from the case at bar. The court allowed | Wiley, 22 App. D. C. 329; Taylor v. Stowell, the offset and gave judgment for the de- 4 Metc. (Ky.) 175; Forbes v. Cooper, 88 Ky. fendant for a balance found due it, and in the course of its opinion said: 285, 11 S. W. 24; Edminson v. Baxter, 4 Hayw. (Tenn.) 112, 9 Am. Dec. 751; North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co., 152 U. S. 596, 14 Sup. Ct. 710, 38 L. Ed. 565. The authorities both for and against the proposition are so exceedingly well collated in the note in 30 L. R. A. (N. S.) 21, supra, that it is needless to recapitulate them here. We have carefully examined them, as well as other cases cited by counsel, and agree with the doctrine announced by the Supreme Court of Arkansas in the case first cited. The plaintiffs in this case come into a court of equity and say to the defendants: "You owe us $3,000 upon a note and mortgage, and we demand payment or foreclosure." The defendants reply: "Please allow us to use the equitable machinery of this court to sell these people out of house and home, and after we have done that they can come to Chicago and bring an action at law to determine whether we have broken our agreement to furnish them water." "The evidence was sufficient to sustain the findings of fact by the court. At law appellee was not entitled to set up in this action, by way of set-off or counterclaim, the $1,050 damages suffered by it by a breach of contract made by appellant. Was it entitled to set it up as an equitable set-off? In 2 Story's Equity Juris prudence (13th Ed.) § 1437a, it is said: 'It has already been suggested that courts of equity will extend the doctrine of set-off and claims in the nature of set-off beyond the law in all cases where peculiar equities intervene between the parties. These are so very various as to admit of no comprehensive enumeration.' In North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co., 152 U. S. 596, 616, 14 Sup. Ct. 710. 716, 38 L. Ed. 565, 572, it is said: 'By the decided weight of authority it is settled that the insolvency of the party against whom the set-off is claimed is a sufficient ground for equitable interference. * * * In addition to in"Yes, it is true that we gave you a note and solvency, it is held by many well-considered de- mortgage and agreed to pay you $3,000; but cisions, including those of Illinois, that the that promise was in consideration, among othnonresidence of the party against whom the set-er things, that you would furnish us water to iroff is asserted is good ground for equitable re- rigate our orchard and crops. You did not furlief. Quick v. Lemon, 105 Ill. 578; Taylor nish the water, and by reason of your breach v. Stowell. 4 Metc. (Ky.) 175; Forbes v. Cooper, of the contract the land that we mortgaged to 88 Ky. 285, 11 S. W. 24; Robbins v. Holley, you failed to produce the crops which a com1 T. B. Mon. [Ky.] 191; Edminson v. Baxter, pliance by you with your agreement would have 4 Hayw. (Tenn.) 112, 9 Am. Dec. 751; Davis v. enabled us to produce, and by your failure to Milburn, 3 Iowa, 163.' In Forbes v. Cooper, keep your agreement we are injured in a sum supra, it is said: 'It is certainly unconscien- greater than the amount of your mortgage." tious for an insolvent party to coerce the payment of his claim when he is owing the other The plaintiffs then say to the court: party an equal or larger sum, and thus leave the latter remediless; nor should a nonresident be allowed, under like circumstances, to enforce through the agency of the courts the collection of his debt, and compel the other party to seek a foreign jurisdiction for relief, and then perhaps find the debtor insolvent. If the object of litigation be the attainment of justice, assuredly such results should be prevented. Indeed, the doctrine of equitable set-off, to the extent it was formerly applied, was based upon moral justice, and to meet such cases as the above, thus preventing wrong. It was then not uncommon to stay an insolvent or nonresident debtor in the collection of his claim until dam[2] The next question suggested in the ages, to which the complainant might be entitled against him, were liquidated under the order of brief of appellant is that there was no althe chancellor, and then apply them in satisfac- legation in the answer upon which the court tion of his independent debt.' In Quick v. Lem- could base a finding of damage to defendants' on, supra, it is said: 'It would seem to be in-agricultural crops. While the allegations in equitable to require the corporation to go to another state to collect its demand in an action at law, and we are inclined to hold that the nonresidence of the complainant, in connection with the fact