Mortg. Bond Co. v. Stephens

• Decision Date: 22 June 1937
• Docket Number: Case Number: 26849
• Citation: 181 Okla. 182,1937 OK 411,72 P.2d 831
• Parties: MORTGAGE BOND CO. et al. v. STEPHENS, Trustee
• Court: Oklahoma Supreme Court

1937 OK 411

72 P.2d 831

181 Okla. 182

MORTGAGE BOND CO. et al. v. STEPHENS, Trustee

Case Number: 26849

Supreme Court of Oklahoma

Decided: June 22, 1937

Syllabus

¶0 1. MORTGAGES - Foreclosure of Deed of Trust or Mortgage - Successor Trustee Proper Party Plaintiff Without Joining Beneficiary.

A successor trustee, under a deed of trust or mortgage, is the proper party plaintiff in an action for foreclosure and may institute such action without joining the beneficiary.

2. BILLS AND NOTES - Note Held not Made Nonnegotiable by Provision Referring to Certain Stipulations in Mortgage.

A promissory note, otherwise negotiable, was not made nonnegotiable because it contained a provision referring to certain paragraphs in the accompanying mortgage, that the maker, on demand, and at his own expense, would take such legal proceedings as appeared to the lender desirable to perfect the title to the property mortgaged or in case of the subsequent enactment of any law changing the value of the land for taxation so as to affect the lien thereon, or the debt secured, that the maker would, upon notice, liquidate such added liability and upon failure so to do that the due date of the note and mortgage would be accelerated at the option of the trustee.

3. USURY - Entire, Period of Contract Considered in Determining Whether Contract Usurious.

In determining whether a contract is usurious, entire period of contract will be considered.

4. SAME - Ambiguous Contract Construed Against Claim of Usury.

Where a contract claimed to be usurious is susceptible of two constructions, that construction which makes it lawful will be adopted.

5. SAME - Effect of Deducting From Face of Note Agreed Commission for Securing Loan.

Where the agreed commission or bonus for securing the loan is deducted from the face of the note at the time the loan is made, same is treated as interest for one year paid in advance, and the face of the note is regarded as the amount of the loan. If the amount deducted exceeds one year's interest, the excess will be considered as a credit made on the loan and the balance treated as the amount of the loan.

6. SAME - Usury not Shown by Fact That Lender Received Half of Commission Paid Borrower's Agent.

Usury is not shown by the fact that a lender received from the borrower's agent, as a condition of making the loan, half of the commission which the borrower has already agreed to pay the agent for his services in procuring the loan, although the amount so received by the lender, added to the rate reserved for the loan, exceeds the legal rate of interest, where the parties act in good faith without intent to evade the usury law and no additional burden is placed on the borrower by the division of the commission.

7. CORPORATIONS - Statutory Conditions for Foreign Corporations to "Transact Business" in State - Single Act Pertaining to Particular Business not "Transacting Business."

Under sections 5433 and 5435, C. O. S. 1921, prescribing conditions under which foreign corporations may transact business in this state, by the phrase "transacting business" is meant the doing or performing of a series of acts which occupy the time, attention, and labor of men for the purpose of livelihood, profit, or pleasure; but the doing of a single act pertaining to a particular business is not carrying on, transacting, or doing business as contemplated in said sections.

8. CONTRACTS - Law of Place of Contemplated Execution of Contract Governs.

Where contracts are made in one place to be executed in another, the law of the place of execution governs.

9. CORPORATIONS - Transactions by Foreign Corporation Relating to Loan Held not Necessarily "Transacting Business" in State. Within Purview of Statutes.

The fact that the note and mortgage were executed on forms furnished by the foreign corporation, and such corporation wrote the borrower (located in this state) advising of the receipt of the instruments, and of the execution thereof, and that in one or two instances, for pertinent reasons, paid out on the loan direct from its office located in another state, and for a time authorized the person negotiating the loan to collect payments thereon, does not necessarily constitute "transacting" or "doing" business in this state in the absence of satisfactory proof that such foreign corporation was attempting to evade the laws of this state.

Appeal from District Court, Tulsa County; Jesse J. Worten, Assigned Judge.

Action by Roger L. Stephens, trustee, against Mortgage Bond Company, a corporation, et al. to foreclose a mortgage. Judgment in favor of plaintiff, and defendants Mortgage Bond Company and Industrial Building & Loan Association appeal. Affirmed.

Leon C. Phillips, Carter Smith, Joe Chambers, and Jack Paden, for plaintiffs in error.

