emies. When arrested the defendant had up- mailed them and by whom they were to be
on his person the three bills and the fifty- intercepted and to be withdrawn from the
eent piece which had been marked by the mails before they reached the persons to
postoffice inspectors and placed in the letter whom they were addressed, was no defense,
and deposited in the letter box, addressed as and that such letters were in reality in-
stated. Appreciating his position, the de- tended to be conveyed by mail within the
fendant endeavored then and there to ac- meaning of the statute on that subject. In
count for his possession of the money, and he that case the court, speaking through Mr.
accounted for it by saying that someone, some Justice Shiras, said:
enemy of his at the office, had done him a “Error was likewise assigned to the refusal
dirty trick, by which, as he testified, he meant of the court to charge that there was a fatal

to say that someone had deposited that money variance between the indictment and proof (348)in *his coat pocket while his coat hung up in in respect to the description of the letters,

the sorting room, and while he was absent for the stealing or embezzling of which the from that room.

This evidence of defendant defendant was indicted. was an attempt to raise a suspicion, at least, “In the indictment it was a verred that the that some enemy of his in the building had letters in question had come into the defendplaced this money in his coat, and thereby to ant's possession as a railway postal clerk, relieve himself from the suspicion of having to be conveyed by mail, and to be delivered to stolen it and to show his own innocence. It the persons addressed. It was disclosed by was an attempt at an explanation showing the evidence that the letters and money thus an honest possession of the money. It was mailed belonged to the inspectors who mailed therefore admissible, upon cross-examina- them, and were to be intercepted and withtion, for the purpose of showing the improb- drawn from the mails by them before they ability of the explanation, to obtain from the reached the persons to whom they were adwitness all the circumstances which might dressed. throw light upon the subject. For that pur- “There is no merit in this assignment. pose he was asked if he had any enemies in The letters put in evidence corresponded, in the department, and he said that he had, address and contents, to the letters described naming two employees at this particular in the indictment, and it made no difference, station, one the superintendent and the with respect to the duty of the carrier, other a fellow letter carrier.

whether the letters were genuine or decoys If this were true, it might have been ar- with a fictitious address. Substantially gued to the jury that the explanation of de this question was ruled in the case of Goode fendant was strengthened, and the inference v. United States, above cited." that one or both of these enemies had done In the last-cited case, which is reported in this trick might for that reason have been 159 U. S. 663 [40: 297], the court said, at maintained with more plausibility. To page 671 [40: 301), speaking through Mr. show that no such inference could properly be Justice Brown: drawn, the government proved that the men “It makes no difference, with respect to the defendant_named as enemies were not the duty of the carrier, whether the letter be such in fact. The evidence was not collateral genuine or a decoy, with a fictitious address. to the main issue of guilt or innocence, nor Coning into his possession, as such carrier it was the subject first drawn out by the gov- *is his duty to treat it for what it appears to[350] ernment. The district attorney on the cross- be on its face—a genuine communication; to examination simply obtained the names of make an effort to deliver it, or, if the address those upon whom the defendant attempted be not upon his route, to hand it to the propto cast a suspicion by his statement in er carrier or put it into the list box. Cerchief. He could not escape from the possi- tainly he has no more right to appropriate bility of being contradicted, by the failure it to himself than he would have if it were to name the enemies on his direct examina- a genuine letter. For the purposes of these tion. That examination suggested an ex- sections a letter is a writing or document, planation which, if believed, showed an in- which bears the outward semblance of a gennocent possession, and however improbable uine communication, and comes into the posit was, the government had the right to pur- session of the einployee in the regular course sue the subject and to show that it was un- of his official business. His duties in refounded. The objection to the evidence spect to it are not relaxed by the fact or by cannot therefore be sustained.

his knowledge that it is not what it purports We think the court below was also right to be—in other words, it is not for him to in its refusal to charge as above requested judge of its genuineness.” regarding the decoy letter. The correctness In this case the letter was addressed al. of the ruling has in substance been already though to a fictitious personage, yet to a upheld in this court.

