to and tried in the Circuit Court of the United States, where a ver-
dict was returned by direction of the court for the defendant. Held,
(1) That as the proceeding involved a judicial determination of the
liability of Greene's estate for the claim in question, with parties
before the court to contest all questions of law and fact, it was a
"suit" within the meaning of the act of Congress providing for the
removal of suits from the state courts. It is not competent for a State
by legislative enactment conferring upon its own courts exclusive
jurisdiction of proceedings or suits involving the settlement and dis-
tribution of the estates of deceased persons, to exclude the jurisdiction
in such matters of the courts of the United States, where the constitu-
tional requirement as to citizenship of the parties is met; (2) That
the value of the matter in dispute here is the amount of the claim
the plaintiff seeks to establish, and that amount being in excess of
$5000, without costs, this court has jurisdiction without reference to
any inquiry as to what might be ultimately realized from Greene's
estate, if the claim be established; (3) That the estate of Greene is
not liable for the face value of the stock by reason of the statute
of Iowa providing that nothing therein contained "exempts the stock-
holders of any corporation from individual liability to the amount of
the unpaid instalments on the stock owned by them or transferred by
them for the purpose of defrauding creditors, and execution against
the company may to that extent be levied upon such private property
of any individual." Revision of Iowa, 1860, sec. 1172; Code of 1873,
sec. 1082; (4) That whether a stockholder in law or in fact, owed to
the corporation any sum on the stock held by him, was left by the
statute to be determined in each case, upon its own circumstances,
and in accordance with the principles of general law touching the
rights and liabilities of creditors and stockholders. Clark v. Bever, 96.
3. While the capital stock of a corporation, especially its unpaid subscrip-
tions, is a trust fund sub modo for the benefit of its general creditors,
a corporation no statute forbidding — may in good faith sell or dis-
pose of its stock to creditors in discharge of their debts. Ib.
4. The principle reaffirmed that when the interest of the public or of a
stranger is to be affected by any transaction between the stockholders
owning a corporation and the corporation itself, such transaction is
subject to rigid scrutiny, and if found to be infected with anything
unfair towards such third person, calculated to injure him, or designed
intentionally and inequitably to screen the stockholder from loss at
the expense of the general creditor, it will be disregarded or annulled
so far as it inequitably affects him. Therefore, when the interest of
creditors requires, those holding shares in a corporation purporting to
be, but which are shown not to have been, paid for to the extent of
their face value, should be held liable to pay for such shares, unless it
appears that they acquired the stock under circumstances that did not
give creditors and other stockholders just ground for complaint. lb.
5. It is the settled doctrine of this court, as well as of the Supreme Court
of Missouri, that unpaid subscriptions to the stock of a corporation
constitute a trust fund for the benefit of creditors, which may not be
given away or disposed of by it, without consideration or fraudulently,
to the prejudice of creditors. Fogg v. Blair, 118.
6. While it is competent for a railroad corporation in Missouri, exercising
good faith, to use its bonds and stock in payment for the construction
of its road, it could not rightfully, at least, as against creditors or
stockholders, issue its stock to contractors as full paid, without getting
some fair or reasonable equivalent for it. What is such equivalent
depends primarily upon the actual value of the stock at the time it
was contracted to be issued, and upon the compensation which, under
all the circumstances, the contractors were equitably entitled to receive
for the particular work undertaken or done by them. The corporation
could not, by its directors, sell or dispose of its assets to the prejudice
of creditors and stockholders, under such circumstances, on such terms,
and at such prices as indicated upon the face of the transaction, that
they were being squandered recklessly or fraudulently in disregard of
the trust committed to them. Ib.
7. When a charter power is once fully exercised by a corporation, and
exhausted, it is, in respect of further contracts and rights of the cor-
poration, as if it had never been granted. East Tenn. Virginia &c.
Railway v. Frazier, 288.
8. The plaintiff in error having exhausted the power to mortgage its prop-
erty given by the act of 1847, before its property was mortgaged in
1881, the latter mortgage was made under the then existing laws of
Tennessee. Ib.
