were limited by the articles of consolidation, and the laws of its creation, to the ownership and operation of railroads wholly within the states of Indiana and Illinois. Killian v. Ashley, 24 Ark. 511, 91 Am. Dec. 519; Cooper v. Dedrick, 22 Barb. 516; Partridge v. Davis, 20 Vt. 499; Webster v. Cobb, 17 Ill. 466; Jackson v. Foote, 12 Fed. Rep. 37; Studabaker v. Cody, 54 Ind. 586; Davis v. Wells, Fargo, & Co. 104 U. S. 169, 26 L. ed. 690; Toppan v. Cleveland C. & C. R. Co. 1 Flipp. 74. The power of the board of directors to make the guaranty was so exercised as to bind the appellee in favor of bona fide Thomas v. West Jersey R. Co. 101 U. S. 82, 25 L. ed. 952; Oregon R. & Nav. Co. v. Oregonian R. Co. 130 U. S. 1, 32 L. ed. 837; Pearce v. Madison & I. R. Co. 21 How. 441, 16 L. ed. 184; Ernest v. Nicholls, 6 H. L. Cas. 418; Balfour v. Ernest, 5 C. B. N. S. 600; Ridley v. Plymouth 8. & D. Grinding & Baking Co. 2 Exch. 711; Bedford R. Co. v. Bow-holders. ser, 48 Pa. 29; People, Peabody, v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497; Davis v. Old Colony R. Co. 131 Mass. 258, 41 Am. Rep. 221. The appellee had no general power to lend its credit or guarantee the debts of any other enterprise or company. Colman v. Eastern Counties R. Co. 10 Beav. 1; East Anglian R. Co. v. Eastern Counties R. Co. 11 C. B. 775; Pearce v. Madi- | son & I. R. Co. 21 How. 443, 16 L. ed. 184. It requires special legislative power to authorize the purchase of the stock or to guarantee the debt of any other company or enterprise. People, Peabody, v. Chicago Gas Trust Co. 130 Ill. 268, 8 L. R. A. 497; Sumner v. Marcy, 3 Woodb. & M. 105; Mechanics & Workingmen's Mut. Sav. Bank & Bldg. Asso. v. Meriden Agency Co. 24 Conn. 159; Starin v. Genoa, 23 N. Y. 439. Those dealing with a special agent must take notice that his authority, as such special agent, is not general but limited, and no presumption will be substituted for actually absent special authority. Pratt v. Short, 79 N. Y. 437, 35 Am. Rep. 531; Valley R. Co. v. Lake Erie Iron Co. 46 Ohio St. 44; Hackensack Water Co. v. DeKay, 36 N. J. Eq. 548; Martin v. Great Falls Mfg. Co. 9 N. H. 51; LeMoine v. Bank of North America, 3 Dill. 44; Spence v. Mobile & M. R. Co. 79 Ala. 585; Ernest v. Nicholls, 6 H. L. Cas. 418; Chambers v. Manchester & M. R. Co. 5 Best & S. 588. Messrs. Swagar Sherley, St. John Boyle, and Barnett, Miller, & Barnett for respondents: The directors of the "Monon," under the powers granted by the Kentucky act of 1882, had the right to make the guaranty. Hoyt v. Thompson, 19 N. Y. 216; Louisville, E. & St. L. R. Co. v. McVay, 98 Ind. 393, 49 Am. Rep. 770; Thompson v. Nachez Water & Sewer Co. 68 Miss. 423; Hodder v. Kentucky & G. E. R. Co. 7 Fed. Rep. 796; Nashua & L. R. Co. v. Boston & L. R. Co. 27 Fed. Rep. 825, 136 U. S. 356, 34 L. ed. 363; Wood v. Whelen, 93 Ill. 153; Hendee v. Pinkerton, 14 Allen, 387; Beveridge v. New York Elev. R. Co. 112 N. Y. 1, 2 L. R. A. 648; Flagg v. Manhattan R. Co. 10 Fed. Rep. 431; McCullough v. Moss, 5 Denio, 575; Moses v. Tompkins, 84 Ala. 613; Dana v. Bank of United States, 5 Watts & S. 223; Hutchinson v. Green, 91 Mo. 367; Gashwiler v. Willis, 33 Cal. 11, 91 Am. Dec. 607; Conro v. Port Henry Iron Co. 12 Barb. 27; Clark v. Barnard, 108 U. S. 436, 27 L. ed. 780. The guaranty indorsed on the Beattyville bonds is negotiable. Battles v. Laudenslager, 84 Pa. 446; Stoney v. American L. Ins. Co. 11 Paige, 635; Farmers' Nat. Bank v. Sutton Mfg. Co. 6 U. S. App. 312, 52 Fed. Rep. 191, 3 C. C. A. 1, 17 L. R. A. 595; Farmers' & M. Bank v. Butchers' & D. Bank, 16 N. Y. 125; Bissell v. Michigan S. & N. S. R. Cos. 22 N. Y. 289; Mechanics' Bkg. Asso. v. New York & 8. White Lead Co. 35 N. Y. 505; Wright v. Pipe Line Co. 101 Pa. 204, 47 Am. Rep. 701; Hackensack Water Co. v. DeKay, 36 N. J. Eq. 548; Credit Co. v. Howe Mach. Co. 54 Conn. 357; Gelpcke v. Dubuque, 1 Wall. 203, 17 L. ed. 524; Genesee County Sav. Bank v. Michigan Barge Co. 52 Mich. 438; Bird v. Daggett, 97 Mass. 494. The guaranty is valid as the act of the appellee's agent. Humboldt Twp. v. Long, 92 U. S. 642, 23 L. ed. 752; Eastern Counties R. Co. v. Hawkes, 5 H. L. Cas. 331; Kinyon v. Wohlford, 17 Minn. 239, 10 Am. Rep. 165; Clarke v. Johnson, 54 Ill. 296; Burson v. Huntington, 21 Mich. 415, 4 Am. Rep. 497; McDougald v. Lane, 18 Ga. 444; Norwich v. Norfolk R. Co. 4 El. & Bl. 397; Story on Agency, Secs. 452, 562; Fitzherbert v. Mather, 1 T. R. 11; Locke v. Stearns, 1 Met. 563, 35 Am. Dec. 382; Hackett v. Ottawa, 99 U. S. 608, 25 L. ed. 363; New York & N. H. R. Co. v. Schuyler, 34 N. Y. 31; North River Bank v. Aymar, 3 Hill, 262. *Mr. Justice Gray, after stating the case[561] as above, delivered the opinion of the court: The plaintiff, the Louisville, New