postoffice within the territory of Arizona. It 349] *In Montgomery v. United States, 162 U. was properly stamped, and it was placed

S. 410 (40: 1020], we not only decided that, and came within the jurisdiction and auupon an indictment against a letter carrier, thority of the Postoffice Department by be charged with secreting, etc., a letter con- ing dropped into a United States street lettaining money in United States currency, ter box, in the city of New York. The duty the fact that the letter was a decoy was no of the defendant was, as above stated predefense, but it was also held that the further cisely the same in regard to that as to any fact that the decoy letters (mentioned in the and all other letters that came into his poscase) and the moneys inclosed therein, al. I session from these various letter boxes. The though belonging to the inspectors who intention to convey by mail is sufficiently

proved in such a case as this, by evidence of money loaned, under Minn. Gen. Stat. 1894, the delivery of a letter into the jurisdiction $ 2217. providing that such contract shall be of the Postoffice Department by dropping it

canceled and given up. in a letter box as described herein.

3. The public policy of a state with respect

to contracts made within the state and sought Section 5468, Revised Statutes, provides

to be enforced therein is obligatory on the that the fact that any letter has been de

Federal courts, whether acting in equity or posited in any postoffice, or branch postoffice, at law. or in any authorized depository for mail 4. The right given by a state statute to have matter, etc., shall be evidence that it was a contract canceled for usury without repay. intended to be conveyed by mail, within the ing the money loaned can be enforced in a meaning of the two preceding sections.

Federal court. This prima facie evidence is not contradicted

(No. 66.) or modified by proof, as in this case, that the letter was a decoy and addressed to a ficti. tious person. It was deposited in a proper Argued December 2, 1898. Decided January letter box, and it was intended that it should

S, 1899. be taken and conveyed by defendant, a mail carrier, and his duty as such carrier was to

N WRIT OF CERTIORARI to the United convey it to the station postoffice, and while so being carried it was being conveyed by Eighth Circuit to review a decree of that mail, and was under the protection of the court in an action brought by Theodore M. Postoffice Department, and its safety pro- Krumseig et al. against the Missouri, Kan.

vided for by the statute under consideration. sas, & Texas Trust Company, affirming the 1351]An intention to have the letter thus conveyed decree of the Circuit Court of the United

by the carrier is, within the statute, an in- States for the District of Minnesota declar.
tention to have it conveyed by mail. The ing a certain mortgage and notes to be void
difficulties of detecting this kind of crime and enjoining their enforcement. Affirmed.
are very great, and the statute ought not to See same case below, 71 Fed. Rep. 350.
be so construed as to substantially prevent
a conviction under it. A decoy letter is not

Statement by Mr. Justice Shiras: subject to the criticism frequently properly

*In May, 1894, Theodore M. Krumseig and[352] made in regard to other measures sometimes Louise Krumseig filed in the district court of resorted to, that it is placing temptation be the eleventh judicial district of Minnesota a fore a man and endeavoring to make him bill of complaint against the Missouri, Kancommit a crime. There is no temptation by sas, & Texas Trust Company, a corporation a decoy letter. It is the same as all other of the state of Missouri, praying that, for letters to outward appearance, and the duty reasons alleged in the bill, a certain mortgage of the carrier who takes it is the same. made by complainants on the 5th day of

The fact that it is to a fictitious person is September, 1890, and delivered to the defend. in all probability entirely unknown to the ant, and by it recorded, and certain notes carrier, and even if known is immaterial. therein mentioned, might be canceled, and Indeed, if suspected by the carrier, the sus. the defendant be permanently enjoined from picion would cause him to exercise particular enforcing the same. The defendant thereupcare to insure its safety, under the belief on, by due proceedings removed the cause to that it was a decoy.

the circuit court of the United States for the The other objections taken upon the trial district of Minnesota, where the Union Trust we have examined and are of opinion they Company of Philadelphia was made a codeare without merit, and the judgment is there. fendant, and the case was so proceeded in fore affirmed.

that, on October 22, 1895, a final decree was
entered, granting the prayers of the com.

plainants, declaring the said mortgage and
MISSOURI, KANSAS, & TEXAS TRUST ants from ever taking any action or proceed-

notes to be void, and enjoining the defendCOMPANY, Petitioner,

ing for their enforcement. 71 Fed. Rep. 350.

