ment cannot be intercepted by means of a creditors' bill, or intervening petition in the nature thereof. Such a proceeding would be, in effect, a suit against the government and the clerk of court, to make them liable as garnishees.

John E. Humphries, for intervener.

Allen Weir, for respondents.

HANFORD, District Judge. This suit was instituted by the government of the United States against the several owners of a tract of land for condemnation of said land for the use of the government as a site for the Point Wilson fortifications. All persons who, by the public records, appear to have been owners of any part of the tract required, or of any interest therein, or having liens thereon, were made defendants. The list includes Henry Bash and his wife, and their son, Francis L. Bash, and their daughter, Clementine B. Long, and her husband, B. M. Long. By the judgment of the court it was determined that said Francis L. Bash and B. M. Long were the owners of undivided interests of part of the tract condemned, and compensation therefor was awarded to them. After the trial and final adjudication of the rights of the parties, J. B. Hogg, as administrator of the estate of George E. Hogg, deceased, by leave of the court, filed a petition, as an intervener, for the purpose of contesting the right of said Francis L. Bash and B. M. Long to receive the money awarded to them as compensation for their interests in said land, and in his petition the intervener prays to have said money paid to him, and applied in satisfaction of a judgment rendered by the superior court of the state of Washington for Jefferson county, in the month of April, 1893, in favor of George E. Hogg and against Henry Bash. The amended petition avers that on and prior to the 30th day of May, 1892, said Henry Bash and Charles Eisenbeis were the owners as tenants in common of part of said tract of land described in the amended petition; and on said day, for the purpose of defrauding the creditors of said Henry Bash, he conveyed the legal title to his interest in said property to said Francis L. Bash and B. M. Long, without consideration, and his said grantees took the title, and have since held the same, merely as trustees for said Henry Bash, who has been ever since and is the real owner thereof, and by reason of his ownership the said judgment in favor of George E. Hogg became a lien upon said property, and continued to be a lien, up to and including the time of the condemnation proceedings herein. The amended petition also avers that the debt for which said judgment was rendered was a community debt of said Henry Bash and his wife, and that said Henry Bash at all times since the date of said judgment has been insolvent, having no property upon which an execution could be levied, except his interest in said land, and that said judgment remains wholly unsatisfied. The case has been argued and submitted upon a demurrer to said amended petition.

In the argument the attorney for the intervener has expressly disclaimed intention to attack the validity of the conveyance from Henry Bash and wife to Francis L. Bash and B. M. Long, on the ground that the same was executed on Memorial Day, and in the amended

petition it is averred explicitly that the legal title was conveyed to, and became fully vested in, said Francis L. Bash and B. M. Long. The main question in the case, therefore, is whether, under the laws of this state, a mere equitable interest in real estate becomes impressed with the lien of a judgment against the owner of such equitable interest. This is a question of local law, because a judgment of a state court in a personal action becomes a lien upon real estate of the judgment debtor only by force of the statutes of the state; and the supreme court of this state having passed upon the question, and rendered a decision declaratory of the law of this state, it be comes the duty of this court to accept that decision as conclusive, and follow it. In the case of Sawtelle v. Weymouth, 14 Wash. 21, 43 Pac. 1101, the question now under consideration was considered and decided by the supreme court of this state. In that case a judgment creditor claimed a lien upon real estate, which prior to the date of the judgment had been conveyed by the judgment debtor to his wife, without consideration, and thereafter transferred by the husband and wife to other near relatives in payment of existing debts. In the opinion by Mr. Justice Gordon, the court said that, at the date of entry of the judgment, the legal title to the premises in question was in Margaret E. Weymouth, the wife of the judgment debtor. "Hence no lien attached to the land as a consequence of said judgment or of the filing of the transcript, and the subsequent conveyances by the respondent Margaret E. Weymouth and her husband to De Lanty and Strong, for value, prior to any proceedings taken by said creditor. attacking the transfer from the husband to the wife, were sufficient, and would be upheld." In this case the legal title was conveyed by the judgment debtor prior to the date of the judgment. No proceedings were commenced by the intervener or his testator attacking the validity of the transfer of title from Henry Bash and wife to their son and son-in-law until after the trial and determination of the issues in the condemnation proceedings by which the land was ap propriated by the United States government. In effect, the legal title and the interest of all the parties named as defendants was, by the final judgment herein, conveyed to the government, so that the case comes fairly within the rule laid down by the supreme court of this state in the case above cited. The judgment set forth in the intervener's petition never became a lien upon any part of the land appropriated by these proceedings. Therefore the petition fails to show that the intervener has any just or legal claim to any part of the money paid into the registry, or any standing to contest the right of the parties to whom said money has been awarded to receive the

same.

The intervener's amended petition cannot be treated as a creditors' bill, and he cannot be permitted to intercept the passage of money from the government of the United States to the persons to whom compensation was awarded, while that money remains in the custody of this court, for two reasons: First. Such a proceeding would be, in effect, a suit against the government of the United States, and, the clerk of this court having legal custody of the funds, to make them liable to the intervener, as garnishee. Proceedings of

Sec

this nature, to reach funds in legal custody, are not tolerated. ond. The intervener's amended petition is insufficient as a creditors' bill for the reason that it does not aver that an execution has been issued upon the judgment, and returned nulla bona, nor that the legal remedies for enforcing the judgment have been exhausted. rer sustained.

