Brown v. Bryan

• Decision Date: 24 January 1898
• Citation: 6 Idaho 1,51 P. 995
• Parties: BROWN v. BRYAN
• Court: Idaho Supreme Court

51 P. 995

6 Idaho 1

BROWN v. BRYAN

Supreme Court of Idaho

January 24, 1898

TRUST DEED A MORTGAGE UNDER STATUTES OF IDAHO.-A trust deed executed to secure a given debt, payable at a specified time upon real estate, is, under the statutes of Idaho, a mortgage, and cannot be foreclosed by notice and sale, under a power of sale in such trust deed; and such trust deed can only be foreclosed by judicial sale, pursuant to decree rendered in an action brought therefor in the proper court.

(Syllabus by the court.)

APPEAL from District Court, Blaine County.

Order reversed, and a new trial ordered, costs awarded to appellant.

Brown &amp Henderson, for Appellant.

If a deed absolute upon its face be in truth a mortgage, the title still remains in the mortgagor; no right of possession is given the mortgagee under such a deed--it still is a lien. ( Kelley v. Leachman, 3 Idaho 392, 29 P. 849.) The statutes of Idaho not only provide that there shall be no other method of foreclosure, except that in a court, and the decree of a court (section 4520), but also provide that any contract for forfeiture of property subject to a lien in satisfaction of a debt secured thereby, and any contract in restraint of the right of a redemption form a lien, are void (section 3334). A deed of trust to secure the payment of indebtedness is a mortgage in nearly all the states, whatever the ruling of the state may be as to power of sale. ( Shillaber v. Robinson, 97 U.S. 68; (argument of Dillon, J.); 2 Am. Law. Reg., N. S., 648-650, and cases cited; Eaton v. Whiting, 3 Pick. 484; Dubuque Bank v. Weed, 57 F. 513; Pickett v. Forbes, 36 F. 514; Union Bank v. Kansas City Bank, 136 U.S 223, 10 S.Ct. 1013; Dupee v. Rose, 10 Utah 305, 311 37 P. 567; disapproving Koch v. Briggs, 14 Cal. 257 73 Am. Dec. 651.) Where states have provided a statutory foreclosure, as the method of exercising the power, such statute excludes all other forms--excludes private sales, and the statute must be strictly followed and the power can only be exercised in statutory manner. (Shillaber v. Robinson, 97 U.S. 68; Grover v. Fox, 36 Mich. 461; Lee v. Mason, 10 Mich. 403; Sanford v. Flint, 24 Mich. 26; Mowry v. Sanborn, 68 N.Y. 160; McDonald v. Kellogg, 30 Kan. 170, 2 P. 507.) In many other states they have held that any contract contained in the same instrument by which the money is borrowed to shorten or change or diminish or abolish the equity of redemption, is absolutely null and void. (Lawrence v. Trust Co., 13 N.Y. 200; Ingle v. Culberson, 43 Iowa 265; Woodruff v. Robb, 19 Ohio 216; Waters v. Randall, 6 Met. 479, 484; Pugh v. Davis, 96 U.S. 337; Jackson v. Lawrence, 117 U.S. 681, 6 S.Ct. 915.)

Kingsbury & Parsons and Johnson & Johnson, for Respondents.

On the presentation of this cause, upon the former hearing, no argument was made by plaintiff's counsel upon the question of the right to foreclose at trustee's sale. It seemed to be taken for granted by both parties that the decision of the supreme court of the United States in the case of Bell Silver etc. Min. Co. v. First Nat. Bank, 156 U.S. 470, 15 S.Ct. 440, and the decisions in adjoining states, whose statutes governing the question are identical with ours, settled the question. The California court, in Bateman v. Burr, 57 Cal. 483, says: "The instrument annexed to the complaint and marked exhibit 'D' is a deed of trust which authorizes the trustees therein named to sell and convey the lands described, upon default in the payment of the note or interest, and it is not a mortgage requiring judicial foreclosure." (Koch v. Briggs, 14 Cal. 256, 73 Am. Dec. 651; Fogarty v. Sawyer, 17 Cal. 589.)

