in the case of Railroad Co. v. Tripp, 147 Mass. 3541, 17 N. E. Rep. 89. The majority of the judges in that case held that a railroad might grant to one an exclusive right to solicit the patronage of incoming passengers; but this is the only American case making that distinct holding, and that opinion was delivered by four judges, the other three members of the court vigorously dissenting, and with better show of reasoning, in our judgment. The case of Barney v. Steamboat Co., 67 N. Y. 301, Fluker v. Railroad Co., 81 Ga. 461, 8 S. E. Rep. 529, and Cole v. Rowen, 88 Mich. 219, 50 N. W. Rep. 138, do not present the precise point involved in the case before us. They are all decisions of other questions, and can be readily distinguished from the case in hand. Counsel for appellant think that in Cole v. Rowen, 88 Mich. 219, 50 N. W. Rep. 138, the Supreme Court of Michigan has swung away from the doctrine announced in the earlier case of Hack Co. v. Sootsma, 84 Mich. 194. 47 N. W. Rep. 667. But that very able court did not so think, and was careful to disabuse the mind of counsel, who seems to have the notion which counsel here puts forward, and the court clearly distinguished the two cases."

The

CONTRACT LOTTERY-DISTRIBUTION. Appellate Court of Indiana, bolds in Emswiler v. Tyner, that a contract by which, in consideration that the owner of some land would locate thereon a factory, and plat the land into lots of different values, other persons agreed to take each three $25 shares of stock in the factory and one of such lots, to be selected as the purchasers should determine, and pay a certain price for them, was not void in the first instance as being tainted with the vice of a lottery. But where the seller and a number of the purchasers distributed the lots by chance in the form of a lottery, such distribution was illegal. and a purchaser to whom was assigned a worthless lot cannot be compelled to accept and pay for it. The contract not being void in its inception, and being divisible, the illegal manner of distributing the lots did not relieve the purchaser from his obligation to accept and pay for the three shares of stock. The following is from the opinion: It is apparent from this paragraph of answer that the pleader proceeded upon the theory that the contract, in the first instance, is void, because it is tainted with the scheme of a lottery or chance. This court has recently passed upon this exact question in Washington Glass Company v. Mosbaugh, 19 App. 105, where it was held that a contract of similar tenor was not void on the ground urged, and we still adhere to such holding. But the facts in that case and those charged in the third paragraph of appellee's answer in the case now before us are not at all similar. The contract sued upon here does not contain any provision relating to the awarding and distribution of the lots by lottery or chance, but, like the case in the 19 App. cited, leaves the manner of such distribution to be determined and agreed upon by the subscribers,

and hence, under the authority of that case, the contract, in the first instance, and on its face, is enforcible. If, then, the contract, as originally entered into, was not subject to the objection urged by appellee, the question for us now to determine is, do the averments of the answer, descriptive of the plan and the manner of the distribution of the lots, render the enforcement of the contract against appellee void? The answer avers that various subscribers and decedent met for the purpose of determining how and in what manner the lots were to be awarded, and that the decedent, at said meeting, directed the manner of the distribution. We need not repeat the allegations of the answer, but it is sufficient to say that the plan devised by the decedent, participated in by him and the subscribers present, was a scheme tainted with the vice of a lottery. In other words. it was a scheme of chance, where the will and judgment, both of the decedent and subscribers, were in no sense exercised. Appellee did not participate in the distribution and was not present. In Washington Glass Co. v. Mosbaugh, supra, appellant was not a party to the distribution, and in the complaint in that case it was alleged 'that in making said selection of lots by said drawing, plaintiff neither participated therein nor counseled or advised the same.' In that case, also, appellee was a party to the agreement between the subscribers, was present at and participated in the drawing of lots, and took possession of the lot apportioned to him. So that it is clear that the question to be here decided rests upon very different facts than the case to which we have just referred. The fact that appellant directed and participated in the drawing and distribution of the lots in this case brings it, we think, within the rule announced in Lynch v. Rosenthal, 144 Ind. 86. There the contract was, in its essential features, similar to the contract here sued on. There was, however, this distinction: there the contract itself provided that the lots should be awarded by 'lot' to each respective subscriber, and it was held that it could not be enforced, as being against public policy and good morals. It was there held that contracts tainted with the vice of lottery schemes are not enforcible, and it was said that such contracts are against publie policy, and that those who have entered into them shall have no relief in the courts to enforce those that are executory or to recover that which has passed under such as have been executed, is without doubt,' citing many authorities to which we refer. Continuing, the court said: 'We find, therefore, that both the contract and the manner of attempting to comply with its provisions were against public policy and void. * It is enough to say that who asks equity must present clean hands in which to receive it. Here the appellant from the beginning had unclean hands. He originated, carried forward, and, in this suit, sought to enforce a vicious contract. He is in no position to ask that equity estop his ally from exposing the vice of that contract, the enforcement

