coupons thereof payable to bearer where such bonds are held by citizens of other States. 20 A case where the instrument is made by a natural person and payable to bearer, 21 case where the instrument is made by a corporation but is payable to order, 22 is not within this exception. or a An exception to this restrictive provision is made by other sections of the statutes.23 A suit may be brought by the United States or by a duly authorized officer thereof, or any suit necessary to wind up the affairs of a National bank, upon any promissory note or other chose in action, without reference to the citizenship of the payee or original holder thereof.24 The restrictive clause under consideration applies to suits upon derivative claims-to cases where an indorsee or subsequent holder attempts to recover upon the right of action first vested in the payee or original holder. It does not apply to suits upon new rights of action, although, in a measure, connected with an assigned chose in action. The indorsee of a note or bill may sue his immediate indorser in a Circuit Court of the United States if their citizenship be diverse, and the necessary sum be in controversy, without reference to the question whether the payee or the then holder could maintain a suit on the note or bill against the maker. He sues upon an original, not a derivative, contract.25 161, 4 Cent. Law J. 125, 15 Alb. Law J. 311. 20 Rollins v. Chaffee County, 34 Fed. 91; Barnum v. Custer County, 34 Fed. 91. Wilson v. Knox County, 43 Fed. 481; Laird v. Indemnity Mut. Mar. Cloud v. Sumas, 52 Fed. 177; 21 Jones v. Shapera, 13 U. S. App. | mouth, 76 Fed. 881; 481, 6 C. C. A. 423, 57 Fed. 457; Steel v. Rathbun, 42 Fed. 390. 22 New Orleans v. Benjamin, 153 U. S. 411, 14 Sup. Ct. 905, 38 L. 764, | cl. -see the comments on this case in Quinlan v. New Orleans, 92 Fed. 695, 696, where this distinction is clearly made; Thomson v. Elton, 100 Fed. 145. 23 Ante § 18; Rev. St. U. S., § 629, cl. 3; § 563, 4. 24 Ante § 111; United States v. Greene, 26 Fed. Cas. 33, 4 Mason 427. 25"In such a case, the indorser Newgass v. New Orleans, 33 Fed. [indorsee] does not claim through 196; an assignment. It is a new conRollins v. Chaffee County, 34 tract entered into by the indorser Fed. 91; and indorsee, upon which the suit The acceptance of a bill of exchange creates a new contract between the payee (or other holder at the time of acceptance) and the acceptor, and jurisdiction of a suit in a Federal Court upon such new contract against the acceptor is not affected by the citizenship of the drawer of the bill.26 Where the holder of a note or bill sues, not his immediate indorser, but a remote indorser, he sues upon a derivative claim, in the right of the person to whom the defendant indorsed the note or bill, and jurisdiction of his suit is restricted by the citizenship of him in whose right the plaintiff sues. In other words, the citizenship of the person to whom the defendant indorsed the note or bill must be diverse from that of the defendant.27 The removability of a suit brought by a party to a contract is brought; and if the indorsee is a citizen of a different State, he may bring an action against the indorser in the Circuit Court." Young v. Bryan, 6 Wheat. 146, 5 L. 228. The law was well stated-better stated than by the Court-in the brief of the defendant in error in that case by Mr. Sergeant. After quoting the restrictive clause of the judiciary act, ante § 6, note 2, he proceeded: Campbell v. Jordan, 4 Fed. Cas. 1173, Hempst. 534; Codwise v. Gleason, 5 Fed. Cas. 1164, Brunner Col. Cas. 33, 3 Day 3; Gaylord v. Johnson, 10 Fed. Cas. 124, 5 McLean 448. One who indorses a note or bill before its delivery to the payee, while sometimes called an indorser, occupies prima facie the position of a surety for the maker; his jurisdiction status is that of a comaker of the note. Skinner v. Barr, 77 Fed. 816. "These words necessarily import a recovery by an assignee, claiming through the medium of an assignment, of the same contents which might have been recovered by the assignor, if he had not assigned. They apply only to a derivative claim." This doctrine is followed in later ing of a bill,-the payee or other cases. Evans v. Gee, 11 Pet. 80, 9 L. 639; Keary v. Farmers' & M. Bank, 16 Pet. 89, 10 L. 897; Coffee v. Planters' Bank, 13 How. 183, 14 L. 105; Superior v. Ripley, 138 U. S. 93, 11 Sup. Ct. 288, 34 L. 914; He has no right to recover from the payee; on the contrary the payee may recover the amount of the note or bill from him. The term indorser is used in this section in the sense of an indorser after the execution of a note or the draw subsequent holder who indorses it. 25 Superior v. Ripley, 138 U. S. 93, 11 Sup. Ct. 288, 34 L. 914. 27 Mollan v. Torrance, 9 Wheat. 537, 6 L. 154; Coffee v. Planters' Bank, 13 How. 183, 14 L. 105; Campbell v. Jordan, 4 Fed. Cas. 1173, Hempst. 