LaFayette Ins. Co. v. French, 59 U. S. 18 How. 408 (15 L. ed. 453); Baltimore & O. R. Co. v. Harris, 79 U. S. 12 Wall. 81 (20 L. ed. 358); St. Clair v. Cox, 106 U. S. 356 (27 L. ed. 225).

The law of Missouri provides that foreign corporations doing business in this State may be sued by service upon the agent of the corporation in this State (Rev. Stat. § 3489), and that a general judgment may be entered against it as if created by the laws of this State (Act 1881, p. 173.)

suit, an inhabitant and a corporation of Missouri, and subject to the jurisdiction of this court, under the Act of March, 1887.

Thayer, D. J., delivered the opinion of the court:

Ex parte Schollenberger, 96 U. S. 369 (24 L. ed. 853).

Neither the Act of 1875 nor that of 1887 affects the principle upon which the cases cited above were decided; namely, that where a foreign corporation avails itself of the comity of a State to do business therein, it thereby consents, for the purposes of suit, to be an inhabitant of the State, and places itself exactly in the attitude and position of any other inhabitant of the State, for the determination of all controversies, and not place the inhabitaut of a State at the disadvantage of having to seek redress in the courts of a distant State, for wrongs done by the corporation in his own State, after abusing its comity. 'Foreign corporations doing business in a State are to be regarded and treated, for the purposes of suit, as corporations of the State.

New York L. Ins. Co. v. Best, 23 Ohio St. 105; Hannibal & St. J. R. Co. v. Crane, 102 Ill. 249; Mc Nichol v United States Merc. Rep. Agency, 74 Mo. 457.

Whether, then, the suit at bar relies for its jurisdiction upon the fact of diverse citizenship only, or upon the Interstate Commerce Act, the defendant, under the authority of the cases above cited, is, for the purposes of the though permitted to transact business where its, charter does not operate, it cannot on that account acquire a residence there (Baltimore & O. R. Co. v. Koontz, 104 U. S. 5, 26 L. ed. 643), unless the statute giving the permission must be necessarily construed as creating a new corporation of the State granting the permission. Pennsylvania R. Co. v. St. Louis, A. & T. H. R. Co. 118 U. S. 290 (30 L. ed. 83; Baltimore & O. R. Co. v. Harris, 79 U. S. 12 Wall. 65 (20 L. ed. 354). The residence of a corporation is the place where its business is done, and where it exercises its franchise and engages in the prosecution of its corporate enterprise. Louisville, C. & C. R. Co. v. Letson, 43 U. S. 2 How. 497 11 L. ed. 353); Day v. Newark I. R. Mfg. Co. 1 Blatchf. 628; United States Bank v. McKenzie, 2 Brock. 393; Bristol v. Chicago & A. R. Co. 15 Ill. 436; Gill v. Kentucky & C. G. & S. Min. Co. 7 Bush, 635; Baltimore & O. R. Co. v. Glenn, 28 Md. 287; New Orleans, J. & G. N. R. Co. v. Wallace, 50 Miss. 244; Conroe v. National Prot. Ins. Co. 10 How. Pr. 403; Hubbard v. National Prot. Ins. Co. 11 How. Pr. 149; Ormsby v. Vermont C. Min. Co. 56 N. Y. 623; Glaize v. South Carolina R. Co. 1 Strobh. L. 70; Cowardin v. Universal L. Ins. Co. 32 Gratt. 445. A corporation is not a citizen, within the provision of the Constitution relating to privileges and immunities of citizens. Paul v. Virginia, 75 U. S. 8 Wall. 168 (19 L. ed. 357); Liverpool & L. L. & F. Ins. Co. v. Oliver, 77 U. S. 10 Wall. 566 (19 L.

Defendant appears specially and moves to set aside the marshal's return of service, and to dismiss the suit on two grounds: (1) because the petition shows that the cause of action is of such character that defendant can only be sued thereon in a Federal court, in the district where it was incorporated and has its chief office, that is, in Mississippi; (2) because (as it is claimed) the person on whom process was served was not its agent at the time of service.

