of the defendant, that the contract which is the subject of the euit is void because illegal, the court will not lend its aid either to enforce on one hand or give relief on the other: Buchtel v. Evans, 21 Or. 309; Ah Doon v. Smith, 25 Or. 89. But there is a marked distinction between contracts which are void ab initio and those which are void only as to third parties: Harris v. Harris, 23 Gratt. 737. A contract which was void when executed cannot be made valid by. ratification of the parties: Wait on Fraudulent Conveyances, sec. 489; McIntosh v. Lee, 57 Iowa, 356; Atlee v. Fink, 75 Mo. 100; 42 Am. Rep. 385. Nor is there any method whereby an illegal contract-one which never had life— can be rendered efficacious. A fraudulent conveyance is not void, but merely voidable at the suit of the creditor, and is therefore capable of ratification: Bump on Fraudulent Conveyances, 457; Wait on Fraudulent Conveyances, sec. 482. A contract entered into to defraud creditors is clearly against the policy of the statute of frauds, as well as against the general policy of the law; but it is not illegal in the strict sense of the term, for the wrong may be condoned by the creditor, and the transaction will thus become purged of the fraud: Millington v. Hill, 47 Ark. 301. The conveyance being valid between the parties to it, and not illegal in the strict sense of the term, it follows that the defendant should not have been 202 permitted to plead the defense interposed, and there was error in overruling the demurrer.

2. The plaintiff was the owner of lot 5 in block 21, and, having executed a deed to the defendant for lot 5 in block 51, in which she had no interest, the question is presented whether there was any consideration for the note and mortgage. The plaintiff having in her complaint described the property as lot 5 in block 21 in Albina addition to Portland, Oregon, the defendant, in her second defense, inter alia, alleges that "said plaintiff, upon the seventh day of November, 1891, made, executed, and delivered to defendant a warranty deed to the following described real property in the county of Multnomah, state of Oregon, to wit, lot five (5), block fifty-one (51), Albina addition, Portland, with the frame buildings situated thereon, the same being the real property described in plaintiff's complaint; that no consideration whatever passed from defendant to plaintiff; that defendant has ever since held the deed to said property. At the same time, and as a part of the same transaction, defendant made her certain promissory note in words and figures as follows [here follows & copy of the note set out in the complaint]. And, at the same time, defendant made and executed a mortgage upon said prop

erty, the same being the mortgage described in the plaintiff's complaint, said note and mortgage being made and executed without any consideration whatever." It is very evident from these allegations that the defendant did not intend to rely upon any failure of title to the lot which the plaintiff purported to convey to her as a defense to the suit. No attempt is made to allege that the plaintiff was not the owner of the lot described in her deed, or that, by reason of any failure of title thereto, there was no consideration for the note or mortgage. It is true, the defendant, upon filing her 203 answer, tendered a deed to the premises, but the rescission which she sought was in consequence of the alleged fraudulent transfer, and not because of any failure of title. A grantee of premises conveyed with warranty has a remedy upon the covenants of his deed for a failure of title, and if a perfect title be tendered by the grantor before a decree is rendered, the contract will not be rescinded, unless it appear to the court that the grantee has sustained some loss, injury, or damage by reason of the delay in perfecting the title: Kimball v. West, 15 Wall. 377; Mays v. Swope, 8 Gratt. 46; Hughes v. McNider, 90 N. C. 248. The plaintiff, before the decree was rendered, tendered a deed to the defendant, which contained a correct description of the premises, and there having been no proof of a demand for a rescission of the contract, nor any loss, injury, or damage sustained by the defendant by reason of any delay in perfecting the title, no rescission should be decreed.

3. That the deed was the consideration for the note and mortgage is admitted by the answer, in which it is alleged that they were executed at the same time, and as parts of the same transaction. When two contracts are contemporaneously executed by the same parties, and relate to the same subject matter, they must be construed together as constituting but one agreement: Dean v. Lawham, 7 Or. 422; Kruse v. Prindle, 8 Or. 158. The mortgage recited that it was given to secure the purchase price of the premises, and, while there was an error in the description contained in the deed, the subject matter related as well to the purchase price and security as to the property conveyed or mortgaged.