Demur.

EASTERN BUILDING & LOAN ASS'N v. BEDFORD.

(Circuit Court, W. D. Tennessee, W. D. May 31, 1898.)

No. 487.

1. FOREIGN CORPORATIONS-STATE REGULATION-“DOING BUSINESS." Complainant, a New York corporation, loaned money to defendant in Tennessee, taking as security a mortgage upon land in the latter state. without having complied with the conditions prescribed by the Tennessee statutes for foreign corporations doing business within the state. The negotiations were all carried on by mail, through agents in Tennessee, the loan being approved at the company's home office in New York, and all notes being payable at that office. Held, that the contract was made in New York, and to be performed there, and that the company was not doing business in Tennessee within the meaning of the statutes.

2. CONTRACTS--NONENFORCEABLE IN STATE COURTS-POWER OF FEDERAL COURTS. A federal court will not refuse to enforce a valid contract, harmless in itself, which is nonenforceable in the state courts merely on account of noncompliance with state administrative regulations.

8. USURY-LEX LOCI CONTRACTUS GOVERNS.

A contract which would be usurious in the state where it is sought to be enforced is not subject to the usury penalties of that state if it is not usurious under the law of the state where it was made.

4. CONTRACTS-ENFORCEABILITY-CURING DEFECTS.

Where a contract is nonenforceable simply by reason of noncompliance with administrative regulations of the state, and not because of any vice inherent in the contract itself, the defect is cured, and the contract rendered enforceable, by subsequent compliance with such regulations.

In Equity. Bill to foreclose a mortgage.

By an act of the legislature of the state of Tennessee of March 28, 1891 (chapter 2), entitled "An act to regulate the business of building and loan associations," it was required that no building and loan association organized under the laws of another state should do business in Tennessee unless said association should deposit, and continually thereafter keep deposited. in trust for all its members and creditors, mortgages amounting to not less than $25,000 or more than $50,000, at the discretion of the treasurer. They were also required, before commencing to do business, to file with the treasurer of the state a duly-authenticated copy of their charter or articles of incorporation, and a certificate of deposit of the valid securities required. By another section the officers, directors, or agents of foreign building and loan associations were forbidden to solicit subscriptions to their stock in that state, or to sell or knowingly cause to be issued to a resident of the state any stock of the association, unless a deposit had been made in accordance with the terms of the act, and it had otherwise complied with its provisions. Agents were required to be licensed by the treasurer, for which they were to pay a fee of $2, and he was also to receive a fee of $25 for filing the papers mentioned in the act. Any violation of the prohibition against the sale of stock without a compliance with the act was made a misdemeanor, and punished as such by fixed penalties. By another act of March 17, 1891 (chapter 95), chapter 31 of the acts of the legislature of Tennessee for the year 1877, being sections 1992 to 2003 of Milliken & Vertrees' Code, was amended so as

to apply that act to corporations, chartered under the laws of other states, known as "building and loan associations," and other specifically enumerated corporations. The act of 1877, carried into Milliken & Vertrees' Code was an act for the encouragement of mining and manufacturing corporations, which were required, if desiring to carry on their business in this state, to file in the office of the secretary of state a copy of their charters or articles of incorporation, and such corporations were to be deemed and taken to be corporations of this state, subject to its jurisdiction, to sue and be sued therein in the mode and manner directed by law in the case of corporations created and organized within the state. Then the act conferred the privilege of acquiring and holding real property, which was made liable for its debts. The act gave resident creditors priority. Taxation was regulated. Rights of way were given for the maintenance of roads, bridges, canals, tramways, telegraph lines, etc.; but they were required to begin business within a year, it being declared to be the object of that act to secure the opening and development of the mineral resources of the state, to facilitate the introduction of foreign capital, etc.; and such corporations were authorized to establish villages and settlements for the use and residence of its employés and others; and the sale of liquor was prohibited within a radius of five miles of such villages and settlements. Subsequently, by an act of March 26, 1891 (chapter 122), this act (chapter 31, 1877) was extended to all corporations chartered or organized under the laws of other states or countries for any purpose whatsoever, which may desire to do any kind of business within the state of Tennessee. This last act further required that a copy of the charter should be filed with the secretary of state, and an abstract thereof in every county in which a foreign corporation desired to do business. And then, by section 3, it was enacted that "it shall be unlawful for any foreign corporation to do or attempt to do any business or own or acquire any property in this state without first having complied with the provisions of this act, and a violation of this statute shall subject the offender to a fine of not less than one hundred dollars, nor more than five hundred dollars, at the discretion of the jury trying the case." And by section 4, when the corporation had complied with the provisions of the act, it should be to all intents and purposes a domestic corporation of the state, and if it had no agent in the state upon whom process could be served, it was liable to attachment, to be levied upon any property owned by the corporation. The last section of the act re-enacted the provisions of chapter 31 of the Acts of 1877, thus extending all the privileges of that original act to all corporations whatever coming into the state to do business. The plaintiff is a building and loan association of the state of New York, having its location at the city of Syracuse, which has never complied or attempted to comply, except as hereinafter stated, with any of the foregoing acts, nor with a subsequent act known in the legislation of the state as the "Curative Act" of May 10, 1895 (chapter 119), which authorized corporations that had been doing business in the state contrary to the provisions of the former act to file their charters as required, and be relieved of the penalties and forfeitures incurred, but with the important provision that no suit should be instituted upon any contract thus made valid until after two years from the passage of the act.

