BROWN V. ELLIS.
"But even If the Kentucky acts did create a new corporation out of the Loulsvllle. New Albany & Chicago Railway Company, in 1880, the new corporation, though created by Kentucky law, was, for the purposes of federal jurisdiction, a citizen of Indiana."
For this the court rely on Railway Co. v. James, supra. The doctrine is summed up in these words by the supreme court, in Railroad Co. v. Steele:
"'Whlle a railroad company owning and operating a line running through several states may receive and exercise powers granted by each, and may for many purposes be regarded as a corporation of each, such legislation does not avail to make the same corporation a citizen of every state it passes through, within the meaning of the jurisdiction clause of the constitution of the United States." 167 U. S. 659, 17 Sup. Ct. 925.
So, whether we construe the act of assembly of the state of South Carolina as imposing a condition upon foreign corporations, which conflicts with the constitution of the United States and the laws passed thereunder, or whether we construe the act as adopting foreign corporations, and as making them for manv purposes domestic corporations, still, the jurisdiction of this court over such corporation is not affected thereby, and it can seek and receive the exercise of this jurisdiction notwithstanding the existence of this act. The motion to remand is refused.
BROWN v. ELLIS. (Circuit Court, D. Vermont.
FEDERAL COURTS - JURISDICTION SHAREHOLDER'S ESTNl'E.
March 4, 1898.)
An assessment against the estate of an owner of national bank stock, in the hands of his executrix, is enforceable in the federal courts, though proceedings for settlement of the estate are pending in the probate court of Vermont.
This was a suit in equity by Jonathan W. Brown against Rosette R. Ellis, executrix of the estate of J. R. Ellis, to recover an asseSffiIlent made by the comptroller of the currency against such estate on shares of national bank stock. Thomas J. Boynton, for plaintiff. Hiram A. Huse, for defendant. WHEELER, District Judge. Section 5151 of the Revised Statutes of the United States provides that the shareholders of national banks shall be holden for the debts and obligations of the banks; and section 5152 that:
"Persons holding stock as executors, administrators, guardians or trustees shall not be personally subject to any liabilities as stockholders but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward or person interested in such trust would be, if living and competent to act and hold the stock in his own name."
The plaintiff is receiver of the Sioux National Bank, and the defendant is executrix of the estate of J. R. Ellis, who is alleged to have
86 FEDERAII REPORTER.
held:' of the stock of thafbank, which came to her hands as executrix, after his death, Jannary9, 1892, and upon which, while so in her hands, the comptroller of the currency, on March 5, 1897, assessed $75 per share for payment of the debts of the bank. This bill is brought recover this assessment out of the assets of the estate in her hands. The answer denies holding the stock, and alleges the appointment of commissioners of claims against the estate by, and the return of their proceedings to, the probate court of the state having jurisdiction ()fthe of the estate, which is still pending, as exclusive of this suit. The plaintiff has excepted to this part of the answer as impertinent, and this exception has been argued. Nearly all questions relating to the liability of assets in the hands of an executor for such an assessment, in a suit in equity like this, that have been raised here now, were raised and fully considered in Witters v. Sowles, 32 Fed. 130, and .de(lided in favor of the plaintiff. That decision was referred to in Keyser v. Hitz, 133 U. S. 138, 10 Sup. Ot. 290, with reference to the effect of the statute in laying this liability, and has not been far .as has been noticed. The question of reaching .the assets than through proceedings in the probate court has.been more fully argued here, without noticing that case, and has been again examined and considered. The claim did not, as shown, so accrue in the life of J. R. Ellis that commissioners on his estate would have jurisdiction of it. It never was a claim against him. Sawyer v. Hebard's Estate, 58 Vt. 375, 3 Atl. 529; Hatch v. Hatch's Estate, 60 Vt. 160, 13 Atl. 791. The federal statute puts the liability 'directly upon the assets. The question here is whether they are so in the custody of the probate court that they cannot be reached but through