taking with him a jug of whisky, went round to the house of each of these men, and thus gaining their assent to his project, brought them together in his own wagon to the county seat, on a day not provided by law, nor authorized by any previous order or notice, and there induced them to sign this contract. Whether a like influence attended the subsequent voting at precincts, where the average vote was twelve to a township, we are not informed. But there is no reason to doubt that the arguments used with the supervisors were potent with the voters. CINNATI, Appt., V. THEODORE COOK ET AL., Trustees, etc. Bankrupt's assets. A chose in action, whether good or bad, collectitrustees in bankruptcy, and cannot be retained by ble or uncollectible, of a bankrupt, passes to his him. [No. 182.] Argued Jun. 28, 1878. Decided Feb. 11, 1878. APPEAL from the Circuit Court of the Unit It appears that for some time before this con- THE FIRST NATIONAL BANK OF CINtract was made, the County of Wright had been urging her claim to swamp lands, before the department at Washington, through Mr. Savary, who acted as her agent. A short time before this contract was made, Mr. Savary informed the authorities of the County that their claim had been rejected, and that this rejection was accompanied by the announcement of a rule which left but little to hope for on the part of the County. Very shortly after this, Mr. Crawford, as the agent of the Emigrant Company, made his appearance in Wright County, and procured the contract we have mentioned. As soon as this was done, Mr. Savary, as the agent of the Emigrant Company, by the assistance, as he says, of able lawyers, and in the cases of other counties with which the Company had similar contracts, inaugurated proceedings to procure the reversal of the rule announced by the department. Succeeding in this, he presented the renewed claim of Wright County, and secured the allowance of several hundred acres still unsold in the County, and money and scrip for six thousand acres to be located elsewhere, in lieu of swamp lands sold by the Government. It is not a violent presumption, under all the circumstances of this case, that when, just after Mr. Savary had made the impression on the supervisors of Wright County that their case was hopeless, Mr. Crawford appeared in Wright County, he had some information of a different character on which he acted, and which was not communicated to the supervisors. The record in this case is a voluminous one, consisting largely of depositions of witnesses. We are not convinced that any false representations were made by the agents or officers of the Emigrant Company. But the impression made upon us by the whole testimony is, that the officers and citizens of the County were in gross ignorance of the nature and value of what they were selling; that the Emigrant Company, on the other hand, were well informed in regard to both, and withheld this information unfairly from the officers of the County; that the sudden change of the relationship of Mr. Savary from an unsuccessful agent of the County to a successful agent of the Company requires an explanation which has not been satisfactorily given; that the fact that all parties knew they were dealing with a trust fund devoted by the donor to a specific purpose demanded the utmost good faith on the part of the purchaser; that so far from this, there is a provision for a diversion of the fund to other purposes, a gross inadequacy of consideration, and a successful speculation at the expense of the rights of the public. For these reasons we concur with the Circuit Court that the contract should be rescinded, and ed States for the Southern District of Ohio. This case is substantially the same as that of Merchants Nat. Bank v. Cook, No. 68 of this Term, ante, 412. The facts as to the sale of draft, amount of same, the sending of securities to appellant, directions of Homans to his clerks are the same. In this case, instead of a note this memorandum accompanied the securities "Collateral to check of Homans & Co. on New York, August 25, $10,000." Mr. T. D. Lincoln, for appellant. Messrs. George Hoadley and E. M. Johnson, for appellees. Mr. Chief Justice Waite delivered the opinion of the court: All the questions involved in this case were considered and decided at the present Term in Merchants Nat. Bk. v. Cook [ante, 412], and West Phila. Bk. v. Dickson [ante, 407], except that which relates to the order of the circuit court directing an assignment to the trustees in bankruptcy, of the judgment against the Ohio Lard and Sperm Oil Company upon the bills of that company, transferred by the bankrupt to the appellant with the other securities, and as to this we see no error in the action of the court below. The transfer of these bills, as well as the others, was void under the Bankrupt Law, and the title to them passed to the trustees in bankruptcy when appointed. The fact that, in the hands of the bankrupt or his assignees, the bills may not be good against the oil company, does not affect this case. The bills, whether good or bad, belonged to the trustees, who have, consequently, the right to the judgment into which they have been merged. Whether the oil company will have the same defenses to the judgment in the hands of the trustees that it would have had to the bills before judgment, is a question which we need not now decide. It is certain that the appellant cannot hold the judg ment as against the trustees, any more than it could the bills. The decree is affirmed 1877. OMAHA HOTEL Co. v. Wade. JEPTHA H. WADE ET AL. (See S. C., 7 Otto, 13-24.) Foreclosure action, by bond holders-parties tomortgage to directors, when valid—usury. 