STATE OF SOUTH CAROLINA V. PORT ROYAL & A. RY. CO.
incompetency of legislators,-to say nothing of the method of "log rolling" by which measures are gotten through, having the form and substance of general laws, but in design and practical opera· tion solely for the benefit of a particular locality,-and recognizing, on the other hand, the timidity of some courts, with a mawk· ish deference to a co-ordinate branch of government, in hesitating unduly to declare its acts unconstitutional, that they wrote into the fundamental law the provision that whether or not the subjectsmatter of legislative acts could by "a general law be made applicable in any case is hereby declared a judicial question, and as such shall be judicially determined, without regard to any legislative assertion on that subject." Section 53, art. 4. To one familiar with the history of the city of Westport, its municipal aspirations and environments, in whose interest the act in question had its birth, the relevancy of its provisions to that locality are as apparent as though it had been entitled tcAn act for the construction of sewers in and about the city of Westport, in this state." Without questioning the benefits to certain of the inhabitants of this city coming from this special statute, the solemn duty rests upon the court to follow where, in its judgment, the constitution-the supreme law of the land-leads. It results from the views of this statute entertained by the court that the demurrer should be overruled. It is accordingly so ordered.
STATE OF SOUTH CAROLINA v. PORT ROYAL & A. RY. CO. et aI. v. SAME. OGDEN v. SAME. Ex parte LOUISVILLE & N. R. CO. (Circuit Court, D. South Carolina. L March 15, 1897.)
RAILROAD LEASE-JOINT OWNERSHIP-BoAHD OF MAKAGEMEK'I'.
Where all the business of a railroad lease was conducted by a board of commissioners under a name selected by the joint owners of the lease,· and one of the joint owners became bound for a debt incurred to this board in the conduct of the business, the other joint owner had the right to maintain a suit to compel him to pay over the amount of that debt to the unincorporated association conducting the business of the lease, as that association could not maintain a suit against one of its members. Where the common agent selected by the joint owners of a railroad lease to conduct the business of the lease was, by the terms of the agreement. to receive the gross earnings, and pay all current expenses, accounting to the principals for the net results, the several interests of the principals in any debt accruing to the agent in the conduct of the business do not arise until the accounts of the agent were made up and the gross earnings had been used in meeting the current expenses; and therefore one of the two joint owners of the lease may be compelled to pay over to the common agent the whole of a debt for which he is bound, and not merely one-half thereof. Although an agreement between the joint owners of a railroad lease for the annual selection of commissioners to conduct the business of the lease made no provision for the commissioners thus selected to hold over in the event of a failure to select new commissioners, yet, as the pUblic interest
SAMl'l-PmNCIPAL A)<1) AGENT.
SAME-MAKAGEHS Hor,DING OVER.
79 FEDERAL REPORTER.
required It, and the very existence of the lease depended on it, it was the duty of the old board, when there was a failure to appoint new commissioners, to go on and preserve all interests for whom it might concern.
This is an intervening petition filed by the IJouisville & Nashville Railroad Company to compel the receiver of the property of the Port Royal & Augusta Railway Company to pay over to the Georgia Railroad Company the amount of a claim for traffic balances due by the receiver to that company. The Louisville & Nashville Railroad Company is owner of a half interest in a lease of the Georgia Railroad & Banking Company, and the Georgia Railroad Company is merely a name selected by the owners of that lease under which all the business of the lease is conducted, and in the conduct of which the claim in question arose. Joseph B. Cumming, for petitioner. ' Henry Crawford and Mitchell & Smith, for purchasers. SIMONTON, Circuit Judge. This is an intervention in the main causes, seeking payment of a claim against the receiver, held by the Georgia Railroad Company. The claim is for traffic balances due by the receiver to that company. Under the terms of the order of sale, the purchaser of the Port Royal & Augusta Railway property assumed the payment of debts due by the receiver. The facts of the case upon which depends the solution of the issues made by the petitioner are these: W. M. Wadley obtained from the Georgia Railroad & Banking Company a lease of its railroad line and railroad property for 99 years, on an agreed rental. He assigned one-half interest in the lease to the Louisville & Nashville Railroad Company. The terms of the assignment were these:
