M'LEAN 'V. CLARK.
rherewas a creditors' bill to obtain satisfaction of a judgment from i'roperty upon which were several prior liens. Some of' those lien-holders having controversies, of course, as to the validity of their liens, were of different states than the complainant, but the supreme court say that that makes no difference. The plaintiff had but the one cause of action, and that for a decree applying the property to the payment of his claim after satisfaction of these prior claims, and it was not a case for removal. Of course, this opens-and that is fairly to be considered-the possibility of a plaintiff making improper parties defendant in order to prevent a removal. I take it that there is no great danger in this direction, however; for if it appears that parties are named parties improperly, for the mere sake of preventing a removal, the court would not ignore that fact, or refuse a removal. But that can hardly be said to be the case here. The title was taken by one defendant upon execution sale, and he conveyed it to the Wisconsin defendant; and the allegation of the complaint is that that was a colorable transfer,-one without consideration; that really, while the legal title is transferred to the Wisconsin defendant, it is held by him in trust for these Colorado defendants. That mayor may not be true. What may be the truth cannot, of course, be determined upon a motion to remand; nor is there any propriety in the court now considering the sufficiency of this complaint as a complaint. Whether it does or does not 8tate a cause of action is not a question to be considered on the motion to remand. That is a matter which the court in which the proceedings are finally tried has a right to determine, and no court, upon a motion to remand, ought to consider the sufficiency or insufficiency of the bill. It is enough that the plaintiff in the state court has stated what seems to be a single cause of action, affecting, perhaps, differently different defendants. but still only a single cause of action; and that it does not appear that any defendant is collusively or improperly joined to prevent a removal. The motion to remand will be sUlltained.
McLEAN 'V. CLARK
(Circuit Court, E. J). Michigan.
UNITED STATES CmCUIT COURT CONVEYANCE.
C., a judgment creditor, and also the purchaser of land under an execution sale, conveyed the same to M., his son-in-law, a non-resident, for an interest in a worthless patent. SUbsequent to his agreement to convey he endeavored to obtain possession of the land by proceedings in which he swore that he was the owner, and entitled to possession. The grantee never saw the land, never examined the title. or inquired as to its value, and took no part in the suit brought in his name to set aside a fraudulent deed made by the judgment debtor. Held, that the conveyance was collusive, and the court had no jurisdiction.
Where a party is called as a witness by the opposite party, the latter tsnot bound by his general statement as to his motives or intention in a particular transactIOn, but may draw any inference from his testimony which the facts· to justify. stated by the witness
QUQJ1'8 whether a bill will lie by the purchaser at an execution sale to remove a cloud from the title.
OI,OUD ON TITLE-BILL TO REMOVE.
(Syllabu8 by the Oourt.)
In Equity. This was a bill in equity by the assignee of a purchaser at an execusale to procure the annulment of deed made by John Clark, defendant in the execution, to the defendant Townsend, prior to the sheriff's sale. The facts of the case are substantially as follows: On June 9, 1882, one David R. Shaw recovered a judgment in the Wayne circuit court against John Clark, John T. Clark, and UrieHJlark, for $4,653.33, upon a promissory note made October 29, 1879, and payable 90 days after date. At the time this note was made, and until after it had matured, John Clark was the owner of certain v81uable real estate in the county of Lapeer, which, on 7, 1881, he conveyed to the defendant Townsend for the nominal consideration of $50,002.94. Late in June, 1882, an execution was issued upon this judgment, and levied upon these lands, and at the execution sale, September 8th, they were bid in by the plaintiff Shaw for the amount of his judgment. In December, 1883, the sheriff executed a deed of the lands to Shaw, in pursuance of the statute, and on May 22, 1884, Shaw conveyed the lands to plaintiff, a citizen of Ohio, who 'filed this bill June 14, 1884; alleging that the conveyance from' Clark to Townsend was fraudulent and void, and was made for the purpose of hindering and delaying the creditors of Clark in the collection of their claims. The case was submitted upon bill, answers, and proofs. A. a. Angell and Otto Kirchner, for plaintiff. Geer Williams, for defendants.
