staffifeprescribil1.g the jtirisdletii6I1 of-the: It Isbetterptllt'!t!ce, also. ,to'mow affifunatlvely in tbe'biU tbe groupd in contl1oversy is a 1001"1 I>r clailn. I, '
On White,k:M:Qnroe and
' Ch'apniari,'for complainant. " i'.
ROSS, Oirc,1Jit The fact th3.t ;this suit. Wasp,l'()ught under and by virtue of section 2326 of. the United States not, ,I think, exempt ,the cwnplainant fro:r;n the of showing, tl;J,atthe value o,f tbe property in controversy is sufficient to bring it. within the requirement of.,thegeneral stat!1teprescribing the the, Qf the Unitep, S-pttes. Mining Co. v. Rutter,31 C. C. v.Harrington, 111 U. S. 350, 4 Sup. Ct. 428; Stras,burger y. Beech,eJ,',44 Fed. 213; Burke v. Concentrating 00., 46 Fed, 64'l<. . Whether necelilsary Or not, I think itis allilo better, ill' order to.saveap,y question iAoregard to the matter, that the bill sh()waffirmatively, andp.ot by,inference only, is, a lode or whether the ground in controYersy:between the placer claim.' An order,wiUbe entered demurrer, with, leave. to the complainant to amend the lj)j)l, witllin the \llilu,a\, time, if it shall be so. advised.
ANGLE et ill. v. CHICAGO, P. & , (CircUit ,Court,
'. , .;.<' · " ·
,i ( ;, : : ' "
, ' I ,\. ,
W:':6. Wisconsill.July 21,
FEDERAL CO'iJRTS...,.RuLES EDENT., " ,
Where"thlOl questions ar!$ing in a suit jna circuit court are the same as those involved iI). ,R' suit between other parties which has been determined by the' snprem,e :court, and, the 'evidence' material' to such quesdecision of the supreme court, while tions is substantially it does ,not render the questions 'res jUdicata, constitute!ii. a precedent which should,.'be followed by 1-; ,',-' "," ' . , court. ' inferior .,. .. ,',:; -'i'
OF St;PREM'E COURT AS. PREC,', ' , ..
This was a ,suit in equity, in the nature of a creditors'bill, brou.ght by Sarah RAngle, administratrix, and Thomas M. Nelson, administrator, of the estate of H. G. Angle, deceased, against the Chicago, Portage & Superior Railway Oompany, the Ohicago, St. Paul, Minneapolis & Omaha Railway Company, and the Farmers' Loan & Trust Company. On final hearing. Burr W.Jones and F. J. Lamb, forcomplainantB. ' Thomas H. :Wilson, for defendants..
'j.' , ',,;,
BUNN, District Judge. It has not been, and is not now, my purpose to ,this case, put only to indicate very briedy, and in a general way, the conc1usionsieached, with the grounds on which they ave based; Each party on the hearing having indicated apurpose dftakingan appeal in the ah'adverse decision by Wis goes, up,yyill. stal;ld, f9r hearing :/;lovo in theappeUate court upon the same allegations and the same evidence
ANGLE V.CHICAGO, P. " S.RY. CO.
