the said defendant for labor and services done, or due for necessary supplies furnished in the operation of the said defendant's railway, or in maintaining or keeping the same in repair, since the first day of March, 1884.'

This is, substantially, an application to the court to enforce an equitable lien against the corpus of the railway property, to secure the payment for necessary supplies furnished to the corporation more than three months before the appointment of the receivers. When the debt was contracted, the mortgage was subsisting and outstanding; the company was operating the road, and the creditor had only the relation of a general creditor. There was no lien upon anything to secure it. Does it legally result, from the mere fact of the appointment of receivers to preserve the property pendente lite, that the character of the debt has changed from an unsecured to a secured claim?

It is sometimes said that when a bill is filed to foreclose a railway mortgage, and an application is made for receivers to take charge of the mortgaged property, the bondholders, in making such request, are asking a favor of the court, and the court, in granting it, may impose such terms for the payment of existing debts as it deems equitable and just. The reason for the remark is that the receipts from running the road is a fund primarily to be applied to the payment of the necessary operating and managing expenses, and when these receipts come into the hands of a receiver the court should take care that they are thus applied, before the bondholders should derive any benefit therefrom. But in the present case the appointment of receivers was not a favor granted to the bondholders, but was a right which had been expressly reserved them in the mortgage, the contract between the parties. It was a matter of discussion, when the appointment was made, as to how far the receivers should be allowed, from the income of the road, or from money received from the sale of their certificates, to pay antecedent debts, and the court, in the order of appointment, gave to them the discretion of going back to the first of March preceding, -about three months,-and the present claim was not paid by them because the debt was contracted before that date.

If any income from the road had been left in the hands of the receivers after paying current running expenses, there would be no difficulty about the case. Under the authority of Fosdick v. Schall, 99 U. S. 235, and Burnham v. Bowen, 111 U. S. 776, S. C. 4 Sup. Ct. Rep. 675, I should not hesitate to order the payment of the claim out of such income. It would be only equitable to require the receivers to do what the company would have been expected and ordered to do if it had retained the possession of the property, to-wit, to use the current receipts for the payment of current debts. But the receivers have no net income for any purpose; their running expenses have greatly exceeded their current receipts. The court, with much reluctance, authorized the payment of the deficiency from funds obtained from the sale of the receivers' certificates. It assented to this

because the great body of bondholders represented that their ultimate interests required that the road should be kept in operation even if the expenses and losses should become a charge upon the corpus of the property, and should be treated as a lien superior to their mortgage.

The fact that the receivers had no net income after the payment of the necessary operating and managing expenses, proper equipments, and useful improvements, is decisive of this case. I am sorry that there are no funds for the payment of the honest and undisputed debt of the petitioner. He trusted the corporation and the corporation is insolvent. But I cannot allow my sympathy for the creditor to lead me to the unjustice of taking property, or the proceeds of the sale of property, previously pledged for the payment of the debts of other people, to reimburse him.

The note of warning sounded by the chief justice, speaking for the whole supreme court, in Burnham v. Bowen, 111 U. S. 776, S. C. 4 Sup. Ct. Rep. 675, is quite suggestive, in this connection. "We do not hold," he says, "any more than we did in Fosdick v. Schall or Huidekoper v. Locomotive Works, 99 U. S. 260, that the income of a railroad in the hands of a receiver for the benefit of mortgage creditors who have a lien upon it ander their mortgage can be taken away from them and used to pay the general creditors of the road. All we then decided and all we now decide is that if current earnings are used for the benefit of mortgage creditors before current expenses are paid, the mortgage security is chargeable in equity with the restoration of the fund which has been thus improperly applied to their use."

There has been no such use or application in this case, and the claims of the petitioner can only be paid from any surplus that may remain after the full satisfaction of the debts of the mortgage creditors.

