provides that "in all suits by material men for supplies or repairs or necessaries, the libelant may proceed against the ship and freight in rem, or against the master or owner in personam." In The Lottawanna, supra, it was held that this amendment restored the rule of 1844, or rather, as Mr. Justice Bradley said, in stating its effect, "we have made it general in its terms, giving to material men in all cases their option to proceed either in rem or in personam. Of course, this modification of the rule cannot avail where no lien exists; but where one does exist, no matter by what law, it removes all obstacles to a proceeding in rem if credit is given to the vessel." And in another part of the opinion he says: "As to the recent change in the admiralty rule referred to, it is sufficient to say that it was simply intended to remove all obstructions and embarrassments in the way of instituting proceedings in rem in all cases where liens exist by law, and not to create any new lien, which, of course, this court could not do in any event, since a lien is a right of property, and not a mere matter of procedure." As a reason for the rule, or for the enforcement of state liens where the contract is maritime, it is said in The St. Lawrence, 1 Black, 530, that "the state lien was enforced, not as a right which the court was bound to carry into execution upon the application of the party, but as a discretional power which the court might lawfully exercise for the purpose of justice, where it did not involve controversies beyond the limits of admiralty jurisdiction." The state law does not confer jurisdiction on the federal court, but, as said in Ex parte McNiel, 13 Wall. 243: "A state law may give a substantial right of such a character that, where there is no impediment arising from the residence of the parties, the right may be enforced in the proper federal tribunal, whether it be a court of equity, of admiralty, or of common law. The statute in such cases does not confer the jurisdiction. That exists already, and it is invoked to give effect to the right by applying the appropriate remedy." But, whatever may be the origin of the practice, it seems to be well settled that when the contract is maritime, and the maritime law does not give a lien, as for necessary supplies or repairs to the vessel in her home port, state statutes cannot confer jurisdiction by a proceeding in rem. In the majority of the state courts where the question has arisen the decisions are adverse to jurisdiction to proceed in rem. Warren v. Kelley, 80 Me. 512, 15 Atl. Rep. 49; The Petrel v. Dumont, 28 Ohio St. 602; Weston v. Morse, 40 Wis. 455; Sheppard v. Steele, 43 N. Y. 52; Poole v. Kermit, 59 N. Y. 554; Association v. Robertson, 65 Ala. 382; Waggoner v. St. John, 10 Heisk. 503; Walters v. The Mollie Dozier, 24 Iowa, 192; Marshall v. Curtis, 5 Bush, 615; Dever v. The Hope, 42 Miss. 715; The Crawford v. The Caroline Reed, 42 Cal. 469. Contra. Donnell v. The Starlight, 103 Mass. 230; DryDock Co. v. Gibson, 22 La. Ann. 623; Williamson v. Hogan, 46 Ill. 504; Mitchell v. The Magnolia, 45 Mo. 67; Atlantic Works v. Tug Glide, 157 Mass. 527, 33 N. E. Rep. 163. In view of the authorities, we feel bound to hold that the statute, so far as it authorizes a proceeding in rem in the courts of this state for the enforcement of a lien for necessary supplies furnished a vessel in her home port, is in contravention of the laws and the constitution of the United States, and invalid, and, as a consequence, that the judgment in this case must be overruled. (24 Or. 504) WILSON et al. v. CITY OF SALEM et al. (Supreme Court of Oregon. Nov. 13, 1893.) On rehearing. For former report, see 34 Pac. Rep. 9. BEAN, J. A petition for rehearing has been filed, in which it is contended that the mode of making an assessment for street improvements is provided by the charter, and therefore an assessment by the front foot is invalid and void. The rule is undisputed that, if the charter prescribes a mode or rule for ascertaining the cost of making a proposed street improvement to be assessed against the adjoining property, that mode must be pursued, and the council cannot adopt another. But, from a careful re-examination of the charter under consideration in this case, we are still of the opinion that its only effect is to declare that the property shall be liable for the cost of making a proposed improvement upon the half street in front thereof, and to vest the power in the council of ascertaining and assessing such cost upon each lot or part thereof. But the charter nowhere prescribes a rule or mode which the council shall adopt in estimating or ascertaining the cost of making the improvement, and, in the absence of such a provision, it is at liberty to adopt the