"This agreement, made and entered into this 17th day of May, 1881, by and between William M. Wadley, of Monroe county, Georgia, of the first part. and the Louisville and Nashville Railroad Company, of the second part. witnesseth: .Whereas, the said party of the first part has become the lessee of the Georgia Railroad,. with all its dependencies, as will more fully appear by a copy of the lease hereto attached; and whereas, it is deemed of great importance to the said Louisville and Nashville Railroad Company to become interested in said lease in connection with other parties: Now, therefore, it is hereby mutually covenanted and agreed that the said party of the second part, for and in consideration of the sum of twelve thousand five hundred dollars ($12,500) paid by the party of the second part to the said party of the first part, and the deposit of five hundred thousand dollars ($500,000) of bonds, being one-half the amount stipulated to be deposited, as security for the faithful performance of said lease, with the ]'armers' Loan and Trust Company of the city of New York, the said party of the second part shall be entitled to an equal joint control and management of the said Georgia Railroad and its dependencies, together with one-halt interest in all advantages and profits resulting from the same; it being understood and agreed that the said Georgia Railroad and its dependencies shall be managed by a board of six commissioners to be appointed annually, three to be chosen by the said party of the second part, and the other three by such other party as may control the other one-half interest in the said lease, said six commissioners to elect a seventh, who shall be president of the board and chief executive officer for the management of the property under the control of the board. Should the six commissioners, as chosen, be unable or fail to agree upon the seventh as president of the board, then and in that event an impartial umpire shall be
STATE OF SOUTH CAROLINA V. PORT ROYAL & A. BY. 00.
selected to decide; and his' decisIon shall be final. This covenant and agreement to continue of full force and effect for and during the full term for which the Georgia Railroad and dependencies has been leased to the saId party of the first part,and to include all profits already accrued under said lease since its commencement."
On the 1st of June, 1881, the assignment of the other half of the lease was made to the Central Railroad & Banking Company of Georgia, in writing, on the same terms. This leased property was conducted as provided in these assignments for several years. But the Central Railroad & Banking Company was put into the hands of receivers, who took the place of the Central, and shared in the lease during the receivership. The proceedings under which the receiver was appointed culminated in a sale of the property of the Central Railroad. Messrs. Ryan & Thomas, who purchased at this sale, claimed to have purchased, with all the other property, the interest in this lease. This, however, has been denied by Mr. Comer, who was one of the receivers of the Central Railroad & Banking Company; and these adverse claims are still unsettled. In the meantime the Georgia Railroad was operated by the Georgia Railroad Company. In their operations a large business was done with the Port Royal & Augusta Railway Company, which connected with the Georgia Railroad, and from this business grows this claim for traffic balances. The Georgia Railroad Company is not a corporation. It is only a name selected by the owners of the lease under which all the business pertaining to that lease is conducted. 'rhe practice was to submit monthly accounts to each of the owners of the lease, and to pay over to each one-half of the net results of the business of the month. When the annual rental became due, each owner of the lease paid its one-half of the entire annual rent into the hands of the Georgia Railroad Company, who paid it to the lessors. Since the sale of the Central Railroad & Banking Company, the Louisville & Nashville Railroad Company has paid the whole rental, and has received all the monthly profits. The petition filed by the Louisville & Nashville Railroad Company prays that the receiver be ordered to pay the balance due on traffic balances to the general manager of the Georgia Railroad Company. The prayer of the petition is resisted by Messrs. Ryan & Thomas, the purchasers of the Port Royal & Augusta Railway Company, who file a demurrer thereto. The first question is as to the right of the Louisville & Nashville to prefer this petition. Assumin& for the sake of argument, that Messrs. Ryan & Thomas are the owners of one-half of interest in this lease, can the Louisville & Nashville Railroad Company maintain this petition? Were the petition presented by the Georgia Railroad Company, then, under the assumption we have made, we would have a suit by an association composed in part of Messrs. Thomas & Ryan against Messrs. Thomas & Ryan; that is, they would be plaintiffs and defendants in the same action. Under the law of South Carolina (Rev. 'St. § 1776), an unincorporated association may be sued and proceeded against by the name and style it is usually known, without naming the individual members. No pro-
