dell v. McDonald, 41 Cal. App. 175, 182 P. 450; Owens v. McNally, 113 Cal. 444, 45 P. 710, 33 L. R. A. 369. In a general way we have recognized this rule in Bernard v. Benson, 58 Wash. 191, 108 P. 439, 137 Am. St. Rep. 1051, where we said: them." BRIDGES, J. This is a very interesting | will be harsh and oppressive. These princisuit in equity. In December, 1911, Charles ples are supported by the following cases: H. Arland and his wife, Mary E. Arland, Johnson v. Hubbell, 10 N. J. Eq. 332, 66 Am. entered into a written agreement concerning Dec. 773; Alexander on Wills, § 97; Runall their property which belonged to the community. By its terms each agreed to, and did, execute to the other a warranty deed, covering all of the property; the contract providing that such deed should have the effect of vesting in the survivor the entire title. These deeds were to be, and were, "We think the true rule, and the one which put in escrow to be held until the death of best harmonizes with the broad principles of eqone of the parties, and then the proper deeduity, is that specific performance will be dewas to be delivered to the survivor. It was nied when rights of innocent third parties have further agreed that the survivor should im-intervened so that the enforcement of the conmediately upon the death of the other party tract would be harsh, oppressive, or unjust to make a will, giving whatever he or she had at his or her death to the children of the contracting parties. Mrs. Arland died within a year after the execution of this contract, and Mr. Arland at once obtained from the escrow holder the deed running from his deceased wife to himself. About four years thereafter he married again. He died about six years after his second marriage, leaving his wife, Josephine, surviving him. At the time of his death he was 79 or 80 years of There were no children resulting from the second marriage. He did not make the will contemplated by the contract between himself and his first wife, but did make one giving to his second wife a one-third interest in his estate; the remainder being given to his children (all by the first wife). (The second wife had no knowledge of the contract or its terms until after the death of Mr. Arland. From the time of the death of his first wife until his second marriage and thereafter he and his wife lived on the property in question. They did not add to the estate that was in existence at the time of the death of his first wife; but, on the contrary, a small portion of it was expended for their living. The foregoing facts are set out in a stipulation which provides that the question to be determined "is as to the right of the petitioner, Josephine E. Arland, to the portion of the estate of Charles H. Arland, deceased, bequeathed to her under his last I will and testament. The trial court upheld Mr. Arland's will, and the children have appealed. age. * [4] While there are many equities in favor of the appellants, we think they are overcome by the greater equities of the respondent. She married Mr. Arland in entire ignorance of the contract between him and his deceased wife. She lived with him for six years and cared for him during his old age. In so doing she must have relieved the appellants of many duties which otherwise would have been imposed upon them. In a sense her equities are based on an actual consideration, while theirs are based on the right of heirship. She obtains only one-third of the estate. The appellants obtain all that portion which formerly belonged to their mother and some in addition thereto. If the contract did not exist, no one would think of denying that an equitable division had been made. Under our statute, section 1399, Rem. Comp. Stat., if Mr. Arland had made the will provided for in the contract, it would have been avoided by his marriage to the respondent. His widow is his heir as well as. the children, for the statute provides that in the event one die intestate leaving a wife and children one-third of his estate shall go to his wife. Section 1341, Rem. Comp. Stat. If the respondent had been an innocent purchaser for value of all the property in question, and not the widow, courts of equity would not, for a moment, think of enforcing the contract against her. While in the ordinary sense she is not a purchaser, in an equitable sense she is in as favorable a position as if she were such. It is quite true that as between the appellants and their father or as between him and his deceased wife the contract would unquestionably be enforced, but that situation would not take into consideration the equities of the respondent. [1-3] This case rests entirely upon equitable principles. The court is free to do that which its conscience dictates. Contracts of the character of the one involved here will be enforced if equity so demands, but although there may be equities supporting it, There are but few cases closely touching it will not be enforced if by so doing the this question. The