ed to the consideration of any of the supposed errors in the record because the same were not assigned in the notice of appeal. Section 537, Hill's Code, among other things provides, in case the judgment be one rendered in an action at law, the notice of appeal shall specify with reasonable certainty the grounds of error upon which the appellant intends to rely on the appeal; and section 544 authorizes this court to affirm, reverse, or modify the judgment or decree appealed from in the respect mentioned in the notice, and not otherwise. These provisions of the Code, according to the plain import of the language, require that in an action at law the notice of appeal to this court must specify the grounds of error upon which the appellant intends to rely; and such has generally been the interpretation placed upon them by this court. Dolph v. Nickum, 2 Or. 202; Fulton v. Earhart, 4 Or. 61; Lewis v. Lewis, Id. 209; Williams v. Gallick, 11 Or. 337, 3 Pac. Rep. 469; Krewson v. Purdom, 13 Or. 563, 11 Pac. Rep. 281. But an exception to this rule was stated and recognized in this court for the first time in McKay v. Freeman, 6 Or. 449. In that case the court said: "Before examining the assignments of error set out in the notice of appeal, it is necessary for us to pass upon the objections made for the first time in this court to the sufficiency of the complaint, and to the jurisdiction of the court below over the subject-matter of the action. It has been the practice of this court to consider that the court below had not jurisdiction of the subject-matter, and that the complaint does not state facts sufficient to constitute a cause of action or suit, whether they are assigned as error in the notice of appeal or not. And this seems to have been followed in State v. McKinnon, 8 Or. 487. The reason of this exception was not stated, but no doubt it is that in a case where the court below was without jurisdiction, or where it acted upon a pleading which was utterly destitute of legal merit, that is, which entirely failed to state a cause of action or defense,-the court was without power to render a judgment that would be of any validity; and therefore, rather than incumber its records with nullities in the form of void judgments, the court would of its own motion take notice of the objection, though not assigned as error in the notice of appeal. This case is not within the exception above referred to, and it is difficult to see how we can examine the supposed errors without disregarding the plain mandate of the statute. Woodruff v. Douglas Co., 17 Or. 314, 21 Pac. Rep. 49, was found by the court to be within the exception, and, properly understood, is in harmony with the other cases on the subject. These suggestions lead to an affirmance of the judgment, and it is so ordered.

CUSTER V. CUSTER.

(Supreme Court of Oregon. Feb. 23, 1892.) Appeal from circuit court, Linn county; R. P. BOISE, Judge.

Suit by Ruel Custer against Margaretta

Custer for divorce. From a decree dismissing the suit as to both parties, plaintiff alone appeals. Reversed.

W. R. Bilyeu and J. K. Weatherford, for appellant. L. H. Montanye, J. N. Duncan, H. C. Watson, and Blackburn & Wright, for respondent.

The

PER CURIAM. This is a suit for divorce, on the ground of cruel and inhuman treatment and desertion. The allegations of the complaint are denied by the answer, and the defendant alleges affirmative matter, upon which she asks relief. suit was dismissed in the court below as to both parties, from which the plaintiff alone appeals. The question is one of fact alone, and the evidence is voluminous. No useful purpose will be subserved by making any portion of it a matter of record. We have attentively and carefully examined all the testimony in the case, and as a result are of the opinion that plaintiff is entitled to a decree of divorce. The two minor children being girls of tender years, the defendant should have their care and custody until otherwise ordered, and the plaintiff to pay the sum of $40 per month for their support. Decree reversed; plaintiff to pay the costs and disbursements of this suit.

(22 Or. 29)

PEARCE et al. v. BUELL et al. (Supreme Court of Oregon. Feb. 22, 1892.) FRAUDULENT REPRESENTATIONS-SALE OF LAND-RESTORATION OF MORTGAGE LIEN.

1. A sale will not be set aside simply because of fraudulent representations of the vendor. It must appear that the vendee was ignorant of the actual facts, and relied on the representa tions.