VISIOn of this character is made for suits by them. If, however, were the ease, it could not change the rule of law that the same person cannot be in the same right plaintiff as well as defendant. This being SO, in what way could this claim be brought into court, and adjudicated, other than that adopted here? The main cause is on the equity side of the court. The proceeding, in effect, is one asking that a debt incurred with the manager of the business, the person to whom normally and by contract it would have been paid, be paid to it, to be accounted for, with all the other results of the business, in the mode provided by the standing agreement between the real owners of the property, the principals of this common agent. The other objection to the granting of the prayer of the petition is that this is a debt due to the Georgia Railroad Company; that Messrs. Thomas & Ryan are part owners in the business conducted under that name, as owners of one-half the leasehold interest; and that, at the most, they can only be called upon to pay theone-half of the claim. As I understand it, the owners of this lease selected a common agent to manage and conduct the entire interest in the lease. This involved the management and conduct of a large and valuable business as common carriers over an important link in several through lines. The common agent, in the conduct of this business, received the earnings, and paid all current expenses. It accounted with its principals for all its receipts, and they were entitled to the net results. But, by the mutual agreement, all the earnings went first into the hands of the common agent, and the several interests of the principals therein did not arise until the accounts of the agent were made up, and the gross earnings had been used in meeting the current expenses. This being the case, no one of the owners could go to a debtor of the Georgia Railroad Oompany, and demand the one-half of the debt he owed. Such part owner did not have a several interest in that debt or the amount it represented. Under the contract between these owners, all earnings go to the common agent. It alone is authorized to receive and receipt for them. And, .when so received, they are expended and accounted for. This being so, the receiver of the Port Royal & Augnsta Railway Company was bound to pay over to the Georgia Railroad Company the traffic balances, and this obligation has, under the terms of sale, devolved upon the purchaser. It has been assumed, for the purposes of this opinion, that Messrs. Thomas & Ryan are the owners of one-half this leasehold estate. The pleadings are not of a character to discuss and decide this question; nor is it now discussed or decided. Upon its determination other questions will arise, which may affect the payment of the money now chtimed,-questions between the different owners of the leasehold estate and the equities existing between them. It is to be regretted that the pleadings are not· in such shape as to justify a consideration of them. But the present proceeding presents but one class of questions: Did the receiver of the Port Royal & Augusta Railway owe the traffic balances claimed here in his transactionswith the Georgia Railroad Company? What is the amount
BEST V. BRITISH ok AMERICAN MORTG. CO.
of these balances? These seem not to be disputed. Then to whom must these be paid? In my opinion, they must be paid to the only person authorized to receive them, the Georgia Railroad Company. It has been urged with much force that the agreement provides for the selection, by each part owner of the leasehold interest, of three commissioners annually; that there is no provision under which they can hold over; that there have been no commissioners appointed by both part owners for several years; and that the socalled "association" is functus officio. But in view of the disputed rights which exist, especially in view of the fact that the commissioners and chief executive officer in charge when the disputed point arose have been intrusted with a railroad of quasi public character, which must be kept a going concern, not only because the public interest required it, but because the very existence of the lease depended on it, it was the right and duty of the board to go on and preserve all interests for whom it may concern. Their administration of these trusts, thrust upon them by peculiar and unforeseen circumstances, can, and no doubt will, be criticised and examined hereafter. The demurrer is overruled, with leave to the respondents to answer over if so advised.
BEST el at. v. BRITISH & AMERICAN MORTG. CO. (Circuit Court, E. D. North Carolina. 1.
April 1, 1897.)
When one negotiates a loan through a third party with a money lender, and the latter bona fide lends the money at a legal rate of Interest, the contract is not made usurious merely because the intermediary charges the borrower with a heavy commission; the intermediary having no legal or established connection with the lender, as agent. Whaley v. Mortgage Co., 20 C. C. A. 306, 74 Fed. 77, followed. A loan secured by a deed of trust Is not rendered usurious by a provision in the deed that in case of sale under the deed the proceeds shall be applied to the payment of expenses of sale, including commissions and a counsel fee. Such a provision is in the nature of a penalty. and the court can determine, when it has taken the matter within its jurisdiction, to what extent the penalty can be enforced.
