204
I'EDERAL REPORTER,
vol. 63.
fidence by counsel for the receivers, is that the owner of the cotton burned on ba,r,ge 49 expressly assumed the ftre risk while the cotton was on the b8il'ge, and expressly relieved the Cairo, Vincennes & Chicago Line and its receivers from liability for loss of the cotton by ftre whilE! on the barge; or, to put the matter in the language of counsel's brief: "The receivers, by Na.."lh, their agent, purchased and paid for an interest in the. insurance of the cotton already effected by the. owner in its open policies of insurance issued by the Insurance Company of North A,merica, to the extent of the risk while the· cotton was on barge 49. By these con"t;ntcts the insurance held by the owner inured to the ,beneftt of the receivers to the extent of the risk while the. cotton was on barge 49." This defense, and the alleged facts on which it is founded, are controverted and vigorously denied by petitioners. The receivers insist t4at the shipper assumed the river risk, and produce two instruments of writing purporting to be signed by William Bowles & Son, per Hayes, in support of this view. Nash testiftes that the money mentioned in the instruments was for the assumption by Bowles & Son of the river risk. These two papers and Nash's testimony constitute the substance of the receivers' evidence upon the point. The petitioner produces William Bowles, Jr., and Mr. Hayes, who characterize the two papers as forgeries, and deny positively that the shippers, Bowles & Son, ever assumed the "river risk" or insurance risk between Memphis and Cairo. These two witnesses and others do say, however, that Bowles & Son were paid a rebate by Nash of two to eight cents per 100 pounds; that competition at Memphis for eastern consignments was sharp, and the payment of rebatel1l usual, if not universal. The cross-examination of the wit· nesses upon the disputed point, together with the various circumstances and explanations offered in evidence, satisftes me that the shipper did not assume any snchrisk; and that, if he was paid anything by Nash in connection with the transportation of the. cotton, it was in the nature of a rebate. No other point or question is deemed of sufficient importance to warrant further discussion in the case. There will be a decree in favor of petitioner for $35,867.
WALKER et al. v. BROWN et 8.L (Circuit Court of Appeals, Eighth Circuit. No. 375, LLJEN-WHAT CONSTITUTE!!.
September 10, 1894.)
An agreement made with a prospective creditor of a firm, by one who ,has loaned bonds to it, that such bonds, "or the valUe thereof," shall not pe returned to him untll any money owing to such creditor shall be paid, and. that the bonds. "or the value thereof," shall remain at the risk of the ftl'Jh'S business, so far as any.claim of such creditor is concerned, does not create a lien on the bonds tb,emselves, Its the owner may take them back at any time by paying their value to the firm. 58 lJ'ed. 23, afiirmed. BREACH 011' CONTRACT-REMEDY.
I.
Defendants' decedentagreed with plaintUYs that cerain bonds loaned by to a firm seeking credit from· plaintiffs should not be returne4 to him
,
WALKERtJ. BROWN.
205
untIl any money owing plaintiffs should be paid, and that the bonds, "or the value thereof," should remain at the risk of such firm's business, so far as any claim of plaintiffs was concerned. The bonds were afterwards returned to decedent without consideration. Held, that plaintiffs' remedy was by action at law for breach of contract, rather than In equity to subject the bonds, as no lien on the bonds was created. 58 Fed. 23, atIirmed. 8. EQUITY-SUIT AGAINST ADMINISTRA'l'OR. 11
Suit cannot be maintained on the equity side of a federal court to enforce purely legal demand merely because the demand is against the estate of a deceased person. 58 Fed. 23, affirmed.
