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(2) That the first parties will release from the lien of said mortgages and each of them, as well as all other liens held by first parties, from time to time, within the period of one year, tracts or parcels of lands, upon payment to the first parties for the amount so released as follows." After providing the terms upon which the releases shall be given, the agreement continues: "(4) That for the considerations and agreements herein contained the second party shall, from this date until said mortgages, interest, costs and attorney's fees are fully paid, pay to the first parties, or their assigns, the sum of $550.00 for each and every month or fraction of a month that the aforesaid mortgages, interest, costs and attorney's fees, or any part thereof, remain unpaid. Provided, however, that the total sum thus paid for the considerations herein expressed for the entire year during which proceedings are stayed shall not exceed the sum of $5,000.00. The sum so agreed to be paid shall bear interest at the rate of eight per cent. per annum and shall be paid within the year during which proceedings are stayed, and before the full satisfaction of said mortgages, and if not so paid said obligation shall be construed to be a lien on the land described in the mortgage and platted as Lakeside City, and may be foreclosed in any manner provided by law, and said land may be sold and the proceeds thereof applied to the payment of said obligation, and in any suit or action which may be brought for the recovery of said payments there shall be included in any judgment which may be recovered a reasonable attorney's fee. (5) That Lakeside City shall be conveyed to a reputable trustee within thirty days from this date, which trustee shall have power to sell said lands and shall be instructed to apply the proceeds of said sale or sales to the payment of said mortgages, interest, costs and attorney's fees and other obligations of the second party as provided in the deed of trust. (6) It is understood that the American Investment & Improvement Company is now in the hands of a receiver, and if the court orders a sale of said lands, through the receiver, and such sale is made, this agreement shall be void." The mortgages referred to in the agreement were executed by the defendant corporation to the plaintiffs, were purchase-money mortgages, and secured the payment of two notes drawn respectively for $15,999 and $3,000, and bear interest at the rate of 6 per cent. per annum; the former from a date several months anterior to the date of the note, the latter from the date of the note. The defendant Lee did not sign either the note or the mortgages. The mortgage indebtedness was paid prior to the commencement of the action without the aid of the sale and release clause in the contract. At the time the contract was made, the defendant corporation was in default in the pay

some $3,000, was heavily indebted to other parties in such a manner as to embarrass it in the sale of the land, and its property was in the hands of a receiver, but none of the property was sold through him. The plaintiffs seek to recover the $5,000 and interest stipulated in the contract, and to foreclose the lien which it purports to create. It is alleged in the bill that the defendant Lee had acquired some interest in the mortgaged land before the date of the execution of the contract, which he would have lost through the mortgage foreclosure, and that he was the principal stockholder in the defendant corporation. The consideration for the contract is thus alleged in the bill: "That thereupon, while the said defendants stood in great danger of losing said lands as aforesaid, the defendants agreed with the plaintiffs that if the plaintiffs would stay and suspend proceedings in said mortgage foreclosures for the period of one year, and would, during the year within which proceedings were to be stayed, release from the lien of said mortgages the lands therein described in small tracts from time to time on the payment on said mortgages of the amounts agreed upon in said agreement, that the defendants would pay to the plaintiffs the sum of five thousand dollars ($5,000.00), with interest thereon from the date of such agreement until paid at the rate of eight per cent. per annum." The defendants pleaded affirmatively that the mortgage notes bore interest at the rate of 6 per cent. per annum; that the mortgages had been paid and discharged of record; that the real consideration for the promise to pay the $5,000 was the extension of the time of payment of the mortgage notes for one year; that the amount agreed to be paid was largely in excess of the lawful rate of interest; that, at the time the contract was executed, the property of the defendant corporation was in the hands of a receiver; and that the contract was usurious. Both mortgages provide for a release of certain lands upon the payment of stipulated sums of money. There was a judgment and decree for the plaintiff, which the defendants have brought here for review.

[1] The consideration for the contract was twofold: (1) Extension of time of payment of the mortgage notes for a period of one year from the date of the execution of the contract, and (2) the agreement to release the property in parcels to conform to actual sales at fixed prices. The contract does not segregate these items. The amount which the appellants agreed to pay is almost treble the lawful rate of interest. We think the contract is usurious upon its face. This view is given prominence by the promise to pay at the rate of $550 per month, "for each and every month or fraction of a month that the aforesaid mortgages, interest, costs and attorney's fees, or any part thereof, remain unpaid," not exceeding $5,000. If the meat of

time, why this provision? If sufficient prop- | ton, etc., Co., supra; 29 Am. & Eng. Ency. erty had been sold and released in one month Law (2d Ed.) 486.

