heimer subsequent to the execution of the deeds of trust, in which Freiberg is said to have asked Werner, as agent of the Moerlein Brewing Company, to give him, Freiberg, the agency for the sale of the beer, saying that "after they got a settlement they would go right ahead; the beer would not change hands at all; go to the same customers; and that the firm was in such a shape that they had to fail." This evidence was objected to upon the ground that it related to statements made by the firm after the execution of the deeds of trust, and was not known or assented to by the trustee or the beneficiaries of the trust deed, and was incompetent to affect their interests. of the others renders it unnecessary to con 1. JAMES L. UTTER et al., Appts., v. BENJAMIN J. FRANKLIN et al. (See S. C. Reporter's ed. 416-425.) bonds, when may be made valid—judg- Bonds issued by a county in a territory, Werner, the witness, was agent for the [415]brewing company, living in Cincinnati. Hearing of the failure, he left home and Void reached Galveston three or four days after the assignment. He went immediately to the office, and met Seinsheimer and Freiberg. At this interview Freiberg made the statement in question. There is no doubt of the general proposition laid down by this court in Winchester & Partridge Mfg. Co. v. Creary, 116 U. S. 161 [29: 591], that in an action by the vendee of personal property against an officer attaching it as the property of the vendor, declarations of the vendor to a third party, made after the delivery of the prop- Argued and Submitted December 12, 1898. erty, are inadmissible to show fraud or conspiracy to defraud in the sale, unless the al 2. A judgment holding bonds invalid is not res judicata as to their validity after a subsequent statute has cured their defect. [No. 94.] Decided January 3, 1899. leged collusion be established by independ-A Court of the Territory of Arizona denyPPEAL from an order of the Supreme ent evidence, and the declarations fairly form part of the res gestæ. The same question was again considered in Jones v. Simpson, 116 U. S. 609 [29: 742], in which declarations of the vendor made after delivery of the property to the vendee, but on the same day and fairly part of the res gesta, were held to be admissible to show intent to defraud the vendor's creditors by the sale, it being also shown by independent evidence that the vendee shared the intent to defraud with the vendor. ing a petition for a writ of mandamus to Statement by Mr. Justice Brown: This was a petition for a writ of mandamus to compel the defendants, who were respectively governor, auditor, and secretary of to issue certain bonds in exchange for bonds the territory, acting as loan commissioners, issued by the county of Pima in aid of the Arizona Narrow Gauge Railroad Company. In the case under consideration there was independent evidence that the vendors, Freiberg, Klein, & Co., and the vendee, Sonnentheil, were engaged in a common purpose to defraud the creditors of the vendors, and the declarations in question were not mere admissions of what had already taken place, the bona fide holders for value of certain The petition set forth that plaintiffs were but were propositions for a further continu-seven per cent bonds and coupons issued in ance of business with the brewing company, upon a basis which indicated that after they had obtained a settlement with their creditors, they would assume their ownership, and charge of the stock, and continue business as they had done before. While the propriety of admitting these declarations as against the plaintiff Sonnentheil and the secured creditors may be open to some doubt, it is entirely clear that they were admissible against Freiberg, Klein, & Co., and the rights of the secured creditors were so carefully guarded in the charge to the jury that we think no harm could have resulted from allowing the jury to consider them. We have examined the remaining assign[416]ments of error, of* which there are a large number. but the disposition we have made July, 1883, in compliance with an act of the Defendants demurred to the petition, and The petition being denied by the supreme court of Arizona, the relators appealed to this court. No opinion was filed in the supreme court of the territory. Messrs. John F. Dillon, Harry Hubbard, John M. Dillon, and William H. Barnes for appellants. Mr. C. W. Wright for appellees. [417] *Mr. Justice Brown delivered the opinion of the court: The bonds now held by the relators were declared to be invalid by this court in Lewis v. Pima County, 155 U. S. 54 [39: 67], upon the ground that bonds issued in aid of railways could not be considered debts or obligations "necessary to the administration of the internal affairs" of the county, within the meaning of the act of June 8, 1878. 20 Stat. at L. 101, chap. 168. of bonds already contracted for under express provisions of law, leaving the courts to determine the validity of such acts and obligations and the further question whether such bonds had been contracted for in pursuance of express provisions of law. It simply with held its assent to, as well as its negative upon, such transactions, and declined to commit itself one way or the other. Nor did it assume to prevent the territorial legislature from legalizing the acts of any subordinate municipality as to bonds theretofore issued or contracted to be issued, leaving it to the territorial legislature to determine whether they should attempt to legalize such issues, and to the courts to pass upon the question whether this could be lawfully done. The bonds theretofore issued were left precisely where they stood before, and no attempt was made either to legalize or avoid them. Congress merely stayed its hand, and left the matter open for future consideration. Whether the loan commissioners of the territory can be required to refund these ob- In this state of affairs the legislature of ligations, and issue new bonds to the holders Arizona, on March 10, 