BROWN, J. A preliminary objection is taken to the jurisdiction of this court, which we think is fatal, By section 5 of act of March 3, 1875: "If, In any suit commenced in a circuit court, ... ... ... it shall appear ... ... ... that such suit does not really an:i substantially involve a dispute or controversy properly within the jurisdiction of said circuit court, or that the parties to said suit have been improperly or collusively made or joined, either as plaintiffs or defendants, for the. purpose of creating a case' cognizable' 01' removable under this act, the said circuit conrt shall proceed no further therein, but shall dismiss the suit. " It is insisted by defendants that the deed from Shaw to plaintiff was colorable only, and was not made bona fide, but for the sole purpose of conferring jurisdiction upon this court. Let us examine the facts, llnd See how far this contention is supported by the proofs. In December, 1883, Shaw became the purchaser of these lands at execution sale for
H'LEAN t1. <:'LAme.
$4,863.70. The lands were estimated to be worth 350,000, and were incumbered to the amount of about $25,000, besides the conveyance to Townsend which this bill seeks to annul. To substantiate the claim of collusion, defendants rely solely upon the testimony of plaintiff McLean, who was called by them as witness, and who swore, in substance, that he was an attorney of some ten years' standing, residing in Elyria, Ohio, and was the son-in-law of David R. Shaw. Before beginning the practice of his profession he taught school in Pontiac, in this state, for two years. From conversations with Shaw he knew of his suit against Clark, and of his levy upon and sale of the lands in question. He says that at about Christmas, 1883, while spending the holidays with hisfuther-inlaw in Detroit, he had two or three conversations with him about taking a deed of these lands in exchange for 100 shares of the stock of a certain corporation which had been formed in Ohio, to manufacture a patented combination of a burglar and fire alarm upon a telephone, and' that in the May subsequent the deed was sent to him. He never saw the lands, and had no knowledge of them, except as they had been described to him by Shaw, w.ho told him that there were 1,100 acres, well improved, and with 8 number of buildings upon it. He did not know in. what township the buildings were situated; knew nothing of the state oithe title,or the prospects of success in the litigation; and was informed by Shaw that the lands were mortgaged to the extent of $25,000.. Some correspondence passed between them after he left Detroit, but the letters were not produced. The deed was sent to him in May, and forwarded by him to the register of deeds at Lapeer. He was here in June or July, . and consulted an attorney with regard to bringing aauit;but the bill is neither signed nor sworn to by him. The only consideration for the. transfer was the one-half of plaintiff's one-third interest in the patent above' mentioned, which turned out to be worthless. No value was fixed upon the patent, nor upon Shaw's interest in the land; but, the patent having been made over to the corporation, plaintiff had agreed to convey to Shaw 100 shares of the stock, the par value being $50 aahare. The corporation possessed no property besides the patent, and tio certificates of stock were ever issned, thongh plaintiff says a memorandum of the transaction was made on the books of the corporation. Notwithstanding the bargain for this exchange of speculative properties was consummated in January, and nothing remained but the delivery of the deed, in the following March Shaw filed a sworn complaint against Clark, with a circuit court. commissioner in Lapeer county, for the purpose of getting possession of these lands, in which he stated that the lands were his, and he was entitled to the possession of the same. This suit was dismissed by the commissioner April 24th. McLean has taken no part in looking up the testimony in this case; but Shaw, without being requested by him, has been actively engaged in that pursuit. Upon this state of facts we think it clear that the transfer in question was purely colorable. The case is not unlike those of Hayden v. Manning; 106 U. S. 586, 1 Sup. Ct. Rep. 617, and Little v. Giles, 7, Rep. 36. It had been decided by the supreme court of this state in Cransm
v. Smith, 47 Mich. 189, 10 N. W. Rep. 194, that a bill of this kind would hot lieflfter a sale upon execution, but an opposite view had been taken by this court in the case of Oreridorf v. Budlong, 12 Fed. Rep. 24. This furnished a strong motive for such a transfer of Shaw's interest as would give this court jurisdictibn. It was hopeless to expect to succeed in the state court except by an action in ejectment. There was at least a possibility of success here. The circumstances' attending the transfer; the total want of knowledge on the part of the plaintiff of the value, situation, and state of the title of the land in question, and of the probabilities of success in the suit which he must institute to obtain possession; the utter ignorance upon Shaw's part of the patent, and all which pertained to it; the indifference of McLean, and the activity of Shaw in prosecuting this suit;, and Shaw's attempt to obtain possession of the lands subsequent to his bargain with the plaintiff, -satisfy