Such statutes are in recognition and enforcement of the public policy of the state to secure to the family the beneficent protection of the homestead law. The courts are quite in harmony under similar statutes in declaring that all sales or contracts looking to the alienation of the homestead by the husband without the co-operating assent of the wife are null and void. Newton v. Newton, 162 Mo. 173-183, 61 S. W. 881. It would be quite absurd to say that the statute did not apply as well to a contract of sale as to an alienation by deed, as the contract is made the basis for the claim to a specific performance on which the court may compel the execution of the deed or make its alternative decree. Under a like declared policy of the state the Supreme Court of Kansas, in Thimes v. Stumpff, 33 Kan. 53, 5 Pac. 431, said:

"The Constitution of the state, as well as the statute relating to exemptions, provides that the homestead shall not be alienated without the joint consent of the husband and wife, when that relation exists. In interpreting and applying the above provisions it has been uniformly and consistently ruled by this court that, so long as the premises are impressed with the homestead character, no lease, mortgage, deed, or other contract, intended to alienate the homestead or interfere with its use and occupancy as a homestead, made and executed alone by the husband and without the consent of the wife, is valid or effectual for any purpose whatsoever. If a party cannot convey the homestead by mortgage or deed without the consent of his wife, he certainly cannot make a contract agreeing to convey that will be valid or binding without her concurrence."

* *

The Missouri homestead law is well understood to have been fashioned after that of the state of Vermont, where it is held that a mortgage contract made by the husband alone on the homestead was void ab initio for all purposes when made, because the wife did not join in its execution. Martin v. Harrington, 50 Atl. 1074, 73 Vt. 193, 87 Am. St. Rep. 704. That the rule applies as well to a contract to convey as to a deed of alienation is generally recognized. Barton v. Drake, 21 Minn. 299; Law v. Butler, 47 N. W. 53, 54, 44 Minn. 482, 9 L. R. A. $56. The answer made to this situation by complainant's counsel is that, as there is no homestead interest in the Winnifred Court property, the contract is susceptible of specific performance as to that, and that, as to the homestead lot, a court of equity can ascertain the value thereof and decree that as damages to the complainant. The court makes no question of the general rule in the proceeding for specific performance of contracts for the sale of several parcels of land that where as to one of the parcels, separable from the others, the vendor is unable to specifically perform, as where he has no title at the time when the decree is reached, if the vendee be willing to accept that part to which the vendor has an acceptable title, the chancellor may compel performance as to that, and ascertain the amount and award damages as to the residue. But, does the rule obtain in this case where the contract as to the one-fourth part in value of the premises is absolutely void, being in contravention of the public policy of the state? When the text-writers and the courts speak of the right to commute in damages as to a part of the contract not susceptible of specific performance, they have in mind a contract of a party, sui juris, which he had a right to make, not forbidden by the law, and which he could perform

153 FEDERAL REPORTER.

if he had the title, or where he has by some act disqualified himself from performance. The ascertainment and awarding of damages in lieu of the specific thing in equity presupposes a contract valid, and one enforceable in an action at law. Whether the suit be in equity for specific performance with the incidental jurisdiction to proceed to the complete adjustment of the subject-matter of the controversy by awarding damages as to that part of the property embraced in the contract not capable of being conveyed for want of title, or the like, or whether it be an action at law for damages consequent upon failure to entirely perform, the underlying basis of the right to relief is the existence of a valid contract. It is inconceivable to the judicial mind how a contract void, especially when it contravenes the public policy of the state where made, can ever form the basis of a suit recognizable either in equity or law.

While there may be found some utterances by courts, based upon peculiarities of the local statute, where an action for damages may lie in such cases, they are so opposed to correct principles and the weight of authority as not to commend them to my approval. The following authorities, in effect, hold that a contract growing out of the husband's attempt to alienate the homestead without the wife's concurrence cannot form the basis of relief for damages: Thimes v. Stumpff, supra; Hodges v. Farnham, 49 Kan. 777, 31 Pac. 606; Webster v. Warner et al., 78 N. W. 552, 119 Mich. 461; Weitzner v. Thingstad, 55 Minn. 244, 56 N. W. 817; Cowgell v. Warrington, 66 Iowa, 666, 24 N. W. 266; Barnett v. Mendenhall, 42 Iowa, 296; Wap. Homestead, 384394, and note 6; 15 Amer. & Eng. Enc. of Law (2d Ed.) 670; Miller v. Gray, 68 S. W. 517, 29 Tex. Civ. App. 183; Meek v. Lange, 91 N. W., loc. cit. 696, 65 Neb. 783.

