existing debts against the receiver, or liens on the property, although their extinguishment was necessary in order to vest the title in Reed and Warner. The condition of the title and the situation of the parties at the time the power of attorney was executed, and the object to be accomplished by it, show clearly that it was intended to enable Rosenzweig to mortgage the property for sufficient to clear the title. Reed and Warner had bid in the property, but had not been able to pay the purchase price. They were anxious to close up the transaction and secure title. To do this it was necessary to meet the balance due on their bids and take care of the expenses of the receivership and the $20,000 previously borrowed of Conrad, and for the security of which he held a deed to a part of the property.

After protracted negotiations, it was finally agreed between Reed and the plaintiffs that the latter would advance for the purpose stated $100,000 in cash, and the plaintiff Curtze, who held in his own right and as the representative of a local bank $46,188.96 in receiver's certificates, would surrender them up for cancellation, and take a mortgage on the property in his favor to secure the payment thereof, and that the plaintiff Conrad would surrender his lien and take a mortgage in lieu thereof. It was mutually agreed that Rosenzweig should come to Oregon and act for and represent all the parties interested in closing up the transaction. It was in pursuance of these arrangements that the money and receiver's certificates were delivered to him by the plaintiffs and the power of attorney given by Reed and Warner. It is therefore quite probable that the mortgage as executed was within the power conferred. The power to borrow money and secure the same by mortgage for the purpose of paying certain obligations would, it seems, include the power to satisfy and discharge such indebtedness by arranging with the holders thereof to postpone the time of payment and accept security therefor by mortgage. But, however that may be, as an original proposition it is not important here. The mortgage as executed was manifestly given in pursuance of the understanding and agreement of all the parties, and it accomplished the purpose intended. Immediately after Mr. Rosenzweig returned to Pennsylvania he made a written report to the parties inter

ested, giving in detail and at length a statement of his transactions, including the execution of the mortgage, the amounts of money received and expended by him, from whom received and to whom paid, and no objection was made thereto by any one until after this suit was commenced. The objection now made, therefore, that the mortgage was not strictly within the terms of the power, should not prevail.

2. On the 5th of August, 1902-two days before the mortgaged property was conveyed to the defendant corporation-the owners thereof, being the plaintiffs and the defendant Reed and one Mrs. Shatto, who claims an interest therein, entered into a written agreement, which agreement, after reciting that the parties thereto were willing to accept the offer of the mining company to purchase the property subject to the mortgage and other liens thereon for $4,000,000 of its capital stock, stipulated that 395,000 shares of such stock should be issued by the corporation to the plaintiff F. F. Curtze, as trustee, and 5,000 shares to the defendant Reed, or whoever he might direct; and the shares issued to Curtze should be voted by him for such directors of the corporation as himself, Reed, Conrad, Fink and Sproul, who represented Mrs. Shatto, should jointly direct. It was further stipulated that the trustee or his successor should not vote to sell below par any of the 100,000 shares of the capital stock of the company remaining in the treasury, and that during the continuance of the agreement none of the parties should sell or assign any part of the shares held in trust by Curtze without the consent in writing of all the others. This agreement, by its terms, was to continue irrevocably until August 1, 1905, unless the mortgage and liens on the property and the indebtedness of the company were in the mean time paid, and the treasury stock sold and paid for. At the termination of the agreement the shares issued to Curtze should be divided among the subscribers in certain specified amounts.

Now it is contended that this agreement, which was, in effect, a mere voting trust or pooling arrangement, operated in some way to postpone the payment of the mortgage to the plaintiffs until August 1, 1905, unless a sufficient amount of the stock of the defendant corporation was sold in the mean time to pay

the same. It was the evident purpose of the agreement to vest the title of the stock to which the subscribers were entitled in a trustee, so as to facilitate the management of the corporation, to protect the rights of interested parties, and to expedite the sale of the treasury stock, and it was no doubt thought at the time that money could be promptly raised by the sale of such stock with which to pay the indebtedness, including the plaintiffs' mortgage. But there is no provision in the agreement which can be construed as extending the time for the payment of the mortgage, and that such was not the intention of the parties is evident from the fact that the first draft of the pooling or trust agreement contained such a provision; but it was eliminated because some of the parties refused to agree to an extension. There is nothing, therefore, in this point even if the defense that the suit is prematurely brought was not waived by joining it with an answer to the merits: Hopwood v. Patterson, 2 Or. 49. 3. It is contended that the loan to secure which the mortgage was given was usurious. The answer avers that, in addition to the stipulated interest, the borrowers agreed to pay to the plaintiffs, as a bonus for such loan, $20,000 in cash and one tenth of the mortgaged property. This averment is denied by the plaintiffs, and upon the issue thus joined there is a conflict in the testimony. But the decided weight of the evidence is, in our opinion, with the plaintiffs, and supports the findings of the trial judge. Mr. Rosenzweig, an attorney in good standing at the bar, and evidently a man of credit and respectability, who arranged the loan and is familiar with the entire transaction, says that more than a year before the loan was made he was employed by the plaintiffs Curtze, Fink and Metcalf to represent them in the matter of a claim they asserted against Reed and the property then in the hands of the receiver in Oregon, and for that purpose came to Oregon to investigate the situation. Soon after his return home, Reed desired to retain him to assist in extricating him (Reed) from his financial difficulty, and what occurred is thus related by the witness:

