lic use in the exercise of the government's sovereign authority over Indian tribes.

[Ed. Note.-For other cases, see Waters and Water Courses, Cent. Dig. § 2; Dec. Dig. § 7.*]

In Equity. Bill by the United States against Samuel W. Morrison and another to restrain the diversion of water from a government irrigation project to irrigate land claimed by Morrison. Writ granted.

HALLETT, District Judge. This is a bill by the general government against Samuel W. Morrison and Ignacio Mesa Ditch & Reservoir Company to restrain the diversion of water from a ditch constructed by the government for irrigating lands in the counties of Montezuma, La Plata, and Archuleta, in this state. The record discloses that the lands in question were part of an Indian reservation maintained for many years in that locality. June 15, 1880, Congress passed an act to ratify a treaty with the Ute Indians, who were then upon the reservation, and to award the lands in severalty among the Indians. Directions for allotting lands in severalty among the Indians. were given, and it was declared that the lands so granted should not be subject to alienation for a term of years. Provision was also made for improving the lands so granted in order to make them habitable. Act June 15, 1880, c. 223, 21 Stat. at Large, 199. Pursuant to this authority the ditch in question was built. Obviously the purpose of Congress was to induce the Indians to abandon nomadic life and to become in some measure civilized and self-supporting.

[1] Respondent Morrison has filed an affidavit in which he shows. that he has taken up a tract of land within the limits of the reservation which was not awarded to the Indians, and that the ditch constructed by the general government affords the only means of irrigating it. Respondent's occupation of the lands was begun in the year 1899 under the Desert Land Law (Act March 3, 1877, c. 107, 19 Stat. 377 [U.. S. Comp. St. 1901, p. 1548]) and the Homestead Act (Act May 20, 1862, c. 75, 12 Stat. 392). His position in defense to the suit is not very well explained, but perhaps he means to say that the government, owning the ditch and also the lands which may be irrigated from it, should furnish water from the ditch to every one who may be able to apply it on government lands. Respondent states, however, that some of the Indians owning lands in severalty have given him the right to divert the water from the ditch. As already explained, the Indians. have no power of alienation, and therefore any gift or grant made by

them must be void.

[2] Respondent also alleges that the agent in charge of the Indians gave his consent, and that of the government, to the diversion of the water, and the agent has denied the charge under oath. However the fact may be on that point, it must be said that the government was not bound by anything said or done by the agent in its behalf.

[3] In a general view of the whole record, it is entirely clear that in building the ditch for the purpose of supplying water to the Indians. the general government exercised an important function conferred upon

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

it by law under acts of Congress. The government has had full authority to manage and control the Indians and to take all necessary steps for the welfare of those unfortunate people from the earliest times. Therefore the ditch and the diversion of water from the Rio Las Pinos was a public act done pursuant to law and for a public purpose.

Such acts are not subject to interruption from any source whatever. No citizen can interfere to prevent or annul anything done by the government pursuant to law in the management and control of the Indians. The acts of Congress and of the state Assembly relating to appropriation of water for irrigating lands were made for and are applicable only to cases arising between citizens. They have no application whatever to the case in which water is appropriated to a public use by the government in the exercise of its sovereign authority over the Indian tribes. This, however, is aside from the question in issue, because respondent has not in any way attempted to comply with local acts. He seems to have regarded the water in the ditch as publici juris, in the same way as if it was flowing in a natural channel and subject to appropriation by any one who might desire to use it.

The government is entitled to the writ it has asked, and it will be issued accordingly.

COMMERCIAL CITY BANK OF AMERICUS v. HALL.

(District Court, S. D. Georgia, W. D. March 18, 1913.)

PAYMENT (§ 39*)-APPLICATION OF PAYMENTS-SECUREd Debt-SalE OF MORTGAGED PROPERTY-PROCEEDS.

