verse liens, whether they mayor may not have been extinguished by the bankruptcy. This is not a "suit of a civil nature," "arising under the constitution or laws of the United States," in the meaning of the act of March 3, 1875. It is in fact a suit between citizens of the state, and to be determined by the laws of the state, and in the state courts. In the case ofWolJ v. Stix, 99 U. S. 1, on which counsel for complainant relies, there was no lien in existence prior to the application for bankruptcy. The case of Brazelton v. De Graffenreid, removed from the superior court of Mitchell county, Georgia, wherein a decl'ee was rendered by his honor. Judge ERSKINE, November 13, 1879, (not reported,) was, it is true, analogons to the bill before the court. Upon an examination of the record in that case it will appear, however, that it was determined after a decree pro confesso, and, the court is inclined to think, was neither argued nor resisted. In the case of Arnett v. Mosely, decided December 4, 1879, by Judge ERSKINE, the issue was precisely as made here, and on motion the cause was remanded. With regard to the case of Gibson v. Williams, (decree in this court,) the parties were citizens of different states, and the case was properly removable, and, while no opinion was filed, I presume that jurisdiction was entertained by the presiding judge because of the citizenship of the parties. While having a very decided opinion upon the merits of the application, the conrt, having no jurisdiction to entertain the subject, will remand the record to the court from whence it came, to be there determined.
(Oh-c'Uit 001M't. D. Oalif()fflia. April 21, 1885.)
EQUITY-PLEA IN ABATEMENT TO JURISDICTION-CITIZENSHIP-DECISION FINAL.
Complainant filed a bill as a citizen of Nevada against defendant, a citizen of California, in the circuit court for the district of California. Defendaq.t filed a plea in abatement, alleging that complainant was a citizen of California, whereupon complainant filed a replication, and the issue of citizenship upon hearing was decided in favor of complainant. Defendant then filed an answer to the merits of the case, and also denied that complainant was a citizen of Nevada. A replication was filed and testimony taken. and subsequently, pending the examination of witnesses. defendant offered to show by affidaVIts tha.t complainant was in fact a citizen of California. Held, that the determination of he issue as to citizenship on the plea in abatement was conclusive. and could not be raised and determined again on affidavits or upon the denials in the answer.
In Equity, William M. Stewa'1't,for complainant. D. S. Terry, for defendant.
8HARON t1. HILL.
SAWYER, J. I have before had occasion to consider and pass upon the question of jurisdiction in this case, and my convictions on the subject, as I have two or three times expressed them, are very clear. Still, as the point was again raised on this motion, I felt willing to hear further argument of counsel to see if allYthing new could be presented. I am satisfied that the question of jurisdiction was finally determined for this case upon the plea in abatement. Under the law. as it existed before the passage of the act of March 3, 1875, the question of the citizenship of the parties to a suit could only be raised by a plea in abatement. as decided by the supreme court in not less than a dozen cases. Smith v. Kernochen, 7 How. 216; D'Wolfv. Rabaud, 1 Pet. 476; Jones v. League, 18 How. 81; De Sabry v. Nicholson, 3 Wall. 421; Coal Co. v. Blatchford, 11 Wall. 177; Wickliffe v. Owings, 17 How. 51,52; Livingston v. Story, 11 Pet. 351; Sheppa'rd v. Graves, 14 How. 505; Same v. Sa,me, ld. 512,513. So, the thirty-ninth equity rule prescribed by the supreme court excludes from the general answer to the merits "matters of abatement, objections to the character of the parties, and to matters of form." Eq. Rule 39; Wickliffe v. Owillgs, 17 How. 51, 52. The supreme court has not modified or amended equity rule 39 since the passage of the act of 1875 which was lU years ago. This indicates that in its opinion the act does not affect the practice of courts of equity in this particular. The court would not be likely to retain a rule so long which it supposed had been abrogated by an act of congress. Upon that plea it has been repeatedly held that the burden of proof is on the defendant. De Sobry v. Nicholson, 3 Wall. 423; Sheppard v. Graves, 14 How. 505; Same v. Same, ld. 512, 513. No decision of the supreme court made since the passage of that act as to whether this jurisdictional question may be raised in the general answer where it has not in fact been otherwise presented has been brought to my notice by counsel, and it has not been very clear to my mind what the ruling of the supreme court would be were that point so presented. In my opinion, however, the former decisions should be followed still. If the question can be raised upon affidavits at this stage of the case, it can again be raised in any subsequent part of the proceedings, and on indefinitely. Or, if it can be raised in the general answer to the merits, there would be no use of a plea in abatement. Such a plea upon that practice would only obstruct and prolong the proceed. ings, without any possible advantage to be gained thereby. The par· ties are entitled to have an issue once tried and determined. If through negligence or otherwise they do not present their evidence, the fault is their own, and they must abide the consequences. I have no doubt that where a party does put in a plea in abate. ment to the jurisdiction, and the issue so raised by the plea is tried and determined upon sufficient pleadings as to form and substance, it is for the case, and the question cannot again be raised.