By the charter of the plaintiff company it was authorized to establish a local board anywhere, to be composed of its members in that locality, to assist in carrying on its business, it being a mutual company. It had a firm of agents in Memphis, Shelby county, Tenn., and also a local board, composed of members thereabouts. On the 23d day of January, 1891, before the passage of any of the foregoing acts except that of 1877, the defendant signed in Shelby county, Tenn., a written application for shares in the plaintiff association in the form prescribed for the purpose, and customary in doing its business. This application was forwarded by mail through the above agents to the plaintiff company at its home office in Syracuse, N. Y. The application was granted by the board of directors at the home office, and on February 2, 1891, a certificate for 46 shares of the stock, amounting to $4,600, was issued to the defendant, being sent to him by mail through the Memphis agents. According to the scheme of the company, this stock was

to mature by the payment of its dues and assessments on the 1st of August, 1897. These dues and assessments were payable at its home office in Syracuse, N. Y., but a by-law authorized them to be paid to the local board or agent where the stockholder resided, if the stockholder so desired. On March 20, 1891, the defendant made a written application for a loan, which, according to the custom of the company, was sworn to, and appraisers appointed by the local board indorsed on the application a sworn appraisement of the property which was offered as security. In this application for a loan of $4,600 for 62 years it was stated that the loan was to bear interest at the rate of 5 per cent. per annum, and a premium of 5 per cent. per annum, payable annually on or before the last Saturday of each month, “all pay ments to be made as the lender may direct," and to secure the same the defendant agreed to give a mortgage upon the property offered as security. This application and appraisement, like the application for stock, was sent by the agents, through the mail, to the home office at Syracuse, N. Y.; and on the 18th of May, 1891, the board of directors at Syracuse, in the state of New York, recommended and approved the loan. Subsequently Bedford made a written application, again sent through the mails for what is called "an advance of loan," and referred to the resolution of the board of directors of May 18, 1891, allowing the advance at "a premium of ten per cent.," attached to which written application was the affidavit of one of the agents, which was again forwarded to the board of directors by mail. The defendant and his wife then executed a mortgage upon real estate situated in Shelby county, Tenn., dated May 1, 1891, duly and properly acknowledged June 18, 1891, filed for record June 20, 1891, and duly recorded in the register's office of Shelby county. This mortgage acknowledged the receipt of $4,600, and secured the sum of $5,683.08, "the same being the principal, interest, and premium of the loan, evidenced by 78 notes, dated Memphis, Tenn., May 1, 1891, payable to said association at its office in Syracuse, monthly." Having signed these notes at Memphis, and recorded this mortgage, they were again forwarded by these agents, through the mail, to the home office, in the city of Syracuse, N. Y., and thereupon the plaintiff company drew its draft on the Bank of Onondaga at Syracuse, N. Y., in favor of the defendant, for the sum of $4,140, which in due course of business was paid to him, or to his order, at Syracuse, N. Y. The shares of stock were withdrawn, duly receipted for, according to the customary method of doing business. The plaintiff company did file a copy of its charter with the secretary of state on August 11, 1893, and an abstract thereof in Shelby county on August 15, 1893, more than two years after the completion of this transaction, and before the passage of the curative act. The 78 notes executed were all dated May 1, 1891. Each was for $72.86, except the last three, which were each for the sum of $38.36. They were all payable to the order of the plaintiff company at its office in Syracuse, N. Y., the first on or before the last Saturday of May, 1891, and each successive one on the last Saturday of every month thereafter up to and including the last Saturday of November, 1897. These notes represented the amount of dues estimated to mature and become payable on the shares of stock which the defendant held until the same should mature and reach their par value from the payment of the dues, together with the earnings thereon, and the interest and premium advance during that period. The shares of stock were also pledged as collateral security in addition to the mortgage. The mortgage itself contained stipulations to pay the principal, interest, and premiums, and to conform to the constitution and by-laws of the order, pay the fines and penalties prescribed thereby according to the intent and meaning of the articles of association, keep the buildings on the premises insured against loss by fire, to pay all taxes, and to perform all other necessary things relative to said premises which were imposed by the contract and by-laws of the association. The defendant further agreed to pay the monthly installment dues of 75 cents on each share. There was also a provision that if he should fail to pay any of the notes, shares, or dues, the whole should become fully due and payable; that the shares of stock should be forfeited, and the mortgage and contract should be immediately enforced. The notes were all paid up to and including the last Saturday of June, 1893, since which time none of the notes, assessments, or dues have