that he calls upon a court of equity to enforce his judgment, is suflicient to allow the defendant corporation to prove and set off its demand set up in the cross bill against the judgment of the complainant.' To the same effect see Porter v. Roseman, 165 Ind. 255, 74 N. E. 1105, 112 Am. St. Rep. 222, 6 Ann. Cas. 718, and note to that case and cases cited. The rule announced in these cases is a just rule, and should be enforced. We see no good reason for sending a citizen of this state to a foreign jurisdiction to obtain justice when the courts of this state can afford relief. They are as fully competent to afford relief to the citizen as to the nonresident. Why should one in cases like this be accorded greater rights than the other?" Among the cases cited in the note to the above case are the following, where the claims offset were for unliquidated damages: Plattner Implement Co. v. Bradley A. & Co., 40 Colo. 95, 90 Pac. 86; Fitzgerald v. This is not one whit overdrawn. It is plaintiffs' contention, stripped of legal verbiage and expressed in common, everyday language; and the very statement of it marks its inequity. The defendants' answer was good as an equitable defense. regard to damage to agricultural crops are somewhat meager when compared with the reiteration of the claim for damages respecting the orchard, we think, in the absence of a motion to make more definite and certain, they were sufficient. They are these: "That by the use of said water on said land in the irrigation thereof, under and pursuant to said perpetual right of use as aforesaid, said land became especially valuable for the cultivation and progagation of fruit trees, and particularly for apples, peaches, and pears, and said land also thereby became valuable for the raising of the ordinary agricultural crops." This, taken in connection with the other allegations regarding the worthlessness of the land without water, fairly states that water was necessary in order to raise agricultural crops. Again we find this allegation: fusals (referring to plaintiffs' failure to furnish "And by reason of said faults, failures, and rewater), said S. M. Willis has suffered the loss of, and to, her fruit trees and fruit, and agricultural crops planted and growing on said land to the full amount of $4,500." 1 tor to make arrangement to conserve in its reservoirs a sufficient quantity of water to meet the demand. The evidence indicates that defendants frequently verbally demanded the water to which they were entitled, and that it was not furnished. It also sufficiently appears that the original grantor and these plaintiffs used water from their irrigation system to irrigate 800 acres of their own land, and that this occasioned such a shortage they were unable to furnish the water in the agreed quantity to defendants. This they had no right to do. It was their duty to furnish the water they had contracted to furnish to defendants at any inconvenience that a compliance with their contract might occasion to themselves, and they had no legal right to occasion a shortage by creating an additional use on lands owned by them. Both these allegations are denied in the reply. We think they put in issue three matters: (1) Whether the water was necessary for the growing of agricultural crops; (2) whether such crops were planted and grown upon said land; and (3) whether they were injured by reason of plaintiffs' refusal to furnish the necessary water to irrigate them as provided in the agreement. It is true that the allegations in the answer are not models of good pleading, but they were sufficient to raise the issue, and the testimony on this branch of the case was not objected to on the ground of the insufficiency of the pleading. We think such damages were general and such as might reasonably be expected as the result of the injury averred. Sutherland on Damages, 763 et seq.; 8 R. C. [4-6] The court erred by decreeing that L. § 156, p. 611; Wisner v. Barber, 10 Or. there should be no deficiency judgment rel342; Dose v. Tooze, 37 Or. 13, 60 Pac. 380. Itative to tract No. 1. As to this tract there is the view of the writer that the pleading would be sufficient, even if tested by the rule applied to allegations of special damage: there being no specific objection to it by motion. 