which expenditure was, by the terms of the contract, to be borne solely by the defendant corporation; that Bartlett, at the termination of the contract in 1878, had in his possession as cashier the sum of $60,000 of the joint funds, 31 per cent of which belonged under the contract to the plaintiff; and that, acting under the direction of the defendant corporation, he had refused to pay the plaintiff its share thereof, but had either retained such share in his own hands, or had paid it over to the defendant corporation. The prayer of the bill was for an account.

The Boston & Lowell R. R. Corporation and Bartlett have demurred to the bill, assigning various grounds of demurrer.

By the familiar rules governing courts of equity the plaintiff is clearly entitled to equitable relief upon the case stated in the bill. The joint earnings of the roads constituted a trust fund in the hands of the joint agent, to be held by him as a trustee for the benefit of the two corporations, and to be applied by him in the manner specified in the contract. A failure on his part to perform this duty rendered him liable to account to the party aggrieved. If, through the mistaken or wrongful act of the agent, the Boston and Lowell road has received a larger share of the net earnings than belonged to it under the contract, the plaintiff is at liberty to follow the fund into the hands of the defendant corporation and compel its restitution. If, as the defendants argue, the pooling contract was not within the corporate powers of the parties to it, that can afford no defence to the Boston and Lowell road, when called upon to restore to the plaintiff the sums received in excess of its due share. As the contract has been fully executed, and the defendant road has availed itself of all the benefits to be derived from it, that corporation is now estopped to deny its validity. Still less can the agents of the parties set up a defence of this character which is not open to their principals.

Bartlett is properly joined as a defendant. The plaintiff is entitled to join as defendants with the defendant corporation all persons into whose hands it can trace any part of the funds of the joint management.

It has already been decided in this case that the plaintiff, as a corporation chartered by the laws of New Hampshire, can maintain this suit in this court against the defendants, who are citizens of Massachusetts, although the plaintiff is a part of a joint or consolidated corporation under the laws of New Hampshire and Massachusetts. Corporations thus created are separate for the purposes of jurisdiction, and to enable each State to exercise control over the charters which it grants and over the acts of the corporation within its own limits. But the corporations are so far identical that they represent each other in suits by or against either of them, and the judgments or decrees will bind the whole corporation. Horne v. Boston & M. R. R., 12 Am. & Eng. R. R. Cas.

"

287. The Massachusetts corporation is therefore not a necessary party to this bill.

The bill waives an answer under oath. By waiving the oath no discovery is sought, and it is not necessary to interrogate the defendants specially and particularly upon the statements of the bill. Equity rules 40, 41.

The bill prays that the defendant corporation may answer by its president, J. G. Abbott. This must be regarded as mere surplusage, and not as ground of demurrer. The plaintiff is entitled to the answer of the corporation, but has no right to require that it shall answer by its president.

Demurrers overruled.

Effect of Consolidation of Railroad Companies of Different States.Where two railroad companies created by the laws of different States consolidate by virtue of concurrent legislation, the new company is considered as a corporation of each State. Chicago & N. W. R. Co. v. Chicago & P. R. Co., 6 Biss. 219; Sprague v. Hartford, P. & F. R. Co., 5 R. I. 233; State v. Metz, 3 Vroom (N. J.), 199; McGreger v. Erie R. Co., 88 Ill. 615; Boardman v. L. S. & M. S. R. Co., 4 Am. & Eng. R. R. Cas. 265. Although according to some authorities two distinct and separate legal entities are considered as being in existence. Racine & M. R. Co. v. Farmer's Loan & Trust Co., 49 Ill. 331; Cram v. Same, 5 Rob. (N. Y.) 226; Ohio & M. R. R. Co. v. Wheeler, 1 Black, 286.

Construction of Charter as Contract.-Where a corporation is created by the concurrent legislation of two States, the charter will be liberally construed as a compact between the States for the benefit of the citizens of both of them. Covington v. Covington & C. Bridge Co., 10 Bush, 69; Brocket v. Ohio & P. R. Co., 14 Pa. St. 241; Cleveland & P. R. Co. v. Speer, 56 Pa. St. 325; Union Branch R. Co. v. East Tenn. & S. R. Co., 14 Ga. 327.

