Court Opinion

ID: 6895185
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:48:50.937273+00
Date Added: 2024-06-11T16:05:57.675534
License: Public Domain

Thayer, J.,
concurring.—The question to be determined in this case is whether the mortgage, which the suit was brought to foreclose, ever had any valid inception. It purports to have been executed by H. C. Burch to Joseph Chandler on the twenty-fourth day of March, 1882, to secure the payment of the sum of two thousand five hundred dollars, and interest, in accordance Avith the terms of a promissory note bearing even date therewith, which also purported to have been executed by said Burch to the order of Chandler, or bearer, and payable two years after date, with interest at the rate of ten per cent per annum, and such additional sum as the court might adjudge reasonable as attorney’s fees.
It appears from the testimony in the case that Burch desired to borrow íavo thousand five hundred dollars; that one E. J. DaAvne, then residing at Salem, wrote him that he would let him have it; that Burch came over to Salem from Yamhill County, where he resided, and signed the note, and signed and acknowledged the mortgage and left them with Dawne, who gave him the money, after taking out of it the amount of a thousand-dollar mortgage, purporting to have been executed by Burch to the appellant, and taxes, some money paid to Mr. Bamsey, and fifty dollars brokerage fees; that the remainder of the money Burch received was about eleven hundred dollars. Dawne delivered over the note and mortgage to the appellant on or about their date. That on the third day of May, 1882, the appellant duly executed, under his hand and *90seal, a written acknowledgment of satisfaction of the said thousand-dollar mortgage. Said instrument was duly acknowledged, and contains a recital that said thousand-dollar mortgage was recorded in the office of the clerk of the county of Yamhill on the fourteenth day of January, 1882. The appellant testified as a witness in the case “ that Dawne came to him and asked him if he had any money to dispose of; that he told him he had; that Dawne asked him if he did not want some good paper; that he told him he did if it was good; that Dawne said it was good; that he asked him the amount it would take to lift it; that Dawne told him two thousand five hundred dollars, and he paid Dawne the money; that Dawne did not tell him what Joseph Chandler it was; that he supposed that when the note became due Dawne would collect it for him, and for that reason he gave no further thought about it.’
It appears there was, at the time of the transaction, a man residing in Salem by the name of Joseph Chandler, who lived near Dawne’s place of residence, and that Dawne for some time did business for him in loaning money. Chandler was called by respondents, and testified as a witness in the suit that Dawne loaned the first money for him about 1876 or 1877; that he quit loaning money January, 1882; that he desired to use what money he had on hand, and to collect in what was outstanding, for the purpose of paying for some real estate in East Portland which he had negotiated the purchase of; that he got from Dawne thirteen hundred dollars to make up the first payment of two thousand dollars. That left a balance of two thousand dollars due on the property, to secure which he gave a mortgage; that he was unable to get any more money from Dawne at the time, as the man who had it had died, and Dawne told him he would have to wait until an administrator could sell some property to pay it; that in December, 1881, he gave Dawne instructions to collect in his money, and not to loan out any more for him; that he got from Dawne his last money, $>2,403.94, January 18, 1883; that Dawne had no authority to lend money for him after January, 1882; that he never made any assignment of the note and mortgage in suit; that he first heard of said note *91and mortgage about the 1st of November, 1885; that appellant was the first one who told him about it. • Burch, it appears, did not know until two years after he gave the note and mortgage but that Chandler was the owner and holder of them; Dawne continually so represented the matter to him.
This is an outline of the main facts in the case, and the counsel for the respective parties claim different conclusions therefrom. The appellant’s counsel contend that the note and mortgage sued upon were intended to include Joseph Chandler as the real payee of the note and mortgagee in the mortgage, while the respondents’ counsel insists that such payee and mortgagee are purely fictitious; that the name “Joseph Chandler” was so used without intending any real party. If the conclusion drawn by the appellant’s counsel prevails, it presents the question whether the note and mortgage became effective in the hands of the appellant. Such instruments must be delivered to the party to whom the obligation contained therein is due before they have any force or virtue. If, therefore, said instruments had been intended for Chandler, a delivery thereof to Dawne would have been ineffectual, unless he were the agent of Chandler, and as such agent authorized to receive them for Chandler. And in order to vest the title of them in the appellant through a sale made by Dawne to him, the scope of Dawne’s agency must have been sufficient to empower him to make the sale.
It is very doubtful, to say the least, whether the evidence in the case shows that Dawne was invested with any such agency. The authority to loan Chandler’s money would empower Dawne to accept and receive securities therefor; but I hardly think that would authorize him to sell them, and if the testimony of Chandler is to be relied on, Dawne’s authority to loan money had been revoked at the time of the transaction with Burch. If, however, these conjectures are wrong, still I am very positive that it cannot be maintained that the evidence proves that the money advanced to Burch belonged to Chandler. The testimony of the latter shows very conclusively that it did not. It shows that Dawne had at the time no money in his hands belonging to Chandler, available for any such purpose; that Chandler had *92directed him not to lend any more of his money, but to collect in what was outstanding, and pay it over to him; besides if it had been Chandler’s money, and it had been intended to take the note and mortgage to him, he would doubtless have been informed in regard to the loan.
The appellant at about the time the loan was made advanced to Dawne money, he says, to buy the security, and it is very evident that that was the money which was advanced to Burch. Why Chandler’s name was inserted in the note and mortgage is very peculiar; but it seems to have been an irregular mode which parties engaged in loaning money through Dawne and others had adopted. They probably considered it an honest way to do business, but the courts must consider it from a legal standpoint. The result of the transaction, if Chandler’s name was used without his knowledge or consent, was to render the note and mortgage inoperative. One person cannot make a contract with another without the knowledge and consent of the latter; it must be a mutual agreement between the contracting parties. A contract in form, with a person who is a stranger to it, stands upon the same footing as an assumed contract with a fictitious person. It would lack the essential elements of a contract—the meeting of the minds of the parties.
There is but one exception to this rule that I am aware of, that is in case of a promissory note made payable to the order of the maker thereof, or to the order of a fictitious person, and negotiated by the maker. The statute gives to such note the same effect and validity as against the maker, and all persons having knowledge of the facts as if payable to bearer. But the statute does not extend to mortgages. They must be upheld, if at all, by general rules applicable to contracts. The note in suit having been made payable to bearer may possibly, under the provisions of the statute, be held valid in the hands of the appellant. The Circuit Court seems to have so regarded it, and as the respondénts have not appealed from that part of the decree, it is not necessary to consider the question. A question has, however, occurred to me. in considering the appeal, relative to the costs of the suit.
*93The rule of this court is, that the prevailing party in equity cases will usually be entitled to costs against the losing party; but in view of the fact that the appellant is subjected to a severe hardship in being deprived of a lien upon the premises for his debt; that the respondents are profited thereby; that he did not act dishonestly, or in bad faith, in the transaction out of which the debt arose, and that his misfortune has been occasioned by the bad advice he received concerning it, I think his case should be made an exception to the general rule upon that subject, and that his taxable costs and disbursements in the suit and on the appeal should be paid out of the proceeds of the sale of the mortgaged premises, with the other costs and disbursements therein, and that, no costs or disbursements should be taxed against him in this court or in the Circuit Court.