9. The failure to enter a vote of stockholders in a corporation in the cor-
poration records at the time when it was adopted does not affect its
validity. Handley v. Stutz, 417.
10. A resolution of stockholders in a corporation organized under the laws
of Kentucky to increase the capital stock of the corporation, passed at
a meeting held without the limits of that State, is binding upon the
members present and voting for it. Ib.
11. An increase by a Kentucky corporation of its capital stock within the
amount authorized by law is not invalidated by reason of the fact
that no amendment of the charter authorizing such increase was ever
recorded or published, as required by the laws of that State. lb.
12. When a stockholder in a corporation who assents to an increase in the
capital stock of the corporation, and its gratuitous distribution among
the shareholders, receives such stock as full paid stock, an obligation
arises to pay for it in full, when called upon to do so by creditors
whose debts are subsequent to the authorization of the increase: but
this equity does not exist in favor of a creditor whose debt was con-
tracted prior to such authorization. Ib.
13. An active corporation, finding its original capital impaired by loss or
misfortune, may, for the purpose of recuperating itself and of produc-
ing new conditions for the successful prosecution of its business, issue
new stock, and put it upon the market, and sell it for the best price
that can be obtained: and in such case no such trust in favor of a
creditor arises against the purchaser who, in good faith, buys for less
than par. Ib.
See BILLS OF EXCHANGE AND PROMISSORY NOTEs, 4.
The court may withdraw a case from the jury, and direct a verdict for
plaintiff or defendant, as the case may be, when the undisputed evi-
dence is so conclusive that the court would be compelled to set aside a
verdict returned in opposition to it. Delaware, Lackawanna &c. Rail-
road Co. v. Converse, 469.
COURT OF CLAIMS.
See JURISDICTION, C.
1. "White hard enamel," imported in 1884, and used for various purposes
when a smooth or enamelled surface was desired, including the making
of faces or surfaces of watch dials, the form or condition of it, as
imported, affording no indication of the use to which it was to be
applied, and it requiring to be ground o" pulverized, and new pro-
cesses of manufacture to be applied before it could be made of any
practical use, the article in this case having been imported for use in
making watch dials, and having been in fact so used, was subject to a
duty of 20 per cent ad valorem, under § 2513 of the Revised Statutes,
as enacted by § 6 of the act of March 3, 1883, c. 121, as an article man-
ufactured in whole or in part, not therein enumerated or provided for,
and not to a duty of 25 per cent ad valorem, as "watch materials,"
not specially enumerated or provided for in the act, under Schedule N
of § 2502 of the Revised Statutes, as enacted by the same § 6. Worth-
ington v. Robbins, 337.
2. In order to be dutiable as "watch materials," the article, when imported,
must be in such form of manufacture as to show its adaptation to the
making of watches. Ib.
3. Under Schedule K of § 2502 of the Revised Statutes, as enacted by § 6
of the act of March 3, 1883, c. 121, 22 Stat. 509, women's and children's
dress goods, composed of wool and cotton, valued at less than 20 cents
per square yard, and weighing less than 4 ounces to the square yard,
the cotton being carded in with the wool from which the yarn compos-
ing the warp was spun, there being 94 per cent of wool and 6 per cent
of cotton, the cotton being put in to secure a lower classification for
duty, and an ordinary examiner not being able to detect the cotton
without a careful examination, and there being no threads or yarns
made wholly of cotton or other material than wool, are dutiable at 5
cents per square yard and 35 per cent ad valorem, and not at 9 cents
per square yard and 40 per cent ad valorem. Seeberger v. Farwell,
608.
4. The case of Seeberger v. Farwell, ante, p. 608, affirmed and applied to
goods in which the percentage of cotton varied from 1.99 to 4.47.
Magone v. Luckemeyer, 612.