as it stands here, so that the decision here will be but preliminary to a tinal hearing in the court of appeals. Nevertheless, the case has been argued with all the fullness that it could be if this was the court of last resort. Fully two weeks were consumed by oral argument of on the hearing, and elaborate briefs have been prepared and filed since. This court has endeavored to give the case all the attention which its importance demands. The litigation has been in this court and the supreme court, in some form, for 10 Or 12 years, and this is the final hearing, so far as this court is concerned, upon the equity side. The conclusion which the court has reached is that the bill of complaint must be dismissed for want of equity, on the ground, generally stated, that the allegations of the bill are not supported by the evidence. The case was first heard before Mr. Justice Harlan, on the circuit, upon general demurrer to the bill, and the demurrer sustained and the bill dismissed. 39 Fed. 912. An appeal was taken from that decision to the supreme court of the United States, and was decided by that court on January 4, Bya careful opinion, prepared by:Mr. Justice Brewer, the decision of the circuit court was reversed, and the allegations of the bill held to be sufficient to constitute a good cause in equity.' The case is reported in 151 U. S. 1, 14 Sup. ct. 240. It is claimed by plaintiffs' counsel that this decision constHutes, in an important sense, the law of this case, and so it does; but .only to this extent: that, if the allegations of the bill are fairly supported by the evidence, there should be a decree for the plaintiffs. Since that case was in the supreme court, another case in equity has been decided there, to wit, the case of Farmers' Loan & Trllst 00. v. Same Defendants, decided. on May 4, 1896, and reported in 163 U. S. 31, 16 Sup. at. 917. That was a suit brought by the of ,the Portage & Superior Company, seeking to have tlIeir claim declared a lien upon the lands taken away from that ,company on account of a failure to perform the conditions of the grant, and conferred upon the Omaha Company. That. case was also heard by Mr. Justice Ilal'lan,: at the circuit, upon the merits, and the for want.of equity. See his opinion in 39 Fed. 143. The, facts in ;t)1is case are,fully stated by Mr. Justice Harlan in his opinion, an,d,aIso by Mr. Justice Brewer in the same case, and in this case on appeaUn the supreme court, .so that it seems quite the,pl here. H. G. Angle, the husband of this unnecessary plaintiff, made a contra<:t, with what is in this case called the Portage Company, in AUg'q$t, 1881, for the grading of the 65 miles of its road (being the· portion thereof) from a point between ships 25 a,nd31 to the west end of Lake Superior. In 1887, the company .having' failed, theplaintjji, as Angle's administratrix, obtained a judgment in this court upon that contract for work done, and for damages . and costs, in the SUPl of The judgment not being satisfied, this suit was brought, in the nature of a creditors' biIl,against the OmahilRailway Company, to have the judgment declared a lien upon the land-grant lands which the legislature by the acts. and 1883 had taken away from the Portage COIll" panY,and conferred upon the Omaha Company, which had built the road, on the ground that those acts were unconstitutional and void,
95 FEDERAL REPORTER.
because of fraud and wrongdoing committed by the officers of that cOIhpany in obtaining the grant, in getting control of and wrecking the P()J1tageCompany, and depriving it of the opportunity and right to earn'thelands under the grant to that company; alleging that the Omaha Company, on account of such wrongful acts, became and is a trustee) of the lands, ex maleficio, for the creditors of the Portage Company. The nature and purpose of the suit brought by the trustee of the bondholders, as creditors of the Portage Company, were the same as in this,-to reach the land-grant lands in the hands of the OmruhaCompany, and have that company declared a trustee of the landsf'Ol1.the benefit of the bondholders. The material allegations of that bill are substantially the same as those of the bill in this case. If the proof is the same,-and it is claimed by counsel for defendant that itis,-then the decision of the supreme court dismissing the bill is an authority for this case in this court, not on the ground that it is stare.dedsis, because the parties are not the same, but as a precedent by. the highest which is binding upon an inferior court of the same jurisdiction. The allegations of the bill and the issue being the same, if the evidence in support of the bill is also the same, or substantially the same, the decision would constitute a precedent or rule which I think would be binding upon this court, though not upon the supreme court, if the case should ever get there. I have read carefully all the evidence in both records, and the best judgment I can form is thatthe testimony, so far as it has a material bearing upon the issue, is substantially the same in each case, and that where there is a difference, as in the testimony of Porter, Spooner, and Peck, that difference makes rather in favor of the defendant than the plaintiff. The supreme court in that case held that the allegations of the'bill were not supported by thevidence; that Barnes and Jackson had a right to sell the stock standing in Jackson's hame; that the Omaha Company had a right to buy it, and that in doing so it did no wrong, and that it had a right to take the land grant which the legislature conferred upon it; and that in doing so it committed no wrong. It is insisted by counsel that the case at bar should be heard and decided as though the s<Halled "I\ond Case" had never been heard. Ko doubt, it is to be tried on its own merits; but the Bond Case, in the circumstances, can hardly be disregarded as a rule and precedent. 'My opinion is that it should have very great weight, and I confess that I am unable to distinguish it materially from this upon any just principle of legal procedure. The prime difficulty in tbis 'case, as in the Bond Oase, is that the a11egations of Uie. bill are not supported by the evidence. The allegations of frau.d .and bribery and conspiracy and wrongdoing are full and profuse in the bill. I should entertain no doubt of their sufficiency as they stand in the bill. But it seems to me there ifla fatal lack of evidence to support the tions. It is a poor laWyer that,' in the privacy of his office, cannot find to make a case in equity on 'paper,-especially as he is not· trOUbled' with any necessity for verifying the bill upon oath. But in legal controversies it is not at all uncommon thl'J,t "the success and vigor of the war do not· quite come up to the lofty and sounding phrase of thf. manifesto." . .