In Curry v. Whitmore, 110 Mo. App. 204, 84 S. W. 1131, the writer of the opinion, in a single sentence, gives expression to the view that damages might be awarded on a contract to convey the homestead; but as the assertion is not buttressed by other authority or enforced by any plausible argument, the utterance, not coming from the highest court of the state, while it may be entitled to respectful consideration, does not command obedience. The Supreme Court of Michigan, in Phillips v. Stauch, 20 Mich. 369, under a homestead law with provisions similar to the Missouri statute, held that alone to premises which included the homestead would not only have deed by the husband been voidable merely as to that (i. e., as to the homestead interest), but would have been wholly void; and that a contract by the husband to make such a conveyance intended to have a direct and present operation will not be specifically enforced. The court then proceeding to make a practical application of the law to the case in hand said:

"The farm in question in this case contains a little over 92 acres, and is valued by complainant at a trifle over $6,340, and by the defendant at about $4,600. To give relief on the principle of compensation as contended for. would exempt from the conveyance the homestead right of the value of $1,500, and embracing the dwelling house, and would leave the balance of the premises subject to the contingent right of dower of defendant's wife. This would necessarily exclude from the conveyance a very material part of the subjectmatter of the contract, and almost certainly result in great pecuniary injury to all parties interested. The adjustment of the compensation would be quite

difficult in a case like this, and especially that part of it founded on the con tingent dower right. That is quite different from the case where the right is consummate. The interest of defendant's wife would also be exposed to some detriment by partial alienation. These considerations taken together inspire the opinion that the case is not one in which the court ought to compel a conreyance with compensation."

This ruling was followed in Hall v. Loomis, 63 Mich. 709, 30 N. W. 374, aptly expressed in the syllabus as follows:

"A contract for the sale of land occupied as a homestead, not executed by the wife, is a nullity, so far as the homestead is concerned, and the fact that the value of the property exceeded the statutory limit will not render the contract enforceable as to the residue."

There is another decision by the Supreme Court of Michigan (Engle v. White, 104 Mich. 15, 62 N. W. 154), to which attention may be directed, but which is quite distinguishable from the case at bar. In that case, a father owned and occupied a farm consisting of three subdivisions of 40 acres each, and, in addition thereto, he owned 69 acres of adjoining land. Becoming incapacitated to operate the farm, to induce his son to return to the farm, he entered into a written agreement with him, which provided that the father was to give to the son 69 acres, and the latter was to work the farm on shares, keep it in repair and care for his father and mother, with the promise that, at the father's death, the son was to have a deed to the farm. The son moved upon the 69 acres, and for 18 years, during which time the mother died, and the father married and again became a widower, fully performed the terms of the contract. The buildings occupied as a homestead were situated upon one of the 40-acre subdivisions, which was treated as his homestead. Disagreements arising between the father and son, the father sought to eject him from possession of the 69 acres, whereupon the son filed against him a bill in equity for specific performance, which only asked the court to decree specific performance "in so far as it can now be done." Inasmuch as no question of dower interest was involved or to be considered, and no right or interest was sought to be enforced as to the 40-acre tract embracing the homestead estate, and the other tracts were entirely disconnected therewith, it was held that decree for specific performance as to the independent tracts might go, the complainant presumably accepting the same in full satisfaction of his rights.

But in the case at bar, not only are the marital rights of the wife of the defendant involved, but the bill includes the homestead in its prayer for relief; and, on the hearing at bar, the court inquired of counsel for complainant if he was willing to take decree of specific performance for the Winnifred Court property alone, and he promptly answered "no." This bill cannot, for the reasons above given, be sustained in its entirety. Beyond this, on the whole merits the inclination of my mind is that the exercise of a sound discretion on the part of a chancellor might well warrant a refusal to specifically enforce the contract. In view, however, of the conclusion reached on the first proposition involved, further discussion will not be pursued.

It results that the bill of complaint must be dismissed.

In re BELFAST MESH UNDERWEAR CO.

(District Court, D. Connecticut. April 11, 1907.)

No. 1,714.

BANKRUPTCY-ACTS OF BANKRUPTCY-APPOINTMENT OF RECEIVER.

The appointment of a receiver for a corporation under Pub. Acts Conn. 1903, p. 158, c. 194, § 26, which authorizes proceedings for the dissolution of a corporation and the appointment of a receiver therein on various stated grounds, which do not include insolvency by name, or for other “good and sufficient reason," may constitute an act of bankruptcy under Bankr. Act July 1, 1898, c. 541, § 3a (4) 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422], as amended by Act Feb. 5, 1903, c. 487, § 2, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 683], where the record and findings in the state court show that the appointment was in fact, although not in name, made "because of insolvency."

[Ed. Note.-For cases in point, see Cent. Dig. vol. 6, Bankruptcy, § 80.]

In Bankruptcy. On report of special master.