1897, passed an act(419) thereof, depends upon the effect given to cer- (Rev. Stat. Arizona, p. 361), constituting tain legislation upon this subject, both by the governor, auditor, and secretary of the congressional and territorial statutes. These territory loan commissioners of the terri statutes were enacted both before and after tory, with the duty of providing "for the pay. the decision in Lewis v. Pima County, supra. ment of the existing territorial indebtedness, It seems that doubts were entertained as to due and to become due, and for the purpose of the validity of bonds issued in aid of rail- paying, redeeming, and refunding all or any roads, in view of the fact above stated, that part of the principal and interest, or ether, under the congressional act of 1878 the power of the existing or subsisting territorial legal of municipalities to incur debts or obligations indebtedness," with power to issue negotiable was limited to such as were necessary to the bonds therefor. This power, however, was administration of their internal affairs. To limited to the legal indebtedness of the terriput this question at rest, Congress on July tory, and apparently had no bearing upon the 30, 1886, passed an act to limit territorial in-indebtedness of its municipalities, certainly debtedness (24 Stat. at L. 170) in the second not upon indebtedness which had been illesection of which it was declared "that no ter-gally contracted. Indeed, the act is only perritory of the United States now or hereafter tinent as showing the authority under which to be organized, or any political or munici- the loan commissioners were appointed. pal corporation, or subdivision of any such territory, shall hereafter make any subscrip[418]tion to the capital stock of any incorporated company, or company or association having corporate powers, or in any manner loan its credit to or use it for the benefit of any such company or association, or borrow any money for the use of any such company or associa-ness due, and to become due, or that is or may tion." This section was undoubtedly designed to put a stop to the practice, which had grown quite common in the territories, of incurring debts in aid of railway and other corporations. On June 25, 1890 (26 Stat. at L. 175), Congress passed an act approving with amendments this funding act of Arizona, "subject to future territorial legislation," the second section of which declared it to be the duty of the loan commissioners "to provide for the payment of the existing territorial indebted be hereafter authorized by law, and for the the existing and subsisting terri- The fourth section provided for a limit of municipal indebtedness, and then declared "that nothing in this act contained shall be so construed as to affect the validity of any act of any territorial legislature heretofore enacted, or of any obligations existing or contracted thereunder, nor to preclude the issuing of bonds already contracted for in pursuance of express provisions of law, nor to prevent any territorial legislature from legalizing the acts of any county, municipal corporation, or subdivision of any territory as to any bonds heretofore issued or contracted to be issued." This section evidently left the law where it stood before. It did not assume In compliance with the permit thus given to pass upon the validity of any territorial by Congress for future territorial legislation, act previously enacted, or of any obligations the legislature of Arizona on March 18, 1891 thereunder incurred; nor preclude the issue' (Laws of 1891, p. 120), enacted a new fund ing act, only the following sections of which | and in construing the act of Congress passed are material: in response thereto it may properly be con[420] *"Sec. 1. That the act of Congress entitled sidered as bearing upon the intention of[422] 'An Act Approving with Amendments the Congress and the exigencies the act was Funding Act of Arizona,' approved June 25, designed to meet. 1890, be, and the same is hereby, now re-enacted as of the date of its approval, subject to the modifications and additional provisions hereinafter set out, and to carry out the purpose and intention of said act of Congress the loan commissioners of the territory of Arizona shall provide for the liquidation, funding, and payment of the indebtedness existing and outstanding on the 31st day of December, 1890, of the territory, the counties, municipalities, and school districts within said territory, by the issuance of bonds of said territory, as authorized by said act, and all bonds issued under the provisions of this act and the interest thereon shall be payable in gold coin of the United States." "Sec. 7. Any person holding bonds, warrants, or other evidence of indebtedness of the territory or any county, municipality, or school district within the territory, existing and outstanding on the 31st day of December, 1890, may exchange the same for the bonds issued under the provisions of this act at not less than their face or par value and the accrued interest at the time of exchange; but no indebtedness shall be redeemed at more than its face value and any interest that may be due thereon." It seems, however, that the existing legislation upon the subject was not deemed adequate by the territorial legislature, since in 1895 it adopted a memorial (Laws of 1895, p. 148), to the effect that, under various acts of the assembly, the counties were authorized to, and did, issue railroad aid bonds, which were sold in the open market at their face value, and were then held at home and abroad by bona fide purchasers; that the validity of these bonds, though questioned, was acknowledged by the payment of interest thereon; that a repudiation of the same would work a great hardship to the holders and affect the credit of the territory, and therefore the general assembly urged upon Congress the propriety of passing such curative legislation as would protect the holders of all bonds issued under authority of its acts, the validity