"The present suit is not for money, nor for anything the value of which can be measured by money. The bank has no interest in taxes to be placed on the tax duplicate. * If the cashier is compelled to testify and produce the books to be used in evidence for the purpose required, the damages, if any, resulting to the bank, would be in the highest degree remote and speculative."

In Barry v. Mercein, 6 How. 103, 12 L. Ed. 70, it was decided by the Supreme Court that to give the Supreme Court jurisdiction in cases depended upon the amount in controversy. The matter in dispute must be money or some right, the value of which in money can be calculated and ascertained. See, also, Pratt v. Fitzhugh, 1 Black, 271, 17 L. Ed. 206, De Krafft v. Barney, 2 Black, 704, 17 L. Ed. 350, and Potts v. Chumasero, 92 U. S. 358, 361, 23 L. Ed. 499.

I am unable to say that the right involved in this controversy has a value which can be calculated and ascertained in money, and for that reason the plea will be sustained and the cause remanded to the common pleas court of Cuyahoga county at the costs of the defendant.

COMMONWEALTH S. S. CO. v. AMERICAN' SHIPBUILDING CO. (three cases).

(District Court, N. D. Ohio, E. D. January 20, 1912.)

Nos. 8,210, 8,214, 8215.

1. COURTS (§ 312*)—JURISDICTION OF FEDERAL COURTS-SUITS BY "ASSIGNEE." A suit by a corporation, to rescind a contract for the building of a steamship by defendant, made between defendant and complainant's promoters, acting as trustees for complainant, and assumed by complainant on its organization, on the ground that the contract was fraudulent and procured by defendant by paying a secret commission to the promoters, is not one in which complainant sues as assignee within the Imeaning of Judiciary Act March 3, 1875, c. 137, § 1, 18 Stat. 470, as amended by Act March 3, 1887, c. 373, § 1, 24 Stat. 552, corrected by Act Aug. 13, 1888, c. 866, § 1, 25 Stat. 433 (U. S. Comp. St. 1901, p. 508), which provides that no federal court shall have cognizance of any suit to recover the contents of any chose in action "in favor of any assignee unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made." In such case complainant is asserting no right derived from its promoters or which they could have asserted, and such statute has no application. [Ed. Note. For other cases, see Courts, Cent. Dig. §§ 865-875; Dec. Dig. § 312.*

For other definitions, see Words and Phrases, vol. 1, pp. 562-564; vol. 8, p. 7584.]

2. CORPORATIONS (§ 448*)-CONTRACTS BEFORE ORGANIZATION-FRAUD OF PROMOTERS.

A bill in equity filed by a steamship company alleged that it was organized by certain persons as promoters; that such persons had previously procured from defendant an option for a contract under which defendant was to build a steamship for a price stated therein; that the promoters represented that they had large experience in such matters and that the option was very favorable as to price, etc.; that on securing subscribers to the stock they entered into a contract with defendant for building the vessel, and complainant on its organization as*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

sumed the contract, received and paid for the vessel, partly in cash and partly by the issuance of bonds, and also paid the promoters for their services in procuring the contract and superintending the building of the vessel in its behalf; that in fact the contract was fraudulent in that defendant, with knowledge of their purpose to organize a corporation to take over the contract, agreed to and did pay to the promoters a secret commission thereon. Held, that on the facts alleged the promoters in the transactions with defendant acted as trustees and agents for complainant and its stockholders, and the payment to them by defendant of a secret commission was in effect a bribery of its agent which vitiated the contract for fraud and entitled complainant to its rescission in equity, and on surrender of the vessel to recover the consideration paid therefor. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1709, 17891792; Dec. Dig. § 448.*]

8. CANCELLATION OF INSTRUMENTS (§ 15*)—REMEDY AT LAW-DAMAGES. Where an agent has been bribed or paid a secret commission to enter into a contract, it is the absolute right of the principal on discovering the fraud to promptly rescind the contract, and he cannot be required to resort to an action at law for damages, especially where a bill for rescission requires an accounting which could not be had in an action at law.

[Ed. Note. For other cases, see Cancellation of Instruments, Cent. Dig. §§ 14, 21; Dec. Dig. § 15.*]

4 CORPORATIONS (§ 448*)-CONTRACT OF PROMOTER-SUIT FOR RESCISSIONDEFENSES.

It is not a defense to such a suit for rescission by a corporation that the agent through whose bribery the contract was procured by defendant is a stockholder of complainant.

[Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1709, 17891792; Dec. Dig. § 448.*]

5. COURTS (§ 312*)-FEDERAL COURTS-ASSIGNEES-VALIDITY OF ASSIGNMENT -LAW GOVERNING.

The question whether a cause of action was assignable, so as to entitle the assignee to maintain a suit thereon in a federal court, is to be determined by the law of the state where all the transactions took place. [Ed. Note. For other cases, see Courts, Cent. Dig. §§ 865-875; Dec. Dig. § 312.*]

6. CORPORATIONS (§ 591*)-CONSOLIDATION-RIGHT OF ACTION-VALIDITY UNDER OHIO STATUTES.

Under the law of Ohio, by which all causes of action which are survivable are assignable, and Gen. Code Ohio, § 11,235, which provides that causes of action for deceit or fraud shall survive, the consolidation of two corporations, and the transfer by one to the other of all of its property and assets of every kind and description under sections 87108713 of said Code, vests the assignee corporation with the right to maintain a suit in equity for rescission of a contract made by the merged corporation on the ground that it was induced by the fraud of the defendant.

[Ed. Note. For other cases, Corporations, Cent. Dig. §§ 2034, 23682372; Dec. Dig. § 591.*]

In Equity. Suits by the Commonwealth Steamship Company against the American Shipbuilding Company. On demurrers to bills. Overruled.

See, also, 197 Fed. 797.

For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

A. B. Thompson, Charles P. Hine, and Clarence R. Bissell, all of Cleveland, Ohio, for complainant.

A. C. Dustin and Homer H. McKeehan, both of Cleveland, Ohio, for defendant.

DAY, District Judge. The questions under consideration arise upon transactions set forth and complained of in the bills filed in cases Nos. 8,210, 8,214. and 8,215.

The bills are, in their effect, the same with this exception; that in cases Nos. 8,214 and 8,215 the complainant is suing as assignee or successor in interest of the original parties alleged to have been defrauded by these transactions.

Bearing in mind this distinction as to these respective cases, the demurrers can all be considered together at this time.

It appears from an examination of the bills: That the Commonwealth Steamship Company is engaged in the business of owning and operating freight steamboats on the Great Lakes, and the defendant company is engaged in the business of constructing and repairing similar boats which operate on the Great Lakes. This Commonwealth Steamship Company, the Milwaukee Steamship Company, and the Cuyahoga Steamship Company were promoted by W. A. Hawgood and A. H. Hawgood. They formed a plan of promoting these corporations for the purpose of contracting on their behalf with the defendant for the construction of boats or freight steamers, and of obtaining from the defendant large secret commissions for making such contracts and at such prices as should be fixed by the defendant, and also of obtaining from these steamship companies a large compensation for services pretended to be rendered on complainant's behalf in making said contracts and in obtaining first-class steamers at the prices stipulated in the several contracts, which prices the Hawgoods intended to represent were the lowest possible prices for which the steamers could be purchased, and for pretended services in superintending the construction of the steamers in these companies' behalf. That the Hawgoods, having formed this plan, procured a number of innocent persons to agree to become subscribers to the stock in the proposed corporations, and thereafter these Hawgoods, pursuant to this plan, obtained from the American Shipbuilding Company an option in the name of A. H. Hawgood for the building by the American Shipbuilding Company of a freight steamer, as alleged in case No. 8,210, for the ostensible sum of $385,000, which it appears differs in the other two cases; but so far as this consideration is concerned it is not important to refer to these separate prices for the other boats. That. pursuing this plan, the Hawgoods had at about the same time obtained from the American Shipbuilding Company, which at all times had notice and knowledge of the plan of the Hawgoods, and of the acts done thereunder, an agreement to pay to the Hawgoods the sum of at least $15,000 in the event that they should succeed in procuring the execution of a contract with the American Shipbuilding Company in accordance with the terms of the option; said sum to be paid as an alleged commission for obtaining the contract for the American

Shipbuilding Company. It might be said in passing that these commissions differed in the other two cases.

It is also charged in the several bills: That other sums were agreed to be paid and were paid to the Hawgoods by the American Shipbuilding Company in order to procure the contracts. The Hawgoods, having secured the options, made the fraudulent arrangements with the defendant, and then induced various innocent persons to associate themselves with the Hawgoods in the plan of forming the complainant corporation. That the Hawgoods represented to the persons that they had great experience in all matters relating to the building of freight steamers and that they were able to obtain from the defendant the construction of first-class steamers at the lowest possible prices, and that in securing the option they had used their best efforts on behalf of the persons associated with them in the formation of the complainant company to obtain contracts for first-class freight steamers at the lowest possible prices from the defendant, and they represented that they would cause the contracts and specifications to contain all the requirements necessary for obtaining first-class freight steamers and would superintend the construction thereof and thereby assure their associates and complainant that first-class freight steam-. ers would be obtained.

