the benefit of creditors to the same extent tha individuals may. In making the assignment, the corporation may make preferences for one or more creditors over others, or of one class of creditors over other classes. A preference by the directors of themselves is generally held to be fraudulent.' By section 5098, Burns' Rev. St. 1894 (section 3879, Rev. St. 1881), the legislature of this State has removed all doubt as to the right or power of a foreign corporation, organized for a like purpose as the one in this case, to acquire lands in this State and mortgage the same. This statute is an affirmative permission by the State to foreign corporations, organized for manufacturing and mining purposes, to purchase and hold real property in this State for the purpose of its business, and to convey or mortgage the same, as corporations of this State, organized for similar purposes, may do. It is true that this statute is not intended to confer any power or right upon a foreign corporation which is denied to it by its charter, or the governing laws of the place of its organization and domicile. As to the rights mentioned in the statute cited, it is simply permissive, and may be said to be but a recognition of the rules of comity existing between sister States. There is no question but what the indebtedness secured by these mortgages is a legitimate and bona fide one in all respects, and is such as the company was fully authorized, under the laws of Ohio, to contract or incur. Neither can it be said that a preference created thereby in favor of Strasburger and Levi was a part of the assignment made by the company on August 6, 1895. That assignment, as we have seen, was adjudged by the lower court to be invalid and of no effect so far as it attempted to assign or transfer property owned by the company situated in Dearborn county, Ind.; and the mortgaged premises apparently remained under the dominion of the company, after the execution of the mortgages, for a period of over six months, until the appointment of the receiver by the Dearborn circuit court on February 22, 1896.

The power of this corporation, under the circumstances, to make the mortgages, and thereby prefer these creditors over others, is not prohibited, as we have seen, by the statutes of its own State; neither is it denied by the rules of the common law or of the laws of this State. The situs of the mortgaged premises being in Indiana, it is evident, under the circumstances, that the parties to the mortgages at the time of their execution must have contemplated their enforcement, if necessary, in the courts of this State. If these mortgages are to be adjudged invalid, and the right of appellants to enforce them denied, by the courts of this State, these results must follow by virtue of the rule announced and adopted by the Supreme Court of Ohio in Rouse v. Bank, supra. In that decision the court did not construe or interpret any statute of that State in relation to the execution of a mortgage by an insolvent corporation. The court therein expressly recognizes the

fact that decisions of the higher courts of other jurisdictions are conflicting in respect to the question in dispute in that appeal; and the court expressly admits that it is one of first impression, so far as that court is concerned, and, therefore, it is said, that it is at liberty to adopt the rule which in its judgment best coincides with justice and right. The rule adopted by the court in the case in question, and the one which controlled the question therein involved, is but an application of the equitable principle which arises out of what is denominated the 'trust fund doctrine.' The foundation upon which this rule or doctrine, as recognized in the Rouse case, and which now prevails in Ohio and other States, is said to rest, is that the assets or property of a corporation, when it becomes insolvent and has ceased to be a going concern, eo instante becomes a trust fund for the benefit of its creditors, and, under the circumstances, its officers, being trustees for all of its creditors, cannot lawfully dispose of or incumber the property otherwise than for the equal benefit of all of its creditors. This doctrine or rule does not prevail in this jurisdiction, and this court has declined to accept or enforce it. See Henderson v. Trust Co., 143 Ind. 561, 40 N. E. Rep. 516; First Nat. Bank v. Dovetail Body & Gear Co., 143 Ind. 534, 42 N. E. Rep. 924; Levering v. Bimel, supra; First Nat. Bank v. Dovetail Body & Gear Co., 143 Ind. 550, 40 N. E. Rep. 810."

