"That Jefferson county is justly indebted to the relator for the amount of the warrants in question will not be controverted; and when such is the case, there is no doubt of the power of the legislature to require the county to issue its bonds for the amount of its indebtedness."

The question raised by this contention was also considered by this court in the case of Read v. Plattsmouth, 107 U. S. 574; [S. C. 2 SUP. CT. REP. 208.] In that case an act of the legislature of Nebraska, approved February 18, 1873, was brought under review. The preamble of the act recited that the city council of the city of Plattsmouth had issued and sold certain bonds, and with the proceeds thereof had proceeded to let the contract for the erection of a school-house, and had appointed two persons, naming them, superintendents of the construction of the same, and that the work on said building had commenced. The first section then declared that all the acts and proceedings of the city council in relation to issuing said bonds and letting said contract and the appointment of said superintendents, and all matters and proceedings connected there with which might in any way affect the validity of said bonds, should be, and the same were, thereby legalized, confirmed, and made valid in law. This act was attacked as in violation of the same section of the constitution which the plaintiff in error invokes in this case. It was contended that the act in question, by legalizing bonds of the city, was void because it had no power to issue them, was legally equivalent to an act conferring upon the city power to issue bonds, which was conferring corporate power, and being a special act, was therefore unconstitutional. But this court, speaking by Mr. Justice MATTHEWS, said:

"As the city of Plattsmouth was bound by force of the transaction to repay to the purchaser of its void bonds the consideration received and used by it, or a legal equivalent, the statute which recognized the existence of that obligation, and, by confirming the bonds themselves, provided a medium for enforcing it according to the original intention and promises, cannot be said to be a special act conferring upon the city any new corporate powers. No addition is made to its enumerated or implied corporate faculties; no new obligation is, in fact, created."

And the court added that the very proposition there involved was maintained by the supreme court of Nebraska in the case of Com'rs Jefferson Co. v. People, supra. See, also, Railroad Co. v. County of Otoe, 16 Wall. 667; Foster v. Com'rs Wood Co. 9 Ohio St. 540.

In the cases of Clegg v. School-dist. 8 Neb. 178, and Dundy v. Richardson Co. Id. 508, [S. C. 1 N. W. Rep. 565,] cited by plaintiff in error, it was held that an act authorizing a school-district or a city to contract a debt for the purpose of erecting a public building, and to issue bonds therefor, was forbidden by the constitution, because it was a special act conferring corporate powers. These cases are clearly distinguishable from those we have cited. In the latter, as in the case now under review, a debt already existed, and the statute simply authorized a change in the form of the obligation by which

the debt was evidenced. The distinction is clearly stated in Read v. Plattsmouth, ubi supra, the court remarking: "The statute operates upon the transaction itself, which had already been consummated, and seeks to give it a character and effect different in its legal aspect from that which it had when it was in force;" and adds that such a result "is not affected by the supposed form of the enactment as a special or general act conferring corporate powers." The cases cited effectually dispose of the point under consideration.

Lastly, the plaintiff in error contends that the act under which the bonds in suit were issued is repugnant to section 15, art. 3, of the present constitution of Nebraska, which went into effect November 1, 1875, after the law authorizing the issue of the bonds was passed, but before the bonds were issued. The section referred to declares: "The legislature shall not pass any local or special laws in any of the following cases: * * * Granting to any corporation, association, or individual, any exclusive privileges, immunity, or franchise whatever. In all other cases, where a general law can be made applicable, no special law shall be enacted."

