sion of J. M. GILMER, ROBERT L. GILMER and M. BAER, Plffs. in Err., contract, by whomsoever made, had been fully | P. W. H. CUMMINGS, Admr. of the Succes performed. Clearly, then, under our rulings in the Removal Cases, 100 U. S., 457 [XXV., 593], and Blake v. McKim [ante, 563], the case was not removable under the first clause of the 2d section of the Act of 1875, because all the parties on one side of the controversy were not citizens of different States from those on the other. H. H. JONES ET AL. (See 8. C., 14 Otto, 419.) Limitation of writs of error. 1008 of the Revised Statutes, for bringing writs of Submitted Dec. 19, 1881. Decided Jan. 16, 1882. of Louisiana. On motion to dismiss. The case is sufficiently stated by the court. Mr. Chief Justice Waite delivered the opinion of the court: Neither do we think it was removable under the second clause of the same section, on the ground that there was in the suit a separate controversy wholly between citizens of different States. To entitle a party to a removal under this clause, there must exist in the suit a separate and distinct cause of action in respect to which all the necessary parties on one side are citizens of different States from those on the other. Thus, in Barney v. Latham [ante, 514], two separate and distinct controversies were directly involved; one as to the lands held by the Winona & St. Peter Land Company, in respect to which the land company was the only necessary party on one side and the plaintiff on the other; and the second as to the moneys collected from the sales of lands before the land company was formed, and as to which only the natural of Louisiana, brought more than two but less This is a writ of error to the Supreme Court persons named as defendants were the necessary than five years after the judgment to be reparties on one side and the plaintiffs on the viewed was rendered, and one of the questions other. One was a controversy about the land raised on this motion is, whether the limitation and the other about the money. Separate suits, of two years prescribed by section 1008 of the each distinct in itself, might have been properly Revised Statutes, for bringing writs of error to brought on these two separate causes of action the Circuit and District Courts, applies to writs and complete relief afforded in each suit as to of error to State Courts. We have no hesitathe particular controversy involved. In that tion in saying it does. Section 1003 provides about the land, the land company would have that "Writs of error from the Supreme Court been the only necessary defendant; and in that about the money, the natural persons need on- shall be issued in the same manner, and under to a State Court, in cases authorized by law, ly have been brought in. In that about the the same regulations, and shall have the same land, there could not have been a removal, be- effect, as if the judgment or decree complained cause the parties on both sides would have been of had been rendered or passed in a court of citizens of the same State; while in that about the United States." This is almost the exact the money there could have been, as the plaint- language of a similar provision in the 25th seciffs would all be citizens of one State, while tion of the Judiciary Act of 1789, and we are the defendants would all be citizens of another. not aware it was ever supposed that writs isWhen two such causes of action are found united sued to the State Court under that section in one suit, we held in the case last cited, there could be a removal of the whole suit on the pe- writs to the Circuit Courts by the 22d section. were not subject to the limitation prescribed for tition of one or more of the plaintiffs or defend- In Brooks v. Norris, 11 How., 204, this seems ants interested in the controversy, which, if it to have been assumed, and a writ to a State had been sued on alone, would be removable. Court was dismissed "On the ground that it is But that, we think, does not meet the require-barred by the limitation of time prescribed by ments of this case. This suit presents but a the Act of Congress." There was at that time single cause of action, that is to say, a single Ino other limitation than the one contained in controversy. The issues made by the pleadings the 22d section. do not create separate controversies, but only show the questions which are in dispute between the parties as to their one controversy. The suit is, therefore, governed by the principles applied in the Removal Cases and Blake v. McKim, rather than those in Barney v. Latham, and was properly remanded. The second clause of section 639 of the Revised Statutes was, as we think, repealed by the Act of 1875, and as the second petition for removal was not filed in time under the Act of 1875, it was of no avail. The whole case depends on the first petition. The order to remand is affirmed. True copy. Test: James H. McKenney, Clerk, Sup. Court, U. s. Cited-105 U. S., 578; 106 U. S., 194, 196; 108 U. S.. 132; 110 U. S., 60; 112 U. S., 193; 3 McCrary, 593; 18 N. W. Rep., 644; 20 N. W. Rep., 785. The motion to dismiss is granted, for the reason that the writ was not brought within two years after the judgment complained of was rendered. True copy. Test: James H. McKenney, Clerk, Sup. Court, U. 8. Cited-108 U. S., 568. UNITED STATES. (See S. C., 14 Otto, 442, 443.) Witness, admissibility of. Sections 1079 and 1080, of the Revised Statutes do not prevent the United States from using, as a wit NOTE.