ACTION-CONSPIRACY.-In Doremus v. Hennessey, 52 N. E. Rep. 924, decided by the Supreme Court of Illinois, it appeared that plaintiff conducted a laundry business, engaging others to do the work, she receiving and delivering the same to her customers. Upon her refusal to increase the price for her work in accordance with a scale fixed by a laundrymen's association, defendants combined, and caused the parties who had contracted to do her work to break their contracts and refuse to do the same longer, and induced others to refuse to do the same, in consequence of which plaintiff's business was destroyed. It was held that an action would lie for the damages sustained. The court said in part: "It is urged by appellants that they cannot be held liable for inducing certain persons named in the declaration to terminate their contractual relations with appellee, because their acts could not produce the injuries complained of without an independent force, which was the act of the parties themselves; and these appellants, it is urged, cannot be held liable for an intervening cause of damages sufficient to cause the injury, and that the refusal of different persons to work for the appellee was sufficient, of itself, to occasion injury for which the appellants cannot be held responsible. The first branch of this proposition has been disposed of by what we have heretofore said, and the authorities above cited. In Lumley v. Gye, 2 El. & Bl. 216, it was said: 'He who maliciously procures a damage to another by a violation of his right ought to be made to indemnify.' In Bowen

v. Hall, 6 Q. B. Div. 333, it was said: Merely to persuade the person to break his contract may not be wrongful in law or in fact; but, if the persuasion be used for the direct purpose of injuring the plaintiff, * it is actionable, if injury ensues from it.' The second branch of the proposition, in which it is urged that appellants could not produce the injuries complained of without the intervention of an independent force, presents the question whether the proximate cause of the injury is a question of fact. It has been settled by the adjudication of this court, so far as this question is here concerned, that in this State what was the cause of the injury, or the combination of causes producing it, is a question of fact. Whether the injury and damages sustained by plaintiff resulted from the acts of the defendant, or were the result of a new, independent factor, for which appellants were not responsible, cannot be determined by the court as a question of law, unless the fact be conceded, or the proof be substantially all to that effect. Car Co. v. Bluhm, 109 Ill. 20; City of Mt. Carmel v. Howell, 137 Ill. 91, 27 N. E. Rep. 77; Meyer v. Butterbrodt, 146 Ill. 131, 34 N. E. Rep. 152. The finding of the trial and appellate courts on this question is not subject to review in this court."

INSURANCE-LOCATION OF PROPERTY.-It was held by the Supreme Court of Michigan, in Village of L'Anse v. Fire Assn., 78 N. W. Rep. 465, that a fire insurance policy covering the fire apparatus of a village, "while located and contained as described herein, and not elsewhere, "does not cover a loss of such property when temporarily out of the building designated, and being used in attempting to extinguish a fire. The court said in part: "It is admitted by counsel for plaintiff that the case involves but the one question: What is the proper construction of the words in the policy, while located and contained as described herein and not elsewhere?' It is argued by counsel that the usual purpose and use by the plaintiff of a fire engine, hose, hose cart, and other appliances described in the policy would be to extinguish fires in the village, and that, in order to be so used, it would be, as occasion might require, temporarily out of the engine house, which would be its place of deposit when not in use; that such use must have been contemplated by both parties to the contract; and that such use must be presumed to have been taken into consideration by the defendant in fixing the rate of premium. It is said by counsel that the words 'contained in,' etc., and like expressions, were in use before the adoption of the standard form of policy, and had a well settled meaning, and, if applied to property, the natural use of which required it to be kept in one place, the insurance was lost if the property was removed to some other place, but if, however, the property was of a sort that the natural use of it required a temporary removal from the place designated in the policy, and while so temporarily absent was destroyed, it was covered by the policy; that the words 'contained in,' etc., were of further description, and indicated th

