time of the execution of the releases full knowledge as to the manner in which the accident occurred, and by way of new matter, and as a further and affirmative reply to the affirmative defense of the defendant company, the plaintiff alleged that after the death of her husband, acting for herself and their minor child, the plaintiff Teresa seasonably and diligently investigated to the best of her ability the facts and circumstances surrounding the accident; that she had no means at or after the time of the accident of ascertaining whether warning devices, called "telltales," were suspended in their proper place across the track of the defendant's road over which the train on which the deceased was a brakeman had to pass in going from the tunnel to the snowshed, except from the statements of employés of the defendant company, for the reason that within a few hours after the accident telltales were placed across the track at the point referred to, of which fact the plaintiffs were kept in ignorance by the express direction of the defendant company; that at the time of the accident no such telltales or other warning devices were in place, of which fact the plaintiffs were likewise kept in ignorance; that after the accident the agent of the defendant company having in charge the settlement of such claims for damages persistently sought a compromise and settlement of the plaintiffs' claims, and in so doing repeatedly represented to the plaintiff Teresa that the telltales were in their proper place at the time of the accident, and that the deceased was thereby seasonably warned of his proximity to the mouth of the snowshed, and that his death was solely due to his failure to heed the warning thus given; that these and other like representations were wholly false, and so known to be, by the defendant company's agent, and were so made for the fraudulent purpose of securing a compromise and settlement of the plaintiffs' claims; and that it was solely by reason of such fraudulent representations, relied on by the plaintiffs as being true, that the settlement was agreed to and the releases executed. The reply also alleges that the proceedings in the probate court in respect to the authorization and confirmation of the settlement of the claim of the minor plaintiff for damages were taken by the attorneys for the defendant company, and were never examined by any attorney for either of the plaintiffs. It admits it to be true that the plaintiff Teresa Hill consulted counsel shortly after the accident in regard to the liability of the defendant company, and that "upon the facts of the case as they then appeared to her, and as they had been represented to her" by the defendant, her counsel advised that it was doubtful whether the defendant was liable; but that the true facts were not then known to her or her counsel, and were not discovered until a few days before the commencement of this action. The reply of the plaintiffs to the affirmative defense of the defendant contains no averment of a tender of the money received by them upon the compromise and settlement, nor any offer to return the money so received, but does aver a willingness on the part of the plaintiff's "to deduct from the amount to which they are entitled by reason of their damages as set forth in the complaint (alleged to be $20,000 in all) said sum of $700 and said sum of $500, together with interest thereon at the legal rate from July 8, A. D. 1897, and hereby credit said sums, with interest, upon their claims against said defendant for the afore

said damages." The court below (104 Fed. 754) sustained a demurrer to the reply, which ruling presents the question for decision.

It is conceded that under the provisions of the statute of the state of Washington, as well as a number of other states, a release of a right of action may be avoided in an action at law by showing that it was obtained by means of false and fraudulent representations; and the position is taken on behalf of the plaintiffs in error that the same right exists in the federal courts by virtue of section 914 of the Revised! Statutes, which provides that:

"The practice, pleadings, and forms and modes of proceeding in civil causes, other than equity and admiralty causes, in the circuit and district courts, shall conform, as near as may be, to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the state within which such circuit and district courts. are held, any rule of court to the contrary notwithstanding."

It is thoroughly settled that it was not the design of this section to abolish, in the federal courts, the distinction between actions at law and suits in equity. Robinson v. Campbell, 3 Wheat. 212, 4 L. Ed. 372; Whitehead v. Shattuck, 138 U. S. 146, 11 Sup. Ct. 276, 34 L. Ed. 873; Sheffield v. Witherow, 149 U. S. 574, 13 Sup. Ct. 936, 37 L. Ed. 853; Lindsay v. Bank, 156 U. S. 485, 15 Sup. Ct. 472, 39 L. Ed. 505; Shampeau v. Lumber Co. (C. C.) 42 Fed. 760; Johnson v. Granite Co. (C. C.) 53 Fed. 569; Messinger v. Insurance Co. (C. C.) 59 Fed. 529; Vandervelden v. Railroad Co. (C. C.) 61 Fed. 54; In re Foley (C. C.) 76 Fed. 390; Kosztelnik v. Iron Co. (C. C.) 91 Fed. 606. It is true that in an action at law in a federal court a release, with or without seal, or any deed to which the plea of non est factum may apply, is subject to annulment upon proof of fraud in the execution of the instrument; and in the late case of Wagner v. Insurance Co., 33 C. C. A. 121, 90 Fed. 395, the circuit court of appeals for the Sixth circuit held that where, as in the present case, the issue involves simply a question of fraud between the parties, it is proper, in an action. at law, for the plaintiff to meet a plea of release by a replication that the release was obtained by fraud, whether the fraud is in the execution or in misrepresentation as to material facts inducing the execution. That ruling seems to be in conflict with the cases of George v. Tate, 102 U. S. 564-570, 26 L. Ed. 232; Hartshorn v. Day, 19 How. 211, 222, 15 L. Ed. 605; Ivinson v. Hutton, 98 U. S. 82, 25 L. Ed. 66; Shamperu v. Lumber Co. (C. C.) 42 Fed. 760; Johnson v. Granite Co. (C. C.) 53 Fed. 569; Vandervelden v. Railroad Co. (C. C.) 61 Fed. 54; Kosztelnik v. Iron Co. (C. C.) 91 Fed. 606,-relied on, among others, by counsel for the defendant in error. We find it unnecessary in this case to decide whether the question of fraud leading up to and inducing the execution of such instruments may be inquired into and determined in an action at law in a federal court, for the reason that, conceding that it may be, good faith and fair dealing would require the plaintiff, as a condition precedent to the presentation and maintenance of such an issue, to return or offer to return the money received in consideration of the instruments. In considering a similar question the court, in the case of Barker v. Railroad Co. (C. C.) 65 Fed. 460, said:

"But there is another insurmountable obstacle in the complainant's way upon this feature of this case, and that is, although she desires to set aside the contract of release, she still retains the consideration and has never of fered to return it. Where a party attempts to rescind a contract, the rescission must be complete. He cannot affirm it in part and reject it in part. Common honesty would require him, seeking to escape the burdens of the contract, to return the benefits which he has received. This is not only a rule of common honesty and fairness, but has been recognized by the courts from time immemorial. There are some few exceptions where railroads have been involved, but they simply illustrate that courts sometimes give way to sentiment, and allow compassion and sympathy to rule, instead of tranquil judgment; and these offers of restitution should come promptly, not reluctantly or tardily. To withhold a restitution is to exhibit a want of confidence in the integrity and justness of his case, who complains of a contract, and seeks to set it aside because of fraud. Vandervelden v. Railroad Co. (C. C.) 61 Fed. 54; Johnson v. Granite Co. (C. C.) 53 Fed. 569; Gould v. Bank, 86 N. Y. 75; Cobb v. Hatfield, 46 N. Y. 533; Thayer v. Turner, 8 Metc. (Mass.) 550; Kimball v. Cunningham, 4 Mass. 502, 3 Am. Dec. 230; Doane v. Lockwood, 115 Ill. 490, 4 N. E. 500; Railway Co. v. Hayes (Ga.) 10 S. E. 350; Burton v. Stewart, 3 Wend. 236, 20 Am. Dec. 692; Bain v. Wilson, 1 J. J. Marsh. 202; Jarrett v. Morton, 44 Mo. 275; Hart v. Handlin, 43 Mo. 171; Estes v. Reynolds, 75 Mo. 563; Kerr, Fraud & M. 366.”

And in Vandervelden v. Railroad Co. (C. C.) 61 Fed. 54, the court applies the general rule, and refers to a class of cases where it may not be necessary, by reason of the peculiar facts, to enforce it strictly. It is there said:

"It is not questioned that the general rule is that where a party seeks to rescind a contract on the ground of mistake or fraud, and thereby seeks to relieve himself of the burdens imposed by the contract. he should not be permitted to retain the benefits of the contract to the detriment of the other party to the transaction. Seeking equity, he must do equity. Therefore the ordinary rule is that as a prerequisite to invoking the action of the court for the purpose of setting aside a contract, and thereby being relieved of the burdens thereof, the plaintiff must, so far as is reasonably within his power, place or offer to place the other party in the position he would have occupied if the contract had not been entered into. In short, if he would escape the burdens, he must give up the benefits, of the contract. The acts to be performed in the observance of this general rule are, of necessity, de pendent upon the circumstances of the particular case. A court of equity is not insistent as to matters of form, if the substance of the duty is per formed, and, furthermore, a court of equity can give due weight to exceptional cases which may demand an exceptional rule. The purpose of the general rule is to enable the court to do justice to both parties, so that, if the contract is set aside at the request of one party, the court may be able to restore the other party to the position he occupied before the contract was entered into, or otherwise the court may be made the instrument whereby great wrong may be wrought, in that the one party is freed from the performance of the contract on his part without being compelled to restore or account for the money or other thing of value which he received by means of the contract which he now repudiates. If the contract is of such a nature that by means thereof one party thereto is induced to pay a given sum of money to the other, which he would not have paid except for the inducement of the contract, and, after the payment of the money, the party receiving the money seeks to rescind the contract, it is clear that in justice and equity he should be required to repay the money as a condition of rescission. There is a class of cases wherein the facts are such that the court, without a repayment or tender on part of the plaintiff, has it within its power to protect fully the interests of the other party in case of rescission, and in such cases the court may proceed to a hearing without requiring repayment or a tender. Illustrations of this class of cases may be found in Thackrah v. Haas, 119 U. S. 499, 7 Sup. Ct. 311, 30 L. Ed. 486, and Billings v. Smelting

Co., 3 C. C. A. 69, 52 Fed. 250. * If the judgment was adverse to him on that question, he would still have in his possession the money paid him to procure a settlement, and thus, in effect, the company would have been deprived of all the benefits of the settlement, without having secured to it the return of the money which it paid to secure the settlement. Cases have been cited in which it seems to be held that of this result the company cannot complain, upon the theory that the company had agreed that the plaintiff should in any event receive the sum paid him. This theory is not sustainable upon any fair consideration of the facts, nor in accordance with the well-recognized principles touching the settlement of disputed claims."