Albany, & Chicago Railway Company, undoubtedly became a corporation of the state of Indiana in 1873 by its incorporation according to the general statute of 1865 of that state. Whether it afterwards became a corporation of the state of Kentucky also was strongly contested at the bar, and depends upon the legal effect of the statute of Kentucky of 1880. That statute (being the first statute of Kentucky affecting this corporation) is described indeed in its title, as well as in the title of the statute of 1882 amending it, as "An Act to Incorporate" this company, although in the title of the first statute the[562] word "Louisville" in its name is omitted. By the first words of the enacting part of the statute of 1880, it is "the Louisville, New Albany, & Chicago Railway Company, a corporation organized under the laws of the state of Indiana," and not any other corporation, or any association of natural persons, that is "hereby constituted a corporation," with the usual powers of corporations, and with "authority to operate a railroad." And is the corporation so described that, by the other provisions of that statute, may purchase, lease, or condemn real estate required for railroad purposes in the county of Jefferson, and may connect with any other railroad in that county, or build, lease, or operate any such connecting line, "and may bond the same, and secure the payment of any such bonds by a mortgage of its property, rights, and franchises;" and, by the amendatory statute of 1882, may guarantee the bonds of, or consolidate with, other corporations authorized to construct railroads in Kentucky. state by which it was originally created. It could neither have brought suit as a corporation of both states against a corporation or other citizen of either state, nor could it have sued or been sued as a corpora tion of Kentucky, in any court of the United States. Ohio & Mississippi Railroad Co. v. Wheeler, 1 Black, 286 [17:130]; St. Louis & San Francisco Railway Co. v. James, 161 U. S. 545 [40:802]; St. Joseph & G. I. Railroad Co. v. Steele, 167 U. S. 659,663 [42:315, 317]; Barrow Steamship Co. v. Kane, 170 U. S. 100, 106 [42: 964, 967]. In St. Louis & San Francisco Railway Co. This court has often recognized that av. James, the company was organized and 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. Ohio & Mississippi Railroad Company v. Wheeler, 1 Black, 286, 297 [17: 130, 133]; Baltimore & O. Railroad Co. v. Harris, 12 Wall. 65, 82 [20: 354, 358]; Chicago & N. W. Railway Co. v. Whitton, 13 Wall. 270, 283 [20: 571, 576]; Indianapolis & St. L. Railroad Co. v. Vance, 96 U. S. 450, 457 [24: 752, 756]; Memphis & Charleston Railroad Co. v. Alabama, 107 U. S. 581 [27: 518]; Clark v. Barnard, 108 U. S. 436, 451, 452 [27: 780, 786]; Stone v. Farmers' Loan & Trust Co. 116 U. S. 307, 334 [29: 636, 645]; Graham v. Boston, Hartford, & Erie Railroad Co. 118 U. S. 161, 169 [30: 196, 2011; Martin v. Baltimore & Ohio Railroad Co. 151 U. S. 673, 677 [38: 311, 313]. But this court has repeatedly said that, in order to make a corporation, already in existence under the laws of one state, a corporation of another state, "the language used must imply creation or adoption in such form as to confer the power usually exercised over corporations by the state, or by the legislature, and such allegiance as a state corporation owes to its creator. The mere grant of privileges or powers to it as an existing corporation, without more, does not do this." Pennsylvania Railroad Co. v. St. Louis, Al[563]ton, & Terre Haute Railroad Co. 118 U. S. 290, 296 [30: 83, 88]; Goodlett v. Louisville & Nashville Railroad Co. 122 U. S. 391, 405, 408 [30: 1230, 1232, 1233]; St. Louis & San Francisco Railway Co. v. James, 161 U. S. 545, 561 [40: 802, 808]. The acts done by the Louisville, New Albany, & Chicago Railway Company, under the statutes of Kentucky, while affording ample evidence that it had accepted the grants thereby made, can hardly affect the question whether the terms of those statutes were sufficient to make the company a corporation of Kentucky. But a decision of the question whether the plaintiff was or was not a corporation of Kentucky does not appear to this court to be required for the disposition of this case, either as to the jurisdiction, or as to the merits. As to the jurisdiction, it being clear that the plaintiff was first created a corporation of the state of Indiana, even if it was afterwards created a corporation of the state of Kentucky also, it was and remained, for the purposes of the jurisdiction of the courts of the United States, a citizen of Indiana, the incorporated under the laws of the state of In an action brought by a citizen of Mis souri against that company in the circuit