These are the allegations of the bills. In cases Nos. 8,214 and 8,215, the complainant is the assignee of the companies formed by the Hawgoods.

Having progressed thus far, the Hawgoods concealed from those associated with them the fact that they were to obtain any money from the American Shipbuilding Company, and that those persons. relying upon these representations, and believing that the Hawgoods were not obtaining any money from the defendant, but were acting in good faith, subscribed for the capital stock of the complainant. That later, the Hawgoods, after they had obtained a sufficient number of subscribers to the capital stock, as trustees for the subscribers and for the corporations, contracted with the Shipbuilding Company for the construction of the ships referred to. These contracts were adopted by the steamship companies as soon as incorporated. The American Shipbuilding Company paid the Hawgoods the commission agreed upon, and the Commonwealth Steamship Company and other corporations paid the Hawgoods for their alleged services in securing the option and contract of superintending the construction of the steamer. That the Commonwealth Steamship Company and the corporations mentioned in the other two bills, in assuming the contract, relied entirely upon the belief induced by the acts and representations of the Hawgoods and the American Shipbuilding Company. The consideration for the vessels was paid partly in cash and partly in bonds, secured by a mortgage on the vessels, a portion of which has been paid and a portion of which is outstanding. That the Shipbuilding Company, with full knowledge of the relation of the Hawgoods to the persons associated with them and the companies so organized, paid these secret commissions to the Hawgoods. That most of the persons, if not all of them, are now stockholders in the com

plainant company. That the consideration for the vessels in each instance has been delivered and accepted by the defendant, and that most of the bonds have been negotiated by the defendant. That the Shipbuilding Company at all times knew the trust relationship of the Hawgoods to the steamship companies, and that these facts were not known to the complainant until September, 1911. That on the 18th day of September, 1911, the complainant notified the defendant that. the Commonwealth Steamship Company rescinded the contracts on the ground of the fraudulent acts of the defendant and tendered and offered the vessel in each case to the defendant, and also offered to compensate the defendant for any amount that was justly due to the defendant for the intermediate use of the steamers and offered an accounting. It is further alleged that the complainant has no adequate or complete remedy at law, and prays that the contract be rescinded and canceled and that the defendant shall surrender the unpaid bonds or secure their payment by a deposit in court, that the amount of the purchase money may be paid to the complainant, together with such amounts as the complainant has paid on the principal and interest on the bonds, together with interest. And it is accordingly contended that the Commonwealth Steamship Company is entitled to rescind the contracts with the American Shipbuilding Company.

To these bills which have substantially the same allegations, with the addition of the allegation of assignment in cases Nos. 8,214 and 8,215, the defendant has filed demurrers; the following reasons being assigned as ground of demurrer:

(1) The court is without jurisdiction herein, in that the bill of complaint is filed on behalf of an assignee of a contract, and it does not appear from said bill that the assignors of said.contract could have maintained an action in this court.

(2) That the bill on its face does not show that the complainant is entitled to the relief prayed for.

(3) Said complainant, if entitled to any relief whatever, by reason of the facts set forth in said bill, has an adequate remedy at law.

And an additional ground of demurrer in cases 8,214 and 8,215, which will be here designated as the fourth ground: (4) If the facts alleged in said bill of complaint are sufficient to give the Cuyahoga Steamship Company, the original purchaser of the steamer Sheldon Parks, a remedy for the wrongs complained of, in the nature of a rescission of said contract (which is denied), such remedy was personal to the Cuyahoga Steamship Company and did not pass to the complainant by the sale of all the assets and property of said Cuyahoga Steamship Company to the complainant herein.

[1] The first ground of the demurrer raises the question whether the court has jurisdiction herein, and counsel for the shipbuilding company contend that the bill of complaint is filed in behalf of an assignee of a contract, and that it does not appear from the bill that the assignors of the contract could have maintained an action in this court.

Now section 629 of the Revised Statutes of the United States (U. S. Comp. St. 1901, p. 508) provides in substance that no Circuit or District Court shall "have cognizance of any suit to recover