ANGLE V. CHICAGO, P. & S. RY. CO.
The evidence, in my judgment, shows that the final collapse of the Portage Company in the winter of 1882 was not caused by any wrong committed by Jackson or C. J. Barnes or Porter or Cable or the Omaha Company, but by the continued and hopeless insolvency of the Portage Company, caused by an inadequate and irretrievably bad management. The sale of the $1,000,000 of Jackson stock and the transfer of the land grant to the Omaha Company were, it is true, coinci· dent with the final collapse of the Portage Company; but there is no reason to believe, from the testimony, that these things stood in the relation of cause and effect to such final collapse. They may with much more propriety be said to be an effect or result of the general insolvency and total inability of the Portage Company to raise money for the accomplishment of such an enterprise. Jackson did not wish to sell to the Omaha Company. He had been connected with the Portage Company from· the beginning as attorney. It was clearly for his interest that that company should build the road and earn the grant. There is no reason to doubt his good faith when he says that he wanted to see the Portage Company succeed, and that he did all he could to that end, and to get that company, or those representing it, to take the stock and pay his claim and those of his friends, Sloan and Ruger. The entire amount of those claims was but $30,000, -$18,000 to Jackson for legal services, $2,000 to Sloan for legal services, and $10,000 to Ruger for engineering services. If these small claims could have been paid, Jackson would have had no further claim, except two or three thousand dollars for legal services not included in the judgment against the construction company, and which he has never yet received. It is very significant that .under the management of Schofield and Gaylord, with their interminable series of contracts with the investment company and with the "English parties," so called, for the raising of money, the company was in debt for everything; that it was unable to pay its attorneys or its engineers, or the men who were doing the grading. These various agreements without end of words brought no money. There were constating agreements and investment contracts in plenty, but no investment and no money. Apparently, one leading purpose of these contracts was to make safe provision for an equal division of the profits of the land grant between Gaylord, Schofield, and Barnes, by the earlier ones; and by the later, between Gaylord, Schofield, and the investment company. John C. Barnes was one of the original promoters until he fell in with Willis Gaylord, who, uniting William H. Schofield with him, took the concern out of his hands. He says in many places that he had not much to do with it after they came in. He had put in some money,-no one knows how much, but about all he had; he thinks, from $100,000 to $200,000; he cannot remember. Gaylord was a mere adventurer, with no money, nor much character, whose business, as J. C. Barnes says, seemed to be to work such schemes as this. Schofield had once had money, but had lost it. He could put but little into the enterprise. The land grant was an uncertain quantity at t.hat time. It is easy now, after the road is built and the lands partly sold, to see that the grant was valuable; but Gaylord and Schofield had much difficulty in satisfying
the English: parties (Rickson and Meddaugh, the 'president and attorney of the Gl'and Trunlr, Limited, attEnglish corporation) that the grant was of· much value. They had in their ha:ndsa large majority of the stock oUhe Portage Company, amounting to which, if lawfully issued, as they claimed it was, would give control of the company. But, to raise money in England, theymllst issue a prospectus to advertise the stock and bonds. Bills had been introduced into the legislature of Wisconsin in the winter of'1881 forfeiting the grant, and conferring it on other companies. Partly' by the efforts of .Jackson and Sloan these bills had been defeated. There was danger, amounting almost to a certainty, that other bills would be introduced in the winter of 1882. There was question made as to the value of the grant:" 'l'he English parties· had been informed that it was not as valuable as had been i-eprel'iented by the officers' and agents of the Portage Company. In England. where peoplewereifuore honest and the law more strict than elsewhere, sueh things had to be conducted openly and ott· the