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erty easily to be worth $40,000. The application was sworn to and accompanied by the affidavit of three other persons that they regarded Bedford "as a prompt, upright, reliable person, pecuniarily responsible for his contracts."

The application and report of the local board of appraisers was received by the association on the 12th of May, 1891, by mail from H. B. Martin, the soliciting agent of the association. It was accepted and a loan granted on the 18th of May, and to secure the same the notes and mortgage in suit were subsequently executed.

The statutes of Tennessee relied on as a defence were passed March 26, 1891, and to repeat, the question is, did the subscription to the stock of the association, its issuance and the application for a loan in pursuance of it, constitute a contract which was inviolable by the state legislature? We think the answer should be in the affirmative. By his subscription to stock of the association Bedford became a member of the associationbound to the performance of what its by-laws and charter required of him, and entitled to exact the performance of what the by-laws and charter required of the association. Each acquired a right to what the other promised, and there were all the elements of a contract. We are compelled, therefore, to disagree with the views expressed by the Supreme Court of Tennessee, in New York &c. Building & Loan Association v. Cannon, 99 Tennessee, 344, notwithstanding our high respect for that learned tribunal. It was there contended that "Cannon, having become a stockholder in the association before the acts were passed, with a view to becoming a borrower, and for that purpose, and having made his application for a loan likewise before the acts passed, acquired a vested right to the consummation of the loan, and the association became legally obligated to complete it, and it was also unfinished business, which the association had a right, and which was its duty, to finish, notwithstanding the acts of the legislature." To this contention the court replied: "If we were to grant that the borrower had a vested right to the loan, and the association had a legal obligation to consummate it, still, it must follow that the contract could be entered into, and the loan and mort

Opinion of the Court.

gage made, only in compliance with the law. There was nothing to prevent the association from complying with the statutes and thus placing itself in the attitude where it could legally make the loan and take the mortgage if it were under obligation to do so, as it claims."

And the court observed that it could not be considered that the association and Cannon were winding up an old transaction and unfinished business, but were doing business in the sense of the statute and in defiance of its prohibition, and refused to enforce the mortgage of the association. We cannot assent to the view that there is nothing to prevent the association from complying with the statutes. The mere filing of its charter in a particular office-the secretary of state's or some other office-might be easily complied with, but the deposit with some responsible trust company or state officer of the State or some other State, of mortgages or securities of from $25,000 to $50,000 in amount, at the discretion of the state treasurer, might be impossible to comply with. At any rate, the requirement is so very onerous that the association could justly decline to do business in the State on that condition. It might indeed have the right to decline any condition and retire from the State, and from all it had the option to retire from. But it could not retire from the execution of its contracts. It contracted with Bedford to make him a loan if it had the means in its treasury and his security was good. The State could not affect that obligation nor impair it. "The obligation of a contract is the law which binds the parties to perform their agreement."" 4 Wall. 452. The building association was incorporated under the laws of New York to make loans to its members, and rights to a loan accrued to membership. The condition of a loan existing-means in the treasury, a tender of good security-the contingent right became a vested one, a contract was formed, and, can there be a doubt, that it was enforceable against the association? If it could have been enforced by suit, it was properly yielded to without suit and possessed all legal sanctions.

We recognize the power of the State to impose conditions upon foreign corporations doing business in the State. We VOL. CLXXXI-16

Opinion of the Court.

have affirmed the existence of that power many times, but manifestly it cannot be exercised to discharge the citizens of the State from their contract obligations.

It is claimed, however, that if the transactions between Bedford and the association were otherwise legal they were affected with usury, and to the extent that they were usurious they were unenforceable. The contention is that in making the loan of $4600 Bedford was required to pay a fixed premium of $460, and received only $4140, and that this constituted usury in Tennessee. This is made out because, it is said, Bedford was required to withdraw his stock and receipt in full, and could therefore get no benefit from future profits of the association; and, it is asserted, that thereby the loan became "fixed and certain and no element of contingency" remained, and the transactions are withdrawn from the principle expressed in Spain v. Hamilton, 1 Wall. 604, that “where the promise to pay a sum above legal interest depends upon a contingency, and not upon the happening of a certain event, the loan is not usurious." But the fact was not as asserted.