It seems to me to be perfectly clear upon principle that such is the
case. And the practice is so settled by the supreme court in Grand Ohute. v. Winegar, 15 Wall. 371, wherein it is held that "s party having his plea in abatement passed upon by a jury and found against set up the same matter in bar, and again go him is not permitted to the jury upon it." The qnestion is by no means new to me; and in consequence of the doubt above expressed, where no plea in abatement is interposed, this court, in January, 1882, amended rule 9 of its rules of practice so as to read as follows:
"RULE 9. Matters in Abatement. All matters in abatement shan be set up in a separate preliminary answer, in the nature of a plea in abatement, to which the plaintiff may reply or demur; and the issue so joined shall be determined by the court before the matters in bar are pleaded. And when any matter in abatement, other than such as affects the jurisdiction of the court, shall be pleaded in the same answer with matter in bar, or to the merits, orsimuItaneously with an answer of matter in bar, or to the merits, the matter so pleaded in abatement shall be deemed to be waived. When the matter so pleaded in abatement consists of matters of fact, the plea or preliminary answer shall be sworn to. And when matters showing that the court has no jurisdiction, which might have been pleaded in abatement, are first developed during the proceedings in the cause upon the merits, the court will, upon its own motion, dismiss or remand the case, in pursuance of the requirements of section 5 of the act of March 3, 1875, and, in its discretion, tax the costs of such proceedings upon the merits so far as is practicable to the party most in fault in not presenting such matters in some proper mode, before proceeding upon the merits."
Undoubtedly, it was entirely competent for the court, there being no statute to the contrary, to establish a rule providing that matters in abatement shall be presented and tried, before going into the merits. The object of such a rule is to provide that jurisdictional and other questions of this character shall be first tried and determined, and not to admit of such questions being raised toward the end of a trial, after an extended examination or a tedious trial of the cause upon the merits. In this case counsel evidently understood that the question of citizenship should be so raised and determined, and it was in fact pleaded in abatement. No testimony was put in under the plea; and under the ruling of the supreme court that the burden was on the defendant to establish her plea the plea was adjudged to be false, and overruled for want of evidence to support it. I have regretted that the issue raised by that plea was not tried and disposed of upon evidence duly taken. But the plea having been interposed and regularly disposed of, an answer upon the merits having been afterwards put in, replication filed, issue joined, and the examination of witnesses having been proceeded with for' two months, I am satisfied that this question is not now open to examination in any form. It would be improper to go back and reopen this matter now, so long after it has been regularly determined for the case. No application was made to reopen that issue after the decision upon the
plea. Even if the court had authority, in its discretion, to reopen the issue after the decision, and before answer to the merits filedupon which point I express no opinion-it would be improper to do so now. The time within which defendant should answer was liberi$lly extended, and an answer upon the merits filed, issue joined, and testimony taken. It would be an abuse of discretion, if any such discretion there be, to reopen that issue. The alleged marriage contract, as set out in the bill, both the part signed by the defendant, as well as that purporting to be signed by complainant, represents the complainant as being of the state of Nevada and defendant of California. As a matter of general public history we all know that complainant, during the time covered by the affidavits, was recognized by the state of Nevada as being a citizen of that state, and elected as such to represent the state in the United States senate, and that he was serving as such senator at the date of the alleged contract. The proper citizenship is alleged in the bill, I1nd the issue upon that point raised by the plea to the jurisdiction was regularly determined in favor of complainant. Although in the general answer to the merits defendant has denied that com.i;'lainant is a citizen of another state, as alleged in the bill, yet as the issue has already been determined on the plea to the jurisdiction on that ground, in my judgment testimony is inadmissible at this stage of the case to prove the issue thus attempted to be again raised. At all events, if that question is still open it is one of the issues to be tried in the case upon the evidence, and cannot be raised upon affidavits on a collateral motion to affect proceedings upon the issue on the merits. If I am wrong in my judgment that the question is not now open to further investigation, and that testimony upon this issue is inadmissible, my error will be corrected, and the matter authoritatively determined by the supreme court. I am, however, clear in my conviction that whatever might have been the result under the act of 1875, had no plea in abatement been filed and the issue taken thereon regularly determined, such a plea having been interposed and having been regularly determined, the question thereby raised is finally and conclusively adjudged for this case, and cannot be again opened and retried at any subsequent stage of the proceedings in the case. The provision of section 5, that "if it shall appear to the satisfaction of said circuit court, at any time after such suit has been brought," that it does not involve a controversy properly within its jurisdiction, it shall be dismissed, doubtless means when it shall appear in some proper mode or form recognized by the rules and established practice of the courts it shall be dismissed. It does not mean that the objection may be suggested ore tenus, or by affidavit, or in any other manner outside the regularly established course ofpractice of the court. It often happens that the defect regularly appears in the record, as when there is a want of proper allegations in the
