Opinion of the Court.

off the indebtedness of that company, which then amounted to over two thousand dollars, and that Main afterwards, at their instance and request, sold and conveyed all said property in consideration of the sum of $2465, paid by the complainants in the cross-bill, which sum was all the property was worth; and it was further decreed that a deed of conveyance, in the name of the St. Louis and Sandoval Coal and Mining Company, should be made of said property.

As already stated, Ozias Townsend and others appealed from this decree to the Supreme Court of Illinois, where the same was affirmed.

To escape from the conclusive effect of this decree, the complainant in the present bill asserts that his claims for services and for money expended by him for the St. Louis and Sandoval Coal and Mining Company were not in issue in said cases, and that as a creditor he can now assert such claim against the assets of that company now in the possession of the new company.

It may not be said that, in no case or in no circumstances, can a creditor of a company dissolved by legal proceedings assert a claim against its assets in the hands of a new company organized on its ruins, but it is clear that this complainant is in no condition to maintain such a claim in the present instance. Not only did the original bill against Townsend and others allege that the stock held by him and by others to whom he had caused stock to be issued had been fraudulently issued, but the cross-bill directly charged that the credit of ten thousand dollars, for which said stock had been issued on account of said Townsend, was fraudulently voted for pretended labor and money furnished and performed by him, when no such labor had ever been performed by him nor any money furnished or expended by him for such company. These allegations were traversed by answers, denying that the company "fraudulently acknowledged an indebtedness to the said Townsend or issued paid-up stock to him without a sufficient consideration or anybody else."

In the present bill Townsend alleges that by his agreement with the St. Louis and Sandoval Coal and Mining Company

Opinion of the Court.

he was to have a right to be credited on stock with ten thousand dollars for his services, and in his testimony he says that he gave of this paid-up stock $5000 worth to his wife, $4000 worth to George Wharton, and $1000 worth to True N. Blackman. This stock so issued by Townsend to his wife, Elizabeth Townsend, to Wharton and Blackman, was part of the very stock declared by the Circuit Court of Marion County, in its decree sustaining the cross-bill, to have been invalid as issued without consideration.

The manifest purpose and aim of the present bill are to go back of this decree, and to assert his original claim for services against the new company. We are of opinion that the invalidity of his claim for services was substantially established by the decree that the stock issued therefor was invalid, because issued without anything having been paid for it; and we are also of opinion that even if Townsend's original claim for services had not been merged in stock, but had remained as a valid and unsatisfied claim, no ground has been shown upon which the court below could have declared that such claim could be asserted at law or in equity against the Sandoval Coal and Mining Company or its stockholders. Even if the complainant's claim had been a conceded and bona fide claim against the St. Louis and Sandoval Coal and Mining Company, yet, as it had accrued to him, according to his own showing, on January 1, 1878, it could not be successfully asserted in a court of equity against purchasers at a judicial sale made in August, 1878, by a bill filed November 30, 1885. If, as he now is obliged to contend, Townsend did not assert his claim for personal services during the long litigation in the state courts, such claim, if not barred by the statute of limitations, was too stale to receive favor from a court of equity.

The decree of the court below is

Affirmed.

Statement of the Case.

WHITE v. EWING.

CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT.

No. 913. Submitted May 20, 1895. - Decided June 8, 1895.

A Circuit Court of the United States has "jurisdiction, in a general creditor's suit properly pending therein for the collection, administration, and distribution of the assets of an insolvent corporation, to hear and determine an ancillary suit instituted in the same cause by its receiver in accordance with its order, against debtors of such corporation, so far as in said suit, the receiver claims the right to recover from any one debtor a sum not exceeding $2000."

