in a regular and legally called meeting, a majority of the board. being present, duly considered such request, and declined to take the action so requested, and refused to call a meeting of the stockholders for the purpose of considering the same, the complainants thereby being left to such redress as they might think proper for the purpose of protecting their said interests as stockholders. Complainants therefore claimed that as the corporation, through its directors and its stockholders, had refused to protect its property by suitable legal proceedings, it was incumbent upon them to take such action as was necessary to protect their respective holdings of stock in said company. The prayer of the bill was for an injunction and for general relief. The defendants have answered, replication thereto has been filed, affidavits and exhibits have been read, and the argument of counsel has been heard and considered.

I do not find it necessary to dispose of the contention of defendants as to the insufficiency of the bill, as the conclusion I reach concerning the jurisdiction of the court renders that unnecessary.

The Pennsylvania Consolidated Coal Company, a West Virginia corporation, one of the defendants, could not, under the provisions of existing law, maintain a suit in this court against its codefendants, who are citizens of West Virginia. It is entirely clear that said company, acting by and through some of its officials, in connection with some of its stockholders, endeavored to create a condition of affairs that would justify an application to this court for an injunction, and that would make applicable to this litigation the requirements of the ninety-fourth equity rule, as announced by the Supreme Court of the United States. It appears that said company, in its own name, acting by its directors and other officials, had before the institution of these proceedings filed in the circuit court of Taylor county, W. Va., a suit, the object of which was to obtain from that jurisdiction, in substance, the relief now asked of this court. That suit was a recognition of the limitations placed by law on the jurisdiction of this court, and the fact that it was subsequently abandoned after the complainants in this suit, who were familiar with that litigation, and some of whom actively engaged in its prosecution, supposed that they had qualified themselves for this jurisdiction, emphasizes the effort that has been made in this case to evade the legislation of the Congress, and of the rules applicable thereto, relating to the diverse citizenship of litigants in this court. The complainants, stockholders in the defendant company, did not endeavor to induce the directors of that company to institute a suit in this court, having for its object the protection of the property and assets of the company, for they were well aware that this court would not have had jurisdiction of such litigation, for the reason that the parties complained of were citizens of the state of West Virginia. It was not necessary for the complaining stockholders to ask the directors to sue in the courts of the state of West Virginia, where the jurisdiction was unquestioned, for such a suit for the purpose mentioned was then pending. What the complainants intended to do, and what they in fact did, was to have the management of the coal company declare that nei

ther they, as officials thereof, nor the company, as a corporation, would institute and prosecute the suit referred to; thereby providing, as they supposed, a method by which the complainants, who were stockholders and citizens of the state of Pennsylvania, would be able to sue in this court for the purpose mentioned. Such likely would have been the result, had the effort been an honest endeavor to further a sincere intention, and not the simulated action of designing men, who collusively formulated the scheme, and prepared the answer to the request that suit be brought before the petition containing it had been submitted for the consideration of those whose action it requested. It is quite evident that it was the plan of the complainants and of some of the directors of the coal company, collusively acting together for that purpose, to make the situation fit the conditions indicated by the terms of equity rule 94; and, when this conclusion has been reached, it follows that any pretense of jurisdiction by this court over this controversy has disappeared. The refusal of their request was the one thing they wished. The granting of it would have been the one thing that would have circumvented their plans. Their conduct was insincere, their effort was pretended, and the action they desired was not indicated by the request they submitted.

The question here involved is of great importance, including, as it does, the principles upon which in many instances the federal jurisprudence is based. Where the right to sustain a suit in this court depends upon the citizenship of the parties, the positive requirement of the law is that the litigants shall be citizens of different states. The case made by the bill is in fact a controversy between the Pennsylvania Consolidated Coal Company, a corporation and citizen of the state of West Virginia, and the defendants Haggerty, Noon, True, and others, all likewise citizens of that state. The efforts of complainants, citizens of the state of Pennsylvania, to produce the diversity of citizenship necessary to sustain the controversy in their names, utterly fails to meet the requirements indicated by the decisions of the courts relating to equity rule 94, which was adopted for the purpose of giving effect to the principles enunciated by the Supreme Court of the United States in Hawes v. Oakland, 104 U. S. 450, 26 L. Ed. 827. In this connection, see Huntington v. Palmer, 104 U. S. 482, 26 L. Ed. 833: Detroit v. Dean, 106 U. S. 537, 1 Sup. Ct. 560, 27 L. Ed. 300; City of Quincy v. Steel, 120 U. S. 241, 7 Sup. Ct. 520, 30 L. Ed. 624.