An objection is raised to any consideration of the first point of the motion, for the reason that it is not raised by demurrer. With reference to that objection it is only necessary to say that where it is claimed that a petition shows on its face that the court is without jurisdiction of the cause, I can conceive of no substantial reason why the defendant should not be permitted to move a dismissal of the same on that ground. In such case it is, in my opinion, wholly immaterial whether the jurisdictional question is raised by demurrer or by

motion to dismiss.

I accordingly proceed to consider whether the first point of the motion is well taken.

Section 1 of the Act of March 3, 1887, regnlating the jurisdiction of Federal courts, provides that "no civil suit shall be brought before either of said courts (district or circuit) against any person in any other district than that whereof he is an inhabitant; but, where jurisdiction is founded only on the fact ed. 1029). But it is a person entitled to an equal protection of the laws. Santa Clara County v. Southern P. R. Co. 118 U. S. 394 (30 L. ed. 118).

Jurisdiction of Federal courts. Where a Federal court can take jurisdiction of controversies between citizens, it will take it in like controversies between corporations. Kansas P. R. Co. v. Atchison, T. & S. F. R. Co. 112 U. S. 414 (28 L. ed. 794). A corporation may sue and be sued in the circuit court. United States Bank v. Deveaux, 9 U. S.5 Cranch, 61 (3 L. ed. 38); Parsons v. Greenville & C. R. Co. 1 Hughes, 279; Minot v. Philadelphia W. & B. R. Co. 2 Abb. Ú. S. 323. So a circuit court may have jurisdiction over a controversy on account of residence, independently of the subject-matter. Nesmith v. Calvert, 1 Woodb. & M. 34. It may institute an action in another State, although associated with a corporation of that State. Chicago & N. W. R. Co. v. Chicago & P. R. Co. 6 Biss. 219. If a corporation is created by the laws of two States, it is deemed a separate body in each State, and cannot sue a citizen of either State in the cir cuit court. Ohio & M. R. Co. v. Wheeler, 66 U, S. 1 Black, 286 (17 L. ed. 130). But a citizen of one of the States may sue it in the other State. Muller v. Dows, 94 U. S. 444 (24 L. ed. 207); Chicago & N. W. R. Co. v. Whitton, 80 U. S. 13 Wall. 270 (20 L. ed. 571); Vose v. Reed, 1 Woods, 647; Culbertson v. Wabash Nav. Co. 4 McLean, 544.

In the present case it is obvious that the jurisdiction of this court (if it has jurisdiction) does not depend "only on the fact" that plaintiff and defendant are citizens of different States.

The action is brought to recover damages sustained by reason of violations of an Act of Congress approved February 4, 1887 (21 U. S. Stat. at L. p. 379), commonly called the "Interstate Commerce Law."

The petition is drawn with especial reference to the provisions of that law, and states a cause of action over which the Federal courts are expressly given jurisdiction by S9 of the Act, without reference to the citizenship of the parties.

garded as a citizen of the State that creates it, it may also be said to be an inhabitant of such State, especially if (as in this case) its chief office and place of business is there located.

In one case at least a corporation has been termed an inhabitant as well as a citizen of the State under whose laws it was incorporated. Thus in the case of Louisville, C. & C. R. Co. v. Letson, 43 U. S. 2 How. 556 (11 L. ed. 377), the court says: "A corporation created by a State seems to us to be a person, though an artificial one, inhabiting and belonging to that State, and therefore entitled, for the purpose of suing and being sued, to be deemed a citizen of that State."

If an artificial person, like a corporation, may be an inhabitant of a State or district, it can, with most propriety, be said to be an inhabitant of the State that created it, or of the State where it keeps its records and principal office, and where its chief officers reside or may most usually be found.

These, in my judgment, are the tests which should determine the domicile of a corporation; and, tried by such tests, the defendant is clearly an inhabitant of the district of Mississippi.

In any view of the case made by the petition, it is clear that the jurisdiction of this court is not dependent "only on the fact" of diverse citizenship; therefore if jurisdiction of the cause is retained, it must be on the ground that the defendant is an inhabitant of this district, within the meaning of the Act of March 3, 1887. For the purpose of determining whether defendant is an inhabitant of the district, I shall assume that the averments of the petition are true; that is, that it keeps' an office and an agent in this district for the purpose of making freight contracts, but that its chief office as well as its railroad is located in the State of Mississippi.

