property can be created, transferred, or declared otherwise than by operation of law, or by conveyance or other instrument in writing, subscribed by the party creating, transferring, or declaring the same, or by his lawful agent, under written authority, and executed with such formalities as are requir ed by law. Section 781, Hill's Ann. Laws Or. The rule is universal that a parol declaration of a trust will not affect the land, and for this reason parol evidence is inadmissible to establish such a trust. In Fairchild v. Rasdall, 9 Wis. 379, the court, speaking of the universality of this rule, say: "We do not feel called upon to cite authorities to show that in the absence of fraud, accident, or mistake, parol evidence cannot be received to prove that a deed absolute on its face was given in trust for the benefit of the grantor." But if it be agreed that the land shall be sold and converted into money, and in pursuance thereof a sale is made, the subsequent declaration of the trust by the trustee will bind the proceeds or the money. 1 Perry, Trusts, § 86. The reason assigned for the existence of this rule is that a trust in personal property may be declared by parol, and a sale of the land by the trustee of a parol trust under an agreement to convert it into money changes the land into personal property, and the subsequent declaration of the trust by the trustee, being supported by the prior agreement, to hold the premises in trust, furnishes a sufficient consideration for the enforcement of the declaration. Hon v. Hon, 70 Ind. 135; Mohn v. Mohn, 112 Ind. 285, 13 N. E. 859; Maffitt's Adm'r v. Rynd, 69 Pa. St. 380; Wiseman v. Baylor, 69 Tex. C3, 6 S. W. 743. In Karr v. Washburn, 56 Wis. 303, 14 N. W. 189, it is held that a parol trust in land is not absolutely void, but void only at the election of the trustee. The court, speaking of the power and duty of the trustee under a parol trust in lands, say: “He may execute it or not, as he chooses; and the courts will not interfere to compel him to execute it, or to restrain him from doing so. If he refuses to execute it, from thenceforth the trust, which rests only upon a moral obligation, is a nullity." Tested by this rule, it appears that the land in question was converted into personal property by Cooper under a parol agreement to apply the proceeds to the satisfaction of Christian's debts, and that, having executed the trust, he subsequently declared his liability to Christian, and accounted with him for the money received from Thomason. Such a declaration of the trust in personal property rendered Cooper liable to Christian for any balance that might be left after the satisfaction of his debts, and an action could be maintained for its recovery. In such an action, parol evidence would be admissible to show the parol declarations of a trust in personal property, and such evidence must be admissible also, in equity, to prove a parol declaration of the trust in land, as a consideration

for the subsequent declaration. The deed to Cooper having recited a consideration of $7,000, the conveyance of the land was either absolute or in trust, and, if the latter, the trust has been fully executed, and the subsequent declaration must take the case out of the statute; but, if the deed was absolute, Cooper would be liable to Christian for the balance of the fund, after the satisfaction of the debts agreed to be paid out of it; and in either case the facts, in our judgment, show a sufficient consideration, as between Cooper and Christian, to support the deed.

2. The conveyance to Cooper transferred the legal title which must prevail unless defeated by the prior record of Hirschberg's deed. If Hirschberg, for a valuable consideration, acquired his deed without notice or knowledge of the execution of the prior deed, it must be conceded that he has the paramount legal title. His deed recites a consideration of $6,100, but it is difficult to ascertain from the evidence what amount he has actually paid on account of the purchase. He assumed, however, the payment of a portion of Christian's indebtedness, and agreed to pay him the balance of the purchase price, and this would furnish a valuable consideration for the conveyance. Before Hirschberg accepted the deed, he sent Christian to the First National Bank for a statement of its demand against him, and was furnished a written memorandum showing that the amount thereof was $2.482.47. Concerning this transaction, the cashier of the bank testifies that Christian demanded, and he furnished him, a statement of his individual indebtedness, but that no request was made for a statement of the firm or other notes on which Christian was liable. This statement cannot become the foundation of an equitable estoppel against the bank, so as to preclude it from recovering more than the amount stated in the written memorandum, because it was furnished upon a request for a statement of Christian's individual indebtedness, and not for a statement of the whole demand against him. Nor is Hirschberg in a position to invoke such an estoppel, for the reason that his agreement with Christian was to pay $6,100 only on account of the purchase of the premises, and hence the amount of Christian's indebtedness to the bank was immaterial. Hirschberg caused the records of Polk county to be searched, and, finding that they showed the title to the property to be in Christian, he accepted the deed; and this want of notice by the record would give him a perfect title, if it were not for the existence of certain facts of which he had knowledge. Christian testifies that he told Hirschberg he had given Cooper some writing concerning the property, but he did not know the nature or character of the instrument, and, on cross-examination, further testifies that Hirschberg knew he had given Cooper a deed of trust. Klemsen, the part

