encouraged him to wait. It should not | peals of the ninth circuit (27 C. C. A. 550, have encouraged him, because, as we have 48 U. S. App. 668, 83 Fed. 365). See also said, it gave him no rights. The fact that 36 Fed. 808; Farmers' Loan & T. Co. v. the receiver used the ties is of no impor- Kansas City, W. & N. W. R. Co. 53 Fed. tance. They already were the property of 182; Farmers' Loan & T. Co. v. Northern the road, and it was his business to use P. R. Co. 68 Fed. 36; Atlantic Trust Co. them. The material point is not the time v. Woodbridge & Irrig. Co. 79 Fed. 39. And when they were used, but the time when even the sixth circuit, from whence the they were acquired. pending case now comes. Central Trust Co. v. East Tennessee, V. & G. R. Co. 26 C. C. A. 30, 47 U. S. App. 663, 80 Fed. 624. Decree affirmed. Mr. Justice McKenna, with whom concur Mr. Justice Harlan and Mr. Justice White, dissenting: I am unable to concur in the opinion of the court, and the importance of the questions involved justifies an expression of the ground of my dissent. There is strength in this agreement at circuit, and much that was said could be quoted with advantage; but, as my ultimate reliance must be the decisions of this court, I shall proceed immediately to an examination of them. Miltenberger v. Logansport, C. & S. W. The controversy arises from a claim, to R. Co. 106 U. S. 286, 27 L. ed. 117, 1 Sup. quote from the circuit court of appeals, Ct. Rep. 140, is one of the most important "for cross ties essential to the replacement of the cases. Indeed, it is the leading case, of ties decayed in current operation of the and is carried into and approved in a numrailroad. A large proportion were on hand ber of subsequent cases. The decisions which when the receiver was appointed, and were precede it, including Fosdick v. Schall, 99 used by him in the maintenance of the road-U. S. 235, 25 L. ed. 339, I assume, are unway. They were all purchased within six derstood. Wallace v. Loomis, 97 U. S. 146, months before the receivership, and under circumstances indicating an expectation that they would be paid for out of current income. The claim is, in every respect, a highly meritorious one." This description is supplemented by stipulation of counsel that the claim is for "necessary operating expenses in keeping and using said railroad and preserving said property in a fit and safe condition." The claim is denied, affirming the judgment of the lower court, payment out of the body of the fund in the hands of the receiver; and why? That the decisions of this court may be construed as extending the equity of claims for supplies so far is conceded. It is said: "An impression that such a general rule was to be deduced from the decisions of this court led to an evidently unwilling application of it in New England R. Co. v. Carnegie Steel Co. 21 C. C. A. 219, 33 U. S. App. 491, 75 Fed. 54, 58, and perhaps in other cases." 24 L. ed. 895, may, however, be noticed. It was a suit to foreclose a mortgage on a railroad, in which suit a receiver was appointed. The receivers were authorized to raise money by loan upon certificates to be issued by them, "to put the road and property in repair, and to complete any uncompleted portions thereof, and to procure rolling stock, and to manage and operate the road to the best advantage, so as to prevent the property from further deteriorating, and to save and preserve the same for the benefit and interest of the first mortgage bondholders, and all others having an interest therein." The receivers obeyed the order, and the decree of the court "declared the amount due on the receiver's certificates to be a lien on the property in their hands prior to that of the first mortgage bonds." This court sustained the decree as follows: "The power of a court of equity to appoint managing receivers of such property as a railroad, when taken under its charge as a trust fund for the payment of encumbrances, and to authorize such receivers to raise money necessary for the preservation and management of the property, and make the same chargeable as a lien thereon for its repayment, cannot at this day be seriously disputed. It is a part of that jurisdiction, always exercised by the court, by which it is its duty to protect and preserve the trust funds in its hands. It is, undoubtedly, a power to be exercised with great caution; and, if possible, with the consent or acquiescence of the parties interest The concession hardly exhibits the strength of the sanction which the rule has received at circuit, and, apparently, neither willingly nor unwillingly, but in the desire only to ascertain what this court has decided, and to follow it. I may refer to St. Louis Trust Co. v. Riley, decided by the circuit court of appeals of the eighth circuit (30 L. R. A. 456, 16 C. C. A. 610, 36 U. S. App. 100, 70 Fed. 32), Finance Co. v. Charleston, C. & C. R. Co. in circuit court of appeals of the