gardless 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 canceled. Freeland v. Charnley, 80 Ind. 132; Bethell v. Bethell, 92 Ind. 319; Swank v. Hufnagle, 111 Ind. 453, 12 N. E. 303, 13 N. E. 105 (present term); 1 Jones, Mortg. § 823.

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 incumber or convey her land, except by deed in which her husband should join. 1 Davis, St. 550 (section 5117, Rev. St. 1881).

Since the only power of married women to convey or incumber 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." Luntz v. Greve, 102 Ind. 173-183, 26 N. E. 128; 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. Strupler, 52 Pa. 400. The case 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; Story, Eq. Jur. § 700; Pom. Eq. Jur. § 1377.

The mortgage in question, although absolutely void, was nevertheless an apparent cloud or incumbrance on the plaintiff's title. She had therefore a clear equitable right to invoke the aid of the court to procure its cancellation. This was the appellee's equity. It was the equity which she sought the aid of the court to enforce. The mortgage which the plaintiff sought to have canceled grew out of a transaction in which the appellant undertook to aid her in purchasing the land covered by the void mortgage. The subject-matter of the suit, therefore, comprehended and brought within the jurisdiction of the court the entire transaction. When a court of equity once obtains rightful jurisdiction of a subject-matter, it avails itself of the opportunity to invesTHROCKM.EQ.JUR. (2D ED.)-5

tigate and decide all incidental matters necessary to enable it to make a full and final determination of the whole controversy. With the equities of the plaintiff, it settles any and all legal or equitable rights of the defendant pertaining to the same subject-matter, and thus avoids a multiplicity of suits. Souder's Appeal, 57 Pa. 498.

Taking the facts put forward in the answer as true, has the appellant any equity, within the principles already laid down, which the court may require the appellee to recognize as a condition upon which it will afford her the relief to which we have seen she is entitled? Has the appellant an equitable right, upon the facts stated in his answer, to maintain a bill to declare and enforce a lien against the appellee's La Porte county property? If he has, the maxim, "He who seeks equity must do equity," imperatively requires that relief be denied the plaintiff, except upon condition that she consent that the decree shall also adjust the corresponding equities of the appellant. That the appellant has a right, cognizable in a court of equity, growing out of the transaction involved in the suit, is demonstrable upon authorities which leave the subject in no sort of doubt. A vendor's lien for unpaid purchase money will be declared and enforced against property purchased and held by a married woman precisely as in the case of a person who is under no legal disability. Perry v. Roberts, 30 Ind. 244, 95 Am. Dec. 689; Haugh v. Blythe, 20 Ind. 24; Huffman v. Cauble, 86 Ind. 591; Martin v. Cauble, 72 Ind. 67; Haskell v. Scott, 56 Ind. 564.

The substance of the transaction between Mrs. Gregory and the appellant was that the former became indebted to the latter for a specified amount of the purchase money due on the La Porte county land, for which indebtedness the appellant received no security. If, at the time Mrs. Gregory sold her Michigan property, she had paid the appellant the amount of his secured debt, and the latter had at her request applied the money so paid upon the purchase price of the La Porte county land, it is clear upon authority that, as between the parties, a vendor's lien would have resulted by implication of law in favor of the appellant. Substantially that was the nature of the transaction. As we said, in effect, in the recent case of Barrett v. Lewis, 106 Ind. 120, 5 N. E. 910, the lien which arises in favor of the person to whom purchase money is due is peculiarly of equitable cognizance. Equity has regard in such cases, as in others, for the substance and not for the mere form. If, upon looking through the transaction, it appears that the debt which the party owes is in fact part of the purchase price of land, acquired in the transaction out of which the debt arose, a lien will be declared upon the land in favor of the person to whom such debt is due.

The substance of the arrangement between the parties here concerned was, as the admitted facts, made it appear, that Mrs. Gregory and her husband owed the appellant a debt which amounted to $500. This debt was secured by a mortgage which created a valid incum

brance upon her property in Michigan. She sold the Michigan property, and desired to purchase property in Indiana; but, to enable her to make the purchase, it became necessary that she should realize the full amount of the price at which she sold the property in Michigan. It was therefore agreed that the appellant should release his mortgage on the property sold, so as to enable the appellee to receive the whole of the purchase money, which was to be applied in payment of the property purchased, so that, instead of owing her vendor part of the purchase price, she would owe the appellant the amount which he had in effect paid, or transferred to her to be paid, on the La Porte county land.

In the case of Austin v. Underwood, 37 Ill. 438, 87 Am. Dec. 254, it was held that where a party purchases land, and procures the purchase money to be paid by a third person, as a loan to the purchaser, the money thus loaned will be regarded as purchase money as against the person for whom it was paid. Magee v. Magee, 51 Ill. 500, 99 Am. Dec. 571; Carey v. Boyle, 53 Wis. 574, 11 N. W. 47; Jones v. Parker, 51 Wis. 218, 8 N. W. 124; Carey v. Boyle, 56 Wis. 145, 14 N. W. 32. The lien, in such a case, results from the transaction between the parties, and is manifested by all the circumstances attending each particular case.

The controlling question in cases of this character is whether or not the debt owing is, as to the debtor, the balance due for purchase money. Barrett v. Lewis, supra; Boyd v. Jackson, 82 Ind. 525; Nichols v. Glover, 41 Ind. 24.