place of deposit, when the property was not necessarily absent. It is, therefore, contended that, in framing the standard policy, the intention was to express and adopt this construction. On the other hand, counsel for the defendant claims that, even under the old forms of policy, the insurance did not continue while the property was removed from its place of deposit, where the limitations were as contained in this policy, to-wit: while located and contained as described herein, and not elsewhere.' We think the cases cited by counsel for plaintiff clearly distinguishable from the policy in suit. Here the words are plain and unambiguous, and are not susceptible of construction other than that which the words themselves import. 'While located and contained as described herein, and not elsewhere,' means that the policy covered the property only while in that particular building, and did not cover it while it was anywhere else. In Green v. Insurance Co., 60 N. W. Rep. 189, 91 Iowa, 615, the words of the policy were, 'while contained in the two-story brick and frame dwelling house,' etc. The court, in speaking of other cases to which its attention had been called by counsel for plaintiff, said: This contract is widely different from those in the cases cited. The evidence shows that the property was kept sometimes in the chapel and sometimes in the house, and part of it used in both places; and, if we assume that the parties, when making the contract, knew of this, we have additional reason for limiting the liability to losses while in the house. It is sufficient to say that the liability is thus limited, and the courts have no right to extend it.' This case was followed by Lakings v. Insurance Co., 94 Iowa, 476, 62 N. W. Rep. 783. In Bahr v. Insurance Co. (Sup.), 29 N. Y. Supp. 103, the limitation in the policy was, 'while located as described herein, and not elsewhere, to-wit: while contained in the frame building occupied as a wheelwright shop,' etc. The carriage was burned in a livery stable, a block and a half away from there. Judgment for plaintiff was had below, and the court said: "This judgment cannot stand. The location of the insured property was a warranty, a breach of which avoided the policy.' This rule was recognized by this court in Wildey v. Insurance Co., 52 Mich. 446, 18 N. W. Rep. 212, and English v. Insurance Co., 55 Mich. 273, 21 N. W. Rep. 340. The court below was not in error in directing judgment in favor of defendant."

WRITTEN CONTRACT PAROL EVIDENCE.-In Violette v. Rice, 53 N. E. Rep. 146, it was held by the Supreme Court of Massachusetts, that evidence that at the time an actress made written agreement with the proprietor of certain theatrical companies to render services at any theaters" it was agreed that the word "services" meant services in a particular part in a certain play, contradicts the instrument, and is inadmissible, and that by written contract of employment of an actress, providing that she shall "conform to and abide by all the rules and regulations" adopted by the employer for government of his theatrical companies, she adopts the rules, though she does not know what they are.

JURISDICTION OF STATE AND FEDERAL COURTS IN ACTIONS BY AND AGAINST NATIONAL BANKS, AND RECEIVERS THEREOF.

1. Exclusive Federal Jurisdiction.-The exclusive jurisdiction of the federal courts is conferred by section 711 of the United States statutes, which is taken from the Judiciary

Act of 1789, and does not embrace within its terms civil actions by or against corporations organized under federal statutes, and, therefore, does not affect national banks, which were conceived long after that act became a law. Two subjects, however, have been committed by the national bank act to the exclusive jurisdiction of the federal courts: First. Suits to enjoin the comptroller of the currency from placing the bank in the hands of a receiver.1 Second. Suits by the comptroller of the currency to have a forfeiture of the bank's franchise decreed for violation of the law.2

2. The Power of Congress to Confer Jurisdiction on the federal courts in suits by and against national banks, as corporations organized under the laws of the United States, is settled in the leading case by Chief Justice Marshall, and the more recent important case by Justice Bradley.3

3. The General Power to Sue, be Sued, etc., conferred on national banks by the act for their creation, authorizes the corporation "to sue and be sued, complain and defend, in any court of law or equity, as fully as natural per

sons.

4

4. Federal Jurisdiction Expressly Conferred. Prior to the Act of July 12, 1882, sec. 563, U. S. Stat., gave to the United States District Courts, and sec. 629 gave to the United States Circuit Courts, in their respective districts, jurisdiction of suits by or against any banking association under the National Bank Act.5

Stockholders' Liability.-By an Act of June 30, 1876, the shareholder's liability un

1 R. S. U. S., sec. 5237; Bank v. Bank, 14 Wall. 383, 395, Clifford, J.

2 R. S. U. S., sec. 5239.

3 Osborn v. Bank of U. S., 9 Wheat. 738, Marshall, C. J.; Pacific R. R. Removal Cases, 115 U. S. 1, Bradley, J.

4 R. S. U. S., sec. 5136; Bolles' Nat. Bank Act, secs. 49, 239; Pratt's Dig. N. B. Laws, 7.

5 R. S. U. S., secs. 563, 629; Brown's Nat. Bk. Cases, 519; Pratt's Dig. N. B. Laws, 128; Bolles' Nat. Bank Act, sec. 242.

der R. S. U. S., sec. 5151, of a national bank going into voluntary liquidation under sec. 5220, may be enforced by a bill in equity in the nature of a creditors' bill, by any creditor for himself and other creditors, in any court of the United States, having original jurisdiction in equity, in the district where the bank was located; but where a receiver has beer