** *

of which public morals forbid.' This language conveys no uncertain meaning, and from it it is plain that neither the law nor courts will lend their aid to enforce contracts tainted with the vice of a lottery, and which are against public policy, good morals and a quickened conscience.

"As we have said, the contract before us, in its conception, was not subject to the infirmity of the contract in Lynch v. Rosenthal, supra, but in the manner of its execution, which was directed and participated in by appellant, it was inoculated with a like vice, and, under the authorities, appellant, coming into court with unclean hands, and asking the enforcement of a contract, which he himself has made obnoxious to public policy and good morals, is in no position to ask the court to enforce its execution. We are unable to distinguish the difference, in principle, between a contract void ab initio and one made so after its execution, by the very party under whose provision she seeks to secure its benefits."

CRIMINAL LAW LARCENY AS BAILEE. - In Bergman v. People, decided by the Supreme Court of Illinois, it appeared that prosecutrix was a dealer in jewelry. Defendant stated to her that certain persons, including himself, wished to make a wedding present, and that he wanted to take some jewelry to show such persons. She declined to put the jewelry in his possession without security, whereupon he delivered to her an instrument purporting to guaranty the payment of whatever jewelry defendant should buy of prosecutor, for not over $200. Defendant thereby obtained the jewelry, and promised to return either it, or the money for it, within three days. The jewelry was not returned or paid for. The representations as to the wedding present were false, and made to obtain the jewelry. It was held, that defendant obtained the property as a bailee, and not as a purchaser, so as to be within Cr. Code § 170, providing that a bailee shall be deemed guilty of larceny if he shall convert property intrusted to his custody with intent to steal the same. The court says: "This is a writ of error brought to reverse the judgment of the criminal court of Cook county adjudging the plaintiff in error to be guilty of larceny. The indictment contained a count charging larceny as at the common law, and other counts charging larceny as bailee under the statute. The facts proven were not sufficient to support a verdict that plaintiff in error was guilty of larceny as at the common law. It is urged in behalf of plaintiff in error it did not appear from the proofs that the property alleged to have been stolen was intrusted to him as bailee, but that he obtained the property as a purchaser. It appeared from the evidence that the Dorothy Lindberg was engaged in business as a retail dealer in jewelry in the city of Chicago; that plaintiff in error came to her place of business, and told her that a number of persons, of whom he was one, contemplated

