APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF OREGON.
MR. JUSTICE LAMAR delivered the opinion of the court.
This was a suit in equity to foreclose two mortgages of real estate in Oregon. The case is this: On the first of November, 1871, Thomas Cross of Salem, Oregon, gave his note to the firm of Allen & Lewis of Portland in that State, for $30,000, payable in three years, with interest at 10 per cent per annum from date; and to secure its payment he and his wife, Pluma F. Cross, on the same day executed a mortgage in favor of that firm upon fifteen parcels of agricultural land in that State, numbered respectively from "one" to "fifteen," and containing over 3000 acres. Parcels "14" and "15," containing about 211 acres, were the separate property of Pluma F. Cross, while the remainder of the property belonged to Thomas Cross. On January 23, 1872, they gave another mortgage to the same firm upon the same property embraced in the preceding mortgage and certain town lots in Salem, to secure the payment of another note, of even date therewith, given by said Thomas Cross to said firm, for $10,000, due in one year, and bearing twelve per cent interest from date.
On the 16th of September, 1872, before either note became due, Pluma F. Cross died, but there was never any administration of her estate.
Nothing was paid on either of the notes when they became due, but on the 22d of January, 1876, Thomas Cross conveyed the premises embraced in the mortgages to C. H. Lewis of Portland, one of the members of the firm to which the mortgages were given. This conveyance, though absolute in form, was in fact, and was intended to be, upon the following trusts: (1) that the grantee should, at the cost and expense of the lands, keep them in cultivation, or lease or let them, or any part of them; (2) that he should sell and dispose of the crops, collect the rents, and, after deducting all necessary and proper charges and expenses connected therewith and incident thereto, apply the net proceeds thereof upon the mortgage debts; and (3) that he might, with the consent of said Thomas Cross, sell any portion or portions of said premises either at public or private sale, and apply the net proceeds of such sales toward the satisfaction of the mortgage debts.
During the year 1876, Lewis, with the assent of Thomas
Cross, had a large portion of the lands surveyed and divided into 40-acre tracts, and between October 14 and November 15 of that year, in pursuance of the trust contained in the deed to him, he sold at private and public sale over 800 acres thereof for $8593.18, which was $268.16 more than their appraised value, the net proceeds of which sum, amounting to nearly $7000, after payment of certain items owing by Cross, were credited upon the aforesaid indebtedness, and the firm afterward executed a release to Cross discharging the lands thus sold from the lien of the mortgages.
On the 5th of February, 1884, Thomas Cross died; and on the 8th of July following the claim on the notes and mortgages was presented to the administrators of his estate and was rejected by them. Soon afterwards, the notes and mortgages were assigned by the firm to L. H. Allen, one of the members thereof, a resident of San Francisco, California, who, on the 6th of August, 1884, brought this suit to foreclose the mortgages and establish and enforce their lien on all the property embraced in them.
A number of persons, including the present appellants, E. C. Cross and Frank R. Cross, (who are the children of Thomas Cross, by his wife Pluma F. Cross,) were made parties defendant to the bill. Frank R. Cross, being a minor, defended by his guardian ad litem, E. C. Cross. The other defendants were the heirs at law of Thomas Cross, deceased, the administrators of his estate, and said C. H. Lewis.
Upon the filing of the bill, it appearing that the mortgaged property would be insufficient to pay the indebtedness, a receiver was appointed to collect the rents and manage the property generally, pending the foreclosure proceedings.
On the 21st of January, 1885, an order was entered in the court below that the bill be taken as confessed by all of the defendants, except Edwin C. Cross and Frank R. Cross; and they, on the 10th of March following, filed their joint and several answer to the bill.
The defences set up in this answer were, substantially: (1) laches on the part of complainant and staleness of his claim; (2) the sale of ...