In the case of Dwenger v. Branigan, 95 Ind. 221, the facts were that one party furnished the other $1,500 in money for the purpose of paying the purchase price of certain real property, it being agreed at the time that the party furnishing the money should have a lien on the land purchased. A vendor's lien was declared in favor of the person furnishing the money. The principle which ruled that case fully sustains our conclusion here. The appellant having at the appellee's request, in effect, paid $500 of the purchase money for her under an agreement that he was to hold a lien upon the land purchased, although the particular lien contemplated has miscarried, he will be subrogated by a court of equity to the rights of the vendor who received his money.

Equitable subrogation is the creature of courts of equity, and obtains regardless of any contractual relations between the parties to be affected by it. Courts of equity administer its principles whenever it is necessary to secure substantial justice, without regard to form. This is the appellant's equity. Before the appellee can have the relief which she demands, she must recognize the corresponding equity of the appellant. It is always incumbent, upon a party asking the interposition of a court of equity in his behalf, to show a perfect equity. Piatt v. Smith, 12 Ohio St. 561; Hill v. Nisbet, 100 Ind. 341. Of course, upon the answer as it is pleaded, the appellant can have

no affirmative relief. Such relief can only be obtained by setting up the facts by way of cross-complaint. But a defendant is not compelled to become an actor, and ask affirmative relief. He may rely upon the facts, as an equitable defense to defeat his adversary's claim. East v. Peden, 108 Ind. 92, 8 N. E. 722. Our conclusion is that the facts pleaded were sufficient to defeat the appellee's right to any relief. Judgment reversed, with costs, with directions to the court below to carry the demurrer to the answer back, and sustain it to the complaint, with leave to both parties to reform their pleadings.

VII. He Who Comes into Equity Must Come with Clean Hands 10

CARMEN v. FOX FILM CORPORATION et al.

(Circuit Court of Appeals of the United States, Second Circuit, 1920. 269 Fed. 928, 15 A. L. R. 1209.)11

Appeal from the District Court of the United States for the Southern District of New York.

Suit in equity by Jewel Carmen against the Fox Film Corporation and the William Fox Vaudeville Company. Decree for complainant, and defendants appeal. Reversed.

For opinion below, see 258 Fed. 703.

Before WARD, ROGERS, and HOUGH, Circuit Judges.

ROGERS, Circuit Judge. The plaintiff seeks to have certain contracts declared void which she alleges that she made with the defendants during her minority, and she prays that an injunction be issued restraining the defendants from asserting that the contracts are valid and from interfering with her contract relations with any person, firm, or corporation in employing the plaintiff and availing himself or itself of her services under any contract of employment entered into with her. Damages are also asked.

The court below has adjudged that the contracts were duly rescinded by her and have been null and void since July 15, 1918, and has issued a perpetual injunction as prayed, and awarded her damages in the sum of $43,500.

The plaintiff is a moving picture actress, and in her complaint alleges that at all the times mentioned therein she was and still is a citizen and resident of the state of California. The defendants are

10 For discussion of principles, see Eaton on Equity (2d Ed.) § 20. 11 Certiorari denied 255 U. S. 569, 41 Sup. Ct. 323, 65 L. Ed. 790.

corporations organized under the laws of the state of New York, and are each engaged in the business of manufacturing and producing photoplays.

The contract with the Fox Film Corporation, which is one of the contracts the plaintiff repudiated and asks to have declared void, provided employment for a period of one year, commencing October 17, 1919. The compensation agreed upon was $175 per week. In 'consideration of $1,300, which was to be paid in weekly installments of $25, an option was given to continue the employment for further periods of six months each until said employment extended over to October 17, 1921. The salary stipulated, if the options were exercised, was $200 per week for the first year, $225 per week for the first half of the second year, and $250 per week for the second half of the second year until October 17, 1921, the termination of.the contract.

The contract with the William Fox Vaudeville Company which the plaintiff also repudiated, provided employment for six months with the option in the company to employ her for a further six months until the employment extended over to October 17, 1919. The salary, if the options were exercised, was $125 per week for the first six months; $150 per week for the second six months; $200 per week the last six months and until the termination of the contract. sideration for the several options was $650 for each of the options. Each of these contracts was executed on July 31, 1917, and in each of them the plaintiff is described as of the city of Los Angeles in the state of California.

The con

Prior to the plaintiff's repudiation of the agreements above mentioned and while they had still several years to run, and on March 28, 1918, a few months before she attained her majority, the plaintiff entered into a contract with the Frank A. Keeney Pictures Corporation for her exclusive appearance in motion pictures under its employment for a period of two years commencing on or about July 15, 1918. Under this agreement the Keeney Corporation was to pay to the plaintiff at the end of each week for 46 consecutive weeks the sum of $450. And for the first six months during the year commencing July 15, 1919, she was to be paid $500 for each week, and for the last six months she was to be paid the sum of $550 per week. The contract also gave to the Keeney Corporation an option on her exclusive motion picture services for one year commencing July 15, 1920, the corporation agreeing to pay her if it availed of the option $600 per week for the first six months, and $650 per week for the last six months. The contract also provided that the corporation should have a further option for her exclusive services for the year commencing July 15, 1921, her compensation to be $700 per week for the first six months, and $750 for the last six months. It granted the corporation a further option for the year commencing July 15, 1922, the compensation for the first six months to be $800 per week, and for the