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[1, 2] Whether the District Court has jurisdiction to grant any relief must be determined upon a consideration of the allegations of the bill and the amendment thereto.
should not have and receive the relief prayed for because of any defect in claimants' claim of title, that he be declared as such trustee to have an equitable lien or charge on the said land, at least to the extent of the value of the improvements. That the said *E. J. Coleman be required to specifically perform his promise and agreement to convey title to the land to M. C. Coleman, and the title be made in the petitioner's name as trustee for the benefit of the creditors of the bankrupt. Afterwards the complainant filed an amendment to the bill in which it was alleged: That within the period of four months immediately preceding the filing of the bankruptcy proceedings by M. C. Cole- | act, 30 Stat. 566 (Comp. St. § 9654) providing man, to wit, in January, 1915, while insol- that the trustee may avoid any transfer of vent, and with intent to hinder, delay and de- the bankrupt's property that any creditor fraud his creditors, the said M. C. Coleman, might have avoided, and may recover the who then held the title to the above-describ- property, so transferred, or its value, from ed real estate, fraudulently disclaimed such the person to whom it was transferred, untitle, and surrendered possession thereof to less he was a bona fide holder prior to the E. J. Coleman, and thereby fraudulently adjudication. transferred his rights, title, interests and equity in said real estate to E. J. Coleman, and transferred said rent notes with the pur-36 pose and intent to make the tenant the tenant of the respondent, and as such he has at
that there is any indebtedness owing to E. J. [dence of the complainant, assuming it to be Coleman by M. C. Coleman. That the notes true for that purpose, only, and that it did collected by E. J. Coleman be accounted for. not show such a transfer within the meaning That any of said notes which may not have of the laws of Congress relating to bankbeen collected, be decreed to be surrendered ruptcy as would give the court jurisdiction to petitioner. That the 377 acres of land be of the proceedings. declared to be the property of the petitioner as trustee in bankruptcy for the purpose of applying the same to the credit of the creditors of the bankrupt. That in the event that the court should hold that the complainant | If there be enough of substance in them to require the court to hear and determine the cause, then jurisdiction should have been entertained. Looking to the allegation of the bill and the amendment, as we have stated them, it appears that the trustee invoked the aid of section 60b of the Bankruptcy Act, as amended by Act Feb. 5, 1903, c. 487, 32 Stat. 799 (Comp. St. § 9644), relating to preferential transfers made within four months before the filing of the petition in bankruptcy, also section 67e, 30 Stat. 564 (Comp. St. § 9651) making fraudulent transfers within four months null and void, except as to persons acting in good faith, or for a present, fair consideration, and of section 70e of the
Since the amendments to the Bankruptcy Act of 1903 and June 25, 1910 (32 Stat. 797; Stat. 838, c. 412) the District Courts of the United States are given concurrent jurisdiction with the state courts to set aside preferences under section 60b of the act, and fraudulent transfers within four months prior to the filing of the petition, under section 67e of the act, and transfers under section 70e, making void any transfer by the bankrupt of his property which any creditor might have avoided, and giving the trustee the right to recover the same. See Stellwagen v. Clum, 245 U. S. 605, 614, 38 Sup. Ct. 215, 62 L. Ed. 507; Collett v. Adams, 249 U. S. 545, 39 Sup. Ct. 372, 63 L. Ed. 764, decided April 28, 1919.
An answer was filed taking issue upon the allegations of the bill as to fraudulent transfers and conveyance, and making other allegations unnecessary to set out in detail. The cause was referred to a master, who took the evidence, and found that the District Court had jurisdiction, and that there was a fraudulent transfer, and advised a judgment in favor of the trustee. After considering the report of the master, the District Court made a final decree, finding: That, assuming for the purpose of the consideration of the *The opinion of the District Court, as set question of jurisdiction, the testimony sub-forth in the record, shows that its conclusion mitted by the complainant to be true, the that there was no jurisdiction was based upcourt was without jurisdiction to make a on a consideration of the evidence, from decision on the merits of the controversy. which it was found that no preference was And it was ordered and directed that the bill shown under section 60b, nor any fraudulent of complaint be dismissed without prejudice transfer under sections 67e or 70e. To jusof the petitioner's right to maintain his ac- tify its conclusion that it was without juristion in a state court. The District Court diction the District Judge cites certain decialso made a certificate stating: That the de- sions of this court. Bardes v. Hawarden cree of dismissal was based solely upon the Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 L. ground that the court was of opinion that it Ed. 1175, in which this court held that unhad no jurisdiction to grant any relief to the der section 23 of the Bankruptcy Act (Comp. complainant, that, in reaching this determi- St. § 9607) the District Court could by the nation, the court had considered the evi- consent of the defendant, and not otherwise,
entertain suits by the trustee against third | ment of damages in a proceeding to appropripersons to recover property conveyed by the ate a crossing, to which a junior company was bankrupt before the institution of the bank- entitled by statute, and, being no part of P.' ruptcy proceedings. It is sufficient to say of charter, it having been organized under the that case that it was decided under the law of another state, gave it no vested right to insist that the rule should not be changed by terms of the act before the amendments of statute, as it was by Laws Wash. 1913, p. 74, 1903 and 1910, respectively, to which we have or by court decision. referred, and which give concurrent jurisdiction to the state and federal courts. The District Court also cited Harris, Trustee, v. Bank of Mt. Pleasant, 216 U. S. 382, 30 Sup.