to discharge the indebtedness, the liability would have been limited to $550. If the same object had been accomplished in two or three months as the evidence showed the parties anticipated, the liability would have been twice or thrice that sum, and $5,000 if it required one year. The lawful and the unlawful are so intermingled as to taint the entire transaction as usurious. If we look to the evidence we find it equally confusing. The case is within the rule announced in Inland Trading Co. v. Edgecombe, 57 Wash. 257, 106 Pac. 768. Wherever a disguise has been used to evade the statute, the courts will, as aptly observed by Judge Ailshie, in Ford v. Washington, etc., Ass'n, 10 Idaho, 30, 76 Pac. 1010, 109 Am. St. Rep. 192, "look through a veneer of words" and find the real object sought. It is too apparent to require comment that the releases would have been unavailing without an extension of time.

[2] Counsel for the respondents argue that the contract provided a scheme of liquidation, and that a charge of $1,440, the difference between the rate of interest in the mortgage notes and the rate allowed by law, could have been exacted. The latter part of the statement may be admitted, but this was not done, and the evidence shows that it was not even considered. He also argues that, in addition to the extension, the respondents lost their place upon the trial calendar. This, as counsel for appellants have pertinently suggested, is one of the incidents of the forbearance.

The real case presented, however, is this: The respondents gave no releases and rendered no equivalent for the $5,000 which they seek to recover other than a postponement of the maturity of the interest-bearing mortgage notes for one year. Any reasoning would be specious which would seek to give the exaction any name other than interest.

The respondents have cited in support of this contention Truby v. Mosgrove, 118 Pa. 89, 11 Atl. 806, 4 Am. St. Rep. 575. It affords them no comfort. The court there said that, where the lender risks the principal with the chance of getting interest exceeding the lawful rate, there is no taint of usury. [4] The last point pressed by the respondents is that the contract is lawful as to the appellant Lee under the rule announced by this court in Grubb v. Stewart, 47 Wash. 103, 91 Pac. 562, and Fenby v. Hunt, 53 Wash. 127, 101 Pac. 492, to the effect that the defense of usury "is personal to the debtor or his privies and cannot be set up by a stranger." The appellant Lee was not a stranger to the transaction. The record shows that he was to all intents and purposes the corporation; that he owned nine-tenths of its capital stock. The complaint states and the evidence shows that he united in the contract so as to relieve the property of certain entanglements. In his agreement to pay the $5,000 he stood in the relation of a surety, and may invoke the protection of the statute. 29 Am. & Eng. Ency. Law (2d Ed.) 485. In the broad sense there was a privity between the appellant corporation and the appellant Lee. Black's Law Dictionary (2d Ed.) p. 941, subject "Privies." The lawful and the unlawful are so blended that there can be no segregation, and the entire contract falls within the ban of the statute. Rem. & Bal. Code, § 6231; Lay v. Bouton, 131 Pac. 1153, recently decided.

The judgment is reversed, with directions to dismiss the action.

PARKER, ELLIS, MAIN, FULLERTON, and CHADWICK, JJ., concur.

MORRIS, J. I am unable to concur in the majority opinion, and will state my reasons for not doing so.

In order to determine whether or not this contract was usurious, it is necessary to review the situation of the parties at the time of the execution of the contract, with a view of ascertaining its true import and the intent of the parties. In addition to the facts recited in the contract, it appears that these two mortgages were being foreclosed. The day of trial had been set for June 17th, and the parties were then in court awaiting the calling of the case, when D. H. Lee, the moving spirit in the appellant company, with his attorney, conceived the idea of an adjustment of the difficulties facing the company which would enable it to extricate itself from the financial and other entanglements in which it was then floundering. At this time the company, in addition to facing the loss of its property through this foreclosure, was involved in much litigation growing out of its handling of the lands involved in the mort

[3] It is argued that the clause in the contract to the effect that, if the land is sold through the receiver, the agreement "shall be void," creates a contingency which makes the contract lawful. The word "void" as there used means only that, if the sale is made through the receiver, the contract shall terminate. The rule is, however, that the contingency provided for must put in peril some part of the principal or some part of the interest that may lawfully be reserved. This did neither. The interest reserved in the mortgage notes was subjected to no hazard. Where there is no contingency which subjects the lender to the hazard of a loss other than through a depreciation of the security or the inability of the borrower to pay, these not being classed as hazards or contingencies, and the event happens which imposes a liability in excess of that which the statute permits, the contract is usurious. Bang v. Phelps & Bigelow Windmill Co., 96

