Statement of Facts.

gate amount of principal and interest, as the commissions and fees allowed to the clerk. R. S. § 828. Thereupon, on the next day, the clerk, under his hand and seal of office, issued a certificate of redemption for the lots so levied on.

On November 15th, 1880-on which day, according to the rule established by the Supreme Court of Illinois, the additional three months given to judgment of creditors expired, Robert D. Fowler, assignee of Monroe's judgment and of his interest in the levy and redemption that had been made, deposited with the clerk of the federal court the further sum of $62,037.01 for the redemption of certain others of the lots purchased by the company. That sum covered the latter's bid for those lots, with interest at eight per cent. A certificate of redemption covering such lots was issued on the day of Fowler's deposit. The marshal, on November 16th, 1880, advertised for sale, on the 8th day of December, 1880, all the lots sought to be redeemed under the Monroe judgment and execution. The record does not show the indorsement of any additional levy beyond that made November 9th, 1880. The sale occurred as advertised, Fowler becoming the purchaser of all the lots embraced in the two certificates of November 10th and November 15th, at a sum equal to the amount of the sums deposited, with interest at the rate of eight per cent. per annum from the date of such deposits. No money was paid to the marshal, and none to any other officer, except that deposited with the clerk, who, as required by the act of Congress and the rules in question, placed it in the registry of the court.

The property so sold was, as was claimed by appellee, lawfully redeemed within the time and in the mode prescribed in the rules established by the court below for the redemption of real estate from sales under decrees.

But the contention of the insurance company was that those rules did not conform to the statutes of Illinois; that the latter, equally, as to the time within which, the persons by whom, and the mode in which, redemption might be effected, constituted a rule of property, obligatory as well upon the federal court as upon the courts of the State; and as the property sold was not redeemed in the particular mode prescribed by the local stat

Argument for the Appellant.

utes, there was no effectual redemption, and, consequently, the company became entitled to a deed at the expiration of the period fixed for the exercise of the right of redemption.

The circuit court was of opinion, and so adjudged, that the rights of the parties as to the mode of redemption were to be determined by its rules; and since there had been a substantial compliance with them, the application by the company for a deed was overruled. From the final order denying that application this appeal was prosecuted.

Mr. E. S. Isham and Mr. C. Beckwith for appellant. I. The parties to the record are the mortgagee and purchaser at a sale under foreclosure on one side, and on the other a purchaser of a judgment by confession for the purpose of redemption. Such purchaser has no right of redemption except as it is created by statute. Phillips v. Demoss, 14 Ill. 410. He has no claim to have the statutory terms of redemption enlarged by a court of equity. Apart from statute, no right exists to redeem from a mortgage sale. Fisher v. Eslaman, 68 Ill. 78. In terms it must be conceded that the federal rule is inconsistent with the statute, and a compliance with its terms is not a compliance with the terms of the statute. It is, therefore, said that the differences are not of substance, but of form, which a court of equity should disregard. We concede that when a general right is given by a special statute of a State, the federal courts will give effect to it, and in matters of mere form pursue their own. Railway Company v. Whitton, 13 Wall. 270. But this cannot be done where compliance with the statutory preliminary methods is a condition of the enjoyment of the right. And the courts of Illinois have held that such right of redemption is statutory and must be exercised in pursuance of the statute. Littler v. People, 43 Ill. 188; Stone v. Gardner, 20 Ill. 304; Durley v. Davis, 69 Ill. 133; Clingman v. Hopkie, 78 Ill. 152; Brine v. Insurance Company, 96 U. S. 627. II. The act reducing the rate of interest to be paid on redemption was passed after this mortgage was made, and after the bill of foreclosure was filed. To apply it in this case is, in fact, to impair the obligation of a contract, and brings this transaction within the line of

Argument for Fowler.

cases which decide that laws which subsist at the time of making a contract enter into and form part of it as if they were expressly referred to or incorporated in its terms. Von Hoff

man v. Quincy, 4 Wall. 535; Bronson v. Kinzie, 1 How. 311; Edwards v. Kearzey, 96 U. S. 595; McCracken v. Hayward, 2 How. 608; Planters' Bank v. Sharp, 6 How. 301; Green v. Biddle, 8 Wheat. 1.

Mr. George F. Edmunds (Mr. William R. Page was with him) for Fowler.

