Beiseker v. Svendsgaard

Bruce, J7 (after stating the facts as above). Counsel for appellant is hardly in a position to complain because of the action of the trial court in making an order to show cause and in receiving the affidavit of E. A. Palmeter in resistance to said application. We believe that it was the intention of the legislature that an injunction shall be granted if a defense is set forth in the petition, and that the matters in controversy and the truth of the defense shall be settled and determined [370] upon the trial of an action to foreclose, rather than upon affidavits on an order to show cause. In the case at bar, however, all that the affidavit furnished upon the order to show cause disclosed were the terms and conditions of the mortgage as given in that instrument. The affidavit of E. A. Palmeter did little more in fact than to identify the mortgage. It would have been perfectly competent for the court, in the first instance, to have examined the mortgage, as its date, book, and page were given both in the advertisement and in the petition for the injunction. We have held that the application by the mortgagor for an injunction is usually to be considered as an ex parte proceeding, and that counter affidavits are not allowed as a matter of right. McCann v. Mortgage, Bank & Invest. Co. 3 N. D. 172, 54 N. W. 1026; Commercial Nat. Bank v. Smith, 1 S. D. 28, 24 N. W. 1024. We have never held that the court is powerless to inform itself of the terms and conditions of the mortgage that is sought to be foreclosed. We are satisfied, however, that the trial court erred in refusing to restrain the foreclosure of the mortgage. We realize that the power of the court to enjoin a foreclosure by advertisement which is conferred by § 7454, Eev. Codes 1905, is discretionary, and will be disturbed for abuse only. McCann v. Mortgage, Bank & Invest. Co. supra; James River Lodge v. Campbell, 6 S. D. 157, 60 N. W. 750; Nichols v. Tingstad, 10 N. D. 172, 86 N. W. 694; State ex rel. Security Bank v. Buttz, 21 N. D. 540, 131 N. W. 241. We also realize that the affidavit of the petitioner does not allege any fraud, deception, or mistake. The petition, however, seems to clearly state that the ten $75 notes were in the nature of interest, and should only become operative when the same became due as 1-| per cent items of interest on the first mortgage. If this was the case, it would seem that no consideration was earned for the additional seven notes of $75 each, but only for the three notes which had matured. It is well established that in spite of the fact that notes and mortgages are written instruments, extraneous evidence may be introduced to show the real nature of the consideration, and this notwithstanding the recitals of the mortgage itself. See 27 Cyc. 1055; United States Trust Co. v. Lanahan, 50 N. J. Eq. 796, 27 Atl. 1032; Ruloff v. Hazen, 124 Mich. 570, 83 N. W. 370; Lanahan v. Lawton, 50 N. J. Eq. 276, 23 Atl. 476; Babcock v. Lisk, 57 Ill. 327; Wimberly v. Worthan (1888) — Miss. —, 3 So. 459; Har [371] wood v. Toms, 130 Mo. 225, 32 S. W. 666; McAteer v. McAteer, 31 S. C. 313, 9 S. E. 966; Jones v. New York Guaranty, & I. Co. 101 U. S. 622, 25 L. ed. 1030; Blair v. Carpenter, 75 Mich. 167, 42 N. W. 790; Bray v. Comer, 82 Ala. 183, 1 So. 77; Lefmann v. Brill, 73 C. C. A. 230, 142 Fed. 44; Sheats v. Scott, 133 Ala. 642, 32 So. 573; Smith v. Krueger, 71 N. J. Eq. 531, 63 Atl. 850. We believe that a 'trial should be had so that the facts attending the transaction may be fully ascertained, and that the district court erred in refusing the injunction prayed for. All that we can here pass upon, however, are the allegations of the affidavit of the petitioner. Whether in fact the additional 1J per cent was interest at all, we do not decide. We merely say that the affidavit of petitioner alleges it to be such. It has been urged that the order which is complained of is not appealable. This would have been true under the holding of this court in the case of Tracy v. Scott, 13 N. D. 577, 101 N. W. 905, and prior to the passage of chap. 79 of the Laws of 1907. It is true that the act of 1907 is somewhat indefinite, and a technical objection can be made that on such appeal there is no adverse party (the proceedings being intended to be ex parte under the prior decisions of this court), and that there being no opportunity to file counter affidavits as a matter of right (see McCann v. Mortgage, Bank & Invest. Co. 3 N. D. 172, 54 N. W. 1026), the mortgagee would be more or less at a disadvantage, and that the transaction could hardly be said to be an action or proceeding. The act of 1907, however, in express words provides for an appeal in such cases, and if the mortgagee is at a disadvantage, it is a disadvantage in a proceeding, that is to say, a foreclosure by advertisement, to which he has no natural right and which is governed by the statute merely. The statute, under certain conditions, avoids the necessity of foreclosure by action. It may place around that privilege any limitations that it desires. Although, too, nothing is said as to who shall be made the respondent on such an appeal, or to whom notice of appeal shall be given, it is quite clear that it was the intention of the legislature that the ordinary practice should be followed, and that the mortgagee should be considered the real party in interest. The judgment of the District Court is reversed.