1. Where some of the holders of bonds apply to the trustee to whom the deed of trust is given as security for the bonds, to foreclose it, and he refuses to do so, they may bring a suit for such purpose making the trustee and other bond holders who refuse to join them in the suit defendants therein. 2. Of such suit the circuit court has jurisdiction, where the defendants are citizens of the State where the suit is brought, and the complainants are citizens of other States. If a citizen of another State refuses to unite with the complainant, he may be omitted as a defendant, unless it appears that his rights would be prejudicially affected by the decree. 3. Bonds and mortgages are not void upon the ground that the lenders of the money were also the directors of the company, where the terms of the contract were sanctioned by the stockholders. 4. When the contract on its face is for legal interest only, then, in order to constitute usury, it must be proved that there was some corrupt agreement. device or shift to cover usury, and that it was intended by the parties. [No. 188.] Argued Jan. 29, 30, 1878. Decided Feb. 11,1878. APPEAL from the Circuit Court of the United States for the District of Nebraska. 1. We think that the court below erred in not dismissing the bill for want of jurisdiction. Story, Eq. Pl., sec. 201; Russell v. Clark, 7 2. That the court erred in not holding the bonds and mortgage invalid and not enforcible, because of the trust relation which the lenders of the money sustained to the stockholders, being a majority of the Board of Directors. Durant v. Trustees, this Term; Michoud v. Girod,4 How.,552; Koehler v. Iron Co., 2 Black, 715 (67 U. S., XVII., 339); Drury v. Cross, 7 Wall., 299 (74 U. S., XIX.,40); Jackson v. Ludeling,21 Wall.,616 (88 U. S., XXII., 492); Stephen v. Beall, 22 Wall., 329 (89 U. S., XXII., 786); Oil Co. v. Marbury, 91 U. S., 588 (XXIII.,329). The last case will be cited against us, but to distinguish that case from this is not difficult. Great Lux. R. R. Co. v. Magnay, 25 Beav., 586; Coal Co. v. Sherman, 30 Barb., 553; Hoff man S. C. Co. v. Cum. C. & I. Co., 16 Md., 456; Davoue v. Fanning, 2 Johns. Ch., 252; Coleman v. R. R. Co., 38 N. Y., 203; Ogden v. Murray, 39 N. Y., 202; Redmond v. Nickerson, 9 N. J. Eq.. 516; Wright v. Smith, 23 N. J. Eq., 111. "The underlying principle is, that no man can serve two masters. He who is acting for others cannot be permitted to act adversely to his principals." Eur. & N. A. R. R. Co. v. Poor, 59 Me., 277. San Diego v. R. R. Co., 44 Cal., 106; Cov. & "If such contracts were held valid until People v. Board of, etc., 11 Mich., 225; Flint & P. M. R. R. Co. v. Dewey, 14 Mich., 488; Puzey v. Senier, 9 Wis., 370; Hill. Trust., 144, 764, 770; Ashurst's Appeal, 60 Pa., 290; Goodin v. Cin. & W. Can. Co., 18 Ohio St., 182. 3. That the court erred in not, at least, holding that the lenders contracted for and did receive usurious interest, thereby forfeiting all interest. Bk. v. Owen, 4 Pet., 536; Browne v. Vredenburgh, 43 N. Y., 195; Billington v. Wagoner, 33 N. Y., 31; Craig v. Pleiss, 26 Pa., 271; Fielder v. Darrin, 50 N. Y., 437; Grant v. Merrill, 36 Wis., 393; Kelley v. Lewis, 4 West. Va., 456; Curtiss v. Leavitt, 15 N. Y., 87; Bk. v. Dodge, 30 Barb., 631, Andrews v. Pond, 13 Pet., 65; Chapman v. Robertson, 6 Paige, 634; Peck v. Mayo, 14 Vt., 33. 4. That the court erred in not holding the bonds claimed to be held by Wade and Bosler open to the same defense as between original parties, they not being bona fide purchasers. Mr. J. M. Woolworth, for appellees. Mr. Justice Clifford delivered the opinion of the court: Jurisdiction of the circuit courts, concurrent with the courts of the several States, under the existing Act of Congress, is extended, where the matter in dispute exceeds the sum or value of $500, to all suits at common law or in equity in which there shall be a controversy between citizens of different States, without any exception or qualification, employing the very words contained in the Constitution. 