I. A. An act of Congress providing for any method of disposing of property drawn into adjudication in the national courts is valid, however different that method may be from the methods provided by State law. Brine v. Insurance Company, 96 U. S. 627; Allis v. Insurance Company, 97 U. S. 144. B. The rules adopted by the Circuit Court in the Northern District of Illinois are authorized by and are in conformity with the laws of the United States (Revised Statutes, sections 917 and 918), and they are in perfect harmony with section 995 Revised Statutes, requiring all moneys paid to officers of the court to be placed in some public depository. They, therefore, have the same force and effect as if they had been embodied in an act of Congress. C. The State law speaks only to the officers of the State. It cannot speak to any others. The national law speaks to the courts and officers of the United States, and as to them its voice is sovereign. D. It is admitted that Congress cannot establish a rule for the transfer of property in a State as a rule of private conduct. But it is submitted with entire confidence that Congress has power, in the establishment and regulation of the judiciary of the United States, to provide for the method and fact of the disposition of any kind of property concerning which the United States courts have (as in this case) a controversy and suit properly depending before them. E. In cases like this the court has, pursuant to the law of Congress, prescribed methods of practice and administration merely, to effectuate with the greatest possible safety, as between its own suitors, the very substance of the rights that the law of the State gives when cases arise in her courts. It is only a varia

Opinion of the Court.

tion of formal means to the very same end. II. A. At the time the mortgage was given, the law of the State allowed a contract rate of interest up to ten per cent. The contract rate on the debt was nine per cent. The State law allowed six per cent. on judgments and decrees. It provided for sales on foreclosure decrees at public auction to the highest bidder. It provided that redemptions from such sales by the debtor or his execution creditor might be made on paying the sum bid and paid by the purchaser, with ten per cent. interest. Before the decree of foreclosure and sale the State changed its law of interest on such redemptions, and required the payment of only eight per cent. interest. B. There is no conceivable legal or equitable privity of contract between the purchaser at such a sale and the payee or holder of the obligation secured by the mortgage. The purchaser as purchaser is an entire stranger to the contract of debt, and he would hold the land sold even if the decree should be reversed, and the whole debt claimed be held fraudulent. It follows, therefore, that a change in the law of the interest payable to the purchaser, cannot impair the obligation of the contract of debt between the original parties. And, as it was enacted before the purchaser acquired any interest, it cannot impair the obligation of any contract of his. See Wood v. Kennedy, 19 Ind. 68; Bank v. Dudley, 2 Pet. 492. III. If it be possible to suppose there is any doubt on the foregoing question, the redeeming creditor paid the purchaser his money with eight per cent. interest, in obedience to the express command of the sovereign power of the State, in good faith, meaning to pay all that was due. He then, if in error, acted under a power apparently valid and under a mistake as to its validity, and while the case and the estate were still in court, he tendered the other two per cent. In such a case, it is confidently insisted that the mistake (if there were one), whether it were of law or fact, or both, may be relieved against in the court of equity having judicial domain of the whole subject.

MR. JUSTICE HARLAN delivered the opinion of the court. After reciting the facts as above set forth, he continued:

In Brine v. Insurance Company, 96 U. S. 627, it is decided—

Opinion of the Court.

reversing the practice which had obtained for many years in the Circuit Court of the United States sitting in equity in Illinoisthat the State law giving to a mortgagor of real estate the privilege, within twelve months after a decree of foreclosure, and to his judgment creditors within three months thereafter, of redeeming the premises, is a substantial right, and constitutes a rule of property to which the circuit court must conform.

In anticipation, however, of the difficulties which might attend exact conformity, in every case, to the local statutes, the court, in that case, said:

"It is not necessary, as has been repeatedly said in this court, that the form or mode of securing a right like this should follow precisely that prescribed by the statute. If the right is substantially preserved or secured, it may be done by such suitable methods as the flexibility of chancery proceedings will enable the court to adopt, and which are most in conformity with the practice of the court."

The decision in that case doubtless suggested to the circuit court the necessity of adopting definite rules in relation to redemptions from sales under its own decrees. Hence the rules were established which form part of the statement of facts. It will have been observed that these rules differ from the provisions of the local statutes in this, that by the former the redemption money in all cases is required to be paid to the holder of the certificate, or to the clerk of the court, whereas by the latter, in case of redemption by a judgment creditor, the money must be paid to the officer having the execution. In no case do the rules of the federal court provide for payment either to the master or other officer who conducted the decretal sale, or to the officer holding the execution of the judgment creditor.

However this difference may be regarded in the courts of Illinois when administering the statutes by which they are created, and their jurisdiction defined and limited-Littler v. The People, 43 Ill. 188; Stone v. Gardner, 20 Ib. 304; Durley v. Davis, 69 Ib. 133-we entertain no doubt of the power of the federal court to adopt its own modes or methods