13 Cyc. 179; Knittel v. Schmidt, 16 Tex. Civ. App. 7, 40 S. W. 507; Conover v. Manke, 71 Wis. 108, 36 N. W. 616. The wrong alleged is a breach of a contract to furnish water. The damage therefrom is alleged to be the injury to fruit and agricultural crops planted and growing upon the land. The defendants were not asked, and neither did the law require them, to itemize their damages, nor to present them in the form of a bill of particulars. was no defense. The demurrer to the answer having been sustained, and no new pleading having been filed, the case stood as though no answer had ever been attempted, and there was no pleading upon which the court could base a decree that the note and mortgage given on that tract were executed to secure the purchase price. Upon tract No. 2 the case is different. The agreement to furnish the water, the deed conveying the land, and the mortgage were all parts of the same transaction, and it is specified in the contract, which is executed with all the formalities attending a conveyance of real property, that the right therein conveyed shall be perpetual. The water right thereby became an of the realty. Ruhnke v. Aubert, 58 Or. 6, 113 Pac. 38. Treating the deed, the water contract, and the mortgage as one instrument, as they should be considered under the circumstances, the conclusion follows that the mortgage was for the purchase price of real property, and the plaintiffs were not entitled to a deficiency judgment as to the mortgage upon tract No. 2. With the modification above suggested, the decree will be affirmed, and defendants will recover their costs. [3] It is further contended that, under the irrigation agreement between plaintiffs' pred-appurtenance to the land, and as such a part ecessor and the defendants, the plaintiffs could not be put in default for failure to furnish water unless the defendants should have demanded the delivery thereof by a three days' notice in writing. We do not so construe the contract. It is evident that it was the intention first to provide for a continuous flow of water in quantity of one-half a miner's inch for every acre of land in tract No. 2 during the irrigation season, namely, from April 1st to September 15th of each year. The succeeding clause giving the purchaser a right to vary the method of delivery by giving three days' notice in writing was for the benefit of the purchaser, who might thereby, instead of having a small quantity delivered continuously, amass water, so to speak, and have the quantity so conserved delivered to him according to his needs, so long as the quantity ultimately demanded should not exceed 4% acre feet during the season, which would be the total flow computed in acre feet. There was reason in requiring notice to be given in writing when a delivery of water was to be required in larger quantities and at intervals, instead of continuously, since it would enable the gran BENSON, BURNETT, and HARRIS, JJ., concur. (83 Or. 326) BENNETT v. BENNETT. (Supreme Court of Oregon. March 20, 1917.) 1. HUSBAND AND WIFE 131(1)—PARTNER SHIP-BURDEN OF PROOF. Where husband claimed property held in wife's name by virtue of an alleged oral partupon him to prove such relation by clear evinership agreement with her, the burden rested dence, and such burden was greater, since the partnership was alleged to be between husband | agreement. He alleges that they discussed and wife. [Ed. Note.-For other cases, see Husband and Wife, Cent. Dig. § 471.] 2. HUSBAND AND WIFE 133(1)-PARTNERSHIP-SUFFICIENCY OF EVIDENCE. In action by husband to establish a partnership between himself and his wife and to divide certain alleged partnership property held in her name, evidence held insufficient to establish the partnership, where only two witnesses testified to wife's admission of the partnership which evidence by L. O. L. § 868, is required to be received with caution, and all other evidence showed that practically all property was purchased with the wife's money by husband acting only as her agent. [Ed. Note.-For other cases, see Husband and Wife, Cent. Dig. §§ 487, 493.] Department 1. Appeal from Circuit Court, Clatsop County; J. A. Eakin, Judge. Suit by C. N. Bennett against Emma K. Bennett. Judgment for defendant, and plaintiff appeals. Affirmed. C. N. Bennett is prosecuting this suit against his wife Emma K. Bennett for the purpose of establishing a partnership between them and to secure a decree marshaling and dividing the alleged partnership assets. The complaint avers that the husband and wife verbally agreed to purchase certain cranberry lands in Clatsop county, to sell portions, and to improve and raise cranberries on other portions of the land. The pleading speaks of two tracts of land: One is known as the the terms "during the winter of 1910-11," The plaintiff and the defendant were married in Pennsylvania on February 21, 1897, when he was about 21 years of age. He was a civil engineer, earning less than $100 a month, while her "parents were in pretty ed in his profession with the progress of good circumstances." Apparently he advanctime, for in 1907 he was the chief engineer West place, and the other as the railway 