tention may be ascertained and discovered; and they have been so often recognized and approved by the courts that they have become maxims in the law. Among said rules is the following:

"(3) Where a covenant goes only to a part of the consideration on both sides, and a breach of such covenant may be paid for in damages, it is an independent covenant, and an action may be maintained for a breach of the covenant on the part of the defendant without averring performance in the declaration."

The contract between the parties in this case included the leasing as well as the purchase of the premises. The leasing for a term of five years constituted a material part of the consideration. The agreement to purchase was evidently the inducement to lease. The appellant says by the contract, in effect, that if the respondent will lease the premises to the appellant for the term of five years, at the monthly rent of $55, the appellant will, on or before the expiration of that time, pay to the respondent $5,500 therefor. The former, after enjoying that privilege, had no alternative but to pay the purchase price, and look to the latter for the deed. The appellant had the right to pay the purchase money at any time extending through a period of five years, and it would be absurd to require the respondent to have had a deed prepared ready to deliver during all that time. It may be claimed that the rent was an equivalent for the use of the premises; but I do not know that. If the stipulation in the contract to purchase the premises had not been included in it, the respondent might not have been willing to rent for $55 a month, or at all. I understand the meaning of the rule I have recited to be that where a contract embraces two subjects, and it has been performed as to one of them, and the party has a remedy for the breach of the performance of the other, the covenants as to that are not dependent unless made so by express words or necessary implication. The payment of the money for the premises would naturally precede the execution of the deed, and after the appellants had enjoyed the benefit of a part of the contract, its obligation to perform the other part became absolute.

I am of the opinion that this case comes within the reason of said rule. I think it would be unjust to allow said appellant to enjoy the part of the contract, and not pay the purchase price of the premises, as it stipulated to do, because the respondent did not come forward in advance of such payment, and tender a deed. Under the circumstances of the case, I do not believe that the respondent's obligation to tender a deed would arise until after payment of the money.

(12 Or. 474)

WATSON V. DUNDEE MORTGAGE & TRUST INVESTMENT Co. and others.

Filed November 16, 1885.

1. MORTGAGE-ASSIGNMENT-REGISTRY ACT.

The assignment of a mortgage is not a conveyance within the intent of the registry act, and an assignee need not record his assignment to protect himself against a subsequent purchaser or mortgagee. THAYER, J., dissenting. 2. SAME-FORECLOSURE-TITLE ACQUIRED BY PURCHASER.

The effect of a foreclosure is to transfer to the purchaser the rights of the mortgagee, so far as he has any claim or interest in the mortgaged premises for the security of his debt; and also to transfer to him so much of the equity of redemption as was not bound by the lien of a junior mortgage.

3. SAME-MERGER-INTEREST.

Where the fee is acquired by a mortgagee, merger will not take place where it is to his interest that it should not do so, and such merger would work a flagrant injustice.

Ellis G. Hughes, for appellant.

Wm. M. Ramsey, pro se, and for respondents B. F. Bonham, W. G. Piper, and S. F. Chadwick.

W. H. Holmes, for respondent F. Levy.

LORD, J. This is a suit in equity to foreclose a mortgage executed by Eugene McCallister to the plaintiff upon a certain tract of 220 acres of land in Marion county. The question to be decided involves the priority of liens-First, as between the appellant and the plaintiff; and, second, as between the appellant and his co-defendants. A summary of the facts out of which the controversy arises is that the two first mortgages on this land were given by H. M. McCallister and wife to Eliza Dickson, one in October, 1874, and the other in November, 1878, to secure two certain promissory notes, and that subsequently the same were assigned to James Dickson. After this, and in September, 1879, the next mortgage was given by the said H. McCallister and wife to "Wm. Reid, manager," upon the same land, and other lands of the mortgagors to secure notes of that date; and this is the mortgage through which the appellant, the Dundee Mortgage & Trust Investment Company, make their claim in this suit. At the time this mortgage was executed, and until September, in 1882, William Reid was the general agent of the Dundee Company, and manager of its affairs in this state. In January, 1880, William Reid, manager, assigned the said mortgage by an instrument in writing, duly acknowledged but not recorded, to the Dundee Company. In December, 1880, James Dickson brought a suit to foreclose the two mortgages assigned to him by Eliza Dickson, in the circuit court for Marion county, against H. McCallister and wife, and made William Reid a party as the holder of a subsequent lien. Service of the summons was duly made on Reid personally. In February, 1881, a decree was rendered in favor of Dickson for $6,282.28, and $338 costs and disbursements as the first lien. Execution was issued, and the premises were sold in April, 1881, to John Hughes for $6,794.19; being but one dollar in excess of such decree, interest, costs, and disbursements, and accruing expenses.