court of the United States for the western district of Arkansas, to recover for its neg-eminent domain; and the Missouri corporaligence on that part of its road within the state of Missouri, the company pleaded to the jurisdiction that it was a citizen of Missouri; and the question was certified to this court whether the company, by filing a copy of its articles of incorporation under the laws of Missouri with the secretary of state of Arkansas, and continuing to operate its railroad through that state, became a corporation and citizen of the state of Ar kansas. [565] *This court, speaking by Mr. Justice Shiras, upon a careful review of the earlier cases, answered that question in the negative. The fundamental proposition deduced from the previous decisions was thus stated: "There is an indisputable legal presumption that a state corporation, when sued or suing in a circuit court of the United States, is composed of citizens of the state which created it, and hence such a corporation is itself deemed to come within that provision of the Constitution of the United States which confers jurisdiction upon the Federal courts in 'controversies between citizens of different states.'" The court frankly recognized that "it is competent for a railroad corporation organized under the laws of one state, when authorized so to do by the consent of the state which created it, to accept authority from another state to extend its railroad into such state, and to receive a grant of powers to own and control, by lease or purchase, railroads therein, and to subject itself to such rules and regulations as may be prescribed by the second state;" and that "such corporations may be treated by each of the states whose legislative grants they accept as domestic corporations." 161 U. S. 562 [40:808]. But the court went on to say: "The presumption that a corporation is composed of citizens of the state which created it accompanies such corporation when it does business in another state, and it may sue or be sued in the Federal courts in such other state as a citizen of the state of its original creation." And after referring to the provisions of the statutes of Arkansas of 1881 and 1889, the court added: "But whatever may be the effect of such legislation, in the way of subjecting foreign railroad companies to control and regulation by the local laws of Arkansas, we cannot concede that it availed to create an Arkansas corporation out of a foreign corporation, in such a sense as to make it a citizen of Arkansas, within the meaning of the Federal Constitution, so as to subject it as such to a suit by a citizen of the state of its origin. In order to bring such an artificial body as a corporation within the spirit and letter of that Constitution, as construed by the decisions of this court, it would be necessary to cre[566]ate *it out of natural persons, whose citizenship of the state creating it could be imputed to the corporation itself." 161 U. S. 562, 565 [40: 808,809]. In that case, the Constitution of Arkansas denied to foreign corporations the right of tion acquired that right, and owned and oper ated a railroad in Arkansas, in virtue of statutes authorizing it to purchase the property, rights, and franchises of Arkansas corporations, and requiring it to file a copy of its articles of incorporation or charter with the secretary of state of Arkansas, and enacting that it should "thereupon become a corporation of this state, anything in its articles of incorporation or charter to the contrary notwithstanding." Yet it was held that it was not thereby made a corporation of Arkansas, in the sense of the provisions of the Constitution, and of the acts of Congress, conferring jurisdiction on the courts of the United States by reason of diverse citizenship. The statutes of Arkansas in that case went quite as far, to say the least, towards constituting a corporation of another state a corporation of the state enacting those statutes, as the statutes of Kentucky did in the case at bar. The consolidation of the Louisville, New Albany, & Chicago Railway Company, under the same name, with a railroad company of Illinois in 1881, clearly does not affect the question of jurisdiction. That consolidation appears, by cases cited at the bar, to have been in accordance with the law of Indiana, but not to have been authorized by the law of Illinois. Louisville, New Albany, & Chica 90 Railway Co. v. Boney, 117 Ind. 501 [3 L. R. A. 435]; American Loan & Trust Co. v. Minnesota & Northwestern Railroad Co. 157 11. 641. It may have been ratified by very recent legislation in Illinois. Illinois Stat. June 9, 1897; Laws of 1897, p. 281; McAuley v. Columbus, Chicago, & Indiana Railway Co. 83 Ill. 348, 352. But 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 suit. Morgan v. Morgan, 2 Wheat. 