Appeal from the Circuit Court of the United States for the Southern District of Iowa. In Equity. Bill by James H. Walker, Columbus R. Cummings, and William B. Howard against Anna L. Brown, Willis S. Brown, and Edward L. Marsh, administrators of the estate of Tallmadge E. Brown, deceased. There was a decree dismissing the bill (58 Fed. 23), and complainants appeal. This is a bill which was prefelTed by the appellants, composing the firm of James H. Walker & Co., of the city of Chicago, agair.st the appellees, as administratrix and administrators, respectively, of the estate of Tallmadge E. Brown, deceased, to enforce an alleged equitable llen upon certain bonds of the city of Memphis, Tenn., aggregating in amount the sum of $15,000. The bill charged that prior to May 9, 1889, the deceased, Tallmadge E. Brown, was a stockholder of the Lloyd Mercantile Company, he having theretofore transferred the bonds now in controversy to 'laid corporation in payment for stock therein by him purchased; that on the 1st day of August, 1889, Brown became anxious to withdraw his capital from the Lloyd Mercantile Company, whereupon a partnership was formed by J. Collins Lloyd and Copley Lloyd, under the name of Lloyd & Co., which latter firm bought all of the assets of the Lloyd Mercantile Company, except the Memphis bonds aforesaid, which were at that time SUlTendered to said Brown, and also assumed to pay all of its debts, including a debt in the sum of $1,524, which was then due from the Lloyd Mercantile Company to the appellants. The bill further charged: That on the 20th day of September, 1889, the firm of Lloyd & Co. applied to the firm of James H. Walker & Co. to make a purchase of merchandise on credit, whereupon said Tallmadge E. Brown, for the purpose of inducing the appellants to.extend such credit, executed the following agreement, in the form of a letter, to wit: "Chicago, September 21, 1889. "Messrs. James H. Walker & Co., Chicago, Ill.-Gentlemen: I beg to advise you that the loan of fifteen thousand dollars, Memphis bonds, made by me to Mr. J. C. Lloyd for the use of Messrs. Lloyd and Company, Ellensburg, Wash. Ter., is with the understanding that any indebtedness they may be owing you at any time shall be paid before the return to me of these bonds, or the value thereof, or that these bonds, or the value thereof, are at the risk ot the business of Lloyd and Company, so far as any claim you may have against said Lloyd and Company is concerned. "Yours, truly, T. E. Brown." That, in reliance on the agreement e",ide,lced by the aforesaid letter, Walker & Co. thereafter extended credit to Lloyd & Co. in the sum of about $13,000, between August 20 and December 11, 1889. The bill further alleged in substance that Lloyd & Co. failed on December 25, 1889, owing Walker & Co. at the time about $13,000, no part of which has yet been paid; that prior to said failure Lloyd & Co. surrendered and returned to said Brown, without consideration, the Memphis bonds aforesaid; and that on the death of Brown, in the month of May, 1891, they passed into the custody of his adminIstrators, as assets of his estate. The answer of the defendants denied, among other thIngs, that Tallmadge E. Brown, In his lifetime, was a stockholder'of the Lloyd Mercantile Company, or that he had transferred the Memphis bonds In question to that corporation
206
FEDERA.L Ul'OJtTER"
In Pll3"ment for stock/as Was fillegl!defo:thebill; or was in any wise responsible for any'ofthe debts of the mercantile company when it ceased to, oo',bwliness",and when the firnu)f Lloyd &, Cl>. was formed. It llverred in subfltance that Prior to the 9th day' of May. 1889, Brown loaned the bonds now' in ;Mercantile Company to enable it to raise money, and that s&ld oompany, prior to M:ay9, 1889, pledged said bonds to secure a debt which it then owed In the city of Chicago; that the bonds remained. pledgl'l'd W!Secure said tndebtednes,s Of, the, mercantile oqmpany on the 21st day of 1$89, when the aforesuid letter was written by Brown to James H. Walker & Co.; that Lloyd & Co.. to,pay this in<Iebtedness when they were called upon to pay it, and that Brown paid the same in the month of and received