From this decree an appeal was taken to THEODORE M. KRUMSEIG and Louise the circuit court of appeals for the eighth Krumseig.

circuit, where, on November 5, 1896, the de.

cree of the circuit court was affirmed. On (See $. C. Reporter's ed. 351-361.) March 20, 1897, on petition of the Missouri,

Kansas, & Texas Trust Company, a writ of
Contract void for usurywhen there need certiorari was awarded whereby the record

not be an offer to repay-public poucy of a and proceedings in said cause were brought
state obligatory on Federal courts--right for review into this court.
given by state statute.

Mr. William C. White for petitioner.
1. A contract under which $1,970 is actually Mr. J. B. Richards for respondents.

received by a borrower who gives ten notes
of $360 each, payable in monthly instalments

*Mr. Justice Shiras delivered the opinion[352] of $30 each, with a proviso that in case of his

of the court:
death all the debt remaining unpaid shall be
released if he is not then in default,-is a

The bill of complaint alleged that on July
scheme or colorable device to cover usury.

27, 1890, Theodore M. Krumseig, one of the 2. A plaintiff suing to cancel a Minnesota con. complainants, made a written "application to[353]

tract for usury need not offer to repay the defendant, a corporation of the state of Mis-

172 U, S.


souri, for a loan of $2,000, to be secured upon operations, or in the manufacture, handling, real estate in the city of Duluth, Minnesota, or transportation of explosives, or entered and among the conditions in the said appli. into the service of any railroad train, or on cation was the following:

a steam or sailing vessel for two years.' “In consideration of the above premises, I The bill further alleged that the sole conagree to execute and deliver to the said com- sideration for the notes and mortgage was: pany ten promissory notes, each of the sum 1st, the sum of $1,970, together with the in. of $360, payable in monthly instalments of terest thereon from date until maturity of $30, commencing at date of signing contract. the instalment notes; and, 2d, the clause in The said notes aver principal sum loaned, in the mortgage last referred to, which latter terest and cost of guaranty to cancel debt was in fact an arrangement between the rein case of death, and shall ise secured by good spondent and the Prudential Life Insurance and sufficient deed of trusa or mortgage exe- Company of Newark, N. J., to save the forcuted by myself and wife on said ground and mer harmless from any loss that might ocimprovements. The contract hereafter to be cur to it in case of the death of the complainentered into, if my application shall be ac-ant, Theodore M. Krumseig, during the term cepted and contract entered into in writing covered by che mortgage. It was also alleged between myself and said company, shall pro- that the defendant company had not complied vide that the mortgage or deed of trust given with the laws of the state of Minnesota govto secure the above notes shall contain a erning life insurance companies, and that the clause guaranteeing in case of my death be- contract was therefore void. The bill prayed fore payment of any unpaid instalments, a that the mortgage be canceled of record and release of unpaid portion of debt, if I shall the remaining notes should be delivered up have promptly paid previous instalments and to them. kept other conditions. As part of foregoing The answer denied that the contract was condition I agree, before acceptance of this usurious, and alleged that the sum of $1.970. application and the execution of said con- received by complainants, with the legal in-(355) tract, to pass such medical examination as terest thereon and the cost of the guaranty may be required by said company, and to pay of defendant to cancel the loan in case of the said company the usual $3 fee therefor, and death of Theodore M. Krumseig during the to pay all fees for recording deed of trust or continuance of the contract, constituted *a mortgage.”

