year, remaining unpaid, is that shown to have | been extended and levied upon the 'right of way, of the Atlantic & Pacific Railroad Company, which was and is assessed at the lump sum of $327,103, upon the assessment roll for said year, together with the further sums placed in said assessment roll in the column headed 'Value of cattle,' opposite the words contained in the column in said assessment roll headed 'Name of property owners,' save and except as hereinafter stated. "The names and sums referred to are as follows: $1,888 00 1,383 00 Blue Water, 9th San Jose, 2nd. -"All of which is shown by the said assessment and levy of taxes upon said assessment roll, as will fully appear by reference to said Receiver's Exhibits No. 1 and No. 2, and the indorsements thereon. [550] *"That prior to the first day of January, 1894, the Atlantic & Pacific Railroad Company paid each and every item of taxes assessed and levied against it or its property in said Valencia county, territory of New of way was assessed, and the taxes levied against the assessed value of its 'right of way,' and that levied against the figures set opposite the names of the stations as hereinabove set forth and described." The right of way, therefore, was assessed in 1892, and whatever taxes were due on it or any part of it were left delinquent. As to the other years the record is not much less definite. It appears that the right of way was assessed, and the taxes levied against it were not paid. In all the pleas there is a careful allegation of payment of the taxes which were conceded to be valid " embraced within said right of way where *"Also the cross ties, rails, fish plates, bolts,[551] Station houses, depots, switches, water tanks and all other im- water tanks and all other imStation houses, depots, switches, provements at La Guna station.. water tanks and all other imStation houses, depots, switches, provements at Cubero station... water tanks and all other imStation houses, depots, switches, provements at McCarty's station water tanks and all other imStation houses, depots, switches, provements at Grant's station... water tanks and all other im provements at Blue Water station 540 600 2,100 600 1,300 3,100 1,300 $11,340" The assessments were not, as contended by and as careful a one that the company re-appellee, of personal property. They were fused "to pay the balance of the taxes be- clearly of real estate, and because the imcause of the fact that the assessment as provements were designated by name and made by the assessor was an assessment of some of them given a separate valuation the right of way and station grounds of the did not invalidate their assessment as real Atlantic & Pacific Railroad, which were and estate. It was mere description which did are exempt under the act of Congress cre- not change the essential or legal character of ating said railroad company." It is manithe superstructures. fest that the right of way was assessed and the taxes were delinquent. In what manner were the additional assessments made? It is shown in the exhibit to the intervening petition. We select the assessment for 1892. The assessments for the other years are the same, the amounts only being different to a small extent. It follows from these views that The judgment of the Supreme Court of the Territory must be reversed, and the cause remanded for further proceedings in accordance with this opinion; and it is so ordered. LOUISVILLE, NEW ALBANY, & CHICA-[552j v. LOUISVILLE TRUST COMPANY. LOUISVILLE, NEW ALBANY, & CHICA- v. "The cross ties, rails, fish plates, bolts, spikes, (See S. C. Reporter's ed. 552-577.) poration of another state-corporation a N WRITS OF CERTIORARI to the Unitdiction of suit-suit to cancel a guaranty, the Sixth Circuit to review a judgment of etc., can only be brought in court of equity that court reversing the decree of the Cir-power of railroad corporation to guar-cuit Court of the United States for the Disantee bonds of another corporation when trict of Kentucky, entered for the plaintiff guaranty not ultra vires-rights of bona against all the defendants in a suit in equity fide holders-when validity assumed-ob- brought by the Louisville, New Albany, & ligation to inspect records-jurisdiction | Chicago Railway Company against the Louisdepending upon citizenship. 1. A corporation of one state may be made a corporation of another state by the legislature of that state in regard to property and acts within its territorial jurisdiction. 2. A corporation created by a state remains a citizen of that state for the purposes of the Jurisdiction of the Federal courts, although also created a corporation of another state. 8. Jurisdiction of a suit, once acquired by a court of the United States by reason of the requisite citizenship, is not lost by a change in the citizenship of either party pending the sult. 4. A suit to cancel a guaranty of negotiable bonds which might otherwise pass into the hands of bona fide purchasers, and to restrain suits upon the guaranty, because of facts not appearing upon its face, can only be brought In a court of equity. 5. A railroad corporation, unless authorized by its act of incorporation or another statute, has no power to guarantee the bonds of another corporation. 