Meador v. Johnson
| Decision Date | 16 November 1910 |
| Citation | 112 P. 1121,27 Okla. 544,1910 OK 346 |
| Parties | MEADOR v. JOHNSON. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
By reason of section 5033 (Ind. T. Ann. St. 1899, § 3238) and of chapter 55, Mansf. Dig. Arkansas (Ind. T. Ann. St. c. 24), in force in the Indian Territory before the admission of the state, a defendant in an action of ejectment brought in one of the United States courts of the Indian Territory may plead in his answer any equitable defenses he may have to the action.
A charge of usury by a national bank in the Indian Territory on a note executed to it did not vitiate the note or the mortgage given to secure the payment thereof.
In a foreclosure proceeding by advertisement under a power of sale, failure of the mortgagee to give notice of the sale in the manner and for the time provided in the mortgage invalidates the sale; and snell irregularity may be pleaded as a defense by the mortgagor in an action of ejectment brought by a purchaser at the sale or by his grantee, both of whom had notice of such irregularity.
Recitals in the deed of the trustee or mortgagee that are by the terms of the power of sale in the mortgage made prima facie evidence of the truthfulness of the facts recited, are not conclusive evidence of such facts, and may be rebutted by the mortgagee who attacks the irregularity of the sale. The only effect of such recitals, showing that the sale was regular is, upon the introduction of the deeds containing them, to place upon the mortgagor the burden of establishing the irregularities complained of.
In the absence of a provision of the statute or of the mortgage requiring that the mortgaged property shall be sold in separate parcels or tracts, the sale en masse of the property by the trustee under the power of sale, although the property is susceptible to division, and of being sold in separate tracts or parcels, rests largely in the discretion of the trustee; but where the sale is made en masse with fraudulent intent, and results in the property's being sold for much less than its value, and much less than what it would have brought if it had been sold in separate tracts, the sale will be set aside.
(Additional Syllabus by Editorial Staff.)
Mansf. Dig. Ark. § 2632 (Ind. T. Ann. St. 1899, § 1916), requires that in actions for recovery of land, except forcible entry and unlawful detainer, plaintiff shall set forth in his complaint, all written evidences of title on which he relies and that defendant in his answer shall plead in the same manner. Section 2633 (Ind. T. Ann. St. 1899, § 1917) requires defendant to set forth in his answer exceptions to any of such documentary evidence relied upon by plaintiff to which he wishes to object. Held, that such instruments set forth in the complaint constitute no part of the pleadings and defendant's failure to except to them does not amount to an admission of the truthfulness of the recitals therein.
"Prima facie evidence" of a fact is such evidence as in the judgment of the law is sufficient to establish the fact, and, if not rebutted, remains sufficient for that purpose.
Error from District Court of Seminole County; A. T. West, Judge.
Action by J. Coody Johnson against L. D. Meador. Judgment for plaintiff, and defendant brings error. Reversed and remanded.
J. A. Baker, for plaintiff in error.
Crump, Rogers & Harris, for defendant in error.
This action was originally brought in the United States Court for the Western District of the Indian Territory at Wewoka by defendant in error, who will hereafter be referred to as plaintiff, to recover possession of certain real property to which plaintiff claims title through a foreclosure by advertisement under a power of sale. Plaintiff is the grantee of the purchaser at said sale. In the foreclosed mortgage, the Farmers' National Bank of Wewoka is the mortgagee, and plaintiff in error, hereafter referred to as defendant, the mortgagor. Defendant by his answer interposed three defenses, which are as follows: (1) Usury; (2) failure to give public notice of the time and place of sale; (3) sale of the property as an entire tract, instead of in separate parcels; and for an inadequate price. He alleges that plaintiff had full knowledge and notice of all the facts alleged as his defense. Special demurrers to the paragraphs of the answer setting up the foregoing defenses were sustained by the trial court, and said action of the court forms the basis of the principal assignments of error urged here for reversal of the cause.