Shepherd & Busbee and W. R. Allen, for complainants. R. O. Burton, for defendant SIMONTON, Circuit Judge. This case began in the superior court of Greene county, N. C., and has been removed into this court The complaint is by B. J. and R. E. Best, brought in the first instance to restrain a sale under a trust deed executed to secure the British & American Mortgage Company for a loan made by it to the Bests. The charge is that the loan secured by the mortgage is usurious. The further purpose of the complaint is to redeem the mortgage debt so soon as this question of usurious interest is settled. The facts ofthe case are these: On 20th January, 1890, the complainants employed, by an instrument in writing, Messrs. Theo. Edwards and W. T. Dortch, who
reside in North Carolina, to obtain for them a loan of $10,000, to be secured by a mortgage of real estate. The authority to these gentlemen is general. They are to negotiate the loan through any brokers, at a commission not exceeding 6 per cent., which is not to be considered as a part of the loan. The amount desired was $10,000. Messrs. Dortch and Edwards employed as brokers for the purpose Messrs. Shattuck & Hoffman, of New Orleans. These brokers negotiated the loan with the British & American Mortgage Company, a foreign cor· poration, having an office in that city. The testimony shows that Shattuck & Hoffman do a general brokerage business, a part of which is the placing of loans on commission. The business of the mortgage company is the lending of money. The brokers were able to negoti. ate with the mortgage company for a loan of $7,500 only, and not for $10,000. With this the complainants were content. They then executed a deed of trust in the nature of a mortgage by way of indenture tripartite between themselves; Albert It. Shattuck, of New Orleans, trustee, and the British & American Mortgage Company as cestui que trust. This deed secures this loan of $7,500 upon. the tract of land described in the pleadings; the loan being evidenced by five notes, four of them being for $750 each, dated 24th May, 1890, and due respectively on 1st days of November, 1890, 1891, 1892, 1893, and one note for $4,500, dated the same day and due 1st November, 1894. With these- also were five notes fOir interest,-one for $233.35, due November 1, 1890; one for $472.50, due November 1, 1891; one for $420, due November 1, 1892; one for $367.50, due November 1, 1893; and one for $315, due November 1, 1894. These notes are calculated at the rate of 7 pt'r cent. interest. The deed of trust provides that, in case the power of sale therein provided for be exercised, the proceeds of sale shall be applied-First, to the payment of the costs and expenses of executing the trust, including the commissions of the trustee, and 10 per cent. for the creditor's attorney fees in the event of litigation; next, to the payment of the unpaid part of the loan in full, the remainder to the grantor. The mortgage company paid to Shattuck & Hoffman, the brokers, $7,500, who deducted their 6 per cent. commissions and remitted the remainder, $7,050, to the Bests. Is this a usurious contract? The crucial test in cases of this kind is, was the broker who negotiated the loan -the agent of the lender? If in negotiating the loan he exacts a commission, either under direct instruction from his principal, or because of an understanding with the principal that he must look to the borrower for compensation, the transaction is tainted with usury. The circuit court of appeals of this circuit has established the law for us, in Whaley v. Mortgage Co., 20 C. C. A. 310, 74 Fed. 77:
"There are three established principles of law on this subject, whIch are as follows: (1) There can be no doubt that when one negotiates a loan, through a third party, with a money lender, and the latter bona fide lends the money at a legal rate of Interest, .the contract is not made usurious merely by the fact that the intermediary charges the borrower with a heavy commission; the intermediary having no legal or established connection with the lender. as agent. Fowler v. Trust Co., 141 U. S.885, 12 Sup. Ct. 1; Grant v.Insurance Co., 121 U. S. 105, 7 Sup. Ct. 841; Oall v. Palmer, 116 U. S. 98, 6. Sup.
BRITISH &: AMERICAN MORTG. CO.
Ct. 301. (2) So, also, when an agent authorized to lend money for his principal exacts, without the knowledge or authority of such principal, money from the borrower for his own benefit, this does not make the contract usurious. Call v. Palmer, 116 U. S. 98, 6 Sup. Ct. 301. (3) But when a lender authorizes his agent to make loans tor him under a general arrangement that he must look to the borrower for his compensation, and such agent for the lender effects a loan, and charges the borrower a commission, this will make the contract usurious, whether the lender knew of the charge or not (Fowler v. Trust Co., 141 U. S. 385, 12 Sup. Ct. 1), for this exaction is by the authority of the lender, the principal."
