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them was bribed to do so ; and that the court-house never was built.
In Stewart v. Lansing, 104 U. S. 505, the county judge, assuming to act under authority of a law of the State, rendered a judgment appointing commissioners to execute bonds of the town of Lansing. This judgment was carried by certiorari to the Supreme Court, and there “reversed. The county judge, the commissioners, and the railroad company to which the bonds were ordered to be issued, all had notice of the certiorari and the subsequent proceedings under it. Before the judgment of reversal, however, the commissioners, notwithstanding the pendency of the writ, issued the bonds in suit in the case, taking from the company an obligation for their personal indemnity. This court held that as between the company and the town the judgment of reversal was equivalent to a refusal by the county judge to make the original order, and invalidated the bonds.
There is no pretence of any fraud in the inception of the bonds in question in this case. It is not denied that they were issued in good faith and for a valuable consideration. The question, then, arises, Is the irregularity in the conduct of the election such an illegality as throws on the plaintiff the burden to show that he paid value for the coupons? We are clearly of opinion that it is not.
It will appear from an examination of the cases above cited, in which the defence was illegality in the inception of the instrument, that the illegality which shifts the burden of proof on the holder to prove that he paid value must be something wbich relates to the consideration of the paper sued on. It must appear that the consideration arose out of a transaction contrary to law, or against public policy. Thus, in Sisterman: v. Field, 9 Gray (Mass.), 331, the illegality which the court held threw the burden on the plaintiff of proving that he gave value for the notes sued on, was the fact alleged by the defendant that they were given in payment for intoxicating liquors sold by the payee of the notes to the defendant in violation of law. Precisely the same illegality was held in Cottle v. Cleaves, 70 Me. 256, to throw upon the plaintiff, who was indorsee, the burden of showing that he paid value for the note.
So in Fuller v. Hutchings, 10 Cal. 523, the paper sued on was given for losses at a public banking game called “faro." Gaming was prohibited by statute. It was declared by the laws of California to be a felony in the keeper of the game, and a misdemeanor in the player. In this case the court held that the illegal consideration being admitted, it devolved upon the plaintiff to show that he took the paper without notice and for value.
In the case of Bailey v. Bidwell, 13 Mee. & W. 73, it was alleged, as matter of defence, that the consideration for the note sued on was an agreement that the payee should not oppose a petition in bankruptcy filed by the defendant, the maker of the note, and that the note was indorsed to the plaintiff without value. The court, by Baron Parke, held the rule to be that if the note was proven to have been obtained by fraud, or affected by illegality, that afforded a presumption that the person who had been guilty of the illegality would dispose of it, and place it in the hands of another person to sue on it, and that such proof casts upon the plaintiff the burden of showing that he was a bona fide indorsee for value.
In Fitch v. Jones, 5 El. & Bl. 238, the note which was sued on by an indorsee was given for a wager on the hop duty. This, the court said, was not within the statute of Anne or any other statutes which prohibit wagers. There was no penalty imposed for such a wager, and, therefore, as between the maker and payee, there was no illegality or violation of law, but it was a mere nudum pactum. And the court held that the defendant was bound to prove his plea by showing that the plaintiff did not give value for the note.
The authorities illustrate the rule and show that it does not apply to this case. There was no illegality whatever in the consideration of the bonds in question in this suit. The mere irregularity in the conduct of the election was not such an illegality as is contemplated by the rule, and does not deprive the holder of the coupons of the presumption that he acquired them for value.
The next contention of the plaintiff in error is that the decree of the Circuit Court of Christian County, Illinois, by which the bonds in question were declared void, is binding on the
plaintiffs in this case, and is a bar to the action upon the coupons sued on.
The plaintiffs in this case are citizens of the State of Maine. It is sought to bind them by a decree rendered in a proceeding purely in personam in a case in which they were not named as parties, when there was no personal service upon or appearance by them, and when the only pretence of notice to them of the pendency of the suit was a publication addressed to the known holders and owners of bonds and coupons issued by the town of Pana."
It is' contended that, under the statutes of Illinois, parties may be thus brought in and a valid personal decree rendered against them. Whatever may be the effect of such a decree upon citizens of the State of Illinois, this court has held that, as to non-residents, it is absolutely void. Cooper v. Reynolds, 10 Wall. 308; Pennoyer v. Neff, 95 U. S. 714 ; Brooklyn v. Insurance Company, 99 id. 362; Empire v. Darlington, 101 id. 87.