full and ample consideration for the notes The bill further alleged that thereupon and mortgage in question, and that the same Krumseig passed the medical examination was so understood and agreed to by complain. required, paia the fee demanded, and com- ants at the time of the execution of the conplainants then executed ten certain promis. tract. sory notes, each for the sum of $360, dated The circuit court did not consider it neces. September 5, 1890, payable in monthly in-sary to pass upon the question whether the stalments of $30, with interest at ten per contract was one of life insurance, and hence cent after due, forty-one of which instal- void, for the admitted fact that the defendant ments, amounting to $1,230, have been paid ; company had not complied with the laws of on the same day, in order to secure these Minnesota respecting life insurance compannotes, they executed and delivered to the de- ies; but regarded the contract as one for the fendant a mortgage on the premises, with the security and payment of borrowed money, usual covenants of warranty and defeasance, and, under the facts, as usurious and void reciting the indebtedness of $3,600, in manner | under the statute of Minnesota ; and granted and form aforesaid, and containing the fol. the relief prayed for in the bill. 71 Fed. lowing clause:

Rep. 350. “And it is further understood and agreed The circuit court of appeals affirmed the by and between the said parties of the first decree of the circuit court. Two of the part, their executors, administrators, or as- judges concurred in holding that the con

signs, and the said party of the second part, tract was usurious, and that the complain(354]the Missouri, *Kansas, & Texas Trust Com- ants were therefore entitled to the relief pany, that in case the said Theodore m.

prayed for.

One of the two judges so holdKrumseig, one of the parties of the first part, ing construed the contract as one of life should die after the execution and delivery insurance, and hence also void under the Minof the said notes and this mortgage, and within ten years thereafter, each and every

nesota laws. The third judge, while apof the said notes remaining unpaid at the parently concurring in the view that the said date shall be surrendered to the execu- contract was usurious, thought that the comtors or administrators of the said Theodore plainants were not entitled to a remedy for M. Krumseig, one of the parties of the first a reason which we shall presently consider. part, and this mortgage shall be canceled and 40 U. S. App. 620. satisfied; provided, however, that said par

Usury is, of course, merely a statutory of ties of the first part shall have promptly paid fense, and Federal courts in dealing with each nionthly insta!ment that shall have be- such a question must look to the laws of the come due prior to his death according to the state where the transaction took place, and terms of the notes hereinbefore mentioned, follow the construction put upon such laws and that he has not committed suicide within by the state courts. De Wolf v. Johnson, 10 two years, and has not without written con- Wheat. 367 [6: 343]; Scudder v. Union Na. sent of the party of the second part visited | tional Bank, 91 U. S. 406 [23 : 245]. the torrid zone, or personally engaged in the Section 2212, General Statutes of Minnebusiness of blasting, mining, or submarine' sota of 1894, provides that upon the loan of

noney any charge above ten per cent shall | mining whether the contingency be a real ve usurious; and section 2217 provides that one, or a mere shift and device to cover “whenever it satisfactorily appears to a usury.” court that any bond, will, note, assurance, Similar views were expressed in the subpledge, conveyance, contract, security, or evi- sequent case of Matheus v. Missouri, Kan dence of debt has been taken or received in sas, & Texas Trust Co. [69 Minn. 318], 72 N. violation of the provisions of this act, the W. 121, where the supreme court of Minnesocourt shall declare the same to be void, and ta again reached the conclusion that the enjoin any proceedings thereon, and shall or- notes and mortgage, forming a contract be der the same to be canceled and given up." tween the same trust company and one Math

As was said in De Wolf v. Johnson, above ews, were usurious and void. 1856]cited, it does not, *in general, comport with The next question for our consideration is