fourth circuit (10 C. C. A. 323, 8 U. S. App. 547, 62 Fed. 205), New York Guaranty & Indemnity Co. v. Tacoma R. & Motor Co. in the circuit court of ap-ed in the fund." The principle expressed was applied in of such business relations would be a probthe Miltenberger Case. The receiver appoint- able result in case of nonpayment, the gened in that case was empowered by the court eral consequence involving largely also to purchase four engines, four passenger the interests and accommodation of travel cars, and one hundred new coal cars; also and traffic, may well place such payto adjust certain indebtedness of connect- ments in the category of payments to ing lines, not exceeding $10,000, and to preserve the mortgaged property in a large expend $30,000 to complete 5 miles of road, sense, by maintaining the goodwill and and build a bridge, and to enter into the integrity of the enterprise, and entitle contracts required therefor. With the ex- them to be made a first lien. This view penditure, the earnings of the road were of the public interest in such a highway charged "as with a first lien, prior to all for public use as a railroad is, as bearing encumbrances upon such road." The le- on the maintenance and use of its frangality of this was contested. Speaking of chises and property in the hands of of a the order this court said: The authority The authority receiver, with a view to public convenience, conferred by it "was intended to benefit the was the subject of approval by this court, res in the hands of the court, which was the speaking through Mr. Justice Woods, in entire mortgaged property as covered by Barton v. Barbour, 104 U. S. 126, 26 L. ed. both mortgages, and not merely the equity 672. The appellants furnish no basis for of redemption of the mortgagor as against questioning any specific amounts allowed the mortgagee." And the power to make in respect to the arrears referred to, but it was decided, the court quoting from object to the allowance of anything out of Wallace v. Loomis as above, and observing the sale of the corpus for such expenditures. "the principle thus recognized covers most Under all the circumstances of this case, of the objections here urged." The pay- we see no valid objection to the provisions ment of $10,000 due to connecting lines of of the orders complained of." road for materials and repairs, etc., was The case is not overruled; it is distinalso sustained. It thus appears that not It thus appears that not guished, and the distinction seems to be only expenditures made after the appoint-based upon the difference between supplies ment of the receiver, but debts incurred prior to the appointment, were directed to be paid out of the corpus of the property. Justifying its decision, the court said: for preservation of the road and payments necessary to the business of the road. Is not the distinction questionable? Can anything be done for the preservation of a road that is not done for its business? If a distinction can be made, how immediate to the business must the supplies be? Is not a bridge across a stream as indispensable to the "accommodation of travel and traffic" as "unpaid ticket and freight bal Or (as in the case at bar) is not "the replacement of ties decayed in current operation” as indispensable as the payment of laborers? It is conceded that labor claims were decreed to be paid in Union Trust Co. v. Illinois Midland R. 117 U. S. 434, 29 L. ed. 963, 6 Sup. Ct. Rep. 809. Then why not the other? What distinction in principle can there be in expenditures for any of the many things which are necessary to keep a railroad a going concern? Let all the expenditures be declared subordinate which are subsequent to the mortgage, and it can be understood. But how can a distinction be made in value and preferential payment between equally indispensable things? "It cannot be affirmed that no items which accrued before the appointment of a receiver can be allowed in any case. Many circumstances may exist which may make it necessary and indispensable to the business of the road and the preservation of the property, for the receiver to pay pre-existances?" ing debts of certain classes, out of the earnings of the receivership, or even the corpus of the property, under the order of the court, with a priority of lien. Yet the discretion to do so should be exercised with very great care. The payment of such debts stands, prima facie, on a different basis from the payment of claims arising under the receivership, while it may be brought within the principle of the latter by special circumstances. It is easy to see that the payment of unpaid debts for operating expenses, accrued within ninety days, due by a railroad company suddenly deprived of the control of its property, due to the operatives in its employ, whose cessation from work simultaneously is to be deprecated, in the interests both of the property and of the public, and the payment