5. Under the act of March 3, 1883, c. 121, § 6, bichromate of soda is subject
to the duty of 25 per cent ad valorem, imposed by Schedule A upon
"all chemical compounds and salts, by whatever name known;" and
is not subject, by virtue of the similitude clause, to the duty of 3
cents per pound, imposed by that schedule on bichromate of potash.
Mason v. Robertson, 624.
A conveyance by deed of a perpetual right in land, for a solid consideration
therein expressed, without any covenant for the payment of rent or
the redelivery of possession, creates the relation of grantor and grantee
between the parties. Bybee v. Oregon & California Railroad Co., 663.
A demurrer admits facts well pleaded, but does not admit that the con-
struction of a written instrument set forth in the bill is the true one,
or that its legal effect is contrary to that which its language imports.
Interstate Land Co. v. Maxwell Land Grant Co., 569.
DEPOSITION.
See EVIDENCE, 3.
ELECTION.
See LOCAL LAW, 9.
1. In a suit brought against contractors for the construction of a railroad
to hold them liable for the face value of stock received by them, in
payment for work done, the bill alleged that they got $12,000 in the
company's first mortgage bonds, for each mile of constructed road,
and, in addition, $850,000 in its stock, and that the mortgage bonds
received by them were full and adequate compensation for the work;
but there was no allegation as to the real value of the stock. Held,
that the bill was bad on demurrer; that it should have shown that
the stock was of some value; and that the general allegations that the
arrangement was a "fraud," a "breach of trust," a "scheme," and
"colorable," without stating the ultimate facts upon which they were
based, were only allegations of conclusions of law, which the demurrer
to the bill did not admit. Fogg v. Blair, 118.
2. M., a planter of Louisiana, died in 1860, leaving as his heirs, the minor
children of his deceased daughter Julia, and the minor grandson of
his deceased daughter Ann. At the death of his wife, in 1844, a large
portion of the property then in his possession was community property,
in which she was entitled to a half interest. Before his death he
attempted, by sale and donation of specified estates, valued and
appraised by him, to give to his daughter Julia (who was then living)
her interest in the community property left by her mother and three-
fourths of his own remaining estate; and, in a like way, to give to
the grandson of his daughter Ann his like interest in the community
property and the remaining one-fourth of his own estate. At his
death he left a will with similar provisions. The parties each entered
into possession of the properties thus respectively assigned to them,
occupying in separate parcels, without interference from the testa-
mentary executor. But in 1869 the testamentary executor of M. made
a simulated sale of all the lands at the instance of one of the parties
concerned. A creditor of his estate then filed a bill on behalf of him-
self and other creditors, to set aside this sale as fraudulent, and to
subject the lands to the payment of the testator's debts; and such
proceedings were had thereon that this court, at October term, 1883,
decided that the sale was fraudulent in fact, and that the lands in the
hands of the heirs were liable for his debts. Johnson v. Waters, 111
U. S. 640. The cause having been remanded to the Circuit Court for
further proceedings and to afford other creditors an opportunity to
become parties, the representatives of the heirs of Julia and of the
heirs of Ann respectively presented their claims as creditors for their
interest in the community property, and also filed bills in the nature
of supplemental or cross-bills, setting up that they were not parties to
the former decree, averring the validity of the sale declared fraudu-
lent, setting up their claims to the community property, and claiming
that they should be allowed for improvements. The creditors' repre-
sentative answered, that the debts for the community property had
been fully paid from rents and revenues, or, if not paid, had, under
the laws of Louisiana, become subordinated to the debts of ordinary
creditors. Further evidence was taken in addition to that in the orig-
inal cause: Held,
(1) That the decision in Johnson v. Waters, was right as to the fraudulent
character of the sale made in 1869, and that it be affirmed;
(2) That the act of sale and donation to M.'s daughter Julia, mentioned
in Johnson v. Waters, was void as a donation, but valid as a sale to the
extent of the consideration named therein; to wit, the debt due to her
for her share in the community property, and the sum to be paid by
her to the other heir;
(3) That any debt which may have been due from M. to either of his
heirs on account of the community property, was more than satisfied
by their respectively receiving that portion of the property which was
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