6. The guaranty by one railroad company of the bonds of another is not ultra vires in the sense of being outside of its corporate powers when expressly authorized by a statute of the state of its creation; the prerequisite prescribed by the statute, that it should be made upon the petition of a majority of the stockholders, is only a regulation of the mode and agencies by which the corporation should exercise the power granted to it. 7. A guaranty of bonds by a corporation, which could be lawfully made only by a pet!tion of the majority of its stockholders, which was not obtained, is enforceable by bona fide holders of the bonds, but invalid as to other holders. was ville Trust Company et al., for the cancelation of a contract and of a guaranty indorsed upon bonds issued by the Richmond, Nicholasville, Irvine, & Beattyville Railway Company and held by other defendants, and for an injunction against suits thereon. A supplemental bill filed against the Louisville Banking Company and others holding the guaranteed bonds. The Circuit Court of Appeals further ordered the suit to be dismissed as to the Louisville Trust Company and the Louisville Banking Company except as to forty-five bonds held by the latter company; and as to these bonds ordered an injunction against suits on the guaranty, etc. Decree of Circuit Court of Appeals in the first case affirmed and case remanded to the United States Circuit Court, with directions to dismiss the suit as against the Louisville Trust Company; and in the second case decrees of both lower courts reversed and case remanded to the United States Circuit Court, with directions to enter a decree in conformity with the opinion of this court. See same case below, 69 Fed. Rep. 431, and 57 Fed. Rep. 42, and 43 U. S. App. 550, 75 Fed. Rep. 433, 23 C. C. A. 378. Statement by Mr. Justice Gray: This was a bill in equity, filed April 9, 1890, in the circuit court of the United States for the district of Kentucky, by the Louisville, New Albany, & Chicago Railway Company (hereafter called the New Albany Company), described as "a corporation duly organized and existing under the laws of the 8. One who takes from a railroad or business state of Indiana," against the Ohio Valley corporation, in good faith and without actual Improvement & Contract Company (hereaftnotice of any inherent defect, a negotiable er called the construction company), the obligation issued by order of the board of Richmond, Nicholasville, Irvine, and Beattydirectors, signed by the president and secre-ville Railway Company (hereafter called the tary in the name and under the seal of the Beattyville Company), and the Louisville[553] corporation, and disclosing upon its face no Trust Company, all corporations of the state want of authority. has the right to assume Its validity if the corporation could, by any of New York and of Illinois, for the cancelaof Kentucky, and other citizens of Kentucky, both, have authorized the execution and issue tion of a contract between the New Albany Company and the construction company, and of a guaranty indorsed by the New Albany Company, in accordance with that contract, upon bonas issued by the Beattyville Company and held by the other defendants, and for an injunction against suits thereon. The Louisville Banking Company, a corporation of Kentucky, and other bondholders were afterwards made defendants by a supplemental action of its officers or stockholders or of of the obligation. Records of a railroad corporation are private records which a purchaser of bonds is not obliged to inspect to see whether a guaranty thereon was authorized by a majority of the stockholders. 10. The rights and liabilities of a state corporation, as a corporation of other states than that which created it, cannot be adjudicated in a suit in a Federal court in which the jurisdiction depends upon its citizenship in that state, and would be ousted by citizenship in the other states. [Nos. 29, 30.] bill. The bill alleged that the guaranty was fraudulently placed on the bonds of the Beattyville Company by a minority of the plaintiff's directors, who, as individuals, had secured the option to buy the bonds at a low was void, for want of the presence of a quo Argued May 4, 5, 1898. Decided May 15, price; and also averred that the guaranty 1899. rum of the directors at the meeting which directed it to be executed, as well as for want of a previous petition in writing by a majority of the stockholders, pursuant to a statute of Indiana. | Chicago Railway Company, a corporation organized under the laws of the state of Indiana, is hereby constituted a corporation, with power to sue and be sued, contract and be contracted with, to have and use a common seal, with the power incident to corporations, and authority to operate a railroad. Pleas to the jurisdiction, asserting that the plaintiff was a corporation and a citizen of Kentucky, as well as demurrers to the bill for want of equity, were overruled by the court. 