leaves but few questions for determination at the present time. Those still open to investigation will now be examined briefly:

The power of the circuit court to allow amendments to the pleadings after the remand of the cause was the same as it was before the appeal was taken. The remand was ordered that the lower court might examine this power, and this court had no authority to prescribe the character of the amendments or the terms of their allowance. And we think this view is in full accord with a fair construction of the language employed in the opinion upon the subject of the remand.

But conceding the power of the lower court to permit the amendment to the complaint which the appellant objects to, still the respondents (plaintiffs below) can have no relief on the new cause of suit thus introduced. It is doubtful if the allegations show any cause of suit, but if they do the proof wholly failed to establish one. The theory upon which the complaint appears to have been framed, and the proofs introduced in respect of this cause of suit, seems to be that all the debts of a private corporation are equitable liens upon its property, which are not discharged by a purchase in good faith and for an adequate consideration, even if made with notice of unpaid debts.

The position taken by the respondents is thus stated by their learned counsel in his supplemental brief: "No act of the grantor or grantee of this corporation property, no matter what, can set aside this trust imposed by the law short of the actual payment of the debt." According to this doctrine the debt of a private corporation is a specific lien on every portion of its property, and a purchaser with notice cannot get a good title while such debt remains unpaid. It is true, such corporation holds its property. in trust for its creditors and stockholders. Field Corp. § 143; Chicago, etc., R. R. v. Howard, 7 Wall. 392. But this is perfectly consistent with the power to sell any portion or all of its property for an adequate consideration, free from the incumbrances of its debts, the price received for the property taking its place as the trust fund. Powell v. North Missouri R. Co., 42 Mo. 63; Hill v. Fogg, 41 Mo. 563. As the case made by the pleadings and proofs in this instance shows no bad faith nor want of adequate consideration paid for the property purchased by the appellant from the Willamette Valley R. R. Co. we hold that the property in the hands of the purchaser is not subject to any trust for the satisfaction of the unpaid debts of its grantor, although chargeable with notice of them at the time of the purchase.

The evidence shows that Joseph Gaston subscribed for 1000 shares of the capital stock of the Dayton, Sheridan & Grand Ronde Ry. of the par value of $100 per share, and also subscribed for 5000 shares of the capital stock of the Willamette Valley R. R. Co. of the par value of $100 per share; all of which he after

wards assigned to Ellis G. Hughes to hold in trust for any person or corporation who or which might become a purchaser of the property and stock of such corporation upon the terms specified in such assignment. Said stock is unpaid stock, and the legal title thereto is still in Hughes. After the assignment, and on or about the fourth day of February, 1880, William Lowson, Peter Moir Cochrane, and other parties residing in Scotland contemplating the incorporation of the appellant, and on its behalf, agreed to take said property and stock, and furnish the money used in its purchase prior to the incorporation of the appellant. As a means of carrying out the scheme and advancing the interests of the appellant, the Oregon Ry. Co. (Limited) was incorporated and organized under the laws of Oregon. The property purchased except the stock-was conveyed to and temporarily vested in this corporation until the appellant should be fully incorporated and organized, and ready to receive title to the same. On the eleventh day of December, 1880, the property was formally conveyed to the appellant, which was all the time the real owner.

We have already decided that the indebtedness of the Dayton, Sheridan & Grand Ronde Ry. Co., which forms the basis of this suit, is chargeable to the holders of the legal title to such unpaid stock. See opinion, 10 Or. 278. In addition to the authorities there cited, to the effect that the remedy of the creditors of the corporation is against the holders of the legal and not equitable title, we refer to the following: Worrall v. Judson, 5 Barb. 210; In re Empire City Bank, 18 N. Y. 199; Burr v. Wilcox, 6 Bosw. 198; s.c., 22 N. Y. 551; Richardson v. Abẹndroth, 43 Barb. 162; Crease v. Babcock, 10 Metc. 525; Grew`v. Bred, Id. 569; Holyoke Bank v. Burnham, 11 Cush. 183. Gaston and Hughes are therefore both liable to the respondents in this suit by reason of having held the legal title to such stock. Hughes, as last holder, stands first in the order of liability.