534; against an assignee of the other party to such contract, where diverse citizenship exists between the parties to the suit, is not affected by both parties to the contract being citizens of the same State; and in such a case, where the suit is one in equity and is removed to a Circuit Court, the defendant may file a cross-bill after removal for the specific performance of the contract, although such cross-bill would not be, as an original bill, within the jurisdiction of the Federal Court, for that both parties to the contract are citizens of the same State.28 Fry v. Rousseau, 9 Fed. Cas. 971, 3 McLean 106,-but in this last case the statement of law cited is not necessary to the decision. The citizenship of intermediate holders, if any, between the defendant's indorsee and the plaintiff is not material. Note 1 to this section. 28 Brooks v. Laurent, 39 C. C. A. 201, 98 Fed. 647. Compare Adams v. Shirk, —C. C. A.—, 105 Fed. 659. CHAPTER IX. SEPARABLE CONTROVERSY. § 138. Must a suit be within the original jurisdiction of a United States Circuit Court to be removable thereto from a State court under clause 3 of § 2 of the act of 1875 as amended by the act of 1887-8, known as the separable controversy clause?—The meaning of clause 3 of section 2 of the present judiciary act, which is held to authorize the removal of a cause from a State court to a United States Circuit Court upon the ground that it contains a separable controversy, is not clearly expressed. Its meaning is yet, in some respects, after years of litigation and many decisions construing such clause, obscure and uncertain.1 The wording of this clause of the act of 1887-8 seems to the author to make only such suits removable from a State court thereunder as are within the original jurisdiction of the United States Circuit Court under the preceding section.2 § 138. 1 That clause reads thus: This third clause begins with "And when in any suit mentioned the expression "And when in any in this section there shall be a controversy which is wholly between citizens of different States, and which can be fully determined as between them, then either one or more of the defendants actually interested in such controversy may remove said suit into the Circuit Court of the United States for the proper District." Ante §7, clause 3; 25 St. L. 433, 434-5; 1 Supp. Rev. St. U. S. (2 Ed.) 611, 212. The corresponding clause in the act of 1875 is ante §7, note 7, clause 2. 2 Ante §6. suit mentioned in this section," that is, already mentioned in the preceding clauses of the section. It is only to a suit so mentioned that the third clause, by its terms, applies. Now, the only suits so mentioned are suits described in the preceding section as within the concurrent jurisdiction of the State courts and the Circuit Courts of the United States. Ante §§ 63, 67. The meaning of clause 3 is thus stated by Judge Shiras of Iowa (my italics): "(3) Suits of a civil nature, at A contrary practice existed under the language of the act of 1875.3 There are several Circuit Court decisions upholding removals under the separable controversy clause of the present act where the citizenship of the parties was such that the Circuit Courts could not take original jurisdiction of the suits. The Courts in these decisions, I respectfully suggest, lost sight of the radical difference between the wording of the removal section of the act of 18755 and that of the corresponding section of the act of 1887-8.6 While the question has not been directly adjudicated by the Supreme Court, that Court has used language wholly inconsistent with the theory that a suit is removable from a State court to a Circuit Court of the United States under clause 3 of § 2 of the act of 1875 as amended by the act of 1887-8, if the citizenship of the parties is such that original jurisdiction of the suit could not be taken by such United States Circuit Court under amended § 1.7 But in another law or in equity, coming within the | P. Ry. Co., 72 Fed. 637; Hukill v. Maysville & B. S. R. Co., 72 Fed. 745; Lake St. El. R. Co. v. Farmers' Loan & T. Co., 72 Fed. 804; Fergason v. Chicago, M. & St. P. R. Co., 63 Fed. 177; 8 Ante § 7, note 7. Suits were removable thereunder which were not within the original jurisdiction of a United States Circuit Court. Ante § 64. 4 Vinal v. Continental Const. & 5 Ante § 7, note 7. The section of the present act authorizing removals has a general clause restricting the right of removal thereunder to cases in which original jurisdiction is given to the United States Circuit Court by the preceding section,-see the discussion of this subject ante § 63; whereas the removal section of the Batey v. Nashville, C. & St. L. act of 1875 contained no such reR. Co., 95 Fed. 368; striction, ante § 7, note 7, and dis 7 Ex parte Pennsylvania Co., 137 Hartshorn v. Atchison, T. & S. cussion § 64. F. R. Co., 77 Fed. 9; Sugar Creek, P. B. & P. C. R. Co. U. S. 451, 11 Sup. Ct. 141, 34 L. 738; v. McKell, 75 Fed. 34; Chicago, R. I. & P. R. Co. v. Mar Warax v. Cincinnati, N. O. & T. |