United States Mortgage Co. v. Marquam

Mr. Justice Wodverton,

after stating 'the facts, delivered the opinion of the court.

1. We will consider the numerous questions presented as they appear to arise upon the record. It is first urged that the Title Company was the agent of the mortgagee under the trust agreement for the collection of rents and profits and their application to the payment of taxes and interest, and that, such agent having collected sufficient of the rents to discharge the interest notes, the suit was prematurely instituted. These are matters of fact, and were disposed of under the plea in abatement, and, as the evidence has not been brought up, the findings of the trial court are conclusive.

2. In this connection there was another question presented relating to the leasing of divers parcels of realty to continue beyond the maturity of the mortgage, whereby it is claimed that the lien of the plaintiff acquired by virtue of the mortgage has been waived and forfeited, or at least postponed until all damages arising from said unauthorized leasing are made good. The court found, however, that the Title Company had made two leases, only, extending beyond the maturity of said mortgage, neither of which was at the instance of the Mortgage Company. This was not effective to postpone or forfeit the plaintiff’s mortgage lien. Plaintiff’s action in relation thereto, as so found, cannot be construed to extend beyond the bare assent of a mortgagee to the leasing. It was not an affirmative impairment upon its part of the value of the mortgaged property, and such was not its purpose by any inference that can be drawn from the transaction.

3. The next question presented by appellants is that the loan was usurious. This contention is necessarily based upon the hypothesis that the Title Company was the agent of the lender in the control and management of the trust property and the collection of the rents, issues, and profits, for which services it charged and received a commission from Marquam and wife. Such relation, however, was found not to exist under the plea in abatement; but, even if it did, the contract is not shown.to usurious. The statute (Hill’s Ann. Laws, § 3593,) provides that all contracts made or entered into in this state on which the rate of interest is 8 per cent or under, whereby one party shall agree to pay the taxes on the debt, credit, or mortgage, shall not be deemed or taken to be usurious ; and the argument is that any contract to pay anything beyond the rate agreed upon, however small, with taxes, although such rate is under 8 per cent, is usurious; that is to say, as applied to the case at bar, the parties having agreed upon 7 per cent, with taxes added, any further charge for the use of the money in addition to the agreed rate would render the contract invalid, whether it was made thereby to exceed 8 per cent or not. This is neither the spirit nor the intendment of the statute. Parties are permitted to contract for interest as high as 8 per cent, with taxes added; and if all rates, charges, or other compensation agreed upon for the use of the money do not exceed the rate, aside from the taxes on the debt or obligation, the transaction does not fall within the interdiction of the law, and is, therefore, not usurious. Now, it is alleged that the Mortgage Company charged commissions for collecting rents, etc., diming a period of five years, amounting to $3,000, and claim brokerage and salary, covering the same period, of $9,000, aggregating $12,000, or $2,400 per annum. At 8 per cent, the interest charge would be $24,000 per annum on the amount of the loan, but the rate agreed upon was 7 per cent, or $21,000, per annum, thus leaving a margin of $3,000, which exceeds the alleged additional charges and commissions; so that, conceding the allegations of Marquam and wife to be true, — as we must where the pleadings are tested by demurrer, — usury has not been established.

4. The second separate defense proceeds upon the idea that the plaintiff has forfeited its mortgage lien, and is estopped to insist upon its foreclosure, by reason of having been instrumental in the execution of the unauthorized leases of parcels of realty. It appears by the answer that some five leases were executed extending beyond the time designated in the supplemental trust agreement, which permitted the trustee to execute them for one year beyond the maturity of such mortgage. It is not shown, however, what rents were stipulated for, or in what respect they were injurious to Marquam’s reversionary estate, and the statement that the leases are apparent incumbrances and clouds upon Marquam’s title is a mere conclusion of law; so that the facts pleaded are wholly insufficient to create an estoppel, much less to require a forfeiture of the Mortgage Company’s lien.

5. It is next urged that by the mortgage and deed of trust Marquam and wife transferred substantially all their property to the mortgage and title companies, which operated as a hindrance and fraud upon divers other of their creditors, and was so intended by the parties concerned, and that the mortgage is void on that account. Giving to the allegations of the answer their strongest interpretation in favor of the pleader, the transaction, being founded upon a consideration, was voidable only at the instance of the creditors, but valid as between the parties to the contract, and enforceable in equity: Bradtfeldt v. Cooke, 27 Or. 194 (40 Pac. 1, 50 Am. St. Rep. 701). The plea is therefore unavailable, as held by the trial court.

