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Otis v. Gregory.

•ward, in June, 1874, the plaintiff sold her Michigan property and purchased that in question in LaPorte county. To enable her to make the purchase, it became necessary that she should be able to use the entire purchase-money arising from the sale of the Michigan property, including the amount due the defendant on his mortgage debt. The defendant agreed that he would release his mortgage on the property in Michigan, and permit the plaintiff to use the amount due him in paying the purchase-money of the LaPorte county property, she agreeing to give him a mortgage on the latter when the transaction should be completed. The defendant released his mortgage accordingly, and took a mortgage, executed by the plaintiff, without the joinder therein of her husband, upon the property described in the complaint. Mrs. Gregory paid for the property purchased with the proceeds of that sold. This last mortgage, it is averred, was executed in the State of Michigan, both parties believing in good faith at the time, that the law of Indiana, as in Michigan, empowered a married woman to encumber her separate real estate without the joinder of her husband. But for such belief, the defendant says he would not have released his mortgage on the Michigan property and received that on the property in Indiana.

It appears that the only interest which the defendant claims in the land in question is such as results from the foregoing fact3. It further appears that the only purpose of this action is to secure a cancellation of the mortgage thus taken, and a removal of the apparent cloud or encumbrance which it casts upon the plaintiff's title.

The appellant claims that the circumstances are such as that it would be inequitable to cancel his mortgage, without first requiring payment of the debt which it was intended to secure, or otherwise placing him in as favorable a position as he would have occupied in case he had received a valid mortgage. In other words, his position is, since Mrs. Gregory has come into a court of equity, asking its aid to cancel an alleged invalid mortgage, which was made and received in Otis v. Gregory.

good faith, she must accept the aid of the court in subordination to the maxim, " He who seeks equity must do equity." That this maxim, in its true spirit and purpose, expresses the principle which lies at the foundation of all equity proceedings, guiding and governing courts of equity at every stage in the administration of justice, is one of the distinguishing excellencies underlying all chancery jurisdiction. Pom. Eq. Jur., sections 120, 363.

In a court of equity the principle thus expressed is as authoritative as though it were enacted into positive law. In its proper sense it is a universal rule, binding upon parties and courts in all controversies in which complete justice can only be accomplished by its application, within reasonable and recognized rules.

Plowden, speaking of the quality of maxims, in Collhirst v. Bejushin, 1 Plow. 21, 27, says: "Further, there are two principal things from whence arguments may be drawn, that is to say, our maxims, and reason, which is the mother of all laws. But maxims are the foundations of the law, and the conclusions of reason, and therefore they ought not to be impugned, but always to be admitted; yet these maxims may by the help of reason, be compared together, and set one against another (although they do not vary), where it may be distinguished by reason that a thing is nearer to one maxim than to another, or placed between two maxims; nevertheless they ought never to be impeached or impugned, but always be observed and held as firm principles and authorities of themselves."

Accepting the maxim above referred to as in the highest degree authoritative, it becomes proper to inquire concerning the manner of its application in the practical adjustment of controversies between parties.

What is the " equity " which a party appealing to a court of chancery must do before he is entitled to relief? Can a party who becomes plaintiff in a court of equity be compelled, as the price of the relief demanded, to surrender to the deOtis r. Gregory.

fendant something which the latter could not have compelled by some proceeding, either at law or in equity, in case the former had not appealed to the court? If he can, then the rule that he who would have equity must do equity depends for its application in each case upon the arbitrary notions of the chancellor concerning the equities between the parties. The effect of such an application of the rule would inevitably, in many cases, be to refuse aid to which a plaintiff would be «ntitled, except upon condition that the latter should concede to the defendant some supposed equitable right which was not enforceable at law orcoguizable in a court of equity, and, hence, not within any description of a legal or equitable right.