Jurisdiction as to Corporate Property.-As regards the corporate property in each State the courts of that State have full jurisdiction over it. Taylor o. Atlantic & Gt. W. R. Co., 57 How. Pr. 9; In re United States Rolling Stock Co., 57 How. Pr. 16; Richardson v. Vermont & M. R. Co., 44 Vt. 613; Ellis v. Boston H. & E. R. R. Co., 107 Mass. 1; In re Sage, 70 N. Y. 220; Peck v. Chicago & N. W. R. Co., 94 U. S. 164; Ohio & Miss. R. R. Co. v. Weber, 5 Am. & Eng. R. R. Cas. 101. But the courts of one State have no jurisdiction as to property wholly in the other State. Eaton & H. R. Co. v. Hunt, 20 Ind. 457.

Jurisdiction as to Corporate Matters Generally.-Where a corporation is created by the laws of two or more States, proceedings involving the whole corporate character and existence may be instituted in the courts of either State.

Injunctions. It may therefore be restrained by injunction from using the corporate funds for other than corporate purposes by the courts of either State. March v. Eastern R. Co., 40 N. H. 458; Fisk v. Chicago, R. I. & P. R. Co., 4 Abb. Pr. (N. S.) 378; State v. Northern Central R. Co., 18 Md. 193; Balt. & Ohio R. R. Co. v. Gloom, 28 Md. 287.

Foreclosure. The courts of either State may foreclose mortgages of the corporate property wherever situate. But the purchaser at the foreclosure sale will take subject to the liens existing against the property in the other State. Hand v. Savannah & C. R. Co., 12 S. C. 314; Mead v. N. Y. & N. H. R. R. Co., 45 Conn. 199; McElrath . Pittsburgh & S. R. Co., 55 Pa. St. 189; Muller v. Dows, 94 U. S. 444.

The circuit court of the United States for a district in one State may appoint a receiver for the whole line of such a railroad company, even though such line may extend through several States. Wilmer v. Atlantic & R. A. L. R. Co., 2 Woods, 409.

Bankruptcy and Insolvency.-Where a corporation is created by the laws of two or more States, bankruptcy proceedings may be instituted in either State against it. In re Boston H. & E. R. Co., 9 Blatch. 101.

Such a corporation may be wound up and dissolved in one State, without its franchise in the others being affected. Hart v. Boston H. & E. R. Co., 40 Conn. 524.

Amendments to Charter.-Where a corporation derives its corporate existence and franchises from more than one State, its charter may be amended by one of such States so as to control its actions and property therein, even though such amendment may be opposed to the constitution and laws of some other State whereby it has also been incorporated. Covington v. Covington & C. Bridge Co., 10 Bush, 69.

Removal of Causes.-As to the right to remove a cause to United States courts where a corporation created by the laws of two States is a party, see C. & W. I. R. Co. v. L. S. & M. S. R. Co., 1 Am. & Eng. R. R. Cas. 627; Uphoff v. Chicago, etc., R. Co., 1 Am. & Eng. R. R. Cas. 628.

Taxation. As to the taxation of corporation composed of consolidated companies of different States, see Ohio & Miss. R. R. Co. v. Weber, 5 Am. & Eng. R. R. Cas. 101; State Treasurer v. Auditor-General, 13 Am. & Eng. R. R. Cas. 296; Lake Shore & M. S. R. Co. v. People, 46 Mich. 193.

Pooling Agent. As to the appointment of such an officer, see Burke v. Concord R. R. Corp., 8 Am. & Eng. R. R. Cas. 552; State ex rel. v. Concord R. R. Corp., 13 Am. & Eng. R. R. Cas. 94.

MILLS et al., Executors,

v.

CENTRAL R. R. Co. oF NEW JERSEY et al.

(Advance Case, U. S. Circuit Court, District New Jersey. May 2, 1884.)

A bill was filed by the stockholders of a railroad corporation to set aside a lease of the road which was alleged to be void and contrary to law. Defendants moved to remove the case to a United States Court on the ground that the lease was justified by a State statute which the complainants averred to be in violation of the original charter contract.

Held, that as this contention was not raised by the pleadings, the mere possibility that it might be raised at a later stage in the cause did not warrant the removal of the cause into the United States Court.

In an action where the main controversy is between citizens of the same State, there being no controversy wholly between citizens of different States which can be fully determined as between them, the suit is not removable from the State to the United States courts on the ground of citizenship, under section 2, act of March 3, 1875; and when it has been removed, a motion to remand will be granted.

ON Bill. On motion to remand.