square; or the promoters of thepl"ospectus would tender themselves personally "liable;" iThis was' dangerous ground to tread. All these discotiraging things niust be placed in the prospectus Dr manifesto which was to take the people's money. But, if these things were put in, nobody'weuld buy> There was another controlling consideration: ;',A 8uggestioni was made when all the parties were met· in Ohicago in Jannary;1882, that the Jackson and Barnes $1,00@,,000 of stock constituted a:majol'ity of legal stock, with whomsoever"shcHlld own it, because the '$5;100,000 in the hands of the English parties had 'not been legally issued, under the laws of consin, whicll'reqtiired; a consideration for the issue,-something to be paid for it. R-was merely placed there by GayHwd and Schofield, who carried. the stock us well as the corporation in their pockets from country to eountry;but without consideration, except to raise money upon whenever: they could·tle·sold. It had never been sold, or anvthing paid for it. 'Meddaugh was said to be a competent man arid lawyer, and had examined and looked far into the affairs of the POrtage He· claimed the stock in theirihands-was Iegall,v issl1ed.·Jacksonthoughtotherwise, and said It is now admitted that Jackson :knel: the best of the argument, and that'his and Barnes' stock was the [only valid stock of any controlling amount, and the far greatetafn,(l)unt of the stock in the hands of the English parties When this doubt came to would not give (lontrol of the the' knowledge of Hickson, he refusea to: go on with the negotiations. He had come to Chicago, where to hold a general meeting of the Grand, Trunk' officers, .preparea to advance $50,000 to the Portage Company; provided·he fonndeverything right. But the time for the completion of the road 6f the Portage Company was about to expire. A bill had already been introduced (or was about to be) ill the legislature to forfeit the grant, and this, withtue donbt as to the validity of· the English stock, caused Hickson 'to withdraw from the enterprise. These considerations were quite as much the cause of the collapse of the company; and the cessation of the work, as the act of the Omaha Company in purchasing the Jackson stock,in my judgment, much mot"e so. Negotiations were broken bff. Hicki
ANGLE V. CHICAGO, P. &: .S. RY. CO.
son withdrew, and Gen, went home to New York two or three days before the con.tract for the sale of the .Jackson stock had been perfected, on ,Ja;o.uary 19th. ,Hickson had been offered the Jackson topm'chase. John C. Barnes and C. J. Barnes could have had Hany time by paying the sum of $30,000,the amount of Jackson's,Sloall's,and Ruger's claims. But they could not buy. They had nQ.ll1pney..·:rackson is arraigned for betraying his company and selling his stock to Cable, who represented the Omaha C'Almpany. But what could he do? If the company collapsed and the grant was taken away, his stock and all stock would be worthless. ,He had a right, under these circumstances, to secure himself and Barnes, Ruger, and Sloan, who with him had stood by the company so long. The legal title was in him, but, after he and Sloan and Ruger were paid,' the balance belonged to the Barnes interest. Jackson is also blamed for suggesting to the English parties that the stock in their hands was not legally issued, because it is .said this information discouraged the negotiations for the advance of the $50,000, though it is conceded that Jackson was right in his opinion, and Meddaugh, the English lawyer, was wrong. But why should not Jackson express his opinion? Or what reason was there for nursing a lie,so long as he knew the stock was not legally issued stock, under the laws of the state where he had practiced his profession so many years?' ppon a careful consideration of the evidence, I am unable to find anything in the conduct of Jackson to subject him to criticism. He had consent of the two Barneses to sell the stock. Indeed, the negotiations for sale and the sale were conducted by Charles J. Barnes, the 'nephew of his uncle, in New York, who had been notified, and who telegraphed C. J. Barnes to look out for his interests. 1.'hat Jackson and Barnes owned this stock, and had the right to sell it; 'that they were lawfully in possession of it, and had been guiltvof no wrong in obtaining that possession; and that Porter and Cable had the right to purchase from them,-seems to me very clear, from the evidence. It is claimed that it was the sale of this stof;k that wrecked the Portage Company. 