[2] The district court had jurisdiction, and the amount involved being less than $100, the appeal is dismissed. All the Justices concurring.

AARON et al. v. ROTHROCK et al. (No. 21213.) (Supreme Court of Kansas. Jan. 12, 1918.)

(Syllabus by the Court.)

1. TRUSTS 203 OIL AND GAS LEASERIGHTS OF PURCHASER.

Where an oil and gas lease is executed to a member of a group of buyers, who takes title for the benefit of all, one who buys from the trustee with notice of the trust acquires no beneficial title against the actual owners. 2. FRAUDS, STATUTE OF 56(5)-SALE OF INTEREST IN LANDS-OIL AND GAS LEASE.

Where an oil and gas lease negotiated by several lessees is made to one of them for the benefit of all, he by agreement advancing the purchase price and drawing upon the others for their respective shares, the drafts being paid, their claims thereto cannot be defeated on the ground that the transaction amounts to an oral contract for the sale of an interest concerning lands.

3. TRUSTS 17, 18(3)-CREATION BY PAROLINTEREST IN LANDS-STATUTE.

Where, without any fraudulent intent, an oil and gas lease is executed to one of several purchasers, all of whom join in paying the consideration, under an agreement that he is to hold it for the benefit of all, neither the trustee nor any purchaser from him with notice of his fiduciary capacity can defeat the trust on the ground that it was not created or evidenced by writing, even assuming that a trust in relation to such lease is one concerning real estate. 4. TRUSTS 237-SALE-RATIFICATION.

Where such a trustee makes a sale of the lease, and receives the proceeds thereof, one of the beneficial owners who, with knowledge of the facts, elects to look to the trustee for his share of the purchase price, thereby ratifies the sale and precludes himself from claiming title to the lease as against the purchasers.

Appeal from District Court, Montgomery County.

Action by W. H. Aaron and G. W. Goss against W. M. Rothrock and another. Judgment for plaintiff Goss, and defendants and plaintiff Aaron appeal. Affirmed.

Thurman Hill, O. L. O'Brien, and Chester Stevens, all of Independence, and W. H. Sproul, of Sedan, for appellants. Capt. Paul B. Mason and D. B. Horsley, both of Pawhuska, Okl., and Tomlinson & Shukers, of Independence, for appellees.

to adjudge that they were each the owners of a one-sixth interest in the lease, the title to which had been by agreement taken by Lucas for the benefit of himself, the plaintiffs and two other persons. Judgment was rendered in favor of Goss and against Aaron. The defendants appeal from the judgment against them, and Aaron appeals from the refusal to grant him relief.

[1] 1. The defendants claim that they are entitled to protection as innocent purchasers. There was evidence, however, that before they acquired the lease and while the purchase was under consideration, Goss had told Rothrock that he and Aaron each owned a sixth interest in it. This was sufficient to warrant a finding, which the court must be deemed to have made, that the buyers had such notice of the fact that Lucas held the title as a trustee as to put them on inquiry, and prevent their obtaining higher rights than were held by their grantor. 28 A. & E. Encyc. of Law, 1128; 39 Cyc. 374-376; 2 Perry on Trusts and Trustees (6th Ed.) § 828, pp. 1364, 1365. The question does not turn directly upon the interpretation of the statute requiring conveyances to be recorded, as was the case in Nordman v. Rau, 86 Kan. 19, 119 Pac. 351, 38 L. R. A. (N. S.) 400, Ann. Cas. 1913B, 1068. The situation does not arise from the omission to record an existing instrument, but upon the holding of the legal title to property by one person in trust for others. It is not necessary to the affirmance of the judgment that this court should be able to say that the facts shown constituted notice, but merely that there was room for a reasonable inference to that effect.

[2] 2. The contention is also made that a recovery is precluded by the section of the statute of frauds which prevents the enforcement of a contract for the sale of an interest in or concerning lands, unless it is evidenced by a writing. Gen. Stat. 1915, § 4889. This is upon the theory that Lucas himself acquired the lease and agreed orally to sell an interest in it to Aaron and Goss. The evidence, however, was sufficient to justify the conclusion that the original transaction, as a result of which the lease was executed, was participated in by Aaron and Goss, and that the title was taken by Lucas for their benefit as well as for that of the other persons interested, although by agreement Lucas advanced the money to pay for it and drew upon the others for their respective shares, the drafts being paid. In that situation the statute referred to interposes no obstacle to the plaintiff's claim.