For some years prior to September 22, 1888, George W. Venable, George V. Bryan, and George H. Roberts had been mining partners, each owning one-third in the Red Elephant and other mining properties, described in the complaint. On the said date the partners met and effected a settlement of previous accounts, which had been kept in such a manner that it was difficult to tell how much each had advanced, each had drawn, and how much each was debtor or creditor of the firm. This settlement culminated in the following agreement, to wit:

"Whereas, the undersigned, George H. Roberts, George V. Bryan, and George W. Venable, are mining partners and working the Red Elephant group of mines, in Mineral Hill mining district, in Alturas county, Idaho territory, and have been so working said mine for some time past; and whereas, for the purpose of carrying on the work of said mine, and the payment of the debts of said partnership, said George W. Venable has advanced to said company, on May 1, A. D. 1888, the sum of five thousand ($ 5,000) dollars, bearing interest at the rate of six per cent per annum: Now, in consideration of the premises, it is mutually agreed, by and between said parties, that the said George W. Venable shall be paid out of the first proceeds of said mine the sum of $ 5,000, with the interest as aforesaid, and the same shall be so paid him as the same accrues. And the said Bryan and Roberts hereby transfer and assign to said Venable the proceeds of said mine until the said $ 5,000, and interest shall be fully paid. And it is further agreed on the part of said Venable that said Roberts and Bryan shall each have the right to draw from the proceeds of said mine $ 200 per month, until a further agreement is made by and between the parties hereto. And it is further agreed that the said Roberts shall, at this time, draw the sum of $ 500, the same to be on account of said $ 200 per month, he to receipt for the same as such; such amounts, to be so drawn by said Bryan and Roberts, to be charged to them against their respective interest in said mines. It is further understood and agreed that, after the said sum of $ 5,000 shall have been fully paid and liquidated, the proceeds of said mines, after deducting the monthly dividend to be paid to said Bryan and Roberts as herein provided, shall be placed in a fund for the purpose of the future operation of said mines, to be used for the erection of machinery or otherwise, as the said parties may agree. And it is understood and agreed, by and between the parties hereto, in adjustment of the several amounts due from the partnership to the several members thereof, that there is due George W. Venable, in addition to the said sum of $ 5,000 above mentioned, the sum of $ 5,664.18, moneys advanced by him for the use of said partnership, and it is agreed that the same shall bear interest at the rate of six per cent per annum from November 1, 1887; and that there is due George H. Roberts from said partnership, for moneys advanced by him for the use of said partnership, the sum of fifteen hundred dollars ($ 1,500) dollars, which it is agreed shall bear interest at the rate of six per cent per annum from November 1, 1887. And this arrangement and agreement shall be in full adjustment and settlement of all past accounts between said parties, and shall form the basis of new accounts from this date forward. In witness whereof the said parties have hereunto set their hands this twenty-second day of September, A. D. 1888.

(Signed) "GEO. H. ROBERTS.

(Signed) "GEO. W. VENABLE.

(Signed) "GEO. V. BRYAN.

"Witness: (Signed) LYTTLEON PRICE."

It will be seen, by the terms of this agreement, that the claim of $ 5,000, which is admitted to be what is termed the "Stevenson claim," was to be paid out of the first proceeds of the mine. After this amount was settled, it was agreed that Roberts and Bryan were each to receive $ 200 per month, until a further agreement is made between the parties and after the said sum of $ 5,000 was paid, and after deducting the monthly dividends to be paid to said Bryan and Roberts, the proceeds of the mine were to be placed in a fund for the future operation of said mines. It was also agreed that there was due the said mining partners as follows: To George W. Venable the sum of $ 5,664.18, and to George H. Roberts the sum of $ 1,500; both of which sums were to bear interest at the rate of six per cent per annum from November 1, 1887. This agreement is dated September 22, 1888. The said mine, or a portion thereof, was then, on the 24th of September, 1888, leased to George V. Bryan aforesaid. On the twenty-fifth day of January, 1889, the said George H. Roberts gave a trust deed to Frank Taylor, of Hailey, Idaho for the benefit of the First National Bank of Hailey, party of the third part, to secure the payment of the sum of $ 1,500 on the twenty-fifth day of July, 1889, upon the following property, to wit: The Red Elephant lode, the Queen Fraction lode, the Caledonia lode, the O. K. claim, and the Red Elephant, Central, Queen Fraction, and Caledonia mill sites, describing the same. Said trust deed contained a power of sale, which authorized the holder of said trust deed and promissory note given said bank for said money, in case of default of payment of the same, to sell said property at public sale, after advertising the said sale by publishing the time and place of the same, with description of the property, for three weeks, in some newspaper published in the county where said property is situated, and authorizing the holder of said note, or his assigns or agent, to become the purchaser of said property. On the twentieth day of July, 1889, the First National Bank of Hailey sold and transferred all its interest in said note and trust deed to J. H. Moore, of the city of New York. The said Moore was the agent of the said George W. Venable; acted for and was his agent in the purchase of said note and trust deed, and all his subsequent proceedings with relation thereto; and from first to last acted under the direction of the said Venable in all things, and had no personal interest in said...