'T'his is not shown to be true, but we will suppose that it is. If it was the only validly issued stock, and Barnes and .Tackson had the right to sell it to protect their own interests, and the representatives of the Omaha Company had the right to purchase it, how could the Omaha Company be made responsible for the consequences of the transfer? But, in my judgment of the evidence, the sale of the Jackson stock is not what wrecked the corporation. It was mel'ely a coincident circumstance in the final drama, and was not the cause. The cause was the weak and vicious management of the company, and its utter want of capital and financial standing and ability. Suppose the $50,000 which Hickson brought to Chicago to pay over to the company if he, found everything all right had been paid. Sloan testified it would have been but a mere drop in the blleket, whieh is, no doubt, true. 'If the company had not applied it to pay for labor and services already performed, it may have sufficed to eontinue the work for a few days,. perhaps ,two or three weeks, as the evidence shows that the work was costing some $3,000 a day.
vVhat good ground of hope was there that with bills in the legislature to forfeit theg-rant, with the. company owing ,$140,000, and not a mile of road completed after ofthe grant for eight years, more money could have been raised to complete the road? Gaylord and Schofield had entire control of the affairs of· the corporation. They had no money and.no credit, andn'o sufficient ability to finance such an enterprise. The wonder is that the grant had not been taken away long before. But tbe state of Wisconsin was very indulgent, as it always had been to railroad corporations to wbom it had made its grants of land to aid in the construction of these great internal improvements. This grant was.conferred upon the company in March, the Jands was this condition: 1874. In the act
"That said company shall construct, complete and put in operation that part of its said railway above mentioned as soon as a railway shall be constructed and put in operation from the said city of Hudson to said point of intersection [Superior Jnnction] and witMn five years from its acceptance of said lands as herein provided, and shall also construct and pnt in operation the railway Of said company from Genoa northerly at the rate of twenty miles per year." Laws 1874, p. 188,§ 8.
In March, 1878, the state further extended the time three years. The company was given abundant time in which to complete the building of the road. It is true that some of these years covered very hard times, but other roads, including the Omaha Company, defendant, pusbed its railroad enterprises in spite of the hard times. There is not much need to look about for conspiracy or fr::tud as a motive force in iDducing the legislature to take the grant away from the Portage Company and confer it upon the defendant. The financing of the enterprise under the lead of Barnes, Gaylord, and Schofield had proved a. dismal and chronic failure. The Omaha Company was well known totbe people of tbe state, and had a good standing and reputation for able and efficient management. The same act which thelands sought to be reached in this case to the Chicago & Northern Pacific Air Line Company, which company was afterwards changed to the Portage & Superior Company, also granted to the North Wisconsin Railway Company, afterwards succeeded and represented bI the Omaha Company, that part of the congressional grant applicable to the land from Hudson, on the St. Croix river, to Bayfield,--a dis· tance of about 170 miles. This line was completed by the defend· ant company in 1881. The defendant also completed its line from Hudson'to and beyond SuperioI" Junction in 1880, and in 1880 and 1881 had commenced the construction of a road between a point on its Bayfield line, near Superior Junction, and Superior City. From the experience the state had had with the defendant company, there could be no cause for wonder that the legislature should entertain. some in its ability to build the road and earn the grant, which was what the state, as well as the general government, in conferring the grant, most wanted. The state, as well as the general wanted the added industries and commercial facilities which 'the building of the road would give. The only fulfillment of the original purpose of the grant was to be found in the completion of the line of road for the building of which the grant was made.