Plaintiff contends that in an action of ejectment, equitable defenses cannot be interposed, and, for such reason, the special demurrers were properly sustained; but in so far as the defenses set up were equitable in their nature, this contention is without merit. Section 5033, Mansf. Dig. Ark. (Ind. T. Ann. St. 1899, § 3238), in force in the Indian Territory, authorizes the defendant in an action to set forth in his answer as many grounds of defense, whether legal or equitable, as he shall have. This section of the statute, prior to its adoption in the Indian Territory, had been construed in connection with the statute on ejectment, and held to authorize the interposition of an equitable defense in an action to recover the possession of land. Trulock et al. v. Taylor, 26 Ark. 54; Alexander v. Hardin, 54 Ark. 480, 16 S.W. 264; Rudisill v. Cross, 54 Ark. 519, 16 S.W. 575, 26 Am. St. Rep. 57. Robinson v. United Trust, Limited, 71 Ark. 222, d1 was a consolidated action. One of the actions consolidated consisted of a bill to redeem from a mortgage foreclosure sale. The other was an ejectment suit. In the ejectment suit, plaintiff derived his right of possession from a sale under a mortgage. Defendants interposed as a defense that they did not know "whether said sale was made at public outcry and in the manner provided in said deed of trust, or whether the said property was ever appraised or brought two-thirds of the aforesaid value thereof, defendants are not fully advised, either to admit or deny same, and they ask that strict proof be required with regard to same." The sustaining of the demurrer to this portion of the answer was held by the appellate court to be error. The foregoing authorities are in harmony with the decided cases from several of the other states. Meyer et al. v. Opperman, 76 Tex. 105, 13 S.W. 174; German Bank v. Stumpf, 73 Mo. 311; Cobe v. Lovan, 193 Mo. 235, 92 S.W. 93, 4 L. R. A. (N. S.) 439, 112 Am. St. Rep. 480; Dwight v. Phillips, 48 Barb. (N. Y.) 116. See, also, Sulphur Mines Co. v. Thompson, 93 Va. 293, 25 S.E. 232.
There was no error, however, in sustaining the demurrer to the defense of usury. That attempted defense was pleaded by defendant upon the theory that section 4735, Mansf. Dig. Ark. (Ind. T. Ann. St. 1899, § 3046), prescribing as a penalty for usury that any contract affected therewith shall be void, applies to the mortgage in the case at bar, and to the note which the mortgage secured. In this assumption plaintiff is in error. The mortgage was executed to a national bank, and section 5198, 5 F. St. Ann. p. 133 (18 Stat. 320 [U. S. Comp. St. 1901, p. 3493]), fixes the penalty for a national bank's charging a rate of interest greater than is allowed by the law. Under the penalty prescribed by this statute, only the interest, where it has not been paid, is forfeited for violation of the statute; and where the interest has been paid, a right of recovery in an action therefor twice the amount of the interest paid; but the usurious element of the contract does not vitiate the entire contract. Defendant, in his answer, alleges that he has made payments on the interest, but there is no contention that the principal of the note secured by the mortgage has ever been paid. A charge of usury therefore by the bank would not defeat the foreclosure of the mortgage to enforce the payment of the principal. Whether, if the Arkansas statute applied, usury would be a defense in this action, it is not necessary to decide. By some of the authorities, it is held that the validity of the original instrument, to wit, the mortgage, cannot be questioned in an action of ejectment. Diefenbach v. Vaughan, 116 Ala. 150, 23 So. 88. In Northwestern Mortgage Trust Co. v. Bradley et al., 9 S. D. 495, 70 N.W. 648, it was held that a foreclosure proceeding could not be attacked on the ground of usury. But, as previously stated, since usury does not render absolutely void the mortgage in this case, we do not decide whether if the same were void such fact could be availed of as a defense in this proceeding. For the reason already given, it is apparent that the court did not commit error in sustaining the demurrer to this plea.
The power of sale in the mortgage provides that in the event default be made in the payment of the note at maturity, the mortgagee shall have power to sell the property or any part therefore at public sale to the highest bidder for cash at Wewoka in the Western Judicial District, public notice of the time, place, and terms of sale having first been given thirty days, by advertisement published in a newspaper in said district, or by printed or written bills posted up in 10 different places in the vicinity in the district of said property. One of the paragraphs struck out denies that notice of the sale in either of the manners prescribed was given. This constitutes a good defense to the action. The power of a...
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