Ct. 296, 54 L. Ed. 528, wherein no transfer of the bankrupt's property was alleged in the petition. The suit was one by the trustee to recover securities of the bankrupt, alleged to be held by the bank for the security of an overdraft which, it was averred, had been paid; and also to recover certain notes alleged to have been paid by the bankrupt.
The opinion of the District Court shows that it really considered the merits of the case in reaching the conclusion that it was without jurisdiction. As this court has not infrequently said, jurisdiction must be determined not upon the conclusion on the merits of the action, but upon consideration of the grounds upon which federal jurisdiction is invoked.
 Much of the brief of counsel is taken up with a discussion as to whether the alleged transfers amount to a conveyance under the Georgia statutes and decisions. This discussion is pertinent to the merits, our sole inquiry concerns the jurisdiction of the court. We are of opinion that there was enough alleged to properly invoke jurisdiction, and that the charges of fraudulent transfers of the rent notes, and of interests in real estate, were sufficiently made to bring the action within the jurisdiction of the District Court under the provisions of the Bankruptcy Act. In this view the judgment of the District Court dismissing the action for want of jurisdiction is Reversed.
(250 U. S. 332)
1. CONSTITUTIONAL LAW 101-RAILROADS 91(1) — GRADE CROSSING-SAFETY DEVICES BURDEN OF EXPENSE-VESTED RIGHT
-RULE OF LAW.
2. CONSTITUTIONAL LAW 297
As to a railroad constructed before, and
crossed by another railroad after, passage of Laws Wash. 1913, p. 74, changing the prior law that the crossing road should bear all the expense of necessary interlocking safety devices, the statute was within the rule that the imposing of uncompensated charges, involved in obeying a law passed in a reasonable exercise of the police power, is not a taking of property without due process, within the Fourteenth
A statute of Washington, in effect when the P. Railroad was constructed therein, which, as
construed by its court, while giving any junior company, formed under such statute, right to cross it, required the junior companý to pay the entire cost of crossing, including installing and maintaining of interlocking safety devices, was at most a rule of law, applicable to assess
In Error to the Supreme Court of the State of Washington.
Mr. Justice CLARKE delivered the opinion of the Court.
The defendant in error, Puget Sound & Willapa Harbor Railway Company, hereinafter designated the Willapa Company, a railroad corporation organized under the laws of the state of Washington, in the con(Argued April 28, 1919. Decided June 2, 1919.) struction of a new line of railroad in 1914,
found it necessary to cross at grade, at two places, tracks which had been constructed in 1890-1892 by the plaintiff in error, Northern Pacific Railway Company, hereinafter designated the Pacific Company, a corporation organized under the laws of the state of Wisconsin.
Petition by the Puget Sound & Willapa Harbor Railway Company to the Public Service Commission of the State of Washington for leave to cross the Northern Pacific Railway Company's track at grade. Judgment of the superior court, affirming order of the commission that the expense of interlocking safety devices, required to be installed, be borne wholly by petitioner, was reversed by the Supreme Court of Washington (161 Pac. 850; 166 Pac. 793), and the Northern Pacific Company and the Public Service Commission bring error. Affirmed. *Messrs. Lorenzo B. Da Ponte, of Tacoma, Wash., and C. W. Bunn and Charles Donnelly, both of St. Paul, Minn., for plaintiffs in error.
Mr. Heman H. Field, of Chicago, Ill., for defendant in error.
