nant to the Constitution of the state. Upon Messrs. Newton Wyeth, Warren B. Wil. this question the decision of that court is son, and Walter L. Fisher for defendant in conclusive, and plainly we have no power to error. review it.

It is further urged that the construction Mr. Justice Holmes delivered the opinion given by the state court to its Constitution of the court: impaired the obligation of a contract, result- This case comes up on the single question ing from the acceptance of the granted lands of the jurisdiction of the circuit court, which by the state of Montana, and that this im- was saved by bill of exceptions and stipulapairment was in violation of the Constitution, and which is certified to this court. tion of the United States. Nothing more The defendant in error, the original plaintiff,

, need be said of that claim than that it ap- and hereafter called plaintiff, is an Illinois pears for the first time in the petition for a corporation; the plaintiff in error is a purely writ of error from this court, and the accom- local Indiana corporation, organized for the panying assignment of errors. This is not furnishing of heat, light, and power in Insufficient to give this court jurisdiction of dianapolis. The questions are whether the any Federal question (Corkran Oil & Devel- service of the writ was good (Board of Trade opment Co. v. Arnaudet, ubi supra), even v. Hammond Elevator Co. 198 U. S. 424, 435, though another Federal question has been 49 L. ed. 1111, 1116, 25 Sup. Ct. Rep. 740), or, properly raised and brought here by the same if not, whether the defendant submitted to writ of error (Dewey v. Des Moines, 173 U. the jurisdiction. The material facts are these: S. 193, 43 L. ed. 665, 19 Sup. Ct. Rep. 379). The service was upon one Schott in Chicago.

Other questions were argued, but the view By the laws of Illinois a foreign corporation we have taken of the case renders it unnec- may be served with process by leaving a essary to consider them.

copy with its general agent, or with any The judgment of the Supreme Court of agent of the company. Schott had an entire Montana is therefore affirmed.

contract with the defendant by which he was to build and equip the plant, assume general management of it, and operate it for the

company until fully completed, "approve MERCHANTS HEAT & LIGHT COMPANY, contracts therefor," certify bills, and have Plff. in Err.,

the heating plant ready for service on De

cember 1, 1902, and finally finished by July JAMES B. CLOW & SONS. crow

1, 1903. Schott was acting as general manaWrit and process—service on foreign corpo- ger under this contract at the date of servration-effect of setting up cross claim.

ice, March 23, 1903, and did any purchasing The lack of any valid service of required for the company in Illinois. In the process upon a foreign corporation does not same capacity he made the contract sued updefeat the jurisdiction of a Federal circuit on, which was for materials to be used for court of an action in which such corporation equipping the plant. He made it in the city pleaded in its answer a demand in recoup; of Chicago. After the suit was begun, a ment,—especially since, under the local motion to quash the return of service was practice, as defined in Ill. Rev. Stat. chap. made and overruled, and thereupon the de110, SS 30, 31, the defendant may have a verdict and judgment in his favor if it ap- fendants, after excepting, appeared, as orpears that the plaintiff is indebted to him dered, and pleaded the general issue and for a balance when the two claims are set also a recoupment or set-off of damages unagainst each other, and, after the cross claim der the same contract, and overcharges, in is set up, the plaintiff is not permitted to excess of the amount ultimately found due dismiss his suit without the consent of the to the plaintiff. There was a finding for the defendant or leave of court granted for

plaintiff of $9,082.21. cause shown. [No. 118.]

It is tacitly conceded that the provision

as to service does not apply unless the forArgued January 15, 1907. Decided January eign corporation was doing business in the 28, 1907.

state. If it was, then, under the decisions

of this court, it would be taken to have as. I United States for the Northern District lawfully could transact such business there

. N the sented to the which alone it of Illinsis to review a judgment in favor of Old Wayne Mut. Life Asso. v. McDonough, plaintiff in an action on a contract against a 204 U. S. 8, 51 L. ed. 315, 27 Sup. Ct. Rep. foreign corporation. Affirmed.