a negotiation for a loan of money that anyone not free from difficulty. Can a borrower thing should enter into the views of the par- of money upon usurious interest successfully ties, but money, or those substitutes which, seek the aid of a court of equity in cancel. from their approximation to money, circu- ing the debt without making an offer to re late with corresponding, if not equal, facil pay the loan with lawful interest ? ity. Still, however, like every other case, it Undoubtedly the general rule is that is open to explanation, and the question al courts of equity have a discretion on this ways is whether it was or was not a sub- subject, and have prescribed the terms on terfuge to evade the laws against usury which their powers can be brought into ac The books contain many cases where artful tivity. They will give no relief to the bor. contrivances have been resorted to, whereby rower if the contract be executory, except on the lender is to receive some other advantage the condition that he pay to the lender the or thing of value beyond the repayment of money lent with legal interest. Nor, if the the loan with legal interest. Sometimes the contract be executed, will they enable him agreement has taken the form of the purchase to recover any more than the excess he has of an annuity. More frequently there is a paid over the legal interest. Tiffany v. collateral agreement whereby the borrower Boatman's Sav, Inst. 18 Wall. 375 (22: 868). is to purchase an article of property and to But what, in such a case, is held to be the pay therefor more than its intrinsic value. law by the courts of the state of Minnesota! It has been frequently held that to constitute Under the statutory provision already cited, usury, where the contract is fair on its face, that whenever it satisfactorily appears to a there must be an intention knowingly to con- court that any bond, bill, note, assurance, tract for or to take usurious interest, but pledge, conveyance, security or evidence of mere ignorance of the law will not protect a debt has been taken or received in violation party from the penalties of usury. Lloyd v. of the provisions of this act the court shall Scott, 4 Pet. 205 [7: 833].

declare the same to be void, and enjoin any The precise character of the contract be proceeding thereon, and shall order the same tween the present parties is not clear. It to be canceled and given up, the supreme has some of the features of a loan of money; court of Minnesota has repeatedly held that in other respects it resembles a contract of a plaintiff suing to cancel a Minnesota conlife insurance. But our examination of its tract for usury need not offer to repay the various provisions and of their legal import money loaned. Scott v. Austin, 36 Mion. has led us to accept the conclusion of courts 460; Exley v. Berryhill, 37 Minn. 182: Math. below, that the scheme embodied in the ap- ews v. Missouri, Kansas, & Teras Trust Co. plication, notes, and mortgage was merely [69 Minn. 318] 72 N. W. 121. à colorable device to cover usury. The su- *Under statutes providing that, in cases of (358) preme court of Minnesota has more than usury, the borrower is entitled to relief with. once had occasion to consider this very ques. out being required to pay any part of the tion. In the case of Missouri, Kansas, & usurious debt or interest as a condition Texas Trust Co. v. McLachlan, 59 Minn. thereof, it has been held by the courts of New 468, that court said:

York and of Arkansas that courts of equity “The peculiar and unusual provisions of are constrained by the statutes, and must this contract themselves constitute intrinsic grant the relief provided for therein with evidence sufficient to justify the finding of out applying the general rule that a bill or the existence of every essential element of other proceeding in equity, to set aside or alusury, viz., that there was a loan; that the fect a usurious contract, cannot be main money was to be returned at all events, and tained without paying or offering to pay the that more than lawful interest was stipu- amount actually owed. Williams v Firs lated to be paid for the use of it. The only hugh, 37 N. Y. 444; Lowe v. Loomis, 53 Ark. one of these which could be seriously claimed | 454. to be lacking was that the money was not to But it is strenuously argited, and of that

be paid back at all events, but only upon a opinion was Circuit Judge Sanborn in the (857 contingency, *to wit, the continuance of the present case, that Federal courts, in the er.

life of McLachlan; but the facts warrant the ercise of their equity jurisdiction, do not re inference that this contingency was not bona ceive any modification from the legislation fide, but was itself a mere contrivance to of the states or the practice of their courts cover usury. The mere fact that the contract having similar powers, and that consequenthas the orm of a contin will not ex- no act of the legislature of Minnesota empt it from the scrutiny of the court, which could deprive the Federal courts sitting in is bound to exercise its judgment in deter-equity of the power or relieve them of the

duty to enforce and apply the established mortgagor twelve months to redeem, after a principle of equity jurisprudence to this sale under a decree of foreclosure, and to case, that he who seeks equity must do his creditor three months after that, conequity, and to require the appellees to pay ferred a substantial right; and it was so to the appellant what they justly owe for held, and that such right of redemption aftprincipal and lawful interest as a condition er sale was as obligatory on the Federal of granting the relief they ask.