judgments against the company. Others were still pending, and in one of them a receiver of all the assets of the company had been appointed. Its pressing obligations, including the costs in the receivership suit, exceeded $40,000. Unless something could be done to extricate the company from these difficulties, it faced a loss of its interest in these lands which, since their purchase and the giving of the mortgages, had become very valuable. Mr. Lee believed, if the company could continue to handle these lands by placing low and salable values upon the lots into which portions of it had been platted, in a comparatively short time sales could be made aggregating enough money to enable the company to pay off all claims against it. Accordingly, overtures were made to respondents to abandon the foreclosure, which resulted in the contract sued upon. Under this contract the company went ahead, and in the course of time succeeded in meeting all its obligations. It now refuses to keep its contract under a plea of usury.

It is apparent, I think, from these facts that the equities of the case are all with respondents. By delaying foreclosure of these mortgages, the company was able to put these lots on the market with releases as sold, until it had accumulated enough money to meet its obligations and save for itself a property of value which otherwise, the chances are, would have been lost. Ordinarily the plea of usury is made by a borrower who has been made the victim of oppression and whose necessities have been so taken advantage of by another as to deprive him of that freedom in contracting which the law requires and place him at the mercy of his creditor. It would hardly seem as though such a situation was before us. This scheme was the proposal of the borrow er for its own protection, which has resulted, as it anticipated, to its great advantage. Section 6 of this contract provides that it shall be void if the court shall order a sale of the lands in the receivership proceeding. This was a contingent event beyond the knowledge or control of either party, and which might or might not happen. This $5,000 was not payable absolutely upon the happening of a certain event, but was contingent upon the receiver not being ordered to make a sale of these lands. In other words, the contract and each and all of its provisions were dependent upon the action of the court in the receivership proceeding; and, as we understand the law, when the payment of interest is subject to a contingency wholly or in part, so that the lender's profit is put in hazard, the interest so contingently payable need not be limited to the legal rate, providing the parties are contracting in good faith and without intention to avoid the usury statute, and that the same rule governs where only part of the legal in

terest is in hazard. In the case of Lay v. Bouton, just decided, the above rule from 39 Cyc. 952, is quoted with authority, as is also the case of White Water Valley Canal Co. v. Vallette, 62 U. S. (21 How.) 414, 16 L. Ed. 154, where it is said: "Where there is a loan, although the profit derived to the lender exceeds the legal rate, yet if that profit is contingent and uncertain, the contract, if bona fide and without any design to evade the statute, is not usurious." Missouri K. T. Tr. Co. v. McLachlan, 59 Minn. 468, 61 N. W. 560, is also quoted to the effect that, where the contract has the form of a contingency, the court will scrutinize it for the purpose of ascertaining whether that contingency is a real one or a mere shift or device to cover usury.

Applying these rules of law to the facts in this case, it does not seem to me there can be any question but that this contract was entered into in good faith, and that the parties at the time had no thought of the usury statute or any intent or purpose to avoid it. The appellants wanted to save their property. They could do it in no other way. If the respondents desired to push the appellants to the wall, all that was necessary to do was to proceed with the foreclosure suit. It was not necessary, in order to derive any additional profit, that they should enter into this contract, because forcing the foreclosure suit to a final determination and repossessing themselves of the lands, which had become very valuable, would have been much more profitable to them than the $5,000 which was the greatest sum that they could secure under this contract. It therefore seems to me that the contract bears upon its face, when read in connection with the facts surrounding it, evidence that it was entered into in good faith, at appellants' request and need, and for the purpose of extricating them from their financial straits, without any thought of avoiding any usury statute. Now that it has served its purpose, they wish to avoid it. The court ought not to assist them in doing so, and thus put a premium on dishonesty.

For these reasons I dissent.

CROW, C. J., and MOUNT, J., concur.

(73 Wash. 529) AUGERSON v. SEATTLE ELECTRIC CO. (Supreme Court of Washington. May 14, 1913.) 1. APPEAL AND Error (§ 878*)—Scope of ReVIEW-NECESSITY OF CROSS-BILL.

Where plaintiff in an action for personal injuries does not appeal, that portion of the order of the trial court in part sustaining defendant's challenge to the sufficiency of the evidence on the ground that plaintiff was guilty of contributory negligence becomes the law of the case and cannot be reviewed.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3573-3580; Dec. Dig. § 878.*]

TRACK.