"Mr. Reed and Mr. Conrad came to my office, stating that Mr. Reed desired to employ me. I said that I was tied up to these other people, and that they would have to adjust the matter with them before I could be released. It was suggested that Mr. Curtze

be sent for, and after phoning for him or sending for him we talked it over, and then Mr. Curtze was directed to see Mr. Fink and Mr. Metcalf, and he came back and stated to me, of which I informed Mr. Reed, that they would not release me; that Reed had got them into trouble, and that they did not purpose, after they had expended money in educating a man in the conditions cut here, that Reed should have the benefit of it. After several conversations we got down to an agreement, by which it was agreed that I was to be free to represent Reed in his western matters on condition that he would give a note for the amount of money that they had expended in prosecuting their claim, less $500 of my fees, and $20,000 and a one-tenth interest conditionally upon Mr. Reed's acquiring title to the property, and to come out of the property. At the time Reed did not have title to the property. It was in jeopardy. There was a controversy in the United States court. It was a doubtful title at the best. "After these parties, the present plaintiffs, proposed this large lean, Fink and Metcalf claimed this entire amount as their settlement. I told them it would only make a controversy between the parties they borrowed the money from, and I did not want to be a party to that, or have any more controversy between them, and whatever they agreed upon was to be divided pro rata among them. Fink, Curtze and Metcalf were to realize on their respective claims pro rata with the other people. In other words, the $20,000 coming to Fink, Curtze and Metcalf, as originally intended, and the one-tenth interest, I divided up in proportion to every man's interest who furnished the money, so as to put them on an equality. This $20,000 and the interest in the property was not offered by Reed or accepted by the plaintiffs as an aducement to make the loan, nor was it intended as a bonus for that purpose. It was to induce these people to let me act for Reed in these western propositions, and was contingent upon his getting title. It was called a bonus to protect Reed. There was some $100,000 in other claims in the same condition as those adjusted, and if the people had known the situation they would have employed some lawyers to do just exactly what I did, and compel Mr. Reed to sell or make a settlement. It was a condition that was dangerous, as I believed at the time, to Mr. Reed. The amount was called a bonus in the different dealings between the parties to cover up the situation from other people who had expended money the same as Metcalf, Fink and Curtze, and to prevent the knowledge that there had been a settlement or adjustment with them, and because Mr. Reed did not want Mrs. Shatto to know that he had made a settlement with Fink, Metcalf and Curtze. No part of the $20,000 promised to be paid

by Reed to Fink, Metcalf and Curtze is included in the mortgage."

This testimony of Rosenzweig is corroborated by Curtze, Metcalf, Conrad and Fink, and is no doubt a true statement of the actual facts. Reed has a different version of the affair, and tries to make it appear that the $20,000 and the one-tenth interest in the property were given and received as a premium for making the loan; but his testimony is halting and evasive, and is not sufficient to overcome that of the plaintiffs. The reference to the matter as a bonus in the statement of Reed to his creditors in the bankruptcy proceeding and in the other transactions between the parties was, as Mr. Rosenzweig stated, for the purpose of keeping the knowledge of the true situation of Reed's affairs. from the creditors similarly situated. The transaction by which it is alleged the plaintiffs acquired a one-tenth interest in the mortgaged property and a promise for the payment of $20,000 in cash when realized from the property was merely the result of an adjustment between Curtze, Fink and Metcalf on the one hand and Reed on the other of an alleged loss sustained by the former in some previous financial venture with Reed, and had no connection whatever with the loan. At the time of this settlement Reed had no title to the property. Everything was contingent upon the result of the suit then pending in the federal court. The ownership of the property was in the original parties, subject to the options of the mining company to purchase it. To meet these options, large amounts of money were required, which Reed was having difficulty in securing. To have Metcalf, Fink and Curtze intervene in the suit then pending in the federal court, as they were threatening to do, and attempt to assert their claims, would have complicated matters, and increased the difficulty of Reed's carrying out his plans. To adjust these claims and prevent such a complication, and to secure the services of Mr. Rosenzweig, who seems to have been the attorney for large moneyed interests, was the motive for the settlement. It took place more than a year before the mortgage in suit was made, and had no connection whatever with such mortgage. The $20,000 agreed to be paid by Reed to Metcalf, Fink and Curtze has never been paid. It was not included in the mortgage, but

[39-46 Or.]