69 Fed. Rep. 431, 432, 57 Fed. Rep. 42. The case was afterwards heard upon pleadings and proofs, and, so far as is material to be stated, appeared to be as follows: The New Albany Company, by articles of incorporation, filed with the secretary of state of Indiana in January, 1873, reciting its purchase at a judicial sale at New Albany of the railroad and franchise, and all the property, real and personal, of another railroad company whose line of railroad ran from New Albany to Michigan City in the state of Indiana, and expressed to be made "for the purpose of carrying out the design of the said purchase, and forming a corporation of Indiana," became a corporation, under the statute of Indiana of March 3, 1865, which contained these provisions: "The said corporation shall have capacity to hold, enjoy, and exercise, within other states, the aforesaid faculties, powers, rights, franchises, and immunities, and such others 554]as may be conferred upon it by any law of this state, or of any other state in which any portion of its railroad may be situate, or in which it may transact any part of its business; and to hold meetings of stockholders and of its board of directors, and to do all corporate acts and things, without this state, as validly and to the same extent as it may do the same within the state, on the line of such road." Indiana Stat. 1865, chap. 20, § 5, p. 68; Rev. Stat. § 3949. "Any railroad company incorporated under the provisions of this act shall have the power and authority to acquire, by purchase or contract, the road, roadbed, real and personal property, rights and franchises, of any other railroad corporation or corporations which may cross or intersect the line of such railroad company, or any part of the same or the use and enjoyment thereof, in whole or in part; and may also purchase or contract for the use and enjoyment, in whole or in part, of any railroad or railroads ly ing within adjoining states; and may assume such of the debts and liabilities of such corporations as may be deemed proper." "Any railroad company incorporated under the provisions of this act shall also have power to consolidate with other railroad corporations in the continuous line, either within or without this state, upon such terms as may be agreed upon by the corporations owning the same." Indiana Stat. 1865, chap. 20, § 7, p. 68; Rev. Stat. § 3951. On April 8, 1880, the legislature of Kentucky passed a statute, entitled "An Act to Incorporate the New Albany & Chicago Railway Company," which took effect upon its passage, and the first two sections of which were as follows: "Sec. 1. The Louisville, New Albany, & "Sec. 2. The Louisville, New Albany, & Chicago Railway Company is hereby authorized to purchase or lease, for depot purposes in the city of Louisville or county of Jefferson, such real estate as may be deemed by it[555] to be necessary for passenger and freight depots and transfer, machine shops, and for all switches or turnouts necessary to reach the same; and is also authorized to connect with any railroad or bridge now operated or used, or which may be hereafter operated or used, in said county of Jefferson, and may build any such connecting lines, or lease or operate the same; and for all said purposes shall have the right to condemn all property required for the carrying out of the objects herein named; and may bond the same, and secure the payment of any such bonds by a mortgage of its property, rights, and franchises." The third section of that statute directed how proceedings for the condemnation of such real estate should be conducted in the courts of the state of Kentucky. Kentucky Stat. sess. 1879, chap. 858, p. 233. On May 5, 1881, the New Albany Company (describing itself as "a corporation existing under the laws of the state of Indiana," and as owning and operating a line of railroad from New Albany to Michigan City in the same state), and the Chicago & Indianapolis Air Line Railway Company (describing itself as "a consolidated corporation organized and existing under the laws of the states of Indiana and Illinois," and as having in proc ess of construction a line of railway extending from Indianapolis in Indiana to a connection with a railroad at or near Glenwood in Illinois so as to secure a connection with Chicago in that state), consolidated their stock and property, under the laws of Indiana and of Illinois, "so as to create and form a consolidated corporation, to be called and known as the Louisville, New Albany, & Chicago Railway Company," by articles of in accordance with the statutes of Indiana, consolidation, the third of which provided, that "the said consolidated corporation hereby created shall be vested with all the rights, privileges, immunities, and franchises which usually pertain to railroad corporations under the laws of the respective states of Illinois and Indiana, wherein the lines of its railroad are situate, and shall also be vested with all and singular the rights, powers, privileges, immunities, capacities, and franchises which before the execution of these[556] articles were lawfully possessed or exercised by either of the parties hereto;" and the ninth of which provided that "the principal place of business and the general office of the consolidated corporation shall be established in the city of Louisville, Kentucky." On April 7, 1882, the legislature of Kentucky, by a statute entitled "An Act to the "Sec. 1. The board of directors of any railway company organized under and pursuant to the laws of the state of Indiana, whose line of railway extends across state in either direction, may, upon the petition of the holders of a majority of the stock of such railway company, direct the execution by such railway company of an indorsement guaranteeing the payment of the principal and interest of the bonds of any railway company organized under or pursuant to the laws of any adjoining state, the construction of whose line or lines of railway would be beneficial to the business or traffic of the railway so indorsing or guaranteeing such bonds. Amend an Act Entitled 'An Act to Incorpo- | Laws of Any Adjoining