2. STREET RAILROADS (§ 81*)-CARE REQUIR- | returned a verdict for $225 in plaintiff's faED-CARE IN REMOVING AUTOMOBILE FROM vor. Both parties interposed a separate mo tion for judgment notwithstanding the verdict. All motions were denied, and judgment ant only has appealed. was entered upon the verdict. The defend

A street railroad, in an attempt to remove an automobile partly overturned on its track and obstructing traffic, with the consent of the owner's agent, owed the owner no duty further

than to exercise due care.

[Ed. Note. For other cases, see Street Railroads, Cent. Dig. §§ 172-177; Dec. Dig. § 81.*] 3. STREET RAILROADS ($114*)-ACTION FOR DAMAGES TO PROPERTY SUFFICIENCY OF EVIDENCE-NEGLIGENCE.

[1] The only question presented is whether the trial judge erred in denying appellant's motion for judgment notwithstanding the verdict. As the plaintiff has not appealed, that portion of the order of the trial court in part sustaining appellant's challenge to the sufficiency of the evidence on the ground that respondent was guilty of contributory

Evidence, in an action against a street railroad for damages to an automobile while removing it from an excavation under the track into which it had run, held not to show any negligence on the part of defendant. [Ed. Note.-For other cases, see Street Rail-negligence has become the law of the case roads, Cent. Dig. 88 239-250; Dec. Dig. 114.*]

Department 1. Appeal from Superior

Court, King County; J. T. Ronald, Judge.

Action by Earl Augerson against the Seattle Electric Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded, with directions to dismiss.

Jas. B. Howe and H. S. Elliott, both of Seattle, for appellant. S. A. Keenan, of Seattle, for respondent.

and cannot be reviewed. In Winningham v. Philbrick, 56 Wash. 38, 105 Pac. 144, this court said: "Respondent, however, has not appealed, and it has long since become the

established rule in this court that we will not review any order or ruling made by the court below unless the appeal is presented by the party aggrieved. If therefore respondent desired this court to review the ruling of the court below upon the questions submitted in his brief and upon which the ruling below was adverse to him, he should have taken a cross-appeal, failing which the rulings thereon of the court below become the law of this case, and we are precluded from reviewing them."

CROW, C. J. The Seattle Electric Company, a corporation, owns and operates a double-track cable car line on Yesler street in the city of Seattle. In October, 1911, a [2-3] The trial judge instructed the jury deep excavation had been made in the street that the only questions before them were under the car tracks for the purpose of con- whether the automobile was further damagstructing improvements. The cars were oper- ed by taking it out of the excavation, and, ated upon the tracks, which were supported if so, whether such damage resulted from by heavy timbers. About midnight on Octo- appellant's negligence. On this record we ber 31, 1911, the plaintiff, Earl Augerson, are compelled to approach the consideration drove an automobile down Yesler street on of this appeal, assuming that appellant was a heavy grade and ran into the excavation. guilty of no negligence before the automobile After being ditched, the automobile rested went into the excavation, and that it can at an angle of 45 degrees, with one front only be held liable, if at all, for such damwheel pinioned under one of the timbers, ages or injuries as may have been inflicted while its rear wheels extended above the thereafter upon the automobile as the proxitracks and obstructed the street cars. The mate result of its negligence. Taking this automobile was taken from the excavation view of the case, we find no evidence suffiby defendant's servants in the manner here- cient to support a finding of negligence on inafter stated. The automobile then belong- appellant's part. Immediately after the aced to one F. J. McCurdy, who, on December cident, respondent went to the police station, 6, 1911, sold it to plaintiff, and assigned to in the immediate neighborhood, where he enplaintiff his claim for damages against the deavored to telephone for an equipment to Seattle Electric Company. Thereupon plain- remove the automobile, but failed to get the tiff, who was a minor, commenced this action parties whom he sought. An unsuccessful by his guardian ad litem, against the Seattle attempt was first made to raise the autoElectric Company, to recover damages for mobile by using a small jack. Thereafter it personal injuries sustained by himself, and was suggested by some one present that a also to recover damages for injuries to the rope be attached to the automobile, and to automobile. The trial judge, as a matter one of appellant's street cars, so that the of law, held plaintiff guilty of contributory car might pull the automobile from the exnegligence at the time he drove the automo- cavation. This plan was adopted, the rope bile into the excavation, but submitted the was attached, and the street car, on the case to the jury upon the issue whether de- second or third trial, succeeded in pulling fendant was afterwards guilty of negligence the automobile from the excavation. During in removing the automobile from the excava- most, if not all, of this time, respondent tion, and further injured the machine to was present and made no objections to the plaintiff's damage. Upon this issue the jury plan adopted, further than to protest that

