that the terminal point of the road, as established, is not near the point as designated in the petition, and this invalidates the proceedings: Johns v. Marion Co., 4 Or. 46; Woodruff v. Douglas Co., 17 Or. 314 (21 Pac. 49); Sime v. Spencer, 30 Or. 340 (47 Pac. 919). The judgment of the court below will therefore be reversed, and the cause remanded, with direction to the court below to vacate the order of the county court in the establishment of said road. REVERSED.

Argued 25 January; decided 12 March, 1900.

RICHMOND v. BLOCH.

[60 Pac. 388.]

SET-OFF JOINT JUDGMENT.

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A defendant cannot set off against the judgment against her and her co-defendants a judgment that she alone had recovered in a former action against the plaintiff and another, who was not a party to the last action.

From Multnomah: E. D. SHATTUCK, Judge.

Appeal from an order denying an application to offset a judgment. The facts are fully stated in the opinion. AFFIRMED.

For appellant there was a brief and an oral argument by Mr. James Gleason.

For respondents there was a brief over the names of Chamberlain & Thomas, Williams, Wood & Linthicum, and R. & E. B. Williams, with an oral argument by Mr. Gco. E. Chamberlain.

Mr. Chief Justice Wolverton delivered the opinion.

The facts attending this case are briefly stated as follows: On February 23, 1897, a judgment was given and rendered in the Circuit Court of the State of Oregon, for Multnomah

1

County, in favor of Adelaide Bloch, who was plaintiff therein, and against F. L. Richmond and F. A. E. Starr, who were defendants therein, for the sum of $4,001.25, and $15.50 costs and disbursements, which was reduced by partial payments to $3.355.03. On June 30, 1897, F. L. Richmond, one of the plaintiffs herein, recovered a judgment against the defendants Adelaide Bloch, M. M. Bloch, and F. Bloch for the sum of $1,300 and costs, taxed at $94.15; and upon this judgment the attorneys for plaintiff, who are coplaintiffs herein, claim a lien for $1,000 as compensation for services in obtaining the judgment. The defendant Adelaide Bloch now seeks to have the judgment against her and codefendants set off, so far as it is adequate for the purpose, against the judgment which she has against the plaintiff herein and F. A. E. Starr. From an order denying the ap plication, defendants appeal.

This application comes in contravention of two general rules of law: (1) Where two or more defendants are jointly sued, one or more of them, less than all, cannot set off a debt due to him or them only from the plaintiff; and (2) the defendant cannot set off a joint claim against plaintiff and another who is not party plaintiff in the action. See 22 Am. & Eng. Enc. Law (1 ed.), 287, 293; Gordon v. Swift, 46 Ind. 208; Bridgham v. Tileston, 5 Allen, 371; Langley v. Brent, 3 Cranch, C. C. 365 (Fed. Cas. No. 8,066); Waters v. Bussard, 2 Cranch, C. C. 226 (Fed. Cas. No. 17,262); Atkins v. Churchill, 19 Conn. 394; Snyder v. Spurr, 33 Conn. 407; Phelps v. Reeder, 39 Ill. 172; Peoria R. R. Co. v. Neill, 16 Ill. 269. There are exceptions to these rules, but the case made by the defendant who is seeking the set-off comes fairly within both their letter and spirit. Her judgment, under the showing, is a joint one against the plaintiff and Starr, the latter of whom is not a party plaintiff to this action, and under the same showing the judgment which plaintiff has is against her, M. M. Bloch, and F. Bloch, jointly; so that

there is no gainsaying the fact that these general rules have direct application to the controversy. The judgment of the court below being in harmony therewith, it will accordingly be affirmed. AFFIRMED.

Argued 28 December, 1900; decided 7 January, 1901. WASHINGTON INVESTMENT ASS'N v. STANLEY.

MORTGAGE FORECLOSURE

[63 Pac. 489.]

- SUFFICIENCY OF COMPLAINT.

1. A complaint in a mortgage foreclosure suit setting out in full a promissory note, averring the ownership and nonpayment thereof, and that it was secured by a regularly recorded mortgage on certain described realty, sufficiently states a cause of suit, after trial, in the absence of a demurrer, though the mortgage is not set out in haec verba or its legal effect pleaded: Berry v. King, 15 Or. 165, cited.

ESTOPPEL TO DENY EXISTENCE OF DE FACTO CORPORATION." 2. Where a private corporation has attempted in good faith to comply with the laws governing its organization, persons who have borrowed from it, accepted its stock, and dealt with it in its corporate capacity, cannot question its corporate capacity to enforce its contracts because the law has not been fully complied with in its organization, and this statutory rule applies to building and loan associations as well as to other corporations.

BUILDING ASSOCIATION - EVIDENCE OF AUTHORITY.

3. Under Laws 1895, p. 103, providing that, if the Secretary of State is satisfied that a foreign building association has complied with the requirements of the laws entitling it to do business in the state, he shall issue his certificate stating such compliance, such certificate is sufficient to establish, prima facie, the authority of a building association holding it to do business in the state.

BUILDING ASSOCIATION - ANNUAL PREMIUM

4.

USURY.