one most nearly in point rights of others will be invaded. The court is Owens v. McNally, supra. There the facts may not, in its anxiety to relieve one party, were: McNally lived in California, was uninflict a wrong upon another who is entirely married, was more than 50 years of age, innocent. In other words, a contract to de- and had an estate of considerable value. He vise property is valid and enforceable unless had a niece about 18 years of age who lived superior equities have intervened. Equity in Michigan. He promised her that if she (230 P.) his death, leave her all of his property. Re-ing her. The court there held that while the lying on this oral agreement, she went to California and lived with and cared for him for a number of years, when he married and at his death, left a will, giving his property to his wife, (who at all times had been entirely ignorant of the contract between McNally and his niece.) The latter sued to enforce the contract with her uncle. The court said: * "The defendant widow married McNally in ignorance of the contract, and, it appears, continued in ignorance of the contract until after his death. She acquired distinct rights of heirship and succession. There might have been children born of the marriage, with similar rights. It is true that these rights vested after the contract was made, but, where a bill is brought for the specific performance of a contract, the after-acquired rights of third parties are equitable considerations to be regarded in adjudicating the questions. * A specific performance of this contract cannot, therefore, be decreed without sweeping aside, as of no moment or avail, the rights of the wife and widow, vested under a contract most strongly favored by the law. Specific performance, as we have said, is not to be decreed under strict rule and formula. Every consideration which may properly be urged upon the court is to be weighed and passed upon, and it will be decreed only when no other adequate relief is available to plaintiff, and even then it will be denied if it operates by way of a hardship upon the in nocent." The court concluded that the equities of the widow were superior to those of the niece. Mr. Alexander, in his work on Wills (section 97), after saying that specific performance will not be granted to the injury of innocent persons, uses this language: subsequent marriage of the aunt probably revoked the will, yet the equities were all in favor of the plaintiff and that the contract would be enforced. The chief ground upon which the court held for the plaintiff was that he, being the owner of the property, had, without consideration, deeded it to his aunt upon agreement that it should be returned to him at her death. It was claimed there that the McNally Case was controlling, but the court said: ("We believe there are material points of distinction between the respective equities as shown in Owens v. McNally and all the other cases cited to the same point, and those apparent in the case at bar." The court then proceeds at length to set out the various differences, and concludes that the equities were with the plaintiff. The appellants also cite Dillon v. Gray, 871 Kan. 129, 123 P. 878.) There the facts were. that Andrew Gray and his wife lived on a farm owned by them. They procured one of their daughters and her husband to come and live with them and look after their needs on the promise that upon their death they would leave the farm and everything they owned to them. Relying on this promise, they complied with the agreement. Some years afterwards, the farmer's wife having died, he remarried. He left a will by the terms of which he gave to three of his sons all of the property except $25 to his second wife and $200 to another of his daughters. The suit was for specific performance of the contract. The court said: "In the present case the contract was based upon an adequate consideration and has been fully executed on the part of the plaintiffs. No "Thus it might be inequitable to grant spe- circumstances or conditions are shown which cific performance against the estate of a de- render it inequitable, and the decree which the cedent who had agreed to will all of his prop-court made charging the funds in the executor's erty to another, the promisor having subsequently married and the wife having been in ignorance of the agreement. Equity will not enforce a contract where the result will be harsh or oppressive. And since the law presumes that wills are revoked by marriage or by marriage and the birth of issue, it may be said that all parties to a contract to make a will must have done so with the statute in view." hands with a trust in favor of the plaintiffs is fully warranted by the evidence and findings." (It will be noticed that the dispute there was between children with whom the con tract had been made and who had performed (Appellants cite Rundell v. McDonald, su- We have read all the other cases cited in the briefs, but do not consider them of sufficient importance to require discussion. The superior equities are with the respondent, and the judgment is affirmed.) MAIN, C. J., and FULLERTON, MITCH WALSH v. WESCOATT et ux. (No. 18694.) (Supreme Court of Washington. Nov. 18, 1924.) 