H. C. Pitney (with whom was Mr. Gummere) for motion.
James E. Gowan contra.

NIXON, J.-The bill of complaint in this case was originally filed on August 28, 1883, in the court of chancery of New Jersey. The defendants put in a joint and several answer on December 14, 1883, and on the second of February following they presented a petition to the State tribunal praying for the removal of the suit to this court. The petitioners based their right of removal on two grounds: (1) Because the defendants justified the execution of the Tease, which the complainants were seeking to set aside, under the provisions of an act of the legislature of New Jersey, approved March 10, 1880, wherein an attempt was made to alter and amend the charter of incorporated companies, without the consent of all the stockholders, which the complainants allege to be in violation of the constitution of the United States; and (2) because the only necessary and substantial parties to the controversy were the Central R. R. Co. of New Jersey, and the Philadelphia & Reading R. R. Co., which were corporations respectively of New Jersey and Pennsylvania.

Is there a federal question necessarily involved? A careful examination of the pleadings and the issues there presented fail to disclose one. It is true that the defendants in their petition set forth that their right to make the lease which the complainants are endeavoring to avoid is rested by them upon a certain statute of the State of New Jersey, passed March 10, 1880, authorizing corporations organized under any of the laws of the State to lease their road, or any part thereof, to any corporation of New Jersey or any other State, and allege that the complainants contend that said statute is null and void because it violates the provision of the constitution of the United States that no State shall pass any law impairing the obligation of contracts. But no such ground of relief is found in the bill of complaint, nor is it suggested in the pleadings.

It nowhere appears that the complainants invoke the protection of the constitution of the United States or question the constitutionality of any law of New Jersey. They do, indeed, charge that the lease is void and has been executed contrary to law, but they make no specific statement in what respect or upon what ground it is illegal. It is hardly competent for the defendants to incorporate into their petition for removal a possible federal question that may arise during the progress of the case, especially when the question is not only not suggested by the complainants, but is expressly disavowed aud repudiated by them, and then to claim that the removal of the controversy into a federal court is proper in order to have it adjudicated. If it should appear during the continuance of the cause that a federal question is necessarily involved, I do not say that no appeal would lie from the highest State tribunal to the supreme court, but I do say that the defendants should not be allowed to transfer the case from the chosen jurisdiction of

the complainants upon the bare suggestion of a contingency which may never happen.

With regard to the second ground a more difficult question is presented. The difference of views of the respective parties arises from the different conceptions of the learned counsel respecting the real parties to the controversy, and the purposes and objects of the bill of complaint.

The defendants allege that the right of the complainants to bring such an action is based upon the assumption of their right, as stockholders, to represent the Central R. R. Co. of New Jersey; that the relief asked for in the bill of complaint is not merely relief for the complainants as such, but for all the stockholders, and for the said corporation of which they are the representatives; that whether the claims of said company are asserted by its governing body or by one of its stockholders, it is the company itself which is the party to the suit; that the individual defendants are not necessary and substantial parties to the litigation; and that, even if they are, the case discloses a controversy wholly between two corporations of two different States, which can be fully determined as between them without the presence of the other parties.

The complainants, on the other hand, insist that the Central R. R. Co. is the naked trustee of the complainants; that the latter have a beneficiary estate and interest in the lands, franchises, tolls, and all other property in its possession and under its control as trustee; that the execution of the lease and contract was a breach of trust, and a diversion of the trust property to strangers without authority of law; that, so far from there being identity of interest between the complainants and the New Jersey Central R. R. Co., the controversy between them is actual, and in every sense antagonistic; that the individual defendants are made parties, not formally, but for the purpose of obtaining specific relief against them as active agents in making an unlawful transfer of their property; and that no separate controversy can be found between any two parties, citizens of different States, which can be fully determined between them without the presence of the other parties to the action.

It is conceded that support is found for the defendants' view in the case of Arapahoe Co. v. Kansas Pac. Ry. Co., 4 Dill. 277. In that case the plaintiffs, citizens of Colorado and stockholders of the Denver Pacific R. R. Co., a corporation of Colorado, filed a stockholders' bill in a State court of Colorado against the said Denver Pacific R. R. Co. and its directors, and the Kansas Pacific R. R. Co., a corporation of Kansas, and certain individual citizens of other States than Colorado. The object of the suit was to obtain an accounting with the Kansas Co. and other defendants on an allegation that a majority of the trustees of the Denver Co. had been committing frauds, and thus depriving that company of