Opinion of the Court.

II. The tax titles held by Gage not being liens, or encumbrances, they did not impair the security, nor endanger the title; consequently the outlay for the purchase of them was unnecessary, and not authorized by the trust. Williams v.

Townsend, 31 N. Y. 411; Atwater v. West, 28 N. J. Eq. 361; Burnet v. Deniston, 5 Johns. Ch. 35; Anthony v. Anthony, 23 Arkansas, 479; Dale v. McEvers, 2 Cowen, 118; Rapplye v. Prince, 4 Hill, 119.

III. Neither Gage claiming under tax deeds and titles, nor the company as his assignee, is entitled to active relief in a court of equity, even though the tax deeds were regular and legal. Gage v. Bani, 141 U. S. 344.

IV. The taxes, having been satisfied by the sales, were extinct, and were not a lien, charge or incumbrance on the mortgaged property; and neither Gage, nor the company as his assignee, could claim reimbursement from the landowner, the mortgagor, nor from the State. Smith v. Prall, 133 Illinois, 308.

V. The court had not jurisdiction in a chancery foreclosure to deal with the tax titles, or claims or with the holder of them. Gage v. Perry, 93 Illinois, 176; Bozarth v. Saunders, 113 Illinois, 181; McAlpin v. Zitzer, 119 Illinois,

273.

VI. It was error to adopt and confirm the master's report. The master exceeded his authority by the terms of the reference, which restricted him to the truth of the bill, and the amount due on the note, and did not direct him to report conclusions as to the matters of defence, i.e. the questions as to the alleged outlay to Gage, and the claims for professional services. These were judicial questions which the court could not delegate to its ministerial officer. De Leuw v. Neely, 71 Illinois, 473; Mosier v. Norton, 83 Illinois, 519.

Mr. P. S. Grosscup and Mr. J. H. Drummond for appellee.

MR. JUSTICE GRAY delivered the opinion of the court.

This was a bill in equity by a corporation of Maine against a citizen of Illinois to foreclose a deed of trust, in the nature

Opinion of the Court.

`of of a mortgage, of land in Chicago, made by the defendant to the plaintiff on July 12, 1869, to secure the payment of his note of that date for $7500, payable in five years, with interest at the rate of eight per cent; and containing covenants that the premises were "free and clear of all liens and incumbrances," and that the mortgagor would "in due season pay all taxes and assessments on said premises, and exhibit once a year receipts of the proper persons to said party of the second part, showing payment thereof;" and a power to sell on any breach of condition, and out of the proceeds, after paying all expenses, "including all moneys advanced for taxes, insurance or other liens and assessments, with the interest thereon at the rate of ten per cent per annum from the date of payment, all which advances shall be secured by this trust," to pay the principal and interest of the note to the mortgagee, and any surplus to the mortgagor.

This bill was filed February 10, 1882, after default in payment of principal and interest of the mortgage debt. The master, to whom it was referred to state the account between the parties, reported that there was due to the plaintiff the sum of $20,556.11. The defendant excepted to the master's report in two respects; and appealed from a final decree rendered for the plaintiff in accordance with that report.

1. The defendant failed to pay the taxes assessed on the land from 1869 to 1879, and the land was sold and conveyed for non-payment of these taxes to Asahel Gage. The plaintiff's president urged the defendant to redeem the land from the tax sales, (as he might, under the Revised Statutes of Illinois, c. 120, § 210, by paying the amounts for which the land was sold, with interest at the rate of ten per cent, and certain penalties,) and told him that otherwise the plaintiff would be obliged to take steps to protect itself. The defendant promised to pay the taxes and interest, but the tax deeds were void, for want of previous notice to the tenants of Gage's purchases as required by c. 120, § 216, of the same statutes. The defendant never paid the taxes, or took any steps towards redeeming the land. After waiting two years, the plaintiff, on August 1, 1881, bought in Gage's

insisted that

Opinion of the Court.

tax titles for the sum of $3750, which exceeded the amount of unpaid taxes and interest by the sum of $300 only, equal to a very small part of the penalties accrued. The master allowed the plaintiff this sum of $3750, with interest at the rate of ten per cent, amounting to $1809.24.

The defendant argued that the plaintiff could not be allowed for the taxes, because they had been extinguished by the tax sales and deeds; and could not recover on the tax titles, because they were void, and because equity would not enforce them.

But the plaintiff did not set up the tax deeds as a ground of suit, but only as evidence of clouds upon his title, arising out of the mortgagor's own neglect to pay the taxes. It is at least doubtful, upon the evidence, whether Gage did not give notice to the tenants of the tax sales; and there is no evidence whatever of any invalidity in the taxes, the sales or the deeds, in any other respect. In this state of things, the mortgagee was not bound to take the risk of contesting the tax titles, and the sums paid to extinguish those titles were reasonable expenses chargeable to the mortgagor by the terms of the mortgage.