290 [4: 242]; Clarke v. Mathewson, 12 Pet. 164 [9: 1041]; Koenigsberger v. Richmond Silver Min, Co. 158 U. S. 41, 49 [39: 889, 892]. *The demurrers to the bill for want of equi-[567 ty were rightly overruled, and were not insisted on in this court. The object of the bill was that the guaranty upon a great number of negotiable bonds, which might otherwise pass into the hands of bona fide purchasers, might be canceled, and suits upon the guaranty restrained, because of facts not appear. ing upon its face. The relief sought could only be had in a court of equity. Peirsoll v. Elliott, 6 Pet. 95, 98 [8: 332, 333]; Grand Chute v. Winegar, 15 Wall. 373, 376 [21: 174, 175]; Robb v. Vos, 155 U. S. 13 [39: 52]; Springport v. Teutonia Savings Bank, 75 N. Y. 397; Fuller v. Percival, 126 Mass. 381. We are then brought to the question of the validity of the guaranty by the Louisville, New Albany, & Chicago Railway Company of the bonds of the Beattyville Company, as be tween the parties before us, and under the circumstances shown by this record. A railroad corporation, unless authorized by its act of incorporation or by other stat 174 U. S. utes to do so, has no power to guarantee the | whose line of railway extends across the state bonds of another corporation; and such a in either direction, may, upon the petition of guaranty, or any contract to give one, if not the holders of a majority of the stock of such authorized by statute, is beyond the scope of railway company, direct the execution by the powers of the corporation, and strictly such railway company of an indorsement ultra vires, unlawful, and void, and incapa- guaranteeing the payment of the principal ble of being made good by ratification or es- and interest of the bonds of any railway comtoppel. Central Transportation Co. v. Pull-pany organized under or pursuant to the man's Palace Car Co. 139 U. S. 24 [35: 55], laws of any adjoining state, the construction and 171 U. S. 138 [ante, 108]; Jackson- of whose line or lines of railway would be ville, M. P. Railway & Nav. Co. v. Hooper, beneficial to the business or traffic of the rail-[569] 160 U. S. 514, 524 [40: 515, 523]; Union Pa- way so indorsing or guaranteeing such cific Railway Co. v. Chicago, Rock Island, & bonds." Section 2 provides that such petiPacific Railway Co. 163 U. S. 564, 581 [41: tion of the stockholders shall state the facts 265, 271];California Nat. Bank v. Kennedy, relied on to show the benefits accruing to "the 167 U. S. 362, 367, 368 [42: 198, 200]: Davis company indorsing or guaranteeing the v. Old Colony Railroad Co. 131 Mass. 258 [41 bonds." And section 3 provides that "no Am. Rep. 221]; Humboldt Min. Co. v. Varie- railway company shall, under the provisions ty Iron Works Co. 22 U. S. App. 334. of this act," indorse or guarantee such bonds to an amount exceeding half the par value of the stock of "the railway company so indors The real question in the case is whether upon its records, authorizing the president But we cannot doubt that, as was held by The statute of Indiana of 1883 is entitled 69 in accordance with the tenor thereof." The contract, as well as the guaranty on many of the bonds, was accordingly executed by the president and secretary and under the seal of the company, and the contract was spread upon the records of the board of directors. No petition of a majority of the stockholders for the execution of the guaranty was ever presented, as required by the statute: there was no evidence that the stockholders ever authorized or ratified the contract or the guaranty; and, at the next annual meeting of the stockholders, in March, 1890, it was voted to reject and disapprove both the contract and the guaranty, as having been made without legal authority or the approval of the stockholders. Before that meeting was held, one hundred and twenty-five* of the bonds thus guaranteed[570] had been sold by the construction company to the Louisville Trust Company, and ten bonds to the Louisville Banking Company, each of which companies took those bonds in good faith and without notice that no petition had been presented by a majority of the stockholders for the execution of the guaranty. Forty-five more of the bonds were purchased by the Louisville Banking Company 1089 from the construction company after that meeting, and with notice that a majority of the stockholders had never petitioned for, but had disapproved, the execution of the guaranty. The Louisville Banking Compary, thus having notice, when it took these forty-five bonds, that the prerequisite to the execution of the guaranty, under the statute of Indiana of 1883, had not been complied with, was not a bona fide holder of