mode which seems to it most likely to determine the actual cost of making an improvement in front of the property to be assessed; and, if the mode adopted by the council in the case was inequitable or unjust, it is now too late for the property owner to complain, as he had an opportunity to be heard before the assessment was made. The former opinion of the court is therefore adhered to, and the cause will be remanded, as therein directed. (25 Or. 1) GRAY v. PERRY et al. (Supreme Court of Oregon. Nov. 13, 1893.) CONTRACT FOR SALE OF LAND-FORFEITURE. On an issue whether D. declared forfeited a contract with C. for the sale of land, it appeared that the contract provided for monthly payments, and gave D. the option to declare it forfeited on C.'s failure to pay an installment. That, after such failure, D. conveyed the land to P., C.'s father-in-law, who made the following entry in his books: "1891, November 14, Walter Corbin by J. L. Perry, 12, $872.20." That C. continued to live on the land, and paid no rent therefor, and that P. lived with him. P. testified that he bought the land for himself, and D. testified that, when he sold the land to P., the latter agreed to "stand between" D. and plaintiff, who had a mortgage thereon for money loaned C. Held, that there was no forfeiture, and that P. bought the land for the use of C. Appeal from circuit court, Multnomah county; L. B. Stearns, Judge. Action by Charles II. Gray against Jefferson Perry and others to enforce a claim on land in defendants' possession. From a decree directing the land to be sold, and the proceeds to be applied for the payment of claims in a specified order, defendant Perry and plaintiff appeal. Affirmed. Thos. N. Strong and F. D. Chamberlain, for appellant Perry. W. M. Gregory, for respondents. PER CURIAM. This is a suit to enforce a claim upon real property. The facts show that on May 1, 1890, the defendant Walter Corbin entered into a contract with Messrs. Haight & Donner, whereby they, in consideration of $110 paid down, and of $790 payable in installments of $20 on the 1st of each month, agreed to convey to him lots 11 and 12 of block 12 of Maegly Highland, in Multnomah county, Or. Said contract contains a provision that, if default be made in the payment of any installment, it shall be optional with them to declare the contract canceled, and the amount paid thereon forfeited. Mr. Corbin entered into possession of the lots, made improvements thereon, and paid the installments to and including that of January 1, 1891, but made no payments thereafter. That on July 31, 1890, the plaintiff loaned $300 to Mr. Corbin, who, as security therefor, executed and delivered to him a deed of said lots, and since that time made payments to the plaintiff which reduce the amount now due to $212.33. That on November 14, 1891, these lots, with the improvements, were reasonably worth $1,300, while there was due on the contract only $872.20, and on that day G. T. Donner, who had acquired the legal title from Messrs. Haight & Donner, conveyed them and another lot to the defendant Jefferson Perry, who is the father-inlaw of the plaintiff, and of the defendant Walter Corbin. The plaintiff alleges that the defendant Perry advanced the amount due upon the contract as a loan to the defendant Corbin, and, by agreement with him, took the legal title as security therefor. The defendant Perry denied these allegations, and, for a separate answer and defense, alleged that, before these lots were conveyed to him, G. T. Donner had declared a for feiture of the payments made by the defendant Corbin, and canceled the contract, and that he had purchased the property, and taken the title for his own use and benefit. The court, after hearing the testimony, decreed that the lots be sold, and that the proceeds of such sale be applied-First, to the payment of the costs; second, to the amount advanced by the defendant Perry; third, to the amount due from the defendant Corbin to plaintiff; and, fourth, that the remainder be paid to the defendant Perry,— from which decree he appeals; and the plaintiff also appeals from that part which provides that his claim is subordinate to that of the defendant Perry. The question whether G. T. Donner had declared a forfeiture and cancellation of the contract must be decisive of this appeal. It is contended that the deed from Donner to Perry was a forfeiture of said contract. If it be admitted that this conveyance was another and different sale of the property from that agreed to be made to the defendant Corbin, then it would be a forfeiture of his contract. Chrisman v. Miller, 21 Ill. 227. Mr. Perry testifies that he bought the lots for his own use and benefit, and that there was no agreement entered into, whereby he should hold