1. Equity 65(2), 66-If defendants Indorsing note secured by mortgage misrepresented land mortgaged they cannot reform unqualified indorsement to one without recourse, in view of equity maxim. In indorsee's action against indorsers of note secured by mortgage, if defendants misrepresented the land mortgaged, and plaintiff relied thereon, defendants could not, regardless of good intention therein, secure reformation of their unqualified indorsement of note, to read "without recourse," because he who seeks equity must come with clean hands, and must do equity. 2. Equity 66-Equity will deny relief to misrepresenting party retaining benefits, regardless of intent. Equity will deny relief to party misrepresenting facts, connected with relief sought, to injury of another, regardless of intent, so long as he retains benefits therefrom. 3. Bills and notes 452 (4)-Misrepresentations must be material, and relied upon to one's injury. To bar recovery against indorsers of note, secured by mortgage, misrepresentations as to land mortgaged, inducing acceptance by indorsee, must be material, and relied upon to indorsee's injury. Department 2. the indorsement so that it would show that it was without recourse. The appellant in his reply denied that there was any agreement that the note was to be indorsed without recourse, and further alleged that the respondents were not in position to seek relief from a court of equity, because in their effort to consummate the business transaction they had fraudulently misrepresented the land on which the mortgage was given which secured the note sued on; and that he had no personal knowledge concerning the lands or the value of the security, and did not have any opportunity prior to the consummation of the transaction to examine the lands or inquire about them, and that he relied on the representations so made. On these facts the case went to trial. Considerable testimony was introduced: ue of the land. The trial court found with Appeal from Superior Court, Spokane respondents of the right to obtain equitable County; Huneke, Judge. Suit by James J. Walsh against N. J. Wescoatt and wife. Judgment of dismissal, and plaintiff appeals. Reversed and remanded, with directions. relief. There are two questions before us; one of fact concerning the indorsement, and the other concerning the alleged misrepresentations. It will not be useful to review the testimony as to whether there was a mutual agreement Duell & Boyles and Burcham & Blair, all of that the respondents' indorsement was to be Spokane, for appellant. without recourse; suffice it to say that a Charles P. Lund, of Spokane, for respond-reading of the testimony convinces us that ents. the trial court was right in this respect, and that if there were nothing else in the case the judgment should be affirmed. But it is argued by the appellant that whether the respondents are entitled to a reformation of their indorsement depends entirely upon whether they fraudulently or falsely misrepresented the character of the land to his injury, contending that, if the testimony establishes such, the respondents were not entitled to any relief in a court of equity. The argument is based on the maxim that "one who seeks equity must come into court with clean hands." BRIDGES, J. This is an unusual case. The facts are that the respondents were the owners of a note given by one Williams, which was secured by a mortgage upon real estate in Idaho. The appellant was the owner of certain other personal property. The parties traded; the respondents assigning their note and mortgage to the appellant, their indorsement of the note being unrestricted. Later the appellant brought suit on the note, waiving the mortgage. The action was against Williams, as the maker, and against the respondents as unrestricted [1] If there were misrepresentations, and indorsers. Williams was not served with they were fraudulently made, and appellant process. The respondents, by their answer, had a right to, and did, rely on them to his alleged that as a part of the trade it was mu- injury, then the principle of this maxim is tually agreed that they were to indorse the properly applicable to the case. Equity denote without recourse against them, but that mands of suitors fair dealing with reference through mistake the indorsement was unre- to matters concerning which they seek relief. stricted. They prayed for a reformation of If they have acted in bad faith, or been (230 P.) degree induced by his conduct will be unconscionable either in the benefit to himself or the Wis. 172, 125 N. W. 442, 20 Ann. Cas. 576. injury to others." Larscheid v. Kittell, 142 guilty of fraud, or have resorted to trickery | son of a bad motive or where the result in