these bonds, and should not be allowed to enforce the guaranty thereon against the plaintiff. The controverted question is whether the bonds which the Louisville Trust Company and the Louisville Banking Company, respectively, purchased in good faith, and without notice of the want of the assent of the majority of the stockholders, are valid in the hands of these companies. The guaranty by the Louisville, New Albany, & Chicago Railway Company of the bonds of the Beattyville Company was not ultra vires, in the sense of being outside the corporate powers of the former company; for the statute of 1883 expressly authorized such a company to execute such a guaranty, and its board of directors to direct its execution by the company. The statute, indeed, made it a prerequisite to the action of the board of directors that it should be upon the petition of a majority of the stockholders; but this was only a regulation of the mode and the agencies by which the corporation should exercise the power granted to it. The distinction between the doing by a corporation of an act beyond the scope of the powers granted to it by law, on the one side, and an irregularity in the exercise of the granted powers, on the other, is well established, and has been constantly recognized by this court. vided that no such aid should be furnished Again, in Central Transportation Co. v. Pullman's Palace Car Co. 139 U. S. 24 [35: 55], this court, in summing up the result of previous decisions, stated the same distinetion as follows: "A contract of a corpora tion, which is ultra vires in the proper sense, that is to say, outside the object of its creation as defined in the law of its organiza tion, and therefore beyond the powers conferred upon it by the legislature, is not voidable only, but wholly void and of no legal effect; the objection to the contract is not merely that the corporation ought not to have made it, but that it could not make it; the contract cannot be ratified by either party, because it could not have been author. It was clearly indicated in two of its earli-ized by either; no performance on either side [571]est judgments on the subject of ultra vires, can give the unlawful contract any validity, both of which were delivered by Mr. Justice or be the foundation of any right of action Campbell. upon it. When a corporation is acting within the general scope of the powers conferred upon it by the legislature, the corporation, as well as persons contracting with it, may be estopped to deny that it has complied with the legal formalities which are prerequisites to its existence or to its action, because such requisites might in fact have been complied with. But when the contract is beyond the powers conferred upon it by existing laws, neither the corporation, nor the other party to the contract, can be estopped, by assenting to it or by acting upon it, to show that it was prohibited by those laws." 139 U. S. 59 [35: 68]. In Pearce v. Madison & Indianapolis Railroad Co. 21 How. 441 [16: 184], two railroad corporations of Indiana were held not to have the power to purchase a steamboat to be employed on the Ohio river, to run in connection with their railroads, because this "diverted their capital from the objects contemplated by their charters, and exposed it to perils for which they afforded no sanction;" "persons dealing with the managers of a corporation must take notice of the limitations imposed upon their authority by the act of incorporation;" "the public have an interest that neither the managers nor stockholders of the corporation shall transcend In St. Louis, Vandalia, & Terre Haute Railtheir authority;" and the contract in ques-road Co. v. Terre Haute & Indianapolis Railtion "was a departure from the business" of road Co. 145 U. S. 393 [36: 738], one of the the railroad corporations, and "their officers parties relied on a provision of a statute of exceeded their authority." 21 How. 443, Illinois that it should not be lawful for any 445 [16 L. ed. 185]. railroad company of Illinois, or its directors, to consolidate its road with any railroad out of the state, to lease its road to any railroad company out of the state, or to lease any railroad out of the state, "without having first obtained the written consent of all of the stockholders of said roads residing in the state of Illinois, and any contract for such consolidation or lease which may be made In Zabriskie v. Cleveland, Columbus, & Cincinnati Railroad Co. 23 How. 381 [16: 488], the statutes of Ohio empowered railroad corporations, "by means of their subscription to the capital stock of any other company, or otherwise," to aid it in the construction of its road, for the purpose of forming a connection between the two lines, pro |