18 Stat. at L., 470; Const., art. 3, sec. 2. Motives of a public character induced certain residents of the City of Omaha to become organized as a Corporation, to facilitate their efforts to erect a hotel at that place. Expenditures to a large amount were incurred by the Hotel Company in purchasing the lot and in erecting and inclosing the building; and, being unable to complete the same without pecuniary aid from others, they decided to mortgage the premises to raise the necessary funds for the purpose. Arrangements were first attempted and partly perfected, to make a loan of $75,000; but it was soon after determined that it would require $25,000 more to accomplish the object. Negotiations of various kinds ensued, which resulted in a vote of the stockholders in favor of the proposition ultimately carried into effect, to borrow $100,000 to complete the hotel. Action of a corresponding character was had by the Board of Directors; and they voted to accept the proposition made to the stockholders, and directed the President and Secretary of the Company, to execute, acknowledge and deliver to Milton Rogers, trustee, a mortgage or 917 trust-deed of the hotel lot and building, as more | plainants filed the general replication, and proofs fully set forth in the record. were taken on both sides. Hearing was had upon bill, answer, replication and proofs; and the circuit court entered a decree in favor of the complainants, as fully set forth in the record, the details of which are not material to the questions to be decided in this court. Bonds of the Company executed to bearer, with interest coupons attached, to the number of one hundred, each for the sum of $1,000, with interest at the rate of twelve per cent., payable semi-annually, were issued, the principal payable in five years, with the privilege to the Company of paying the same two years earlier. Payment of the bonds, principal and interest, was secured by the mortgage or trust-deed executed by the President and Secretary of the Company, in pursuance of the aforesaid vote of the Board of Directors to carry into effect the proposition previously adopted by the stockholders at their meeting duly notified and held for the purpose. Covenants alleged to have been broken are the following: (1) That the Company shall keep the hotel building insured in good and responsible companies, to be agreed between the parties, in the sum of not less than $100,000, and that the Company shall assign the policies to the trustee, for the benefit of the holders of the bonds. (2) That the Company shall pay all taxes and assessments upon the mortgaged premises. (3) That the sum raised by the mortgage shall be applied to the construction and completion of the hotel building. (4) That the Company shall well and truly pay the interest as it becomes due, and the principal at maturity; and the instrument provides that in case of failure to pay the interest or to perform any other of the covenants or agreements therein contained, then in that case not only the interest but the principal shall become due and payable, and the trustee shall have the right to take immediate possession of the property, foreclose the mortgage, and sell the mortgaged premises. Specific breaches of the covenants of the instrument are alleged, and failures, neglects and refusals of the Company to perform the same, in consequence of which the complainants aver and charge that the principal as well as the interest of the mortgage debt has become due, and that they are entitled to a decree foreclosing the mortgage. Service was made, when most of the respondents entered an appearance, and two of the respondents, to wit: E. D. Pratt and Charles W. Hamilton filed an answer. Certain interlocu tory proceedings followed, which it is not ma terial to notice in this investigation. Six other respondents subsequently appeared and filed an answer, and at a still later period the Hotel Com pany appeared and filed their answer. Special reference need only be made to the answer of the Hotel Company, as the other two answers relate chiefly to the application for a receiver. Four principal defenses were set up by the Company: (1) That the circuit court had no jurisdiction of the case. (2) That the bonds and mortgage were void because of the trust relation which the lenders of the money sustained to the stockholders. (3) Because the lenders of the money contracted for and received usurious interest. (4) That the complainants were not bona fide holders of the bonds, and that the bonds do not equitably bind the Hotel Company. Due process was served, and it is conceded that the respondents who did not answer suffered the bill of complaint to be taken as confessed. Without unnecessary delay, the com Prompt appeal was taken by the respondents; and since the cause was entered here they have filed as an assignment of errors the rulings of the circuit court in overruling the four defenses set up in the answer of the Hotel Company. (1) That the circuit court had not jurisdiction of the case, by which is meant that proper parties are not made in the bill of complaint to enable the circuit court to decree the relief for which the complainants pray. Want of proper parties is the true nature of the alleged error, the principal defects specified being the following: (1) That the suit is in the name of certain bond holders, and not in the name of the trustee designated in the mortgage. (2) That the other bond