By virtue of the fifth section of the act of Congress of March 3, 1875, c. 137, 18 Stat. 470 [U. S. Comp. St. 1901, p. 508], relating to efforts to impose upon the courts of the United States the cognizance of cases not fairly belonging to them-finding, as I do, that this suit does not involve a dispute properly within the jurisdiction of this court, and that some of the parties to it have been collusively joined for the purpose of creating a case cognizable under said actit is my duty to proceed no further with this case.

An order will be entered dissolving the restraining order and dismissing the bill.

UNITED STATES v. SCOTT et al.

(Circuit Court, N. D. Georgia. June 28, 1905.)

1.. CONSPIRACY-MERGER IN COMPLETED OFfense.

A conspiracy to commit an offense against the United States, made in itself a criminal offense by Rev. St. § 5440 [U. S. Comp. St. 1901, p. 3676], is not merged in the completed offense, where the two offenses are of the same grade and the punishment substantially the same.

[Ed. Note. For cases in point, see vol. 10, Cent. Dig. Conspiracy, §§ 68-70.]

2. SAME EVIDENCE.

Evidence that employés of the owner of a distillery joined and participated with him in removing from such distillery to a place other than a bonded warehouse spirits on which the internal revenue tax had not been paid, in violation of Rev. St. § 3296 [U. S. Comp. St. 1901, p. 2136], under circumstances from which they must have known the illegal nature of the transactions, is sufficient to sustain an indictment, under section 5440 [U. S. Comp. St. 1901, p. 3676], of both employer and employés, for conspiracy to commit an offense against the United States.

Criminal Prosecutions. On motion for a new trial and motion in arrest of judgment.

E. A. Angier, U. S. Atty., and Geo. L. Bell, U. S. Atty.
S. A. Darnell and Madison Bell, for defendants.

NEWMAN, District Judge. This case is now before the court on a motion for a new trial and on a motion in arrest of judgment. I think the law of the case was correctly given to the jury in the instructions of the court. The evidence was certainly sufficient to support the verdict.

The first question for consideration is whether, under the evidence, the conspiracy was merged in the completed offense. The indictment was drawn under section 5440 of the Revised Statutes [U. S. Comp. St. 1901, p. 3676], and was for a conspiracy to commit an offense against the United States; that is, the offense of removing distilled spirits from a distillery where produced to a place other than the distillery warehouse without having paid the tax required by law. Whatever may be the correct rule as to merger of conspiracy in the completed offense under the practice in the courts of the United States where the conspiracy is a misdemeanor and the completed offense a felony, it is perfectly clear that the rule of merger does not apply here, where the penalty is so nearly alike. as it is under sections 5440 and 3296 [U. S. Comp. St. 1901, pp. 3676, 2136]. Section 5440 makes the penalty for a conspiracy a fine of not more than $10,000 or imprisonment for not more than two years, or both such fine and imprisonment, in the discretion of the court. Section 3296, for removing distilled spirits in violation of law, fixes the penalty at not less than $200 and not more than $5,000, and imprisonment not less than three months nor more than three years. In the conspiracy section, the imprisonment is only a year less, while the fine may be double that of section 3296. They are offenses of the same grade-both misdemeanors-and, under the well-established rule, there would be no merger of the conspiracy in the completed offense.