2. By the terms of a sale of land, the vendee was, as part of the purchase price, to pay at once part of a debt evidenced by the vendor's note, and secured by mortgage on the land, and to assume the payment of the balance thereof, and to execute his note, secured by mortgage on the land, therefor. Held, that the mortgagee, who, in ignorance of a judgment lien on the land, and with no intention of waiving his prior lien, released his mortgage and took the vendee's note, secured by mortgage, for the balance, was, as to such balance, entitled to have his original mortgage restored, as against the judgment lienholder.

case are these: On May 3, 1889, the defend. ant Buell and wife executed to plaintiff Pearce a mortgage upon the premises described in the complaint to secure the paymeut of an indebtedness of $1,129, with interest at the rate of 8 per cent. per annum, as evidenced by a certain promissory note for that amount, due one year after date, which mortgage was on the same day duly recorded. On August 14, 1889, the defendants S. Marks & Co. recovered a judgment by confession against defendant Buell for $1,251, which on the same day was duly entered in the judg. ment lien docket. On July 21, 1890, the plaintiffs Hyde desiring to purchase, and the defendant Buell to sell, the mortgaged premises, it is alleged "that Buell falsely and fraudulently, and with intent to cheat and defraud Pearce and the Hydes, represented to them that there were no liens or incumbrances upon said premises except the mortgage lien of plaintiff Pearce; and relying upon these representations, and induced thereby," the said Hydes purchased said property, agreeing to pay therefor the sum of $1,300, in manner following: To assume the payment of $900 of the mortgage debt of Pearce, and to execute their note, secured by mortgage upon the premises, therefor; to pay $334 in money to Pearce on said debt, and the remainder of the purchase price, $66, to pay to said Buell. In pursuance of this agreement, Buell conveyed the property to the Hydes, and they executed their notes and mortgage to Pearce for $900, paid him $334 in money, and paid the remaining $66 to Buell. Pearce, induced by and relying upon the representations of Buell that the premises were free from all liens or incumbrances except his mortgage, and in ignorance of the lien of Marks & Co., as a matter of accommodation to, and for the convenience of, Buell and the Hydes, accepted the note and mortgage of the Hydes, and canceled his former mortgage upon the record, without intending in any way to relinquish his first lien upon the premises for the balance due him. Afterwards, Marks & Co. caused an execution to be issued upon their judgment, and were proceeding to sell the land thereunder, when this suit was brought to cancel the deed from Buell to the Hydes, and reinstate Pearce's mortgage. By its decree the court below reinstated Pearce's mortgage for the entire amount originally due thereon, and interest; canceled and set aside the satisfaction thereof on the record; canceled the deed from Buell to the Hydes, and the note and mortgage given by them to Pearce; and ordered that the sum of $455, paid by the Hydes to Pearce on his mortgage be returned to them. From this decree, defendants appeal. Although Pearce and the Hydes have joined in this suit as plaintiffs, their interests are separate, and must be so considered by us.

1. The plaintiffs Hyde base their right to relief upon the alleged fraudulent representations of Buell concerning the liens upon the premises purchased by them, and their reliance upon the same in making the purchase. They have not testified in the case, nor is there any evidence whatever

in the record, so far as we can ascertain, supporting or even tending to support the allegations of the complaint in this respect. It is true the evidence shows that Buell stated at the time of the sale and purchase that there were no liens or incumbrances on the land except Pearce's mortgage; but whether they were ignorant of the actual facts, or relied upon this representation, does not appear. The complaint is not verified by them, but by their co-plaintiff, Pearce; so that it nowhere appears in the record that the Hydes are willing to swear that the representations of Buell in any way induced them to purchase the land. For aught that appears in this record, they may have been fully informed that Marks & Co. held a judgment lien against the land they were purchasing, either from an examination of the record or from other sources of information. If so, certainly, they cannot have the sale set aside on account of any representations of Buell in relation to the matter, even if false. The burden of proof is upon them, and they must prove the allegations of their complaint by a preponderance of the evidence before they can prevail in this suit. This they have not done, or even attempted to do, and there is an entire failure of proof on their part. So much of the decree of the court below as is in their favor must, therefore, be reversed, for want of evidence to support it.