saldl1QllUs from the pledgee; and ,that be afterwards, before his death, made a valid girt and delivery of the bonds to his wife, ,AnnaJ,. Brown, one of,the who was the owner of the same in her own right whentliebillwas ffiecL On'theIDlng of the answer, which disclosed faet that' Anna' L. Brown had become the owner oj' the bonds by a, gift her Jlusb"nd, the appellants amenped t!;leir bill n th,e aa:iq." rIg . '," , ," ,,' J,.',Br-o'Y a defendantJn h,er own The circuit court appears to have dismissed the appelUintS" bill ot complaint upon the ,ground tba.t the of September, 21, 18Sl}, did not the no other matters were stated 1Il! t1J,ebiU or proven on the ,triaI: the ,case one, ot equitabiecognizance, Vide;:Walk.erv, :ijrowIl, i58Fed. 23,
nen,rY,','S,' N., 'BefoooCALDiWELL, SANBORNtandTHAYER, Circuit Judges. . '::""," t,··, , f.,
,THA'Y:ER, Cil'cuitJudge, after as above, delivered the the Qourt., ",' " " presented,fot;consideration by this court is The letter of T. E. Brown to James :Et:. & Co., of da,te P, 18,8,9,;h,ad" of g an eq,Ui',table lien upon. Mem,phli!l ponds thereln,referred to, III favor of James n. Walker & Co., whichrlien a:oourLQ! chancery will enforce. ,In his :work on;Ell,uity'JurisprudentJe,Ml'.Pomeroy says, and the authori· ties citetf.!bY him'undoubtedlY' Support the proposition:'-:": · . "Thaie'\[ery,exprelils'executory agreement In writing, whereby the contracting some pa.rticularproperty" real ,or fuM,Werein df'scri1'>#;l pI', II- :ScCUTlty.fOr a debt, or the t? convey 01' aSSIgn or transfer tl),e" as. se!;1P11ty" .all MUlt,able lIen upon the property so inwlpch Ise11,fQrcE>able ;ilie property ill: the bands, not only of the {irigillalcQntractor" but of1:\is.lwirs, "administrators, executors, voluntary asslguee!l,and purc1:l,a$ers or Und,er like circumstances, a: merely verbal agreemE>nt mar, create ,a similar 11ell upon personal ,:,3 Pam. Eq. JUl'. § 1235, and cases there cited.
The to be found in the letter in viewed in COIllileetion with the circumstances under which it,was, written, an expression of: an intention on the 'whatevel1creditr the "fi.:nn of. James,:B. ,Walker, &< Co, might thereafterexteDd·to'Lloyd& Co; Thiil"1.etterappears tobavebeen writ· ,tl:P ,James II: & ,Co.·atth.e Cit;Y?f' a::\la;. sent at hIS reSIdence I,D the CIty ol])es;¥oines, Iowa, where it: walj1,signedby him, and returned
WALKER'V. BROWN.
207
through the mail to the appellants. The record shows in substance that Lloyd & Co. applied to the appellants to purchase certain merchandise on credit, and, at the time of such application, made a statement of the firm's assets and liabilities. At this interview the fact was disclosed to the appellant8, and they appear to have been aware of the fact before the disclosure was made, that Lloyd & Co. were indebted to T. E. Brown in the sum of $15,000 for bonds of the city of Memphis which he had loaned to the firm, and which were then hypothecated to the Union National Bank of Chicago to secure a loan for that amount, which the firm of Lloyd & Co. was obligated to pay. The appellants refused to extend credit to Lloyd & CQ. unless T. E. Brown, the owner of the bonds, would sign an agreement with respect to the return and surrender of the same which was satisfactory to the appellants. Thereupon, at the suggestion of Lloyd & Co., Mr. William A. Mason, in behalf of the firm of J. H. Walker & Cb., dictated the aforesaid letter, as containing such an agreement as would be satisfactory to his principals, and would induce them to extend credit to Lloyd & Co. With reference to his motive in formulating the letter which was subsequently signed by the deceased, Mr. Moore testified, in behalf of the appellants,as follows: "'We understood that Mr. Brown was a partner in the Lloyd Mercantile Company. 01' held stock in the Lloyd Mercantile Company, and that in making this change from the Lloyd Mercantile Company to Lloyd & Co. he had become a creditor, Instead of a stockhOlder, and we Insisted that be must take the same position that be had before, so far as we were conc(lrned; that the capital of Lloyd & Co. mUflt be fifty thousand dollars, or about that, the same as of the Lloyd Mercantile Company."