So far as any general rule on the subject can be laid down, it may, with assurance, be stated, that a plaintiff, who shows himself otherwise entitled to the aid of a court of equity, will not be denied relief, unless the defendant brings forward some corresponding equity, growing out of the subjectmatter then in suit, which would at some time subsequent to the transaction, in some form of proceeding, entitle him to a remedy against the other party in respect to the subject-matter involved. It can not be maintained in reason that a defendant, to whom the plaintiff is under some imperfect obligation of a merely moral character, which never had ripened, and never could ripen into an enforceable legal or equitable right, may nevertheless, for some merely sinister purpose, defeat an equity to which a plaintiff is entitled. If the defendant, at no time subsequent to the transaction which formed the subject-matter of the plaintiff's bill, had, and could not thereafter acquire, in respect to that transaction, any right to relief, cognizable in a court of equity or otherwise, no reason is perceived why the plaintiff should be denied an equitable remedy to which he would otherwise be entitled. As was said by the learned vice-chancellor, in Hanson v. Keating, 4 Hare, 1: "The court can never lawfully impose merely arbitrary conditions upon a Otis v. Gregory.

plaintiff, only because he stands in that position upon the record, but can only require him to give the defendant that which by the law of the court, independently of the mere position of the parties on the record, is the right of the defendant in respect of the subject of the suit." Or, as the same learned judge said in Neesom v. Clarkson, 4 Hare, 97, 101: "I think it may be generally said, that, unless the equity which the defendant claims from the plaintiff is one which the defendant might enforce by bill, it is not a term which the court has a right to impose on the plaintiff." It may be admitted that there are cases which do not seem to fall within the foregoing general principles; but such cases must be regarded as of a special and exceptional character. Pom. Eq. Jur., sections 385, 386. The general doctrine as stated in Hanson v. Keating, and Neesom v. Clarkson, supra, meets the approval of our judgment.

It should bo observed that the rule embraces and applies only to the one matter which is the subject of the suit, and not to distinct transactions having no proper relation to nor connection with the subject-matter of the action. The plaintiff who seeks the aid of a court of equity, must .submit to the condition that all corresponding equities of the character above described, in favor of the defendant, growing oat of the subject-matter or transaction involved in the suit, may be fully and finally adjusted. Tuthill v. Morris, 81 N. Y. 94, 100.

With the foregoing principles in view, we proceed to consider the equities of the respective parties to the record. Since conveyances and mortgages of real estate take effect according to the law of the place where the land conveyed or mortgaged is situate, it follows, regardless of the intention or good faith of the parties, that the law of this State must determine the validity of the mortgage which is sought to be cancelled. Freeland v. Charnley, 80 Ind. 132; Bethell v. Bethcll, 92 Ind. 318; fhoank v. Hufnagle, ante, p. 453; 1 Jones Mort., section 823.

Otis v. Gregory.

The statute of Indiana, touching the marriage relation, in force at the time the mortgage in question was executed, provided that a married woman should have no power to encumber or convey her land, except by deed in which her husband should join. 1 R. S. 1876, 550 (section 5117, R. S. 1881).

Since the only power of married women to convey or encumber their real estate is derived from the statute, it follows necessarily that the separate deed of the wife, purporting to mortgage her land within this State, was absolutely void. Mattox v. Hightshue, 39 Ind. 95; Scranton v. Stewart, 52 Ind. 68. It was without legal force, and of itself created no equity which the courts can recognize or protect. As was said in Baxter v. Bodkin, 25 Ind. 172: "In the nature of things, it must be impossible for a right in equity to arise out of an instrument which binds nobody." Lunlz v. Oreve, 102 Ind. 173, 183; Hamar v. Medsker, 60 Ind. 413, and cases cited; Abdil v. Abdil, 26 Ind. 287; Williams v. Wilbur, 67 Ind. 42.

The invalidity of the mortgage having arisen out of a want of capacity to make the instrument, a court of equity is powerless to afford the defendant any aid in respect to the invalid instrument. Glidden v. Simpler, 52 Pa. St. 400. The ease stands as if no mortgage had ever in fact been attempted, so far as the appellant is concerned. Whatever may have been formerly held in other jurisdictions in respect to the cancellation of void contracts, the doctrine that a party to an instrument, which is of no legal force or validity whatever, may ask the aid of a court of equity in procuring its surrender and cancellation, is now fully set at rest here. It is regarded as against conscience, that one party should persist in holding a deed or other instrument against another of which he can make no possible use except as a means of embarrassing his adversary. Huston v. Roosa, 43 Ind. 517; Hardy v. Brier, 91 Ind. 91; 1 Story Eq. Jur., section 700; 3 Pom. Eq. Jur., section 1377.

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