But

But the acts of the promoters of the appellant in making this purchase on its behalf are seen to have been fully ratified by it after its incorporation. These acts are therefore to be treated as its own, and place Hughes in the position of an agent or trustee in taking and holding the legal title to the unpaid stock. Such being the relation of these parties, as we declared in our former opinion, the appellant must save Hughes from loss or damage on account of his liability on such unpaid stock, unless it can show some abuse of authority or misconduct on his part justifying its release from such obligation. Story, Ag. § 339; Powell v. Trustees of Newburgh, 19 Johns. 284; Ewell, Ag. 353; Moore v. Appleton, 26 Ala. 633; Coventry v. Barton, 17 Johns. 142; Avery v. Halsey, 14 Pick. 174; Drummond v. Humphreys, 39 Mo. 347. It does not appear from the evidence that Hughes was the agent of the promoters of the appellant, or so considered by any of the parties in making the pur

chase. He seems to have been anxious to see the purchase effected, and exerted himself to secure a favorable consideration of the scheme by the appellant's promoters in Scotland beyond all question. He may have anticipated some benefit to himself ultimately as a possible consequence of its adoption by them. But at that time he was a mere volunteer, not entitled to the compensation nor subject to the responsibilities of an agent. He may have erred in respect to the "freight scrip" debts being an incumbrance upon the property whose purchase he advocated. But there is nothing to show that the opinion he expressed on this subject was not honestly entertained. We do not think it can be even plausibly maintained, upon the evidence in the case, that Hughes acted in bad faith in this transaction towards the appellant or its promoters; and it certainly is not sufficient to justify the appellant's release from its obligation to indemnify him against loss through a transaction in which he was its agent or trustee, that in respect to some other matter, where no such relation existed, he may have volunteered an erroneous though honestly entertained opinion, by following which appellant has been misled and has suffered injury. We think the appellant should be compelled to indemnify him against such loss, and that it may properly be required to do so in this suit, as we have already held. See opinion in 10 Or. 278; also, Story, Eq. Pl. § 72 et seq.; 1 Daniell, Ch. Pl. & Pr. (4th ed.) 281 et seq.; Greenwood v. Atkinson, 5 Sim. 419; Camp v. Mc. Gillicuddy, 10 Iowa, 201; Williams v. Bankhead, 19 Wall. 563.

The appellant's claim to be itself indemnified by William Reid and the Oregon Ry. Co. (Limited) seems to us equally devoid of equity. Reid also was a volunteer, although, like Hughes, he doubtless expected to be benefited indirectly by the consumination of the scheme. There is no ground, however, in the evidence for imputing to Reid either neglect of the interests of the appellant and its promoters, or any sort of misconduct or bad faith, throughout the entire transaction; and the Oregon Ry. Co. (Limited), as we have seen, was a mere instrumentality in the hands of the appellant's promoters and friends for effecting the purchase and transfer of the property. A strenuous effort has been made to hold this corporation to the position of seller of the property to the appellant, assumed in a certain writing purporting to be an agreement between it and two of the ap pellant's promoters, Lowson and Cochrane, signed by the former on March 4, 1880, and by the two promoters some time afterwards. It was not such seller in fact, and all the parties concerned knew it was not. The evidence fully satifies us that this instrument never was intended or understood by any of the parties concerned to be an actual agreement, but was, in fact, a mere form, to appear in the prospectus of the proposed corporation which the promoters were required by the law of Scotland to publish. If

we have drawn a correct conclusion from the evidence upon this point, then such written instrument never acquired the force of a binding agreement between the parties, and neither can predicate any rights upon it as against the other in this suit. Parol evidence to establish a state of facts showing that a written instrument, purporting to be an agreement, has not gone into effect, and is therefore no agreement, is clearly competent.

We are satisfied the decree of the circuit court upon the merits is correct, and it is therefore affirmed.

AMES V. KANSAS ex rel. JOHNSTON, Attorney-General. KANSAS PACIFIC RY. Co. v. KANSAS ex rel. JOHNSTON, AttorneyGeneral.

(111 United States Reports, 449.)