The stock was pledged as security for the advance, and the pledge was no more a withdrawal of the stock, terminating Bedford's ownership of it, than his mortgage was an absolute conveyance of his land. It is provided in section 3, article 19, that in addition to real estate security for a loan a shareholder shall "transfer in pledge to the association one share of the stock held by said shareholder, as collateral security, on all loans made by the association" to him. Besides, the transactions were not usurious under the laws of New York, where the notes were payable. Concordia Savings &c. Association v. Reed, 93 N. Y. 474. Therefore, the principle expressed in Miller v. Tiffany, 1 Wall. 298, applies. It was said in that case: "The general principle in relation to contracts made in one place to be performed in another is well settled. They are to be governed by the law of the place of performance, and if the interest allowed by the law of the place of performance is higher than that permitted at the place of contract, the parties may stipulate for the higher interest without incurring the penalties of usury. The converse of this proposition is also

Opinion of the Court.

well settled. If the rate of interest be higher at the place of the contract than at the place of performance, the parties may lawfully contract in that case also for the higher rate." See also Anderson v. Pond, 13 Pet. 78; Railroad Company v. Bank of Ashland, 12 Wall. 226; Scotland County v. Hill, 132 U. S. 107; Cromwell v. Sac County, 96 U. S. 57; Cockle v. Flack et al., 93 U. S. 344.

In Pioneer etc. Loan Co. v. Cannon, 96 Tennessee, 599, a note secured by mortgage was given to a building association and made payable at Minneapolis. It provided for the payment of five per cent interest per annum, a five per cent premium per annum, monthly, on or before the last Saturday of each month, and stipulated, further, that "any failure to pay interest or premium, when due, shall, at the election of the payee, make the principal, interest and premium at once due." Of the note and mortgage the court said: "The second assignment of error is that the note and mortgage were both usurious on their faces and nonenforceable. As already stated, the note stipulates on its face to pay five per cent interest per annum, at the office of the company at Minneapolis, Minn. This contract is a Minnesota contract, and is expressly authorized by the charter of the company and the laws of that State, which have been distinctly proved, and appear on the record." The assignment of error was held not well taken.

The Circuit Court adjudged Mrs. Bedford personally liable for the indebtedness to the association. This is conceded to be error, and it has been stipulated "that an order or decree may be entered in this cause releasing her from said liability upon such terms and conditions as to this court may seem just." The judgment of the Circuit Court will be modified in accordance with the stipulation, and, as modified, affirmed. Costs are awarded to Mrs. Bedford on her appeal to and in the Circuit Court of Appeals and in this court.

Opinion of the Court.

WALL v. COX.

CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS FOR THE FOURTH

CIRCUIT.

No. 504. Submitted April 15, 1901.-Decided April 29, 1901.

Under the Bankrupt Act of 1898, the District Court of the United States in which proceedings in bankruptcy are pending has no jurisdiction, unless by consent of the defendants, of a bill in equity by the trustee in bankruptcy against persons to whom the bankrupt, before the proceedings in bankruptcy, made a sale and conveyance of property which the plaintiff seeks to set aside as fraudulent as against creditors, but which the defendants assert to have been made in good faith and to have vested title in them.

THE case is stated in the opinion of the court.

Mr. Clement Manly for appellants.

Mr. Louis M. Swink and Mr. Lindsay Patterson for ap pellee.

MR. JUSTICE GRAY delivered the opinion of the court.

On October 12, 1899, certain creditors of W. H. Gilbert filed against him a petition in bankruptcy in the District Court of the United States for the Western District of North Carolina, alleging that he was insolvent, and on October 10, 1899, transferred his stock of goods, with intent to hinder, delay and defraud his creditors, by a bill of sale to John D. Wall and Thomas W. Huske.

On October 14, 1899, the District Court issued an order of notice to Wall and Huske to show cause on October 24, 1899, why they should not be perpetually enjoined from disposing of the goods alleged to have been purchased by them from Gilbert, and meanwhile restraining them from disposing of it. At the time of the issue of that order, Wall and Huske had those goods in their possession.