bill or complaint, but it has not attracted the attention of the court. Whenever this IS the case, or where the defect is made to appear to the court in any stage of the proceedings in its regularly established course of practice, the court must dismiss the case. This was always the rule, and the statute but gives express sanction to it, and requires its enforcement by the court, of its own motion, whether counsel suggest it or not, without attempting or professing to change the regularly established forms of procedure by "Which the defect shall be properly made to appear. It is as important now to determine the question of jurisdiction upon a plea of abatement before going into the merits at large, as it ever was. Any other practice would be extremely inconvenient, and often oppressive. I see no satisfactory indication of an intention on the part of congress to change the practice in this particular. But however this may be, the fact as to the citizenship of complainant can only be determined upon testimony presented upon issues properly framed, in pursuance of the regular practice of the court. The affidavits and other evidence offered on the question of citizenship relate to the residence of complainant, and it is claimed that the mere residence in any state of a citizen of the United' States, under the fourteenth amendment to the national constitution, makes him a citizen of the particular state in which he resides, and that if complainant is a resident he is also a citizen of California. My own judgment is that the provisions of the fourteenth amendment to the constitution have not so changed the law as to make a man necessarily against his will a citizen of the state in which he is residing. It doubtless gives him the right to claim citizenship of such state, but as I think does not compel him to abandon the citizenship of the state of his birth or adoption, and adopt the citizenship of the state in which some exigencies of his business or his pleasure induce him to fix his present residence. A party may have property and various interests in different states, and his interests in some respects may well require him to retain his original citizenship in the state where he was born, or of his adoption, while other interests may be promoted by a residence in some other state. The question whether a party has a right to be a citizen of the state in which he resides is a very different one from the question whether he is compelled, willing or unwilling, to abandon his citizenship of the state of his choice, and become a citizen of the state in which he resides, whatever his interests may require. It may be that where a person estab· lishes his domicile in a state he is prima facie a citizen of that state, but that the question of his citizenship is not absolutely concluded by the fact of residence temporary or otherwise. My impression is, as I have stated, that a man may elect to remain a citizen of a pf,ate of which he has become a citizen, and yet actually after· wards change his residence to another state, without necessarily affect.
UNITED STATES MORTGAGE CO. 'lI. SPERRY.
ing his citizenship. And this seems to be the view of the supreme court of the, United States, aa that tribunal has several times, since the adoption of the fourteenth amendment, held that an averment 01 residence in a particular state, even of a citizen of the United States, is not an averment of citizenship of that state. In Robertson V. Cease, 97 U. S. 649, this point was made in the argument of counsel and noticed by the court. In deciding the point that an averment of residence in a state is not an averment of citizenship of that state, even since the adoption of the fourteenth amendment, the court observes: "Those who think the fourteenth amendment requires some modification of those rules claim, not that theplaintif's residence in a particular state necessarily or conclus'ively proves him to be a citizen of that atate, within the meaning oj the constitution, but only that a general allegation of residence, whether temporary or permanent, made a primajacie case of right to sue in the federal courts;" and in Grace v. American Cent. Ins. 00., 109 U. S. 284, S. C. 3 Sup. Ct. Rep. 207, the court says in express terms that "they may be doing business in and have a residence in New York, witlwut necessarily being citizens of that state."
But, under the views taken as to the conclusiveness of the determination of the question of citizenship upon the plea in abatement, for the purposes of this suit, it ia not now necessary to definitely decide that important question. Did the question arise upon issues regularly framed in pursuance of the practice of courts of equity, the com· plainant could of course be entitled to introduce opposing testimony. But it does not now 80 arise. The objection on the ground of want of jurisdiction, as now presented. is overruled.