of the limited amounts due to other and connecting lines of road for materials and repairs and for unpaid ticket and freight balances, the outcome of indispensable business relations, where a stoppage of the continuance It is said, however, that the later cases have observed and marked "the wholly exceptional character of the allowance" made in the Miltenberger Case. Kneeland Case, 136 U. S. 89, 34 L. ed. 379, 10 Sup. Ct. Rep. 950, Thomas Case, 149 U. S. 95, 37 L. ed 663, 13 Sup. Ct. Rep. 824, and Virginia & A. Coal Co. v. Central R. & Bkg. Co. 170 U. S. 355, 42 L. ed. 1068, 18 Sup. Ct. Rep. 657, are cited. Two deductions may be made. | R. Co. v. Carnegie Steel Co. 176 U. S. 257, If it is meant that the instances were ex- 44 L. ed. 458, 20 Sup. Ct. Rep. 347. The claim in controversy is manifestly within the rule. It is, as we have seen, "for cross ties essential to the replacement of ties decayed in current operation." In other words, used in and necessary for the business of the road, and comes even within the limitation which the court implies may put on the Miltenberger Case. There is another consideration which may be urged in addition to or independently of the general rule. Ties of the value of $3,200 were used by the receiver after his appointment. This circumstance is too summarily dismissed from consideration. "The material point is," it is said, "not the time when they were used, but the time when they were acquired." A broad declaration, and seems to make all claims accruing before the receivership nonpreferential. This probably is not intended; and, not extending the remark so far, is not the time of use important if we regard the substance of things? It must not be overlooked that we are dealing with with equitable considerations. tions. What would be said of an expenditure by the receiver for ties to displace decaying ones, if those furnished by petitioner had not been at hand? Was it not, at least, competent for a court of equity to have restored the ties upon the application of the petitioner? It is said, however, "it is mere speculation if he would have demanded back the ties." He was not given an opportunity. But suppose "he would have taken his chance?" Of what and upon what assurance? Certainly upon the assur ceptional, I am not at present concerned with it. If it is meant that the principle was, I cannot assent. Admonition to care in the application of a principle is one thing: its overthrow another; and the principle of the Miltenberger Case has never been overthrown. Virginia & A. Coal Co. v. Central R. & Bkg. Co. explains the other two cases. It involved the payment for coal supplied before the appointment of a rereceiver. There was surplus income during the receivership, and the point under discussion in the case at bar was not directly presented. But there were some observations made which are of value. They remove diversion of income as an element of decision or confusion. It was declared to It was declared to be immaterial to the equity invoked for the claim whether there had been diversion of income by the company before the appointment of the receiver or afterwards by the receiver; and it is only necessary to consider whether the equity was confined to surplus earnings. I think that it was not so confined. There were surplus earnings, and the principle which established equity in them was alone contested, and was alone necessary to be decided. The decision was carefully made upon a review and an estimate of prior cases. The admonitions of the Kneeland Case and the Thomas Case were not overlooked. Regarding them, and in connection with them, the Miltenberger Case was quoted from, and not only left undisturbed, but approved; and from it, as well as from other cases, was deduced the principle which was applied in the judg-ance, in addition to his general equity, that ment. And that principle has its founda- a court of equity would not deliberately use tion in the public interests. A railroad, his property through its officer, the receiver, from its nature and public responsibilities, must be kept a going concern. This is the supreme necessity, and affords the test of the equity invoked for the claims for supplies. It cannot depend upon diversion of income or upon the existence of income. It cannot be confined to debts contracted dur an ing the receivership. It may in the interest of the business of the road, whose affairs it was administering, and not find in its powers the means and right to order payment for the property so used. (197 U. S. 178) CITY OF DAWSON, Appt., v. ant instead of plaintiff solely for the purpose | for the water, in the events which had hapof reopening, in the Federal courts, a con- pened, which had made the waterworks comtroversy which had been decided against the pany unable to pay the interest on the waterworks company in the state court. mortgage, had yielded to the plaintiff's demand that it should collect the rentals, and that the plaintiff had notified the city, and had made demand, but that the city refused to pay. Other details are immaterial. The waterworks company was made a party defendant, and was served with process. An answer was served, although not filed, by the defendants other than the waterworks com 2. The formal repudiation by a municipality of its contract with a waterworks company, and its refusal to perform its obligations under it, cannot give rise to a suit under the Federal Constitution, of which a Federal circult court can take jurisdiction without ref erence to the citizenship of the parties.