-Competency of witnesses in U. S. Courts in civil cases; how far governed by state laws. See, note to Vance v. Campbell, 66 U. S., XVII, 168. ness to defeat a claim, one whose interest is adverse | possession under it and had held it ever since, in an to the claimant; and that, too, when a judgment in action between him and the second purchaser. favor of the United States may have the effect [No. 99.] of establishing the right of the witness to the same Submitted Nov. 18, 1881. Decided Jan. 16, 1882. [No. 188.] Decided Jan. 16, 1882. claim. Argued Dec. 22, 1881. APPEAL from the Court of Claims. The only point discussed by this court is sufficiently explained in the opinion. For report of the case in the court below, see 12 Court of Claims, 578. Messrs. Charles E. Hovey and Alexander Porter Morse, for appellant. Mr. Samuel F. Phillips, Solicitor-Gen., for appellee. IN ERROR to the Supreme Court of the Territory of Utah. The case is stated by the court. Messrs. J. G. Sutherland and John R. McBride, for plaintiffs in error. Messrs. Shellabarger & Wilson, for defendant in error. Mr. Justice Miller delivered the opinion of the court: Nickles brought his action of replevin in the District Court of the Third Judicial District to Mr. Chief Justice Waite delivered the opin-recover possession of a large amount of sawed ion of the court: lumber, laths and logs, of which he claimed to The defendants, Wells and be the owner. others, denied this, and set up ownership in The case was tried by a jury, to themselves. whom the court gave the following instruction at the request of plaintiff: Section 1079 of the Revised Statutes provides that no claimant suing the United States in the Court of Claims, nor any person from or through whom such claimant derives his alleged title, claim or right, nor any person interested in any such title, claim or right, shall be a competent witness in supporting the same, but under section 1080 the United States may make a claim-a ant a witness. We agree with the court below that this does not prevent the United States from using, as a witness to defeat the claim, one whose interest is adverse to the claimant; and that, too, when a judgment in favor of the United States may have the effect of establishing the right of the witness to the same claim. The objections urged against the competency of the witness under the provisions of section 858 of the Revised Statutes are disposed of by National Bank v. Potter [ante, 111]. The judgment is affirmed. True copy. Test: "To make a case entitling plaintiff to recover, it is only necessary for the plaintiff to show, by preponderance of testimony, that the logs in question, and the logs from which the lumber in question was made, were cut on government lands, seized by the timber agents and sold to the plaintiff, and that the defendants detained the logs and timber from the plaintiff." As there was no doubt but that all the logs had been cut from government lands, and that plaintiff bought it of a timber agent, the jury found a verdict for plaintiff, and judgment was rendered accordingly. This was affirmed in the Supreme Court of the Territory, where the soundness of this instruction was the main question to be decided, as it is here. One of the defenses set up by Wells and his James H. McKenney, Clerk, Sup. Court, U. S. co-defendants, was that this same lumber had been seized and taken out of his possession by timber agents, under order of Oliver A. Patton and V. M. C. Silva, Register and Receiver of DANIEL H. WELLS ET AL., Piffs. in Err., the Land-Office, within whose territory the tim v. JOHN NICKLES. (See S. C., 14 Otto, 444-449.) Timber agents-selling timber-compromise. *1. While there is no Act of Congress expressly authorizing the appointment of timber agents by the Commissioner of the Land-Office, or by the registers and receivers of the local land-offices, the appropriation of money in several Acts of Congress to pay them, is a recognition of the validity of their appointment. 2. The instructions of the Commissioners of the General Land-Office delivered occasionally from 1855 to 1877, directing them to seize and sell timber cut from the public land, also authorized them to compromise with the trespassers on payment of a reasonable compensation for the timber cut and taken away. the 3. A compromise so made by which a trespasser agrees to pay all the costs and expenses of a seizure by one of these agents, and gives bond to pay value of the timber when ascertained in a manner pointed out in the agreement, and does pay the actual expenses, is a valid adjustment of the matter, and binds the United States. 