We think that'the letter of September 21, 1889, when considered by itself, without the aid of parol testimony, is fairly susceptible of but one interpretation, which is well stated in the foregoing extract from the testimony of the person by whom the letter was drafted. The appellants were advised that Brown had loaned Lloyd & Co. the sum of $15,000 in Memphis bonds, which was being used by the firm as a part of its capital. They were willing to extend credit to the firm to a certain amount, if Brown would agree that the money thus loaned should not be withdrawn until the indebtedness of Lloyd & Co. to the appellants was paid, and that until such time the loaned capital should remain at the risk of the business of Lloyd & Co. The only undertaking on the part of the defendants' intestate that can fairly be extracted from the letter is a promise on his part that the capital loaned to Lloyd & Co. should not be withdrawn until the appellants' debt was paid. It is manifest, however, that the decedent did not intend to give the appellants a lien upon the Memphis bonds for the payment of such indebtedness as they might allow Lloyd & Co. to contract, and that he did not even intend to obligate himself to leave said bonds in the possession of Lloyd & Co. until such indebtedness was paid and extinguished, for his promise was clearly in the alternative,-that said "bonds, or the value thereof,should be at the risk of the business of Lloyd & Company," so fur as the appellants' claim was concerned. It will hardly of a doubt, we think, that within the contemplation of both
208
FEDERAL BEPORTER,
parties to the agreement,of September 21, 1889, the deceased had the right 'at any time to withdraw the Memphis bonds from the custody of Lloyd & Co., provided he left other securities of equal value, either money or property, in the hands of that firm, subject to the vicissi· tudes of its business. Indeed, the bill of complaint appears to have been drawn upon the theory that the deceased had the right to with· draw said bonds on the condition last stated, and that he had no in· tention of creating a lien thereon, for the bill contains the following allegation: "Your orators 'were also unwilling to extend any credit to sald Lloyd & Co. after. and so long as said fifteen thousand dollars of Memphis bonds were withdrawn from said assets, and redeliveredto,said Brown as and for his own property; and thereupon the said Brown, for the purpOse of inducing your ora· t01'S to perIIlit the withdrawal'by said Brown of said bonds, and to extend to Lloyd & Co, such further credit!in the sale of 'merchandise as said Lloyd & Co. U\i:ght desire, promised and agreed in a wt:iting duly signed by said Brown With your orators on the 21st day of September, 1889, that, in consideration of your oratorSl' extending further .credit to said Uoyd & Co. as aforesaid, any indebtednesl!, that said Lloyd &; Co. should be owing to your orators at any time should be paid before there ,should be returned to him, said Brown, the said Memphis b(}nds so loaned to said Lloyd as aforesaid, or the value thereof."
;We must accordingly concur in the view which appears to have been taken by the circuit court,-that the testimony failed to es· tablish the existence of a lien, either legal or equitable, so far as the bOllds now in controversy are concerned, and that at most it only tended to show that the deceased had,violated his agreement not to withdraw the amount of capital which he had loaned to Lloyd & Co. until the debt of the appellants was paid. We must also con· cur in the further view of the circuit court that a court of law is com· petent to afford adequate relief for a breach of contract of that nature, The result is that the bill was properly dismissed, unless it be'true that even in the absence of a lien the appellants had the right to go into a court of equity for an assessment· of the damages which they had sustained. ,This brings us to the consideration of the seooud proposition maintainedby counsel for the appellants,-that eyen in the absence of a lien,as charged in the bill, the complainants below had the right to sue In equity for the enforcement of their demand. The contention bi this respect goes to the extent of asserting. that the holder of a purely legal demand agllinst the estate of a deceased person may sue in equity in the United States circuit court for the proper district, for'the establishment ,of his claim, if he happens to be a nonresident, and that in aid of such proceeding the C0urt may take to itself the administration of the decedent's estate. Thea:rgument by which this 'Conclusion is reached is very brief,and is to the following effect: It is said that the eqUitY jurisdiction' vested in the .federal courts as was exercised by the high court of chancery in England . at the adoption of the ·federal constitution, and that the English couns efchancery had jurlsdiction'of, bills to enforce the due ad· ministration of the estates of deceased personS' The proposition, if tenable, is certainly; startling,-that,notwithstanding the elab· orate code·of laws now in force in most of the staie$df this Union regulating the subject· Qf administration, the federal courts, as
WALKER
v.
BROWN.