In a case decided at the present term it was declared by this court, speaking by Mr. Justice Field, that “the courts of the United States only regard judgments of the State courts estab lishing personal demands as having validity or importing verity when they have been rendered upon personal citation of the party or upon his voluntary appearance." St. Clair v. Cor, 106 id. 350, 353.
These authorities settle the rule which is conclusive of this question. It would be a reproach to jurisprudence if the rights of citizens of Maine to recover the contents of a chose in action, held and owned by them, could be cut off by a suit in Illinois to which they were not made parties by name, and in which there was no personal service or appearance.
It is insisted by counsel for the plaintiff in error that the decree of the State court recites the fact that the persons made defendants under the designation of “the unknown holders and owners of bonds and coupons issued by the town of Pana,” which includes the defendants in error, appeared in that court, and that they are, therefore, concluded by the decree in the case.
There is no pretence that there was any appearance in fact
of the parties referred to. It is sought to conclude them by a loose expression in the decree, which, in our opinion, was clearly not intended to recite their appearance, and is not fairly open to such a construction.
Lastly, it is assigned for error that, in computing the amount due upon the coupons described in the declaration, the court allowed seven per cent interest, the legal rate in New York, where the coupons were payable, instead of six per cent, the legal rate in Illinois, where they were made. There was no error in this. The coupons, after their maturity, bore interest at the rate fixed by the law of the place where they were payable. Gelpcke v. City of Dubuque, 1 Wall. 175.
What we have said covers all the assignments of error.
We find no error in the record.
MYERS v. SWÅNN.
The Circuit Court cannot take jurisdiction of a suit removed from a State
court under the third subdivision of sect. 639 of the Revised Statutes, on account of “prejudice or local influence,” unless all the necessary parties on one side of the suit are citizens of different States from those on the other.
ERROR to the Circuit Court of the United States for the Eastern District of North Carolina.
The case is stated in the opinion of the court.
Mr. Thomas T. Crittenden and Mr. Franklin H. Mackey for the plaintiff in error.
Mr. Samuel F. Phillips for the defendant in error.
MR. CHIEF JUSTICE WAITE delivered the opinion of the court.
This is a writ of error brought under the act of March 3, 1875, c. 137, to reverse an order of the Circuit Court remanding a cause removed from a State court under the third subdivision of sect. 639 of the Revised Statutes, on account of “ prejudice or local influence.” At the time the application for removal was made in the State court, the suit was being
prosecuted by citizens of North Carolina, as plaintiffs, against George Myers, then in life, a citizen of New York, and certain other persons, all citizens of North Carolina, to recover the possession of a lot in Wilmington, occupied by Myers, and to obtain a conveyance of the legal title held by the other defendants. The suit was originally begun on the 19th of May, 1873, against Myers alone, to recover the possession and damages for the detention; but on the 29th of May, 1877, an amended complaint was filed, not changing the action as against him, but bringing in the other defendants, who, it was alleged, held the legal title, and asking for a conveyance from them. Myers alone answered the amended complaint on the 8th of September, 1877, and on the 12th of March, 1878, petitioned for a removal, filing an affidavit to the effect that he had reason to believe, and did believe, that from prejudice or local influence he would not be able to obtain justice in the State court. The State court of original jurisdiction refused to allow a removal; but on appeal to the Supreme Court this was overruled, on the ground that the new defendants were merely nominal parties as trustees, and thereupon the cause was docketed in the Circuit Court of the United States on the 18th of November, 1878. In November, 1879, the Circuit Court, “ being of opinion that the action in its present form ” could not be maintained in that court, remanded the suit to the State court, and from that order this writ of error was brought.
As the suit was pending in the State court against Myers from 1873 to 1878, his application for removal was too late to secure the benefit of the separable controversy provision in the act of 1875. Such an application should have been made at or before the term at which the cause could be first tried, or rather, as this suit was begun before the act of 1875 was passed, it should have been at or before the term at which the cause could be first tried after that act went into operation. Removal Cases, 100 U. S. 457, 473.
Under the local prejudice act there can be no removal unless all the necessary parties on one side of the suit are citizens of different States from those on the other. This was decided in Vannevar v. Bryant, 21 Wall. 41. It is not enough that there be a separable controversy between parties having the