In appropriate proceedings, provided for
by the state law, the Public Service Commission of the state of Washington granted authority and permission to the Willapa Company to cross the tracks of the Pacific Company at grade at the two designated places.
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This permission was subject to the condition that suitable interlocking devices, of a type to be agreed upon between the two companies, should be installed at the crossings. The companies agreed upon all of the conditions involved in the crossing of their tracks, excepting as to the cost of installing and maintaining the required interlocking devices, and upon due submission of this question to the commission it was decided that the entire expense should be borne by the junior, the Willapa Company. The superior court affirmed this holding by the commission, but on appeal the Supreme Court of the state, in the decision which we are reviewing, reversed the two lower tribunals and ruled that the expense should be divided equally between the two companies.
 The decision of the Supreme Court of Washington is based upon the interpretation which it placed upon applicable state statutes enacted in 1913 (chapter 30, Laws of Washington 1913, p. 74), and the case is presented to this court on the single assignment of error:
"That the state Supreme Court erred in holding and deciding that chapter 30 of the Laws of Washington of 1913, as construed and applied to the facts of this case, is not repugnant to the Fourteenth Amendment to the Constitution of the United States."
Ct. 581, 41 L. Ed. 979), and that it would be valid as applied to crossings of railroad lines constructed prior to its enactment where no contract had been entered into with respect to the protection of the crossing (Detroit, etc., Railway v. Osborn, 189 U. S. 383, 23 Sup. Ct. 540, 47 L. Ed. 860). But it is contended that it is not a valid law as applied to the case at bar, where the road of the Pacific Company was constructed at a time when the state law imposed the entire cost of the construction and maintenance of the crossing upon the junior company.
Obviously this is a slender thread on which to hang a grave constitutional argument, and it is difficult to treat it seriously.
Conceding that the construction placed upon the state statute by the state Supreme Court will be accepted by this court, the contention of the Pacific Company is that, when that company entered the state of Washington and constructed its line, an act of the Legislature, passed in 1888 (Laws 1887-88, p. 63) was in effect, which gave to railway companies formed under the act the right to cross any other railway theretofore constructed, but subject to conditions which the state Supreme Court held, in 1908, in State v. Northern Pacific Railway Co., 49 Wash. 78, 94 Pac. 907, required the junior company to pay the entire cost of the crossing, including the installing and maintaining of interlocking devices where necessary; that this constituted a vested right of property in the senior company, and that the later statute of 1913, which the Supreme Court held in this case required it to bear one-half of the cost of installing and maintaining the interlocker, deprived it of its property without due process of law.
It is admitted in argument that the act assailed would be validly applicable to apportioning the cost of crossings of highways and railroads, regardless of the dates of their construction (New York & New Eng land Railroad v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. Ed. 269; Chicago, etc., Railroad Co. v. Chicago, 166 U. S. 226, 17 Sup.
At most, the earlier statute, and the interpretation which the state Supreme Court placed upon it, was a rule of law applicable to the assessment of damages in a proceeding to appropriate a crossing to which a junior company was entitled by the statute. It was no part of the charter of the Pacific Company, which was organized under the Wisconsin law, and that company had no vested right to insist that the rule should not be changed by statute or by court decision. Pennsylvania R. R. Co. v. Miller, 132 U. S. 75, 83, 10 Sup. Ct. 34, 33 L. Ed. 267; Chicago & Alton R. R. Co. v. Tranbarger, 238 U. S. 67, 76, 35 Sup. Ct. 678, 59 L. Ed. 1204; New York Central R. R. Co. v. White, 243 U. S. 188, 189, 37 Sup. Ct. 247, 61 L. Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 629; Chicago & Alton R. R. Co. v. McWhirt, 243 U. S. 422-425, 37 Sup. Ct. 392, 61 L. Ed. 826.
 While this is sufficient to dispose of the case, it may be added that the act of 1913 was passed in an obviously legitimate and customary exercise of the police power of the state to protect travelers and employés, from injury and death at such crossings, and also to protect property in the custody of the carriers from damage. It has long been settled law that the imposing of uncompensated charges, involved in obeying a law, passed in a reasonable exercise of the police power, is not a taking of property without due process of law, within the meaning of the Fourteenth Amendment to the Constitution of the United States. Chicago, etc., R. R. Co. v. Nebraska, 170 U. S. 57, 73, 74, 18 Sup. Ct. 513, 42 L. Ed. 948; New Orleans Gaslight Co. v. Drainage Commission, 197 U. S. 453, 461, 462, 25 Sup. Ct. 471, 49 L. Ed. 831; Northern Pacific Ry. Co. v. Minnesota ex rel. Duluth, 208 U. S. 583, 594, 28 Sup. Ct. 341, 52 L. Ed. 630; Chicago & Alton R. R. Co. v. Tranbarger, 238 U. S. 67, 76, 35 Sup. Ct. 678, 59 L. Ed. 1204.
