title, then, which Hughes acquired under the sale to him was precisely the same as if he had taken an assignment of the Dickson mortgages and the deed of Hardin McCallister and wife of all their interests in the premises, subject to the right of the appellant to redeem the premises by the payment of the amount due on the Dickson mortgages. He had all the estate of the mortgagors and mortgagee, subject only to the lien of the appellant's mortgage; and as to the Dickson mortgages, with which we are more particularly concerned, he acquired the right to them in the same manner and to the same extent as though the mortgages had been assigned to him without foreclosure. Vanderkemp v. Shelton, 11 Paige, 33; Vroom v. Ditmas, 4 Paige, 531. Of course, we are proceeding on the hypothesis, as contended for by counsel for appellant, that the appellant, the Dundee Company, was not made a party to the foreclosure under the Dickson mortgages, and as to it the proceedings were a nullity.

But to return. As a result of this it is admitted that when Hughes bought at the foreclosure sale, he acquired, as separate and distinct interest in him, the prior lien of the Dickson mortgages, and the legal title, subject to the lien of the appellant's mortgage. Now the counsel for the appellant contends that if these interests were in fact existing in him as separate and distinct interests, then, under the rules of merger, he had the power to merge one in the other, and once merged they never could be separated; or that he had the power to keep them separate, and convey one as separate from the other, but that when he conveyed by deed to Swegal, and Swegal to Eugene McCallister, the effect was to work a merger of the lien and fee; and as a consequence, when the plaintiff loaned the money to Eugene McCallister for the purchase of the property, the Dickson mortgages and the fee being merged, she did not succeed to the equitable interest of the Dickson mortgages as a purchaser under the decree of foreclosure.

It is difficult to understand, upon the facts disclosed by this record, how the foundation for a merger could exist while the outstanding incumbrance of the appellant was a subsisting lien upon the land. Some brief notice of what constitutes merger, and how it is regarded in equity, will assist in the disposal of the question under consideration. A merger is defined to be "where a greater and lesser estate coincide and meet in one and the same person, in one and the same right, without any intermediate estate," that at once the lesser estate is absorbed by the greater, or, in legal parlance, merged. In equity mergers are considered odius, and are much less favored than at law, and are made to depend upon the intention and interest of the party. It is only in those cases where it is perfectly indifferent to the party in whom the interests had united whether the charge or term should or should not subsist that in equity the term is merged. Forbes v. Moffat, 18 Ves. Jr. 394. But if the owner has an interest in keeping them distinct, or there is an intervening right, there will be no merger.

"The doctrine of merger," said BELLOWS, C. J., "springs from the fact that when the entire equitable and legal estates are united in the same person, there can be no occasion to keep them distinct; for, ordinarily, it could be of no use to the owner to keep up a charge upon an estate of which he was seized in the fee-simple; but if there is any outstanding intervening title, the foundation of the merger does not exist, and as a matter of law it is so declared." Stantons v. Thompson, 49 N. H. 272. "But if the owner of the legal and equitable title has an interest in keeping these titles distinct, he has a right so to keep them, and the mortgage will not be extinguished." WILDE, J., in Loud v. Lane, 8 Metc. 518. The intent to preserve the interests or rights distinct may be express or implied. And Lord THURLOW said: "Whenever it is more beneficial for the person entitled to the charge to let the estate stand with the incumbrance upon it, than to take it discharged of the incumbrance, that circumstance will have a controlling influence in deciding upon the implied intent." Compton v. Oxenden, 2 Ves. Jr. 264. In the absence, then, of an express intention to the contrary, the intention to keep the two estates separate will be implied or presumed, when it is for the interest of the party that they should be kept separate. "It will not do, then," as was said by ELLIOTT, J., "to assume, as a matter of course, that there was a merger; for there are many cases in which, in order to prevent injustice, courts will not allow merger to take place. although all the essential elements of a technical merger combine in the particular case." Evansville Gas-light Co. v. State, 73 Ind. 222.