holders are not joined as complainants in the suit. Application was made to the trustee, by the complainants, to take possession of the mortgaged premises, and to bring an action in proper form for the foreclosure of the deed of trust and for the sale of the premises; and they allege that he refused to comply with their request, notwithstanding that they offered to indemnify him and save him harmless. Sufficient appears to show, beyond controversy, that the complainants had a right to have suit for a foreclosure in the name of the trustee; and having applied to him for that purpose, and he having refused to perform his duty, the complainants, with the other parties interested in the security, might properly become the actors in such a suit against the mortgagor, impleading the trustee also as a respondent. Resident parties interested to foreclose the mortgage or trust deed also refused to join in the suit with the complainants, and they were joined as respondents with the Hotel Company and the recusant trustee. Circuit courts, it is admitted, have jurisdiction, under the Judiciary Act, of all suits of a civil nature, at common law or in equity, where the amount in dispute is sufficient, and the suit is between a citizen of the State where the suit is brought and a citizen of another State. 1 Stat. at L., 78. Words and phrases of a much wider signification are used in the recent Act of Congress defining the jurisdiction of the circuit courts, which provides that those courts shall have original cognizance, concurrent with the courts of the several States, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds the sum or value of $500, and in which there shall be a controversy between citizens of different States. When the decree in this case was entered, the latter provision was in operation, but the suit was commenced before the Act which contains it was passed. 18 Stat. at L., 470. Tested by either provision, the court is of the opinion that the objections to the jurisdiction of the circuit court cannot be sustained, as the respondents are citizens of the State where the suit is brought, and the complainants are citizens of other States; nor does it make any difference that some of the respondents were joined as such because they refused to unite with the complainants in the prosecution of the suit. Equity practice in such cases is more flexible than the rules of pleading at common law, and often enables a complainant in equity to maintain the jurisdiction of the court in a case where a plaintiff in an action at law would find it to be difficult to do so, and perhaps impossible. Argument to show that the case made in the record shows that the holders of the overdue and unpaid securities were entitled to sue for the foreclosure of the mortgage or trust-deed is unnecessary, as the pleadings and proofs are full and decisive to that effect; and if so, then it is clear that the complainants, under the circumstances of this case, might select the circuit court as the forum for the adjudication of their rights. Holders of such securities otherwise entitled to sue in the circuit court to foreclose the mortgage or trust-deed are not compelled to join as respondents other holders of similar securities, if resident in other States, even if they refuse to unite as complainants, as the effect would be to oust the jurisdiction of the court. Cases of the kind frequently arise; and the rule is that such a party, if he refuses to unite with the complainant, may be omitted as a respondent, unless it appears that his rights would be prejudicially affected by the decree. But it is suggested that the proper parties for a decree are not before the court, as the bill of complaint shows that there are other holders of the securities besides the complainants. It is true, beyond doubt, that all persons materially interested in the fund to be distributed should be made parties to the litigation; but this rule, like all general rules, will yield whenever it becomes necessary that it should be modified in order to accomplish the ends of justice. Authorities everywhere agree that exceptions exist to the general rule; and this court decided that the general rule will yield if the court is able to proceed to a decree and do justice to the parties before the court, without injury to others not made parties, who are equally interested in the litigation. Payne v. Hook, 7 Wall., 425 [74 U. S., XIX., 260]. Examples of the kind are put by Judge Story, in his work on Equity Pleading. Speaking of a bill brought by one of several residuary legatees for a final settlement and distribution of the estate of a testator or intestate, he says, all the residuary legatees or distributees ought in general to be made parties; but he admits that, if some are out of the jurisdiction of the court and cannot conveniently be joined, the court will dispense with them, and proceed to decree the shares of those before the court, the rule being that the decree is conclusive only as to those who are parties to the litigation. Story, Eq. Pl., sec. 89; West v. Randall, 2 Mas., 193; Wood v. Dummer, 3 Mass., 308. Parties who are not named may intervene and make themselves actual parties, so long as the proceedings are in fieri and are not definitely closed by the course and practice of the court. Campbell v. R. R. Co., 1 Woods, 369. 