making a present to a young married couple, and that he wanted to take some jewelry out to show to such persons; that she declined to put the jewelry in his possession without some security, and that he left her store, but soon returned, and delivered to her a written instrument as follows: 'I, the undersigned, do hereby guaranty for the payment of whatever jewelry Robert Bergman, of 3044 Wentworth avenue, buys of Mrs. Dorothy Lindberg, for a sum not over $200 (two hundred dollars). Gustave Swanson;' that she satisfied herself the instrument bore the genuine signature of Swanson, and plaintiff in error said to her he would return either the goods. or the money for them, within three days; that she then delivered to him a watch, chain, and diamond brooch, of the aggregate value of $200; that he did not return the goods, nor did she see him again until he was in court to answer the charge of larceny. It is clear that the jewelry was not sold to the plaintiff in error. It was delivered to him for the purpose of exhibiting it to others, who, together with himself, as he represented, contemplated buying articles of that kind, and to be bought if satisfactory to the contemplated purchasers. The title remained in Mrs. Lindberg, and she intrusted the possession to him, expecting and intending that the identical articles of jewelry should be returned to her, or disposed of for her benefit, in the particular way as agreed upon between her and the plaintiff in error. The guaranty of Swanson was available only in the event a sale of the jewelry was consummated. The jewelry was not sold or returned. The evidence in the record was sufficient to satisfy the jury, beyond a reasonable doubt, that the representations of the plaintiff in error that others, together with himself, contemplated purchasing jewelry as a wedding present, were but false and fraudulent representations and pretenses, and part of a scheme devised by the plaintiff in error for the purpose of enabling him to secure the possession of the jewelry, in order that he might convert the same to his use. He was a 'bailee' of the property, within the meaning of that word as employed in section 170 of the Criminal Code, which provides that a bailee shall be deemed guilty of larceny, if he shall convert property intrusted to his custody, with intent to steal the same. The doctrine of this statute is that if 'the owner parts with the possession voluntarily, but does not part with the title, expecting and intending the same thing shall be returned to him, or that it shall be disposed of on his account, or in a particular way, as directed or agreed upon, for his benefit, then the goods may be feloniously converted by the bailee, so as to relate back, and make the taking and conversion a felony, if the goods were obtained with that intent.' Farrell v. People, 16 Ill. 506; Welsh v. People, 17 Ill. 339; Stinson v. People, 43 Ill. 397; Murphy v. People, 104 Ill. 528; Doss v. People, 158 Ill. 660, 41 N. E. Rep. 1093."

CONFLICT OF THE LAWS OF USURY.

The fact that the laws of usury are founded in the varying statutes of the several States, has led to numerous and unavoidable conflicts in their application. The reconciliation and , harmonizing of the diverse holdings of the courts of different States upon several propositions is a difficult problem yet to be solved. Lex Loci Contractus.-"It is an established rule that the construction and validity of contract, which is purely personal, depends upon the law of the place where it is made, i. e., lex loci contractus, unless it is made with reference to the laws of some other place where it is to be performed, in which event the law of the place of performance, i. e., lex loci solutionis, governs.' In accord with this rule, "it is competent for the parties to contract in good faith for the payment of the debt in another State with the higher rate of interest allowed there; and such contract will be enforced even in the State where it was made." So, if a contract made in one State, to be performed in another, is usurious where made, but valid where it is to be performed, it will be upheld by virtue of the laws of the latter place. The rebuttable presumption is that the parties intended to adopt the laws of the place of performance. The only limitation upon the comity recognized by the States in the enforcement of each other's laws, is that the courts of one State will not enforce a contract made in another State, where the contract is unjust, immoral or contrary to some law or policy of the State where its enforcement is sought." It is well settled that the courts of no State will enforce penalties imposed by the laws of another State. Such laws are strictly local, and have no extraterritorial operation or effect, whether the penalty be to the public or to the person."

1 Webb on Usury, p. 289.

2 27 Am. & Eng. Enc. of Law, p. 972, citing Peck v. Mayo, 14 Vt. 33, 39 Am. Dec. 205; Andrews v. Hoxie, 5 Tex. 171; Robinson v. Bland, 2 Burr. 1077; Thomp. son v. Bowles, 2 Sim. 194.

3 Butler v. Meyer, 17 Ind. 77; McAllister v. Smith, 17 Ill. 328, 65 Am. Dec. 651; Wayne County Sav. Bank v. Low, 81 N. Y. 566, 8 Abb. N. Cas. 390, 37 Am. Rep. 533.