2. Passing now to the case as made by the plaintiff Pearce, it clearly appears from the testimony that he accepted the note and mortgage from the Hydes for the balance due from Buell, and canceled the former mortgage on the record, under a mistake and in ignorance of the lien of Marks & Co., and with no intention of waiving his prior lien. This was but a mere change in the form of the indebtedness, growing out of the fact that Buell had sold the mortgaged premises to the Hydes, who were to pay the Pearce mortgage as part of the consideration, and therefore, as a matter of convenience, the new note and mortgage from the Hydes was given. This mere change in the form of the indebtedness did not operate as a payment of the Buell mortgage or discharge the lien, because it was evidently not so intended by the parties. "No change in the form of indebtedness or in the mode of payment will discharge the mortgage. A mortgage secures the debt, and not the note or bond or other evidence of it. No change in the form of the evidence or the mode or time of payment, nothing short of actual payment of the debt or an express release, will operate to discharge the mortgage. Jones, Mortg. § 924. This is so both between the parties and as to a subsequent lienholder. Id. § 927. Nor did the giving of a new note with the names of the Hydes in place of Buell operate as a waiver of the original mortgage. Jones, Mortg. § 929; Pond v. Clarke, 14 Conn. 334; Hyde v. Tanner, 1 Barb. 75. In such case a court of equity will look through the form to the substance, and keep alive the original security, if it can be done without injury to the third parties. No rule of law is better settled than if the holder of a mortgage

take a new mortgage as a substitute for a former one, and cancel and release the latter, in ignorance of the existence of an intervening lien upon the mortgaged premises, although such lien be of record, equity will, in the absence of the intervening rights of third parties, restore the lien of the first mortgage, and give it its original priority. Jones, Mortg. § 972; Geib v. Reynolds, 35 Minn. 331, 28 N. W. Rep. 923; Bruse v. Nelson, 35 Iowa, 157; Downer v. Miller, 15 Wis. 677; Vannice v. Bergen, 16 Iowa, 555; Robinson v. Sampson, 23 Me. 388; Corey v. Alderman, 46 Mich. 540, 9 N. W. Rep. 844; Cansler v. Sallis, 54 Miss. 446. The fact that the mortgage was released in ignorance of the existence of the intervening lien is, in equity, deemed such a mistake of fact as to entitle the party to relief, although such lien may have been of record. Bruse v. Nelson, supra; Cobb v. Dyer, 69 Me. 494; Geib v. Reynolds, supra. To restore the mortgage of Pearce as a lien upon the mortgaged premises for the amount due him, prior and paramount to the lien of Marks & Co., is but to prevent manifest injustice and hardship, and interferes with no superior intervening equities. The lien of Marks & Co. was obtained prior to the release of Pearce's mortgage, and therefore they have not been in any way misled by the discharge of the mortgage. They have advanced no new consideration in consequence of such release, or changed their position in any way. With the mortgage restored for the amount due Pearce, they will be in the same position as before the cancellation, no better and no worse. It would be inequitable and unjust to permit them to take advantage of plaintiff's mistake in canceling his mortgage. The cancellation of a mortgage is but prima facie evidence of its discharge, and it may be shown that it was made by mistake, as is clearly the fact in the case here. Under such circumstances, Marks & Co. have no equity or claim to resist the older and superior equity of Pearce to a restoration of his original rights. The principle running through all the cases of this class, says BARCULO, J., "is that, when the legal rights of the parties have been changed by mistake, equity restores them to their former condition, when it can be done without interfering with any new rights acquired on the faith and strength of the altered condition of the legal rights, and without doing injustice to other persons. Barnes v. Camack, 1 Barb. 392. In such cases a court of equity will look through the form to the substance of the transaction, and keep an incumbrance alive, or consider it extinguished, as will best serve the purposes of justice and the intention of the parties. Barnes v. Camack, supra; Starr v. Ellis, 6 Johns. Ch. *393. It follows, therefore, that plaintiff Pearce is entitled to a decree reinstating his mortgage as a lien upon the premises described in the complaint for the amount due him, towit, $745, with interest at the rate of 8 per cent. per annum from July 21, 1890, prior and paramount to the lien of the judg ment recovered by Marks & Co. against Buell; and if the parties so desire a decree of foreclosure may be entered here. The

decree of the court below is therefore modified as indicated in this opinion, neither party to recover costs in this court.