997

appointed he brings the action against the stockholders "As provided in sec. 5234." The comptroller of currency determines the necessity for such suit by the receiver, and an allegation showing that he has taken action and directed the suit, is essential to the sufficiency of the complaint or bill.8

5. In such Suits the Jurisdiction of the Federal Courts, Even Before the Later Acts Referred to Below, was not Exclusive, but only concurrent with the State courts. Justice Rappallo: "The only cases in which exclusive jurisdiction is conferred by the banking act upon the courts of the United States, so far as we can find, are proceedings to enforce the forfeiture of the franchises of banking associations for violation of the act and proceedings to enjoin the comptroller of the currency from winding up the corporation through a receiver. There is nothing in the act which withdraws from the jurisdiction of the State courts civil actions to enforce rights of individuals against national banks or their officers.''10

6. State Courts May Exercise Jurisdiction in all cases wherein it has not been vested ex

clusively in the federal courts." Justice

Maxwell: "The statutes of the United States extend over every State as a part of its laws; and although exclusive jurisdiction may be given to the federal courts, yet if it is not so

61 Sup. R. S. U. S., 107; Act June 30th, 1876; Richmond v. Irons, 121 U. S. 27, 49.

71 Sup. R. S. U. S., 107; Act June 30, 1876, sec. 1. 8 Kennedy v. Gibson (1869), 8 Wall. 498.

9 Bletz v. Bank (1878), 87 Pa. St. 87, 30 Am. Rep. 343; Brown's Nat. Bk. Cases, 120, 209, 366, 421; Pettilon v. Noble, 7 Biss. 449; Thompson v. Schaetzel, 2 S. Dak. 395, 50 N. W. Rep. 631; Bank v. Overman, 22 Neb. 116, 34 N. W. Rep. 107; Cook v. Bank, 52 N. Y. 96; Brinckerhoff v. Bostwick, 88 N. Y. 52, 60; Dow v. Bank (1877), 50 Vt. 112, 28 Am. Rep. 493; Picketts v. Bank (1879), 32 Ark. 346; Fresno Nat. Bk. v. Superior Ct., 83 Cal. 491, 24 Pac. Rep. 157, 159, et seq.

10 Brinckerhoff v. Bostwick, 88 N. Y. 52, 61.

11 Claflin v. Houseman, 93 U. S. 130, 136; Teal v. Felton, 12 How. 284, 292; Raisler v. Oliver, 97 Ala. 710, 12 South. Rep. 238-40, 38 Am. St. Rep. 213, n. 216; Bank v. Overman, 22 Neb. 116, 34 N. W. Rep. 107; Robinson v. Bank, 81 N. Y. 385.

18

given, either expressly or by necessary implication, the State courts having competent jurisdiction in other respects, may be resorted to.' 12 This doctrine is now firmly established on the authority of Claflin v. Houseman, which is the leading case on the sub. ject. Therefore, a national bank, even prior to the more recent legislation cited below, was not compelled to have recourse to the federal courts but had the same right as any other person or corporation to appear as a plaintiff in the State courts, and was subject to be sued therein.14

7. Jurisdiction Expressly Given State Courts. The original National Bank Act of February 25, 1863, sec. 59, provided that suits by and against banks organized thereunder might be brought in any circuit, district or territorial court of the United States, held within the federal judicial district in which the bank was located. By an act of June 3, 1864, this section was amended by adding: "Or in any State, county, or municipal court in the county or city in which the association is located, having jurisdiction in similar cases.

15

8. Now on Same Footing with Other Banks -Exception.-By sec. 4, of the Act of July 12, 1882, providing for the extension of the corporate existence of national banks, it was "provided, however, that the jurisdiction for suits hereafter brought by or against any association established under any law providing for national banking associations, except suits between them and the United States, or its officers and agents, shall be the same as and not other than the jurisdiction for suits by or against banks not organized under any law of the United States which do or might do banking business where such national banking associations may be doing business when such suits may be begun. And all laws and parts of laws of the United States inconsistent with this proviso be, and the same are hereby, repealed."'16

12 Bank v. Overman, 22 Neb. 116, 34 N. W. Rep. 107, cases. Approved: Bank v. Bollong, 40 N. W. Rep. 411, Id. 413, 45 Id. 164, 56 Id. 209.