4. On a subsequent seizure of the same property, by government officers, in disregard of this settlement and sale of it to another person, this compromise is evidence of the title of the party who took *Head notes by Mr. Justice MILLER. V. OLIVER A. PATTON, V. M. C. SILVA, J. J. HEFFERMAN and WILLIAM MCKAY, Timber Agents of the United States for the Territory of Utah. It is hereby stipulated by said parties as follows: in consideration of the bond to be executed by said plaintiff as below stated and his stipulation herein, said defendants hereby release the property from seizure mentioned in the complaint filed in this action, and will discontinue the publication of the notice of sale thereof, and will not hereafter meddle with said property or interfere with plaintiff's use thereof for his own benefit; said plaintiff, in considera tion of the above, hereby agrees that he will not | question of the ownership of the property which discontinue this suit without the defendants' they asserted a right to seize, were questions consent, but will prosecute the same with dili- eminently proper to be decided by a court, esgence to final judgment, and will now give bond, pecially a court of the United States. If it were with sufficient surety, to pay such sum as he otherwise, all the property held by the citizens shall be adjudged to pay by final judgment on of this vast country is held at the pleasure of the merits of this action. The plaintiff also anyone bold enough to assert that it is governagrees to advance the money to pay the costs of ment property and that he is a government the seizure mentioned in the complaint, and all agent. the costs connected therewith, including advertising, and if the plaintiff shall not be found liable to pay such costs and charges, so paid by such advance, the money so paid shall be deducted from the amount otherwise awarded, if anything, against him by such final judgment. SUTHERLAND & BATES, MARSHALL & ROYLE & HEMINGRAY. Attys' for Defts'. Rec'd of Daniel H. Wells three hundred and twelve dollars for the expenses of seizure mentioned in the last paragraph of the foregoing stipulation. Salt Lake City, July 10, 1875. MARSHALL & ROYLE & HEMINGRAY, Att'ys for Def'ts." The Oliver A. Patton here sued, and who made this agreement in that suit, is the same man who, as register of the land-office, directed the subsequent seizure of the property, and who sold it himself to Nickles. It is under that sale alone that Nickles asserts a title to the property. It appears that, in addition to paying the expenses of the seizure and costs of that suit, Wells gave the bond required by the stipulation. After this the defendants in that action demurred to Wells' complaint, and their demurrer was sustained and the suit was dismissed. It does not appear that any attempt was made in that action to assess the damages of the defendants or the value of the timber delivered by them to Wells, nor that any suit was brought on Wells' bond, or that it was delivered up to him or canceled. It would seem to be undeniable that if all the rights contested in these two suits about the same property were those of private persons, the transaction above detailed would be a bar to the present suit. Apparently conceding this to be so, as far as we can gather from the opinion of the Supreme Court of the Territory, that court and the district court denied the sufficiency of these facts as a bar, on the ground that the property was the property of the United States, and the parties to the former suit had no authority to make the compromise which is relied on. That the lumber was the property of the United States when first seized by the timber agents, is not denied; and it was, therefore, held by them as agents of the government at the time Wells' suit was commenced. That suit was not an action of replevin, but its object was to obtain an injunction to prevent the officers from selling the property, and for a determination of his right to it. It was an eminently proper suit to be brought, if, as he maintained, those officers were seizing and attempting to sell and deliver as property of the United States that which was lawfully his. We know of no principle of law which would forbid him in a proper suit to bring the men thus seizing his property before a legal tribunal. When there, their authority to act for the government, and the The effort we have made to ascertain and fix the authority of these timber agents by any positive provision of law has been unsuccessful. The Department of the Interior, under the idea of protecting the lands of the government from depredations on its timber, has gradually come to assert the right to seize what is cut and taken away from the public lands wherever it can be