The remedy by information in the nature of quo warranto, though criminal in form, is in effect a civil proceeding.

A statute abolishing the common-law proceeding by information in the nature of quo warranto, and authorizing an action to be brought in cases in which that remedy was applicable, makes the proceeding a civil action for the enforcement of a civil right, subject to removal from State courts to the courts of the United States when other circumstances permit.

Proceedings by a State against a corporation created under its own laws, in the nature of quo warranto for the abandonment, relinquishment and surrender of its powers to another corporation with which it has been consolidated under a law of the United States, and proceedings against the directors of said consolidated company for usurping the powers of such State corporation are, when in the form of civil actions, suits arising under the laws of the United States within the meaning of the acts regulating the removal of causes.

When a suit brought by a State in one of its own courts against a corporation amenable to its own process, to try the right of the corporation to exercise corporate powers within the territorial limits of the State, presents a case arising under the laws of the United States, it may be removed to the Circuit Court of the United States if the other jurisdictional conditions exist.

In view of the practical construction put upon the Constitution by Congress and the courts in the statutes and decisions cited in the opinion, the court is unwilling to say that it is not within the power of Congress to grant to inferior courts of the United States jurisdiction in cases where the Supreme Court has been vested by the Constitution with original jurisdiction. The judiciary act of March 3, 1875, 18 Stat. 470, does not confer upon Circuit Courts jurisdiction over causes in which the jurisdiction of the Supreme Court is made exclusive by § 687 Rev. Stat.

Suits cognizable in the courts of the United States on account of the nature of the controversy, and which are not required to be brought originally in the Supreme Court, may be brought in or removed to the Circuit Courts from State courts without regard to the character of the parties. The reasoning and language in Cohens v. Virginia, 6 Wheat. 397, concerning

appellate jurisdiction of the Supreme Court, adopted and applied to the jurisdiction of Circuit Courts over causes in which a State is a party, commenced in a State court and removed to a Circuit Court.

EACH of these writs of error brought up for review an order of the Circuit Court remanding a case to the State court from which it had been removed, and the two cases were considered together. The material facts were these:

The Leavenworth, Pawnee and Western R. R. Co. was incorporated by the Legislature of the Territory of Kansas in 1855, to build a railroad from the west bank of the Missouri River, in the town of Leavenworth, to or near Fort Riley, and from thence to the western boundary of the Territory, which was the east boundary of Utah on the summit of the Rocky Mountains. 10 Stat. 283, c. 59, sec. 19. In 1857 this act was amended so as to authorize the construction of a branch from some favorable point on the main line to some point on the southern boundary of the Territory, where an easy connection could be made with a line of road extending to the Gulf of Mexico, and also of a branch to the northern boundary of the Territory. The company was organized under these acts in 1857, and before January 1, 1862, had located its line from Leavenworth to Fort Riley, and had, to a large extent, secured its right of way and depot grounds.

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On the 1st of July, 1862, the first Pacific Railroad Act was passed by Congress, incorporating the Union Pacific R. R. Co., and providing for government aid in the construction of the several roads brought into the system, which was then inaugurated to establish a railroad connection between the Atlantic and Pacific coasts. Stat. 489, c. 120. By sec. 9 of this act the Leavenworth, Pawnee and Western R. R. Co. of Kansas was authorized to construct a railroad and telegraph line from the Missouri River, at the mouth of the Kansas River, on the south side thereof, so as to connect with the Pacific R. R. of Missouri, to the point in the Territory of Nebraska, then established as the eastern terminus of the Union Pacific road. Provision was made for government aid to this company in all respects like that to the Union Pacific. Sec. 16 is as follows:

"That any time after the passage of this act all of the railroad companies named herein, and assenting hereto, or any two or more of them, are authorized to form themselves into one consolidated company; notice of such consolidation, in writing, shall be filed in the Department of the Interior, and such consolidated company shall thereafter proceed to construct said railroad and branches and telegraph line upon the terms and conditions provided in this act."

The Leavenworth, Pawnee and Western Co. accepted the provisions of this act, and was thereafter designated as the Union Pacific R. R. Co., Eastern Division. By the act of July 2, 1864,