THIS case arose upon a certificate of the Court of Appeals for the Sixth Circuit, based upon the following facts:

The Cardiff Coal and Iron Company, a corporation of Tennessee, becoming insolvent, a creditors' bill was filed in the Circuit Court for the Eastern District of Tennessee by George F. Bosworth, a citizen of Massachusetts, and a judgment creditor of the company, setting forth the insolvency of the company, the wasting of its assets, etc., and praying for a sale of the property, the collection of its choses in action, the appointment of a receiver, and for an injunction. In pursuance of the prayer of this bill the appellee, Ewing, was appointed receiver of the company, ordered to take possession of its assets, and to manage and protect the same for the benefit of the creditors under orders from the court. All creditors were ordered to file their claims.

Subsequently the receiver filed a petition stating that a large proportion of the company's assets consisted of promissory notes, amounting to about $225,000, given for land purchased from the company, upon which liens had been retained to secure their payment. These notes were executed by 130 different persons and were for various amounts, many of them for less than $2000. The receiver petitioned for authority from the court to institute suits for the collection of such notes, stating that, in order to save costs and expense, he had

Statement of the Case.

been advised that it was proper, if it might be done, to bring in all the debtors by bill or petition and join them as defendants in one suit; that he was requested by the creditors to proceed in this manner; and that to sue the debtors separately would require more than one hundred suits with the enormous expense incident thereto.

In compliance with this petition, the court made an order that the receiver be directed to institute suit by proper bill or petition in the pending case against all persons indebted to the defendant company, (the Cardiff Coal and Iron Company,) by note or account, as set forth in his petition.

In pursuance of this order, the receiver filed his bill in the Circuit Court against 130 persons, of whom thirty were alleged to be citizens of Tennessee, and the remainder citizens of other States, all of whom were joined as defendants, and the amounts alleged to be due from them, respectively, were in most cases less than $2000. It was also alleged that special liens were retained in each case in the deed to the purchaser, to secure the deferred payments of the purchase money, and the court was asked to enforce such liens by sale of the lands, for the satisfaction of the balance of the purchase money due separately from each and all said defendants, upon their respective notes.

The resident defendants were personally served with subpoena, and an order of publication made against the non-resident defendants. No exception was taken to the form of the bill by demurrer or otherwise; and the defendants nearly all answered, denying their liability. The case was referred to a master, and on his report decrees were entered against those found to be indebted; such decrees being in a majority of instances for sums less than $2000. The lots were ordered to be sold to pay the amounts so found due. Appeals from these decrees were duly taken to the Circuit Court of Appeals, and perfected by the appellants in this case.

Upon this statement of facts, the Circuit Court of Appeals certified the following question to this court for its determination:

"Had the Circuit Court of the United States in a general

Opinion of the Court.

creditor's suit properly pending therein for the collection, administration, and distribution of the assets of an insolvent corporation, the jurisdiction to hear and determine an ancillary suit instituted in the same cause by its receiver in accordance with its order, against debtors of such corporation, so far as in said suit, the receiver claimed the right to recover from any one debtor a sum not exceeding $2000."

Mr. Heber J. May, Mr. John W. Yoe, Mr. John F. McNutt, and Mr. Tully R. Cornick for appellants.

Mr. Robert Pritchard, Mr. Foster V. Brown, and Mr. Frank Spurlock for appellee.

MR. JUSTICE BROWN, after stating the case, delivered the opinion of the court.

While the receiver prayed in his petition to bring in all the debtors by bill or petition in one suit, alleging that it was so requested by creditors, in order to avoid the expense of a separate suit against each; and the bill was brought in that form against 130 defendants, who were charged to be severally indebted upon notes given for lots of land purchased from the company, no exception was taken to the form of the bill by demurrer or otherwise, but the defendants answered, denying their liability. The question certified does not, as we understand it, demand the opinion of this court as to whether a single bill against all these defendants would lie for the amounts severally due by them (upon which point we do not feel called upon to express an opinion); but whether so far as in said suit the receiver claimed the right to recover from any one debtor a sum not exceeding $2000, the court had jurisdiction to render a judgment against them.

This question must be answered in the affirmative. As was observed by this court in Porter v. Sabin, 149 U. S. 473, 479: "When a court exercising a jurisdiction in equity appoints a receiver to hold the property of a corporation that court assumes the administration of the estate; the possession of the