Does the fact, then, that it has an office and an agent here constitute it an inhabitant of the district?

This precise question, for reasons that appear to me to be sound, has been decided in the negative by the Circuit Court of the United States for the Southern District of New York and Northern District of Illinois. Halstead v. Manning, 34 Fed. Rep. 565; Gormully v. Pope Mfg. Co. Id. 818. See also Reinstadler v. Reeves, 33 Fed. Rep. 308.

It has long been the settled rule that a corporation created by a certain State, by virtue of that fact, is to be deemed a citizen of that State for the purpose of determining questions of Federal jurisdiction dependent on citizenship.

1 L. R. A.

But if the latter position be assumed, no reason is perceived why it might not, with as good reason, be held that a corporation is likewise a citizen of each State where it maintains an office and transacts business. That, however, is a doctrine at variance with all of the deci sions respecting the citizenship of corporations.

On the assumption that the defendant has an office and agent in this State, it goes without saying, that it might have been sued in this district under the Act of March 3, 1875, to determine the jurisdiction of United States courts, as that Act permitted suits to be brought against a defendant, not only in the district of his residence, but wherever he might "be found at the time of serving . . . process." These latter words, permitting service where defendant may be found, have been dropped in the Amendatory Act of March 3, 1887, for the manifest purpose of requiring all suits to be brought in the district of defendant's residence, excepting those suits only in which jurisdiction is dependent solely on the fact of diverse citizenship.

The authorities cited by plaintiffs' counsel in opposition to the motion (being all decisions under the Act of March 3, 1875) are therefore not in point.

The motion to dismiss the suit for want of ju risdiction over the person of the defendant (it being an inhabitant of the District of Mississippi) is therefore sustained, and the suit is dismissed.

LAMBERTVILLE NATIONAL BANK

v.

MCCREADY BAG & PAPER CO. et al.

1. The personal representatives of the deceased assignee of a prior undischarged trust mortgage are proper parties defendant to a suit to foreclose a second mortgage. 2. Where neither the original trustee nor the assignee of a mortgage held in trust for the benefit of third parties disposes thereof by will, the interest of such trustee or assignee passes on his death to his personal representatives; and neither his heirs nor devisees are necessary parties to a suit to foreclose. 8. The bondholders under trust mort gage given to secure their bonds are not necmortgage, when the holder of the trust mortgage is made a party and such mortgage is a first lien. 4. A subsequent incumbrancer cannot compel a prior mortgagee to act at all for the enforcement of his lien,-as, to procure the sale of a parcel of land covered by the first mortgage but not by the subsequent one,-any further than to surrender his mortgage on tender of the amount due.

essary parties to a suit to foreclose a second

NOTE.-Property held in trust passes on death of trustee to his personal representatives. Although decedent held the property as a trustee, on his death it passed under the common law to his personal representatives, who are bound to execute the trust. Emerson v. Bleakley, 2 Trans. App. 175, 3 Trans. App. 102, 5 Abb. Pr. N. S. 364, 2 Abb. N. Y. App. 28; De Peyster v. Ferrers, 11 Paige, 13. The section of the New York Revised Statute in relation to uses and trusts (1 Rev. Stat, 730, § 68) does not relate to personal property, over which the common-law rule still exists and applies. Bunn v. Vaughan, 5 Abb. Pr. N. S. 269.