The Omaha Company, upon the passage of the act of February 16, 1882, proceeded to justify the confidence which had been placed in it by the legislature, by building the line of road the same season, and without any delay; and the state, by its governor, conveyed to it the lands, and the legislature, by act of March 7, 1883, confirmed the previous grant. See chapter 29, Laws 1883. The time for finishing the 65 miles from Superior Junction to Superior City under the extension granted in 1878 expired on May 5, 1882, while the act taking away the grant was passed on February 16th, previous. It is con· tended by plaintiff that the conditions of the grant as to the work north from Genoa-the company never having completed any part of that line as required by the act of 1874, which required 20 miles to be completed each year-did not apply to the portion of the grant from Superior Junction to Superior City. And on this ground Mr. Sloan, one of the attorneys for the company, at the meeting of all the parties in January, 1882, advised the company, when a bill to forfeit the grant was about to be introduced, that, if the bill passed, he thought the Portage Company, by going on and completing the line by May 5th, could successfully resist the taking away of the land grant in the courts, on the same ground, I suppose, as is claimed by the plaintiff,-that the forfeiture impaired the obligation of the contract which the Portage Company had with the state, and was therefore unconstitutional and void. But it is quite unnecessary to decide this contention, as the vital condition of Mr. Sloan's advice (that of going on and completing the line by May 5, 1882) was not kept,-no single mile of the line was ever completed; and, as pointed out by Mr. Justice Harlan in his opinion, if the act of February 16, 1882, was unconstitutional and void, its passage did not, in a legal sense, deprive the Portage Company of the right to proceed with the work, and to complete the construction by the time required by the act of 1878 extending the time; and, this not having been done, it was quite competent for the legislature, by the act of March 5, 1883, to revoke the grant, and to confer it upon the Omaha Company, which it did,-assuming that this purpose was not accomplished by the previous act of 1882. Since the decision of the supreme court on demurrer in this case, the issues are mainly of fact. That is the way the case presents itself on this hearing. The important question is whether there is any sufficient evidence to support the allegations of conspiracy and fraud contained in the bill. And it seems just as true in this as it was in the Bond Case that the allegations of the bill are not supported by the evidence. It is as true in this case as it was in the Bond Case, with reference to the charge that the Omaha Company wrongfully and fraudulently secured, through the action of the legislature, a transfer of the land grant to itself, that it is sufficient to say there is absolutely no foundation for it in the testimony. It does not appear that there was any corruption or attempted corruption by the Omaha Company, or any of the members of the legislature, or other officials. Everything it did was open and aboveboard. :N 0 of the Portage Company had any legal or equitable right to any portion of those lands, and if the legislature had simply revoked
, .95 ',.
!,) . . .
tbe would be .such subject the :'laHdsl 'or any mterest therem, to. the satlsfaetwn of hIS debt. No ,re:sl}medbY' state,' aQdby the same upon another It is Nst as true in this case ari 'ffWas iii the ,Borid Case ,(fdr the issues and, the evidence upon are' l;l,ubstantiaJly tlle same)' that, "putting the most all unfavorable ,construction upon t4e'testimony, it l;1(jles not seem that eHller Jllclrsoh..or Barnes can b('!: for ,any breach of trust or other: t()the (Jpmllany, whep",1J,avirig offered the stock to "tfie Grand ,llt the' price afterwards paid by Cable, and SUch: offer having b('!en. declined, theY sold it to the OmahaCompany." 4s was said "by the supreme court, "it may be that Schofield and Gaylord deprived of profi,tswhich they expected secure bysuccessfuny carrying through the negotiations with 'th.eGrand TrunkOompany, butwe do not understand that one stockholder is, by virtJie'of his owue,rsbip of stock,Dound to continue in the holding of it,fll order to 'apow another stockholder to make a profit out of negotiations pending." ¥y own vjew, as has been o! shown, js that they were, Ilot so d,eprived'?f profits)y tbe Jackson and Barnes, a,nd that they ¢a:n hardly be sald to be deprlVec. of profits which they never earn,el;1 merited. It is as ,true in tbi13 case in the Bond Ci;lse thatl'lO.1ackson was guilty of no breach of k,; that Jt be, both l.egallY,' a,nd equita.bly, , t,rust in" S,e1ling the and hImself; that they pad a full legalalld moral rIght to J. C. tosell it to any one, who would pay their price; and):t equally follows the Company avdCa,ble, in making the purchase, '" " " were them\,elves guilty of no This covers all the vital issues in' the ,case. I bllve not, in this opinioIl,n,'ot,ieed all. the contention!! mad¢. by the plainvery wasllOt my pUrpOl;le to do sq. , Tpe al,'guments of tiffs' for plaintiff are very able, andwoul!l, ,be quite unif ,the proof wei'e asful1, and competenta.'s, the briefs of counsel. Ihaveearefully eonslderep ,all the points made, and am fuHysatistiedto decide the case upon the stated,-of a lack of proof, ,No doubt,some allowal1ce should be made ,'on account of the fact that the, plaintiff has been obliged to rely largely upon testimonY.draw:n from either in, the interest of an adverse party, or from those against, ,whom c1;l1lrges of fraud and conspiracy are made intIiehilf. ,'But, all lHlowan<;esbeing made that would be proper, it is evident that, from whatever source the evidence comes, it should be suffidentto sustain a cause Maction in equitY.'l.'he bilI <;If complairitwiIl be ,dismissed for want of equity, with costs.
