however, the plaintiff would send half of the amount due and interest, he would see that it was satisfactory with the company to allow the other payments to continue one year. This demand was not complied with, and the deferred payment was defaulted; but on December 31, the semiannual interest of $280 was paid with the promise that after the New Year the principal payments would be adjusted with the defendant. On January 1, 1904, defendant's agent acknowledged receipt of the check for $280, being interest due January 2, 1904, and noticed the promise of the plaintiff that the principal payments would be adjusted in a short time. This promise was not kept, and the promised payment was defaulted.

On January 28, 1904, defendant's agent telephoned to plaintiff demanding payment. Plaintiff's agent replied by letter that it was not entirely convenient to make the payment then, but he thought he could arrange it soon. He stated that he would bear in mind the fact that defendant was anxious to reduce the amount at an early date, and he promised to favor the defendant as quick as he could. This promise was not kept and the promised payment was defaulted. On June 17, 1904, defendant's agent demanded of plaintiff by letter payment of the interest of June 2, 1904. On June 27th, defendant's agent corrected the error in the demand as to the date when interest was due, and stated it as being July 2, 1904. No notice was taken of this corrected demand, and payment was defaulted. On August 25, 1904, defendant's agent notified the plaintiff that the defendant company was requesting information regarding arrangements made with the plaintiff for an extension of time on payments due on the contract. The agent stated that in replying to his letter the defendant company had sanctioned his actions in the matter, and stated that they preferred to have the interest paid semiannually, as provided for in the agreement. The agent thereupon requested the plaintiff to comply with this part of the contract, and he would carry the payments along until such time as the defendant should demand that collections be made. No notice was taken of this 'letter by the plaintiff, and no payment of the interest then due was made; plaintiff defaulted.

On December 6, 1904, defendant's agent notified the plaintiff by letter that on January 2, 1905, there would be due on the contract, $5,250, and accrued interest, $571.20, making the total amount due, $5,821.20. The agent stated further in this letter that of this amount he expected a payment of $1,750, and accrued interest, $571.20, making a total of $2,321.20. Plaintiff was requested to give careful attention to this demand, as he must have this amount indicated by the 2d proximo. No attention was paid to this demand by the plaintiff and payment was defaulted. On July 12, 1905, defendant's agent notified the plaintiff by letter that on July 2d there would be due on account of interest on his contract the sum of $873.60, and demand of payment was made. No attention was paid to this demand by the plaintiff and payment was defaulted. On December 15, 1905, the defendant's agent having received a letter from the president of the defendant company, the agent went to The Dalles and submitted this letter to M. A. Moody, plaintiff's agent at that place. The letter is as follows:

"Eastern Oregon Land Co., Columbian Bldg.,

"San Francisco, Cal., December 14, 1905.

"Mr. George T. Parr, Moro, Or.-Dear Sir: In relation to the contract of Z. T. Moody I herewith inclose you a statement of the account as it appears on our books. From this account you will note that Governor Moody is far in arrears with interest and principal. The company has heretofore instructed you to proceed with the collection of this account and to bring the necessary proceedings, if it is necessary, to recover possession of the land and damages on account of the loss sustained by it through the possession which Mr. Moody has had of the land. I want the matter immediately taken up by you and a prompt answer as to what Mr. Moody intends to do. If he refuses to pay in full all that is now due, I wish you to refer the matter to Messrs. Huntington & Wilson and instruct them to begin the necessary proceeding to collect the amount.

After a conversation with plaintiff's agent concerning the matter referred to in this letter, defendant's agent agreed to accept the interest in full to January 2, 1906; the plaintiff stating that he was tired of paying 8 per cent. interest. He requested defendant's agent to write to the defendant company that he would look for the money outside, or borrow it for a less rate of interest, if he could not raise it from his own resources. He said he would pay it within a few months. The defendant's agent thereupon wrote to the defendant company as follows:

"Moro, Oregon, Jan. 1, 1905.

"Mr. E. A. Wasserman, Asst. Secretary, San Francisco, Cal.-Dear Sir: Last Friday we called upon Hon. M. A. Moody of The Dalles with reference to the account of his father, Z. F. Moody. Received from him a check for $1,187.00 which is the full amount of interest on the account to January 2, 1906. Mr. Moody stated that he was very anxious to pay off the indebtedness as he objected to paying eight per cent. and he was endeavoring to make a loan on the outside, and if he could not he would meet the obligation in a few months from his own resources. We promised him to present the matter and if satisfactory to the company would allow the account to continue until he could make some arrangement. Kindly advise us if this is satisfactory, and oblige, Yours very truly, Eastern Oregon Land Co., "By Geo. T. Parr, Agt."