The claims being of the same nature and involving the same principle, a like order must be entered in the following cases: (1) Petition of New York Economic Printing Co. (2) Petition of Cleveland City Forge & Iron Co. (3) Petition of Maher & Brayton. (4) Petition of American Bank Note Co. (5) Petition of Allen W. Swift. (6) Petition of Ross & Sanford.

UNITED STATES v. MCELROY and others.

(Circuit Court, D. Kansas. December 16, 1885.)

MORTGAGE-FORECLOSURE OF RIGHT OF GOVERNMENT TO REDEEM-STATUTE OF LIMITATIONS-LACHES.

Neither the statute of limitations nor laches will bar the government as to any claim for relief in a purely governmental matter; but when the government comes as a complainant into a court of equity, asserting the same rights as an individual,-a mere matter of dollars and cents, involving no question of governmental right or duty, although technically the statute of limitations may not bar, the ordinary rules controlling courts of equity as to laches should be enforced. U. S. v. Beebee, 17 Fed. Rep. 37, followed.

In Equity.

W. C. Perry and C. F. Ware, for complainant.

J. D. McCleverty, for defendant.

BREWER, J. This is a bill brought by the government to redeem. The facts are these: On August 7, 1869, one Moses McElroy was the owner in fee of a lot in Fort Scott. On that day, for value, he executed a mortgage for $3,500 to one Polly Palmer. On the sixteenth day of October, 1869, the present complainant recovered a judgment of $2,000 in the United States district court for this state against said. McElroy. On November 6, 1869, execution was issued on this judg ment and levy made upon said lot; said execution was returned unsatisfied for want of bidders at the sale. On a subsequent execution, and on May 30, 1871, said lot was sold at the front door of the courthouse in the city of Fort Scott to the present complainant, and on October 16, 1871, said sale was confirmed and deed ordered made to the complainant. On May 30, 1871, said mortgagee, Polly Palmer, commenced a foreclosure suit in the district court of Bourbon county, and on October 4, 1871, decree of foreclosure was rendered in her favor. Thereafter the property was sold under that foreclosure and on January 4, 1872, the sheriff's deed was executed and delivered to said mortgagee, Polly Palmer, and duly filed for record in the office of the register of deeds in Bourbon county, Kansas. In that foreclosure proceeding the present plaintiff was not made a party, and indeed could not be without its consent. Both the mortgagor and mortgagee have since deceased, leaving heirs, as against whom this bill to redeem is filed.

The bill in this case was filed November 28, 1884, more than 12 years after the sheriff's deed in foreclosure to Polly Palmer, and more than 13 years after the sale to the government on the execution. To this bill a demurrer has been filed, and the question presented is whether, by laches or limitation, the plaintiff is barred of any remedy. Unquestionably, if the plaintiff was a private individual, the statute of limitations would cut off all right to redeem; but it is said that the statute of limitations runs not against the government. This is unquestionably true, and it may also, for the purposes of this case, be

conceded that neither the statute of limitations nor laches bar the government as to any claim for relief in a purely governmental matter; but when the government comes as a complainant into a court of equity, asserting the same rights as a private individual,—a mere matter of dollars and cents, involving no questions of governmental right or duty, it seems that, although technically the statute of limitations may not bar, the ordinary rules controlling courts of equity as to the effect of laches should be enforced. In the case of U. S. v. Beebee, 17 Fed. Rep. 37, this rule was laid down by the circuit court of this circuit:

"Lapse of time may be a sufficient defense to a suit instituted in the name of the United States. When the government becomes a party to a suit in its courts it is bound by the same principles that govern individuals. When the United States voluntarily appears in a court of justice, it at the same time voluntarily submits to the law, and places itself upon an equality with other litigants."

