lieve against the burden of any technical, formal provision, which will make prolixity, confusion, and needless expense in the particular case, but which, in the great majority of cases, should not be in any way changed.

Under the statute and decisions the following rules may be stated: The conformity act (Rev. St. § 914 [U. S. Comp. St. 1901, p. 684]) provides that in cases at law the practice, pleadings, and forms shall conform, as near as may be, to the practice, pleadings, and forms in like causes in the state courts. (1) The practice must conform, except as to matters covered by Congressional legislation, matters of jurisdiction, substituted service of process, charging juries, other matters relating to the personal administration of the judge, joinder of legal and equitable remedies, actions in rem, etc. (2) The federal courts may, by standing rule, change subordinate provisions which they deem unsuited to their procedure. (3) In their discretion they may reject collateral or subordinate provisions of the state practice, pleadings, or forms, which tend to obstruct the administration of justice. This they may do in a particular case, presenting unusual features, without making any standing rule. They cannot reject the local system as a whole, or in any substantial part; but they may dispense with matters of technical form, not affecting substantial rights or operating to the prejudice of a party. They cannot change the local system designed to produce an issue of law or fact (Railroad v. Horst, 93 U. S. 291, 23 L. Ed. 898); but they are not bound to slavishly follow subordinate technical requirements of form, when justice will be subserved by departing from them.

The order of September 25, 1908, falls within the third class. It affects no substantial right, and no one is prejudiced by it. It relates to form only. Under that order a general replication to all the special pleas, denominated a "replication," concluding with a verification, and signed by the plaintiff's attorney, has been filed, for the purpose of stating once for all the facts on which the plaintiff relies, and which, by reference, is incorporated as a whole into 17 separate special replications, setting up estoppel, ratification, splitting causes of action, res judicata, etc. This general statement or replication is not in technical form. It does not use the approved verbiage of the preamble or conclusion always found in a common-law replication; but it is substantially a replication of all the facts claimed by plaintiff to be material to answer the pleas. It is true that it does contain some legal conclusions, and some argument; but it is not difficult to separate these from the facts pleaded. In substance and effect it is a sufficient replication, though not so in form.

The chief objection raised by defendant's attorney is that the form of pleading allowed by the order casts upon him the onerous burden. of picking out from the long statement of facts contained in the general replication the issuable facts, and then pleading a multitude of rejoinders, each of which, as he thinks, must be single, and not double. The trouble is that the case has a history, long and intricate, in its journey through the Patent Office, the chancery side, and the law side, and it was for that reason that the order was made, to prevent unneces168 F.-49

sary repetition and complication. Defendant's attorney may traverse, or confess and avoid, and he may plead double, if he desires to do so. The salient facts are not difficult or complex. Hein is alleged to have covenanted to license Westinghouse in the use of certain inventions,, and that the latter covenanted to pay a certain sum therefor. This allegation has been traversed by the plea of non est factum, and issue joined by the similiter. Assuming that these covenants were made, the main questions are whether Hein discovered the inventions sold and thus had title to them, whether he obtained patents for them, whether he fortified his title by acquiring the interfering invention, so that Westinghouse actually got all he bargained for, and whether Hein obtained the patents within a reasonable time. It will be easy enough to develop issues on these questions, or others deemed material, by rejoinders denying or avoiding the special replications, and such allegations of fact, not of law or argument, as support them.

Pleadings not in the form of those required by the state practice, but which are substantially a compliance with it, are good. Lewis v. Gould, 13 Blatchf. 216, Fed. Cas. No. 8,324. In Erskine v. Hohnbach, 14 Wall. 613, 20 L. Ed. 745, common-law forms were used in a code state, and the Supreme Court applied common-law tests of sufficiency, paying no attention to the requirements of the local practice.

A memorandum is filed herewith, directing the entry of an order sustaining some of the demurrers and overruling the rest.

BALTIMORE & O. R. CO. v. BERKELEY SPRINGS & P. R. CO.

(Circuit Court, N. D. West Virginia. April 1, 1909.)

1. MORTGAGES (§ 27*)-EQUITABLE MORTGAGES-AGREEMENT TO MORTGAGE. An agreement in writing to give a mortgage or a mortgage defectively executed, or an imperfect attempt to create a mortgage, or to appropriate specific property to the discharge of a particular debt, will create an equitable mortgage, or a specific lien on the property intended to be mortgaged. [Ed. Note. For other cases, see Mortgages, Cent. Dig. §§ 43, 44; Dec. Dig. § 27.*

Equitable mortgages-agreement to give a mortgage, see note to Bridgeport Electric & Ice Co. v. Meader, 18 C. C. A. 458.]