+ Id.

5 McAllister v. Smith, 17 Ill. 328; Jacks v. Nichols, 5 Barb. 38.

6 Heath v. Griswold, 18 Blatchf. C. C. 555; Blaine V. Curtis, 59 Vt. 120, 7 Atl. Rep. 708; Wright v. Bartlett, 43 N. H. 548; Hubbell v. Morristown Land & Improvement Co., 95 Tenn. 585, 32 S. W. Rep. 965.

8

The rules herein discussed have frequent application to contracts by foreign building and loan associations. As long as the association observes good faith, its contracts are enforceable; but when its contracts are so drawn and executed as to evade the law, they are usurious. Thus, in Rowland v. Old Dominion Building & Loan Association, the court said: "Where a party litigant in the courts of this State asserts that his rights are to be adjudicated, not by the laws of this State, but by those of another; that a contract, illegal here shall be enforced because it is legal under the laws of another forum, he must be able to show clearly and conclusively that his case is one that entitles him to make such a demand. In this case, the borrower was in this State; he applied for the loan here; there was a local board of managers here; it had a treasurer; the money was paid to the borrower here and the mortgage was executed here. Calling it a Virginia contract does not make it one. Sending the application to the home office, as it is called; remitting the money from Richmond; calling the local board and its treasurer the agents, not of the corporation, but of the members who live in that locality; providing in the bond that it shall be paid in Virginia-all these things cannot enable the foreign corporation to evade the usury laws of this State."'9

Lex Rei Site.-There is less of harmony among the authorities upon the effect of the law of the place of the security for a loan of money. A contract for the loan of money is usually regarded as purely personal, and governed by the law of the State where it is made; and, in the absence of proof to the contrary, the fact that its performance is secured by a mortgage of land situated in another State, does not change the rules of construction, as they are stated above.10 Thus, in a suit to

7 Thompson v. Edwards, 85 Ind. 414; Martin v. Johnson, 84 Ga. 481; Southern Building & Loan Assn. v. Harris, 98 Ky. 41, 17 Ky. Law Rep. 721, 32 S. W. Rep. 261; Pine v. Smith, 11 Gray, 38.

8 115 N. Car. 825, 18 S. E. Rep. 965.

9 But see Building & Loan Assn. v. Logan, 66 Fed. Rep. 827; Pioneer Sav. & Loan Co. v. Cannon, 96 Tenn. 599, 36 S. W. Rep. 386; Association v. Ashworth, 91 Va. 712, 22 S. E. Rep. 522; Nickels v. Association, 93 Va. 380, 25 S. E. Rep. 8.

10 Sheldon v. Haxtun, 91 N. Y. 124; Ware v. Bank. ers' Loan & Trust Co. (Va.), 29 S. E. Rep. 744; American Freehold Land & Mortgage Co. v. Jefferson, 69 Miss. 770, 12 South. Rep. 464; Stella v. Andrews, 19 N. J. Eq. 409; Tenny v. Porter, 51 Ark. 329, 33 S. W. Rep.

17 Gale v. Eastman, 7 Metc. 14.

18 Odum v. New England Mortgage Security Co., 91 Ga. 505, 18 S. E. Rep. 131; Reiff v. Bakken, 36 Minn. 333; Leake v. Bergin, 27 N. J. Eq. 360.

19 White v. Friedlander, 35 Ark. 52; Smith v. Whittaker, 23 Ill. 367; Camp v. Randle, 81 Ala. 240, 2 South. Rep. 287; Robb v. Halsey, 19 Miss. 140.

20 Balfour v. Davis, 14 Oreg. 47, 12 Pac. Rep. 89; Craven v. Bates, 96 Ga. 78, 23 S. E. Rep. 502; Leake v. Bergin, 27 N. J. Eq. 360; Waite v. Bartlett, 53 Mo. App. 378.

