BEAN
J.
This is
a suit to foreclose a mortgage. The defense is usury. The
facts, as they appear from the pleadings and evidence, are
that in January, 1892, J.C. Havely, defendant, W.H. Kennedy
and J.H. Smith were the owners of a tract of land near the
city of Portland known as "Woodstock," which had
been laid off and platted into lots and blocks, the title to
which was in the defendant, as trustee. On the 12th of
January he applied, as such trustee, to the
plaintiff for a loan of $28,000 on the property referred to
and, after some negotiations, submitted the following written
application for such loan: "The Portland Trust Company
of Oregon--Gentlemen: I desire to procure from your
corporation a loan of $28,000, and as security for said loan
I offer the unsold property in Woodstock as per annexed
schedule, the valuation of which, at the prices now held by
the Woodstock Company, is $124,050, the same to be deeded to
your corporation in trust, and to be retained on the market
at the prices listed, or such prices as the conditions of the
realty market will warrant, the power to regulate prices to
be retained by me; but no decrease from the prices now in
force, as shown by schedule handed you, shall be made so as
to affect materially your security. I further offer, as
collateral security, additional to the real estate above
mentioned, promissory notes in my favor amounting to about
$27,700 (accrued interest to be added), with the
understanding that I shall, should I so desire, be permitted
to draw the amounts which may be paid in on said notes, less
the accrued charges due your corporation; your president
however, should he deem it necessary, to be privileged to
limit the drawing out by me of such funds to one-half of said
accumulations, after your accruing charges are paid. I desire
the trust to continue for the term of two years, the
principal of said loan to be payable on any interest day in
installments of not less than $500; and that deeds or bonds
as I may desire, be issued on the order of myself or my
agents, and on sales made by them a commission of 10 per
cent. to be paid them,--in all cases where the first payment
is large enough, out of the first payment; and in other
cases, out of the payments which may be made from time to
time, until their commissions are fully paid. On all property
which may be hereafter sold by myself or my agents, the
proceeds therefrom, after paying said agents'
commissions, are to be used by you in reducing the amount of
indebtedness now secured by said trust, as fast as they can
be applied, in the manner before stated. I will further agree
to pay your corporation for its services as trustee the sum of $300 per annum, payable in monthly
installments of $25, during the continuance of the trust, but
agreeing that, in any case, said trust fees shall aggregate
not less than $600." On the 13th of January his
application was approved, and on the 21st of the month he
conveyed to plaintiff, by warranty deed, as security for such
loan, the unsold property in Woodstock, consisting of about
225 lots, and the promissory notes referred to, and executed
and delivered his note for $28,000, due two years after date,
bearing interest at the rate of 10 per cent. per annum. At or
about the same time plaintiff executed and delivered to him a
certificate of trust, which, after certifying that the real
property therein described had been conveyed to it by the
defendant and his wife, by deed absolute in form, declares
that it was to be held in trust, however, upon the following
terms and conditions, to wit: "Said Portland Trust
Company of Oregon shall convey all or any portion of said
real property to such person or persons, for such prices, and
on such terms, as said J.C. Havely, trustee, or his agents
duly appointed, may in writing direct; provided, however,
that no part of said real property shall be so conveyed for a
less price than four hundred and fifty dollars ($450) per lot
without the consent in writing of said Portland Trust Company
of Oregon. Said Portland Trust Company of Oregon, in addition
to said real property above described, also holds for
collection certain promissory notes, drawn and passed by
sundry parties to said J.C. Havely, trustee, and by him
indorsed, amounting in the aggregate to twenty-six thousand
six hundred and sixteen dollars and eight cents ($26,616.08),
as more fully set out in two certain receipts for said notes
given by said Portland Trust Company of Oregon to said J.C.
Havely, trustee, dated 23d January, 1892, and 26th January,
1892. The proceeds of said promissory notes are to be applied
by said Portland Trust Company of Oregon in the
same manner as the proceeds of said real property, provided,
however, that said J.C. Havely, trustee, may, whenever all
charges due to said Portland Trust Company of Oregon accrued
at the time have been fully paid, withdraw not to exceed
one-half of the net proceeds of said notes, any further
withdrawal by him to be made only with the consent in writing
of said Portland Trust Company of Oregon. Out of the proceeds
of said real property and of said promissory notes, said
Portland Trust Company of Oregon shall pay: (1) A commission
of ten per cent. to the selling agents of the said J.C.
Havely, truste...