of which had been acknowledged, and relieve the people from 1421]*the disastrous effects of repudiation. The memorial is printed in full in the margin,t +MEMORIAL. To the Senate and House of Representatives of Your memorialists, the legislative assembly Whereas, under various acts of the legislative assembly of the territory of Arizona, certain of the counties of the territory were authorized to issue in aid of railroads and other quasi public improvements and did under such acts issue bonds, which said bonds were sold in open market, in most instances at their face value, and are now held at home and abroad by persons who in good faith invested their money in the same, and, save and except such knowledge as the law imputes to the holder of 500 In compliance with this memorial Congress on June 6, 1896 (29 Stat. at L. 262), passed an act extending the provisions of the act of June 25, 1890, and the amendatory act of 1892 (not here in question), the first section of which provided that the above acts "are hereby amended and extended so as to authorize the funding of all outstand ing obligations of said territory, and the counties, municipalities, and school districts thereof, as provided in the act of Congress approved June 25, 1890, until January 1, 1897, and all outstanding bonds, warrants, and other evidences of indebtedness of the territory of Arizona, and the counties, municipalities, and school districts thereof, heretofore authorized by legislative enactments of said territory bearing a higher rate of interest than is authorized by the aforesaid funding act approved June 25, 1890, and which said bonds, warrants, and other evidences of indebtedness have been sold or exchanged in good faith in compliance with the terms of the acts of the legislature by which they were authorized, shall be funded with the interest thereon which has accrued and may accrue until funded into the lower interest-bearing bonds as provided by this act. "Sec. 2. That all bonds and other evidences of indebtedness heretofore funded by the loan commission of Arizona under the provisions of the act of Congress approved June 25, 1890, and the act amendatory thereof and supplemental thereto approved August 3, 1894, are hereby declared to be valid and legal for the purposes for which they were issued and funded; and all bonds and other evidences of indebtedness heretofore issued under the authority of the legislature of said territory, as hereinbefore authorized to be funded, are hereby confirmed, approved, and validated, and may be funded as in this act provided until January 1, 1897: Provided, That nothing in this act shall be so construed as to make the government of the United[423] States liable or responsible for the payment of any of said bonds, warrants, or other evidences of indebtedness by this act approved, confirmed, and made valid, and authorized to be funded." This is the act upon which the relators bonds issued under authorized acts, are holders of the same: and Whereas, the validity of these bonds for many years after their issuance was unquestioned, and acknowledged by the payment of the interest thereon as it fell due; and Whereas, there has recently been raised a question as to whether these acts of the legislative assembly were valid under the organic law of the territory, which had led to a movement looking to the repudiation of the indebtedness created under and by virtue of such acts; and Whereas, we believe that such repudiation would, under the circumstances, work great wrong and hardship to the holders of such bonds, and at the same time seriously affect the 172 U. S. place their chief reliance. Its evident pur-high-school building. See also New Orleans which had not been theretofore funded, and The fact that this court had held the orig- fect the question. They were invalid because there was no power to issue them. They were made valid by such power being subsequently given, and it makes no possible difference that they had been declared to be void under the power originally given. The judgment in that case was res judicata only of the issues then presented, of the facts as they then appeared, and of the legislation then existing. We think it was within the power of Congress to validate these bonds. Their only defect was that they had been issued in excess of the powers conferred upon the territorial municipalities by the act of June 8, 1878. There was nothing at that time to have pre- Nor was the act intended to be confined to vented Congress from authorizing such mu- the outstanding legal indebtedness of the nicipalities to issue bonds in aid of railways, county. The first section of the act requires and that which Congress could have orig- the funding of all outstanding obligations of inally authorized it might subsequently said territory and its municipalities, and all confirm and ratify. This court has repeat-outstanding bonds, etc., of the territory and edly held that Congress has full legislative its municipalities, "heretofore authorized by power over the territories, as full as that legislative enactments of said territory, bearwhich a state legislature has over its munic-ing a higher rate of interest than is authoripal corporations. American Ins. Co. v. [356 Bales of Cotton] Canter, 1 Pet. 511 [7: 242]; National Bank v. County of Yankton, 101 U. S. 129 [25: 1046]. Curative statutes of this kind are by no means unknown in Federal legislation. Thus, in National Bank v. County of Yankton, supra, this court sustained an act of Congress nullifying a legislative act of the territory of Dakota authorizing the issue of railway bonds, but validating action theretofore taken by the county voting subscription to a certain railroad company, holding it to be "equivalent to a direct grant of power by Congress to the county to issue the bonds in dispute.". In Thompson v. Perrine, [424]103 U. S. 806 [26: 612], we also sustained a similar act of the state of New York ratifying and confirming the action of commissioners in