(1 Okl. 117)

SMITH V. TOWNSEND. (Supreme Court of Oklahoma. Feb. 1, 1892.) PUBLIC LANDS-ISSUE OF PATENT-EQUITABLE JURISDICTION-LOCATION OF HOMESTEAD.

1. Where the officers of the United States land department, acting on a known state of facts, draw a conclusion of law and issue a patent for a portion of the public domain, a court of equity may entertain a complaint praying that the patertee be decreed a trustee for plaintiff, and that he be compelled to convey the legal title.

2. Under Act Cong. March 2, 1889, (25 U. S. St. at Large, p. 1005,) relating to the opening of certain land in Oklahoma for settlement, which provides that, "until said lands are opened for settlement by proclamation of the president, no person shall be permitted to enter upon and occupy the same, and no person violating this provision shall ever be permitted to enter any of said lands or acquire any right thereto," and under the proclamation of the president, declaring that the lands would be opened for settlement at the hour of 12 o'clock noon of the 22d day of April, 1889, an employe of the A., T. & S. F. R. R., who, by virtue of his position, remains on the land from March 2, 1889, to noon of April 22d, cannot take advantage of his presence to select and claim a homestead.

Appeal from district court, Oklahoma County; JOHN G. CLARK, Judge.

Action by Alexander F. Smith against Eddie B. Townsend for the purpose of having defendant declared the trustee of certain land for plaintiff, and praying for a conveyance of the legal title. Decree for defendant. Plaintiff appeals. Affirmed.

Amos Green and J. L. Brown, for appellant. John F. Stone and Johnson & Howard, for appellee.

GREEN, C. J. On the 30th day of April, 1891, appellant, Alexander F. Smith, filed his complaint in the district court of Oklahoma county, against the appellee, Eddie B. Townsend, for the purpose of having the appellee declared a trustee for the uppellant as to the N. E. 4 of section 35, in township 14 N., of range 3 W., and for a conveyance of the legal title of said real estate by appellee to appellant. It is averred in appellant's complaint, inter alia, that, during the year 1889, he was a citizen of the United States, over the age of 21 years, and the bead of a family, and in all respects qualified to enter public lands under the homestead laws of the United States. That, during the years 1888 and 1889, the Atchison, Topeka & Santa Fe Railroad Company was engaged in operating a railroad through the Indian Territory, and had set apart to its use a right of way through said territory, as is provided by treaty with the various Indian tribes and the acts of congress might be done; and, as a part of said right of way, was, during those years, holding a piece of ground at Edmond station, in said territory, and had thereon stationhouses for the use of the necessary employes of said railroad company. That, during the years 1888 and 1889, appellant was one of the persons employed by said railroad company, as one of its necessary

murrer and the dismissal of the complaint at the cost of the appellant.

The questions presented for the consideration of this court are questions of great importance, and their determination will affect interests of claimants in some of the most valuable land in the territory; but, whatever the results may be, the court has but one duty to perform, and that is to declare the law as the court understands the law to be.