ner of Christian, says he heard Christian tell Hirschberg he had given Cooper a deed to the land. It also appears that Hirschberg, at the time he was negotiating for the purchase, knew that Thomason was in possession of the premises, and had a conversation with him about the payment of his note, but made no inquiry of him in relation to his right of possession. Such possession was sufficient to put a person of ordinary prudence upon inquiry concerning Thomason's right thereto, and was constructive notice of everything to which that inquiry might lead. Shaw v. Spencer, 100 Mass. 382; Bohlman v. Coffin, 4 Or. 313; Petrain v. Kiernan, 23 Or. 455, 32 Pac. 158. "As a general rule," says Bean, J., in Exon v. Dancke, 24 Or. 110, 32 Pac. 1045, "the authorities declare that open, notorious, and exclusive possession and occupation of real estate by a stranger to the title is sufficient to put a purchaser from a vendor out of possession upon inquiry as to the legal and equitable rights of the party in possession." In Pell v. McElroy, 36 Cal. 268, the court, discussing this question, says: "He cannot be regarded as a purchaser in good faith, who negligently or willfully closes his eyes to visible, pertinent facts, indicating adverse interest or incumbrances upon the estate he seeks to acquire, and indulge in possibilities or probabilities, and acts upon doubtful presumptions, when, by the exercise of prudent, reasonable diligence, he could fully inform himself of the real facts of the case." We must therefore conclude that Hirschberg, at the time of his purchase, had constructive notice of the unrecorded deed to Cooper, if not actual knowledge of the fact, and that his title must be subordinate to the equities created by the prior deed. We are strengthened in this conclusion by the fact that Hirschberg's deed recites a consideration equivalent to the amount evi denced by Thomason's note, and the further fact that Hirschberg, soon after obtaining his deed, served on Thomason a written notice that this note was payable to him at its maturity. These circumstances tend in no small degree to show that Hirschberg knew of, and acquiesced in, the sale made by Cooper.

3. The next question for consideration is whether a court of equity can compel Thomason to specifically perform his oral contract of purchase. In discussing this question it may be well to consider whether Thomason could compel a specific performance of the contract. The deed executed by Cooper, as trustee, to Thomason, and deposited with Hawley, did not contain the terms of the verbal agreement to convey the premises; and in such case it has been held that a deed deposited in escrow, unless it contained a memorandum of the agreement, was inoperative to take the case out of the statute of frauds. Kopp v. Reiter (Ill. Sup.) 34 N. E. 942. The payment of the purchase price is not such a part performance of an oral contract to con