209
courts of equity, may nevertheless administer the estates of deceased persons at the instance of a nonresident creditor. While there are some expressions to be found in cases which perhaps give color to such an assertion, yet we think that it will be found on a careful view of the subject, and the circumstances under which such utterances have been mane, that there is in fact no substantial ground on which to rest the exercise of the large jurisdiction above claimed. In the case of l'ratt v. Northam, 5 Mason, 95, Fed. Cas. No. 11,376, one of the earliest cases touching this subject which is to be found in the federal reports, Judge Story held that the courts of the United States, as courts of equity, "possess jurisdiction to maintain suits in favor of legatees and distributees for their portions of the estate of the deceased, notwithstanding there may be by local jurisprudence a remedy at law on the administration bond in favor of the party." The facts disclosed in this latter case made it one of equitable cognizance on the ground of fraud. The proceeding was in substance a bill in equity to avoid a final judgment of a probate court settling the accounts of an administrator, which judgment had been obtained through the fraud of the administrator. Suits of that nature may doubtless be maintained in the national courts. In the case of Hagan v. Walker, 14 How. 29, 33, the following statement is found: "That a single creditor may maintain a bill against an administrator of a deceased debtor for a discovery of assets, and the payment of his debt, there can be no doubt." But this was said with reference to a case of which a court of equity, state or federal, clearly had jurisdiction on well-established equitable grounds, it being a case in which a judgment creditor of the deceased sought to reach property in the hands of a third party that had been conveyed to him by the deceased, in his lifetime, with intent to defraud his creditors. The case of Union Bank v. Jolly's :Adm'rs, 18 How. 503, is also referred to, and apparently with great confidence, in support of the appellants' contention. That was a case, however, in which the complainant had obtained a judgment against the administrators of Jolly in the federal court pending the administration. The administrators refused to recognize or pay any part of this judgment, although they had assets in their hands, and were about to distribute such assets among the heirs of the deceased, claiming, as it seems, that the federal judgment was barred because the demand on which it was founded had not been allowed as a debt of the intestate, by certain commissioners appointed by the probate court, pursuant to state laws, to audit claims against the decedent's estate. On a bill filed by the complainant to compel the administrators to recognize and pay the judgment obtained against them in the federal tribunal, it was held in effect that a law of the state limiting nonresident creditors of deceased persons to suits in the state courts for the purpose of establishing their demands would not be enforced, and that such nonresident creditors had the right to establish their claims by a suit in the appropriate federal tribunal, and that when so established they were entitled to recognition in the distribution of the assets of the deceased. v.63F.no.2-14
:210
FEDERAL REPORTER,.v,QI.· 63.
In (lfGreenls Adm'f8.v. Creig-hton,23 How. 94), the prinei· pal question discussed was whethera. nonresident creditor of a de,ceased person walt entitled to sue in tbe federal court of the proper district for of his demand, notwithstanding the j)Nvisi(ms of a state -statute which required all demands agai.\lst .the estates of deceased persons to be allowed by the probate court. 'l'be Court answered tbi$ :inquiry intheaffirmative,f,ollowing its decisions in Suydam v. BrQadnax, 11. Pet. 67, and Union Bank Y. Jolly's Adm'rs, supra-It will be observed in this case that, the court reached the decision of the question whether complainant's demand was One: which entitled him to come into equity for its enforcement, it rested its decision upholding his right to sue in that forum upon the ground that a pot'1:ion of. the assets sought to be- recovered were in .the hands. of the surety of the administrat()r of thedec@sed debtor, who had been joined as a defendant in the bill, andtJIat as against, such surety it was necessary to obtain a discovery,;l.u equity. The decision. in question falbl far short of contended for in the case at upon, ani ,ordinary legaJdemand 'against the estate of a deceased s11it can be maIntained in .eq11ity as wellaeat law against his adnnnistrlLtororrexecutor. Since the deoision in Green's Adm'l'$rv.Oreighton, esta;bIishing the right oia nonresident creditor to,sue,iij"the courts of .the United States for the establishment of his dewand ,against the estate of a/decedent, it !las been ruled in YODJey,v. Lavender, 2lWaiL 276, that the creditof so obtaining a judgIillent,in the federal tribunal ca::nnot .on that account take out an execution against the 'property of the deceased, and cause it to be sold, but must come into probate coqr! oil the state, and take share of the assets of. the deceased the administration lawsoftheliltate allow to creditors of his class. Xt was held in this case, in'lmbstllnce, that tlIe administration laws of/a state are not merely rules of practice.for the courts of the state,but that they are .laws the rights of the parties, and that they will be observed. by the federal courts in the enforcement of individual rights against the estates ·of decedents. See, also, in this connedion tne eease of Hess v. Reynolds, 113 U. S. 73, 5 Sup. Ct. 377, which decides that a proceeding against an administrator for the establishment of a demand against his decedentrsestate is a suit which is l.leDlovable to the federal courts when the creditor and the administrator are citizens of different states. Another case supposed to have .an important beariJ;l.gon the subject in hand, from which hm.gthy quotatiJons have . .Blade by counsel, is Payne v. Hook, 7 Wall. 425, 430. .The general statement is, found in this, as in .soDle,other that jurisdiction conferred on the courts cis tpe same that the high court of chancery in Engla.ndwesesses."B11t, in that'l::ase it that the administ'rato.r had grossly :mismanaged the estate oftl!.e deceased; that he b.adllnade false settlements with tbe probate: a false invenWrytherein.; and that by and other fraudulent means he hadil).duced a nopresident dis4ibutee, who ",as the complainant, to sell her interest in the estate to the administrator for a grossly
WALKER V. BROWN.