The last defense interposed to the complaint is that the Title Company, as plaintiff’s agent, collected the rents and profits of the property deeded in trust, which it failed and neglected to apply in discharge of the interest notes, and converted the same to its own use, and that an accounting is necessary to- a determination of the amount thus collected. If it be conceded that the answer is technically sufficient, the issue was tried out between Marquam and wife and the Title Company, and after a full hearing it was found that the company had conducted and managed said trust carefully and honestly, and had punctiliously accounted for all sums collected and received by virtue thereof. This, in effect, disposed of all the matters in controversy on the merits, and the comet of equity would not be warranted in reversing the decree of the trial court upon a purely technical objection, which could not result in any difrerent adjudication in the end.

6. It is next urged that the Title Company could have no relief by cross complaint, because the trust agreement had not terminated, either by performance or by rescission, and that no final accounting could be had, nor a lien decreed against the property in favor of the trustee, until one or the other of these conditions existed. The trust agreement, as shown by its terms and conditions, was entered into to enable the Title Company to manage the property, and from the rents and profits arising therefrom to discharge the expenses of management and interest charges on the mortgage so far as they were sufficient, and, if there was a surplus, to apply it pro rata to certain specified indebtedness of Marquam and Avife, and after these to apply it on the principal sum for which the mortgage was given. The life of the trust was made dependent upon the existence of the mortgage, and the Title Company was given a lien for advances made in pursuance of the stipulations contained in the trust agreement, so that a foreclosure of the mortgage would necessarily put an end to the trust relations. Regardless of any stipulations of the parties, such foreclosure would deprive the trustee of the subject of the trust to operate upon, and the agreement would henceforth become inoperative. It was, therefore, incumbent upon the Title Company, when made a party, to answer, setting up its duties and obligations in the premises, as well as its rights and interest in the property; and having a lien, whether it comes by a trust agreement, technically speaking, or an instrument more properly denominated a mortgage, it has as good a right to have it foreclosed as if it were plaintiff in the suit: Hill’s Ann. Laws, § 416.

7. The agreement is not susceptible of the construction that the Title Company undertook to advance the money necessary to meet the interest payments upon the mortgage loan as they came due. There is a recital in the agreement that it may become necessary in the matter of the trust for the Title Company to advance moneys to Marquam and wife, but we look in vain throughout its terms and conditions for any stipulation to advance the interest on the loan as it became due, or to pay it otherwise than out of the funds collected and realized from the rents and profits. Other advances are specifically mentioned, and the agreement by the most liberal construction, cannot be extended so as to include interest payments. So the Title Company was not remiss in failing to make advances of interest to prevent the mortgagee from declaring the mortgage due before the date of its maturity.

8. It is no answer to the cross complaint of the Title Company to say that it is now engaged in the performance of its obligations under the instrument, because the institution of the suit to foreclose the mortgage necessarily required the winding up of the trust affairs, and hence it is perfectly legitimate to insist upon an accounting with reference thereto at the present time. This disposes also of the second defense to the cross complaint. In this connection it is contended that the Title Company cannot foreclose as to the lots in block 120, as they are not covered by plaintiff’s mortgage, and not the subject of its foreclosure proceedings. These lots were hypothecated, however, by the same instrument, to secure the same obligations to the Title Company, as the property covered by plaintiff’s mortgage, and is as much subject to a foreclosure at the suit of the Title Company as the other premises. A cross complaint of a defendant having a lien is, for all purposes, a complaint against the holder of the equity of redemption (Ladd v. Mason, 10 Or. 317), and may also extend to all property covered by his lien, and thus he may have full relief at once, and not be driven to a foreclosure by piecemeal: Phillips v. Anthony, 47 S. C. 460 (25 S. E. 294); and Stockton Sav. & Loan Soc. v. Harrold, 127 Cal. 612 (60 Pac. 165).

Decided 3 June, 1902.

Messrs. Edward B. Watson and U. S. Grant Marquam, for the objections.

Mr. Wallace McCamant, contra.

The matter of damages appears, as we have seen, to have been disposed of upon the merits, notwithstanding certain alleged items may have been stricken out of the motion, and concludes further controversy as to them. These considerations affirm the decree of the court below, and it is so ordered.

Affirmed.

On Supplemental Appeal From an Order.

Confirming a Sale.

Mr. Justice Wolverton delivered the opinion.

