band's creditors. Both defendants have appeared and answered; the insurance company making no defense, but stating its readiness to pay the amount due upon the policy to whomsoever may be entitled to it. The widow, by her answer, denies generally all the allegations of fraud, and alleges that under the statutes of Florida, where the contract was made and the policy delivered, no such exception in favor of creditors exists, and that the whole amount of the policy is due and payable to her. The insurance company now moves for leave to pay the money into court, as having no interest in the controversy. The motion has been argued with great care upon both sides. The defendant Harwood insists that nothing should be done by the court to relieve the insurance company from its alleged duty of paying her at once, according to the terms of the policy, and without regard to the complainants' claims. The complainants, however, have a legal right to conduct the proceedings that have been instituted to a judicial termination. Both defendants have appeared, the fund is within the jurisdiction of the court, and the court must ultimately make a final decree, disposing of the fund and of the rights of the parties. By the filing of the bill the complainants have acquired an equitable lien upon the fund for any amount they may ultimately succeed in holding applicable to their judgments, whether it be the whole or only a part of the fund; and this decree will be binding and conclusive upon Mrs. Harwood, as well as upon the insurance company. The insurance company, therefore, cannot safely pay either claimant, except at its peril of anticipating rightly the ultimate judgment of the court. The fund in question arises under the policy of insurance, both parties claiming under the same instrument..

Without considering in detail the numerous cases on the subject of interpleader that have been cited, I am of opinion that in the situation of the parties in this case, the motion should be granted. The equitable lien which the complainants have obtained by the filing of their bill is a controlling feature. The fund must be disposed of in this cause. The insurance company has no interest, as between the opposing parties contending for the fund, and is substantially in the situation of a stakeholder. It should be allowed, therefore, to pay the money into court, including the interest upon it from the time it became due and payable, according to the terms of the policy. One advantage that will accrue to Mrs. Harwood from such an order will be the power of the court to award her at once, upon her application, and upon, suitable security, the payment of a portion of this amount, should satisfactory reasons therefor appear.

WELLS, FARGO & Co. v. MINER and others.

(Circuit Court, D. California. November 9, 1885.)

1. EQUITY PRACTICE-CIRCUIT COURT-STATE STATUTES.

State statutes regulating procedure are not applicable to equity courts of United States, but when they enlarge equitable rights by creating new remedies, such remedies may be enforced in those courts.

2. SAME-INTERPLEADING ADVERSE CLAIMANTS-CODE CIVIL PROC. CAL. § 386. The right to interplead adverse claimants, created by Code Civil Proc. Cal. 386, may be enforced in the circuit court.

3. SAME-INTERPLEADER-WHEN ALLOWED.

To justify an interpleader, the same thing, debt, or duty must be claimed by both claimants; all adverse titles or claims must be dependent on, or derived from, a common source, complainant seeking relief must not have or claim any interest in the subject-matter; and he must have incurred no independent liability to either of the claimants; that is, he must stand perfectly indifferent between them, in the position purely as stakeholder.

In Equity.

Pillsbury & Blanding, for complainants.

Langhorne & Miller, for defendants.

SAWYER, J. This is an application for a preliminary injunction, in a suit on the equity side of the court, brought by the banking-house of Wells, Fargo & Co. against Richard S. Miner, Frank Silva, and the Southern Development Company of Nevada, to compel them to interplead with one another respecting a certain certificate of deposit, for $7,500, which was issued by complainant to defendant Silva. From the papers used on the hearing, it appears that Silva sold a mining claim to the Southern Development Company for an agreed price of $10,000, and received in payment a check for that amount on the Bank of California. Silva deposited the check with the banking. house of Wells, Fargo & Co., who thereupon paid him $2,500 in coin, and issued to him a certificate of deposit for $7,500, "payable to Frank Silva, or order, on return of this certificate properly indorsed." By mesne assignments, before maturity, the certificate came into the possession of the defendant Miner, who now claims to be the owner and holder thereof; but he is alleged by the Southern Development Company not to be a holder in good faith. The Southern Development Company claims that in the sale of the mine Silva made certain false and fraudulent representations as to its character and value, upon which it relied, and by reason thereof it is entitled to rescind the sale, and recover back everything of value which it paid to Silva. Accordingly, before any presentation of said certificate for payment, the Southern Development Company notified Wells, Fargo & Co. that the check on the Bank of California had been obtained by Silva by means of fraud, misrepresentation, and deceit, and that it claimed the certificate in question, and warned them not to pay it to Silva. The Southern Development Company then caused Silva to be arrested and prosecuted on the criminal charge of obtaining money

