Thompson v. Marshall, 21 Or. 171

Thompson v. Marshall

21 Or. 171 | Or. | 1891

Strahan, C. J.

The deed dated January 27,1891, shows upon its face that so far as money was advanced upon the faith of it, or so far as it became security for any debt of the cable railway company, the same is a mortgage, and all of the incidents of redemption and the right of foreclosure attached to it. (3 Pom. Eq. Jur. § 1195.) And the deed of April 5,1890, under the allegations in the complaint which stand admitted by the demurrer, is of the same chai’acter. Though its phraseology is somewhat different, its real character must be determined by its object. If its object were to secure a debt whether theretofore or to be thereafter contracted either by the cable company on the faith of- it or by Marshall as trustee for its use and benefit as between the parties to such transaction, and all persons dealing in relation to the property with notice of the facts, such conveyance is a mortgage. But it is said by the appellant that these deeds are deeds of trust with power of sale super-added, and that in such case the power may be exercised without the intervention of a court of equity. Much of the learning on this subject is collected by Judge Dillon in a very exhaustive article (2 Am. Law Reg. N. S. 641); hut the learned author treats the subject on the theory that upon the execution of the mortgage or deed of trust the legal title becomes vested in the mortgagee. Reasoning from this premise, his conclusions are no doubt correct, and are sustained by an overwhelming array of authorities. But it was long ago settled in this state that a mortgage does not convey title, but only creates a lien. (Anderson v. Baxter, 4 Or. 105; Sellwood v Gray, 11 Or. 534.) In all the states that follow this line of decisions, so far as I have been able to discover, a deed of trust designed as security for money has no other or greater effect than a mortgage. Webb v. Hoselton, 4 Neb. 308; 19 Am. Rep. 638, is a case in point. There, the conveyance was absolute with power of sale in case of default; but the court held the equity of redemption existed and could not be cut off by an attempted exercise of the power conferred by the deed. And it was observed by the *177court: “The fact that the mortgage in this instance is in the form of a deed of trust does not change its character from a mere security for the payment of money, nor does it convey the legal title, nor do the restrictions therein contained prevent the plaintiff from availing herself of the safeguards thrown around the debtor to prevent a sacrifice of her property.” So it was said in Lenox v. Reed, 12 Kan. 223: “ The mere execution of said trust deed of course conveyed no title to E. & B. (although Foreman at the time he executed the same held the entire title to the land), for a deed of trust, given to secure the payment of money was at that time merely a mortgage. (Laws, 1859, 571, § 2; Comp. Laws, 722, § 2.) And a mortgage in this state conveys no estate or title to the land but only creates a lien thereon.” And Flint etc. Ry. Co. v. Auditor-General, 41 Mich. 635; Newman v. Samuels, 17 Iowa, 528, are cases where the question seems to have been much considered. In passing upon the character and effect of the instrument in the latter case, the court said: “In ordinary acceptation this is called a deed of trust, but in legal effect it is a mortgage with the power of sale to“be sure superadded thereto, which does not change its essential attributes.” (Willard’s Eq. 480; Story’s Eq. § 1018; 4 Kent. *146; Powell on |Mortgages, 9 and 104.) In the case of Woodruff v. Robb, 19 Ohio, 212, the supreme court, speaking of a conveyance of land to a trustee as collateral security for the payment of a debt with power to sell on default of payment, says: “ The deed in question contains all the substantial qualities of a mortgage and nothing more. It was a security for a debt to be void if the debt were paid. The fact that the conveyance was made to a person other than to the creditor, and that it contained a power to sell, does not change its character as a mortgage.” The same general principle was declared in the case of Sargent v. Howe, 21 Ill. 148; Eaton v. Whiting, 3 Pick. 484, and many other authorities cited in 2 Am. Law Reg. 643, 649; and the same doctrine prevails in Texas. (Wright v. Henderson, 12 Tex. 43; Blackwell v. *178Barnett, 52 Tex. 326; McLane v. Paschal, 47 Tex. 365; Walker v. Johnson, 37 Tex. 127.)

I am aware that the cases cited on the subject of foreclosure and sale were largely influenced and probably controlled by statutory provision, but substantially the same statutory provision prevails here. Section 414, Hill’s Code, provides: “A lien upon real or personal property other than that of a judgment or decree, whether created by mortgage or otherwise, shall be foreclosed, and the property adjudged to be sold to satisfy the debt secured thereby, by suit.” This language is too plain and direct to be misunderstood. Its import cannot admit of discussion. The lien shall be foreclosed by suit. This cuts off every other method of foreclosure. Upon the argument the learned counsel for the appellant referred to this section of the code and claimed this language was used simply for the purpose of vesting the court with jurisdiction over the subject of foreclosure. But this construction seems unsatisfactory for the reason that the use of such language was wholly unnecessary for that purpose. The creation of a court of equity, and vesting in it general equity jurisdiction would be all that was necessary. It could then take cognizance of every subject of equity jurisdiction that might be brought before it. To give full effect to the language of the code under consideration, it must be given a wider import, and that is, to render imperative a foreclosure by suit of the liens specified and provided for in the section.

What effect later legislation had upon the foreclosure of chattel mortgages, it is not now necessary to consider further than to say that that act may be regarded as a legislative interpretation of this section. After the enactment of the code by a subsequent act, the legislature directed in effect, if the mode of foreclosing a chattel mortgage were provided in the mortgage, it should be foreclosed as therein provided and not otherwise. This last enactment was wholly unnec? essary if the appellant’s contention were sound, for the reason that the parties could have provided for a sale of the *179property in the chattel mortgage, and proceeded to foreclose by sale without the intervention of a court. The general doctrine undoubtedly is, that where the statute prescribes the method of foreclosure, a power of sale or other agreement in the mortgage that it shall be foreclosed in any other manner than that prescribed by the statute, will be void, and the statute in such cases must be strictly followed. (Wiltsie on Mort. Ford. § 3.) The result would be the same in this case whether we hold a deed of trust made as security is a mortgage or not, for the reason that the statute enumerates and includes every lien (except judgments) whether created by mortgage or otherwise. The construction we have placed upon section 414, supra, is further strengthened by section 422 of the same chapter of the code, which provides: “The provision of this title as to the liens upon personal property are not to be construed so as to exclude a person having such lien from any other remedy or right in regard to such property.”

Let the decree appealed from be affirmed.