UNITED STATES MORTGAGE
(Oirouu (Jowrt, N. D. Illinois.
September 12, 1885.)
In Illinois a mortgage note or bond bearing interest at a given rate con· tinues to bear that rate of interest so long as the principal remains unpaid. l 2. SAME-COUPONS, WHEN DRAW INTEREsT-CmQlERcIAL PAPER-"WRITTEN IN· 8TRUMENTS"-REV. ST. ILL. Cu. 74, § 2. Coupons given by a guardian for installments of interest on a mortgage on the ward's land that are not so worded as to bind the guardian or the ward personally will not draw interest after they become due as commercial paper or a8 "written instruments," within the meaninlt of Bev. St. ill. D. 74, § 2. 1 ,
MORTGAGE-INTEREST CoupONs-INTEREST AFTER MATURITY.
1 Bee note at end of case. 'The past due coupons of DlunlclT'al bonds bear Interest at the rate fixed by the law of the place where they are made payable. Town of Pana v. Bowler, 2-Sup. Ct. Rep. 704. .
Dt,,;ier, Herrick tl Allen, for complainant. Lyman Trumbull, J. V. Le Mayne, and Henry Crawford, for defendants.
GRESHAM, J. The first two mortgages, dated July 10, 1872, and April, 1873, to secure loans of $175,000 and $70,000 respectively, were executed by Anson Sperry as guardian of Henry W. Kingsbury. The money was borrowed to enable him to rebuild on his ward's real estate, and to payoff incumbrances thereon. Heman G. Powers, as guardian, executed a third mortgage on December 1, 1876, to secure a loan of $95,000. This amount was needed to payoff overdue interest on the preceding mortgages, and an indebtedness incurred by the former guardian in rebuilding. Default having been made in the payment of interest coupons attached to each of the mortgages, the Mortgage company on November 2, 1877, exercised the right given it by the terms of the mortgages of declaring the principal sums due, and a few days thereafter filed its bill to· foreclose. John V. Le Moyne. who at this time had succeeded Powers as guardian, filed an answer averring that the county court had no jurisdiction to authorize the execution of the mortgages for the purposes specified, and denying their validity. The minor became of age December 23, 1883, and in May, 1885, filed his answer, which, in addition to the averments contained in Le Moyne's answer, alleged that the rate of interest contracted for was unauthorized by the charter of the Mortgage company, and that the mortgages were invalid for that reason. The mortgages were decreed to be valid on the tenth day of September last, and the amount due the complainant remains to be determined. (24 Fed. Rep. 838.) The bonds which the three mortgages were executed to secure all drew 9 per cent. interest, with coupons annexed, and in his application to the court for authority to make the third loan and execute a mortgage to secure it, Powers stated the amount of interest due from his ward at the rate of 9 per cent. upon the first two mortgages, and at the same rate on all past due coupons. On this basis $53,194.27 of the third loan of $95,000 represented interest. It is contended for the defendants that when the principal sums hecame due at the election of the Mortgage company the contract provided no rate of interest, and that thereafter the loans drew the rate allowed by the statute, viz., 6 per cent. It was held in Ohio v. Frank, 103 U. S. 697, that the creditor was entitled to the contract rate up to the maturity of the debt, and thereafter the statutory rate, unless a different local rule had been established. It was also held in the same case that a different local rule had been established in Illinois by the supreme court of that state in Phinney v. Baldwin, 16 Ill. 108, in which it was decided that a note given for a sum of money, bearing interest at a given rate, continued to bear that rate as long as the principal remained unpaid. The rate of interest, therefore, on the
UNITED STATES MORTGAGE CO. ". SPERRY.
three loans rem&ined unchanged when the principal sums became due by the election of the Mortgage company. except as to number) reads as One of the coupons (all being follows:
"Due the United States Mortgage Company $3,150 on the first day of October, A. D. 1873, in gold coin of the United States, payable at such place in the city of Chicago, in the state of Illinois, as the said United States Mortgage Company, their successors, legal representatives, or assigns, shall in writing from time to time appoint, and, in default of such appointment, then at the agency of said company in the said city of Chicago, being for the payment of an installment of interest due on that day on my bond to the said United States Mortgage Company of this date. Conditioned for the payment in gold coin of the United States of $70,000, with semi-annual interest at 9 per centum per annum on the whole sum from time to time remaining unpaid in gold coin of the United States, said bond being made to secure a loan made to me in like gold coin. Said payments are to be made in gold· coin of the quality and fineness of the present standard vf the United States. "Guardian of the estate of Henry W. Kingsbury."