vey land as to overcome the plea of the statute, but possession in pursuance of the terms of the contract, and improvements made upon land, are sufficient for that purpose. When possession, in pursuance of the terms of a verbal agreement to convey land, has been taken by the purchaser, he thereby acquires an equitable estate in the premises; and his notorious occupation thereof is such evidence of his equitable title as to overcome the statute, and renders parol proof admissible to establish the terms of the verbal contract upon the faith of which he has acted. Applying this rule to the case at bar, the evidence shows that Thomason, relying upon the validity of the contract made with Cooper, took and retained the possession of the land, and has made valuable improvements thereon. He alleges that he has been damaged in the sum of $1,000, but the evidence fails to show the value of the improvements made by him. It is the universal rule that courts of equity will enforce a parol contract relating to land, within the statute of frauds, when the refusal to execute it would amount to practicing a fraud. Browne, St. Frauds, 438. Where one party has done acts in part execution or upon the faith of the contract. with the knowledge and consent of the other, this will take the case out of the statute. Brown v. Lord, 7 Or. 302; Plymale v. Comstock, 9 Or. 321; Wagonblast v. Whitney, 12 Or. 83, 6 Pac. 399; Wallace v. Scoggins, 18 Or. 502, 21 Pac. 558. It is the equitable estoppel created by force of the acts or silen acquiescence of the party who would plead the statute of frauds that prevents him from doing so. There is no doubt that Thomason in a court of equity could have compelled the specific performance of the contract, had he instituted a suit for that purpose; and, this being so, can the plaintiffs enforce the contract against him? To entitle a party to invoke the aid of equity for the enforcemen of a verbal contract to convey real property the acts relied upon as part performance to take the case out of the statute must have been done by the plaintiff himself. Browne, St. Frauds, § 453. It is the possession by the purchaser in pursuance of the terms of the contract that entitles him to the specific performance, and, upon the theory of the mutuality of the contract, it is held that the owner should have a right to enforce its terms when he has delivered possession. Pugh v. Good, 3 Watts & S. 56; Wat. Spec. Perf. Cont. § 15; Browne, St. Frauds, i 471. The deed to Cooper transferred the legal title, which drew after it the possession (Swift v. Mulkey, 14 Or. 64, 12 Pac. 76); and this Cooper, with the consent of Christian, delivered to Thomason. The bank, also, relying on the faith of the agreement, advanced money to Christian, and to the firm of which he was a member; and, while the payment of the money is not such part performance of a verbal contract as to take the case out of the statute, yet, taken in connec

tion with the delivery of the possession by Cooper as agent for the bank, it was in execution, and amounted to a part performance of the terms of the contract on the part of all the parties to and interested in it, and, as Thomason could compel a specific performance of the contract to convey, the plaintiffs, for like reasons, are entitled to a mutuality of remedies, and can invoke and obtain the aid of a court of equity to compel the specific performance of the agreement to purchase.

4. It is contended that the decree is inoperative, in that it requires Cooper to cause Hawley, who is not a party to this suit, to deliver the deed deposited with him to Thomason upon the payment of said note, or, upon the failure of Hawley to so deliver it within 30 days, that Cooper execute to Thomason a new deed, or, if Cooper neglect or refuse to do either within 30 days from the default of Hawley, that the decree operate as and for a deed to Thomason. It is alleged in the complaint that Hawley had offered and was ready and willing to deliver the deed to Thomason upon the payment of the note, and this fact is not denied in the answer. The objection to this part of the decree must prove unavailing, for the defendants, knowing that Hawley was not a party, did not demur for defect of parties. This defect was apparent upon the face of the pleading, and the defendants, by failing to demur, have waived their objection to the nonjoinder. Section 71, Hill's Ann. Laws Or. Besides, Thomason is the real party in interest who is affected by this portion of the decree, and, not having appealed therefrom, it must be presumed he is satisfied therewith. It follows that the decree is affirmed.

WOLVERTON, J., having been of counsel in the trial in the court below, took no part in the trial or decision here.

(29 Or. 116)

INMAN et al. v. HENDERSON et al.1 (Supreme Court of Oregon. June 15, 1896.) MECHANIC'S LIEN-PRIORITY OF LIENS-APPEAL REVIVOR OF LIEN BY AGREEMENT WITH OWNER.

1. A mortgagee, as against whom a mechanic's lien has been adjudged invalid on his answer, may insist on its invalidity on appeal by the lien claimant, though no appeal is taken from that part of the decree holding it valid against the owner of the property.