4. This brings us to a consideration of the delivery of the mortgage, the execution of which is admitted in 204 the answer. The statute provides that "the execution of a writing is the subscribing and delivering it, with or without a seal": Hill's Code, sec. 574; but, the defendant having denied the delivery, her pleading should be construed as a whole, and not by the use she

has made of the technical word "executed." The answer also alleges that the plaintiff agreed the defendant might retain possession of the mortgage. As the defendant bases her right to retain possession on plaintiff's agreement, she necessarily admits plaintiff's right to the possession but for such agreement. No lien could attach to the premises until the mortgage had been delivered by the defendant with the intent to give effect to the instrument: 1 Devlin on Deeds, sec. 260. Delivery is a question of fact, but this may be inferred from circumstances. The plaintiff testifies that after the mortgage had been properly signed, sealed, witnessed, and acknowledged, it was delivered to her, and that because the defendant had a safe, it was agreed that she should keep it. If this testimony is to be believed, the mortgage was executed, and the lien attached to the property. The agreement that the defendant should retain it recognizes the right of the plaintiff to contract with reference to it, and, in our judgment, corroborates the plaintiff's testimony. The mortgage having been delivered, the defendant has sustained no injury, even if the plaintiff adopted a ruse to secure its possession. In view of these considerations, the decree of the court below must be reversed, and one entered here foreclosing plaintiff's mortgage for the amount due on the note.

5. The note having provided for a reasonable attorney fee, the plaintiff alleged that five hundred dollars was such sum as the defendant promised to pay in case suit were brought thereon. The defendant denied that any sum was reasonable as such fee, and upon the issue 205 thus formed no evidence was taken, and consequently the statutory attorney fee only will be allowed. Reversed.

ILLEGAL CONTRACTS-ENFORCEMENT OF.-No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act: Note to Lemon v. Grosskopf, 99 Am. Dec. 61. In an action between the parties to an illegal contract, a court will not lend its aid, either to annul it when executed, or to enforce it when executory. A court of equity will leave the parties to such an agreement where it finds them: Note to Bell v. Campbell, 45 Am. St. Rep. 514; Bernard v. Taylor, 23 Or. 416; 37 Am. St. Rep. 693; monographic note to Boyd v. Barclay, 34 Am. Dec. 765, on the rights of parties to illegal or fraudulent transactions. Deeds, conveyances, contracts, and other transactions, entered into in fraud of creditors, are valid between the parties, even where no consideration passes: See monographic note to Whitworth v. Thomas, 3 Am. St. Rep. 727-745, on recriminatory fraud; Gilbert v. Stockman, 81 Wis. 602; 29 Am. St. Rep. 922; Springfield Homestead Assn. v. Roll, 137 Ill. 205; 31 Am. St. Rep. 358. Transfers of property for the purpose of defrauding creditors are, however, voidable, if not void, as against creditors: Note to Whitworth v. Thoinas, 8 Am. St. Rep. 729; Mason v. Vestal, 88 Cal. 396; 22 Am. St. Rep. 310; Johnston v. Harvy, 2 Penr. & W. 82; 21 Am. Dec. 426. There seems to be a want of har

mony in the decisions as to whether notes and mortgages executed dur ing a fraudulent transaction as to creditors may be enforced between the parties thereto: Note to Whitworth v. Thomas, 3 Am. St. Rep. 736. There are exceptions to the rule that courts will refuse to aid either party to a fraudulent transaction, entered into to defraud others, but they are very few. Such contracts are enforced or avoided, both at law and in equity, as may best answer the purpose of discouraging the fraud or contract against the policy of the law: Note to Whitworth v. Thomas, 3 Am. St. Rep. 742, 744.

Although a mortgage is executed by the mortgagor with intent to delav his creditors, it is not fraudulent as to the mortgagee, unless he participated in the fraudulent intent: Sabin v. Columbia Fuel Co., 25 Or. 15; 42 Am. St. Rep. 756. To render a conveyance based upon a valuable consideration, and not fraudulent on its face, voidable and fraudulent as to creditors, there must have been mutuality of participation in the fraudulent intent on the part of both the vendor and the purchaser: See mon graphic note to State v. Mason, 34 Am. St. Rep. 395, on knowledge of vendee as affecting the validity of fraudulent conveyances. Deeds executed to evade the payment of a judgment that might be recovered against the grantor have been held fraudulent and void as to his creditors: Helms v. Green, 105 N. C. 251; 18 Am. St. Rep. 893; Rogers v. Evans, 3 Ind. 574; 56 Am. Dec. 537; Greer v. Wright, 6 Gratt. 154; 52 Am. Dec. 111, and monographic note thereto on claims against which voluntary conveyances may be avoided; Shean v. Shay, 42 Ind. 375; 13 Am. Rep. 366; because one having a cause of action is a creditor, within the meaning of the statute against fraudulent conveyances. If a transfer is made for the purpose of hindering, delaying, or defrauding the creditors of the grantor, it may be avoided by any of his creditors, prior or subsequent: See monographic note to Hagerman v. Buchanan, 14 Am. St. Kep. 745, on voluntary conveyances. In a state where contracts to defraud creditors are prohibited by statute, a note founded upon a consideration, but covinous, and designed by both parties to defraud creditors. is valid and binding as to the parties to it before performance, and void only as to creditors: Carpenter v. McClure, 39 Vt. 9; 91 Am. Dec. 370.