the title for Mr. Corbin. He also testified that he was willing to convey the property to the plaintiff upon the repayment of his money. Mr. Corbin's testimony, in the main, corroborates that of Mr. Perry, but says that he supposes he could secure the lots by paying Mr. Perry his money. Mr. Donner testified that, when he was negotiating with Mr. Perry for the sale of these lots, he told him that if they made a contract he wanted him to stand between him and Mr. Gray, and that Mr. Perry agreed to see that he got into no trouble about the matter. The record shows that, when Mr. Perry paid the money and took the deed, Mr. Donner made the following entry in his books: "1891, November 14, Walter Corbin by J. L. Perry, 12, $872.20." It also shows that Mr. Corbin has been living on this property without paying any rent, and that Mr. Perry is now living with him, and that they are on friendly terms, while Mr. Gray and his wife are not very friendly to Mr. Perry. From a careful examination of the record, we conclude that there had been no forfeiture or cancellation of the contract; that the conveyance to Mr. Perry was for the use of Mr. Corbin; and hence the decree is affirmed. (25 Or. 15) SABIN v. COLUMBIA RIVER LUMBER & FUEL CO. et al. (Supreme Court of Oregon. Nov. 13, 1893.) FRAUDULENT CONVEYANCES-HINDERING AND DELAYING CREDITORS-INSOLVENCY. 1. The fact that a business corporation mortgages its property to a bank to secure not merely its indebtedness to the bank, but any future advances that the bank may make to it, does not show that it is made to hinder and delay unsecured creditors. 2. The debt for which the mortgage was given being a bona fide debt, long overdue, and the mortgage having been given only after the bank had refused to give further accommodation without it, the mortgage will not be held to have been given to hinder and delay unsecured creditors, because the trustee in the mortgage takes possession only by appointing the agents and officers of the mortgagor corporation agents for him, and payments from disposal of the property were applied on overdrafts made subsequent to the mortgage, and the length of time the mortgage was to remain unforeclosed was to depend on circum stances. 3. So long as a corporation is a "going corporation," engaged in the conduct of the business for which it was organized, and not known or believed to be insolvent by its officers and managers, with assets exceeding its liabilities by many thousand dollars, it is not in such a state of insolvency es will preclude its executing a mortgage on its property in good faith to secure a debt of the corporation, though its directors are security for the debt. Appeal from circuit court, Multnomah county; L. B. Stearns, Judge. Suit by R. L. Sabin against the Columbia River Lumber & Fuel Company and others. Decree for defendants. Plaintiff appeals. Affirmed. L. B. Cox, for appellant. Geo. H. Durham, for respondent national bank. E. B. Watson, for other respondents. BEAN, J. This suit was brought by the plaintiff in behalf of himself and other unsecured creditors who might join with him against the Columbia River Lumber & Fuel Company, a corporation, the Commercial National Bank, James F. Watson, trustee, Borthwick & Fraine, partners, H. B. Borthwick, C. W. Knowles, and D. J. Moore, to set aside certain real and chattel mortgages given by the Columbia River Lumber & Fuel Company to Watson, as trustee, to secure the sum of $50,000 due the Commercial National Bank, and also to set aside an assignment by the company direct to the bank of all its accounts and bills receivable as further security therefor, on the ground that the mortgages and assignment are void as to the creditors of the fuel company. On the 28th and 29th of November, 1892, the Columbia River Lumber & Fuel Company, defendant, being indebted to its codefendant the Commercial National Bank in the sum of $50,000 upon certain overdue promissory notes, drafts, and overdrafts, upon three of which notes, amounting in the aggregate to about $35,000, the defendants Borthwick, Knowles, and Moore, directors of the company, were indorsers, executed to the defendant Watson, as trustee for the bank, real and chattel mortgages upon all its property, and also assigned to the bank direct all its accounts and bills receivable to secure the payment of said indebtedness. The mortgages were immediately recorded and filed in the proper county, and the trustee took possession of the property described in the chattel mortgages, and continued to hold the same until the appointment of a receiver in this suit. At the time of the execution of the mortgages and assignment the lumber company was indebted in the sum of about $30,000 to divers and sundry persons, including the assignors