2. The defendant, who is an attorney at law, claimed, by way of set-off, the sum of $2500 for professional services, and the further sum of $5000 for a general retainer by reason of the president having, as the defendant testified, said that he "wished to engage him professionally in behalf of the company with reference to fifteen or twenty cases, litigated or complicated cases, growing out of their foreclosure proceedings and claims upon property."

The master allowed the defendant the sum of $600 for professional services actually rendered, and the evidence does not satisfy us that they were worth more.

The plaintiff's claim for a retainer for services in suits to be brought in the future was rightly disallowed by the master. No express agreement to pay a retainer was proved, and an agreement to pay a retainer for services which are never performed is not to be implied.

Decree affirmed.

Statement of the Case.

CRAWFORD v. NEAL.

NEAL v. CRAWFORD.

APPEALS FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF OREGON.

Nos. 186, 278. Argued March 21, 1892. -Decided April 18, 1892.

The jurisdiction of a Federal court by reason of diverse citizenship is not defeated by the mere fact that a transfer of the plaintiff's interest was made in order, in part, to enable the purchaser to bring suit in a court of the United States, provided the transfer was absolute, and the assignor parted with all his interest for good consideration.

The statutes forbidding the transfer by a debtor of his property with intent to hinder, delay or defraud creditors do not invalidate a conveyance by a debtor to a bona fide creditor, with intent to prefer him. The burden of setting aside a conveyance by a debtor as made with intent to hinder, delay or defraud creditors is on the attacking creditor; but where the fraudulent intent on the grantor's part is made out, and the circumstances are suspicious, then the purchaser must show that he paid full value; and if this is shown it must then be made to appear that the purchaser had full knowledge of the fraud. The findings and conclusions of a master upon conflicting testimony are to be taken as presumptively correct, and unless some obvious error in the application of the law has intervened, or some serious or important mistake has been made in the consideration of the evidence, the decree should stand.

The continued possession by an insolvent debtor of his real estate after the transfer of it to a creditor by way of preference may be explained by the surrounding circumstances.

Of two conveyances made by an insolvent debtor at the same time to two individuals, one may be held to be valid as a preference of a bona fide creditor, and the other invalid as made with an intent to hinder, delay or defraud creditors, unless the two transactions are so intermingled as to make them necessarily but one transaction, in which case both will be void.

THE Court stated the case as follows:

This was a bill filed by Charles A. Neal in the Circuit Court of the State of Oregon for the county of Linn, July 1, 1886, against James H. Foster, John A. Crawford, William Craw

Statement of the Case.

ford, Ashby Pearce, John R. Baltimore, J. L. Liles, E. Walden, and W. H. Goltra, and subsequently removed, on the application of the complainant, to the Circuit Court of the United States for the District of Oregon. The bill was in the nature of a creditor's bill, seeking to set aside certain conveyances of real (and some personal) property by the defendant James H. Foster to the defendants John A. Crawford, William Crawford and Ashby Pearce, upon the ground that they were made to hinder, delay and defraud the complainant and certain of the defendants, as judgment creditors of the said Foster. Complainant was a citizen of the State of Illinois and defendants were citizens of the State of Oregon, and complainant claimed as the assignee of two judgments, the first rendered in the state circuit court, March 8, 1886, in favor of Sibson, Quackenbush & Co., for $14,037.87, with costs and interest, and the second, rendered in the same court and on the same day, in favor of W. C. Noon & Co., for the sum of $1920.35 with interest. The defendants Goltra, Walden, Liles and Baltimore were also judgment creditors of Foster.

Answers and replications having been filed, the cause was referred to a master to take testimony and to report his findings of fact and conclusions of law thereon.

The master found the various judgments, and that execution had been issued and returned unsatisfied upon those in favor of Sibson, Quackenbush & Co. and W. C. Noon & Co.; that Foster was insolvent on February 6, 1884, and had so continued since that time, and had no property out of which the judgments of complainant and the other creditors could be satisfied; that on February 6, 1884, Foster conveyed to John A. Crawford certain parcels of real estate numbered from one to five, and certain personal property, and to William Crawford another parcel of real estate known as the "brick store property," numbered six, and that on February 7, Foster conveyed to Ashby Pearce a certain other parcel numbered seven, and a small amount of personalty; and that the parties to these transfers, at the time they were made, agreed upon the prices of the property, which aggregated $79,000.

"That at the time of the transfer the said several parcels of