us that the deed was given for the sale purpose of vesting this court with an apparent jurisdiction. It is insisted, however, that as McLean was called as a witness by the defendants, they are bound by his statements that the. transaction was bona fide, and that Shaw has no interest in this suit. We do not so understand the law. While it is undoubtedly true, as a general rule, that a party offering a witness in support of his case represents him as worthy of belief, and will not be permitted to impeach his general reputation for truth, or impugn his credibility by general evidence, he has never been considered as bound by his general statements as to motives or intention; or his bona fides in a particular transaction, but may draw any inference from his testimony which the facts stated by the witness seem ,to justify. Particularly is this true where the party is compelled to prove his case from the mouth of the opposite party, who may be presumedto be hostile to,him. In a similar case, (Chandlerv. Town oj Attica, 22 Fed. Rep. 625,) Judge WALLACE held, in passing upon a similar issue, that the court was "at liberty to disregard the testimony of the parties, so far as it is incredible, and to interpret the transaction in a way consistent with the ordinary conduct and motives of business men." If the story of the witness be consistent in itself, the party calling him is to a certain extent bound by his testimony; but, if his recital offacts is inconsistent with his theory, the court is at liberty to draw its own inference from them. If there be anything to the contrary in the case of Tarsney v. Turner, 2 Flip. 735, decided by the late circuit judge, we are compelled to enter our respectful dissent. Kavanagh v. Wilson, 70 N. Y. 177; Koehler v. Adler, 78 N. Y. 288; In re May, 1 Fed. Rep. 737. The view we have taken of the plaintiff's title to these Jands renders it unnecessary to consider the further question, whether a bill will lie by a ,purchaser at an execution sale to remove the cloud from his title. In the case of Orendorf v. Budlong, 12 Fed. Rep. 24, we held, in accordance with what we believed to be the great weight of authority, that such a bill was maintainable; but the recent case of U. S. v. Wilson 118 U.S. 86, 6 Sup. Ct. Rep. 991, suggests a grave doubt whether, if this question were presented to the supreme court, it would not
.". INCORPORA.TED TOWN OF ROCK RA.PIDS.
hold that an action in ejectment was a full, complete, and adequate remedy at law. A decree will be entered dismissing the bill, with costs.
RICHARDS and others .". INCORPORATED TOWN OF ROCK RAPIDS.
(Oircuit Uourt, N. D. Iowa,
May Term, 1887.)
FEDERAL CoURTS-JURISDICTION-LAW Oll' UNITED STATES.
When a complainant invokes the protection of a law of the United States, the federal courts have jurisdiction, when it is apparent that the case depends upon a construction of that law. A party does not waive the right of removal by remaining in the state court. and contesting the case on the merits, if the state court, upon due application, wrongfully refused to order a removal of the cause.
REMOVAL OF CAUSES-WAIVER OF RIGHT.
SAME-Wml:N MAY BE CLAIMED.
The right of removal is not defeated or lost.if the petition therefor is filed in the state court after motion made, the' decision of which does not affect the merits of the controversy. ' Section 5219, Rev. St. U. S., provides that shares in the national banks may be subjected to the imposition of a state tax, but the same shall not be at a greater rlJ,te than is assessed upon other moneyed capital in the hands of individual citizens of such state. Under this section, before the assessment of the shares in a national bank can be held invalid, it must be shown that there is in fact a higher burden of taxation imposed upon money thus invested than is imposed upon other moneyed capital. and it is insufficient to show merely that the state laws provide a different mode or manner of taxing moneyed capital invested in savings banks or other corporations. Sections 818-820, Code Iowa, providing for the taxation of the shares of national banks, and chapter 60 of the Laws of 1874, providing for the organization of savings banks, and enacting that the shares of stock therein are taxable, but that deposits are not, are not in contravention of section 5219, Rev. St. U. S., there being no discrimination against national banks, or the capital therein invested. The owners of shares in national banks are, under section 5219, Rev. St. U. S., entitled to the right of deduction given to tax-payers under section 814 of the Code of Iowa, which provides that from the gross amount of money and credits held by one liable to taxation may be deducted all debts due and owing.
TAXATION-NATIONAL BANK SHARES-OTHER CAPITAL.
SAME-DEDUCTION OF INDEBTEDNESS.
In Equity. The opinion states the facts. E. C. Roach and J. H. O. M. Swan, for complainants. J. M. Par8ons, for defendant.
SHIRAB, J. The complainants, who are the stockholders in the First National Bank of Rock Rapids, taking exception to the assessment made of their shares of stock by the assessor of the incorporated town of Rock Rapids, and to the action of the mayor and trustees of said town, acting as a board of equalization, in refusing to reduce the assessment ma.de, took an appeal from the board of equalization to the circuit court of