13 93 U. S. 130.

14 2 Morse on Bk., p. 1293, citing Bank v. Hubbard, 49 Vt. 1; Adams v. Daunis, 29 La. Ann. 315.

15 Bolles' Nat. Bank Act, sec. 163, p. 160; Bank v. Bank (1871), 14 Wall. 383.

16 1 Sup. R. S. U. S., p. 354, sec. 4; Pratt's Dig. N. B. Laws, 154; Bank v. Cooper, 120 U. S. 778, 7 Sup. Ct. Rep. 777.

9. Deemed Citizen of State-Federal Jurisdiction Withdrawn-Exception.-By the Act of March 3, 1887, relating to jurisdiction of federal courts and the removal of causes, as amended by sec. 4 of the Act of August 13, 1888, it was provided: "Section 4.-That

all national banking associations established under the laws of the United States shall, for the purposes of all actions by or against them, real, personal, or mixed, and all suits in equity, be deemed citizens of the States in which they are respectively located; and in such cases the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same State. The provisions of this section shall not be held to affect the jurisdiction of the courts of the United States in cases commenced by the United States or by direction of any officer thereof, or cases for winding up the affairs of any such bank."'17 Mr. Pratt's note to this section18 is a terse, comprehensive exposition of the effect of this amendment, as a substantial re-enactment of the proviso of sec. 4, of the Act of July 12, 1882,19 and repealing that part of secs. 629 and 563, R. S. U. S., conferring jurisdiction on the circuit and district courts respectively;20 and also a brief digest of a number of cases involving points under the amendment. Condensed as that valuable "note" is, the limit of space forbids quoting it here, and further condensation might impair its usefulness, if not do its author injustice. In addition to the numerous cases cited in Mr. Pratt's note may be added, on the construction of the statutes as quoted in the two sections of this article last above, the list below.21

10. Penalty for Taking Usury.-Sec. 5198, R. S. U. S., expressly confers jurisdiction on the State as well as the federal courts to recover the penalties provided for taking usury by national banks.22

17 1 Sup. R. S. U. S., p. 614, sec. 4; Bolles' Nat. Bank Act, sec. 253, p. 163, cases, n. 5.

18 Pratt's Dig. N. B. Laws, 165 7.
19 See section 8 of this article.
20 See section 4 of this article.

21 Cont. Nat. Bk. v. Folsom, 78 Ga. 449, 3 S. E. Rep. 269; Bank v. Cooper, 120 U. S. 778, 7 Sup. Ct. Rep. 777; Whittemore v. Bank, 134 U. S. 527, 10 Sup. Ct. Rep. 592; Bank v. Hall, 86 Me. 107, 29 Atl. Rep. 952; Bank v. Allen, 2 McCrary, 92; Grant v. Spokane Nat. Bk., 47 Fed. Rep. 673.

22 Bank v. Cooper, 120 U. S. 778, 7 Sup. Ct. Rep. 777; Bank v. Overman, 22 Neb. 116, 34 N. W. Rep. 107; Pratt's Dig. N. B. Laws, 130, cases.

11. Removal of Causes.-Sec. 640, R. S. U. S., providing for removal of causes, expressly excepts from its provision banking corporations, and, therefore, even in the absence of the more recent legislation cited above restricting the jurisdiction of federal courts in suits by and against national banks, the bank would not have the right to remove a suit from a State to a federal court merely for the reason that it is a national bank.23

12. A Receiver of a National Bank, appointed by the comptroller of the currency, is an officer of the United States, and may sue in the federal courts; and if sued in the State courts, for a sum within the jurisdiction of the federal courts under the removal act, may remove the cause to the proper federal court. 24 But under the removal act, as it has been since the amendment of March 3d, 1887, as corrected by the Act of August 13th, 1888,25 there is no right of removal by the receiver, whether in suits in equity or actions at law, unless the matter in dispute, exclusive of costs, amounts to $2,000.26 However, a receiver appointed by the United States Circuit Court, when authorized to defend a suit affecting his trust, may remove the case into the court which appointed him, on the ground that such a suit is ancillary to the principal case in which the court has acquired jurisdiction and control of the assets.27

13. The Jurisdiction in Suits by and against Receivers and other Officers of the United States, referred to in section 12 of this article, is not exclusive, but, as necessarily follows from principles noted above, is merely permissive, and he may sue in the State courts; and if sued there, and does not exercise the right to remove the cause to the federal court, the right will be deemed to have been waived, and the jurisdiction will be complete.28

23 2 Morse on Banks, 1296, cases, note 34; Pettilon v. Noble, 7 Biss. 449, Blodgett, J.; Brown's Nat. Bk. Cases, 120.