under false pretenses; but the jury disagreed on the trial, and thereupon the district attorney dismissed the information, and the prisoner was discharged. The Southern Development Company then brought a civil action against Silva, which is now pending in this court, to recover $15,000 damages, alleged to have been suffered by reason of the fraudulent misrepresentations aforesaid, of which suit it notified complainant. It also brought suit against Wells, Fargo & Co., in which neither Silva nor Miner was made a party, to enjoin the payment of the certificate until the determination of the aforesaid action against Silva for $15,000 damages. In this suit, Wells, Fargo & Co. suffered a default, and judgment was rendered against them according to the prayer of the complaint. At this point, Miner presented the certificate to Wells, Fargo & Co. for payment, which was refused on the ground that they had been enjoined, and thereupon Miner instituted an action at law on the certificate against Wells, Fargo & Co., in this court. They appeared in that action, and made a motion, under section 386 of the Code of Civil Procedure of California, that the Southern Development Company be substituted in their place and stead as defendant. This motion was argued elaborately, and denied by the district judge of Nevada, holding the circuit court, on the ground that an equitable cause of suit could not be thus injected into an action at law in the United States courts. Thereupon, Wells, Fargo & Co. instituted the present suit in equity, to compel the defendants to interplead, and they now move for a preliminary injunction, restraining the prosecution of the actions against them respecting the certificate until the determination of the rights of the parties upon an interpleader. They offer to pay the money into court for the benefit of the party who shall be adjudged entitled to it.

The defendant Silva disclaims all interest in the subject-matter. The Southern Development Company makes no opposition to the motion, and Miner opposes it on the ground that it is not a proper case for an interpleader.

The question as to whether this is a proper case for an interpleader has been very elaborately argued. There are about 400 pages of printed arguments, and a very extensive collection and careful analysis of the authorities, showing the different circumstances under which interpleaders have been denied, and wherein they have been allowed, in courts of equity. This is a motion for an injunction to restrain the prosecution of those suits until the determination of the rights of the parties on the bill for interpleader. The defendants do not deny that the complainants are entitled to the injunction, provided the case is a proper one for a bill of interpleader. They say it is not within the class of cases in which courts of equity, under the chancery practice as it heretofore existed, and under the law of England, have interfered. Conceding defendants to be right on this proposition, it is still, in my judgment, within one of the provisions of the Code of Civil Procedure of the state of California, provided that

provision is applicable. Section 386, among other things, provides as follows:

"And whenever conflicting claims are or may be made upon a person for, or relating to personal property, or the performance of an obligation, or any portion thereof, such person may bring an action against the conflicting claimants to compel them to interplead, and litigate their several claims among themselves. The order of substitution may be made, and the action of interpleader may be maintained, and the applicant, or plaintiff, be discharged from liability to all or any of the conflicting claimants, although their titles or claims have not a common origin, or are not identical, but are adverse to and independent of one another."

The contention here is that these claims have not a common origin, are not identical, that there is an independent claim, and therefore that they are not within the original chancery jurisdiction. If this clause be applicable, and can be acted upon in this court, it abolishes the distinction resting upon these elements. It is insisted, on the part of the defendant here, that the statute cited is not applicable to the United States courts of equity, as the Code of Procedure does not apply on the equity side of the courts. If it were merely a provision regulating procedure, undoubtedly it would be so; but I think it is more than that. It gives a right to a party in equity. It enlarges his equitable rights; it enlarges the scope of his remedy. It is not a question of enlarging the jurisdiction of the court; it gives a new remedy, a new right in the form of a remedy. I think it is within the rule, as established by the supreme court of the United States in the Broderick Will Case, which was an appeal from this court. In that case, there was a bill filed to set aside and vacate the will and the probate of the will of Broderick. This court dismissed the bill. The case went to the United States supreme court on appeal; and, in deciding the case, the supreme court says:

"It is undoubtedly the general rule, established both in England and this country, that a court of equity will not entertain jurisdiction of a bill to set aside a will, or the probate thereof."