Suit by junior incumbrancer; parties thereto. In a suit by a junior mortgagee to foreclose a mortgage, prior mortgagees are not necessary parties. Jerome v. McCarter, 94 U. S. 734 (24 L. ed. 138). But prior incumbrancers will not be bound by the decree in a suit to which they are not made parties; and purchasers at the sale take subject to their prior equities. Finley v. United States Bank, 24 U. S. 11 Wheat. 304 (6 L. ed. 480): Dupasseur v. Rochereau, 88 U. S. 21 Wall. 130 (22 L. ed. 588). It is not necessary that parties who acquire liens subsequent to the mortgage should be made parties. Brewster v. Wakefield, 63 U. S. 22 How. 118 (16 L. ed. 301). In Louisiana, where the mortgage contains the pact de non alienando, the mortgagee may proceed against mortgagor alone; and all claiming under him, whether directly or remotely, will be bound

Bird, V. C., filed the following conclusions: The complainant is a second mortgagee. The first mortgage was given to Ashbel Welsh, in his lifetime, as trustee, to secure the payment of 40 bonds of $500 each. Mr. Welsh died leaving a will and naming therein his executors. It is admitted that by an arrange ment, to which many, if not all, of the bondholders consented, the mortgage so given to Mr. Welsh as trustee was assigned to a third person, Mr. Smith, who has since died leaving a will and naming therein the executors thereof. These last-named executors hold this mortgage so given in trust to Mr. Welsh.

1. The last-named executors are parties defendants; and this is thought to be erroneous. I think this contention is untenable. It must be admitted that no cautious practitioner would omit to bring in a party who held a lien of this character, so long as it was undischarged, or unless it was known that such holder disclaimed any interest in it.

2. Under the notice, it is claimed that the true parties to the bill, as defendants, are the heirs and devisees of Mr. Smith. Now, if this be so, it is because the mortgage was held by Mr. Smith in trust. The question, then, is: Does the fact that a mortgage is held in trust by the testator make it necessary that his heirs and devisees should be made parties to a bill to foreclose, rather than the executors of the will of the deceased trustee? Or, in case it should be considered that said executors are proper parties, as I have, as to these, concluded, then should the heirs or devisees of the deceased trustees be brought in also? In ordinary cases the interest is in the mortgagee, and when be dies, leaving a will, the mortgage passes, as personal estate, to his executor, and, if he leaves no will, to his administrator. is so because the entire interest is in the deceased at the time of his death. But in case the decedent was a mortgagee, as trustee, for bondholders, as in the case before me,-with powers to collect and to pay over, then he has not the entire interest; while he has the legal interest, the equitable is in the bondholders. although not made parties. Avegno v. Schmidt, 113 U. S. 293 (28 L. ed. 976).

This

Foreclosure of railroad mortgage; necessary parties. Beneficiaries under a subsequent trust deed should be made parties to a foreclosure of a mortgage. Clark v. Reyburn, 75 U. S. 8 Wall. 318 (19 L. ed. 354); Oliver v. Piatt, 44 U. S. 3 How. 333 (11 L. ed. 622). Where the mortgage is made directly to the persons holding the bonds, all the bondholders should be made parties to a suit for its foreclosure. Nashville & D. R. Co. v. Orr, 85 U. S. 18 Wall. 471 (21 L. ed. 810). Bondholders need not be made parties in a suit to foreclose a railroad mortgage given to a trustee to secure the bonds. Vose v. Bronson, 73 U. S. 6 Wall. 452 (18 L. ed. 846); Shaw v. Little Rock & Ft. S. R. Co. 100 U. S. 605 (25 L. ed. 757). Where the trustees are dead a bill may be filed by one or more of the bondholders on behalf of themselves and all others secured by the same mortgage. Galveston, H. & H. R. Co. v. Cowdrey, 78 U. S. 11 Wall. 459 (20 L. ed. 199). In a suit for foreclosure of a second mortgage on a railroad, where a receiver is asked, the first mortgagee is a proper party. Miltenberger v. Logansport, C. & S. W. R. Co. 106 U.S. 286 (27 L. ed. 117). To a bill to set aside the foreclosure of railroad mortgages, filed by the stockholders, the trustees in the mortgages which were foreclosed are indispensable parties. Ribon v. Chicago, R. I. & P. R. Co. 83 U. S. 16 Wall. 446 (21 L. ed 367).

ship. The subsequent mortgagees accepted their mortgages with full knowledge of the rights of the first mortgagee, and of the extent of their lien. They labor under no surprise. Any one of them can accomplish all they ask for on the plainest principles of equity. They have the right to discharge the said first mortgage and ask that they may stand in the place of the said first mortgagee. I am of the opinion that any subsequent incumbrancer can do this. I can see no reason for requiring the complainant in this case to take any particular steps in that direction. If he is willing to proceed and run the risk of making his money without availing himself of all the rights which the law gives to him, it seems most plain to me that he may do 80. And what rights one subsequent mortgagee has in this particular another has as well. Therefore any such mortgagee can redeem the said first mortgage, and thus enable himself to do exactly what he claims it is the duty of the first mortgage-holder to do,—that is, bring all

the land into the market under the same decree and thus enable the court to marshal the fund equitably.