The first question presented by the demurrer challenges the jurisdiction of the district court as to the subject-matter of the suit. That the district court had jurisdiction of the subject-matter of the suit cannot be, and is not, seriously questioned. It is a court of general jurisdiction in all cases at law and in equity. Organic Act, § 9. And the question has been so frequently passed upon by the supreme court of the United States that it is no longer open to discussion. Johnson v. Towsley, 13 Wall. 72; Rector v. Gibbon, 111 U. S. 276, 4 Sup. Ct. Rep. 605. In Rector v. Gibbon, supra, the court, in speaking of Johnson v. Towsley, said: "This case is a leading one in this branch of the law, and has been uniformly followed. The decision aptly expresses the settled doctrine of this court with reference to the action of the officers of the land department, that, when the legal title has passed from the United States to one party, when in equity and in good conscience and by the laws of congress it ought to go to another, a court of equity will convert the holders into a trustee of the true owner, and compel him to convey the legal title. This doctrine extends to the action of all officers having charge of proceedings for the alienation of any portion of the public domain. The parties actually entitled under the law cannot, because of the misconstruction by those officers, be deprived of their right." In this case there are no controverted facts, as it was tried and determined before the officers of the land department, including the secretary of the interior, on the statement of facts agreed to, and which is copied at large in the complaint; but appellant's contention is that the officers of the land department misconstrued the law, and thus gave to the appellee the land that should have been given to appellant, and would have been given to appellant had the law been correctly applied to the admitted facts, and which brings this case clearly within the rule, as to jurisdiction of a court of eq. uity, announced by the decisions cited above.

The second ground of demurrer, that appellant's complaint does not state facts sufficient to constitute a cause of action, presents the most important question in this case, and one which is res integra in the courts, although it has been frequent ly passed upon in the land department. If the facts stated do not constitute a cause of action, it is because appellant was disqualified under the law to take the homestead in controversy, by reason of his being within the lands opened to settlement between the 2d day of March, 1889, and noon of April 22, 1889. It is needless to say that this question can only arise with

reference to the homestead settlement of the public domain in the territory of Oklahoma. A part of the public lands in the territory of Oklahoma that were open to settlement at noon of the 22d day of April, 1889, by proclamation of the president of the United States, were obtained by the United States from the Seminole Indians; and these lands lie between the north and south branches of the Canadian river; and a part of the lands, so opened to settlement, were obtained from the Muscogee or Creek Nation of Indians; and these lands lie between the north branch of the Canadian river and the south line of the Cherokee outlet. The act of congress approved March 1, 1889, accepting, ratifying, and confirming the article of cession and agreement with the Muscogee or Creek Nation of Indians, (25 U. S. St. at Large, p. 759,) provides as follows: "Sec. 2. That the lands acquired by the United States under said agreement shall be a part of the public domaiu, but they shall only be disposed of in accordance with the laws regulating homestead entries, and to the persons qualified to make such homestead entries, not exceeding one hundred and sixty acres to one qualified claimant; and the provisions of section twentythree hundred and one of the Revised Stat. utes of the United States shall not apply to any lands acquired under said agreement. Any person who may enter upon any part of said lands in said agreement mentioned prior to the time that the same are opened to settlement by act of congress shall not be permitted to occupy or to make entry of such lands, or lay any claim thereto. These provisions of the act of March 1, 1889, were, however, only applicable to the lands obtained from the Muscogee or Creek Nation of Indians; but by act of congress approved March 2, 1889, (25 U. S. St. at Large, p. 1005,) it was provided: "Sec. 13. That the lands acquired by the United States under said agreement shall be a part of the public domain, to be disposed of only as herein provided, and sections sixteen and thirty-six of each township, whether surveyed or unsurveyed, are hereby reserved for the use and benefit of the public schools, to be established within the limits of said lands, under such conditions and regulations as may be hereafter enacted by congress. That the lands acquired by conveyance from the Seminole Indians hereunder, except the sixteenth and thirty-sixth sections, shall be disposed of to actual settlers, under the homestead laws only, except as herein otherwise provided, (except that section two thousand three hundred and one of the Revised Statutes shall not apply:) and provided, further, that any person who having attempted to, but for any cause failed to, secure a title in fee to a homestead under existing law, or who made entry under what is known as the 'commuted provision' of the homestead law, shall be qualified to make a homestead entry upon said lands: and provided, further, that the rights of honorably discharged Union soldiers and sailors in the late civil war, as defined and described in sections twenty-three hundred and four and twenty-three hundred and five of the