protection. Such waiver may be expressed at any time prior to the sale, but ordinarily it is made in the contract by which the debt is created. Deam vs. Morrison, 10 Ind. 367. Baker vs. Roberts, 14 Ind. 552. And the employment of the simple phrase, “waiving the appraisement laws," or "waiving the stay laws," or both, is sufficient for that purpose. Vesey vs. Reynolds, supra. While, then, it seems settled that the benefit of the stay and appraisement laws may be waived by one desirous of borrowing money upon mortgage security or obtaining extension of an existing mortgage, it is plain to be seen that the provision whereby the mortgagee can be kept out of the possession and rents of the mortgaged property for a year after sale and be at the same time required to keep up insurance, repairs and taxes, will prove a serious impediment, if not a preventive, standing in the way of the transaction of that character of business. I believe, though, that one whose interests demand, may obtain money upon the security of property situated in this state upon terms satisfactory alike to himself and the lender. I believe that the way is still open for one so situated to contract upon terms of equality with the capitalist, and be free to deal with his own as his own interest dictates; in other words, shake off his legislative guardian and become again sui juris. This can be accomplished by his mortgaging the right of possession and the rents, issues and profits during the statutory year of redemption. There is nothing in reason opposed to such a course. It has been for years constant practice in the mortgaging of large properties to secure bond issues to mortgage the rents as well as the property itself, and no difficulty has ever been experienced in enforcing that provision. It has been recently held in a well considered case (Hardin vs. Hardin, supreme court of South Carolina, 12 S. E. Rep. 936) that the question whether the mortgagee can before or pending proceedings for foreclosure, subject the rents and profits of the mortgaged premises to the payment of his debt, depends entirely upon the contract of the parties as stated in the mortgage. This decision has been cited with approval by the supreme court of the United States in the case of Mc Gahan vs. Bank, 156 U. S. 218. But it does not go to the extent covered by the proposition stated. It has, however, been expressly decided under a statute identical in intent with the new statute of Washington that the possession and rents, issues and profits during the year of redemption may be by the mortgage contract subjected to the payment of the mortgage debt. The Iowa statute provides (sec. 4331, vol. 2, McClain's Annotated Code of Iowa) as follows: "The defendant may redeem real property at any time within one year from the day of sale, as herein provided, and will in the meantime be entitled to the possession of the property." By section 4557 of the same code it is provided that the sale upon forclosure of mortgage shall be subject to redemption as in cases of sales under general execution; and the supreme court of Iowa has decided that under these provisions of the statute a purchaser at such a sale is not entitled to possession until the expiration of the year of redemption, and has no right to the rents during that year, nor to the growing crops. Barrett vs. Blackmar, 47 Iowa, 565. White vs. Griggs, 54 Iowa, 650. While the statute of Iowa was as above stated and had been construed as above stated, a mortgage was executed, upon property in Iowa, containing the following provision: "In case of a foreclosure of this mortgage under any of its provisions, it is hereby agreed that on filing the petition for such foreclosure a receiver shall be appointed to take charge of the mortgaged premises at once, and to hold possession of the same until the debt is fully paid and the time for redemption expires, and all rents and profits derived from such premises shall be applied on the debt secured hereby." Upon foreclosure of this mortgage a receiver was appointed and sale was had, and by the decree the receivership was continued during the period of redemption. The question came directly before the supreme court as to the validity of the order continuing the receivership. The provisions of the statute of Iowa relating to the appointment of receivers were similar to those of our own statute, and it was urged against the power of the court that the action was no longer pending, having gone to decree. The court held the controlling fact in the case to be the contract of the parties; that there was nothing in the statute authorizing the appointment of receivers restrictive of the rights of the parties to stipulate for the appointment of a receiver or of the power of the court to appoint one upon such a stipulation, nor was there anything in the receivership sections of the statute intended to deny any right of the court or to the parties as to a receiver that would have existed had the section not been adopted, and that it was not to be seriously questioned but that without such section the court could, pursuant to stipulation of the parties, place the property in the hands of a receiver, to be held under its direction; and it is equally clear that the parties could, by the contract whereby the