"Section 1. That section 9081 of the General Statutes of Kansas for 1915 is hereby amended so as to read as follows: Section 9081. That it shall be the duty of the mayor of such city of the first class within thirty days after receiving a certified copy of the action of the board of education, showing a necessity and giving a statement of the estimated cost of such school sites, repairs, additions, building or buildings, signed by the clerk and countersigned by the president of the board, to issue a proclamation for holding an election to vote bonds to the amount prayed for by the board; and no bonds shall be issued unless a majority of the qualified electors of the city school district voting at such election shall vote therefor; nor shall the entire amount of such school bonds issued exceed in the aggregate, including existing indebtedness, two and one-half per cent. of the valuation of taxable property of such city as ascertained by the last assessment for state and county purposes previous to incurring the proposed indebtedness. Any member of a board of education, or officer thereof, who shall vote for, counsel, consent to or in any wise assist in the issue of any bond or bonds in excess of the per centum herein authorized shall be liable jointly and severally to the holder of any such bonds for the amount due thereon, to be recovered in a civil action in any court of competent jurisdiction; and judgments thereon may be collected and enforced in the same manner as other judgments are collected and enforced: Provided, this act shall not apply to cities having a population of 53,000 or more, and having an assessed valuation of $65,000,000.

"Sec. 2. That section 9081 of the General Statutes of Kansas for 1915 is repealed.

"Sec. 3. That this act shall take effect and be in force from and after its publication in the official state paper."

The plaintiff argues that the Legislature did not intend to deprive the cities of the first class described in the proviso of section 1 of the act, of the power to vote bonds for school purposes. The plaintiff says: "The courts have held that an absolute repeal will be qualified by reason of a purpose manifested in the repealing statute as to the subjectmatter not covered by the repealing statute.'

The plaintiff cites a number of authorities which appear to sustain the principle contended for, but, when we examine the title of chapter 268 of the Laws of 1917 and see that the title includes a repeal of section 9081 of the General Statutes of 1915, and when we examine section 2 of chapter 268 and see that it expressly repeals section 9081, the court is driven to the conclusion that the Legislature intended to repeal that section. To hold otherwise would be to say that the Legislature did not do what it said it did do, and did not do what it said in the title of the act it intended to do.

No. 374 by adding at the end of section 1 the "Senator Getty moved to amend House Bill following: Provided, this act shall not apply to cities having a population of 53,000 or more and an assessed valuation of $65,000,000 or more.' The motion prevailed."

The bill passed the Senate as thus amended, was sent back to the House, and was passed by the House in the amended form. If the bill as it passed the House had become a law, it would have applied to all cities of the first class. The bill as it finally passed, with the Senate amendment, became a law and applies to all cities of the first class, except those described in the amendment. When the Legislature, in the title to an act, says that the act does repeal a certain statute, and then, by a specifically repealing section in the act, positively states that it does repeal that statute, the courts are bound to conclude that the Legislature did what it intended to do.

Section 9081 of the General Statutes of 1915 has been repealed, and bonds for school purposes cannot be issued under it by boards of education in cities having more than 53.000 population and more than $65,000,000 valuation.

The writ of mandamus is denied. All the Justices concurring.

The holder of a mortgage on real estate took a quitclaim deed of the premises, in lieu of his mortgage. The deed was made by a grantee of the mortgagor, who had not assumed payment of the debt. The mortgagee took possession under the deed, canceled the mortgagor's note, and surrendered it. The debt was not satisfied by any one, -and the mortgage was not released. The the quitclaim deed had given a mortgage on the mortgagee then discovered that the maker of premises. This mortgage recited that it was subject to the other. The holder of the second mortgage sought to foreclose it as a first lien. Held, the principle stated in paragraph 1 applies, and the junior mortgagee's position was not bettered because the first mortgagee canceled and surrendered the note secured by his mort

gage.

