·:MOULTON

V.LEIGH'f08.

143

letters, ahd books. These things, I think, are more to be considered than any oral testimony or recollection of witnesses, and my conclusion is that a contract was made substaritiallyas stated by Henry,-a contract by which the company agreed to take new bonds for its holding of old bonds, and for all advances which it had made or should make on account of these ditch companies, no matter how they were evidenced or by what security. As these according to a letter from the trustee, the vice-president of defendant company, been, in a large measure, passed into the custody of the defendant, it follows that the notes and obligations of the ditch companies, with the indorsement of ,Mr. Henry,have been paid and satisfied,. and should be surrendered, and , that aUsecurities which were held simply as collateral for these obliglJ.tions should be returned. Of course. it :is not claimed that this contract l'eaches to any-matter outside the obligations of the ditch compauiea, or that:the private debts of Mr. Henry were in anyway discharged pr to be affected by it., . A decree will therefore go in accordance with this conclusion,-a de<lree establisliing a contract as above stated,and directing an accounting. The matter Will be referred to a master to state the account. This account will statldhe various Sums advanced on account of or fortha , penses of the ditoh companies; theeyiderices of debt giventherefOt; the . securities plaCed as collatei'al therefor, and the disposition plade by defendant of any· and all of them ; also, the number ofbonds received' by defendant, arid the time of their reoeipt. On the coming in of the mas.' ter'a report, a ,decree will be entered such as the facts shown by that :f6port will justify. '

MOULTON ". LEIGHTOloJ, (twoc8ses.)

((}irouit Oourt,». Hinnuota. , .',

MORTGAGE--:-EJECTMENT in' JIoRTGAGOR.,.

15, 1887.)

:POSSESSION.

A mdrtgagor brought action :in against defendant, who was entitled to the rights of a m.ortgagee in possession. Held, that as tlle taking of an account of what was due under the mortgage was a proceeding appertainiIlgto ac'onrt of .equity,and,:a multiplicity ohuits.would thereby be avoided, the aotio!l. could not be maintained. .' . .

On Motionfot Judgment for Defendant on the Pleadings. These Were actions brought by Martha A.Moulton, a mortgag6r,ligairist JamesH. Leighton and Ephraim F. Leighton to 1'6.coveJ; Of premises. .. . Jackson, Atwater &;fIiJl. forplaiQtiff. Kitchel, Cohen .&. Shaw, for defend/!.ut·.
BREWER,

pleadings.

J. This is a motion by defendant for judgment on the
I shall consider two questions only.

/; .:

144

FEDERAL REPORTER.

Ids apparent from the pleadings, taking them altogether, that the plaintiff is a mortgagor, suing in ejectment against the defendant, who has all the rights of a mortgagee in possession. There having been an attempted sale, the title sought to be conveyed by that sale passed by sundry mense conveyances to the defendant. It is insisted that such an action cannot be maintained. If it were in the state court, there would court of this state, in the case of Johnson v. be no qnestion, for the Sandhoff, 30 Minn. 201, 1 has ruled that an action in enjectment will not lie under these circumstances. But it is insisted that a different rule obtains in the federal court, because no equitable defense can be presented in an action of ejectment, and that therefore the remedy of the de.. fendant isbyabill in equity to enjoin the legal action. But the supreme court oithe United States,'in the case of Brobst v. Brock, 10 Wall·. 529. has'also declared that an action of ejectment will not lie in the federal . courts by the mortgagor against the mortgagee in possession. That case went up from the state of Pennsylvania, and it is insisted ,that a. different " rule must obtain here, because, by the settled law of this state, It mortgage passes no title,and conveys no estate,-simply creates a lien; and therefore that as the legal title has not passed from the mortgagor, but remains with him all the time,the mortgagee, though in possession, has nothing but a lien or right in equity, which he can enforce only in a court of equity. Of course"it is familiar that at common law,and in most of the New England states, a mortgage is a conveyance of the title, upon default in the payment of which becomes vested in the the amount secured by the mortgage, and that one of the remedies that he has is an action of ejectment for the possession. It is true that in this as well as in most of the western states a mortgage is looked upon as an incident. The debt is the principal thing; the mortgage is merely a security therefor. An assignment of the debt carries the mortgage. , A conveyance by the mortgagee passes nothing. And there are expressions in several opinions of the supreme court of this state running along that line of tholJ,ght; and yet th,ere are other expressions used by that court by which the 'mortgagor's interest is spoken of as an equity of redemption. In the case in Wallace, aupra, Mr. Justice STRONG states the rule correctly,and I think applicable to the law in force in this state, in these words: "It is true that a mortgage is in substance but a security for the debt, or an obligation, to which it is collateral. 'As between the mortgagor and all others than the IUortgagee, it is a lien, a security, and not an estate. But as between the parties to 'the instrument, or their privies, it is a grant, Which operates'to transmit the legal-title to the mortgage, and leaves the mortgagor "nly the right to redeem. Formerly, lfthe condition was not strictly performed, the estate in the mortgagee. first conditional, became absolute, and the mortgagor's right to redeem was The estate or interest, though defeasible at its inception, became unconditional on a failure of the mortgagor to pay the money secured, or fulfuithecondition at the time appointed for the performance."
114 N. W. Rep. 889.