2. A material man who has no contract for the erection of a building, but who furnishes material directly to the owner for use in its construction, from time to time, on a running account, stands or the same footing as to a lien as one furnishing material to a contractor, and must file his claim for a lien within 30 days after the last material is furnished, or after the completion of the building; and the furnishing of additional articles after the expiration of such time, by agreement with the owner, for the purpose of reviving his right to a lien, will not have that effect as against a mortgagee who is not a party to the transaction.

1 Rehearing denied.

Appeal from circuit court, Multnomah county; L. B. Stearns, Judge.

Action by Inman, Poulsen & Co. against S. J. Henderson and others. From the decree rendered, plaintiffs and defendant F. E. Beach appeal. Affirmed.

R. R. Duniway, for appellants. Guy G. Willis and G. G. Gammans, for respondent.

BEAN, C. J. This is a suit to foreclose mechanics' liens in favor of the plaintiff and defendant Beach upon the property of the defendant S. J. Henderson. Without detailing the evidence, we find the facts to be that about November 1, 1832, the defendant Henderson commenced the construction of the dwelling house No. 1, on property belonging to her in Multnomah county, which was substantially completed about the 15th of March, 1893, and then occupied by her. The plaintiff furnished her, on a running account, as ordered from time to time, with lumber and other material to be used, and which was used, in the construction of the said house, of the reasonable value of $170.35. On December 7, 1892, she commenced the construction of another dwelling on an adjoining lot, which is known as "House No. 2," and which was substantially completed about the 22d of April, 1893. For this house the plaintiff also furnished, in like manner, building material to be used, and which was used, therein, of the reasonable value of $233.95. On June 20, 1893, more than 30 days after the completion of both houses, and more than 30 days after it had ceased to furnish material for either of them, the plaintiff, for the express purpose, as we think the evidence clearly shows, of reviving its lien, furnished, upon the order of Mrs. Henderson's agent, 50 feet of flooring to be used ostensibly in the construction of a porch in front of each of the houses at some indefinite future time, but which in fact was never so used, and was finally sold by her to some other party. On the 14th of July, 1893, the plaintiff tiled the claim of lien on house No. 1 for $171.10, and on house No. 2 for $233.95, for the foreclosure of which this suit is brought. The defendant Beach, between the 7th of December, 1892, and the 23d of April, 1893, furnished building material on a running account, as ordered by Mrs. Henderson from time to time, to be used, and which was used, in said buildings, of the reasonable value of $171.13, of which amount $30 has been paid. Beach furnished no other material for either of the houses until about the 10th of June, 1893, when, "for the purpose of keeping his lien good on the house," he furnished one gallon of floor paint, of the value of $1.50, upon an order obtained from Mrs. Henderson through the solicitation of Beach's agent, which was used in painting a floor in one of the houses. And on July 8, 1893, he filed a claim of lien for the balance due on his account. After the construction of the two houses had been

commenced, Mrs. Henderson mortgaged the property to the Washington National Building, Loan & Investment Association, the respondent on this appeal.

The court below having held the liens of the plaintiff and Beach valid as to Mrs. Henderson, but void as to the mortgagee, ordered the liens foreclosed, and the property sold subject to the mortgage, and from that portion of the decree which postpones their liens to that of the mortgagee the plaintiff and defendant Beach appeal. They contend that, as no appeal has been taken from the decree of the court establishing the liens as against Mrs. Henderson, it is valid and binding on all the parties to this suit, so that the question on this appeal is one of priority between the established mechanics' liens and the mortgage. As to Mrs. Henderson, the decree of the court below must, of course, be accepted as correct, because she has not appealed, but the appeal before us challenges its correctness so far as it subordinates the liens for material to that of the mortgagee; and we think the mortgagee, having denied by its answer the validity of the mechanics' liens, may insist on this appeal that they are void, as against it, for any sufficient reason appearing from the record, and that it was not compelled to appeal from the decree against Mrs. Henderson to raise that question. The decree did not establish the liens as against the mortgagee, and hence did not affect any of its substantial rights, or afford it any grounds for an appeal. The material question between the lien claimants and the respondent, in the court below and here, is the validity of the mechanics' liens as against the mortgagee. The court below, in adjusting these rights, held that as between the lien claimants and Mrs. Henderson the lien was valid, because their right thereto was revived by her ordering additional material for that express purpose, but that such an arrangement between the owner and the lien claimants was not binding on the mortgagee. And in this view, so far as it affects the interests of the mortgagee, we fully concur. The lien claimants in this case were not original contractors, but material men, and, under the statute, were required to file their liens within 30 days after they ceased to furnish material, or after the building was completed. Ainslie v. Kohn, 16 Or. 363, 19 Pac. 97. We take the law to be that a material man who furnishes material directly to the owner, on a running account, as ordered from time to time, is not an original contractor in the construction of the building for which the material is furnished, within the sense of the statute, and must file his lien within 30 days. This is the construction of the mechanics' lien law of California, after which ours is largely modeled. Sparks v. Mining Co., 55 Cal. 389; Schwartz v. Knight, 74 Cal. 432, 16 Pac. 235. In this case the time within which the lien claimants' liens should be filed had expired before any additional arti