2. Suppose that is so, then it is insisted that the bonds and mortgage are invalid because the lenders of the money sustained a trust relation to the stockholders. Voluminous as the proofs are, it is scarcely possible to enter into the details of the evidence without extending the opinion to an unreasonable length, nor is it necessary, as we are all of the opinion that the finding of the Circuit Judge in respect to the theory of fact involved in the present proposition is correct. His finding is that the bonds and mortgage are not void upon the ground that the lenders of the money were also the directors of the Company; that the terms of the contract were sanctioned by the stockholders; and that the money loaned was needed to complete the building, and that it was applied to effect the purpose for which it was borrowed. Preliminary to any action in the matter, the proposition for the loan was submitted to the stockholders, and the record shows that it was adopted by a stock vote. Stockholders and directors knew what amount was to be borrowed, and all the terms and conditions of the contract, and that bonds payable to bearer were to be issued for the loan, and that the bonds were to be secured by a mortgage or trust-deed of the hotel property. All knew that a loan was indispensable to the completion of the building, and all were anxious that it should be effected without further delay. Differences of opinion existed among the stockholders as to the best way of raising the money, and prior discussions had not tended to quiet the dissensions, but the stockholders at the meeting referred to decided to adopt the proposition which was carried into effect. Beyond doubt, some of the conditions of the proposition were somewhat peculiar, but the proofs show that it was openly submitted to the stockholders, and that they adopted it by a majority of their votes; that the bonds were subsequently issued, and that they were voluntarily secured by the mortgage or trust-deed set forth in the record. Taken as a whole, the proofs satisfy the court that the money was advanced in good faith, and that the bonds were duly executed and delivered; nor is the legality of the transaction affected by the fact that others of the directors besides the party who submitted the proposition took certain proportions of the bonds and furnished corresponding proportions of the money. It was the Company or their agents that prescribed the form of the bonds, and, having issued the same in the form of negotiable securities, it must have been expected that they would be negotiated in the market. Enough appears, also, to warrant the conclusion that the stockholders were more interested to raise the money than to ascertain who would become the holders of the bonds. Examined in the light of the circumstances attending the transaction, as the case should be, the court is of the opinion that the evidence fails to support the proposition that the bonds and mortgage are invalid because the directors became the holders of the bonds and advanced the money. Transactions of the kind have often occurred; and it has never been held that the arrangement was invalid, where it appeared that the stockholders were properly consulted, and sanctioned what was done, either by their votes or silence. Stark v. Coffin, 105 Mass.,328; Credit Association v. Coleman, L.R., 6 Ch. App., 568; Troup's case, 29 Beav., 353; Hoare's case, 30 Beav., 225; Smith v. Lansing, 22 N. Y., 520; | CITY OF MEMPHIS ET AL., Piffs, in Err., Busby v. Finn, 1 Ohio St., 409. V. BROWN. 3. Most of the directors who took the bonds UNITED STATES, ex rel. TALMADGE E. and advanced the money were owners of stock in the bank where the money when paid to the use of the Company was deposited. Interest not having been paid on the deposits, it is insisted by (See S. C., 7 Otto, 293-299.) remedy-state law-repeal. 1. A creditor by contract has a vested right to the remedies for the recovery of the debt which existed at law when the contract was made, and the Legislature of a State cannot take them away without it may modify them and even substitute others, if impairing the obligation of the contract, although a sufficient remedy be left or another provided. 