MOULTON V. LEIGHTON.

145

That authority is cited by the supreme court of this state in the opinion to which I have referred. Looking at the instrument itself, it is a conveyance; that is, it is such in terms,-t\ conveyance Of the title subject to a defeasance; and that the legislature of this state recognized the scope and import of it as a conveyance is apparent from several sections. It calls it a conveyance; it provides for its acknowledgment and record as other conveyances of real estate. In one section it uses,this language: "A mortgage of real property is not to be deemed It conveyance so as to enable the owner of the mortgage to recover possession of real property without foreclosure." It has thus, while recognizing the nature of the instrument, placed 'Certain limitations upon its legal effect. Again, looking at the question in a practical' light, supposing this action of ejectment were permitted to lie, and judgment en-tered, thedefendant, a mortgagee in possession, wotild be-andlhisis nbt doubted-atliberty to file his bill in equity to restrain the enforcement of this judgment. Under such a bill, the chanc4jllor might'find the amount due on the mortgage, and r(lstrain the enforcement of the j'Udgment l1t law only until the payment of that sum, and for any improvements made by the mortgagee; but he would be at liberty to simply restraining the enforcement of the judgment at enter a law. There -might be reasons-an insufficiency of proof, or otherwise -which would justify, if not compel, such a decree. And then, as a third suit, the mortgagor would be driven at last to a bill inequity for an accounting. And, furthermore, if a mortgagor has given a mortgage which has not been paid in money, but which has been paid, as he claims, by an appropriation of rents and profits in the hands of the mortgagee in possession, is it any more than fair that he should assume the burden of litigation from the inception? Bilt without discussing the further, and following the decisions of the supreme court of this state, as well as those of the supreme court of the United States, and construing them as applicable to the laws of this state, I think that a mortgagor cannot maintain an action of ejectment against a mortgagee in possession. That compels me to sustain the motion for judgment on the pleadings. , The other matter to which I shall refer is one, decision upon which is unnecessary; and yet, for fear counsel might file a bill in equity, when this question would have to be met, I think it no more than fair to them that I should express my conclusions upon that. This sale, or attempted sale, was in 1866; possession taken in 1867, nearly 20 years ago. In 1883, the legislature of Minnesota passed this law: "Thesheriif's'certificate of any sale heretofore or hereafter made, U11der a power to sell contained in a mortgage, shall be prima facie evidence that all , the requirements oflaw in that behalf have been duly complied with, andp1'ima facie evidenceo(title in fee thereunto in the purchaser at such sale,his heirs or and no such sale assigns, after the time for redemption therefrom has shall be held invalid or set aside by reason of any defect in the notice thereof, or in the pUblication or posting of such notice, or in the proceedings of the officer making sucll' sale. unless the action in which tne validity of such sale shall be called in question be commenced, or the defense alleging its invalidity be v.33F.no.3-10

146

FEDERAL REPORTER·

. interpdsedwithin five years after the date of suCh sale." And "this act shall take effect and be in force from and after tile first day of September, A. D. 1883."