TITLE-RESCIS

VENDOR AND PURCHASER-DEFECTIVE SION. A purchaser cannot be compelled to take a defective title, but a defect in the title may be removed within the time fixed for the completion of the purchase; Note to Burks v. Davies, 20 Am. St. Rep. 217. Equity will compel the vendee to take a defective title which becomes perfected at the time of the entry of a decree for specific performance: Note to Gregory v. Christian, 18 Am. St. Rep. 510. If a vendor fails for a great length of time to make title according to his bond, the purchaser may either sue at law for the breach or in equity for rescission: Humble v. Hinkson, 3 A. K. Marsh. 468; 13 Am. Dec. 195.

CONTEMPORANEOUS AGREEMENTS.-Two or more instruments executed at the same time, between the same parties, with reference to the same subject matter, must be construed together as forming but one contract: Notes to Appeal of Cornwall etc. R. R. Co., 11 Am. St. Rep. 894; Sutton v. Beckwith, 13 Am. St. Rep. 351.

DELIVERY OF INSTRUMENTS is a question of act and intent: Wilson v. Wilson, 49 Am. St. Rep. 176, and note; Weber v. Christen, 121 Ill. 91; 2 Am. St. Rep. 68; but the main element is the intention, as there may be a delivery without an actual physical transfer of possession: Weber v. Christen, 121 Ill. 91; 2 Am. St. Rep. 68; note to Stone v. French, 1 Am. St. Rep. 242. The delivery of a deed is complete when there is an intention manifested on the part of the grantor that it shall become effective as a conveyance. Whether such intent actually existed is a question of fact, to be determined by the circumstances of the case, and cannot, in the majority of instances, be declared as a matter of law: Martin v. Flaharty, 13 Mont. 96; 40 Am. St. Rep. 415. A mortgage must not only be delivered to, but must also be accepted by, the mort

gagee, or the title does not pass; and it would seem that, to constitute delivery, the mortgage must pass under the power of the mortgagee or some person for his use, with the consent of the mortgagor: Woodbury ▼. Fisher, 20 Ind, 387; 83 Am. Dec. 325. But the intention is the substantive thing. If the facts attending the execution of the instrument show that the party executing it intended it to become immediately operative and binding without any further act or ceremony on his part, there is sufficient proot of an effective delivery, whoever may afterward take possession of the document: See monographic note to Jones v. Jones, 16 Am. Dec. 42, on necessity of delivery of deed.

NEGOTIABLE INSTRUMENTS-ALLOWANCE OF ATTORNEY'S FEES.-If, in an action upon a note stipulating for the payment of a reasonable attorney fee in case of suit, the answer denies that the amount claimed in the complaint is reasonable, an issue is thus raised, which must be tried either by the court or a jury: Bowles v. Doble, 11 Or. 474

KERN V. HOTALING.

[27 OREGON, 205.]

EQUITY-POWER TO RESTORE CANCELED MORTGAGE. If a mortgagee takes a new mortgage in the place of an old one, not as payment, but in continuation of the old indebtedness, and cancels the old mortgage without knowledge of an intervening lien, although such lien is of record, equity will, in the absence of the intervening rights of third parties, and on the ground of mistake, restore and enforce the lien of the old mortgage, where he, relying upon a false abstract of title, was guilty of no negligence in not discovering the lien of record.

PAYMENT. THE ACCEPTANCE OF A NEW NOTE AND MORTGAGE in renewal of an old indebtedness, and without any understanding that such indebtedness shall be discharged, is not a payment or discharge of the old indebtedness.

MORTGAGES-PAYMENT.-Nothing short of actual payment of the debt, or an express release, will operate to discharge a mortgage. THE MAXIM THAT WHERE THE EQUITIES ARE EQUAL the law will prevail has no application where the equities are unequal by reason of the fact the plaintiff has a prior and superior equity. ́In such a case, the plaintiff's superior equity will prevail.

MISTAKE. A LIEN discharged by mistake is, in contemplation of equity, still in existence.

EQUITY-MORTGAGE — ENFORCEMENT OF SUPERIOR EQUITY. If one who expects to acquire title to land places a lien thereon, and, after obtaining his deed, gives a mortgage on the land for a part of the purchase price, the lien of the mortgage is paramount, where the mortgagee has not, through his own fault, surrendered or impaired his superior equity, and no disadvantage has accrued to the other party by reason of the mortgagee canceling his mortgage by mistake, and taking a new one in ignorance of the other party's equity.

Suit to have the cancellation of a mortgage set aside and revoked, and to have the mortgage reinstated, foreclosed, and deelared a prior lien. In the summer of 1890, the plaintiff, J. W. Kern, negotiated for insurance on his life to the amount of fifty thousand dollars, with Frank Sperling, who was then the agent of the New York Life Insurance Company. At the same time,