2. RAILROADS (§ 110*) - CONSTRUCTION CONTRACT-MORTGAGES-AGREEMENT TO EXECUTE-PERFORMANCE-LACHES.

Where an original recorded agreement for the construction of a railroad provided for an issue of bonds to cover the construction expenditure made by complainant in excess of $30,000, the bonds to mature after 20 years from January 1, 1888, and plaintiff brought suit to compel the issuance of the bonds and the execution of the mortgage several months before such 20-year period expired, plaintiff was not chargeable with laches.

[Ed. Note. For other cases, see Railroads, Cent. Dig. § 341; Dec. Dig. § 110*]

8. ACCOUNT STATED (§ 6*)-REQUISITES-DEFINITION.

It is not necessary that an acknowledgment of the correctness of an account, in order to constitute an account stated, should be either in writing or made in express words, since an "account stated" is an account rendered by one to another showing a balance due and an acknowledgment of For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

such indebtedness by the debtor either expressly or by failure to deny the account within a reasonable time.

[Ed. Note. For other cases, see Account Stated, Cent. Dig. §§ 30-32; Dec. Dig. § 6.*

For other definitions, see Words and Phrases, vol. 1, pp. 93-98; vol. 8, p. 7561.]

4. ACCOUNT Stated (§ 6*)—EVIDENCE.

Complainant, having completed a railroad for defendant, submitted its construction account to defendant's stockholders at a regular meeting, where it was referred to its board of directors, who returned it for a more itemized statement. This statement was subsequently furnished, after which defendant included the balance as shown thereon in several sworn reports of the cost of its road to the Interstate Commerce Commission, and at a stockholders' meeting held some years after the account was rendered, directed that a county which was a large holder of defendant's stock should be permitted to examine plaintiff's account rendered, if it desired. Nothing more was done for 10 years, nor until plaintiff's original papers, vouchers, and books were destroyed by fire, after which defendant took certain steps to discredit the account. Held, that the account as rendered was an account stated.

[Ed. Note. For other cases, see Account Stated, Cent. Dig. §§ 30-32; Dec. Dig. § 6.*]

5. RAILROADS (§ 165*)-MORTGAGES-AUTHORIZATION-VOTE OF STOCKHOLDERSSTATUTES.

Code W. Va. 1899, c. 54, § 50, par. 11 (Code 1906, § 2343), requiring the assent of two-thirds of the stockholders of a railroad before a mortgage can be executed by it, applies only to mortgages given to complete, improve, or operate a road already in existence, and not to a contract to build a road originally, providing terms of payment by bond and mortgage.

[Ed. Note. For other cases, see Railroads, Cent. Dig. § 513; Dec. Dig. § 165.*]

6. RAILROADS (§ 165*)-CONSTRUCTION-MORTGAGE BONDS-STOCKHOLDERS-ESTOPPEL.

Where stockholders of a railroad company permitted a contract for the construction of the road, requiring the issuance of a bond and mortgage for construction expense to be made and performed by plaintiff, and thereafter received the benefits derived therefrom for nearly 20 years, they were estopped to assert that the mortgage provision was invalid because the assent of two-thirds of the stock required by Code W. Va. 1899, c. 54, § 50, par. 11 (Code 1906, § 2343), had not been given.

[Ed. Note. For other cases, see Railroads, Cent. Dig. § 513; Dec. Dig. § 165.*]

In Equity.

Faulkner, Walker & Woods and H. R. Preston, for plaintiff. J. Hammond Siler and Alex. R. Hagner, for defendant. DAYTON, District Judge. On November 4, 1887, the plaintiff and defendant companies entered into an agreement which was duly executed and recorded in the clerk's office of the county court of Morgan county, W. Va., whereby the plaintiff company agreed to construct the railroad of the defendant company from Hancock station, on the Baltimore & Ohio, to Berkeley Springs. The defendant company was to place in the hands of the plaintiff company $30,000 on or before the 1st day of January next following for the purpose of such construction, and the plaintiff company was to furnish the additional money for such construction, which was to be completed on or before

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

the 1st day of July next following. For all sums over and above the $30,000 so furnished by the plaintiff company, the defendant company agreed to execute its bonds in the sum of $1,000 each, bearing interest at the rate of 6 per cent. per annum, payable semiannually, and to mature 20 years after January 1, 1888. The bonds were to be secured by the defendant company by a first mortgage upon its railroad. It was further agreed that, after the completion of the construction, the plaintiff should operate, for the defendant company, the line of railroad, furnishing the requisite equipment, and making annual statements of the cost of such operation, allowing reasonable compensation for the use of equipment, and that any deficiency should constitute a debt against the defendant company. It was further agreed that a formal contract of operation, to run 10 years from completion of the railroad, should be executed by the parties after the $30,000 had been paid over by the defendant to the plaintiff company. By a supplemental agreement under date of December 24, 1887, duly executed and recorded, the time of payment of the $30,000 was extended so that $10,000 thereof was to be paid on or before March 1, 1888, and the remainder within 30 days thereafter.