Under a statute such as Laws 1895, p. 103, requiring (Section 4)

*NOTE. On the question of estoppel to deny the existence and capacity of a corporation after dealing with it, see notes to Empire Mills v. Alston Grocery Co., 12 L. R. A. 366; Cone Exp. & Com. Co. v. Poole, 24 L. R. A. 289, 297; Edison Elec. Co. v. Canadian Pac. Nav. Co., 24 L. R. A. 315, 320 (40 Am. St. Rep. 916); People v. Montecito Water Co., 33 Am. St. Rep. 172, 180.-REPORTER.

+NOTE. In 46 Am. St. Rep. 178, is a special monograph, What Transactions are Usurious, on pages 200, 202 of which is a review of the authorities relating to usurious contracts of building and loan associations. See, also, Fall v. United States, etc., Building Co., 38 Am. St. Rep. 194,

the by-laws of building and loan associations to provide for the amount of the premium on loans and the rate of interest thereon; and declaring (Section 6) that its provisions relating to bidding on loans shall not apply to those associations that fix in their by-laws the rate of interest and the premium on loans; and (Section 7) that no premium taken by a building and loan association shall be treated as interest, or render the association amenable to the usury laws; a contract with such an association stipulating for a given rate of interest on the loan, and a premium at a stated per cent per annum on the face of the loan, payable during the life of the contract, is usurious, if the premium and the interest together exceed the legal interest. Such a contract is illegal under the statute, for that does not permit the fixing of a premium by a rate per cent on the amount of the loan and dependent as to the time of its payment on the time the loan may remain unpaid; and it is illegal under the established rule for fixing premiums in such associations, which is by the payment of a fixed and agreed sum, usually determined by bidding. FOREIGN CORPORATIONS TRANSACTING BUSINESS.*

5. Where a foreign corporation loaned money in Oregon through a local agent, taking as evidence of the transaction a promissory note and a mortgage on Oregon land to secure its payment, and brings suit in the local courts on the contract, it has done business in this state, within the meaning of Laws 1895, p. 103, § 15, prescribing the conditions on which building and loan companies may "do business" in Oregon.

LOCAL OR FOREIGN CONTRACT - DOMICIL OF PARTIES.

6. A contract made in Oregon between a citizen of Oregon and a foreign corporation doing business here, relating to Oregon property and sued on in the Oregon courts, is an Oregon contract, and must be construed according to local law.

212 (24 L. R. A. 174). Usury in Loans by Building Associations is the subject of a long note in 18 L. R. A. 129. See, also, Iowa Savings & Loan Assoc. v. Heidt, 43 L. R. A. 689; Post v. Mechanics' Building & Loan Assoc., 34 L. R. A. 201; Pioneer Sav. & Loan Co. v. Cannon, 33 L. R. A. 112, 54 Am. St. Rep. 858, and McCauley v. Workingmen's Bldg. & Savings Assoc., 56 Am. St. Rep. 813, s. c. 35 L. R. A. 244, with note, Fixed Premiums or Fixed Minimum of Premiums in Building and Loan Associations, and Borrower's & Inv. Bldg. Assoc. v. Eklund, 52 L. R. A. 637.-REPORTER.

*NOTE. On the question, what is doing business in a state, with reference to such statutes, see State of North Carolina v. Ray, 14 L. R. A. 529; Houston v. Gerye, 14 L. R. A. 719; Cone Er. & Commis. Co. v. Poole, 24 L. R. A. 289, 295; Milan M. & Mfg. Co. v. Gorton, 26 L. R. A. 135; Florsheim Bros. Dry Goods Co. v. Lester, 27 L. R. A. 506, 46 Am. St. Rep. 162: Delaware, etc., Canal Co. v. Mahlenbrock, 45 L. R. A. 538 ; Commercial Bank v. Sherman, 52 Am. St. Rep. 811; State v. Bristol Sav. Bank, 54 Am. St. Rep. 141.-REPORTER.

USURY INTENT TO VIOLATE LAW REQUIRED.

7. To constitute usury it must appear that the parties knowingly violated the law limiting the rate of hire for money; so that where the parties have honestly made a mistake as to the rate that might be lawfully charged, the defendant should be allowed credit for all that has actually been paid on account of the loan, and be charged with his loan at the legal rate.

From Polk: HENRY H. HEWITT, Judge.

Suit by the Washington National Building, Loan and Investment Association against Hartwell B. Stanley and others to foreclose a mortgage on real estate.

The complaint avers that plaintiff is a corporation organized under the laws of the State of Washington, and that, by compliance with the requirements of the laws of this state, it is entitled to do business herein and to maintain this. suit; that on September 2, 1895, Hartwell B. Stanley and wife, of Seattle, Washington, made their certain promissory note to plaintiff, of which the following is a copy: “On or before eighty-four (84) months after date, for value received, I promise to pay the Washington National Building, Loan and Investment Association, a corporation duly organized under the laws of Washington, the sum of five hundred ($500.00) dollars, with six per cent. interest per annum, and six per cent. premium per annum. thereon from date until paid, principal, interest, and premium payable in United States gold coin of the present weight and fineness, payable monthly or on before the last Saturday of each month, principal, interest, and premium payable to the treasurer of the Washington National Building, Loan and Investment Association, at Seattle, Washington. Any failure to pay interest or premium when due shall, at the election of the payee, make the principal, interest, and premium at once due, and any waiver of such right shall not prevent the payee from enforcing the right, at its elec

38 OR.-21.