S. C.

BURCH, J. The action was one to foreclose a real estate mortgage on property to which the defendant held a deed. The defendant asserted priority of a mortgage to himself, antedating the plaintiff's mortgage and the deed. Judgment was rendered in favor of the defendant, and the plaintiff appeals.

In 1909 owners of the property mortgaged it to the defendant to secure payment of a note for $1,000. Through successive conveyances to grantees, who did not assume the mortgage, title passed to Della A. Betz, subject to the mortgage. In September, 1912, Della A. Betz and her husband made a quitclaim deed of the property to the defendant, in lieu of his mortgage. As a part of the same transaction, the defendant gave the husband of Della A. Betz an option to repurchase within six months for the amount of the mortgage and interest, plus such expenditures as the defendant might make in order to render the premises tenable and a source of income. The defendant took possession under his deed, made necessary repairs, insured the property, rented it, collected the rents, and paid the taxes. The plaintiff then sued to foreclose a mortgage given by Della A. Betz and her husband before they deeded to the defendant. The defendant was ignorant of the existence of this mortgage, which recited that it was subject to his mortgage, until served with summons in the foreclosure suit. Interest on the note secured by the defendant's mortgage was paid to February, 1912. After receiving his deed the defendant marked the note paid and returned it to the makers, but did not cancel the mortgage. The debt was not satisfied by any one. The district court gave the defendant a first lien for the amount of his mortgage and interest, and for the balance remaining after deducting receipts from the property for expenditures upon it.

[1] The plaintiff contends that the defendant, by canceling his note and releasing the makers from personal liability, no one else being obligated to pay the debt, forfeited his right to a lien. It is said there can be no mortgage without a debt which is secured, and there can be no debt without a debtor who is obligated to pay. The cases decided by this court in which declarations of this character have been made are collated and urged as controlling. It is not necessary to review them. A former justice of this court was accustomed to say that the doctrine of estoppel applies when it ought to apply. So it is with the declarations referred to, and doubtless they were properly applied in the cases cited. They are not, however, of universal application, and equity has never

lien may be kept alive and enforced after the lien claimant has placed himself in a position which precludes him from resorting to the personal obligation of the mortgagor or any one else for satisfaction of the debt.

[2] It is not necessary to consume space by stating the familiar principles comprised in the doctrine of merger. In this instance the interest and the intention of the mortgagee that merger should not take place were unmistakable, and the ordinary rule governs:

"If a mortgagee purchases the equity of redemption and gives up the mortgage note, without intending this to operate as a payment, the mortgage not being discharged, there is no merger or extinguishment of the mortgage, against an intervening title, as. for instance, by levy, judgment, junior mortgage, or conveyance." 2 Jones on Mortgages (7th Ed.) 397, § 871.

as

Among other cases cited in support of this text is that of Coburn v. Stephens et al., 137 Ind. 683, 36 N. E. 132, 45 Am. St. Rep. 218. In that case the mortgagee took a quitclaim deed from the mortgagor, under an agreement to release the mortgagor from personal liability, the mortgage, however, to remain a lien on the premises. It was held that the mortgage remained superior to a mechanic's lien which attached before the quitclaim deed was delivered. Another case is that of Brooks v. Rice, 56 Cal. 428, in which the deed was taken under an agreement to surrender the notes and mortgages, which was done. The lien of the mortgages was preserved against an intervening mortgage. Another case is that of Shattuck v. Belknap Savings Bank, 63 Kan. 443, 65 Pac. 643. In that case the mortgagee took from the mortgagor a quitclaim deed, under an agreement that the mortgagor should not be liable for any deficiency remaining after exhausting the security. A junior incumbrancer claimed priority. Authorities were cited to the effect that, even when parties have undertaken to discharge a mortgage, it will be upheld as a lien when it is to the interest of the mortgagee to do so because of some intervening cause, and the decision was that the junior incumbrancer's position had not been bettered by release of the mortgagor from personal liability.

In one of the authorities cited in the Shattuck Case the expression was that a released mortgage would be upheld "as a source of title." The plaintiff says such a doctrine can apply in those states only in which the common-law theory that a mortgage confers title prevails. and that in this state a mortgage is merely security. The phraseology employed was, indeed, derived from the common law, but the equitable doctrine involved did not depend on phraseology, and was applied by this court as a part of the juris