Now, the Dickson mortgages being prior liens to that of the appellant who was not made a party to the foreclosure proceedings under them, Hughes, by his purchase at such foreclosure sale, acquired, not only the equity of redemption, subject to the mortgage of the appellant, but the right to the Dickson mortgages, in the same manner and to the same extent as though they had been assigned to him without foreclosure. And it was manifestly for the interest of Hughes that these mortgages should not be extinguished or merged in the legal title, as the mortgage of the appellant was a subsisting lien upon the property, and he would have been obliged to satisfy it before the property would be free from incumbrance; or, in other words, he would lose the benefit of the Dickson mortgages to which he had been subrogated by said foreclosure sale. To place Hughes, or those who succeeded to his place or rights, in this position, upon the ground of a technical merger, would work a flagrant injustice, while by keeping these interests separate and distinct the rights of priority are preserved and maintained in the order in which the several transactions occurred and were recorded, and injustice prevented. Surely, if it be true, as counsel contended, that these mortgages have not been foreclosed as to the appellant, because it was not made a party to the foreclosure proceedings under them, then they are still in existence, not merged, but subsisting liens; and being prior liens to that

of the appellant, the only way for the appellant to get rid of them is to redeem. Nor is it perceived why the same equitable principle is not alike applicable to the other purchasers, Swegal and Eugene McCallister. If Hughes, as purchaser at the sheriff's sale under the decree of foreclosure, succeeded to all Dickson's rights and priorities under these mortgages, so did Swegal as purchaser from Hughes, and Eugene McCallister as purchaser from Swegal, become invested with the same rights and priorities. It would be as manifestly unjust to allow a technical merger against them, as Hughes' and the interest of each successive party to the transaction is such in keeping the estates or interests separate that equity will presume such was the intention.

The facts show a case where it is not perfectly indifferent to parties in whom the interests had united that they should or should not be merged; but their interests require that they should be kept separate to protect from injustice and to conserve equity and good conscience. And in equity the plaintiff is a purchaser, and her claim for the purchase money loaned to Eugene McCallister is equally as much entitled to protection, and her interests as much opposed to a merger, as Eugene McCallister's claim for the same money would have been had he furnished it himself. She had the same equities he would have had if he had advanced the purchase money. This invests her with the same rights and priorities, and entitles her to be paid before the appellant. Nor does it work any injustice to the appellant; for it only preserves that order of priority which existed when its mortgage was executed, and of which it had full notice.

Thus far we have conceded the assumption of counsel for the appellant that the service upon Reid in the Dickson foreclosure was not service upon the appellant, and that as to it the proceeding was a nullity for the purpose of showing that there is no equitable principle which can be applied to push this junior incumbrance in front of the prior lien, or supersede the equitable rights arising under it. The fact is, the contention of counsel necessarily assumes the existence of an outstanding intervening interest or lien which is opposed to the foundation of merger. We must now examine the right of the appellant with respect to its co-defendant. The facts show, as is alleged in the answer of the Dundee Company, appellant, that this mortgage was made to William Reid, manager; but it was in fact for the Dundee Company, and that Reid assigned it to the company, January 26, 1880, but that the assignment was not recorded. Subsequently, in February, 1881, the Dickson mortgages were foreclosed, and Reid, being the ostensible owner of record, was made a party, and made default. Yet, after this assignment and these foreclosure proceedings had taken place, and while Reid was still the agent or trustee of the company, in September, 1881, he brought suit in the United States court in his own name, as manager, to foreclose this same mortgage. In that suit, the regularity of the proceedings, and the service upon Reid in

the Dickson foreclosure is alleged, and the recitals of the record expressly declare that the rights of the Dundee Company were foreclosed and barred, so far as the 220 acres are concerned; and a decree is entered in conformity therewith. The company thus sues in the name of Reid after the assignment, and by virtue of his relation to act for them.