issuing similar bonds. In Read v. Plattsmouth, 107 U. S. 568 [27: 414], a similar ruling was made with regard to an act of the legislature of Nebraska validating an issue of bonds by the city of Plattsmouth for the purpose of raising money to construct a credit and standing of our people for honesty, and fair dealing and bring us into disrepute : Wherefore, we most strongly urge upon your most honorable bodies the propriety and justice of passing such curative and remedial legislation as will protect the holders of all bonds Issued under the authority of acts of the legis lative assembly, the validity of which has heretofore been acknowledged, and that you further legislate as to protect all innocent parties hav. Ing entered into contracts resulting from inducements offered by our territorial legislation, and relleve the people of the territory from the disastrous effects that must necessarily follow any repudiation of good faith on the part of the territory, and that you may so further legislate as to validate all acts of the legislative assembly of the territory which have held out in ized by the aforesaid funding act, approved Resolved, That our delegate to Congress be, and he is hereby, instructed to use all honorable means to bring this subject to the earnest consideration of Congress; that the secretary of the territory be, and he is hereby, requested to transmit a copy of the foregong to each house of Congress and to our delegate in Congress. said authorities" of the municipalities, but In addition to this, however, the act of Congress of June 6, 1896, declared that all the outstanding bonds, warrants, and other evidences of indebtedness of the territory and its municipalities shall be funded with the interest thereon, etc. We are therefore of opinion that it was made the duty of the loan commissioners by these acts to fund the bonds in question, and that the order of the Supreme Court of the Territory must be reversed, and the case remanded to that court for further proceedings not inconsistent with the opinion of this court. CAPITAL NATIONAL BANK OF LIN- v. FIRST NATIONAL BANK OF CADIZ, (See 8. C. Reporter's ed. 425-434.) Federal question, when raised too late that a judgment is contrary to law is not a Federal question-a decision on general equitable principles does not involve such a question. 1. A Federal question is raised too late for writ of error to a state court when presented on application to the state supreme court for a rehearing. 2. A claim that a judgment holding a receiver of a national bank to be a trustee is "contrary to law" does not raise a Federal question. 8. A decision that money in the hands of a receiver of a national bank is held in trust and has never been a part of the assets of the bank, when rendered on general equitable principles, does not involve any Federal question which will sustain a writ of error to the state court. Statement by Mr. Chief Justice Fuller: *This was an action brought by the First National Bank of Cadiz, Ohio, against the Capital National Bank of Lincoln, Nebraska, and Macfarland, the receiver thereof, in the district court of Lancaster county, Nebraska. The petition contained five counts for moneys belonging to plaintiff received by defendant from notes transmitted to it for collection and remittance. Each of the counts concluded thus: "Plaintiff further says that on or before the 21st day of January, 1893, the said defendant bank then and there became, and for some time prior thereto had been, insolvent, and that under and in pursuance of the laws of the United States the said defendant, Macfarland, was duly appointed, and is now acting, as a receiver thereof, and that all the assets and trusts in and belonging to said bank and the beneficiaries thereof passed into the[427] possession of, and are now held by, the said Macfarland for the said bank, and all trusts or money held or obtained by said bank in a fiduciary capacity passed into the hands of said defendant, Macfarland, and he now holds the same in the same capacity that the said bank did before he took possession thereof. "That in the collection of said note the said Capital National Bank was acting as the agent of this plaintiff for the purpose aforesaid, and the money so collected was the property of and belonged to this plaintiff; that said amount so collected never was a part of the assets of said bank and never belonged to the stockholders thereof; that whether or not said amount was ever mixed or mingled with the true assets of said bank plaintiff is unable to state, but does allege that if the same was mixed or mingled with the assets of said bank that the same was done wrongfully and fraudulently by the officers of said bank and without the knowledge or consent of this plaintiff; that a part of the business and powers of said bank was the collection and remittance of moneys for persons and corporations, and that the said defendant bank was acting as agent for that purpose as hereinbefore alleged." The prayer was "that an account may be taken of the trust funds to which the plaintiff may be entitled, and that a decree be entered against the said Capital National Bank and the said John D. Macfarland, directing the payment or delivery to plaintiff of the amount of said collections, and that the said Jan-amount be decreed to be a trust fund in the ERROR to the Supreme Court of the State of Nebraska to review a judgment of that court affirming the judgment of the District Court of Lancaster County in that state adjudging that the plaintiff, the First National Bank of Cadiz, Ohio, recover from the defendant, the Capital National Bank of Lincoln, Nebraska, the amount of a trust fund found to belong to plaintiff, and that Kent K. Hayden, receiver of said defendant, pay the plaintiff the amount of said trust fund, with interest, out of any money in his hands. Writ of error dismissed. See same case below, 49 Neb. 795. hands of said bank and receiver to be first Macfarland having resigned the receiver- |