** [No. 154.] Argued January 26, 27, 1905. Decided pany, setting up among other things, that A March 6, 1905. PPEAL from the Circuit Court of the United States for the Northern District of Georgia, to review a decree in favor of complainant, in a suit brought against a municipality by the mortgagee of a waterworks company, to enforce a contract between that company and the municipality. Reversed, and remanded with instructions to dismiss the bill for want of jurisdiction. The facts are stated in the opinion. Messrs. Charles A. Douglass, Dupont Guerry, and Homer Guerry for appellant. Messrs. Olin J. Wimberly and John I. Hall for appellee. the waterworks company was the real plaintiff, and was made defendant solely to avoid the effect of a decision by the supreme court of the state in a suit by the waterworks company against the city, to the effect that the contract relied on was void. 106 Ga. 696, 32 S. E. 907. The answer, on this ground, denied the jurisdiction of the court. After service of this answer the bill was amended so as to allege that the acts of the city impaired the obligation of its contract, and deprived the plaintiff of its property without due process of law, contrary to the Constitution of the United States. A prayer was added, also, that the waterworks company be decreed to perform its contract with the city, that thereby the rights of bondholders might be saved. The Mr. Justice Holmes delivered the opin- further proceedings do not need mention. ion of the court: They ended in a decree in accordance with the prayer, and the city appealed to this court. Davis & F. Mfg. Co. v. Los Angeles, 189 U. S. 207, 216, 47 L. ed. 778, 780, 23 Sup. Ct. Rep. 498. We are of opinion that the bill should have been dismissed for want of jurisdiction. The waterworks company is admitted to have been a necessary party, and it, like the defendant city, was a Georgia corporation. It was made a defendant, but the court will look beyond the pleadings, and arrange the parties according to their sides in the dispute. When that is done, it is ob This is a bill in equity, brought in the circuit court by the appellee, the trust company, as mortgagee of the Dawson Waterworks Company, to restrain the city of Dawson from taking measures to build a new set of waterworks, and to compel it specifically to perform a contract made with the waterworks company in 1890, to pay that company or its mortgagee a certain sum for the use of its water for twenty years. The trust company is a Pennsylvania corporation, and the only ground of jurisdiction for the bill as originally filed was diversity of citizenship. The bill, aft-vious that the waterworks company is on er stating the contract, set up a formal repudiation of the same by the city on June 27, 1894, refusals to pay for the water from that time, and attempts to collect taxes which, by the contract, were to be satisfied by the furnishing of water, but alleged a continued use of the water by the city. It further stated the calling of an election for December 12, 1894, to see if the city should issue bonds to erect or buy waterworks or electric lights, a vote in favor of the issue, an issue of $10,000 for the erection of an electric-light plant, and a present intent to sell the residue for the purpose of erecting new waterworks. It also alleged that the waterworks company, recognizing the plaintiff's right to be paid the rentals *Ed. Note.-For cases in point, see vol. 13, Cent. Dig. Courts, § 821. the plaintiff's side, and was made a defendant solely for the purpose of reopening, in the United States court, a controversy which had been decided against it in the courts of the state. There was a pretense of asking relief against it, as we have stated, but no foundation for the prayer was laid in the allegations of the bill. On the contrary, it appears from those allegations that the waterworks company insisted on its contract with the city, and did everything in its power to carry the contract out. It also recognized the plaintiff's right to receive the rentals, and yielded to its demand. No difference or collision of interest or action is alleged or even suggested. If we assume that the plaintiff is more than an assignee of the city's contract to pay (which we do |ilton Gaslight & Coke Co. v. Hamilton, 146 not