cles were ordered or furnished, and if the furnishing of such articles, under the circumstances disclosed by the evidence, revived or renewed their liens as against the owner, it could not affect the rights of the mortgagee, who was not a party to the transaction. Brown v. Moore, 26 Ill. 421; Kelly v. Kellogg, 79 Ill. 477; Central Trust Co. v. Chicago, K. & T. Ry. Co., 54 Fed. 598. One who takes a mortgage on land after the construction of a building thereon has been commenced, holds it subject to any valid mechanics' lien, the claim of which may be filed within the time required by statute (Code, § 3671); but the interests of the mortgagee cannot be affected by any agreement between the owner and the lien claimant extending the time in which to file such claim, even if such agreement is valid as between them. Phil. Mech. Liens, §§ 297, 322a, 327. It follows that the decree of the court below must be affirmed.

(29 Or. 147)

SCHAEFER v. STEIN. (Supreme Court of Oregon. June 15, 1896.) APPEAL-BILL OF EXCEPTIONS-PRESUMPTION.

Where it is assigned as error that a motion of nonsuit was improperly overruled, and it does not appear affirmatively that the bill of exceptions contains all the evidence, it will be presumed, in favor of the judgment of the lower court, that there was sufficient evidence to warrant a submission to the jury.

Appeal from circuit court, Multnomah county; H. Hurley, Judge.

Action by August Schaefer against Samuel Stein to recover damages for breach of contract. There was a judgment for plaintiff, and defendant appeals. Affirmed.

F. A. E. Starr, for appellant. N. D. Simon, for respondent.

BEAN, C. J. This is an action to recover damages for breach of a contract by which the defendant agreed to sell and transfer to the plaintiff certain shares of stock in the Watson Fuel Company. Upon the trial, the defendant, insisting that the contract was in writing, interposed objections to all the evidence offered by the plaintiff which tended to show the understanding or agreement of the parties prior to the execution of the written contract. The plaintiff, however, contended that the contract was not in writing, and, in view of this disagreement, the court admitted conditionally all the oral evidence offered by plaintiff tending to show the agreement, reserving its ruling as to its competercy until a later stage of the trial. Subsequently, on a motion for a nonsuit, it having in the meantime appeared that the contract was in writing, the court struck out all the evidence of the plaintiff tending to show the understanding and agreement of the parties prior to the execution of the con. tract, but denied the nonsuit on the ground

that there was some competent evidence tending to show the contents of the written agreement. And to this ruling the only assignment of error is directed. The evidence remaining may not be sufficient to sustain the verdict, but we are precluded from considering that question, because it does not affirmatively appear that the bill of exceptions contains all the evidence before the court at the time the motion for a nonsuit was made. It may be. and is probably, true that such is the fact; but it has long been settled in this court that on an appeal from a judgment on the ground that a motion for a nonsuit was improperly overruled the court will presume, in favor of the judgment of the court below, that there was evidence sufficient to carry the case to the jury, although not shown by the bill of exceptions, unless the contrary is made to affirmatively appear. Woods v. Courtney, 16 Or. 121, 17 Pac. 745; Roberts v. Parrish, 17 Or. 583, 22 Pac. 136; Atterberry v. Railway Co., 18 Or. 85, 22 Pac 527; Coffin v. Hutchinson, 22 Or. 554, 30 Pac. 424. Now, in this case there is no statement or certificate in the bill of exceptions to rebut the presumption in favor of the ruling of the court below, and hence the judgment must be affirmed.