traced. In aid of this the registers and receivers of the land-offices have been, by instructions from the Secretary of the Interior, constituted agents of the United States for these purposes, with power to appoint special agents under themselves. If any authority from Congress to do this was necessary, it may be fairly inferred from appropriations made to pay for the services of these special timber agents. But neither in these Acts of Congress, nor in the instructions from the department, are the powers of these special agents well defined. Fortunately, that point is not material to the decision of the question before us, for the sale under which plaintiff below succeeded in obtaining his verdict, was made by the same reg ister of the land-office with whom Wells made the compromise whose validity is disputed. The action of the other agents may, therefore, be disregarded in the consideration of these questions. It would seem, in the absence of any express limitation of his authority, that the gen eral power to deal with lumber or timber of this character by suit at law, or by such seizure as would subject him to an action, must also authorize the agent to do whatever could be properly done in the conduct of such a suit. But these officers were not left without instruction and authority on this point. In a let ter from the Commissioner of the Land Office, dated November 4, 1870, to the register and receiver of public lands at Salt Lake City, an of fice held by Mr. Patton, the following language is used: "You will discharge with energy the duty devolved upon you by the inclosed circular, having due regard, however, to the right of homestead and preemption settlers, and to the circumstances of the community requiring a supply of timber, for mining, manufacturing and other business pursuits. In cases where timber may be cut from the public lands and extenuating circumstances exist, you are authorized to compromise with the parties committing the trespass, on their paying all expenses incurred, and a reasonable stumpage to be fixed by you according to the condition of the mar kets, and not to fall below the minimum rate of $2.50 per M. feet. When objection is made to the rate fixed under this rule, the matter may be submitted to the Judges of the Supreme Court of the Territory, in which case you will be governed by their decision as to the stumpage to be exacted." The circular so inclosed was a general one, to all registers and receivers, of December 24, 1855, by Thomas A. Hendricks, Commissioner of the Land-Office, directing the verdict and grant a new trial; and it is so James H. McKenney, Clerk, Sup. Court, U. S. LORING P. HAWES, Appt., v. them to be vigilant in preventing persons cutting timber on public lands, and to seize such timber when cut, and sell it to the highest bidder. These instructions are repeated without the limitation to $2.50 per thousand feet, in orders from the commissioner of the dates of July 8, 1874, September 8, 1874, and June 21, 1875, the latter of which, after referring to the circular of 1855, and the other letters just mentioned, adds: "When circumstances justify so doing, you may settle with the parties on their paying any expenses incurred, and a reasonable stumpage for the timber. But you are to regard this as a compromise justified by existing Action by shareholder against corporation—colcircumstances, and not as the granting of permission to cut the timber, which is forbidden by law." These instructions contain ample authority for the compromise made with Wells. It was made July 10, 1875, and the latest of the letters of the commissioner, from which we have cited, is dated June 21, 1875. The compromise appears to have been framed in conformity with the language of the letter of November 4, 1870, for Wells agreed to pay and did pay the expenses of seizure and costs of suit, and nothing remained but for the judge who decided the demurrer to fix the amount of the stumpage and give judgment for it against Wells. He had given bond to pay what was so ascertained. The case was settled in precise accordance with the instructions of the commissioner, and we think the settlement bound the United States, whose agent made the compromise. The authority to make this settlement is quite as clear as the authority of the same officer to sell to Nickles; so that his right to sue depends upon the same authority on which Wells had the property delivered to him; on payment of all costs and expenses and giving a bond, with surety, for the damages. The instruction of the district court held this settlement to be of no validity. The Supreme Court held the same view; and the register who made the sale to Nickles evidently disregarded his own compromise and sold the property to Nickles under the same idea. All this, we think, was erroneous. We have been shown a letter of April 5, 1877, from the Secretary of the Interior to the Commissioner of the Land-Office, in which he says "No agent employed by you will be permitted to make any compromise for depredation on the public lands." But whether this order is limited to the agents specially employed to look after such depredations, or be held to include the registers and receivers also, is immaterial in the present case, for this recall of the power to compromise was nearly two years after the one under consideration was made and a considerable sum of money paid under it. All the letters from the department to its officers above referred to, except the one last mentioned, are in this record and are made part of the case on which the Supreme Court of the Territory decided. We are of opinion that the instruction to the jury, which we have given in full, and the whole theory on which the effect of the stipulation of compromise was decided, is erroneous, and the judgment of both the Supreme and Dis trict Courts is reversed, with directions to set aside CONTRA COSTA WATER COMPANY, (See S. C., "Hawes v. Oakland," 14 Gtto, 450-462.) lusive parties. *The appellant, a shareholder in the Contra Costa Water Works Company, brought his bill in equity against that Company and the City of Oakland, in the Circuit Court of the United States for California, on the ground that he was a citizen of New York and the defendants citizens of California, alleging that the Waterworks Corporation was furnishing the City of Oakland water free of charge beyond what the law required it to do, and that, though he had requested them to desist, the directself and other shareholders and the Company. ors continued to do this to the great injury of him The court examines the right of the shareholder to sustain such a suit in the light of the authorities 18 How., 331 (XV., 401], and holds that in such cases English and American, including Dodge v. Woolsey, there must exist as the foundation of the suit: 1. Some action or threatened action of the manration which is beyond the authority conferred by aging Board of Directors or Trustees of the corpotheir charter or other source of organization; or, 2. Such a fraudulent transaction, completed or with some other party or among themselves or with threatened, by the acting managers in connection the other shareholders as will result in serious injury to the corporation or to the interests of the other shareholders; or, them are acting for their own interests in a manner 3. Where the Board of Directors or a majority of destructive of the corporation itself or of the rights of the other shareholders; or, selves are oppressively and illegally pursuing a course, in the name of the corporation, which is in 5. It must also be made to appear: that plaintiff has made an earnest effort to obtain redress at the hands of the directors and shareholders of the corporation. 6. That he was the owner of the stock on which he claims the right to sue at the time of the transac tions of which he complains or that it has since de volved on him by operation of law. 7. That the suit is not a collusive one to confer on a court of the United States jurisdiction in a case of which it would otherwise have no cognizance. [No. 148.] Submitted Dec. 12, 1881. Decided Jan. 16, 1882. Aates for the District of California. PPEAL from the Circuit Court of the Unit The case is stated by the court. Messrs. Charles N. Fox and S. M. Wilson, for appellant. Mr. Henry Vrooman, for appellees: 1. The complainant has not legal capacity to bring this suit. that if any cause of action exists, by reason of It appears by the bill of complaint herein, the matters therein stated, such cause of action is in favor of the defendant, the Contra Costa Water Company, only. titled to institute and maintain a suit in equity, 2. A stockholder of a corporation is not enir. his own name, against the directors of a cor *Head notes by Mr. Justice MILLER. poration and the corporation itself concerning the management of the affairs of the corporation, unless the directors have been guilty of fraud. Dodge v. Woolsey, 18 How., 343–344 (59 U. S., XV., 405, 406). 3. There is no averment in the bill filed herein that the complainant made a demand before the commencement of this suit, upon the directors or trustees of the said Water Company, that they should commence this or any suit, or for the use of the corporate name; or that the directors or trustees of the said Company refused to institute this suit; or that they are fraudulently, collusively or unlawfully allowing the said City to take and use the water of said Water Company without compensation. Now we submit: (a) That the demand referred to in the bill, was not such a demand as is required by the rule laid down in the case herein before cited; and, (b) That the request made by the complainant to the Board of Directors, to desist from their illegal and improper practices aforesaid," was not sufficiently definite to notify them as to what he desired to have done. The general rule is, that the management of the corporate affairs is vested in its Board of Directors, acting under the corporate name, for which management they are clothed with full power. If ignoring the function of the Board of Directors, one of the stockholders may, without the directors' consent and without demand upon them, bring a suit in his individual discretion, so may another stockholder and another; this would lead to: 1. A multiplicity of suits. 