property was pledged as security, settle the conditions on which it should be preserved and applied. The court uses this further language: "We see nothing in such a contract that is unconscionable or against public policy, nor do we see why it should not be enforced as the parties intended.” The order continuing the receivership was affirmed. I have not found any authority holding to the contrary. The reasoning of the Iowa court seems unanswerable. In my judgment, a mortgage of property in Washington containing such a provision should be accompanied by the mortgagor's affidavit of good faith required by our statute regulating the execution of chattel mortgages. Before leaving this portion of my address attention should be called to the almost certainty that under the present condition of our laws it is possible for the lender and borrower in dealing with Washington securities to contract upon terms more favorable to both than have been heretofore adopted. The general impression has been that a deed of trust to secure the payment of money could not be enforced in this state according to its terms, but would have to be foreclosed as a mortgage by judicial proceedings. I think it has been the general impression that that conclusion was enforced by the provision of our statute (2 Hill's Code, sec. 539) reading as follows: "A mortgage of real property shall not be deemed a conveyance so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure and sale according to law." Section 513 of 2 Hill's Code, in force since February 3, 1886, reading as follows: "The judgment debtor, or his successor in interest, may redeem any real estate sold under execution of judgment or foreclosure of mortgage at any time within one year from the date of the sale, by paying the amount of purchase money, with interest at the rate of one per centum per month thereon from the date of sale, together with the amount of any taxes which the purchaser may have paid,” is now repealed by the act which I have called the "Appraisement Act" of 1897, the substitute provision reading as follows: "SEC. 15. The judgment debtor, his successors or assigns, or any redemptioner, may redeem any real estate sold by virtue of law at any time before the execution of the deed," etc. The time of the execution of the deed, and incidentally the kind of sale and deed referred to, is fixed by the following section, 16, as follows: "In all cases where an appraisement is had of real estate the sheriff shall, upon confirmation of the sale, execute to the purchaser a deed to the property sold, and in all other cases the deed shall not be executed until the expiration of one year from the confirmation of sale." These provisions show clearly that the only right of redemption remaining in this state is that created by statute, and that the right of redemption created by the statute is only from a judicial sale. Unless contained in section 539 aforesaid, there is nothing in our statute prohibiting the execution of the power of sale contained in a trust deed or mortgage, and if there is nothing prohibitory in our statutes, no principle of public policy can be contravened by the enforcement of such a power according to the terms of the contract creating it. The statutes of Montana (sec. 371, Compiled Statutes) contain our section 539 in the following form: "A mortgage of real property shall not be deemed a conveyance, whatever its terms, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure and sale.' The Montana statute was taken ipsissimis verbis from the California code, it there being section 260 of the California practice act of 1851. The courts of California have time and again construed this statute, Kock vs. Briggs, 14 Cal. 256; Bateman vs. Burr, 57 Cal. 480; as merely restricting a trust deed to the purpose of security, and preventing its operation as a conveyance upon condition broken, holding that a trust deed is a mere lien for the purpose of security, and can only be enforced by judicial proceedings, except by the authority of the owner of the property; but that the existence of the mortgage does not prevent the owner from making an independent contract authorizing a sale of the premises to pay off the debt; that the right to dispose both of the possession and estate follows necessarily from the ownership; that a power of sale contained in a mortgage is not a part of the mortgage as such; but is as much independent of it as though contained in a separate instrument; that under such a statute there may be a mortgage with or without a power of sale, and that a trust deed may run to the creditor directly or to a trustee. The supreme court of Montana in 1888 (First National Bank of Butte vs. Bell Silver and Copper Mining Co., 19 Pac. Rep. 403) was called upon to decide this question, and after a thorough discussion of the question arrived at the same conclusion which the California court had previously reached, holding that the words in the statute, "foreclosure and sale," are not confined in meaning to a sale under judicial decree. At the time of this decision Montana was a territory, and the court of the United States. with the California court and court, saying: case was appealed to the supreme That court (156 U. S. 470) agrees affirms the decision of the Montana |
