Jorgenson v. Stirling
| Decision Date | 02 August 1922 |
| Citation | 35 Idaho 785,209 P. 271 |
| Parties | O. C. JORGENSON, Respondent, v. LUELLA STIRLING, Appellant |
| Court | Idaho Supreme Court |
MORTGAGE FORECLOSURE-USURY-CORRECT JUDGMENT UPON ERRONEOUS THEORY OF THE LAW-AGENCY UNDER SEC. 6255, REMINGTON & BALLINGER'S CODE OF WASHINGTON.
1. Under Remington & Ballinger's Code of Washington, sec 6255, a principal is responsible for the acts of his agent in making a usurious contract. The agency referred to in the statute is one which has to do with the making of the contract.
2. The employment of an attorney to pass upon an abstract and an escrow agreement before a loan will be made does not render such attorney the agent of the lender within the purview of the Washington statute.
3. Where the trial court enters a correct judgment upon an incorrect theory of the law applicable to the case, the judgment will be affirmed, but upon a correct theory of the law, provided no injustice will thereby result.
APPEAL from the District Court of the Eighth Judicial District, for Kootenai County. Hon. John M. Flynn, Judge.
Action to foreclose mortgage. Judgment for plaintiff. Affirmed.
Judgment affirmed, with costs to respondent. Petition for rehearing denied.
J. B Hogan, W. B. Mitchell and Geo. D. Ayers, for Appellant, cite no authorities on points decided.
Potts & Wernette, for Respondent.
The rule that when an agent commits a wrong in the transaction of the business of his principal the principal is liable for the injury produced cannot apply where the agent when committing the wrong is bargaining on his own account, for his own private advantage exclusively, and this is known to the person with whom he is bargaining. (Estevez v. Purdy, 66 N.Y. 446; Bank of United States v. Waggener, 9 Pet. (U.S.) 378, 9 L.Ed. 163; Condit v. Baldwin, 21 N.Y. 219, 78 Am. Dec. 137; Franzen v. Hammond, 136 Wis. 239, 128 Am. St. 1079, 116 N.W. 169, 19 L. R. A., N. S., 399; Bovee v. Butters, 92 Minn. 149, 99 N.W. 641; Bingham v. Myers, 51 Iowa 397, 33 Am. Rep. 140, 1 N.W. 613; Goodwin v. Bishop, 145 Ill. 421, 34 N.E. 47; Hutchinson v. Hosmer, 2 Conn. 341.)
"Where the lower court decides the case correctly, but upon an erroneous theory of the law, the supreme court will affirm the holding, but base its decision on the correct theory." (Sheafer v. Mitchell, 109 Tenn. 181, 71 S.W. 86; Guaranty Realty Co. v. Recreation Gun Club, 12 Cal.App. 383, 107 P. 625; 4 C. J. 663; Gagnon v. St. Maries Light etc. Co., Ltd., 26 Idaho 87, 141 P. 88.)
This is an appeal from a decree of foreclosure of a mortgage upon certain real estate situated in Kootenai county. The defenses interposed were that usury was exacted upon the debt which the mortgage was given to secure and that respondent was estopped from declaring the whole amount due under an option contained in the note and mortgage, and that therefore the action was brought prematurely.
On December 17, 1918, W. B. Mitchell executed his note to respondent for $ 6,270, together with a mortgage to secure the same on the property above mentioned. The note provided for interest at the rate of ten per cent per annum. On the same day he executed to Severin Iverson, an attorney at Spokane, a note for $ 2,000 and a second mortgage upon the same land. Thereafter, W. B. Mitchell by quitclaim deed conveyed the property to appellant herein.
It is claimed by appellant that the $ 2,000 note and mortgage were exacted as a bonus for the loan; that the contract between Mitchell and respondent was a Washington contract and under the law of that state the bonus rendered the contract usurious. On behalf of respondent it is claimed that Severin Iverson was the agent of Mitchell in securing the loan; that respondent was wholly ignorant of the exaction or execution of the $ 2,000 note and mortgage and that he had no interest therein. Respondent also denied the facts by reason of which it was claimed that he was estopped from declaring the whole amount due.
The court found that about the month of December, 1918, Mitchell requested Severin Iverson to secure a loan for him of about $ 6,200 and that Iverson acting for Mitchell brought the respondent and Mitchell together; that respondent employed Iverson to prepare and examine the papers, including the abstract and escrow agreement, relative to the loan afterward made by respondent to Mitchell, and that Mitchell agreed to pay the expenses thereof; that the mortgage in controversy was drafted and prepared by Mitchell; that in order to secure a loan of $ 6,270 for said Mitchell, Iverson required him to execute a second and subsequent mortgage on the land in favor of Iverson for $ 2,000, securing payment of a note for said amount, payable to Iverson and due on or before two years after the date thereof, which date was December 17, 1918; that this also included the sum of $ 12 loaned by Iverson to Mitchell, and also included a claim by said Iverson for legal services claimed to have been performed under an agreement therefor, but that Mitchell was not indebted to Iverson for legal services and there was no agreement therefor and that the evidence was wholly insufficient to show the value of any legal services performed by Iverson for Mitchell; that respondent did not know of the execution of the note and mortgage by Mitchell to Iverson until some time in the month of June, 1919; that he did not authorize the same, or consent to the same being executed, and that the said note and mortgage of the defendant Iverson was made wholly without the knowledge, consent or acquiescence of respondent.
The court further found that sec. 6251, Remington & Ballinger's Code of Washington, is as follows: "No person shall directly or indirectly take or receive in money, goods or thing in action, or in any other way, any greater interest, sum or value for the loan or forbearance of any money, goods or thing in action than twelve (12) per centum per annum."
And that sec. 6255 of the same code is as follows:
The court found that under...
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