In reply to this letter defendant's agent received from the defendant company the following letter:

"Eastern Oregon Land Co., San Francisco, January 9, 1906. "Mr. George T. Parr, Moro, Oregon-Dear Sir: We are in receipt of the draft covering the amount of interest due on Gov. Moody's contract. As I stated to you before we are anxious to arrive at some conclusion with him about the principal as well as the interest. All of which is now overdue. I must ask you to immediately take this matter up and get a settlement from Gov. Moody of the principal. We do not wish to have contracts so long in arrears. We recognize that it is necessary to give a leave way in deserving cases but Gov. Moody has imposed on our forbearance more than the conditions warrant and we must therefore require a satisfactory settlement at the present time. *

"Very truly yours,

*

Walter S. Martin, President."

This letter defendant's agent submitted to the plaintiff's agent, with this statement: That if the plaintiff could pay $1,000 on the principal, it was possible to get the defendant company to accept that and continue the other payments for a longer period. He promised defendant's agent that he would send a check for that amount in a short time. Plaintiff failed to keep this promise, and did not send the check, and payment as promised was defaulted.

Parr afterwards received a letter from the defendant dated March 22, 1906, containing the following paragraph:

"Referring to our letter under date of January 9th we stated at that time, that we were anxious to arrive at some conclusion on the contract of Gov. Moody. As before stated, we do not think the conditions warrant us in giving the Governor any more time, as we feel that we have been very lenient with him as the principal as well as the interest is now long in arrears, we desire to have this matter immediately taken up and a settlement made."

After the receipt of this letter, Parr had a conversation with the plaintiff, Z. F. Moody, or his agent, M. A. Moody, concerning these overdue payments. Parr suggested to M. A. Moody that he should do something regarding the making of a payment on that account; that the company was insisting that he settle, and Parr said:

"Now, Mr. Moody, if you cannot pay $1,000 send $500. Make some kind of a payment so as to show that you are doing the best you can."

Moody then promised Parr that he would send $500 in a few days. Moody failed to keep this promise and defaulted in this payment, and afterwards being called up by telephone by Parr and asked the reason why he had not made the payment, Moody promised he would send the money. He failed to keep this promise and defaulted in the promised payment.

On July 2, 1906, he also defaulted in the payment of the interest then due amounting to $280.

It was provided in the contract that, if the plaintiff should make a default in any one or more of the sums of money agreed to be paid for a period of six months, the plaintiff would surrender the possession of the premises, and the defendant was empowered to take possession of the premises and terminate the contract. When the notice of August 11, 1906, was given, the plaintiff had been more than six months in default of all the principal sums agreed to be paid by the plaintiff. The contract was thereupon placed in the hands of the defendant's attorneys, Huntington & Wilson, residing at The Dalles Or., who, on that date, wrote to the plaintiff the following letter:

"The Dalles, Oregon, Aug. 11, 1906.

"Hon. Z. F. Moody, Salem, Oregon-Dear Sir: We are directed and authorized by the Eastern Oregon Land Company, the party of the second part of that certain contract made and executed by you as party of the first part, bearing date January 2, 1902, to demand of you the surrender of possession of all the premises described in said contract; you are hereby notified that said Eastern Oregon Land Company terminates this contract by reason of your failure to make the payments which by said contract you agreed to make. You are now in default in the payments which you by said contract agreed to make, in the sum of seven thousand dollars and interest at the rate of eight per cent. per annum from January 2, 1902, and interest upon each semiannual payment of interest at the legal rate from the date such semiannual interest payment became due. We hereby notify you that unless you surrender possession of all of said premises on or before the 21st of August, 1906, or pay the entire amount now due upon said contract on or before said last-named date, we shall commence suit to foreclose your interest in and to said contract and said premises. The Eastern Oregon Land Company is now ready and willing and hereby offers to convey to you by warranty deed all of said tracts of land described in said conveyance upon the payment of the amount due from you upon said contract.