80. The complaint recites the history of the acquirement of these two tracts of land, ex-"of four different street railway companies plains that both were conveyed to the wife in trust for the partnership, tells about selling portions of the West place, recounts the story of the formation of a corporation known as the Clatsop Cranberry Company and the issuance of 25 shares of the capital stock to C. N. Bennett for the benefit of the partnership, avers that a donkey engine, cars, tracks and tools are on the West place, and that the title to the railway 80 and to the unsold portion of the West place is now held by Emma K. Bennett in trust for the partnership. The defendant denies the making of a business partnership with her husband, and says that she is the individual owner of the equipment on the West place and of all the land in her name, and that the plaintiff holds the 25 shares of Clatsop Cranberry Company stock in his name for her benefit. The answer concludes with a prayer that she be adjudged to be the owner of all the property in controversy. A trial resulted in a decree for the defendant, and the plaintiff appealed. Edward E. Gray, of Astoria (J. Q. A. Bowl-heritances, which were supplemented by a by, of Astoria, on the brief), for appellant. James L. Hope, of Astoria, for respondent. and a bridge company." However, she testified that he was without employment during the year immediately preceding his coming to Oregon. A corporation known as the Astoria, Seaside & Tillamook Railway was organized for the purpose of constructing a railway from Astoria to Seaside and other points, and in March, 1910, C. N. Bennett came to Oregon to assume the management of the corporation at a monthly salary of $250, having been sent here by the stockholders, most if not all of whom resided in Pennsylvania. The plaintiff admits that when he arrived in Oregon he had practically no property or funds. His wife and children followed him and arrived in this state in July, 1910. At the time of her marriage and at different times afterwards her father gave her substantial sums of money, and also a lot. Her father died in 1904, and she inherited property from his estate. Her brother died, and she was a beneficiary. When she came to Oregon in 1910 she owned, as a result of those gifts and in fortunate investment, a house and lot in Pennsylvania free from incumbrance, worth from $5,000 to $7,500, 80 shares of stock in HARRIS, J. (after stating the facts as the West Side Electric Street Railway, valuabove). [1] The husband asserts and the wife ed at $4,000, although it was afterwards sold denies the making of a business partnership for $5,000, and stock in the Klein Logan Man For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes ufacturing Company, appraised at $7,500. by Emma K. Bennett. The plaintiff insists There is some dispute concerning the source that he indirectly furnished $500 of the conof the money used to acquire the West Side sideration for the land by reason of the reElectric Street Railway stock, but the ulti-ceiver having credited the $500 previously mate fact nevertheless remains that the paid on the option to the Astoria, Seaside & plaintiff concedes that this stock was a part | Tillamook Railway. It is a noteworthy fact, of the "Emma K. Bennett capital," and all however, that in the three trial balance the book entries made by him concerning it sheets for the year 1912 which he prepared, are admissions that she had at least a $4,000 as well as the loose leaf ledger which he interest in the stock. Upon their arrival in opened at some time in 1912, the $500 credit Oregon the husband had practically no re- now claimed by plaintiff is not charged sources except his salary, while the wife was against the land while a charge is made for worth from $16,500 to $19,000, with no in- the $1,500 cash payment. Moreover, in 1914 debtedness. the plaintiff himself prepared two typewritThe plaintiff continued in the service of the ten contracts for slashing this land, one Astoria, Seaside & Tillamook Railway until with E. L. Williams, and the other with about the middle of October, 1910, when he Earnest Dawson. Each contract opens with quit on account of the insolvency of his the statement that, "It is hereby agreed beemployer. The railway 80 was originally tween Emma K. Bennett, owner and" the conowned by a certain corporation, which for tractor. Each contract is signed by Emma K. convenience will be called the receiver, for Bennett, and neither one is signed by C. N. the reason that it was in the hands of a re- Bennett. It is conceded by both parties that ceiver. The receiver owned the railway SO Hagmeier never had any interest in the land, and claimed some interest in