The herald., 1897-09-20

this trust, including In case of default the
counsel fees hereinafter mentioned, with
at the rate agreed upon until final repay
ment; and the part Of the first part
hereby agree to repay all said sums and
payments without demand, and also in
terest thereon at the rate CT one per cent
per month until repaid, unless different
rate Of interest is expressly agreed upon
in writing, and on all such sums the rate
OF interest so agreed.
Here 1t is learned that the reasonable
expenses are apart from attorneys
fees, and also that In the event Of no
agreement as to rate of interest the
rate shall be one per cent per month.
A DEFAULTING BORROWER
In the third clause of the deed provi-
sion is made for default on the part of
the borrower In payment Of the princi-
pal or interest In such case the lender
shall inform the trustee that the bor
| rover is delinquent and the trustee
friend or no friend-must then proceed
to sell the property or such portions Of
1t as may be required to pay the princi-
pal, interest and reasonable expenses"
And the mode Of proceeding is as fol-
lows: The trustee shall first publish no.
tice of the time and place Of sale, with
description Of the property, at least
twice a week for three successive weeks
In some newspaper published in Los
Angeles, and II the trustee see At he
may postpone such sale by publication
in the same newspaper, or at his option
by announcing it at the time Of the sale.
On the day of the sale the property shall
be sold to the highest bidder for cash,
and the holder or holders of
the promissory note, their agents
or assigns may purchase II they
so desire. From the proceeds of
the sale shall be paid: First, the ex-
penses of the sale, together with the
reasonable expenses of the trustee" in
cluding counsel fees; secord, all sums
paid out by the trustee on account Of
taxes, assessments, adverse claims,
liens, incumberances or Insurance which
the borrower may not have been able
or willing TO pay; third, the amount due
on the promissory note, with accruing
interest; fourth, any further sums that
may be owing by the borrower to the
lender.
The balance remaining will be handed
over to the borrower, his heirs or as
signs. In the event of a sale Of the
property and in making a deed to the
purchaser, the recital therein Of the de-
fault and the demand made upon the
trustee to sell, and the details of the
sale shall be considered conclusive
proof of the default in payment. 1t will
thus be seen that the borrower is SIM
ply mot in it," for at any time the lender
may start the machinery that in itself
is to be considered proof Of the borrow
er's delinquency, but over which he has
absolutely no control.
Briefly put these are some of the more
salient features Of the deed Of trust
which Is being made compulsory upon
borrowers Of money. If a borrower
won't give deed Of trust then he won't
get the money, that's all there is to 1t.
But while the stipulations set forth are
hard enough it is those that are not set
forth that morally speaking make the
trust deed a delusion and snare. 1t
is to be seen that such document does
away with court proceedings, the trustee
taking the place Of the public tribunal
With this difference, to, that while the
latter afforded an opportunity to the
borrower to put forth his side of the
case and equity as we'll as law cut some
figure, the trustee is merely a figure
head-a puppet to be set in motion al
the will of the lender. Notice beirg
given to the trustee by the lender of
default in the principal or interest the
trustee has not to ask the why or where
fore, but must proceed to sell out the
delinquent. The only technically legal
proceeding taken is when the trust deed
is placed on record.
GOING IT BLIND"
AS matter of fact, when borrower
appends his signature to a trust deed
he is saddling upon himself expenses of
which he has no knowledge, and the
only allusion to which in the deed are
The words reasonable expenses" What
are these reasonable expenses"
AS soon as deed Of trust is made
certain statutory enactments become
operative in connection with it just as
surely as If they were Incorporated word
for word in II. AS proposition of law
they are practically so incorporated, and
anyone contemplating raising money
on the security Of real estate had better
clip the following extracts and paste
them in their hats:
Section 2274 of the Civil Code as amend
ed in 1889, reads:
EACepl DIS pTOVlueQ III SeCtlOu 1lVV OIL LHe
Code of Civil Procedure, when a declara-
tion of trust is silent upon the subject of
compensation the trustee is entitled to the
same compensation as an executor. If 1t
specifies the amount of his compensation
he is entitled to the amount thus specified
and no more. II it directs that he shall
be allowed a compensation but does not
specify the rate or amount he Is entitled
to such compensation as may be reasonable
under the circumstances.
So 1t would seem that as the trust deeds
are silent as to the remuneration of the
trustee he Is entitled to the compensa-
tion Of an executor. Section 1918 Of the
code of civil procedure provides for the
remuneration of executors as follows:
For the first $1,000 at the rate
of per cent; for all above that sum not
exceeding $4,000 at the rate of s per cent;
for all above $1,000 and not exceeding $2O-
000 at the rate of per cent; all above
$4,000 and not exceeding $50.O00 at the rate
of per cent; all above $4,000. and not ex-
ceeding 100000, at the rate Of per cent;
all above 100000 at the rate of per cent.
Another clause, too, In the section OF
the civil code provides that trustee
Shall be allowed all necessary expenses
in the case, management and settlement
Of the estate, including reasonable fees
paid to attorneys for conducting the
necessary proceedings or suits in courts,
etc - Sn in additinu IN hi owp rarn,,uar