As disclosed by this record there can be no doubt that Reid had control of the business of the company in Oregon, and the possession of the property, with authority to transact such business and to hold the legal title to such property in his own name, and in all respects to deal with it as his own, so far as third persons or parties are concerned. This is not the case of an assignment to a stranger, and then afterwards the assignor being impleaded as a junior incumbrancer by a prior mortgagee, and subsequently bringing suit in his own name on the mortgage which he had previously assigned; but that of the agent or trustee of the party, made such ostensible owner of record by such party, and with authority, by virtue of his relation, to act in the premises. The difference is manifest. The act of Reid was the act of the principal, or bound the principal. If he was endued with capacity to sue as the owner, as he did, his act was the act of the principal, and made him a proper party to the prior proceedings in the foreclosure. The transaction seems to be susceptible of no other construction, and to hold otherwise would work a manifest injustice, if not a fraud. It certainly ought not to be allowed to take advantage of its own act, and claim that it had no notice of the Dickson suit, when the party to the record, and the same party it had placed upon the record as owner of this mortgage, was impleaded in the suit and made default. There was in fact but one interest, and that Reid was made to represent. Mr. Jones says: "It has been held in some cases, however, that as trustee and cestui que trust represent but one interest, he alone should be made a party to the suit, as he would be the party entitled to redeem." The facts of this case are such that we think it would be inequitable to allow the appellant to take this advantage, and until better advised, the decree must stand.

THAYER, J., concurs in the result, but does not agree in the conelusion that the recording acts of this state do not extend to assignments of a mortgage.

WALDO, C. J., absent.

(12 Or. 492)

CARTER and others v. KоSHLAND.

Filed November 17, 1885.

1. GARNISHMENT-PERSONAL SERVICE.

When process has been served on a garnishee, and he has made answer, which is alleged by the plaintiff to be untrue, and a further order is passed by the court commanding the garnishee to appear and be examined under oath, service of such order on the attorney of the garnishee is not sufficient to give the court jurisdiction to enter judgment against the garnishee for want of answer, unless he and his attorney were present in court when the motion for judgment was made.

2. SAME-JUDGMENT FOR SALE OF ATTACHED PROPERTY.

Where a judgment for the sale of attached property has been rendered to satisfy the debt, a general judgment against the garnishee for the value of identical property cannot be obtained.

Appeal from Multnomah.

M. G. Munly and E. B. Watson, for respondent.
A. F. Sears and Raleigh Stott, for appellant.

THAYER, J. This appeal is from a judgment of the circuit court for the county of Multnomah, rendered in favor of the respondent, against the appellant, in certain garnishee proceedings. It appears from the transcript that on the thirteenth day of May, 1885, the respondent, a private corporation, commenced an action at law against one L. H. Frank in said court to recover a debt of some $378.57, due from the latter to the former, and thereupon sued out a writ of attachment, which was issued on the next day. The attachment is in the usual form. The sheriff, to whom the writ was delivered, certified thereon as follows:

"I hereby certify that I received the within writ of attachment on the fourteenth day of May, A. D. 1885, and executed the same on the fourteenth day of May, 1885, at Portland, in the county of Multnomah, in said state, by serving a garnishment upon Koshland Bros., as required by law, garnishing all debts, property, moneys, rights, dues, credits of every nature in their hands or under their control, belonging or owing to the said L. H. Frank, to which the said Koshland Bros. made an answer thereto; said answer being hereto attached and made a part of this return."

The answer referred to is as follows:

"I hereby return that we have no property in our hands at this time, nor have we any property, debts, money, dues, credits, of any kind or nature, belonging to L. II. Frank.

[Signed]

"KOSHLAND BROS."

There seems to have been a notice, signed by the sheriff, directed to said Koshland, to the effect that by virtue of said writ of attachment all debts, etc., as mentioned in said return, had been attached and garnished, and that said answer was indorsed thereon. Said notice bore date the fourteenth day of May, 1885. Upon June 1, 1885, the said circuit court gave judgment in said action at law in favor of said respondent, and against said Frank, for the amount of said debt; and on the ninth day of June, 1885, on motion of the respondent's attorneys, the judgment was amended by the insertion of