On September 28, 1906, a petition was filed in the District Court in proper form, asking that respondent corporation be adjudicated a bankrupt. The pleadings therein raised two distinct issues. First. Was said respondent corporation insolvent at the time of the filing of the petition and at the time when it is alleged that it committed an act of bankruptcy? Second. Did the respondent corporation commit an act of bankruptcy, in that on or about the 4th day of August, 1906, a receiver of said corporation was appointed because of its insolvency, which receiver was put in charge of its property under the laws of the state of Connecticut? The matter was referred to Frank B. Munn as a special master to take the evidence and report his findings upon said issues to the court. His report finds upon the first issue that the respondent was insolvent as alleged, and upon the second issue that the respondent committed the act of bankruptcy as alleged. The opinion of the court which follows is based upon the theory that the finding upon the second issue is substantially based upon the record of the state court which was put in evidence before the master, and that the finding of insolvency under the first issue is merely incidental and explanatory.

Charles Phelps, for petitioners.

L. J. Nickerson, for respondents.

PLATT, District Judge (after stating the facts). The only decision in this circuit which offers aid in reaching a conclusion upon the matter under consideration is In re Spalding, 139 Fed. 245, 71 C. C. A. 210. The law of New York under which, in that case, a receiver was appointed to take charge of Spalding's property, did not cover insolvency as a jurisdictional fact. The creditors' petition therein was granted upon other distinct grounds, and insolvency was only brought in incidentally, and could not influence, much less control, the judgment. In New York a corporation could have been proceeded against because of insolvency, but an individual could not.

Under the laws of Connecticut there is no provision for alleging insolvency eo nomine as the cause for obtaining a receivership over the property and affairs of a corporation. Section 26, c. 194, p. 158, Pub. Acts 1903, contains the local law pertaining to receiverships of corporations:

"Sec. 26. Receivership of Corporation. Whenever any corporation having a capital stock has willfully violated its charter or exceeded its powers, or when

ever there has been any fraud, collusion, or gross mismanagement in the conduct or control of such corporation, or whenever its assets are in danger of waste through attachment, litigation, or otherwise, or such corporation has abandoned its business and has neglected to wind up its affairs and to distribute its assets within a reasonable time, or whenever its stockholders or directors have voted to discontinue its business, or whenever any good and sufficient reason exists for the dissolution of such corporation, any stockholder or stockholders owning not less than one-tenth of its capital stock or, in the case of a corporation not having capital stock, any member of such corporation may apply to the superior court in the county wherein such corporation is located, for the dissolution of such corporation and the appointment of a receiver to wind up its affairs. Such court may, if it finds that sufficient cause exists, appoint one or more receivers to wind up the business of such corporation, and may at any time, for sufficient cause shown, make a decree dissolving such corporation and terminating its corporate existence. Whenever such decree of dissolution is passed, it shall be the duty of the receiver or receivers to cause a certified copy thereof to be filed in the office of the Secretary of the State, and said Secretary shall thereupon record such certified copy in a book kept by him for that purpose. Such court, in every case in which it appoints a receiver, shall by its order limit a time, which shall not be less than four months from the date of such order within which all claims against such corporation shall be presented, and all claims not presented within such time shall be forever barred. When such receivership shall be terminated by the court. the receiver or receivers shall file with the Secretary of the State a certificate similar to the final certificate required of directors in section 34 of this act, and said Secretary shall thereupon record such certificate in a book kept by him for that purpose."

An inspection of section 26 shows that, if the facts of this case do not warrant an adjudication, the beneficent purposes of the bankrupt law can never be extended to a Connecticut corporation, no matter how hopelessly insolvent it may be, if the stockholders owning not less than one-tenth of the capital stock prefer to avoid the embrace of the federal arms. It is true that, upon a proper allegation, the state court might say that insolvency was a "good and sufficient reason," but such an allegation would be subject to the whim or caprice of the stockholders. The practical situation is precisely as above outlined.

The essential part of the record in the state court is as follows: "Paragraph 3 of the complaint is as follows: 'Said Belfast Mesh Underwear Company, Incorporated, is indebted to various persons and corporations, and said indebtedness is long past due. A large quantity of its finished product in the city of New York has been attached by one of its creditors, and other ereditors are threatening to attach its property and machinery, unless their elaims are paid immediately and the assets of said Belfast Mesh Underwear Company, the defendant, are in danger of waste through said attachments, and threatened attachments and litigation growing out of the same.'

"Paragraph 4: The best interests of the creditors and stockholders of the defendant corporation require dissolution of the Belfast Mesh Underwear Company and the appointment of a receiver forthwith to wind up its affairs.'

"Under these allegations the plaintiff claimed: (1) The dissolution of the corporation. (2) Appointment of a receiver of said corporation to hold the business and all of the estate and property belonging to said corporation, and with power to dispose of, manage, and apply the same to, and collect all the debts for. the benefit of all parties entitled thereto, and to account for the same to this court as by law provided.''

And asking such further decree as shall be found necessary by the court.

153 F.-15