any to the injury of another, they will be turned away as unworthy of the consideration of such a court. They will be left where they are found. In other words, equity will not help those who have been guilty of serious misconduct in the same transaction concerning which they seek relief. That sought by the respondents is directly connected with the fraud charged against them, and, if that charge is true, we see no reason why a court of equity should relieve them of their mistake concerning their indorsement of the note. What we have said is with reference to fraudulent misrepresentations as distinguished from unintentional misrepresenta tions. But there is another question which may be in the case, and which we ought to dispose of lest it should arise upon a new trial. There is an intimation in the memorandum opinion by the court and also in one of the briefs that, if the respondents made any misrepresentations concerning the land, they did so in the honest belief they were correct. Suppose the trial court should find that the representations were untrue but were made honestly and in the belief that they were true, and that the respondents were not guilty of any actual fraud, and that the appellant relied upon such misrepresentations to his damage, then the question arises whether the court under those circumstances would deny respondents reformation of their indorse ment. The respondents argue that, if they unintentionally misrepresented the land, it cannot be said that they come into court with unclean hands and that the maxim is applicable only when there is intentional wrongdoing. But it seems to us that the maxim is broader than that. It is associated with the other maxim that he who seeks equity must do equity. If the respondents misrepresented the land, the result is the same both to them and the appellant, whether the misrepresentations were honestly or fraudulently made the appellant, under those circumstances, will have been injured, and the respondents will have reaped a corresponding benefit. So long as one retains the benefits flowing from misrepresentations, he may not seek the interposition of a court of equity. It is said that "A court of equity acts only when and as conscience commands, and, if the conduct of the plaintiff be offensive to the dictates of natural justice, then, whatever may be the rights he possesses and whatever use he may make of them in a court of law, he will be held remediless in a court of equity." Deweese v. Reinhard, 165 U. S. 386, 17 S. Ct. 340, 41 L. Ed. 757. Again it is said: "The exclusion of a plaintiff from the peculiar favors of courts of equity results equally where his conduct has been unconscionable by rea 230 P.-11 So also "the maxim applies not only to fraudulent and illegal transactions, but to any unrighteous, unconscientious, or oppressive conduct by one seeking equitable interference in his own behalf." Eaton on Equity, p. 74. A case which is apparently directly in point is that of Cushman v. New England Fire Ins. Co., 65 Vt. 569, 27 A. 426. The purpose of that suit was to reform a fire insurance policy. Touching the question here involved, the court said: "A court of equity will not reform a contract if its execution was procured by the false representation of the party who is seeking to have it corrected; it will not order its specific performance. And this is the rule even if the party did not know of its falsity, and had no intent to deceive; nor does his belief in its truth make any difference. The question is, has the party been misled by false representation calculated to mislead him, and not the existence of a fraudulent design in the cocontractor?" We Appellant has cited other cases which he contends strongly support this view. think, however, they are not in point. They are cases where the plaintiff sought rescission because of misrepresentations, and the courts held that there might be rescission notwithstanding the misrepresentations were not fraudulently made, and that intent was not a controlling factor. This court has long since aligned itself in rescission cases with this doctrine. The maxim here involved was not discussed in those cases. To support their contention that one does not come into court with unclean hands if the misrepresentations were innocently made respondents cite Harlan v. Willard, 52 Cal. App. 194, 198 P. 424. There it appeared that the plaintiff, who was seeking to recover on a contract whereby a deceased person was to will her a portion of his property, had previously sought, as decedent's widow, to acquire one-half of his property. It was there contended that because of her fraud in previous acts the court should not give her any relief. The court said: "The lack of a fraudulent purpose to get something to which she was not legally entitled takes the case without the rule as insisted for by appellant." While this language is somewhat in re spondents' favor, yet it ought not to be so considered, because the plaintiff