certain surveys and that he was used as a mere conduit or rights of way. At some time during the through whom the title was conveyed. The summer of 1910 the plaintiff obtained an deed to Hagmeier was made for the purpose option on the railway 80, together with the of placing the land in the name of a third rights of way for the benefit of his employer person in order to avoid any complications by paying $500 to the receiver. The Astoria, which might result from the insolvency of Seaside & Tillamook Railway became insol- the Astoria, Seaside & Tillamook Railway. vent, and was unable to take up the option. The plaintiff says that when he and his wife C. N. Bennett says that upon learning of the agreed upon a partnership it was underinsolvency of his employer and in order to stood that the railway 80 would be considersave the salary then due him, amounting to ed as partnership property, and that he about $500, he arranged with the receiver for caused the title to be transferred to his wife the purchase of the railway 80 in his own as a matter of convenience. The defendant name. The plaintiff testified that $2,000 was contends that the land was deeded to her the agreed purchase price, and that, with the because her money paid for it, and because consent of the Astoria, Seaside & Tillamook it belonged to her. In passing we recall Railway, $500 of that sum was paid by the that on cross-examination the plaintiff went receiver, crediting to the plaintiff the $500 no further than to claim that at the time of previously paid to the receiver on the option. making the partnership agreement he conThe remaining $1,500 was paid in cash, the sidered that he had an interest in the raildefendant furnishing $500 from her own way eighty; and, although this land was funds, and the plaintiff providing $1,000, purchased prior to the making of the alleged which he borrowed from the Scandinavian partnership agreement, nevertheless, when American Savings Bank of Astoria by giving asked whether he considered that he owned his promissory note. The receiver conveyed the land when the partnership was formed, to C. N. Bennett on September 14, 1910, and he answered, "Well, I don't know that I did.” on September 17, 1910, the plaintiff and the The West place embraced 199.3 acres. defendant deeded the land to the Scandina-“Without putting up any option money," C. vian American Savings Bank for the purpose N. Bennett obtained an option on the West of securing the loan made to the plaintiff. place on February 28, 1911. The option was The $1,000 note to the Scandinavian Ameri- followed by a contract of sale, and it in turn can Savings Bank was paid with funds which was succeeded by a deed to Emma K. BenEmma K. Bennett borrowed in December, nett on July 28, 1911. When the contract of 1910, from the Bank of Charleroi in Penn- sale was made Emma K. Bennett gave her sylvania by giving her promissory note with personal check for $100 to Paul H. West as her West Side Electric Street Railway stock "earnest money." The agreement provided as collateral. Upon payment of the C. N. for the payment of one-third of the purchase Bennett note and by his direction the Scandi- price at the time of concluding the agreement, navian American Savings Bank transferred a note for one-third, payable in one year, the land to H. W. Hagmeier, a brother-in- and a note for the remainder, payable in two law of plaintiff, and afterwards on October years. The first payment was made by Em3, 1911, Hagmeier deeded the land to Emma ma K. Bennett, who gave her check on her K. Bennett. In the final analysis $1,500 of personal bank account, and she gave her the purchase price of this land was furnished promissory notes for the other two install ments. C. N. Bennett did not sign either | $1,000 by saying that he figured that he had note. Both notes were subsequently paid by Emma K. Bennett, who gave checks on her personal bank accounts. She obtained funds for the payment of the first installment by mortgaging her home for $4,000 to Henry Yost. In 1912 and 1913 the Bennetts conveyed portions of the West place to different persons, each of whom gave notes and mortgages for such part of the purchase price as was not paid upon delivery of their respective deeds. Without exception the notes were made payable to Emma K. Bennett. an interest because the investment was made through his influence with the company issuing the stock, and that it was he who made the profit, although he used her money. She says that she had understood that the stock was sold for $4,000, and that it was not until the time of the trial that she learned that it had been sold for $5,000. His testimony on this subject cannot but attract attention. When asked "how much