236. The facts are stated in the opinion.

Whether the purchase of materials for the Messrs. W. H. H. Miller, James W. Fes-construction or equipment of its plant, as a ler, C. C. Shirley, and Samuel D. Miller for preliminary to doing its regular and proper plaintiff in error.

business, which necessarily would be trans

As we

acted elsewhere, in the state of its incorpora- | as to when a defendant becomes so far an tion, is doing busines, within the meaning actor as to submit to the jurisdiction, but of the Illinois statute, was argued at length we are aware of none as to the proposition and presents a question upon which the de- that when he does become an actor in a cisions of the lower courts seem not to have proper sense he submits. De Lima v. Bid. agreed. We shall intimate no opinion either well, 182 U. S. 1, 174, 45 L. ed. 1041, 1047, way, because it is not necessary for the de-21 Sup. Ct. Rep. 743; Fisher v. Shropshire, cision of the case, in view of the submission 147 U. S. 133, 145, 37 L. ed. 109, 115, 13 Sup. to the jurisdiction which the facts disclose. Ct. Rep. 201; Farmer v. National Life Asso.

We assume that the defendant lost no 138 N. Y. 265, 270, 33 N. E. 1075. rights by pleading to the merits, as required, have said, there is no question at the present after saving its rights. Harkness v. Hyde, day that, by an answer in recoupment, the 98 U. S. 476, 25 L. ed. 237; Southern P. Co. defendant makes himself an actor, and, to v. Denton, 146 U. S. 202, 36 L. ed. 943, 13 the extent of his claim, a cross plaintiff in Sup. Ct. Rep. 44. But by setting up its the suit. See Kelly v. Garrett, 6 Ill. 649, counterclaim the defendant became a plain-652; Ellis v. Cothran, 117 Ill. 458, 461, 3 tiff in its turn, invoked the jurisdiction of N. E. 411; Cox v. Jordan, 86 Ill. 560, 565. the court in the same action, and, by invok- Judgment affirmed. ing, submitted to it. It is true that the counterclaim seems to have arisen wholly out Mr. Justice Brewer, Mr. Justice Peckham, of the same transaction that the plaintiff and Mr. Justice Day dissent. sued upon, and so to have been in recoupment rather than in set-off proper. But, even at common law, since the doctrine has been developed, a demand in recoupment is

CITY OF CHICAGO, Appt., recognized as a cross demand, as distinguished from a defense. Therefore, although

DARIUS 0. MILLS. there has been a difference of opinion as to whether a defendant, by pleading it, is con- Direct appeal from circuit court-sufficiency cluded by the judgment from bringing a sub- of certificate. sequent suit for the residue of his claim, a 1. The failure of the certificate of a judgment in his favor being impossible at Federal circuit court to show the exact nacommon law, the authorities agree that he ture of the jurisdictional question relied upis not concluded by the judgment if he does on to sustain a direct appeal to the Supreme not plead his cross demand, and that wheth the latter court, where an examination of

Court does not defeat the jurisdiction of er he shall do so or not is left wholly to his the record, aided by the opinion of the circhoice. Davis v. Hedges, L. R. 6 Q. B. 687; cuit court, contained therein and made part Mondel v. Steel, 8 Mees. & W. 858, 872; thereof, distinctly shows the nature of the O'Connor v. Varney, 10 Gray, 231. This sin- question of jurisdiction passed upon.* gle fact shows that the defendant, if he Courts-jurisdiction of circuit court-diverse elects to sue upon his claim in the action citizenship—collusion. against him, assumes the position of an ac

2. The jurisdiction of the circuit court tor and must take the consequences. The of the United States for the northern dis. right to do so is of modern growth, and is trict of Illinois of a suit brought by a Cali

fornia stockholder of an Illinois gas commerely a convenience that saves bringing an- pany, after the company's refusal to sue, to other suit, not a necessity of the defense.

enjoin the city of Chicago from enforcing If, as would seem and was assumed by the an ordinance regulating gas rates, on the form of pleading, the counterclaim was with ground of want of power in the municipalin the Illinois statutes (Charnley v. Sibley, ity to pass the ordinance, cannot be regard20 C. C. A. 157, 34 U. S. App. 705, 73 Fed. ed as collusively or fraudulently invoked be980, 982), the case is still stronger. For by cause of complainant’s motive in preferring

a Federal tribunal, or because subsequent that statute the defendant may get a ver

events made it to the interest of the comdict and a judgment in his favor if it ap- pany to make common cause with him pears that the plaintiff is indebted to him for against the enforcement of the ordinance, à balance when the two claims are set or because an officer and large stockholder against each other; and after the cross claim in such company personally contributed to is set up the plaintiff is not permitted to the expenses of the suit, or because comdismiss his suit without the consent of the plainant's counsel was afterwards retained defendant or leave of court granted for in a suit then pending between the company

and the municipality.† cause shown. Ill. Rev. Stat. chap. 110, SS 30, 31; East St. Louis v. Thomas, 102 Ill.