appellant's servants should not attach the rope to the differential on the automobile. He suggested that it be attached to the rear springs, which was done. Respondent being in possession of the machine was the agent of the owner and had at least some right to direct and control the conduct of those who were assisting in the removal. That appellant's servants and respondent acted upon this theory is shown by their conduct as disclosed by the evidence. Relative to the plan adopted, respondent in part testified as follows: "Q. Didn't take any part in it at all? A. Only to refuse to let them hitch their cable to my differential. Q. How is that? A. I refused to let them hitch their cable to my differential on the car. Q. And they hitched it somewhere else, then? A. They slid it to the rear spring; yes, sir." One Westedt, a police officer and a disinterested witness who was present, gave the following testimony which stands undisputed: "Q. Now, if I understand you correctly, you made the proposition to this young man that the cable car would pull him out? A. Yes, sir; he asked my advice, what I thought was the best way to get him out of there. Q. And he agreed to that, did he? A. Yes, sir; he agreed to it. In fact, he superintended the job when putting the hook on the axel, and told them not do do it and put it on the spring, which they did."

The judgment is reversed, and the cause is remanded, with instructions to dismiss. MOUNT, CHADWICK, and PARKER, JJ.,

concur.

(73 Wash. 515) FORSYTH et al. v. CITY OF SEATTLE. (Supreme Court of Washington. May 13, 1913.)

1. MUNICIPAL CORPORATIONS (§ 36*) — CONSOLIDATION-PROPERTY AND LIABILITIES.

subject is Rem. & Bal. Code, § 7459, providing Where the only statutory provision on the that no property within a municipal corporation shall be taxed to pay any debt of another included within it, contracted before consolidation, a municipal corporation into which another is merged may levy a tax upon the property formerly included within the merged city to pay its indebtedness, without first applying that purpose, since, in the absence of statute, the property acquired from the merged city for it acquires the property of the other free from any trust for the payment of its debts.

[Ed. Note. For other cases, see Municipal Corporations, Cent. Dig. §§ 105-111; Dec. Dig. § 36.*]

2. MUNICIPAL CORPORATIONS (§ 864*)—LIMITATION OF INDEBTEDNESS-CASH ASSETS.

A city which has cash and outstanding taxes due, sufficient to reduce its liability below tion, has not exceeded the debt limit, although the limit of indebtedness fixed by the Constituits unpaid obligations are in excess of that limit.

[Ed. Note. For other cases, see Municipal Corporations, Cent. Dig. §§ 1828-1835; Dec. Dig. § 864.*]

Department 2. Appeal from Superior Court, King County; R. B. Albertson, Judge. Action by M. F. Forsyth and others against the City of Seattle. Decree in favor of the plaintiffs, and defendant appeals. Reversed and remanded, with directions to dismiss.

Jas. E. Bradford and Ralph S. Pierce, both of Seattle, for appellant. Chas. H. Ennis and Fenley Bryan, both of Seattle, for respondents.

Appellant's servants proceeded with the work of removal in respondent's presence, and without further objection or protest from him. There is evidence that a front wheel of the automobile was fastened by heavy timbers under the car tracks, which at first prevented the automobile from responding to the attempts to remove it, and there is further evidence tending to show that, when the automobile did finally come out of the ditch, its front portions were pulled apart. It is conceded that considerable injury was done to the machine when it first went into the ditch, and such injuries were observed before any attempt at re- FULLERTON, J. The city of Georgetown moval was made. There is no showing that was annexed to the city of Seattle on April with the exercise of due care the automobile 4, 1910. At that time it had property concould have been removed without further sisting of cash in its treasury in the sum of damage, nor has any safer or more practica- | $12,752.99, taxes due and unpaid in the sum ble method of removal been suggested. The of $14,601.98, and municipal buildings and position of the automobile impeded traffic upon the car line, and appellant was obliged to remove it as soon as possible, in order that traffic might be resumed. Respondent also desired that it should be removed as speedily as possible. Appellant owed respondent no duty further than to observe due care, and we conclude that the evidence is not sufficient to show that it failed to exercise due care, or that it did not adopt the best method of removal. Respondent had as much to do with the method selected as did appellant. There is no competent evidence to show negligence on appellant's part.

certain personal property of the probable value of $28,000, all of which upon the annexation was turned over to the city of Seattle. The city of Georgetown was at that time indebted in the form of outstanding warrants in a sum which approximated in principal and interest $56,000. After the annexation the city of Seattle issued bonds, which were made a charge against the taxable property of the former city of Georgetown, in the sum of $46,000, and with the moneys received from the sale thereof liquidated debts incurred by that city to that amount. There remained after this liquidation, in

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