of the plaintiff, in addition to the amount due the bank, and had property, consisting of a sawmill plant, real estate, lumber, wood, ledger accounts, and bills receivable, of the estimated value, in the aggre gate, of about $100,000. The plaintiff, who is a judgment creditor of the lumber company, claims that the mortgages are void as to creditors, for the reasons (1) that they are fraudulent, both in law and fact, as being made to hinder, delay, and defraud creditors; (2) that the company was insolvent at the time the mortgages were executed, and therefore could not create a preference in favor of one creditor; and (3) that, even if an insolvent corporation can create a preference, the mortgages are void so far as they are security for notes upon which the directors of the company are indorsers. The realestate mortgage, after describing the promissory notes, drafts, and overdrafts intended to be secured thereby, contains this stipulation: "Said conveyance is also intended as a mortgage to secure the.repayment to said bank of any future advances or overdrafts which the said bank may make and allow to the said grantor in the conduct of the grantor's business: Now, therefore, if the said promissory notes, and each of them, principal and interest, and the said draft and overdraft, above referred to, shall be paid when the same shall become due, or upon demand of payment where so payable, then this indenture shall be void: provided, further, that the said grantor, its successors or assigns, shall have paid into the said Commercial National Bank, its successors or assigns, such further sums of money (not exceeding in all the sum of $10,000) as the said bank may advance to the said grantor, or which may become owing by the grantor to the said bank at any time hereafter during the continuance of this mortgage, with interest on such further sums from the time the same shall be advanced or become owing as aforesaid, at the rate of nine per cent. per annum, payable quarterly. But, in case default shall be made in the payment of the principal or interest mentioned in said promissory notes, or either of them, or any part thereof, or in the payment of the said draft and overdraft and future overdrafts, or any of them, or any part thereof, or the interest thereon, or any part thereof, then it shall become the duty of the said trustee hereinbefore named, upon 10 days' written notice and demand therefor, to be given to sald trustee by said bank, to foreclose this mortgage as by law provided, and to cause the sale of the said mortgaged premises, or so much thereof as may be necessary to pay the sums due said bank, together with such attorneys' fees as the court may adjudge reasonable for the foreclosure of said mortgage. And whereas it has been and is hereby agreed between the Columbia River Lumber & Fuel Company and the Commercial National Bank, and the party of the second part herein, that time in the exact performance of each and everything herein required or agreed to be performed is of the essence of this contract: Now, therefore, if the said Columbia River Lumber & Fuel Company shall neglect or fail to pay all or any of said promissory notes, drafts, overdrafts, or future overdrafts, or any of them, or any part of them, when the same shall become due and payable, or shall fail or neglect to pay the interest upon any of said demands, in accordance with the terms of the agreement therefor between the said grantor herein and the said bank, or if the said grantor shall attempt to remove from its said mill any of the machinery or plant belonging thereto, or shall suffer its property to be attached, then, upon the happening of all or any of said contingencies, the entire indebtedness of said Columbia River Lumber & Fuel Company to said bank shall become at once due and payable, and it shall be the duty of said trustee to so declare the same, and, upon one day's notice therefor to him given by the said bank, to foreclose said mortgage as provided by law, and to cause the sale of said mortgaged property, or so much thereof as may be necessary to satisfy the demands of the said bank against said grantor, together with costs, disbursements, expenses, and attorneys' fees." The chattel mortgages contain the same provisions as to future advances and overdrafts as the real-estate mortgage, and provide that, "in case default shall be made in the payment of the said principal sums, or any of them, or interest thereon, or any one of said installments of the principal or interest, or if said property is attempted to be removed by any one from where it is now situated, or be attached or levied upon by the creditors of the said party of the first part, or shall be sold, transferred, or assigned, or attempted to be