insists in his r9ply that that act is void, because it was not regu.larly passed; because the title is not broad enough to include the provisions of the act. Upon matters I have nothing to say; for, while they are matters of which the court is bound to take judicial no, a, matter of fact they lIeen brought to my notice. The title is not given in this volume. ,I have not had time to hunt up a volUl;ne in w:hich it is, and I do not know what. circumstances attended the ;passage of that act. I have nothing to say upon thosematters. But i(the act were regularly passed, if the title be Qroad enough to sustain the act whole, so that it is a valid enactment of the legislature of the $tate of Minne$ota, then I have no doubt that a valid defense, is shown to this clailllof the plaintiff, whether presented itt an action of ejectment, (Jr, biU the stll.tute oflimitations would be a perfect bar. It says,' "The sheriff's certificate shall be prima facie evidence;" and if it be t:\lat in this case no ,Qertificate of sale was only a deed,still: that is immaterial,rfor.it is the sale which is not to be held invalid oreet aliJiljeunless the commenced within five, Yl*lrs. This sale w,aa iq)866, the action was. COmmenced 20 years after, and ther!? iorEl' , by this this is barred by oftime. The aCt in to $alesheretoforemade. It is to be that the ..goJnto effect unti), after passage; thus giving timefor aU !jl\litsto be broQghpn, cases where sales were made before its date. ; :' :;,' . " .., Jlldgn;lent'wiJI be entered in, both these suits; they being of a like nature. JUdgmen,t aCQOl'dingly.
",I l

SALEH OAPITAL FLOUR' MILt'S Co. v. STAYTON CANAL Co. ,',
I

;'

1887.)

&

(Circuit (Jourt,:l1..Oregon.Decembej.'

L

WATERS AND WATER,COURBES,.,...!NOORPORATION OF MANUFAOTUltING COHPANY -WATER PRIVILEGES OF. ',:, ' :

·

The. actbf December. 17, 1856,(Sess. Laws. 47,) declaring certain persons and their to be alcorporationby the nanie of the "WaUamet Woolen Manufacturing Company. 1'for the purpose of creatine; and improving waterpowers privileges aD,d conferred on said ,cor,P?fation the power to dIspose of the whole or any part of the "privilege" thereIn granted, take and conduct w:aterfromtjle Santiam.river·at 01' neaj.', Salem, and the "hydr8l1lic thereby ..' .', .
OF CESTUI QUE TRUST. '.. .

may without a c68tui'lue tru8t in existence. so tqat is naI;i1e\l in tile trust, ahdcomes into being! I!ondmay be .distinguished duringthe lffe of the trusteeY .'. . ... ..' .. '.' . I Respecting the' benllflciarlesaifecting the validity of a trust, see Iss8!:Jsv. Emory, (lJd.) 1 At!. Rep. 718; IreJ,alld v.Geraghty, 15 Fed.lliJp. 17:N. W; Rep. 1122; v. Willard, (I?Wa,) 54 N.W.

SALEM CAPITAL FLOUR ¥lL:r.S 9O,V. ST,A.;YTON WATER-DITCH &: C. CO.

147

3.

WATERS AND WATER-COURSES TION. " ' .

GRANT OF WATER PRIVILEGES -CONSTRUC-

P. and wife, for a valuable consideration, granted W., W. and R.. to the use ofthe Wallam,et Woolen Manufacturing Company "alone," the right to take water from the Santialp. anywhere on their donation, and to cut and maintain a canal over and upon said donation capable of carrying sufficient water from said river for; 'the purposes of said company at Salem. Held, (1) that under the act of 1854, regulating conveyances, (2 Laws Or. § 3005,) the duration of the easement granted depends on the in,tent of the parties, and the estate of the grantor in tile land burdened therewith. both of which show that the easement was granted in fee-simple, and is perpetual and assignable with the 10minant estate or ll;tnd In connection with which it is used; (2) that the word "alone" only sign,ifies that the grant wa,s made for the Bole use or benefit of the company, and not the trustees or other person; (3) that the grantee of the easement, and its successors in interest, are entitled to cut and maintain a ditch over and upon any part. ,of the donation necessary to enable it to take the water from the Santiam. and if, by reason of a change in the bed of the stream or other like cause, it becomes necessary to deepen, widen, or proloI1Jl said ditch to get said water, it may be done.
4.

lNJUNCTION-'TRltsPABS.