State," the material rate the Louisville, New Albany, & Chicago provisions of which were as follows: Railway,' approved April 8, 1880," enacted that "the Louisville, New Albany, & Chicago Railway Company is hereby authorized and empowered to indorse or guarantee the principal and interest of the bonds of any railway company now constructed, or to be hereafter constructed, within the limits of the state of Kentucky; and may consolidate its rights, franchises, and privileges with any railway company authorized to construct a railroad from the city of Louisville to any point on the Virginia line; such indorsement, guaranty, or consolidation to be made upon such terms and conditions as may be agreed upon between said companies; or it may lease and operate any railway chartered under the laws of the state of Kentucky: Provided, it shall not lease or consolidate with any two lines of railway parallel to each other." Kentucky Stat. sess. 1881, chap. 870, p. 251. "Sec. 2. The petition of the stockholders, specified in the preceding section of this act, shall state the facts relied on to show the benefits accruing to the company indorsing or guaranteeing the bonds above mentioned. The New Albany Company was not shown *"Sec. 3. No railway company shall, under[558] to have formally accepted the statutes of the provisions of this act, indorse or guarKentucky of 1880 and 1882, or to have ever antee the bonds of any such railway comorganized as a corporation under those stat-pany or companies, as is above mentioned, utes. But the defendants, as evidence that it had accepted a charter of incorporation from the state of Kentucky, relied on the following documents: 1st. Two deeds to it of lands in Jefferson county, made and recorded in 1881, in which it was described as "of the city of Louisville, Kentucky." 2d. Two mortgages executed by it to trustees in 1884 and 1886, including its railway in Indiana and in Jefferson county, in each of which it was described as "a corporation duly created and existing under the laws of Indiana and Kentucky." 3d. A lease to it from the Louisville South1557]ern Railway Company, in 1888 (more fully stated below), in which it was similarly described. to an amount exceeding one half of the par value of the stock of the railway company so indorsing or guaranteeing as authorized under this act." Indiana Stat. 1883, chap. 127, p. 182; Rev. Stat. §§ 3951a-3951c. On December 10, 1888, the New Albany Company took a lease, in which it was described as "a corporation organized and existing under the laws of the state of Indiana and of the state of Kentucky," from the Louisville Southern Railroad Company, a corporation of Kentucky, of the railroad of the latter, running from Louisville to Burgin through sundry other places in Kentucky, and connecting at Versailles in that state with a railroad then being constructed by the Beattyville Company to Beattyville, and which would, if completed, extend the connections of the New Albany Company a considerable distance towards the Virginia line. The Beattyville Company had, on October 11, 1888, made a contract with the Ohio Val 4th. A petition (the date of which did not appear in the transcript) that an action brought against it in a court of the state of Indiana might be removed into the cir-ley Improvement and Contract Company, by cuit court of the United States, upon the ground that it was a corporation of Kentucky. 5th. Proceedings in 1887, in a court of Jefferson county, for the condemnation of lands in that county upon a petition in which "the Louisville, New Albany, & Chicago Railway Company states that it is a corporation, and that it is duly empowered by its charter by an act of the general assembly of the commonwealth of Kentucky to purchase, lease, or condemn in said state such real estate as may be necessary for railway, switches, side tracks, depots, yards, and other railway purposes, and to construct and operate a railroad in said state." On March 8, 1883, the legislature of Indiana passed a statute, entitled "An Act to Authorize Railroad Companies Organized under the Laws of the State of Indiana to Indorse and Guarantee the Bonds of Any Railroad Company Organized under the which that company agreed to construct and equip its line of railroad; and, in consideration thereof, the Beattyville Company agreed to execute and issue to the construction company its first-mortgage bonds for $25,000 a mile, dated July 1, 1889, and pay. able in thirty years, with interest at the annual rate of 6 per cent; and to transfer to that company the subscriptions received from municipalities, and to issue to that company all its capital stock, except what would have to be issued on account of such subscriptions. On October 8, 1889, the board of directors of the New Albany Company, as appeared by its records, passed a resolution ordering the president and secretary to execute, under the seal of the company, a contract with the construction company, which contract described that company as a corporation of the state of Kentucky, and the New Albany Company as "a corporation organized and existing un der the laws of the states of Indiana and "Fourth. The said New Albany Company [559]agrees to and with the said construction company that it will, from time to time, as the said first-mortgage bonds are earned by and delivered to the said construction company pursuant to the terms of their said construction contract, guarantee the payment by