sold, transferred, or assigned, then said promissory notes, drafts, overdrafts, and debts shall at once become due and payable, and it shall and may be lawful for, and the said party of the first part does hereby authorize and empower, the party of the second part, with the aid and assistance of any person or persons, to enter the several places where said personal property may be situate, and such other place or places as the said goods or chattels are or may be placed, and take or carry away the said goods and chattels, and sell and dispose of the same at private sale or at public auction, upon giving one week's notice of the same in any newspaper published in said county of Multnomah, and state of Oregon, and out of the money arising therefrom to retain and pay the said sums above mentioned, and interest as aforesaid, and all charges touching the same, and counsel fees, rendering the overplus, if any, unto the said party of the first part. And it is understood that the party of the second part shall and does take possession of all the personal property described in this instrument, and shall retain the same in trust for the purposes herein expressed, and to that end may appoint any suitable person to hold possession of and care for said property." The contention for the plaintiff is that from these provisions the mortgages show on their face that they were made for the benefit of the mortgagor, and were designed to be used as a shield between the corporation and its unsecured creditors, while it prosecuted its business for an indefinite time; and particular stress is laid upon the fact that provision is made to secure the bank for advances or overdrafts which it might thereafter make or allow the corporation in the conduct of its business. It is undoubtedly true that, where a mortgage is designed and made for the benefit of the mortgagor, and to enable him to continue in business by placing his property beyond the reach of legal process, it is void as to creditors, although it may be intended in good faith for the ultimate benefit of all the creditors by preventing a sacrifice of the property; and, if such is the legal effect of the instrument, the courts will so declare as a matter of law; for, as was said by the vice chancellor in Van Nest v. Yoe, 1 Sandf. Ch. 9: "The law provides that the debtor shall fulfill his obligations, and on his default it gives to the creditor his lawful suit' for the recovery of his demand, and the sale of the property of the debtor for its payment. This is a strict right. And the debtor who * * places his property beyond the reach of the process of the law, whatever may be the pretense under which he cloaks the act, in the language of the statute of frauds 'hinders' and 'delays' and ultimately defrauds' his creditors. It is no answer to this argument to say that the debtor provides an ample fund for the payment of the debt, and that the creditor is ultimately to be paid in full. The law gives to the creditor the right to determine whether his debtor shall have further indulgence, or whether he will pursue his remedy for the collection of the debt. The deferring of payment is generally an injury to the creditor, and he may be overwhelmed with bankruptcy for the want of the fund which is locked up by the voluntary assignment of his debtor. It is a mockery to such a creditor to say that the assignment is made for the benefit of creditors." But it seems to us there is nothing in the terms of the mortgages in question which, if carried into effect, according to a reasonable construction, would in any way necessarily unjustly hinder or delay creditors. From the provision as to future advances it may be inferred that it was the intention that the mortgagor should be permitted to continue in business for its own benefit, yet there is no stipulation in express terms to that effect, or, in fact, that it shall be allowed to continue in business at all, or that the bank shall make any advances, but it is rather a provision that if the bank should see proper to make future advances, such advances should be secured by the mortgages. In this view such provision does not render the mortgages void, and we are bound to construe the terms of the instrument in harmony with honesty and fair dealing, if it can be done without doing violence to the language. The company was at the time in active business, and had an undoubted right to provide by mortgage of its property for future advances. Hendrix v. Gore, 8 Or. 407; Nicklin v. Spring Co., 11 Or. 406, 5 Pac. Rep. 51. And such a provision does not necessarily render the mortgage fraudulent, although it may subsequently turn out that the mortgagor was in fact unable to pay all his debts at we time the mortgage was given. U. S. v. Hooe, 3 Cranch, 