The judgment of the Supreme Court of Washington is Affirmed.
the assessment roll. The improvement was to be paid for by delivering to the contractors interest-bearing certificates of indebtedness
(Argued April 22, 1919. Decided June 2, 1919.) equal, at par, to the expense of the work and
materials furnished. These certificates did
vided that, under certain circumstances, it
(250 U. S. 321)
BENEDICT v. CITY OF NEW YORK.
1. COURTS 382(2)—APPEAL FROM CIRCUIT COURT OF APPEALS-RIGHTS ASSERTED UN
Jurisdiction of the Circuit Court having been invoked not only on the ground of diversity of citizenship, but also because of rights asserted under the federal Constitution, plaintiff's further appeal to the Supreme Court, after dismissal of bill was affirmed by the Circuit Court of Appeals, is permissible.
2. COURTS 375-FEDERAL COURTS-STALE CLAIMS-STATE STATUTE OF LIMITATIONS.
While federal courts sitting in equity are not bound by state statutes of limitation, they
are, under ordinary circumstances, guided by them in determining their action on stale claims.
3. TRUSTS 365(3) ENFORCEMENT LACHES REPUDIATION OF TRUST.
Defense of laches to suit based on alleged breach of trust by city as to fund for payment of improvement certificates is properly sustained, the state statute of limitations being at most 10 years, 17 years having been allowed to elapse after open repudiation of any trust duties before suit was begun, and more than 10 years before any attempt was made to secure settlement by negotiation, there having been no waiver of the statute, and lack of diligence being wholly unexcused.
Certificates were issued to the amount of $1,847,500. A large portion of the assessments levied were left unpaid by the landowners; and it became necessary to sell the properties. Sales for nonpayment of assessments were made in 1888. The purchase price was paid in certificates at par and interest up to the amount of the assessments, the interest and the excess, if any, being paid in cash. In 1892 and 1893 sales of land were made at much less than the amounts of the assessment. Here also bidders were permitted to pay the purchase price in certificates at par and interest. Likewise the
Suit by Elias C. Benedict against the City of New York. Decree (235 Fed. 258) dismiss-owners of lots sold were permitted to redeem ing bill was affirmed by the Circuit Court of lots upon paying the amount of the bid and Appeals (247 Fed. 758, 159 C. C. A. 616), and accrued charges by certificates at par and plaintiff appeals. Affirmed. interest. After all the land had been disposed of and the improvement fund exhausted there remained and are now outstanding unpaid certificates aggregating about $300,000.
Prior to June 11, 1879, Benedict acquired certificates to the amount of $8,000 which he has held ever since, and on which the principal and interest are unpaid. In July, *1910,*
Mr. Justice BRANDEIS delivered the opin- suing on behalf of himself and others simiion of the Court. larly situated, he brought this suit in the Cir(now District) Court of the United States for the Southern District of New York to enforce, as upon an express trust, an accounting of the improvement fund and liabil ity for alleged breaches of trust. The con tention is that Long Island City became trustee of the lien on the several lots for the benefit of the certificate holders; and the alleged breaches of trust relied upon are in substance that, through its treasurer and in spite of the protest, the city permitted and
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Appeal from the United States Circuit Court of Appeals for the Second Circuit.
* Messrs. Leon Abbett, of Hoboken, N. J., and Charles K. Allen, of New York City, for appellant.
Mr. Terence Farley, of New York City, for appellee.
In 1874 commissioners theretofore appoint-cuit ed by special act (Laws N. Y. 1871, c. 765) to improve the streets of Long Island City were directed to improve a particular district. Laws N. Y. 1874, c. 326. The act provided that the cost of the improvement should be assessed upon the land benefited and created a lien upon the land for the assessment and interest; but it declared that no sale for failure to pay the assessment could be made before the expiration of ten years after filing of
authorized sales of land for less than the | because of rights asserted under the federal assessment in violation of the act of 1874; Constitution, his further appeal to this court that instead of canceling certificates received was permissible. Vicksburg v. Henson, 231 in payment of assessments and of the pur- U. S. 259, 267, 268, 34 Sup. Ct. 95, 58 L. Ed. chase price at sales, it reissued the same; 209. and that even where sales had been made for less than the amount of the assessments it allowed redemption from sales in certificates at par and interest. The City of New York is made defendant on the ground that in 1898 Long Island City was merged into it by the Greater New York Act and that the consolidated corporation assumed the obligations and liabilities of the constituent municipalities. Laws N. Y. 1897, c. 378.