Then, in commenting on the statute of California of 1862, which, in the district court of the state, gave the new remedy, the court says: "The statute of 1862 has been referred to, which gives the district courts of California power to set aside a will obtained by fraud or undue influence, or a forged will, and any probate obtained by fraud, concealment, or perjury. While it is true that alterations of jurisdiction of the state courts cannot affect the equitable jurisdiction of the courts of the United States, so long as the equitable rights themselves remain, yet an enlargement of equitable rights may be administered by the circuit courts as well as by the state courts. And this is probably a case in which an enlargement of equitable rights is effected, although presented in the form of remedial proceedings." Broderick's Will, 21 Wall. 519, 520.

In that case, then, the court suggests that new equitable rights granted by statute of the state may be enforced in the circuit courts of the United States, but affirms the decree of the court below, on the statute of limitations. In Ohio, an act was passed authorizing

the restraining of the collection of taxes, which was a remedy that did not before exist, under the circumstances provided for, in courts of equity. A case went to the supreme court of the United States from Ohio, arising under that statute, and the court says in regard to it:

"Though we have repeatedly decided in this court that the statute of a state cannot control the mode of procedure in equity cases in the federal courts, nor deprive them of their separate equity jurisdiction, we have also held that where a statute of a state conferred a new right, or provided a new remedy, the federal courts will enforce that right, either on the common law or equity side of its docket, as the nature of the new right or the new remedy requires. Van Norden v. Morton, 99 U. S. 378;" Cummings v. National Bank, 101 U. S. 157.

In the case of Curtis v. Sutter, 15 Cal. 262, the statute provided, under the old practice act of California, then section 254, that a party in possession of land might bring a suit against a party out of possession, setting up an adverse title, to determine that adverse claim. It was held in Curtis v. Sutter that this provision gave a new remedy; that it enlarged the scope of the remedy, and to that extent gave a new right in equity. That right did not exist before. Under the statutes of Nevada there is a similar provision. A suit was brought there to determine the adverse claim in the case of Central Pac. R. Co. v. Dyer, 1 Sawy. 649. The question arose whether the United States circuit court could administer that remedy, it being a new remedy. Mr. Justice FIELD, in commenting on the statute, said:

"The statute, it is true, enlarges the classes of cases in which the jurisdiction was formerly exercised in quieting the title and possession of real property. It dispenses with the necessity of the previous establishment of the right of plaintiff by repeated judgments in his favor in actions at law. To that extent, it confers upon the possessor of real property a new right,-one which enables him, without the delay of previous proceedings at law, to draw tc himself all outstanding inferior claims. That right the national courts will enforce in the same manner in which they will enforce other equitable rights of parties." Citing Clark v. Smith, 13 Pet. 203.

Those rights have been enforced repeatedly in the supreme court of the United States, and the doctrine is now recognized in numerous cases, as in Holland v. Challen, 110 U. S. 16; S. C. 3 Sup. Ct. Rep. 495; and Reynolds v. Crawfordsville Bank, 112 U. S. 405; S. C. 5 Sup. Ct. Rep. 213. In the last case the right was extended by state statute still further. It was extended to the party out of possession, as does the present statute of California. And the remedy was also extended to the cancellation of a deed void on its face, for which there was before no remedy in equity. The supreme court held that the party out of possession could maintain that suit in equity to cancel a deed void on its face in the United States court. Chapman v. Brewer, 114 U. S. 170, 171; S. C. 5 Sup. Ct. Rep. 799; Cummings v. The National Bank, 101 U. S. 157; Van Norden v. Morton, 99 U. S. 378,-cases to which I have already called attention,-and Ellis v. Davis, 109 U. S. 485, S. C. 3 Sup. Rep. 327, establish this doctrine.