the said Beattyville Company of the principal and interest of the said bonds in manner and form following, that is to say, by indorsing upon each of said bonds a contract of guaranty as follows: "For value received, the Louisville, New Albany, & Chicago Railway Company hereby guarantees to the holder of the within bond the payment, by the obligor thereon, of the principal and interest thereof in accordance with the tenor thereof. "In witness whereof the said railway company has caused its corporate name to be signed hereto by its president and its seal to be attached by its secretary.'" "Sixth. In consideration of the premises, the said construction company agrees to transfer and deliver to the said New Albany Company three fourths of the entire capital stock of the said Beattyville Company, the said delivery to proceed pari passu with the guaranteeing of the said bonds by the said New Albany Company: $3,000 at par of the said stock being delivered for each $4,000 of bonds guaranteed." This contract was dated October 9, 1889; was signed in the name of each company by its president and secretary and under its corporate seal; and a copy of it was spread upon the records of the board of directors of the New Albany Company. The charges of fraud against the directors who took part in that meeting were disproved; and the evidence failed to establish that the meeting was not in every respect a lawful one. company, and the guaranty placed on the bonds of the Beattyville Company, as having been made without legal authority or the approval of the stockholders, and to empower the board of directors to take all proceedings necessary or proper to cancel such contract and guaranty, and to relieve the company from any obligation or liability by reason thereof. Many of the bonds so guaranteed and put on the market, including one hundred and twenty-five bonds purchased by the Louisville Trust Company, and ten bonds purchased by the Louisville Banking Company, were taken from the construction company by the purchasers in good faith, and without notice or knowledge that there had been no petition of a majority of the stockholders for the execution of the guaranty; and fortyfive of the bonds were purchased from the construction company by the Louisville Banking Company after the meeting in March, 1890, and with notice that the majority of the stockholders had not petitioned for, but had disapproved, the guaranty.* The Beattyville Company and the construction company went on with the work of constructing the Beattyville railroad until the summer of 1890, when they both became insolvent, and their property passed into the hands of receivers. The plaintiff, in its bill, tendered back the stock which it had received, and the stock was deposited in the office of the clerk of the court. The circuit court entered a decree for the plaintiff against all the defendants. 09[561] Fed. Rep. 431. The Louisville Trust Corapany and the Louisville Banking Company and other bondholders appealed to the circuit court of appeals, which reversed the decree of the circuit court, and ordered the bill to be dismissed as to the Louisville Trust Company and the Louisville Banking Company, except as to the forty-five bonds held by the latter company; and, as to these bonds, ordered an injunction against suits on the guaranty against the plaintiff as a corporation of Indiana and Illinois, and that there be stamped on each of these forty-five bonds, under its guaranty, these words: "This guaranty is binding only on the Louisville, New Albany, & Chicago Railway Com But no petition of a majority of the stockholders for the execution of the guaranty was presented, as required by the statute of Indiana of 1883, above cited. Nor was there any evidence that the stockholders ever authorized or ratified the contract between the New Albany Company and the construction company, or the guaranty executed in ac-pany, a corporation of Kentucky. It is not cordance therewith. Pursuant to that contract, and before [560]March 12, 1890, the stock of the Beattyville Company was delivered to the New Albany Company; a guaranty, in the terms specified in the fourth article of that contract, and bearing the signature of the New Albany Company by its president and secretary and its corporate seal, was placed on 1185 bonds for $1,000 each of the Beattyville Company; and the bonds thus guaranteed were put on the market by the construction company. On March 12, 1890, the annual meeting of the stockholders of the New Albany Company was held, a new board of directors was elected, and the meeting was adjourned to March 22, 1890, when it was voted by a majority of the stockholders to reject and disapprove the contract with the construction binding on the Louisville, New Albany, & Chicago Railway Company, a corporation of Indiana and Illinois.' 43 U. S. App. 550. The plaintiff applied for and obtained these writs of certiorari. 164 U. S. 707, mem. Messrs. E. C. Field, G. W. Kretzinger, and James S. Pirtle for petitioner: The appellee, created by the consolidation of Illinois and Indiana companies, could not, by general contract, bind itself, if such contract was not authorized by the state of one of its constituents. Shields v. Ohio, 95 U. S. 319, 24 L. ed. 357; Atlantic & G. R. Co. v. Georgia, 98 U. S. 359, 25 L. ed. 185; Clearwater v. Meredith, 1 Wall. 25, 17 L. ed. 604. The general and implied corporate powers of appellee, as a consolidated corporation, |