courts *sitting in equity as on the state[360] We think it a satisfactory reply to such courts; and that their rules of practice must a proposition that the complainants in the be made to conform to the law of the state present case were not seeking equity, but to so far as may be necessary to give full effect avail themselves of a substantive right un to the right. The opinion of the court was der the statutory law of the state. It seems delivered by Mr. Justice Miller, who said: to be conceded, or, if not conceded, it is "It is denied that these statutes of Illinois plainly evident, that if the cause had re- (giving the right to redeem) are of any force mained in the state court where it was origi- in cases where the decree of foreclosure is nally brought, the complainant would have rendered in a court of the United States, on been entitled, under the public policy of the the ground that the equity practice of these state of Minnesota, manifested by its stat- courts is governed solely by the precedents of utes as construed by its courts, to have this the English chancery court as they existed usurious contract canceled and surrendered prior to the Declaration of Independence, and without tendering payment of the whole or by such rules of practice as have been estabany part of the original indebtedness. The lished by the Supreme Court of the United defendant company could not, by removing States, or adopted by the circuit courts for the case to the Federal court, on the ground their own guidance. And treating all the that it was a citizen of another state, de proceedings subsequent to a decree which are

prive the complainants of such a substantive necessary for its enforcement as matter of (859];ight. With the policy of the state *legisla- practice, and as belonging solely to the

tion the Federal courts have nothing to do. course of procedure in courts of equity, it is If the states, whether New York, Arkansas, said that not only do the manner of conductMinnesota, or others, think that the evils of ing the sale under a decree of foreclosure, and usury are best prevented by making usuri- all the incidents of such a sale, come within ous contracts void, and by giving a right to the rules of practice of the court, but that the the borrowers to have such contracts uncon- effects of such a sale on the rights acquired ditionally nullified and canceled by the by the purchaser and those of the mortgagor courts, such a view of public policy, in re- and his subsequent grantees are also mere spect to contracts made within the state and matters of practice to be regulated by the sought to be enforced therein, is obligatory rules of the court, as found in the sources we on the Federal courts, whether acting in have mentioned. equity or at law. The local law, consisting “On the other hand, it is said that the efof the applicable statutes as construed by fect of the sale and conveyance made by the the supreme court of the state, furnishes the commissioner is to transfer the title of realesrule of decision.

tate from one person to another, and that all In Clark et al. v. Smith, 13 Pet. 195 [10: the means by which the title to real property 123], it was said that “when the legislature is transferred, whether by deed, by will, or by declares certain instruments illegal and void, judicial proceedings, are subject to, and may there is inherent in the courts of equity a be governed by, the legislative will of the jurisdiction to order them to be delivered up, state in which it lies, except where the law of and thereby give effect to the policy of the the state on that subject impairs the obligalegislature; that the state legislatures have, tion of a contract. And that all the laws of a certainly, no authority to prescribe the forms state existing at the time a mortgage or any or modes of proceeding in the courts of the other contract is made, which affect the United States; but having created a right, rights of the parties to the contract, enter and at the same time prescribed a remedy into and become a part of it, and are obliga. to enforce it, if the remedy prescribed is tory on all courts which assume to give reme. substantially consistent with the ordinary dy on such contracts. modes of proceeding on the chancery side of “We are of opinion that the propositions the Federal courts, no reason exists why it last mentioned *are sound; and if they are in (361) should not be pursued in the same form as conflict with the general doctrine of the exin the state courts; and that the undoubted emption from state control of the chancery truth is that when investigating and decree practice çf the Federal courts, as regards ing on titles in this country the court must mere modes of procedure, they are of paradeal with them in practice as it finds them, mount force, and the latter must to that ex. and accommodate the modes of proceeding tent give way. It would seem that no argu. to the nature of the case, and to the charac- ment is necessary to establish the proposition ter of the equities involved in the contro- that where substantial rights, resting upon a versy, so as to give effect to state legislation statute which is clearly within the legislative and state policy; not departing, however, power, come in conflict with mere forms and from what legitimately belongs to the prac modes of procedure in the courts, the lattice of a court of chancery."

ter must give way, and adapt themselves to The question in Brine v. Hartford F. In the forms necessary to give effect to such surance Co. 96 U. S. 627 [24: 858), was rights. The flexibility of chancery methods, whether a state statute which allowed to the l by which it molds its decrees so as to give

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