I think that doctrine eminently just and correct. It is especially true in a case like this. The government could not, except at its own will, be made a party to any foreclosure suit. When a complainant is therefore, in a foreclosure suit, unable to compel the appearance of the government or to have its rights adjusted and foreclosed, it would be cruel to hold that a party standing by its own will aloof from the power of the courts could bide its time, and after the lapse of many years, when property values have changed, when parties have acted in the faith of perfect title, come into a court of equity and say that all these proceedings go for naught so far as title is concerned, and now claim a property which by the combined efforts and action of many individuals, among whom is such complainant, has been largely increased in value. I hold, therefore, that the claim of the government is barred by its own laches, and that the demurrer must be sustained and the bill dismissed.

BURMESTER and others v. PHILLIPS and others.

(Circuit Court, E. D. Virginia. December, 1885.)

SALE OF CHATTELS-PROPOSAL MAY BE WITHDRAWN BEFORE ACCEPTANCE. An order was mailed on the fourteenth March by a house in Charleston, South Carolina, to a house in Fredericksburg, Virginia, for a cargo of white Rappahannock corn, at 51 cents a bushel, free on board vessel, and 7 cents freight, to be shipped "on receipt" of letter. The order could not be complied with at once. In answer the Fredericksburg house say they will correspond for the corn, and endeavor to procure vessel, at the prescribed prices. On April 4th the Fredericksburg house write and telegraph that they have secured the corn at the price, and vessel at the rate of freight, prescribed. In due course of mail answer should have been received to the telegram by the sixth, and the letter by the eighth, April. No answer positively accepting the corn was received by the 11th, when the Fredericksburg house telegraphed that the corn

had been resold. Held, that the letter and telegram of the fourth April were a new proposal, and that the failure of the Charleston house to answer before the 11th, prevented the meeting of minds necessary to a contract; so that there was no contract, and defendants were at liberty to resell.

The cause was tried on the eighteenth November, and-under instructions from the court that the correspondence between the plaintiffs and defendants, which was the only evidence submitted on the subject of contract, there was no contract between the parties-the jury found for the defendant. Defendants afterwards moved for a new trial, on the ground that the instructions of the court were contrary to the law of the case. On this motion, counsel was heard at length, and the following is the opinion of the court.

W. L. Royall, for plaintiffs.

St. George Fitzhugh, for defendants.

HUGHES, J. There is no other evidence in this case, on the question whether there was a contract of sale, than the correspondence which occurred between the parties in March and April last. The parties never saw nor conferred with each other in any manner whatever, except by means of this written correspondence. lips & Co. were merchants in Fredericksburg, Virginia, and Burmester & Co. merchants in Charleston, South Carolina. The correspondence was about a proposed shipment of Rappahannock white corn by the defendants, in Fredericksburg, to the plaintiffs, in Charleston. It began in March, but up to the end of that month had contained no letters of distinctive importance except two from Burmester and three from Phillips. On the fourteenth March, Burmester wrote, saying: "On receipt of letter [you] can ship us a cargo of 10 to 15,000 bushels choice dry Rappahannock white corn, at 51 cents, free on board, freight 7 cents a bushel." Phillips wrote in reply, on the 16th, that he had communicated with farmers on the Rappahannock for the corn, and would telegraph when they were heard from. On the 20th, Phillips wrote that he could get the corn at 51 cents, and was then at work to secure a vessel at 7 cents for the freight. Then came a short letter from Burmester, of the twenty-third March, saying, in answer to the letter of Phillips of the 20th, that he hoped Phillips would succeed in getting a vessel promptly; and giving some directions about ship's papers. On the 30th, Phillips wrote that he hoped to succeed in getting a vessel of ten to twelve thousand bushels, at Burmester's limit of 7 cents, and if so, would observe Burmester's directions about ship's papers. Then came the following correspondence:

APRIL 4, 1885.

Messrs. Wm. Burmester & Co.: We have at last succeeded in chartering a vessel at 7c. freight to take cargo corn for you, and we wired you this A. M., saying, "Have secured a vessel, about 12,000 bushels, at 7c., and bought corn at limit," which we now confirm. We have bought this corn, say about 12,000 bushels, at 51c., f. o. b., the best that could be done. The corn is all prime white, and of the best crops on the river. The schooner char