This sale was confirmed, and a sheriff's deed executed to Hughes. On September 21, 1881, William Reid, manager, filed his petition to foreclose the mortgage so given to him in the United States circuit court, and in that petition Reid, as plaintiff, alleges that the two mortgages given to Eliza Dickson on the 220-acre tract were prior liens, and had been foreclosed in a suit to which he was made a party in the circuit court for Marion county, and the said tract was duly sold under the decree therein, and the lien of his mortgage thereby cut off and extinguished as to such tract; and that he then had no lien thereon and was not entitled to any decree for the sale of the same. John Hughes, who then held the legal title to said tract of land under the sheriff's deed, was made a party defendant to such suit. A decree of foreclosure was rendered in May, 1882, for the amount due on the mortgage, and for the sale of all the land included therein, except this 220 acres, and the same was duly sold under such decree in October, 1884. On the third day of October, 1881, Hughes and wife conveyed the 220-acre tract to George W. Swegal for the stated consideration of $7,500, and on July 20, 1882, Swegal and wife conveyed the same property to Eugene McCallister for the stated consideration of $5,000. On that day the plaintiff loaned Eugene McCallister $5,000, and took the note and mortgage which forms the basis of this suit. In July, 1883, Eugene McCallister brought an action in ejectment against H. McCallister and wife to obtain possession of the mortgaged land. The defendants filed a cross-bill in equity that the plaintiff, Eugene McCallister, held in trust for them; and in January, 1884, a decree was made to that effect. On the twenty-ninth day of January, 1884, but after the decree in the supreme court, H. McCallister and wife executed a note and mortgage upon this tract of land to the defendants Bonham, Ramsey, Piper, and Chadwick. The defendant Levy is a judgment creditor. The decree for the balance in favor of the appellant in the United States court was not docketed until subsequently to all these liens. The court below rendered a decree declaring that the lien of the defendant and the lien of the co-defendants of the appellant were prior to its lien.

Upon the facts, as stated, the appellant admits that the plaintiff made her loan and took the security in good faith and without any notice of the trust as between Eugene McCallister and H. McCallister and wife, and upon the representations of the latter to the plaintiff at the time that their son Eugene was about to make the purchase on his own account, and needed the money to pay the purchase price, and that the amount claimed by the plaintiff is due; admits that the plaintiff had no notice of the assignment by Reid to the appellant, nor had Dickson any actual notice of the same, and that Reid was manager for the defendant, and had notice of the facts as to Dickson's foreclosure, and that the 220-acre tract is not of sufficient value to pay the plaintiff anything, if appellant has no first lien; ad

mits that the 220-acre tract was excepted out of the foreclosure proceedings in the United States court, but the plaintiff was no party to that suit.

The first question presented for our consideration upon this record is whether the assignment of a mortgage is such a conveyance as is manifestly within the intent of our registry act. If it is such a conveyance, the counsel for the appellant admits the failure to record the assignment of the mortgage in this suit is fatal to this case. Upon this point, the contention of the plaintiff is that a mortgage is a conveyance of an "estate or interest" in lands, otherwise there is no provision under the registry act for recording it, as it is not specially named in the statute, (Misc. Laws, c. 6, p. 514 et seq.;) and his conclusion is that if a mortgage is such a conveyance, an assignment of a mortgage must be also, for it passes the estate or interest of the mortgagee to the assignee.