73. Every mortgage necessarily tends to hinder or delay creditors other than the mortgagee, but a delay necessarily resulting from a fair and honest exercise of the right to dominion over one's property, and to pledge or otherwise dispose of it, is neither an unjust nor lawful interference with the rights of others, and is not within the terms of the statute making void conveyances intended to hinder or delay creditors. Nor are we able to concur with the contention of I counsel that the evidence shows the mortgages to be fraudulent in fact. There are some circumstances, it is true, which, unexplained, on their face tend to support this contention, such as, for instance, that the corporation was financially embarrassed at the time the mortgages were given; that the debts were long overdue, and no time is provided in the mortgages for payment; the inference that it was contemplated the company should continue in business at the pleasure of the bank, which is sought to be drawn from the stipulation for future advances, and the restriction imposed upon the trustee to foreclose only when requested by the bank; that the only possession in fact taken by the trustee was by appointing the agents and officers of the corporation agents for him, and allowing them to sell and dispose of the property, turning the proceeds into the bank, which were credited on overdrafts paid by the bank subsequent to the execution of the mortgages; that no special effort was made by the bank to collect the accounts and bills receivable assigned to it except by appointing and authorizing the officers of the company to do so; that the length of time the bank was to suffer the mortgages to remain unforeclosed was to depend on circumstances, as testified to by its cashier. While these circumstances point with more or less directness to the conclusion that the mortgages were intended to hinder and delay creditors, yet they are all explainable consistently with honesty and good faith. And when it is remembered that the debt for which the security was given was a bona fide debt, long overdue, and about which the bank had manifested much solicitude, and it was only after repeated and urgent solicitation, and when the company found itself unable to obtain further accommodation at the bank, that it concluded to give the mortgages, that the mortgages were promptly filed and recorded, and there was no attempt at concealment, but the entire transaction was open and above board, it seems to us that upon the whole case it cannot be said that the mortgages were not executed in good faith to secure the debt. The mortgages are prima facie valid, and to overcome this presumption it is not enough that some of the circumstances attending the transaction may tend to show fraud. There is an essential difference between the material fact of fraud and the circumstances tending to prove it. The burden of proof is on the plaintiff, and the mortgages must be deemed valid until he overcomes the presumption by a clear preponderance of the evidence. The findings of the trial court, who heard the witnesses, and was therefore in a better position to judge of the effect and value of their testimony than we are, were in favor of the defendant; and, while the case is not free from doubt, we are unprepared to say that such findings are unwarranted by the testimony. It is claimed there is some evidence which tends to show that one object of the company in giving the mortgages was to hinder and delay creditors by preventing a sacrifice of its property. But it cannot, we think, be successfully contended that the bank participated in the fraudulent purposes of the company, if any such existed, or had any other motive for taking the mortgages than a desire in good faith to secure its claim; and although it may have known the mortgages would operate to hinder and delay other creditors, and even if it knew the company intended them to have that effect, the transaction will not be void, unless the bank participated in the fraudulent purpose of the company. 2 Cobbey, Chat. Mortg. § 771; Dudley v. Danforth, 61 N. Y. 626; Bank v. Lowrey, (Neb.) 54 N. W. Rep. 571; Alberger v. White, (Mo. Sup.) 23 S. W. Rep. 92; Shelley v. Boothe, 73 Mo. 74; Pollock v. Meyer, (Ala.) 11 South. Rep. 385; Ford v. Williams, 3 B. Mon. 550; Worland v. Kimberlin, 6 B. Mon. 608; Covanhovan v. Hart, 21 Pa. St. 495; Hodges v. Coleman, 76 Ala. 103; Olmstead v. Mattison, 45 Mich. 617, 8 N. W. Rep. 555. If a debtor converts his property by sale into money because it is more easily secreted, intending to put it and its proceeds out of reach of his creditors, he, of course, commits a gross fraud; and one who purchases of him with knowledge of his object in making the sale obtains no title as against |