intimate), still, when the arrangement U. S. 258, 266, 36 L. ed. 963, 967, 13 Sup. of the parties is merely a contrivance between friends for the purpose of founding a jurisdiction which otherwise would not exist, the device cannot be allowed to succeed. See Removal Cases (Meyer v. Delaware R. Constr. Co.), 100 U. S. 457, 469, 25 L. ed. 593, 598; Hawes v. Oakland (Hawes V. Contra Costa Water Co.), 104 U. S. 450, 453, 26 L. ed. 827, 829; Detroit v. Dean, 106 U. S. 537, 541, 27 L. ed. 300, 302, 1 Sup. Ct. Rep. 560; Doctor v. Harrington, 196 U. S. 579, ante, p. 355, 25 Sup. Ct. Rep. p. 355. Act March 3, 1875 (18 Stat. at L. 472, chap. 137, § 5, U. S. Comp. Stat. 1901, p. 508). The attempt, by an afterthought, to give jurisdiction by setting up constitutional rights, must fail also. The bill presents a naked case of breach of contract. The first step of the city was to repudiate the contract and to refuse to pay. Whatever it may have done subsequently, its wrong, if contrary to the decision of the supreme court of the state, there was a wrong, was complete then. The repudiation and refusal were kept up until the bill was filed, and the other acts were subsequent, subordinate to, and in aid of, them. The mere fact that the city was a municipal corporation does not give to its refusal the character of a law impairing the obligation of contracts, or deprive a citizen of property without due process of law. That point was decided in St. Paul Gaslight Co. v. St. Paul, 181 U. S. 142, 150, 45 L. ed. 788, 792, 21 Sup. Ct. Rep. 575. Undoubtedly the decisions on the two sides of the lines are very near to each other. But the case at bar is governed by the one which we have cited, and not by Walla Walla v. Walla Walla Water Co. 172 U. S. 1, 43 L. ed. 341, 19 Sup. Ct. Rep. 77, which is cited and distinguished in St. Paul Gaslight Co. v. St. Paul. In Vicksburg Waterworks Co. v. Vicksburg, 185 U. S. 65, 46 L. ed. 808, 22 Sup. Ct. Rep. 585, the city had made a contract with the waterworks company, and afterwards a law was passed authorizing the city to build new works. The city, acting under this law, denied liability, and took steps to build the works, whereupon the waterworks company filed its bill, alleging the law to be unconstitutional. The bill was held to present a case under the Constitution. In the case before us there was no legislation subsequent to the contract, and it is not even shown that there is color of previous legislation for the city's acts. Those acts are alleged to be unlawful, and the allegation would be main tained by showing that they were not warranted by the laws of the state. See Ham Ct. Rep. 90; Lehigh Water Co. v. Easton, 121 U. S. 388, 392, 30 L. ed. 1059, 1060, 7 Sup. Ct. Rep. 916. We repeat that something more than a mere refusal of a municipal corporation to perform its contract is necessary to make a law impairing the obligation of contracts, or otherwise to give rise to a suit under the Constitution of the United States. The decree of the circuit court must be reversed, and the cause remanded with instructions to dismiss the bill. Newburyport Water Co. v. Newburyport, 193 U. S. 561, 576, 48 L. ed. 795, 799, 24 Sup. Ct. Rep. 553. Decree reversed. Mr. Justice Brewer and Mr. Justice McKenna dissented. Mr. Justice White, not having been present at the argument, took no part in the decision. (197 U. S. 169) HENRY DALLEMAGNE, Consul General of the Republic of France, Appt., v. JEAN FRANÇOIS MOISAN. Constitutional law-validity of arrest by state officer under Federal treaty-due process of law-treaties-arrest of insubordinate seamen on foreign vesselhabeas corpus-right to discharge for unauthorized arrest-time-limit of imprisonment. 1. A state police officer is not forbidden to make an arrest on the requisition of a consul of a foreign nation, charging a seaman on a vessel of that nation with insubordination, conformably to a treaty provision, because of the guaranty of the state Constitution against the deprivation of personal liberty without due process of law. 2. 3. Only a Federal marshal can make an arrest on the requisition of a French consul, charging a seaman on a French vessel with insubordination, conformably to art. 8 of the treaty with France of August 12, 1853 (10 Stat. at L. 992, 996), since this, being the mode of arrest specified by the act of Congress of June 11, 1864 (13 Stat. at L. 121, chap. 116), enacted to provide for the execution of treaties respecting consular jurisdiction over the crews of foreign vessels in the waters and ports of the United States, and re-enacted in substance in U. S. Rev. Stat. §§ 4079-4081 (U. S. Comp. Stat. 1901, p. 2766), must be regarded as the only means proper to be adopted for this purpose. An unauthorized arrest by a state official on a requisition of a French consul, charging a seaman on a French vessel with insubordination, conformably to art. 8 of the treaty with France of August 12, 1853 (10 Stat. at |