Equity has jurisdiction to enjoin and prevent the commission of a continuous trespass, on'the of the inadequally of the remedy at law.
"

(81111abm bll tAp (lourt.)

In Equity.

On bill for injunction.

William B.GillJerl, for plaintiff. Parrish ,L;, ,WilliB,for defendant.

DEADY, J. This suit is brought by the Salem Capital Flour"Mills Company, a British corporatiol,l, the.Stayton Water-Ditch & Canal Company, a corporation formed under the laws of Oregon, and Silas A. and S. W. R.Jones, ,citizens of Oregon, to have said defendants enjoined from with ,the prolongation .of the plaintiff's ditch, whereby water is taken from the Santiam river.and conducted in the channel of Mill creektoS!1lem, for the use of the plaintiff's millsi and from diverting the water from the same. The defendants demur to the bill, for that the plaintiff is not entitled to the relief sought. For a proper understanding, of the CMe" a somewhat full abstract of the lengthy second amended bill, and the amendment thereto, must be made. it appears therefrom that op December 17, 1856, the legislature of the territory of Oregon passed an act incorporating the Wallamet Woolen Manufacturing Company, hereinafter called the "Woolen Company," and thereby conferred upon it "power to bring water from the Santiam river to any place in or near Salem," through the channel of Mill creek, as far and ,for such purpose authorized it to enter "upon lands, and alsollPOll .sahlcreelt, and do all things proper and ,suitlj,ble for a safe, direct,. and economical conveyancE! of water a$.aforr-saidi" cpntheeJ!,:cIusive right to powers and privilege$ creat!jd pythe .which it takes from the Su,ntiarn river,'r

148

FEDERAL

and to "use, rent, or sell the same, or any portion thereof, as it may deem expedient." , Under this act the woolen company, at great expense, forthwith dug a ditch from a point on the right.hand bank of the Santiam, near the town of Stayton, to a point in the channel of Mill creek, and did thereby conduct water from the Santiam through said channel to Salem; that in company erected woolen mills at Salem on the bank of said Mill creek, on land then belonging to it, and particularly described in the bill,and thenceforward, until May, 187ti, when the building was destroyed by fire, operated the same continuously by force of said water; that said water-power was and is of great value, and the woolen company kept the exclusive use of the same until April 11, 1870, when it to the Salem Flouring Mills Company t4e right to have one-half water flowing through said ditch and channel to Salem, conducted to its premises therein, and the water-right granted to William Waldo all May.l, 10874. On August 24, 1875, company executed and delivered to the Bank of British Columbia a mortgage on all the said property, rights, and privileges so owned by it, and thereafter, in a suit brought in this court to enforce the lien of said mortgage, the same was sold and conveyed to William Reed on Septerriber 6, 1882, who afterwards sold and conveyed it to the City of Salem Company, which compaJ:1.Y,on June 1, 1884, sold and conveyed the same to the plaintiff, which thereupon became, and still is, the owner thereO'f; that the grant to Waldo was a perpetual right to use the water so brought to Salem for the purpose of operatinga flour mill to be built on a tract of ground on the bank of Mill creek just below the property of the woolen company, and containing about two acres, whereupon he erected a flour mill, which, since 1877, has been operated by the water aforesaid, and about June 1, 1884, the plaintiff, by mesne conveyances from Waldo to itself, became and' still is the owner of said mill property and water-rights; and that in 1882 the plaintiff built another flour mill on property adjacent to said mill, and said flour mills have ever since been operated by the water of the SanHam, and would be comparatively valueless without the same. The ditch was constructed from near the town of Stayton to the Santiam on the donation of Stephen Porter and his wife, who theretofore, on April 3, 1856, for a valuable consideration, had by their deed granted to George H. William8, J08eph Watt, and A. H. Reynolds, to the use of said company, "the right of a canal way through all and any lands then'owned or occupied by them in Marion county, necessary to be passed through in conveying the water of the Santiam into the channel of Mill, creek," and also granted to said persons, for the benefit of said. company, authority "to enter on the same for the purpose of cutting a canal sufficiently large to admit the flow of any amount of water required by said company for their puposes at Salem," and agreed "to allow them all the rights and privileges necessary for the construction, use, and preservation of said canal;" that at the date of such conveyance,