No fact is alleged in the reply that brings this within the case of Thackrah v. Haas, 119 U. S. 499, 7 Sup. Ct. 311, 30 L. Ed. 486, and like cases. Whatever exceptions there may be to the general rule certainly should not embrace a case like the present one, where a trial might establish that the plaintiffs have no valid claim, and at the same time leave the defendant's money in the plaintiffs' pockets. The judgment is affirmed.

(113 Fed. 919.)

KAUFMANN v. UNITED STATES.

(Circuit Court of Appeals, Second Circuit. February 25, 1902.)

No. 123.

1. WASHED REVENUE STAMPS-SALE-EVIDENCE-SUFFICIENCY.

One whom defendant knew to be a dealer in washed revenue stamps asked him to assist in finding purchasers for stamps which such dealer said were a part of the estate left by his deceased uncle. Defendant repeatedly declared he would have nothing to do with washed stamps, and was assured that they were genuine. Defendant found a man who agreed to assist in selling the stamps at 50 per cent. discount, after such dealer had furnished three "samples" which were genuine. The dealer gave defendant an envelope said to contain $663 in stamps, for which $331.50 was expected, and defendant handed the envelope, unopened, to the one who had agreed to assist in selling. The stamps were then taken to another man, who was about to sell them, when they were seized. Defendant was indicted for knowingly having in his possession and offering for sale washed and restored revenue stamps. There was some testimony that it is a custom for genuine stamps to be sold in the neighborhood when these were offered at large discounts. Held, that the evidence was sufficient to justify a conviction.

2. SAME-INSTRUCTIONS-SOURCE OF INFORMATION.

Defendant's requests to instruct the jury that, before they could render a verdict of guilty, they must be satisfied beyond a reasonable doubt that he had inspected the stamps, and had seen that they were canceled and washed, or else there must be proof that such dealer had told defendant that the stamps were washed and canceled, were properly refused.

3. APPEAL-EXCEPTIONS-General.

An exception reserved "to the court's refusal to charge such of the requests as were not charged" does not raise any point for review as to any of the charges so refused.

In Error to the Circuit Court of the United States for the Southern District of New York.

This cause comes here upon writ of error to review a judgment of conviction of the circuit court for the Southern district of New

York, entered upon the verdict of a jury rendered October 15, 1901, upon an indictment charging defendant with the crime of knowingly having in his possession washed and restored adhesive documentary revenue stamps, and of willingly and knowingly offering the same for sale.

Chas. A. Bacon, for plaintiff in error.

W. N. Parsons, for the United States.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

LACOMBE, Circuit Judge. The brief filed for defendant concedes that there is no dispute upon the substantive facts. Defendant, not long before the transaction on which the indictment was founded, met and had several interviews with one Miller, whom he had met before. According to his story, in one of these interviews Miller asked him if he did not have an acquaintance among the members of the Exchanges who used revenue stamps, and if he could not dispose of some revenue stamps owned by him. The explanation that Miller gave to Kaufmann for his possession of them was that he had obtained them from the estate of a deceased uncle. He further told Kaufmann, as defendant testified, that the stamps were in the original form in sheets, that some of them were in full sheets as they came from the government, that none of them were unattached, and that they were in the original form, with the original gum. Thereupon defendant had an interview with one Groff, manager of a broker's office in New York City, and asked him if he could dispose of some revenue stamps on the Consolidated Exchange. After one or more interviews with the two men separately, in which Miller agreed to sen at a discount of 50 per cent., and Groff said he could dispose of them at that figure, defendant, at Groff's suggestion, asked Miller to furnish samples. The latter gave them two $3 stamps and one Si stamp, which he examined and showed to a stamp dealer, and which apparently were genuine. On March 5, 1901, Miller met defendant and one McComish, who had agreed to assist in selling the stamps, at the entrance of No. 47 Broadway, and Miller and defendant then crossed the street to No. 60 Broadway (the Consolidated Stock Exchange), where Miller handed an envelope or package to defendant, who thereupon handed the same to McComish; Miller informing McComish that the same contained $663 in stamps, and that he expected to receive $331.50 for the same. McComish took the stamps to one Casper Hauser, who inspected the stamps and was about to sell them, when they were seized by a revenue officer. There was uncontradicted and satisfactory evidence that in said envelope or package were washed and restored adhesive documentary revenue stamps.

Defendant's counsel frankly concedes that the only matter in dispute is whether or not defendant knew, or was bound by the circumstances to know, that the stamps contained in said envelope or package were washed and restored adhesive documentary revenue stamps. The jury found that he knew, or was bound to know, that the stamps were of that character. That verdict was rendered after a charge which instructed them that this was the vital point in the