Civ. Code Ga. 1910, § 4316, provides that, when a payment is made to a creditor holding several demands, the debtor may direct its application; but, if he fails to do so, the creditor may appropriate it at his election, and, if neither exercises such privilege, the law will apply it in such manner as is reasonable and equitable, as to the parties and third persons, and that in general the oldest lien and the oldest item will be first paid. Held, that where a bankrupt, being indebted to a bank on an overdraft, and also on a note secured by a chattel mortgage, sold a portion of the mortgaged property at the instance of the bank and delivered the proceeds to it, the bank was bound to apply the deposit in payment of the mortgage debt.

[Ed. Note. For other cases, see Payment, Cent. Dig. 88 104-114; Dec. Dig. § 39.*]

In Bankruptcy. In the matter of bankruptcy proceedings of George C. Hall. Petition to review a referee's order sustaining a motion to expunge the claim of the Commercial City Bank of Americus. Affirmed.

John R. L. Smith, of Macon, Ga., for Commercial City Bank.

SPEER, District Judge. This is a contest between the Commercial City Bank of Americus and George C. Hall, a bankrupt. It has been passed upon by the referee and brought here by a petition for review. It appears from the evidence that the bank held a mortgage dated

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

January 11, 1909. This was given to secure the payment of a note made by the bankrupt for the sum of $1,000, and due on demand, “and all other notes or drafts which the grantor may execute to the grantee within 12 months succeeding this date to the amount of $1,000." The mortgage pledged the property following:

"One light chestnut sorrel horse, named Happy Bob, about five years old; one dark chestnut sorrel horse, named True Tucker, about six years old; one black horse, named Frank, about ten years old; one black mare mule, named Beck, about seven years old; one red mare mule, named Mary, about eight years old; one two-horse wagon and one one-horse wagon; one single lowwheeled rubber-tire buggy."

Of these assets thus mortgaged it seems that Happy Bob was of more value than True Tucker, and the rest of his Stable companions, not omitting one two-horse and one one-horse wagon and the lowwheeled rubber-tire buggy.

It appears from the evidence that the bank was aware of the superior value of Happy Bob, and demanded that he should be sold. The bankrupt testifies that the president of the bank told him that he must sell Happy Bob at some price and take up the mortgage on the 20th. Happy Bob brought $2,000. The bankrupt testifies that he carried this sum to the bank on the 22d, and instructed that it be applied on the mortgage. He also testified that he asked for his note and mortgage, but that Mr. McNulty, the cashier, said that he could not find it right then, but would find it and hand it to him. He went back for his mortgage afterwards, but did not get it. This statement was in part denied by the cashier of the bank. He testified that there were no instructions to apply the price of Happy Bob to the discharge of the mortgage. He also testified that Hall had an overdraft of something like $3,000. He, however, added that he knew the horse had been. sold, and that the $2,000 was the proceeds of the sale, and the bank made no demand on Hall for the payment of any particular portion of his debt out of this fund.

The bank contends that the mortgage was not paid, and it had the right to place the $2,000 to Hall's credit on the open account. It appears, therefore, that there is a sharp conflict in the evidence. The referee, passing on this question, having found in favor of the bankrupt, and he having heard the witnesses testify, under the familiar rule, I can discover no reason why I should disregard his finding. There is, moreover, a legal principle settled by the Code of Georgia which seems to make it clear that the referee is right. Section 4316 of the Code of Georgia provides:

"When a payment is made by a debtor to a creditor holding several demands against him, the debtor has the right to direct the claim to which it shall be appropriated. If he fails to do so, the creditor has the right to appropriate at his election. If neither exercises this privilege, the law will direct the application in such manner as is reasonable and equitable, both as to parties and third persons. As a general rule the oldest lien and the oldest item in an account will be first paid, the presumption of law being that such would be the fair intention of the parties."

This statute is a combination both of the common law and the civil law. It is a general rule of the common law that, if the debtor fails

to direct in what manner a payment shall be applied, the creditor may make whatever application he pleases. The rule of the civil law is different; it looks more to the interest of the debtor. It requires that, in case he makes no application of a payment, the creditor shall so apply it as to operate most advantageously to the debtor. In order to do this, it obliged the creditor to make the payment on that debt which was most burdensome to the debtor, or in which his safety or honor was most concerned, or that which he had the most interest to discharge.