in that case had not succeeded in her original fraudulent purpose and imposed no injury thereby. This exact question seems to have been but little discussed by the courts or text-book writers. Chattel mortgages 110-Cost of sacks for marketing wheat held properly deducted from proceeds of sale as against second mortgagee. Where first mortgage on wheat provided that mortgage should cover advances, or expenses of maintenance or transportation, cost of sacks necessarily used to market wheat, held properly deducted from proceeds as against second mortgagee. [2] It is our view that a court of equity transportation, and it was immaterial that liens will deny relief to a party who, to the injury filed were on their face insufficient. of another, has misrepresented facts connect-4. ed with the relief sought, whether the misrepresentations were made with intent to defraud or were made in the honest belief that they were true, so long as the person making them retains the benefits flowing therefrom. [3] The judgment is reversed and the cause remanded, with directions to the trial court to determine whether the respondents made the misrepresentations charged and whether appellant relied thereon to his damage, and, if it answers these questions in the affirmative, then to deny respondents any relief on their cross-complaint and enter judgment for appellant as prayed. If the court find there were no material misrepresentations, or if there were they were not relied on or no injury resulted therefrom, then the judgment should be for respondents and against appellant substantially as now made. 5. Chattel mortgages 110-Advances by first mortgagee to mortgagor for caring for and harvesting wheat held covered by mortgage. Money advanced by first mortgagee to mortgagor for caring for and harvesting mortgaged wheat, held covered by mortgage as against second mortgagee. 6. Judgment 507-First mortgagee could not complain that second mortgagee obtained decree of reformation as between latter and mortgagor. Where mortgagor and second mortgagee intended second mortgage to cover wheat already subject to first mortgage, and second mortgagee subsequently obtained judgment reforming misdescription therein, so that it did cover such wheat, first mortgagee, though not party to reformation suit, could not claim that reformation judgment was not valid as between parties since he was not injured. 7. Marshaling assets and securities 3(1) — As between first and second mortgages, first on wheat and other chattels, and second wheat only, doctrine of marshaling assets applies. Under doctrine of marshaling assets, first mortgagee, having mortgage covering wheat, (Supreme Court of Washington. Nov. 19, horses, farm implements, etc., as against sec 1924.) 1. Chattel mortgages 235-Payment by purchaser of mortgaged chattels in good faith to persons entitled protects such purchaser. Where second mortgagee of wheat had arranged with first mortgagee that second mortgage should be first lien on 2,500 bushels, payment by purchaser in good faith, of purchase money to first mortgagee, after deducting payments on liens and other proper charges, which in turn paid second mortgagee his proportion of the proceeds, protects such purchaser. 2. Chattel mortgages 235-Purchaser or first mortgagee of wheat paying laborers' liens held not to deprive second mortgagee of day in court. ond mortgage on wheat only, was bound to make what it could out of property covered solely by its mortgage, by foreclosure and sale or otherwise, and credit such sums on its indebtedness, and if insufficient, was entitled to such portion of net proceeds of sale of wheat as necessary to pay it, and second mortgagee was entitled to surplus, if any. Department 2. Appeal from Superior Court, Spokane County; Lindsley, Judge. Action by C. B. Shoemaker against the White-Dulaney Company and another. Judgment of dismissal, and plaintiff appeals. Affirmed as to defendant above named, and rePurchaser or first mortgagee of wheat pay-versed as to defendant Fidelity National ing liens of laborers hauling and marketing Bank, and remanded with instructions. wheat, and deducting amounts from payments on two mortgages, held not to deprive second mortgagee of day in court. 3. Chattel mortgages 110-Liens of laborers held sufficient to justify payment as against second mortgagees. Driscoll & Horrigan, of Pasco, for appel lant. Voorhees & Canfield and Hamblen & Gilbert, all of Spokane, for respondents. Liens of laborers against wheat for actual farmer in Eastern Washington, gave a mortBRIDGES, J. The defendant Hadley, a hauling and marketing, held sufficient to justify payment and deduction thereof from amount gage to the Farmers' State Bank of Connell, received, as against second mortgagees of the this state, to secure an indebtedness of $12,wheat, where first mortgage provided it should 500. It covered wheat to be grown during cover advances or expenses of maintenance or the year 1921 on certain described lands in |