There are several suspicious circumstances in this case, which have been acutely discussed and clearly presented by the attorney for the complainants. But suspicious circumstances can only come in as aid to testimony. When they are met and contradicted by the evidence of witnesses whose characters are not attacked, they should not be allowed to overbear facts sworn to. As was said in Mortgage Co. v. Whaley, 63 Fed. 747, the testimony of witnesses, although their character has not been attacked, can be compared with testimony of other witnesses, and indeed with the admitted facts in the case, and may be overborne by them. When, however, it is proposed to contradict the direct testimony of unimpeached witnesses by inferences from facts, this result cannot be reached unless the existence of these facts and the natural inferences from them cannot be reconciled with the conclusion that the direct evidence is true. The two actors in this loan-Hoffman, the broker who negotiated it, and Rowland, the cashier of defendant, who made it-both swear distinctly and positively that the relation of principal and agent did not, in any sense, exist between Shattuck & Hoffman and the mortgage company. The former swears that he placed offers to loan with any lenders he could agree with,-many others besides this defendant, although he frequently did business with the defendant. Both swear that in this transaction he acted solely for the complainants, with no understanding or agreement with the mortgage company for anything else but the loan. It is true that the trust deed is in print, and that in it is printed the name of Shattuck as trustee, and of the mortgage company. This is a strong ground of suspicion, and would be conclusive were it not for the sworn facts that Shattuck & Hoffman did similar business with other well-known and large firms, did a very large business themselves, and frequent business with this mortgage company. It is true that this transaction is mentioned in the correspondence between the broker and the Bests as :j:j:3,180. But there is nothing to show that this was not the private number of the brokers. Naturally they treated this as a transaction of their own, and for convenience gave it a number, especially as by the known custom of this business they superintended the collection of installments of interest. The transaction between English and the Bests was his own, and no connection whatever with it is shown on the part of the defendant. What was said of Jamisson is not important. He was shown the offer of the agents of the Bests to the brokers, and thought well of it, and he was a director in the company. The offer was shown to, and was approved by, the company. The evidence does not establish the charge of usury, from the fact that the brokers took a commission of 6 per cent.
Is the clause in the deed that, "in case of sale under the deed of trust, the proceeds shall be applied to the payment of expenses of sale, including commissions and a counsel fee" usurious? This clause does not come into operation until there is a breach of the contract. The presumption is always thl,tt parties will observe and keep their contracts. At all events, this result is not certain. It is contingent. The contract otherwise being bona fide and not usurious, this uncertain provision should not change its character. Canal Co. v. Vallette, 21 How. 422. In Spain v. Hamilton's Adm'r, 1 Wall. 626, the court say, "The payment of anything additional depends also on a contingency, and not upon any happening of a certain event, which itself would be deemed insufficient to make a loan usurious." This question was made in an exception to the circuit decree in Whaley v. Mortgage Co., 20 C. C. A. 306, 74 Fed. 77. And in the con· eluding part of the decision of the court was sustained in general words. A provision like this is in the nature of a penalty, and is en· forced as such. As the court has taken this matter within its juris· diction, it can determine to what extent the penalty can be enforced. The attorney's charges will be allowed, but no further commissions to the trustee. All actual expenses which he may have incurred are allowed him. The conclusion of the whole matter is that this contract is not usurious. Let the clerk of this court, with the attendance and aid of the counsel for the parties in the cause, compute the amount now due, according to the tenor and effect of the contracts, and add there· to the 10 per cent. for attorney's fees, and such sums as for actual expenses which the trustee may have incurred in executing his trust, and then let a decree be prepared carrying out the principles of this opinion. Each party to the case to pay their or its own taxed costs in this court.
CALIFORNIA FRUIT TRANSP. CO. v. ANDERSON et aL (Circuit Court, N. D. California.
WIFE'S INTEREST IN HOMESTEAD-CONSIDERATION FOR MORTGAGE.
March 15, 1897.)
Under the California laws the wife has an interest in the homestead which requires a consideration for her agreement to conveyor incumber it, and therefore her mortgage of the homestead to secure an antecedent debt of the husband is not binding on her.
Bill in equity to foreclose a mortgage executed by J. Z. Anderson, and joined in by his wife, Sallie E. Anderson. She demurred, on the ground that the property mortgaged was covered by a homestead, and she had received no consideration for her interest therein. Purcell Rowe, for complainant. S. F. Leib, for respondent Sallie E. Anderson. MORROW, District Judge. This is a bill in equity to foreclose a mortgage executed by J. Z. Anderson, and joined in by his wife, Sallie
CALIFORNIA FRUIT TRANSP. CO. V. ANDERSON.