the stock was sold for," he answered by saying, "I think it was in the neighborhood of $4,000," and afterThe defendant insists that she is the owner wards admitted that he sold the stock for of the Clatsop Cranberry Company stock in- $5.000. The plaintiff does not claim that his volved in this controversy. The company wife held any interest in the Key Construcwas organized for the purpose of raising tion Company investment: in that venture cranberries. C. N. Bennett subscribed for he concedes that he used $2,000 of her mon25 shares in his own name, notwithstanding ey, but says that he regarded it as a loan. the fact that he claims his subscription was for the benefit of the partnership. This stock was paid for by deeding 16 acres of the West place to the company and paying $1,216 in cash. The plaintiff says that the partnership furnished $500, and that he borrowed $716 and surrendered the Cranberry Company stock as collateral security for the loan. The defendant says that she did not learn that the stock had been taken in the name of C. N. Bennett until seven or eight months after the issuance of the certificate. The Key Construction Company investment was disastrous, and the $2.000 was lost within a period of four months. Hundreds of checks, check stubs, bank statements, a sort of journal, a so-called loose leaf ledger, another loose leaf book, and many other papers were received in evidence. The three books were kept by the plaintiff, and he says that he commenced to keep books in the middle of 1912, making entries, however, of all transactions dating from July. 1910. The entries in these books relate to the home, the street railway stock, the Klein Logan Manufacturing Company stock, the railway 80, the West place, family expenses. and also individual expenses of the plaintiff. There is not a word in any of these books tending to show that C. N. Bennett, who kept the books, regarded the railway 80 and the West place as partnership property, or that he dealt with that property any different than he did with the railway stock or the Klein Logan Manufacturing Company stock. He does not claim that he kept books as partnership books, nor, indeed, does any book bear the slightest trace of a partnership. The circumstances of the acquirement and disposition of the West Side Electric Street Railway stock may throw some light upon the business relations of the parties. The street railway stock cost $2,500. The plaintiff says that the funds for this investment were obtained by mortgaging the home. The defendant emphatically states that no mortgage was placed on the home until the execution of the Yost mortgage on May 24, 1911, and that the street railway stock was purchased with moneys which she inherited from the estate of her deceased brother Ed Klein. She says, and he does not deny, that the stock was issued in his name; and she tesThe plaintiff counts much on the account tified that it was not until several months carried in the First National Bank of Asafterwards that she learned of the fact that toria. This was a joint account opened in the stock had been issued in his name; and 1913 in the names of the plaintiff and the that it was only after continued insistence defendant. The plaintiff caused some checks that she succeeded in having the stock trans- to be printed with his name and that of his ferred to her. It will be recalled that in De- wife in the upper left-hand corner. Each of cember, 1910, Emma K. Bennett gave her these checks was invariably signed by one note for $1,000 to the Bank of Charleroi and countersigned by the other. The plainwith the West Side Electric Street Railway tiff says that the purpose of this account was stock as collateral, and used the money to to segregate the partnership business. An pay the C. N. Bennett note held by the Scan- examination of these checks will disclose, dinavian American Savings Bank of Astoria. however, that some were for family expenses, In April, 1911, the plaintiff negotiated a sale some were payable to the plaintiff, and othof the street railway stock to C. F. Thomp-ers to the defendant, two were for interest son for $5,000. Of this sum $2,000 was paid to the Bank of Charleroi to satisfy two notes, one of which was the $1,000 note given by the defendant in December, 1910; the plaintiff kept $1,000, and invested the remaining $2,000 in the Key Construction Company. C. N. Bennett explains his retention of the 163 P.-52 on the Yost mortgage, and others were on ac count of expenses connected with the West place. Notwithstanding the avowed purpose of the First National Bank account an examination of the checks in evidence will show that most of the expenses incurred after opening the joint account and connected |