BAILEY V. MOSHER.
BAILEY v. MOSHER et aL (Circuit Court, D. Nebraska. June 13, 1899.)
RIllMOVAL OF CAUSES-AMENDMENT BY PLAIN'fUI'II' AFTER REMAND-RIGHT TO RENEW ApPLIQATION. .
In llDaction In a state court agaInst officers or a national bank, the parties beIng citizens or the same· state, defendants filed a. petition and· bond ror removal, on the ground that the action was based on the laws or the recUnited States. The application was denied, llDd, on the filing or 6rd In the federal court, that court sustained a motion to remand, on the ground that plaintiff's petition did not count upon the statute, but upon the common law. SUbsequently plaintiff amended his pleading by adding allegations showing that he In fact relied on a violation by derendants of their duty as officers of the bank. Defendants answered, challenging the jurisdiction of the state court on the ground that the .cause had been removed. On the making of a second amendment by pll\.intiff, and within the tIme allowed rorpleading thereto, defendants filed a second petItion for removal., Held, that the right of removal was not lost by the lapse of time since the first application, nor was It waived by falling to file a renewed application on the making of the first amendment, since the first petltlonwhich remained on file in the case became efl'ective as soon as 1i appeared of record that the cause was removable. '
On Motion to Remand. Biggs &; Thomas and L. C. Burr, for plaintiff. J.W. Deweese and Charles O. Whedon, for defendants. SHlRAS, District Judge. This action was originally brought in the district court of Seward county, Neb., and on the 29th of Ma:rch, 1895, the defendants'filed a petition for a removal of the cilse into this court 011 the ground that the cause of action was based upon or grew out of the laws of the United States, in that the defendants were proceededagllinst as officers and directors of the Capital National Bank for derelictions in. their duty in that capacity. 'The state court refused tqgrant an order of removal, and thereupon the defendants procured a transcript of the case, and filed the same in this court, wherein a motion to remand was made by plaintiff, and, upon consideration, was by this court sustained. Bailey v. Mosher, 74 Fed. 15. The principal· ground for this ruling was that the plaintiff's petition counted on the common-law liability of the defendants, and not upon a violation of any duty imposed by the national banking act. On May 3, 1897, the plaintiff filed an amended petition in the state court, in ,which itisset forth that the defendants were the officers and directors of 'the Capital National Bank; that, as such directors and officers of said bank, it became and was the duty of the defendants, and each of them, under ,the law as well as the by-laws of the bank, to actively and actually manage and superintend the business thereof; and the petition then sets forth the particulars in which it is claimed that the defendants violated their duty, and thereby caused injury to the plaintiff. To this amended petition the defendants filed answera, wherein, among other matters, they averred that the state court wa. without jurisdiction, in that the case had. been removed into the federal court. On the 6th day of March, 1899, the plaintiff obtained leave to amend the amended petition by interlineation thereon, the defend-