24 Thompson v. Schaetzel, 2 S. Dak. 395, 50 N. W. Rep. 631; Thompson v. Pool, 70 Fed. Rep. 725; Bolles' Nat. Bk. Act, secs. 245, 258, pp. 157 and 166; Pratt's Dig. N. B. Laws, 105, cases, and 167, cases; Hendee v. R. R. Co., 26 Fed. Rep. 677; Sowles v. Witters, 43 Fed. Rep. 700; Sowles v. Bank, 46 Fed. Rep. 513.

25 See sec. 9 of this article.

26 Hallam v. Tillinghast, 75 Fed. Rep. 849; Follett v. Tillinghast, 82 Fed. Rep. 241.

27 Carpenter v. N. Pac. R. Co., 75 Fed. Rep. 850; Hallam v. Tillinghast, 75 Fed. Rep. 849.

28 High on Receivers, sec. 363; Thompson v. Schaet

14. It Necessarily Follows from the Law of his Creation, and the source of his appointment and control, that the State courts cannot interfere with the receiver's administration of the trust by way of injunction, mandamus, etc., as the administration of winding up the affairs of the bank is all under the control of the federal legal machinery.29

15. Receivership does not Preclude Suit against the Bank, and claims may be presented and probated with the comptroller or receiver, or established-adjudicated"-in any court of competent jurisdiction.30 Even if disallowed by the receiver, the claim may be sued on and established in any court of competent jurisdiction.31

16. The Receiver's Title is merely such right and title as the bank itself had to the property held by the bank. His title is regarded as similar to an assignee in bankruptcy, or an assignee in insolvency; and it follows, as a mere corollary, that he acquires no title against the real owner of property held by the bank as a mere custodian, or as a bailment, such as special deposits, escrows, etc.32

17. Attachments, Injunctions, etc., Prohibited. No attachment, injunction or execution shall be issued against a national bank association or its property before final judg ment in any suit, action or proceeding in any State, county or municipal court. Chief Justice Waite held that, although this provision was made to secure equality among creditors in the distribution of the assets of the bank, its operation is not confined to cases of actual or contemplated insolvency,

zel, 2 S. Dak. 395, 50 N. W. Rep. 631; Bird's Executors v. Cockrem, 2 Wood, 232.

29 R. S. U. S., sec. 5234-6 and 5242; Price v. Abbott, 17 Fed. Rep. 506; School Dist. v. Bank, 61 Fed. Rep. 417; Pratt's Dig. N. B. Laws, 129, citing Witters v. Foster, 28 Fed. Rep. 737; Bank v. Colby, 21 Wall. (U. S.) 609, Field, J.; Hendee v. R. R. Co., 26 Fed. Rep. 677; Armstrong v. Ettlesohn, 36 Fed. Rep. 209; Armstrong v. Troutman, 36 Fed. Rep. 275; McConville v. Gilmour, 36 Fed. Rep. 277; Fisher v. Yoder, 53 Fed. Rep. 565; Ocean Nat. Bk. v. Cool, 7 Hun, 237.

30 R. S. U. S., sec. 5236; Bolles' N. B. Act, sec. 346, p. 205; Bank v. Pahquioque Bank, 14 Wall. 383; Thompson N. B. Cases, 77; Kennedy v. Gibson, 8 Wall. 498, 506, Swayne, J.

31 Bank of Bethel v. Pahquioque Bank, 14 Wall. 383. 32 High on Receiver (3d Ed,), sec. 559; Beach on Receiver (1891), secs. 456, 474; Corn Ex. Bank v. Blye, 101 N. Y. 303.

33 R. S. U. S., sec. 5242, last clause; Pratt's Dig. N. B. Laws, 130.