It is a sufficient answer to the contention to say that the word "corporation," as used in this section of the constitution, does not apply to a county. If a county is a corporation at all, it is necessarily a municipal corporation. But the supreme court of Nebraska, in the case of Woods v. Colfax Co. 10 Neb. 552, [S. C. 7 N. W. Rep. 269,] expressly held that in Nebraska a county was not considered to be a municipal corporation. And it is clear that the authority given by the act of February 18, 1875, to Sherman and other counties, to fund the indebtedness evidenced by county warrants, by giving their bonds in exchange therefor, does not of itself make them municipal corporations. But it is unnecessary further to discuss this branch of the case. The decision of the supreme court of Nebraska in Com'rs Jefferson Co. v. People, ubi supra, which, as before stated, was a case in all respects similar to this, and in which the constitutionality of a similar act of the legislature was put in issue, is precisely in point, and is conclusive of the question in hand.

We find no error in the record. The judgdment of the circuit court is therefore affirmed.

(110 U. S. 81)

CLAFLIN and others v. COMMONWEALTH INS. Co. OF BOSTON, Massa

CHUSETTS.

SAME V. WESTERN ASSURANCE CO. OF TORONTo, Canada.

SAME V. FRANKLIN INS. Co. OF ST. LOUIS, MISSOURI.

(January 14, 1884.)

JURISDICTION OF FEDERAL COURTS-ACTIONS BY ASSIGNEES-
INSURANCE POLICY-FRAUD-MOTIVE.

REMOVAL-FIRE

An assignee cannot bring an action originally in the circuit court unless the assignor could have done so, but he can bring the action in the state court and thence remove it to the circuit court, if the other prerequisites exist. The clause in section 1 of the act of 1875, excepting from the original jurisdiction of the federal courts such suits by assignees as could not have been brought there by the assignors, cannot be read, by implication, into section 2 of the same act, governing the removal of causes.

An action upon a policy of fire insurance which provides that any fraud on the part of the assured by false swearing shall vacate it, will be defeated by misstatments under oath of material facts, even though the assured, in making such statements, was actuated by no intention to defraud the insurers, but by ulteterior motives of his own.

In Error to the Circuit Court of the United States for the District of Minnesota.

John B. Sanborn, for plaintiffs in error.

George B. Young, for defendants in error.

• MATTHEWS, J. These actions were tried in the court below at the same time, before the same jury, and, by stipulation of parties, were heard in this court upon one record, the issues and questions in them respectively being the same. They were originally commenced in the district court of the state of Minnesota for the county of Ramsey, the plaintiffs in error being plaintiffs below. The suits were founded on policies of insurance against fire issued by the several defendants upon a stock of dry goods in St. Paul, to Frances E. Barritt, who having sold the property insured to William Murphy, assigned to him, for his benefit, the several policies of insurance, with the assent of the insurance companies, the defendants. After the loss, Murphy assigned the policies of insurance and his claims under the same, for value, to the plaintiffs in error, who brought suit thereon on February 11, 1878. On March 7, 1878, the several defendants filed petitions for the removal of the causes to the circuit court of the United States, alleging that the plaintiffs were citizens of the state of New York, and the defendants, respectively, citizens of Massachusetts, or Missouri, or aliens, subjects of Great Britain, in the dominion of Canada, being corporations created by the laws of those governments respectively." The record does not show anything respecting the citizenship of Murphy, the plaintiff's assignor, and it does not appear, therefore, whether,

in case the assignment had not been made, he could have brought suit upon the policies of insurance against the defendants in the circuit court of the United States. No question concerning the jurisdiction of that court was made by counsel, either on the trial or in this court; but, after having been argued here at the bar on the merits, the doubt upon the right of the court below to entertain jurisdiction arose so seriously as, in our opinion, to require argument upon the point. That has now been submitted and considered, the conclusion we have reached requiring an affirmance of the jurisdiction.