E. Anderson. While it does not appear affirmatively in the bill that the premises incumbered include homestead property, still that tact was conceded and assumed on the argument upon the demurrer filed by the respondent Sallie E. Anderson to the bill. She alone has de· murred, and urges the following grounds:
"First. That said bill does not state facts sutlicient to constitute a cause of action against said defendant. "Second. That it appears from said bill that the notes and indebtedness for which the alleged mortgage therein mentioned was given to secure were the notes and indebtedness of J. Z. Anderson alone, and not in any way or to any extent the notes or indebtedness of this defendant; and it is not alleged, and it does not appear, that there was any consideration as to this defendant for the making or execution of said mortgage by her upon any of the interests owned or rights held by her in or to the property described in said mortgage, or in or to any part thereof. "Third. That it appears from sald bill that the said mortgage, as to this defendant, was made and executed by her without consideration, and hence cannot be enforced against her, or as against any interest in or right held by her in or to said property, or in or to any part thereof. "Fourth. That it appears from said bill that there Is a misjoinder of defenda.nts herein, in this: that this defendant Is improperly joined as a defendant in this action, because It appears from the allegations of said bill that no interest owned or right held by this defendant in or to any part of said lands can be sold or foreclosed in this action, because no mortgage was ever made or executed by her to said plaintiff and complainant upon any consideration."
The only question of law raised by the demurrer is whether the fact that Sallie E. Anderson executed the mortgage for the prior debts of her husband (she herself, so far as the bill discloses, having received no consideration) binds her. The mortgage upon the property in question was given to secure the California Fruit Transportation Company for the pre-existing debts of Mr. Anderson. The alle· gations of the bill clearly show that the mortgage signed by Mrs. Anderson was for the prior debts of her husband, for the payment of which she is not shown to have been in any way legally bound. So far as she was concerned, therefore, her agreement that her interest in the property covered by the homestead declaration be incumbered for her husband's prior debts was without consideration. In the case of Chaffee v. Browne, 109 Cal. 211, 41 Pac. 1028, where a mortgage was given by the wife upon her separate property to secure her husband's antecedent debt, without any new consideration received either by the husband or the wife, or moving from the creditor, the mortgage was held to be not obligatory. The court in that case said:
"It follows that, In the execution of this mortgage, the defendant Neotia Browne undertook to assume and secure her husband's antecedent debt. 'No new consideration was given at the time it was executed. The wife received nothing. The husband received nothing. The creditor· parted with nothing. The instrument was therefore no more than a collateral security given for an old debt of the husband' (Bayler v. Com., 40 Pa. St. 37), and was not obligatory in the absence of a new consideration (Civ. Code, §§ 2792, 2831, 2844; Rohm v. Hoffer, 2 Colo. App. 146, 29 Pac. 905)."
It is contended on the part of the complainant that the authority just referred to is inapplicable to that of the case at bar, for the rea· son that that was a case which involved the separate property of the
wife, while the case at bar concerns the homestead property selected, so it is conceded, from the community property. But I am unable to distinguish the two cases, upon principle, so far as the wife's interest in the property mortgaged and the want of consideration to pass that interest are concerned. Nor can I, in this connection, assent to the position taken by counsel for complainant that section 1242 of the Civil Code was intended simply to prescribe certain formalities relating to the transfer or incumbrance of homestead property. That section provides:
"The homestead of a married person cannot be conveyed or incumbered unless the instrument by which it is conveyed or incumbered is executed and acknowledged by both husband and wIfe."