The other question is as to whether, under the facts in evidence in this case, a conspiracy is properly made out. The question is not wholly free from difficulty. The distillery as to which the alleged fraud is charged was operated and managed solely by John N. Scott. All the other alleged conspirators convicted with him were employés of John N. Scott. The difficulty arises from this fact. John N. Scott was the moving spirit, according to the evidence, in this plan to defraud the government. The others convicted as coconspirators were under his direction and control, employed by, and subordinate to, him. But is this sufficient to justify the court in setting aside the verdict in this case? There is abundant evidence to justify the jury in believing that all of these parties knew of the unlawful nature of the transactions being carried on at the Scott distillery. They not only participated in, and were parties to, the removal of distilled spirits, but they must have known of the large amount of meal and malt being received at the distillery, and they must also have known that it was more than the capacity of the distillery required or authorized. Two barrels of unstamped whisky were removed by two of the co-conspirators, according to evidence which the jury must have believed. There was evidence to show that Fields, the distiller-that is, the man who had actual charge of the work of distilling-told Wheeler that he was a fool for not getting money as other storekeepers and gaugers had done. Whether these defendants, except Scott, received anything more than wages for their connection with this distillery does not appear; but I think the evidence is ample to show that they knew of, and participated in, these unlawful transactions all along. The evidence is also sufficient to justify the jury in concluding that they had such an agreement and understanding with John N. Scott as that it amounted to a conspiracy between all the parties to the transaction to commit an offense against the United States in removing distilled spirits, as set out in the indictment.

I have no question whatever about the correctness of the decision at the trial that the defendants were only entitled to ten challenges, under section 819 of the Revised Statutes. Indeed the court gave the defendants the benefit of the doubt in allowing them ten challenges instead of three, which number it might be argued they would only be entitled to when on trial under section 5440.

The foregoing embrace the only matters which it seems to me necessary to discuss in connection with these motions.

Both the motion for a new trial and the motion in arrest of judgment are denied.

JOHN D. PARK & SONS CO. v. BRUEN et al.

(Circuit Court, S. D. New York. June 17, 1905.)

*

1. RES JUDICATA-CONCLUSIVENESS OF JUDGMENT-NEW YORK STATUTE. Under Code Civ. Proc. N. Y. § 1209, which provides that "a final judgment dismissing the complaint does not prevent a new action for the same cause of action unless it expressly declares, or it appears by the judgment roll that it is rendered upon the merits," a failure to

state expressly, either in the judgment itself, or in some order directing the judgment, that the dismissal was on the merits does not permit a new suit for the same cause of action without further investigation; but it is the duty of the court in which the judgment is pleaded as a bar to a second suit to examine the judgment roll, and determine the question therefrom.

[Ed. Note. For cases in point, see vol. 30, Cent. Dig. Judgment, $$ 1028-1032.]

2. SAME-IDENTITY OF CAUSES OF ACTION.

A suit in a federal court held not barred by a prior judgment of a state court between the same parties, dismissing a complaint filed by complainant on a general demurrer, on the ground that the bill in the second suit alleged new facts, constituting a different cause of action.

In Equity. On plea of res judicata.

Henry T. Fay and Elihu Root, for complainant.
Robinson, Biddle & Ward, for defendants.

PLATT, District Judge. The plea herein sets up as a bar to the bill a final judgment in the Supreme Court of the state, dated May 15, 1900, sustaining a demurrer to an amended complaint filed in that court, and dismissing the complaint. It is not expressly declared in the judgment roll of the state court that the complaint was dismissed upon the merits.

Section 1209 of the Code of Civil Procedure says:

"A final judgment, dismissing the complaint does not prevent a new action for the same cause of action, unless it expressly declares or it appears by the judgment roll, that it is rendered upon the merits."

The contention that a failure to state expressly, either in the judgment itself, or in some order directing the judgment, that the dismissal was "on the merits," permits, without further investigation, a new suit for the same cause of action, is not sound. Alley v. Nott, 111 U. S. 475, 4 Sup. Ct. 495, 28 L. Ed. 491.

The demurrer as filed was equivalent to a general demurrer, and goes far beyond mere matters of form. It admitted all well pleaded. facts as completely as if they had been established by proof, and raised the legal issue that such facts did not constitute a cause of action. In that situation the judgment was, without doubt, upon. the merits.

Leave to amend was not demanded or suggested, for the obvious reason that the complainant did not have in hand pertinent facts which would change its case. The protracted struggle had exhausted everybody, and rest was essential before gathering thought for a fresh start.

It is the duty of this court, as I view it, to examine the judgment roll, and determine whether the case in the state complaint is the same case which appears in the bill at bar. We must discover whether the bill involves any legal issues which were not deducible from the complaint. The test is not whether they were, but, rather, whether they could have been, raised on the facts in the complaint.

Upon examining the bill and complaint, it appears that many acts done by defendants since 1896 are now complained about,