[No. 286.] 453, 458; Butler v. Cornell, 148 Ill. 276, 279, 35 N. E. 767.

Submitted December 21, 1906. Decided FebThere is some difference in the decisions

ruary 4, 1907. *Ed. Note.-For cases in point, see vol. 13, Cent. Dig. Courts, § 1029. tEd. Note.-For cases in point, see vol. 13, Cent. Dig. Courts, § 862.

PPEAL from the Circuit Court of the cuit court of the United States. A certifi. A

United States for the Northern District cate entered the same term at which the of Illinois to review a decree enjoining the appeal was allowed sets forth that the city enforcement of a municipal ordinance regu.objected to the jurisdiction of the court as lating gas rates. Affirmed.

a Federal court, and that the appeal was See same case below, 143 Fed. 430.

prayed solely upon the question of jurisdicThe facts are stated in the opinion. tion of the court as a circuit court of the

Messrs. James Hamilton Lewis, Henry M. United States, and that the appeal was Ashton, and David K. Tone for appellant. granted solely upon the question of juris.

Messrs. William D. Guthrie, John J. Her- diction. rick, and I. K. Boyesen for appellee.

Portions of the proceedings, including the

testimony on the question of jurisdiction, Mr. Justice Day delivered the opinion of duly signed and sealed and made part of the the court:

record, are certified to this court by a cerThis case is here upon a question of ju- tificate in the form of a bill of exceptions. risdiction of the circuit court of the United Re Lehigh Min. & Mfg. Co. 156 U. S. 322, States for the northern district of Illinois 39 L. ed. 438, 15 Sup. Ct. Rep. 375; G. H. to entertain the suit. 26 Stat. at L. 826, Nichols Lumber Co. v. Fransom (decided at chap. 517, U. S. Comp. Stat. 1901, p. 488. this term), 203 U. S. 278, ante, 102, 27 Sup. The case originated in a bill filed in that ct. Rep. 102. court by the complainant, Darius O. Mills, A preliminary objection is made that the a citizen of California, as a stockholder in certificate does not show whether the juristhe People's Gas, Light, & Coke Company, dictional question arose from insufficient a corporation of the state of Illinois, to re- amount, want of diversity of citizenship, strain the city of Chicago from enforcing a collusion, or otherwise. But we are of the certain ordinance limiting the right of the opinion that an examination of the record, gas company as to charges for furnishing aided by the opinion of the court containe gas.

therein, and made part thereof, distinctly Complainant averred a demand of the shows that the question of jurisdiction directors that an action be brought by the passed upon concerned the collusive characcompany to restrain the city from enforcing ter of the action of the complainant. the ordinance, and alleged compliance with

We think this brings the case within the the ninety-fourth equity rule, and the refu- ruling in Smith v. McKay, 161 U. S. 355, 40 sal of the company to bring the action. L. ed. 731, 16 Sup. Ct. Rep. 490, in which the

The original bill alleged that the ordi- court, looking into the character of the apnance impaired the obligation of the con- peal, the certificate of the court, and the cer. tract contained in the charter of the gas tified copy of the opinion, made part of the company, in contravention of the contract record, sustained the court's jurisdiction, clause of the Federal Constitution; and, al- citing, with approval, Shields v. Coleman, so, that the ordinance was illegal in that the 157 U. S. 168, 39 L. ed. 660, 15 Sup. Ct. Rep. city had no power to pass it.

570, and Re Lehigh Min. & Mfg. Co. supra. The ordinance thus complained of was

The circuit court, after an examination adopted by the city of Chicago, October 15, of the testimony, reached the conclusion that 1900, and provided that charges for gas in the action was not collusive, and, upon final excess of 75 cents per 1,000 cubic feet should decree, granted a perpetual injunction be illegal, and fixed a penalty of not less against the enforcement of the ordinance in than $25 or more than $200 for each and question. On this appeal we are only conevery violation of the ordinance.

cerned with the correctness of the conclusion The objection made to the jurisdiction of reached in the circuit court as to the questhe circuit court, and which is said to be es- tion of jurisdiction. This question is before tablished in the record and duly presented us upon this record. Wetmore v. Rymer, here, is based upon the allegation that the 169 U. S. 115, 42 L. ed. 682, 18 Sup. Ct. Rep. suit by Mills was brought in the Federal 293. In order to determine it it is necescourt by collusion between him and the gas sary to consider briefly as may be the facts company, and for the fraudulent purpose of shown in this record. invoking the jurisdiction of the Federal court The ordinance in question was passed Occoncerning a controversy which was really tober 15, 1900. The People's Gas, Light, &