"Huntington & Wilson, Attorneys for Eastern Oregon Land Company." On August 17, 1906, the defendant's attorneys sent the following letter to the plaintiff, correcting the former letter as to the date of the last default on account of the payment of interest, and referring to the payment of interest due July 2, 1906:

"The Dalles, Oregon, August 17, 1906.

"Hon. Z. F. Moody, Salem, Or.-Dear Sir: In our letter to you of the 11th we made an error in stating the amount of which you are in default on the contract referred to; we should have stated the default of interest from January 2, 1906, instead of January 2, 1902; Mr. Parr tells us that the interest has been paid now to July 2, 1906. Huntington & Wilson."

"Yours very truly,

On August 13, 1906, M. A. Moody, plaintiff's agent at The Dalles, mailed to Parr at Moro, Or., a check for $280 in payment of the interest due July 2, 1906. No payment was made or offered to be made of the interest from July 2, 1906, to August 13, 1906, and plaintiff made no reply to Huntington & Wilson's letter of August 11, 1906. On August 19th (?), the plaintiff mailed to Parr, as agent for the defendant, the following letter:

"Salem, August 14 (?), 1906.

"Mr. G. T. Parr, Dear Sir: I recd. note today from H. and W. stating that you had advised them that the interest was paid up to last July but did not say whether or not they were to give further time. Please advise me here and oblige, Z. F. Moody."

Yours, etc.,

In the record the above letter is dated August 14th. It is stated, however, that the date is uncertain on account of its illegibility. The defendant claims that the date is August 19, 1906. This is probably the correct date, as the letter refers to the preceding note from Huntington & Wilson, dated August 17th..

From the receipt of the letter of August 11, 1906, to October 22, 1906, neither the plaintiff nor his agent communicated in any way with the defendant's attorneys, Huntington & Wilson, into whose hands the defendant had placed the business of closing up or terminating the contract of January 2, 1906. Negotiations for extension of time for payments were, however, carried on by the plaintiff and his agent with Parr, at Moro, who had ceased to have charge of this business for the defendant. There is no claim that Parr had authority to extend the time of payment, or that he assumed to do so. He testified with respect to this matter as follows:

"Q. You may state whether or not at the time of the payment of the interest in December, 1905, or at any other time, you ever agreed with Mr. Moody that the time of payment of the overdue installments of principal should be extended. A. No, sir.

"Q. You may state whether or not you ever made any such promise or offer to Gov. Z. F. Moody. A. No, sir; I told him that I would submit the matter to the company and do what I could for him.

"Q. You may state whether or not the suggestion about the extension of time of payment of the principal was ever made by you, or was that made by Mr. Malcolm Moody? A. I always took the position of trying to collect the money.

"Q. That does not quite answer the question that I asked; state whether or not the suggestion about the extension of time came from you or from Mr. Moody. A. The requests for extension came from Mr. Moody."

Parr further testified that about the 15th of August he had a conversation with the plaintiff, in person, as follows:

*

"A. He then informed me that he had received a letter from Huntington & Wilson demanding payment of the full amount, and that he was very much surprised that the company had taken that action. I told him at that time that I knew nothing about it whatever; that I had not been advised that they had taken steps to collect the amount. He wanted to know if I could not arrange with the company to accept $1,000 now and the balance the 1st of next January; that is, the balance January, 1907. I told him that I did not know, that I would try to get them, and that probably I could. That was practically all the conversation I had with the Governor."

Afterwards witness had a conversation with M. A. Moody. He testified with respect to that conversation as follows:

"A. Mr. M. A. Moody said, in substance, the same as his father, that the company had sent a letter through Huntington & Wilson demanding the full payment, or they would begin foreclosure proceedings within 10 days, and Mr. M. A. Moody at that time wanted to know if I could not arrange to have the company accept $1,000 and the balance the 1st of January. I told him that I did not know. He said, 'Cannot you send a telegram to San Francisco and find out?' I did not place very much importance to the situation, and I told him that I thought it would be best to wait until I returned from the Locks, when I would write to the company and explain fully and try and get the extension asked.

*

* *

"Q. During that conversation on the 17th-that is, the conversation that you had with him when you were on your way to the Locks-did you say to him that you would be satisfied if he would pay part of the principal? A. No, sir; I never took that responsibility upon myself. I told him that I would endeavor to have the company accept that and give him an extension until January, 1907."

M. A. Moody testified that on the 17th of August he had a conversation with Parr upon the subject; that Parr was apparently sur