It has been held repeatedly that the homestead can be conveyed or incumbered only in the manner prescribed by law. Lies v. De Diablar, 12 Cal. 321; Gee v. Moore, 14 Cal. 472; Guiod v. Guiod, Id. 506; McQuade v. Whaley, 31 Cal. 526; Flege v. Garvey, 47 Cal. 371; Houghton v.Lee, 50 Cal. 101 ; Hershey v. Dennis, 53 Cal. 77; Gagliardo v. Dumont, 54 Cal. 496; Gleason v. Spray, 81 Cal. 217, 22 Pac. 551. This statute relates not only to the form and manner in which the homestead is to be conveyed or incumbered, but, in my opinion, recognizes the interest which the wife has in it. Whatever the laws and decisions of other states may be, and in whatever light the joint interests of both spouses in the homestead property may be regarded, yet, under the law and decisions of this state, it is regarded as substantially a joint tenancy. Barber v. Babe], 36 Cal. 11. As was said by Mr. Justice Field (then chief justice of the supreme court of this state), referring to the act of 1860, "the act changes the estate of the parties into a joint tenancy." Cohen v. Davis, 20 Oal. 195. See, also, Burkett v. Burkett, 78 Oal. 312, 20 Pac. 715; Gleason v. Spray, 81 Oal. 219, 22 Pac. 551; Campbell v. Babcock, 27 Wis. 512; Adams v. Beale, 19 Iowa, 67, 68. In the case of n'rust Co. v. Kauffman, 1080al. 220, 22..Q, 41 Pac. 467, 468, the wife's interest in the homestead is spoken of as an "estate," and the court said:
"A declaration of homestead properly executed and acknowledged by a married man, when filed for record, immediately inures to the benefit of his wife, whether she is ignorant thereof or is fully acquainted with the transaction: nor does the fact that she is insane deprive her of its benefits, or give to the husband any greater interest in the estate, or authorize him to incumber it, except in the mode prescribed by statute."
Her interest is such that she may sue alone to maintain bel' rigbt or claim to the homestead property. Oode Civ. Proc. § 370, subd. 1; Prey v. Stanley, 110 Cal. 423, 42 Pac. 908. In the event of the homestead having been .selected from the community property, it vests, on the death of either spouse, in the survivor. Civ. Code, § 1265. The homestead can be abandoned only by a declaration of abandonment, or a grant thereof, executed and acknowledged by the husbaud and wife. Id. § 1243. Under the laws of this state and the decisions construing such, I am of the opinion that the wife has an interest in the homestead, which requires a consideration for her agreement to conveyor incumber it,
UNITED STATES T. !!lAUNDERS.
and that, as the bill in this case does not show that sue received any consideration for her interest in the homestead which was the demurrer should be sustained; and it is so ordered.
UNITED STATES v. SAUNDERS. (Circuit Court of Appeals, First Circuit. No. 198L
SUITS AGAINST UNITED STATES-SET' OFF.
March 23, 1891.)
Under the act of March 3, 1881 (24 Stat. 505, 506), provIding for the bringing of suits against the United States, the court has power to render judgment in favor of the United States for any balance which may be found due them upon a set-of! or counterclaim. The rule applied that the United States have the right to recover moneys pa.1d by the errors of their disbursing officers, lUI much where the elTor Is one of law lUI of fact, provided only the moneya belong to the United States ex requo et bono.
2. RECOVERY BY UNITED STATES OF MONEY PAID BY MISTAKE.
Appeal from the District Court of the United States for the District of Maine. Albert W. Bradbury, U. S. Atty. Geo. E. Bird, for appellee. Before OOL'11 and PUTNAM, Circuit Judges, and ALDRIOII, District Judge. PUTNAM, Oircuit Judge. The appellee, who had been a marshal of the United States for the district of Maine, brought his petition in the district court for that district against the United States for $360, now admitted to be due him for sundry attendances before commissioners of the circuit court. Under Act March 3, 1887, c. 359, §§ 1, 6 (24 Stat. 505, 506), entitled "An act to provide for the bringing of suits against the government of the United States," the United States filed a set·off and counterclaim for sundry payments made the petitioner by their disbursing officers, amounting to $504, which payments, under the rule in U. S. v. McMahon, 164 U. S. 81, 17 Sup. Ct. 28,-decided after the judgment of the district court in this case,-were unauthorized. The record shows that there is no dispute as to the amount of these payments. The statute cited not only authorizes, by section 6, this defense, but it also, in section 1, confers jurisdiction to "hear and determine" set·offs and counterclaims; so that, although it does not expressly direct a judgment for the United States for a surplus, if one be found in their favor, yet it is to be presumed that it adopts the usual practice with reference thereto. Indeed, in McElrath v. U. S., 102 U. S. 426, a judgment of the court of claims for a balance found due the United States on a defense of set-off, under section 1061 of the Revised Statutes, and reported in 12 Ct. C1. 201, was affirmed; and the ReviEled Statutes expressly authorized such a judgment. Although the provisions of the Revised Statutes in regard to the prosecution of claims against the United States were to some extent repealed