2. A conflict of authority in managing the corporate business. 3. The subrogation of the authority of the directors, who represent all the stockholders, to the mere option of a single stockholder. Whereas, the very idea of a Board of Directors for a corporation is to prevent all these things. The authorities are uniform upon this point. Smith v. Hurd, 12 Met., 383; Gardiner v. Pollard, 10 Bosw., 675; Greaves v. Gouge, 16 Abb. Pr. (N. S.), 379; Hersey v. Veazie, 24 Me., 9; Memphis v. Dean, 8 Wall., 73 (75 U. S., XIX., 328). As to the isolated or exceptional cases in which a stockholder may maintain the suit: 1. Clearly, if a stockholder considers himself injured or about to be injured, by the fraudulent management of the directors, and if, thereupon, he make application to the directors for the use of the corporate name whereunder to enforce his rights, and they refuse him, then he is entitled to proceed in his own name. But, as we have before stated, no such demand or refusal is averred in complainant's bill, and therefore he is not clothed with the legal capacity of one under and entitled to the benefit of this exceptional case of a stockholder. 2. It may be said that where the directors of the corporation are themselves the parties complained of, there is no need of making a demand upon them for the use of the corporate name. But even conceding that such a case might exist, it could only exist in one of two cases, to wit: (a) Where the directors themselves are charged with fraud or collusion. (b) Where the directors are charged with acts ultra vires. Now there is no averment in complainant's bill of any fraud or collusion, nor of anything that even points in that direction. Nor is there any averment that the acts of the Board of Di rectors were ultra vires. In the case of Dodge v. Woolsey, 18 How., 339 (59 U. S., XV., 403), the directors were about to pay a tax, which complainant there averred was unconstitutional, both under the Constitution of the State of Ohio, and under the Constitution of the United States, and, therefore, an act ultra vires, if payment was made, and in this case the Supreme Court of the United States held that demand and refusal were necessary averments. That was a much stronger case for the complainant there than is this case for the present complainant, in this, that in that case double unconstitutionality was averred and, therefore, an act twofold ultra vires; whereas, in the case at bar, no questions of constitutionality, even under either State or Federal Constitution is raised; and, therefore, no act ultra vires is pleaded by any averment in the bill. And even if in this case com plainant desires to raise the question of l tra vires against the Board of Directors, be never can raise it except by pleading it. So the complainant is not within any of the possible ex ceptional cases wherein he could claim that he is excused from showing the demand for and refusal of the corporate name. Therefore, under both the general rules and under all the possible exceptional cases, this complainant is forestalled from prosecuting this suit upon the pleadings as they now stand. Mr. Justice Miller delivered the opinion of the court: This is an appeal from the Circuit Court for the District of California from a decree in chancery dismissing the appellant's bill. The plaintiff, who is a citizen of New York, alleges himself to be a stockholder in the Contra Costa Waterworks Company, a California corporation, and he files his bill of complaint on behalf of himself and all other stockholders who may choose to come in and contribute to the costs and expenses of the action. The defendants are the City of Oakland, the Contra Costa Water Works Company, and Anthony Chabot, Henry Pierce, Andrew J. Pope, Charles Holbrook and John W. Coleman, trustees and Directors of said Company. The foundation of the complaint is, that the City of Oakland claims at the hands of the Waterworks Company water, without compensation, for all municipal purposes whatever, including watering the streets, public squares and parks, flushing sewers, and the like, whereas it is only entitled to receive water free of charge in cases of fire or other great necessity; that the Waterworks Company comply with this demand, to the great loss and injury of the Company and to the diminution of the dividends which should come to him and other stockholders, and the decreased value of their stock. The allegation of his attempt to get the directors of the Company to correct this evil will be given in the language of the bill. |