The codification of our state law, as is generally known, is largely the work of that famous jurist, the late T. R. R. Cobb. The liberality of the mind of this renowned man impelled him to make large drafts upon the more liberal principles of the civil law. One of these, doubtless, is found in the last sentence of the Code section above quoted:

"As a general rule the oldest lien and the oldest item in an account will be first paid, the presumption of law being that such would be the fair intention of the parties."

Taking the testimony of the bank official to be true, and applying this principle, it is strongly persuasive that the finding of the learned referee was right. There is, however, an additional consideration in support of that finding. Happy Bob was mortgaged property. It is not denied that he was sold by the demand of the bank, and even if the debtor, who still held title to him, notwithstanding that he had been mortgaged to secure the debt, was silent as to the application of his price, the bank knew that he was part of the property given to secure the mortgage, and I think was under obligation to apply the deposit to reduce the amount due on that lien.

For these reasons, order will be taken confirming the findings of the referee.

In re SMITH.

(Circuit Court of Appeals, Sixth Circuit. March 14, 1913.)

No. 2,281.

1. BANKRUPTCY (§ 272*)-TRUSTEES-EMPLOYMENT OF ATTORNEY.

The general rule that the receiver may not employ the solicitor of either party to the suit in which he is appointed applies to trustees, but it is only when the trustee is acting adversely to one of the parties that there is any impropriety in his employing the counsel of the other.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 572, 573; Dec. Dig. § 272.*]

2. BANKRUPTCY (§ 272*)—ATTORNEY FOR TRUSTEE OR RECEIVER-ADVERSE IN

TEREST.

In general, a trustee or receiver in bankruptcy should not employ the attorney who represents the bankrupt, or one who represents interests in litigation which are adverse to the general estate, or in conflict with other interests represented by the trustee.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 572, 573; Dec. Dig. § 272.*]

3. BANKRUPTCY (§ 272*)-ATTORNEY FOR TRUSTEE.

Where it had been the uniform practice in a district to permit the attorneys for the petitioning creditors or the attorney for other creditors to act as attorney for the receiver or trustee, except in those cases where such attorneys represent interests adverse to those of the general creditors, the fact that attorneys for the trustee represented certain creditors, whose interests were not adverse to the estate, did not absolutely disqualify them to represent the trustee, so as to preclude an allowance for their services to the trustee out of the estate.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. §§ 572, 573; Dec. Dig. § 272.*]

4. BANKRUPTCY (§ 446*)-REVIEW-ABSENCE OF SPECIAL FINDING-TRAN

SCRIPT.

In the absence of a special finding or a sufficient transcript from which it appeared that attorneys for the trustee in bankruptcy stipulated for their employment by the trustee in advance of the latter's appointment, the Court of Appeals, on petition to review, could not notice an objection to an allowance for the attorney's services to the trustee on that ground.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. § 929; Dec. Dig. § 446.*]

5. BANKRUPTCY (§ 446*)-PRESUMPTIONS-ATTORNEY'S SERVICES-ALLOWANCE. Where attorneys for a bankrupt's trustee applied for an allowance of $1,950 for services for the trustee, and the court awarded $1,500, it would be presumed, on a petition to review, that the court determined that they were entitled to $1,500.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. § 929; Dec. Dig. § 446.*]

6. BANKRUPTCY (§ 272*)-ATTORNEY FOR TRUSTEE-FEES-ALLOWANCE-LUMP SUM.

The fact that attorneys for the trustee of a bankrupt were allowed $1,500 in a lump sum, for services rendered, without a detail of items, afforded no ground for reversal.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. §§ 572, 573; Dec. Dig. § 272.*]

*For other cases see same topic & § NUMEER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes 203 F.-24