, between the company and the city of Chi-Coke Company, on the 21st of December, cago,-parties lacking the requisite diversity 1900, brought a suit in the circuit court of of citizenship to maintain the suit in the the United States for the northern district Federal courts.

of Illinois, seeking to enjoin enforcement of The record discloses that the appeal was the ordinance, upon the ground that it imallowed to this court solely upon the ques- paired the obligation of its charter contract, tion of the jurisdiction of the court as a cir- 'denied equal protection of the laws, and

amounted to a confiscation of its property; | Mills, and a difference of opinion was deand upon the further ground that no power veloped as to the propriety and advisability had been conferred upon the city of Chicago of a new suit which would cover the points by the legislature of Illinois to thus regulate in difference. The result of this conference the price of gas.

was that the company's counsel notified It is unnecessary to recite all of the pro- counsel for Mills that he should advise the ceedings of that suit in detail. The history board to decline the request to bring a new of the litigation will be found in the opinion suit. of the chief justice when the case came here On January 29, 1903, the company wrote from the circuit court on appeal (194 U. S. to Mills, declining to begin the suit, and sent 1, 48 L. ed. 851, 24 Sup. Ct. Rep. 520). a copy of the resolution reciting the belief

To the bill as originally filed in that case of the board that for the company to instithe city of Chicago filed a general demurrer, tute further legal proceedings to test the and the circuit court, holding that no consti- validity of the ordinance of October 15, 1900, tutional right of the company was impaired, would excite public prejudice against the decided that its jurisdiction would not ex-company, which at that time it was deemed tend to the question of the power of the of great importance to avoid, and aftercouncil to pass the ordinance in question, wards, at the annual meeting of the stock. and that such a question was one primarily holders of the company, a resolution directfor the state courts; thereupon the com- ing the beginning of the suit was defeated. pany filed an amended bill, limiting its The question of jurisdiction must be derights to the alleged impairment of its cided, having reference to the attitude of the contract. The city of Chicago also demurred case at the date the bill was filed, on June to the amended bill, and, upon the hearing 8, 1903. Kirby v. American Soda Fountain of the demurrer, it was sustained and the Co. 194 U. S. 141, 145, 146, 48 L. ed. 911, bill dismissed for want of jurisdiction, and a 912, 913, 24 Sup. Ct. Rep. 619. As to the re

|

. final decree was entered to that effect. An fusal of the company to institute a new suit, appeal was thereupon taken to this court. there is nothing in the record to show any

When the litigation had progressed thus concert of action between complainant and far, complainant, Mills, who was the lar- the company. At that time his counsel in gest stockholder in the company, consulted New York was not concerned in the litigacounsel in New York with a view to protect- tion in Chicago or in the appeal to this court. ing his interests. Counsel, having examined as the case brought by the gas company the record, prepared a letter dated December then stood, it had been dismissed for want 16, 1902, addressed to the directors of the of jurisdiction, and an appeal taken from gas company, and signed by complainant, in that decree of dismissal. The case did not which he set forth that the proceedings in necessarily involve the question of contract the suit concerning the ordinance reducing rights, and did not embrace the question of the price of gas to 75 cents per 1,000 cubic power of the city. feet had been submitted to his counsel, to- In this attitude of affairs counsel might gether with a copy of the opinion of the well advise that the protection of the stockcircuit court, and that an appeal was then holders' interest required the beginning of a pending in the Supreme Court of the United suit which should embrace the vital quesStates; the advice of his counsel that that tions in issue. There was a sharp difference suit might not adequately protect his inter- of views between the representatives of ests, as the bill was dismissed for want of Mills and those of the company's solicitors. jurisdiction, and that the Supreme Court as to the advisability of bringing an action. might limit the decision of the case to the For the prudential reasons outlined in question of jurisdiction. And, further, that their letter of January 29, 1903, above referit did not involve the question of the power red to, the directors of the company declined of the council of the city of Chicago to re- to bring the suit. After the judgment of the duce the rates of the company. He then re- circuit court was affirmed in this court, the quested the institution of a suit against the question of the power of the city to pass the city of Chicago at the earliest practicable ordinance was left undecided, and was submoment for the purpose of preventing the sequently litigated to a final decree in favor enforcement of the ordinance, upon the of the contention made in the suit begun by ground that it impaired its charter contract | Mills. and that the council had no power to pass it. It is true that upon the hearing of the The letter further expounded the necessity demurrer in this action the circuit court orof resorting to a court of equity for protec- dered a decree correcting its former decree tion of the company's rights.