And this conclusion the counsel for the plaintiff insists, is further strengthened by a fair construction of all the provisions of our registry law, taken in connection with the provisions of section 411 of the Civil Code for the foreclosure of liens. In this state a mortgage is literally a security for a debt, or the performance of the acts therein mentioned. Sellwood v. Gray, 11 Or. 535; S. C. 5 Pac. Rep. 196. But in form it is a conveyance, and, as such, within the intent of the registry act, which requires it to be recorded to affect with notice subsequent incumbrancers and purchasers. And the assignment of a mortgage may be in the form of a conveyance, and when thus executed and acknowledged, it may be admitted to record. But we all know that the assignment of a mortgage may be effected without any such formal conveyance. It may be assigned by a mere writing of the assignor, declaring that he hereby assigns the mortgage to the person named in such writing; or it may be assigned by a simple indorsement or delivery of the note for which the mortgage is a security. It is a familar principle that in the case of a debt secured by mortgage the debt is the principal, and the mortgage an incident, and that an assignment of the debt is an assignment of the mortgage. This principle is too well understood, and the authorities in support of it are too numerous, to require citation. And in cases of this character which are not in the form of a conveyance, there is no assignment to record, or which would be entitled to record. Nor do we understand when the assignment of the mortgage is made in the form of a conveyance, there is any obligation imposed by the statute which requires the assignee to have it recorded, to protect himself against subsequent incumbrancers and purchasers; only when executed in such form, it may be admitted to record, and when recorded, a certified copy of it may perhaps be used as evidence.. Such would seem to be the effect and extent of the implication arising out of sections 22 and 34 of the chapter of Miscellaneous Laws referred to supra.

But however this may be, there is nothing in these sections or the

statute expressly or otherwise requiring such an assignment to be recorded by the assignee to protect himself against subsequent purchasers and mortgagees. The most that can be said is that when the instrument of assignment is in the form of conveyance it may be admitted to record; but the statute imposes no obligation upon the assignee to record it. Whether he shall record it or not, when in such form, would seem to be wholly discretionary. The fact that the mortgage may be assigned by other modes not in the form of a conveyance, effectual to transfer the lien which would not be entitled to record, without prejudice to the rights of the assignee as against subsequent purchasers or incumbrancers, would seem to make this all the more apparent. The reason which brings the mortgage within the intent of the recording act, without specially naming it, and requires it to be recorded to give constructive notice, is that it must necessarily be in the form of a conveyance. There is no other mode of executing it; the necessity of the case brings it within the meaning of the registry act for the recording of conveyances.

It is needless to say that an assignment of a mortgage does not come within this principle. The general rule is that unless the recording of the assignment is required by law, the recor ling of it is of no effect. Pom. Eq. § 651, and note. The truth is the construction of our recording act in respect to the particular matter under consideration has received a very careful consideration by Mr. Justice DEADY in Oregon & W. T. Co. v. Shaw, 5 Sawy. 342, 343, and the result he reached was in conformity with the view here expressed. While it is true his construction of our statute is not absolutely binding upon us, yet his acknowledged familiarity with our statutes, rendered perhaps more especially so by his repeated and eminent services in their codification, and his deservedly high reputation as a jurist and thinker, entitle his judicial opinions at all times to high consideration, and in the particular case to more than ordinary weight. He said:

"In the absence, then, of any legislative direction to that effect, there does not seem to be any obligation resting upon an assignee to record his assignment, to protect himself against any subsequent purchaser or mortgagee.

And in this view we record our concurrence as the result of our investigation.

It is next claimed by the appellant that when Hughes purchased at the foreclosure sale of the Dickson mortgages, by such sale he acquired the legal title formerly owned by H. McCallister and wife, suject to the lien of the mortgage to the appellant, and a claim on the property prior to the lien of the appellants as for the amount due on the Dickson mortgages. In Sellwood v. Gray, 11 Or. 535, S. C. 5 Pac. Rep. 196, it was held that the effect of a foreclosure is to transfer to the purchaser the rights of the mortgagee, so far as he has any claim or interest in the mortgaged premises, for the security of his debt, and also to transfer to him so much of the equity of redemption as was not bound by the lien of a junior mortgage. The