The question is whether, under the second section of the act of March 3, 1875, (18 St. 470,) a suit of a civil nature, brought in a state court, where the matter in dispute exceeds the sum or value of $500, and in which there is a controversy between citizens of different states, or between citizens of a state and foreign states, citizens or subjects, may be removed into the circuit court, which suit, because it is founded on a contract in favor of an assignee, could not have been brought in the circuit court if no assignment had been made, not being the case of a promissory note, negotiable by the law-merchant, or of a bill of exchange. That section of the act is confined. to the subject of removals of suits from the state to the circuit courts, and expressly provides that where there is a controversy between citizens of different states, or between citizens of a state and aliens, the suit in which it arises may be removed by either party; while the first section, providing that the circuit courts shall have original cognizance of the same character of cases, concurrent with the courts of the several states, nevertheless declares that they shall not "have cognizance of any suit founded on contract in favor of an assignee, unless a suit might have been prosecuted in such court to recover thereon, if no assignment had been made, except in cases of promissory notes negotiable by the law-merchant, and bills of exchange." The exception out of the jurisdiction, as to suits begun in the circuit courts, contained in this clause, does not, by its terms, nor by the immediate context, apply to suits commenced in state courts and afterwards removed to the circuit courts, but, it is argued, that it must apply from the reason and necessity of the case. The ground of this argument is that no reason can be assigned for limiting the jurisdiction in suits first brought in the circuit courts which does not apply equally to those removed into them from state courts; and that if the limitation is not applied to the latter, the effect will be thereby to remove it from the former, by enabling parties, forbidden to commence their actions in the circuit court, to transfer them at will to that court, after first formally bringing them in a state court. Such, indeed, seems to be the result neccessarily to be anticipated from this construction of the act, and the argument, ab inconvenienti, must be admitted to be cogent.

An attempt to meet it is made by seeking to limit, by construction, the right of removal given by the second section to both parties, with

out qualification, to the defendant only in cases where, if exercised by the plaintiff, it would create jurisdiction in the circuit court in favor of an assignee whose assignor could not have sued in that court originally. This proposed construction is based upon the words of the clause in the first section of the act, which forbids the circuit court to take cognizance of any suit founded on contract in favor of an assignee, which, it is argued, may be taken to mean that when the jurisdiction is invoked by the defendant by a removal from the state court, it cannot be deemed to be exerted in favor of the assignee, but rather in favor of the adverse party. But this, we think, is a refinement upon the language of the clause not justified by its natural import, nor by admitted rules of interpretation. The words, "in favor of an assignee," were evidently used, not to distinguish between the plaintiff and the defendant in the suit, but between the assignee and his assignor, so as not to give the favor to the former of bringing a suit which was denied to the latter.

The question, however, we think, is satisfactorily answered by recurring to the state of the law as it existed under the judiciary act of 1789, (1 St. 78,) until the passage of the act of March 3, 1875. The eleventh section of the judiciary act corresponds to the first section of the act of 1875, describing in similar terms the character of the suits of which the circuit courts should have original cognizance, and containing a similar exception out of that jurisdiction of suits. "to recover the contents of any promissory note or other chose in action in favor of an assignee, unless a suit might have been prosecuted in such court to recover the said contents, if no assignment has been made, except in cases of foreign bills of exchange." The twelfth section of the act of 1789 corresponds to the second section of the act of 1875, limiting, however, the right to remove a suit begun in a state court to the defendant alone, where he is an alien, or a citizen of a state other than that where the suit has been brought, and of which the plaintiff is a citizen. It will be seen, therefore, on a comparison of the two statutes, that the chief differences between them are-(1) that the act of 185 enlarges the original jurisdiction of circuit courts, based on the citizenship of the parties, to all cases of controversy between citizens of different states and between citizens of a state and aliens, retaining substantially the same exception as to suits upon contracts brought by an assignee, when the assignee could. not have sued in the circuit court, but not including negotiable paper; and (2) that the act of 1875 gives to either party the right of removal from a state court to the circuit court, instead of confining it to the defendant. The exception, out of the original jurisdiction, as to assignees of non-negotiable contracts, occupies in both statutes the same relative position, qualifying the provisions of the section in which it is contained as to suits commenced in the circuit court, and not being found in, nor necessarily connected with, that regulating the removal of suits from the state courts.