While it is true that a promise in advance in a note or other instrument to pay compound interest will not be enforced, still coupons given by an individual or a corporation for installments of interest to mature on bonds draw interest. This, however, is upon. the theory that such coupons are separate instruments, promises to pay to bearer specified sums of money at specified times, and when severed from the bonds to which they are attached possess all the essential qualities of commercial paper. Gelpcke v. Dubuque, 1 Wall. 206; Thomson v. Lee Co., 3 Wall. 331; Aurora v. West, 7 Wall. 105; Clark v. Iowa City, 20 Wall. 583. But these coupons are only such in form. They bind neither the guardian nor the ward personally; in fact they bind no one personally. The bonds and coupons are made a charge upon the ward's real estate, and the holders cannot maintain personal actions on them; their only remedy is in equity to enforce the charge or lien. It is expressly provided in the bonds, the mortgages, and the orders of the court authorizing the guardians to make the loans, that they are not to be personally liable, and if the incumbered real estate proves to be an insufficient security the Mortgage company will have no remedy against the guardians or for the deficiency. It is not pretended that the Mortgage company took the bonds or coupons supposing the guardians were personally liable. The coupons, so-called, are not commercial paper, and they do not draw interest. Section 2, c. 74, ill. Rev. St., provides that creditors shall be allowed interest at the rate of 6 per centum per annum on all moneys after they become due on any bond, bill, promissory note, or other instrument in writing. It is claimed that under this statute the coupons are "instruments in writing," and drew interest at the rate of 6 per cent. per annum after they became due. Courts of equity look to the substance and not to the mere form of transactions, and we
have alrea.dy seen that neither the bonds nor the coupons created any personal liability. The three loaDs, evidenced as they are by the bonds, coupons, mortgages, and orders of the court, have no other or greater effect than if the county court had authorized the guardian to procure the money to rebuild, charging the ward's real estate with its repayment with interest at 9 per cent., payable semi-annually, and. the loans had been made under such authority. At the time the third Joan was made, the Mortgage company claimed that there was due it for interest on the principal of the first and second loans and interest on past due coupons, both at the rate of 9 per cent. per annum, $53,194.27. Powers, the guardian, at this time was a member of the Mortgage company's loan committee at Chicago, thus occupying inconsistent relations; and in his petition to the county court for authority to make the third mortgage, he admitted the correctness of this claim. While it was clear that if there was any foundation at all for interest on the past due coupons the rate should not have exceeded the statute rate of 6 per cent., the guardian seemed more mindful of his duty to the Mortgage company than to his ward, and allowed and paid 9 per cent. It is true this was claimed and allowed as interest on interest, and not as interest on the principal sums, but the excess over 6 per cent. was obviously unjust and illegal. Usury consists in the contracting for, receiving. or reserving a greater rate of interest on the principal sum than is allowed by law; while compound interest is the addition of the accruing interest to the principal, and the taking of interest on this interest. Courts decline to enforce contracts providing in advance for compound interest, not, however, because they are usurious, but on the ground that they tend to oppress the debtor, and are against public policy. Money once paid, however, for compound interest cannot be recovered back; and a Dote given for the payment of interest on past due interest is valid, and can be enforced. Kellogg v. Hickok, 1 Wend. 521; Stewart v. Petree, 55 N. Y. 621; Camp v. Blttes, 11 Conn. 487; Wilcox v. Howland, 23 Pick. 167; Mowry v. Bishop, 5 Paige, 98; Otis v. Lindsey, 10 Me. 315; Mosher v. Chapin, 12 Wis. 458. It is not to be presumed that a court, whose peculiar province it is to protect persons of tender years, would charge an infant's estate with compound interest. It was the order of the county court that gave effect to the contracts, and bound the infant's estate. It is true that the interest on the principal sums became due semi-annually, and that instruments in the form of coupons were attached to the bonds; but this of itself was not sufficient to show that the court intended to charge the estate with interest on the interest installments. It is plain that the Mortgage company demanded and received out of the $95,000 loan more than was due it as interest on the first and second loans, but it is claimed by counsel for the company that so far as the third mortgage related to interest, it was an agreement to pay the past due interest on the principal of the first and second mort-