in the gas company suit so as to show that The record discloses that the company's the court decided the case upon the merits counsel came to New York, where a confer- as to the allegations as to contract, and disence was had with the counsel retained by i missed the bill without prejudice to the

bringing of any other suit to test the power | Ct. Rep. 427, and previous cases in this court of the city.

therein cited. The corrected decree was brought before Upon the whole record we agree with the this court in the then pending appeal of the circuit court that the testimony does not gas company. 194 U. S. 1, 48 L. ed. 851, 24 disclose that the jurisdiction of the Federal Sup. Ct. Rep. 520.

court was collusively and fraudulently inAfter the decision in this court, affirming voked, and the judgment below will be afthe decree in the gas company suit, an firned. amended bill was filed by complainant Mills, based solely upon the alleged want of power Dissenting: Mr. Chief Justice Fuller and of the city council of Chicago to pass the Mr. Justice Harlan. ordinance in controversy, which resulted in the decree to which we have referred, enjoining the enforcement of the ordinance, for the reason that the city council of Chicago

ORLANDO F. BACON, Piff. in Err.,

, . . had no power to pass the same.

PAUL H. WALKER et al. As we have said, we think the record establishes that complainant and his counsel Constitutional law—due process of law-rehonestly believed that such new suit was strictions on sheep grazing. necessary to protect the stockholders' inter- 1. An owner of sheep is not deprived of ests. There is an entire lack of testimony his property without due process of law by to show any collusive action at the time of Idaho Rev. Stat. Ss 1210, 211, under which

damages may be recovered from him for the beginning of the suit. It is true that subsequent events made it lic domain within 2 miles of a dwelling

permitting his sheep to graze on the pubto the interest of the company to make house. common cause with Mills against the en- Constitutional law-police power of stateforcement of the ordinance in question, but limits. when he began his suit no proceedings were 2. The police power of a state is not pending which involved the important ques- confined to the suppression of what is oftion of the power of the city upon which fensive, disorderly, or unsanitary, but emthe complainant ultimately prevailed.

braces regulations designed to promote the It is true that an officer of the company, public convenience or the general prosper- . who was the next largest stockholder to Constitutional law-equal protection of the

ity.† Mills, contributed to the expenses in this

laws-discrimination. suit; but he testified, and there is nothing

3. An arbitrary and unreasonable disin the record to contradict him, that he paid crimination against the sheep industry, prothis money from his own resources, without hibited by the guaranty in U. S. Const. 14th actual repayment, or any understanding Amend. of the equal protection of the laws, with the company that he should be reim is not made by Idaho Rev. Stat. $8 1210, bursed.

1211, under which damages may be recovIt is true that Mills' counsel was retained ered from one who permits his sheep to in the suit in this court after the beginning graze on the public domain within 2 miles

of I of his suit in Chicago. It is also true that, in answering to a

[No. 147.] question put in the language of the ninety: Argued January 10, 1907. fourth rule, as to whether the suit was

Argued January 10, 1907. Decided Febru.

ary 4, 1907. brought to confer upon the circuit court of the United States jurisdiction in a case of I State of Idaho to review a judgment

N ERROR to the Supreme Court of the which it would not otherwise have cogni

a zance, complainant answered that he so un- which affirmed a judgment of the District derstood it, but subsequently said that he court for the County of Elmore, in that did not understand the question. This ad- state, which had in turn affirmed a judgment mission, intentionally made, would not nec of the Justice's Court of Little Camas Preessarily show collusion. But we think it was cinct, in such county, for the recovery of not the purpose of the complainant to say damages sustained by the violation of a more than that he expected his action to be statute prohibiting the grazing of sheep on brought in the United States court. When the public domain within 2 miles of a a citizen of one state has a cause of action dwelling house. Affirmed. against a citizen of another state which he See same case below (Idaho) 81 Pac. 155. may prosecute lawfully in a Federal court, The facts are stated in the opinion. and when the suit is free from fraud or col- Messrs. S. M. Stockslager, W. E. Borah, lusion, his motive in preferring a Federal Frank T. Wyman, and John C. Rice for tribunal is immaterial. Blair .y. Chicago, plaintiff in error. 201 U. S. 400, 408, 50 L. ed. 801, 805, 26 Sup. No counsel for defendants in error.