BUILDING ASSOCIATION-LOAN TO MEMBERAPPLICATION OF PAYMENTS.

HALE V. CAIRNS.

Supreme Court of North Dakota, November 19, 1898. A member of a building and loan association, who borrows money from the association, and bids a premium for the privilege of obtaining the loan, and ex. ecutes his bond for the amount of the loan and premium, and gives a mortgage to secure the payment of such bond, and also assigns to such association his shares of stock as collateral security for such payment. s not entitled, in an action brought to foreclose such mortgage by the receiver of such association (said association being insolvent), to apply the amounts he has paid as dues upon his stock in reduction of his indebtedness.

BARTHOLOMEW, C. J.: William D. Hale, the appellant, is the duly-appointed receiver of the American Savings & Loan Association. As such he seeks to foreclose a mortgage given by Robert Cairns and Ella Cairns to said association. Robert Cairns died before the action was brought, and the defendants Mary and Robert Cairns are his heirs at law. The American Savings & Loan Association was a corporation organized and doing business under the laws of the State of Minnesota, with its home office at Minneapolis. The allegations of the complaint, aside from the allegations as to the insolvency of the association and the appointment of the receiver, are substantially the same as in the case of Loan Co. v. Shain (decided at this term), 77 N. W. Rep. 1006. The answer also raises the same issues as in that case. Following the decision in that case, we hold that the contract in this case must be governed by the laws of the State of Minnesota, and that said contract is not usurious.

Sub

Upon the question of the proper credits to be given to the defendants, this case differs materially from the Shain case, as the association has become insolvent, and is unable to mature the stock, and consequently unable to complete the contract on its part. In this case the loan was $400, and the premium bid was $400. The evidence of indebtedness took the form of a bond. Ella Cairns signed as one of the obligors. The bond was for $800, but only the sum of $400 drew interest, and that at the rate of 6 per cent. Eight shares of stock were assigned to the association as collateral security; the bond to be paid by the absolute surrender of such stock at maturity. The bond was payable on or before nine years from date. It is conceded, as we understand the record, that on December 19, 1888, Robert Cairns, deceased, subscribed for and there were issued to him, ten shares of stock in said association. sequently two of said shares were surrendered, and they figure in no matter in this controversy, and we shall treat the manner as a subscription for eight shares. Upon these shares he contracted to make monthly payments at the rate of 60 cents upon each share until the stock matures. Cairns did not apply for a loan until more than a year thereafter, and the loan was not actually made until March 8, 1890. All payment up to that time had been kept up. Consequently there has been paid upon said eight shares, before the loan was made, the sum of $67.20. From the time the loan was made until the insolvency of the association the stock payments were regularly made. This included all payments up to and including October, 1895. Hence he paid upon his stock, after the loan, the further sum of $321.60; and of this amount one-half, or $160.80, was paid upon stock held by the association as collateral security for the bonus or premium. The interest upon the loan of $400 was also paid monthly in advance, and amounted during said term to $134. For what amount of the sums so paid should the repondents receive credit?

swers

This question has received very different anat the hands of different courts. It has never yet been answered by this court. It has been held that a proper and equitable adjustment, in cases where the association has become insolyent and unable to mature its stock, is to charge the borrowing member with the amount of money received, with legal interest thereon, and credit him with all that he has paid, "whether paid as fines, penalties, or dues." Strauss v. Association, 117 N. Car. 308, 23 S. E. Rep. 450; Thompson v. Association, 120 N. Car. 420, 27 S. E. Rep. 118; Buist v. Bryan (S. Car.), 21 S. E. Rep. 537. See, also, Bank v. Whitmore (Sup.). 49 N. Y. Supp. 862. In this case the question was presented in an involved form, and just what the court decided is not clear. Respondent also cites in this connection Randall v. Protective Union, 42 Neb. 809, 60 N. W. Rep. 1019. But in that case the association involved was, so far as the record discloses, an entirely solvent corporation; and under such