PRINCIPAL AND SURETY EXTENSION OF TIME OF

PAYMENT-CONSIDERATION.

The extension of the time of payment of a note in consideration of payment of interest in advance was a contract for an extension, founded on a valuable consideration, and released the surety from liability. Hoyt, C. J., dissenting.

Appeal from superior court, King county; T. J. Humes, Judge.

Action by Henry Binnian against W. J. Jennings and F. H. Whitworth. There was judgment against Jennings on the pleadings, and from a judgment in favor of the defendant Whitworth, plaintiff appeals. Affirmed. C. E. Bowman, for appellant. Stratton, Lewis & Gilman, for respondents.

DUNBAR, J. This action was brought by the appellant against defendant W. J. Jennings and respondent F. H. Whitworth on a promissory note. Judgment, was taken against Jennings on the pleadings. Whitworth answered separately, admitting the execution of the note, but denying any indebtedness, and setting up as an affirmative defense that he signed as a surety only, and that Binnian knew that he so signed, and that appellant, Binnian, and defendant Jennings had entered into an agreement for a valuable consideration for the extension of the time of payment of the note without his knowledge or consent, and asked to be dis

charged from any liability thereon. The trial resulted in a verdict in favor of the defendant Whitworth, respondent here. The action of the court in giving certain instructions to the jury, in refusing certain other instructions asked for by the plaintiff, and in refusing to grant plaintiff's request to instruct the jury to bring in a verdict for the plaintiff when the defense rested, is alleged as error. The plain and only issue in this case was whether or not the plaintiff, for a valuable consideration, extended the time of payment of the note without the consent or knowledge of the surety. It was alleged in the answer that such was the case. There was testimony to sustain the allegations of the answer, and, the jury having passed upon the sufficiency of the testimony, it is not subject to review here. It is argued by the appellant that a surety is not discharged by a mere extension of the time of payment without his consent, unless there is a valid agreement to extend, based on a legal and valuable consideration, precluding the creditor from suing as soon as he has a right to sue under the original contract. This proposition is not disputed by the respondent, and, as far as we are able to ascertain, it is not involved in this case. The consideration here was the payment of interest in advance. Mr. Brandt, in his work on Suretyship and Guaranty (section 354), quotes approvingly the reason for the rule announced in McComb v. Kittridge, 14 Ohio, 348, where the court said: "It is a valuable right to have money placed at interest, and it is a valuable right to have the privilege at any time of getting rid of the payment of interest by discharging the principal. By this contract the right to interest is secured for a given period and the right to pay off the principal and get rid of paying the interest is also relinquished for such period. Here, then, are all the elements of a binding contract." This is the general rule announced by the author, who admits, however, that in spite of the reasonableness of the rule and the cogency of the reasoning above quoted, many courts have held that the promise to pay interest for an extended period creates no additional obligation, for the reason that the payor would have been obliged to pay the interest without any new agreement if the time had been given. The author very pertinently remarks, however, that this reasoning ignores the fact that, if there is no new agreement, the debtor may at any time pay the debt, and stop the interest. This rule is also announced in 24 Am. & Eng. Enc Law, p. 826, where a great number of cases are collated and cited which sustain the doctrine. But, notwithstanding the fact that some of the authorities have decided to the contrary, it is not an open question in this state for we expressly held in Warburton v. Ralph, 9 Wash. 537, 38 Pac. 140, that where a contract for the extension of the time of payment of a promissory note is made by the principal, and not assented