211
inadequate consideration; . The main purpose of the bill appears to have been to cancel the alleged fraudulent purchase of the distributee's interest, and to obtain a decree against the administrator for its full value. There can be nO doubt, we think, that the bill in this latter case contained allegations which entitled it to be entertained on that ground, and that it was so entertained, rather than upon the theory that the mere fact that an administrator was a party defendant rendered it a case of equitable cognizance. Probably the most elaborate as well as the latest expression of the views of the supreme court of the United States on this interesting subject is to be found in the case of Byers v. McAuley, 149 U. S. 608, 13 Sup. Ot.906. In that case it was held, in accordance with well. established principles, that a,nonresident creditor of an estate may establish a demand against the same by a suit in the federal court; also, that a nonresident distributee may establish his right to a share in the estate, and enforce such adjudication against the ad· ministrator personally, or his sureties, or proceed in any way which does not disturb the actual possession of the property by the state court. But it was said in that connection that the federal courts have no original jurisdiction in respect to the administration of decedents' estates, and that they cannot, by entertaining a suit against an administrator, as they may do in some cases, invest them· .selves with authority to determine all claims against it. Looking at the circumstances which gave rise to the last-mentioned decision, we find the fact to be that the debts of the estate had been paid, and that the administration proceedings had reached that point ','"hen it was the duty of the administrator to make distribution of the estate among those entitled to it. At this juncture a controversy appears to have arisen between the administrator and a nonresident distributee as to the amount of the latter's share in the estate, the determination of which controversy depended in part upon the true construction of the laws of descent of the state of Pennsylvania, and in part upon the question whether a testamentary clause in the will of the decedent, which was inefficacious as a will, could be given effect as a valid declaration of a trllilt. It was held in substance that a nonresident distributee was entitled to have both of these questions decided by the appropriate federal tribunal. The court did not decide, however, as is now contended, that the holder of an ordinary legal demand against the estate of a decedent may go into a federal court sitting in equity to establish the same merely because his demand is against a dead man's estate. Moreover, it clearly appears in the case last cited that the cause of action was one of equitable cognizance, inasmuch as it involved the existence and enforcement of a trust. The cases to which we have thus referred serve to illustrate the extent and the appropriate limits of the jurisdiction which the federal circuit courts now exercise in matters pertaining t() the administration of the estates of decedents. They have an undoubted jurisdiction to establish demands exceeding $2,000 against the estates of deceased persons, when that jurisdiction is im'Qked by a creditor; and, if the deID.and Bought to be enforced in
212
FEDERAL REPORTER,
the> court by a' nonresident creditor happens to be of an equitable oRture, it may undoubtedly be enforced by a suit in equity, as distinguished from a suit at law. Speaking generally, we have no doubt that· a .nonresident rruty enforce any right or claim which he hnppens to have against the personal representative of a deceased person bya bill in equity in the appropriate federal tribunal, when such right or claim pertains to any of the recognized heads of equity jurisprodence, or when, for any reason, a court of law is unable to afford adequate relief. But the authorities in question do not support the contention that, in a suit to establish a purely legal demand against the estate of a decedent, the jurisdiction at law and in equity is concurrent so fill' as the federal courts are conoerned. Nor do we perceive any reason why the equity powers of these courts should be invoked to establish a purely legal demand, since it is manifest that,as courts of law, they are able to afford the same of relief that can be obtained in equity. When a demand has been established in a federal court, whether at law or in equity, it cannot be enforced against the property of the decedent by execution in the ordinary form, but must await payment by the process ()f administration in the mode provided by state laws, which are binding alike upon the federal and state tribunals. Yonley v. Lavender and Union Bank v. Jolly's Adm'rs, supra. Moreover, the federal courts, on a bill ,filed to establish a demand against an estate, cannot take to themselves the full