On March 27, 1907, the plaintiff company filed its bill herein, setting forth the contract and supplemental contract, and alleging: That in pursuance thereof it did construct the railroad from Hancock station to Berkeley Springs in all respects as required, and kept proper and accurate accounts of the money expended in the construction, and, when the same was completed, rendered a stated account to the defendant for the sums expended by it over and above the $30,000, which sums aggregated $56,911.85; that the defendant accepted the account. as accurate, has never denied the correctness thereof, but, at various times and in various ways, has admitted that the said sum of $56,911.85 was due by it to the plaintiff company on account of such construction work. It is then alleged that no part of said sum or its interest has ever been paid, and that the plaintiff company is entitled to have it secured by the issue of bonds and the execution of the first mortgage provided for by the agreement, and that the defendant company has received offers and contemplates a sale of its road. The prayer of the bill is that the contract may be specifically enforced, that the bonds and mortgage be required to be executed, and, until this be done, that the defendant company be enjoined and restrained from in any manner disposing of or incumbering the railroad. Upon presentation of this bill, the temporary injunction prayed for was awarded, and subsequently, on the 15th day of October, 1907, a demurrer to the bill and a motion to dissolve the injunction were both overruled.

The defense set up by the defendant company in its answer is based upon a denial: (a) That it ever agreed to pay back any sum of money in excess of the $30,000 to the plaintiff company, but admitting that it did agree to issue its bonds and mortgage to secure such sum; (b) that the supplemental contract was ever recorded; (c) that the plaintiff ever rendered complete and accurate accounts of the cost of construction or of the expenditure of the $30,000, that the plaintiff ever spent any such sum as $56,911.85 demanded by it, that respondent

company ever accepted said sum as being the accurate and correct amount expended by plaintiff in construction, or ever admitted said sum to be due from it, or ever carried said sum upon its books as an indebtedness from it to the plaintiff, or ever made any reports required by law in which such indebtedness was recognized by it; (d) that complainant performed the agreement, is entitled to specific performance, or that the defendant was ever called upon to execute the bonds and mortgage; (e) that it has any offers or contemplates any sale of its railroad; and (f) charges that plaintiff company has been guilty of laches in demanding its alleged right to specific performance, by reason of which it should be held barred of any such right.

The well-known maxim that equity looks on that as done which ought to be done has long since established the principle that:

"An agreement in writing to give a mortgage, or a mortgage defectively executed, or an imperfect attempt to create a mortgage, or to appropriate specific property to the discharge of a particular debt, will create a mortgage in equity, or a specific lien on the property intended to be mortgaged." Daggett v. Rankin, 31 Cal. 321, 326; Fetter on Equity, 26.

The only limitation upon this principle is defined in section 2 of chapter 74 of the Code of this state (Code 1906, § 3100) as interpreted in Feely v. Bryan, 55 W. Va. 586, 47 S. E. 307, that such agreement must be at the time recorded so as not to injure purchasers or creditors without notice. The original agreement, it is admitted, was recorded. It provided for an issue of bonds that should only mature after a lapse of 20 years from January 1, 1888. The equitable lien created by it did not expire therefore until 1908, several months after this suit was brought, and there can therefore no question of bar by laches as against the plaintiff arise in this case. If the defendant company is indebted to the plaintiff company for money expended in the construction of its six miles of road over and above the $30,000 furnished by the defendant for this purpose, then the right of the plaintiff to recover for such sums so expended by it is inevitable, and such indebtedness, if any exists, being now conceded to be due under the terms of the agreement, the character of such recovery will be a decree for such sum and its interest, to be enforced by a sale of the defendant company's railroad, under the equitable lien existing by virtue of the contract to secure it.

The only question therefore is purely one of fact whether or not the demand of the plaintiff company for $56,911.85, with its accumulated interest, is just and true, and, if not, what sum, if any, is due it on account of such construction work? Without consuming time in a needless discussion of the evidence, it is sufficient to say that these facts are clear and to a considerable extent are established by the minute records of the stockholders' and directors' meetings of the defendant itself. After completion of the construction of this railroad, the plaintiff company submitted to the president of the defendant company a statement of this indebtedness for construction, as claimed by plaintiff, which was by him, on January 4, 1890, laid before the stockholders, and by that body referred to the board of directors, which, two days after, referred it back to the plaintiff company, for a more itemized statement. On the 24th day of January,