Balfour v. Davis

• Decision Date: 28 October 1886
• Citation: 14 Or. 47,12 P. 89
• Parties: BALFOUR and others v. DAVIS and others.
• Court: Oregon Supreme Court

12 P. 89

14 Or. 47

BALFOUR and others v. DAVIS and others.

Supreme Court of Oregon

October 28, 1886

W.T Burney and J.V. Beach, for appellants, Davis and others.

E.C. Bronough, for respondents, Balfour and others.

STRAHAN J.

This is a suit commenced to foreclose a mortgage on certain real property in Multnomah county. The mortgage was made to secure a promissory note dated November 29, 1882, which note was due two years after date, and was made payable at the city of San Francisco, California, and provided for the payment of interest half yearly, on the first days of June and December of each year, and, if the interest was not paid when due, to be compounded by being added to the principal, and becoming a part thereof. The rate of interest specified in the note was 9 per cent. The mortgage provided, in substance, that said G.H. Davis should pay, as soon as due, all taxes assessments, and incumbrances whatsoever, which may be and appear to be a lien upon the mortgaged property, or any part thereof; and will keep the buildings erected thereon insured against fire to the amount required by the plaintiffs, or their assignee, in gold coin, in such insurance companies as shall be specified by the plaintiffs; and that if such taxes assessments, or incumbrances be not so paid, or such buildings so insured, and the policies so assigned, then the plaintiffs may pay such taxes, assessments, or incumbrances and be the sole judge of the legality thereof, or may obtain such insurance in their own name, as mortgagees, and all taxes paid therefor shall be secured by said mortgage, and shall be repaid by said G.H. Davis on demand, and shall bear interest from the date of the payment at the rate of 10 per cent. per annum, and be compounded monthly until paid; and that any default in repayment of such sums when demanded should, at the option of plaintiffs, render said whole mortgage immediately due and payable. The mortgage further provides, in substance, that, in case any action should be brought to foreclose said mortgage, counsel fees at the rate of 20 per cent. upon the amount due should be allowed and paid, whether judgment be recovered or not, as also such sum as may have been paid for searching the title of the mortgaged property since the date of the record of said mortgage.

The main questions presented for our consideration arise upon the answers of the defendants W.T. Burney and others, and the separate answer of the defendant G.H. Davis.

The answer of Burney and others is substantially as follows: That defendant G.H. Davis executed and delivered to Burney his two certain promissory notes on the first day of November, 1883, for the payment of $500 each, within one year, with interest at 10 per cent. per annum from date, and reasonable attorney's fee, if collected by suit or action, and also his certain second mortgage on the same land as respondents' mortgage, to secure the payment of said notes; that appellant Burney's notes and mortgage were assigned to said bank on the first of March, 1885, as collateral security for the loan of $800, and interest at 10 per cent. per annum on note indorsed by defendants A.J. Knott and H. Clay Meyers, which had not been paid. "These defendants, further answering herein, deny that they have any knowledge or information sufficient to form a belief whether said sum has been paid to plaintiffs or not, or as to whether plaintiffs have paid the sum of $12.48, or any sum, on the twenty-ninth day of March, 1884, or at any time, or the sum of $14.08, or any sum, on the twenty-third day of May, 1885, or at any time, or any sum, as road tax, on the seventeenth day of July, 1885, or whether plaintiffs have paid any sum, at any time, as taxes, or otherwise."

The separate answer of the defendant Davis is as follows: Admits the execution and delivery of the note and mortgage alleged in complaint, but denied that said note was to be paid in the state of California, or elsewhere than in the state of Oregon; and alleges that, as to that fact, said note was made payable upon the face thereof in said state for the purpose of fraudulently evading the usury laws of the state of Oregon, where this defendant resides, and where plaintiff's business is carried on and this defendant further alleges that said note was executed and delivered to the plaintiffs upon the following usurious agreement, to-wit: "That plaintiff would loan to the defendant the sum of $1,200 on the twenty-ninth day of November, 1882, to be paid in two years, with interest thereon at the rate of nine per cent. per annum, payable half yearly, on the first day of June and December, and, in default thereof, the same to become compounded, by adding the amount of said interest, and the whole thereafter drawing interest as principal, and the further sum of all taxes assessable in Oregon upon the mortgage securing said note, and upon the debt thereby secured, which taxes aggregate the sum of two per cent. per annum, said taxes to be paid to plaintiffs on or before the first day of March of each year; that said amounts were to be paid, and the further sum of $25.75 was retained by plaintiffs, of said sum of $1,200, as interest upon said loan, and not otherwise; and that the aggregate of all said sums amount to a higher and greater rate of interest than ten per cent. per annum upon the said loan, that being the highest rate of interest by the laws of Oregon allowed to be contracted for; and all said sums were contracted to be paid for the use of said sum so to be loaned plaintiffs by defendant, pursuant to the agreement upon which said note was executed." Defendant, further answering, herein alleges that said mortgage referred to in the second amended complaint herein was made, executed, and delivered upon the following usurious contract, to-wit: "That the same was made, executed, and delivered for the purpose of securing the payment of said note pursuant to its...