Fred L. Hoyt and J.A. Denny, for defendant in error.

B.B. Blakeney, Chas. West, S.A. Horton, and B.B. Blakeney, Jr. amici curiae.

PHELPS, J.

¶1 This is an appeal from the district court of Tulsa county. The cause was tried before Hon. Jesse J. Worten, assigned judge, without the intervention of a jury. From a judgment in favor of the plaintiff foreclosing the mortgage sued upon and appointing a receiver, the defendants, Mortgage Bond Company and the Industrial Building & Loan Association, appeal.

¶2 Herein the parties will be referred to as they appeared in the court below, that is, the plaintiffs in error as defendants and the defendant in error as plaintiff. Plaintiff, as trustee, brought suit to establish a lien against certain real estate located in the city of Tulsa by virtue of a trust deed or mortgage; no personal judgment was sought.

¶3 The facts are substantially as follows:

¶4 Prior to the execution of the note and mortgage sued on, the Industrial Building & Loan Association was the owner of the property involved. Subsequently, the property was conveyed to the Mortgage Bond Company for a consideration of $19,000; $1,000 was paid in cash and a mortgage was executed on the property for the balance of the consideration. The Mortgage Bond Company inaugurated a plan for the construction of an apartment building on the property and negotiated the loan involved in these proceedings. Mr. W.L. Reed was president of the Mortgage Bond Company and was also secretary-manager of the Industrial Building & Loan Association. After the construction of the building had proceeded to a certain point, negotiations were entered into by the Mortgage Bond Company with the Phoenix Mortgage Company, Tulsa, Okla., and the Godfrey Investment Company, Oklahoma City, Okla., to secure a loan on the property. Both the Phoenix Mortgage Company and the Godfrey Investment Company were domestic corporations engaged in real estate and brokerage business. In these negotiations it was agreed that the Mortgage Bond Company would pay the brokerage concern a bonus, or commission of $13,500 to obtain the loan. Several years prior to these negotiations, the Godfrey Investment Company had entered into a written contract with the Mortgage Security Corporation of America, Norfolk Va., wherein it was agreed that the Godfrey Investment Company would dispose of certain of its mortgages obtained from borrowers in the course of its business to the Mortgage Security Corporation. In this agreement it was specifically provided that the Godfrey Investment Company was not to be considered an agent of the Mortgage Security Corporation of America in any of the transactions under the agreement. The Mortgage Security Corporation was likewise in the brokerage business at Norfolk, Va. The negotiations finally resulted in the Mortgage Bond Company making written application to the Godfrey Investment Company for a loan of $90,000. The note was executed by the Mortgage Bond Company at Tulsa, April 1, 1928, and was payable to bearer April 1, 1938, at the principal office of the Union Trust Company of Maryland, Baltimore, Md., upon representation and surrender of the original 20 coupons representing interest and installments of principal. The note bears interest at the rate of 6 per cent. per annum, principal installments and interest payable semiannually. Incorporated in the note is the following:

"This note and annexed coupons are secured by deed of trust or mortgage of even date herewith to Union Trust Company of Maryland, Baltimore, Maryrand, and American-First Trust Company in Oklahoma City City, Oklahoma, Trustees, and recorded in the office of the county clerk of the county of Tulsa, state of Oklahoma, to which reference is hereby made with the same force and effect as if incorporated in full herein."

¶5 As security for the note, the Mortgage Bond Company, on April 1, 1928, executed its deed of trust or mortgage to the American-First Trust Company in Oklahoma City and the Union Trust Company of Mary-land, as trustees. In said mortgage the American-First Trust Company is referred to as "local trustee" and the Union Trust Company as "foreign trustee." Conveyance is made to the American-First Trust Company in Oklahoma City, the local trustee, or its survivor or successor.

¶6 Certain provisions of the mortgage are specifically challenged by the defendants as rendering the instruments nonnegotiable. Such provisions are substantially as follows:

(1) That mortgagors, during the existence of the mortgage, will keep the improvements on the property insured against loss by fire or tornado in insurance companies authorized to do business in Oklahoma, and approved by the foreign trustee in an amount of not less than $90,000; such policies to be payable, in case of loss, to the foreign trustee; the policies, and renewals, to be delivered to the foreign trustee. In case of loss mortgagors may restore or rebuild injured or destroyed property under general supervision of foreign trustee in the expenditure of the money. Authority of foreign trustee to apply on the indebtedness covered by the mortgage any excess recovery on insurance policies.

(2) Mortgagor's agreement to warrant

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