 Protest was made by plaintiff at time of sales against the course pursued by the treasurer, but he justified the action complained of, relying upon act of 1874 and chapter 501 of the Laws of 1879 and chapter 656 of the Laws of 1886. Writs of mandamus had previously been issued compelling him to receive certificates at par and interest even in payment for the redemption of land sold for nonpayment of assessments. People ex rel. Ryan v. Bleck wenn, 8 N. Y. Supp. 6381; People ex rel. Oakley v. Bleck wenn, 13 N. Y. Supp. 487 2; People ex rel. Oakley v. Bleckwenn, 126 N. Y. 310, 27 N. E. 376. But plaintiff contended that, in view of section 23 of title VI of chapter 461 of the Laws of 1871, if the acts of 1879 and 1886 were construed as authorizing the action of which he complains, they impair, in violation of the *federal Constitution, the obligation of contracts previously entered into with certificate holders. The case was fully heard in the District Court on evidence, and several distinct defenses were relied upon. The city insisted, among other things, that the statutory lien did not impose a statutory trust upon it; that the persons who acted were not its agents, but independent officers, agents of the state; that the specific provision of the statute relied upon by plaintiff did not constitute terms of the contract but related merely to the remedy; and that the later legislation introduced at most permissible changes of remedy. The court without passing upon these questions, entered a decree dismissing the bill on the ground that the statute of limitations and laches constituted a complete defense. 235 Fed. 258. This decree was affirmed by the Circuit Court of Appeals on the same grounds. 247 Fed. 758, 159 C. C. A. 616. Benedict is a citizen of Connecticut; but as he invoked the jurisdiction of the Circuit Court not only on the ground of diversity of citizenship, but also
1 Reported in full in the New York Supplement; reported as a memorandum decision without opin
ion in 55 Hun, 611.
Reported in full in the New York Supplement; reported as a memorandum decision without opinlon in 58 Hun, 609, 59 Hun, 618.
[2, 3] The whole case is here for review; but we find it unnecessary to decide most of the questions presented, because we are of opinion that the lower courts did not err in holding that the suit was barred by laches. None of the acts relied upon here as constituting breaches of trust occurred later than the years 1892 and 1893. Before the principal action complained of was taken, the city treasurer publicly announced his purpose to pursue the course complained of, which he asserted was in accordance with law. Plaintiff was represented at the sales by an agent who protested there orally and elsewhere in writing against the treasurer's declared pur-, pose and against specific acts now complained of, asserting then as now that the course pursued was illegal. We have here a definite repudiation of the alleged trust duties more than 17 years before the institution of this suit. And there are no circumstances which excuse the delay. What occurred in the interval, so far as appears, was this:
(a) In June, 1893, Benedict commenced in the Circuit Court of the United States for the Eastern District of New York a bill in equity to restrain the treasurer from receiving certificates from property owners when redeeming their properties from assessment sales, made to the complainant, and from marking upon the books as paid any assessment upon such property when it was sold for less than the amount of the assessment. It seems that hearing on the motion was adjourned to a later date, and that a restraining order issued which the plaintiff alleges was never observed. It is not shown that any other proceeding was ever taken in the suit.
(b) On May 9, 1904 (at whose instance does not clearly appear), the Legislature enacted a statute (Laws N. Y. 1904, c. 686) entitled "An act to authorize the comptroller and corporation counsel of the city of New York on behalf of said city to compromise and settle with property owners interested, certain claims for taxes, assessments and sales for the same, and for or on account of evidences of indebtedness issued on account of local improvements in the territory formerly included within the boundaries of Long Island City."
(c) On February 21, 1905, plaintiff filed with the comptroller of the city of New York an offer to sell to the city by way of compromise certificates held.
counsel, acting on behalf of the holders of (d) On May 26, 1909, plaintiff's present 283 certificates, presented to the comptroller a memorial and statement of facts, in which he requested "that provision should be made