9. This is an appeal from a decree confirming the sale of real property under execution. The first objection insisted upon is that there is not sufficient proof of the publication of the notice of sale, there being no affidavit of the printer of the newspaper, Ms foreman, or principal clerk annexed to the sheriff’s return showing the publication. But this question was not raised in the trial court, and hence no error is assignable respecting it. It is not a question like want of jurisdiction, or insufficiency of facts to constitute a cause of suit, that may be raised at any stage of the proceeding, but must be interposed at the proper time in the trial court; otherwise it cannot be urged in this court for the first time. Such is the rule in actions at law (State v. Anderson, 10 Or. 448; State v. Abrams, 11 Or. 169, 8 Pac. 327), and there exists no good or sufficient reason why it should not prevail in equity.

10. It is next contended that the Sunday Welcome is not a newspaper, within the purview and meaning of Hill’s Ann. Laws, § 291, because it is a Sunday paper, and not of general circulation. The paper, as shown by the evidence, is issued on Saturday of each week, from 1 to 4 o’clock in the afternoon, bears date and is mailed and delivered to subscribers on that day, so that, whatever may be its name, it is clear that its issuance and circulation takes place on a secular day, and not on Sunday: 16 Am. & Eng. Ency. Law (1 ed.), 491; Pratt v. Tinkcom, 21 Minn. 142. The Sunday Welcome is therefore not a Sunday publication in a legal sense, and the objection to it on that ground is not well taken.

11. The statute requires that a copy of the notice be published in a newspaper of the county, and it is assumed that it should be of general circulation. The circulation of the Sunday Welcome through the mails, by delivery, and by news stands is from 1,000 to 1,100 copies, and it is not confined to any particular class or sect of individuals. It is sensational in tone, contains the sporting and some current news of general interest, many advertisements of a business nature, and has been made the medium for legal publications for more than two years, beyond which the evidence does not extend. Such a publication would seem to fall within the legal acceptation of a newspaper. Mr. Justice Mitchele, in Hull v. King, 38 Minn. 349, 350 (37 N. W. 792), in attempting to give a very general definition of a newspaper, says that according to the business world, and in ordinary understanding, it is ‘ ‘ a publication, usually in sheet form, intended for general circulation, and published regularly at short intervals, containing' intelligence of current events and news of general interest.” A publication may be devoted to the dissemination of knowledge or intelligence of a particular kind, or to the advocacy of particular views; but if it also contains information of current events, and news of importance and interest to the general reading public, it is nevertheless a newspaper within the meaning of the term. So it is that publications devoted mainly to the promulgation of religious news and doctrines of a religious sect, or essentially to the dissemination of legal learning and literature, when devoting a portion of their columns to news matters of current and public interest, have been held to come within the designation: Hull v. King, 38 Minn. 349, 350 (37 N. W. 792); Kellogg v. Carrico, 47 Mo. 157; Keer v. Hitt, 75 Ill. 51; Railton v. Lauder, 126 Ill. 219 (18 N. E. 555) Pentzel v. Squire, 161 Ill. 346 (43 N. E. 1064, 52 Am. St. Rep. 373); Lynch v. Judge of Probate, 101 Mich. 171 (45 jun. St. Rep. 404, 59 N. W. 409); Lynn v. Allen, 145 Ind. 584 (44 N. E. 646, 33 L. R. A. 779, 57 Am. St. Rep. 223). Kerr v. Hitt is fairly illustrative of the subject-matter, where it was held that the Chicago Legal News, published once a week, devoted principally to the dissemination of legal intelligence, but making reference to passing events and containing advertisements, brief notices of legislative bodies, and personal and political items of interest to the general reading as well as the legal profession, was a newspaper of the character contemplated by statute. We are therefore of the opinion that the Sunday Welcome falls within the category of a newspaper. It was further urged that the immoral tone of the paper inhibits its dissemination among respectable people; but its publication is not prohibited by law, nor is it denied access to the mails, so that its issuance and promulgation is at least lawful; and, so long as it publishes current news items of general public interest, we must assume that, with the circulation it has, it is read more or less by the general public. ■ ;?!

12. The return of the sheriff upon the execution, as it pertains to the posting of the notice of sale, is as follows: “I further .certify that I advertised said sale also by posting copies of the said notice in three public places in the County of Multnomah and State of Oregon for four weeks immediately prior to said sale, said notices so posted being identical in form with the notices so published;” and it is objected that such proof of posting is insufficient, in that it does not set forth facts showing that the places where the notice was posted are public places. Like returns of sales under execution, however, have received the sanction of this court (Bank of British Columbia v. Page, 7 Or. 454; German Loan Soc. v. Kern, 38 Or. 232, 62 Pac. 788, 63 Pac. 1052); so that the sufficiency and validity of the present one is established by precedent. Aefirmed.