2. When a new remedy is authorized after a contract has been made, vested rights acquired by the creditor under and by virtue of it, are beyond the reach of the Legislature, and the repeal of the law will not affect them. the respondent Company that the transaction Vested right to remedy to enforce contract-new was usurious; but the court is not able to sustain the proposition, as there is no evidence that any agreement was ever made that the money should be deposited in that bank. Usury, certainly, is not to be favored; but the rule is well settled, that, when the contract on its face is for legal interest only, then it must be proved that there was some corrupt agreement, device or shift to cover usury, and that it was in full contempla tion of the parties. Bk.v. Waggener, 9 Pet.,378. Nor is that rule at all inconsistent with what was previously decided by the court. Profit made or loss imposed on the necessities of the borrower, whatever form, shape or disguise it may assume, where the treaty is for a loan and the capital is to be returned at all events, has always been adjudged to be so much profit taken upon the loan, and to be a violation of those laws which limit the lender to a specified rate of interest. Bk. v. Owens, 2 Pet., 527: Dowdall v. Lenox, 2 Edw. Ch., 267. Much depends upon the intent of the parties in the transaction. Consequently, where a certificate of deposit was given, payable at a future day, it was held not to be usury, it appearing that it was given at the request of the depositor, and for his accommodation, without any intent to secure usury. Knox v. Goodwin, 25 Wend., 643. Decided cases also establish the rule that the withholding a part of a loan for a time in violation of the agreement of the parties does not constitute usury, as the retention of the money was no part of the contract or loan. Auble v. Trimmer, 17 N.J. Eq., 242; Howell v. Auten, 1 Green, Ch., 44. So where checks were drawn before the discount was made and deposited, and the bank treated the note as discounted at the date of the checks, the court held that it was not usury, as the circumstances negatived any unlawful intent. Walker v. Bk., 3 How., 62. When the bonds were converted into money, the proceeds were deposited in the aforesaid bank, which, no doubt, resulted in an incidental advantage to the directors owning portions of the capital stock; but that matter was ad justed in the decree to the satisfaction of the court, and may be dismissed without further comment. Some delay ensued after the bonds were issued before the money was deposited; but nothing of the kind was contemplated when the agreement was made, nor did it take place as a means of increasing the rate of interest. 4. Other defenses failing, the suggestion is that the complainants are not bona fide holders of the securities for value; but the suggestion is unsupported by proof and, of course, cannot prevail, the burden of proof being upon the respondent Company. Goodman v. Simonds, 20 How., 343 [61 U. S., XV., 934]; Collins v. Gilbert [ante, 170]. Suffice it to say, there is no error in the record. Judgment affirmed. 3. Where a contractor, for paving streets of a city, was to be paid in a manner provided by a law which was afterwards adjudged to be unconstitutional, and a law was subsequently passed for levying a tax to pay for such work, the repeal of the latter law will not take away vested rights which the contractor had acquired under it by proceedings to levy such tax in pursuance of a mandamus, time of the approval of the Governor. [No. 941.] 4. The repealing Act became a law only from the Submitted Dec. 20, 1877. Decided Feb. 11, 1878. States for the Western District of Tennessee. ERROR to the Circuit Court of the United The case is stated by the court. See also, two other cases between the same parties, post, 925, 937. Nos. 599, 778. Messrs. S. P. Walker and Humes & Poston, for plaintiffs in error: It is said for defendant in error, that Brown had acquired a vested right in the provisions of the Act of 1873 above quoted; and that the Constitution of Tennessee, article 1, section 20, provides: The Legislature shall enact no retrospective law, or law impairing the obligation of a contract; and, say they, the Act of 1875, in attempting to repeal the Act of 1873, was retrospective and sought to devest a vested right of Brown to have his judgment satisfied by the levy and collection of taxes under the Act of 1873. To this objection to the repealing effect of the Act of 1875 we reply, that article 1, section 20, of the Constitution of Tennessee of 1870, is identical with a like provision in the Constitution of Tennessee of 1796, and of 1834, that our courts, for a period of eighty years, have construed that provision to mean: The Legislature shall not pass any retrospective law, or other law impairing the obligation of a contract;" thus limiting the restriction to the passage of laws impairing the obligation of contracts. The leading cases on this subject, and the cases approving it, are: Townsend v. Townsend, 1 Peck, p. 1; Webster v. Rose, 6 Heisk., 93; Bell v. Perkins, 1 Peck, 266; Jones v. Jones, 2 Tenn.,2; Wynne v. Wynne, 2 Swan, 410; Smith v. Brady, 7 Yerg., 451; Greenfield v. Dorris, 1 Sneed, 550. Again; the Act of 1873 was a general revenue law applicable to all the cities in the State, ex tending their powers of taxation, but wholly without connection with any contracts. Its enactment was an exercise of the sovereign power of taxation, through the local civil governments of the State. It was, so far as it benefited Brown and others similarly situated, a mere |