I think that the motion to strike out so much of the bill as relates to the payment of premiums on the life insurance policy of the mort gagors must prevail. The allegation is that the complainant took this policy as collateral, but nothing else appears, except that the complainant paid certain premiums, without showing in any way that it was any part of the mortgage contract. Therefore so much of the bill as is framed with the view of imposing additional burdens on the mortgaged premises will be stricken out. But as the further motion is that the complainant be required to account for the value of this policy, which it is its duty to do, so much of the bill as is necessary to show the rights of the respective parties in this regard will be retained. The motion with respect to the insurance policy will prevail.

Charles B. MOORE et al, Apots.,

V.

Chauncey P. WILLIAMSON.

*1. Where a claim is presented to an assignee for the beneût of creditors, which for its sufficiency depends upon the validity of a mortgage of property of the assignor as against his creditors, and exceptions to it are filed, which properly aver the mortgage to be void as against these creditors, for fraud, the orphans' court is the proper tribunal to hear the proofs and allegations of the parties and determine the question of fraud.

2. Such an assignee is regarded as the representative of the creditors, and, as such, may, for the benefit of creditors, set aside conveyances by the assignor in fraud of them, to

the extent that property is needed for the pay

ment of debts.

3. Where a mortgage is made with intent to defraud creditors, and the circumstances are such as should awaken the suspicion of the mortgagee and put him upon inquiry as to the intent with which the mortgage is made, he will be charged with notice of that intent. 4. Where a mortgage was executed for the purpose of defrauding the mortgagor's creditors, and was taken by a mortgagee with knowledge of that purpose, and to aid its execution, it is void as to those creditors, even though it be founded on a perfect consideration.

(October, 1888.)

tions that were filed to a claim presented to the assignee of the property of William H. Gulick for the benefit of his creditors.

By the disputed claim the appellee seeks to have paid to him the sum of $1,040, which he claims is secured by chattel mortgage upon The as

portion of the assigned property signee has sold the mortgaged chattels under an arrangemen' with the appellee that the moneys realized from the sale shall stand in the place of the chattels Enough money has been realized to pay the $1,040 in full.

The exceptions deny the validity of the mortgage, on the ground that it was made for the purpose of defrauding the creditors of William H. Gulick. The exceptants are three of those creditors.

the orphans' court is without jurisdiction to It is insisted, in behalf of the appellee, that declare the mortgage fraudulen, and void.

By presenting a claim against the estate of William H. Gulick to the assignee, based upon and supported by the chattel mortgage, the ap pellee puts himself in a position where an attack upon his claim must of necessity be an attack upon his mortgage. The mode of attacking a claim of this kind is by exceptions, and those exceptions are to be heard and determined in the orphans' court. Rev. 38, § 6.

A fraudulent transfer is void at law as well as in equity. It is treated as a nullity every. where, and a court of law takes cognizance of the fraud, as well as a court of equity. Mul

phans' Court. Reversed. The facts are stated in the opinion. Messrs. George O. Vanderbilt and W. D. Holt for appellants.

Messrs. George E. Pace and Alvah A. Clark for appellee.

McGill, Ordinary, delivered the following opinion:

The decree appealed from overrules excep*Head notes by MCGILL, Ordinary.

Conv.

Where a claim is presented to an assignee for the benefit of creditors, which depends for its sufficiency upon the validity of a transfer of tors, and exceptions to it, which properly aver property by the assignor as against his credithe transfer to be void for fraud, are filed, if follows that the orphans' court is the proper tribunal to hear the proof and allegations to the parties and determine the question of fraud.

It is further urged by the appellee that the effect of the declaring the mortgage to be void,