proceedings in that court. An executor or administrator here does not take title from the probate comt, as a receiver of a court does, but under the will or by representation of the testator or intestate; and, While the assets of an estate are subject to the control of that court as to all proceedings within its jurisdiction, they are liable to judgment or decree in other courts as to matters without its jurisdiction. Sparhawk v. Buell's Adm'r, 9 Vt. 74; Brown v. Sumner's Estate, 31 Vt. 671. In Holmes v. Bridgman, 37 Vt. 28, the supreme court decreed payment by the administrator, out of the estate of Bridgman, of claims arising in the settlement of another estate, which had never been presented or passed upon in any proceedings in the probate court in the settlement of Bridgman's. And decrees in chancery affecting the assets of estates in matters within equity, and without probate, jurisdiction, are common. Williams v. Benedict, 8 How. 107, and Yonley v. Lavender, 21 Wall. 276, were cases where the probate court had jurisdiction of the debts for the purpose of distribution of the assets ratably among the creditors; and .the jurisdiction of the federal eourts over distribution of assets, or applicationof t):J.em to claims established there, was denied. But in Bank v. Adm'rs, 18 How. 503, and Green'$ Adm'x v. Creighton, 23 How. 503, the power of the federal conrts to reach assets in the bands of execlltors and administrators for the satisfaction of equitable claims. of whicb those courts 1:l,ave jurisdiction was, after fullexamination, upheld. This court bas 'jurisdiction of tllis matter on account of
SMITH V. CONSUMERS' COTTON-OIL CO.
its federal nature, as 'Yell as of the citizenship 'of the parties, and in equity, because the assets are held by the executrix in trust. Exception sustained. .
SMITH et at v. CONSUMERS' COTTON-OIL 00. et al. (Circuit Court of Appeals, Fifth Circuit.
March 1, 1898.)
FEDERAL JURISDICTION-DIVERSE CrrrZENSHIP-UJSMISSAJ, OF PARTY.
In an action against the members of a firm for breach of a firm contract, where one of the defendants Is a citizen of the same state with plaintiffs, he may be dismissed without prejudice, and the action continued against the others. . Contractors for putting on asbestos roofing warranted the roofs to remain water-tight for five years, provided the roofs were not damaged by fire "or other accident not traceable to· the use of defective material or poor workmanship." The evidence tended to show that, before beginning work, the contractor called the attention of the owners to the unusually wide spacings between the rafters, but were assured that this was all right, and that the responsibility therefor was with the owners, and not the contractors. In an action for breach of the warranty, it was claimed that the leakages resulted from defective construction of the building. Held, that it was error to charge that as the contractors saw the building and the manner and materials of Its construction, and went forward without modifying their contract, it was a warranty that the roof would remain water-tight on the building as constructed. A written contract may be modified before performance by parol agreement or understanding.
TRIAL-INSTRUCTIONS-BREACH OF WARRANTY.
CONTRACTS-MODIFICATION BY PAROL.
In Error to the Circuit Court of the United States for the Eastern District of Texas. Pressly K. Ewing and H. F. Ring, for plaintiffs in error. J. C. Hutcheson, for defendants in error. Before PARDEE and McCORMICK, Circuit Judges, and SWAYNE, District Judge. McCORMICK, Circuit Judge. The Consumers' Cotton-Oil Company and Swift & Co., both Dlinois corporations, being about to build certain oil-mill plants, contracted with H. F. Watson Company, a Pennsylvania corporation, and Smith, Peden & Co., the agents of H. F. Watson Company, to cover the same with asbestos roofing, and took from them a written guaranty, dated April 18, 1893, to the effect that they warranted the roofs to remain water-tight for the term of five years, and would repair any leakages free of charge for that time, provided the roofs were not damaged by fire or other accident not traceable to the use of defective material or poor workmanship. On March 13, 1896, the defendants in error brought their suit against "Ralph P. Smith, Edward A. Peden, and David D. Peden, Sr., late co-partners, doing business under the firm name and style of Smith, Peden & Co., at the cities of Houston and Waco, in the state of Texas," all of whom were alleged to be citizens of the state of Texas, and resident within