administration of the estate, when it is undergoing administration pursuant to local laws, as the English chancery courts might have done under a creditor's bill. Byers v. McAUley, supra. The power of the federal court ceases with the establishment of the demand, unless it becomes necessary to take further action for the purpose of compelling the administrator or executor to recognize the validity of the federal judgment and give it full force and effect as an adjudicated claim against the estate. In other words, the jurisdiction of these courts over the administration of estates is less extensive than that' which was formerly exercised by the, English chancery courts. Their jurisdiction at besfis but a limited one, depending as it does in all cases either upon the 'existenceofa federal question or diverse citizenship; and they are bound, like the state courts, to render a faithful obedience, within certain well-defined limits, to local administration laws that have now rendered it possible to administer estates fairly and equitably with<mt invoking the extraordinary powers of a court of chancery. Furthermore,the authority of the federal courts, as courts of equity, is circumscribed by the positive mandate of the judiciary act that "suits in equity shall not be sustained in either of the courts of the United States, in any case where a plain, adequate .complete remedy may be had at law." Rev. St. § 723. As we have before remarked, and as we now take occasion to repeat, a: legal demand against a decedent's estate can now be as effectuai1y enforced by aSlIit at law as by a bill in eqnity, and there is no necessity for resorting to the latter proceeding. No advantage is gained by suing in eqUity rather than at law, for the decree in that forum mnststop short with the ascertainment and allowance
BOWDOIN COLLEGE tI. MERRITT.
213
()f the creditor's demand; and if, in any case, or for any reason, it becomes necessary to take further action against the administrator to enforce payment of the allowance, the power of the court, as a court of equity, may be invoked in aid of a judgment at law as well as in aid of a decree in chancery. We are of the opinion, therefore, that as the claim involved in the case at bar was an ordinary legal demand, which grew out ofa breach of contract by the defendants' intestate, the complainants below should have sued at law to establish the demand, and that the bill was properly dismissed. The decree of the circuit court is therefore affirmed. BOWDOIN COLLEGE et aI. MERRITT.
V.
(Circuit Court, N. D. California. July 23, 1894.)
1.
LAW OF THE CASE.
a.
A decision on demurrer that the allegations of the complaint, Including one that defendant trustees refused to sue, gave plaintiff cestui que trust a right of action, is the law of the case on motion to dismiss.
UNITED STATES COURTS-JURISDICTION-COLLUSION.
Refusal of trustees to sue, thereby enabling the cestui que trust to bring the action in a federal court, as involving a controversy wholly between citizens of different states, will not be held collusive, thus subjecting the action to dismissal under Act March 3, 1875, § 5, though they were willing the cestui que trust should bring the action, and were friendly to it, where they would not have sued under any circumstances, for the reason that they would have had to sue in a state court, and thought that an effort would there be made to unduly influence the iury. Where, on the refusal of trustees to bring an action against a citizen of the same state, the cestui que trust, a citizen of another state, brings the action in a federal court, joining the trustees as defendants, the answer of the trustees, admitting all the allegations of the bill, including one that they refuse to sue, does not show that they have changed their attitude, and are no longer antagonistic to the complainant, and thus deprive the federal court of jurisdiction of the action, as one no longer between citizens of different states.
SAME-EFFECT OF. ANSWER.
Action by the president and trustees of the Bowdoin College, and ,others, against James P. Merritt, Frederick A. Merritt, and others, to remove a cloud from title. A demurrer to the bill was overruled (54 Fed. 55), and the cause was then heard on application to file a supplemental bill, and for an injunction. !.eave was given and a preliminary injunction granted (59 Fed. 6), and defendant J. P. Merritt now moves to dismiss. l3lake, Williams & Harrison, E. S. Pillsbury, and Robert Y. Hayne, for complainants. H. W. Philbrook, Arthur Rodgers, J. C. Martin, A. A. Moore, and 'Geo. R. B. Hayes, for respondents. McKENNA, Circuit Judge (orally). The nature of this action has been heretofore defined by Judge HAWLEY (54 Fed. 55), in passing on the demurrer, as one to quiet title, and the facts have been so often stated that it is unnecessary to state them again. The ,action is brought by the college and certain' persons as bene-