Syllabus.

been allowed to avail itself of the old membership, still its liability, if any, would be for a conversion, and the defences of laches and limitations would apply.

Viewed as an action for conversion, recovery was clearly barred as to the plant and the good will, and also as to this certificate, which was issued independently of the mortgage and not embraced within it. And so far as the bill proceeds upon the theory that the plant, the good will and the membership ought on equitable principles to be held subject to the lien of the mortgage, the court properly declined to assist a complainant that had slept upon its alleged rights for nearly eight years, and shown no excuse for its laches in asserting them. Cases sustaining the proposition that a mortgage may be foreclosed even after the debt has become barred by limitation have no application, nor does the fact that the Bowman note was still alive when the suit was instituted, since the question in this aspect is whether either or any of these alleged properties should on equitable grounds be brought within the operation of the mortgage, and upon that question we regard the delay of the complainant as an insuperable obstacle to a decree in its favor.

Decree affirmed.

CATES v. ALLEN.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF MISSISSIPPI.

No. 153. Argued March 22, 1893. - Decided May 10, 1893.

A contract creditor who has not reduced his claim to judgment has no standing in a Circuit Court of the United States, sitting as a court of equity, upon a bill to set aside and vacate a fraudulent conveyance. Scott v. Neely, 140 U. S. 106, affirmed and applied.

Holland v. Challen, 110 U. S. 15, and Whitehead v. Shattuck, 138 U. S. 146, distinguished.

The fact that a court of chancery may summon a jury cannot be regarded as the equivalent of the right of a trial by jury, secured by the Seventh Amendment to the Constitution.

Statement of the Case.

When a suit over which a state court has full jurisdiction in equity is removed to a Circuit Court of the United States on the ground of diverse citizenship, and it appears that the courts of the United States have no jurisdiction in equity over such a controversy, the cause should be remanded to the state court, instead of dismissing it for want of jurisdiction.

R. C. CATES, D. Andrews and L. L. Cates, as individuals and as composing the firms of Luke Cates & Company and Andrews, Cates & Company, made their deed of assignment for the benefit of creditors, December 7, 1886, whereby they conveyed their property to assignees therein mentioned to be converted into money and applied to the payment of their debts, certain creditors being preferred. J. H. Allen, T. W. West, and J. C. Bush, citizens, respectively, of Louisiana, Missouri, and Alabama, and doing business in New Orleans as general commission merchants and cotton factors, under the name of Allen, West and Bush, filed their bill of complaint, December 8, 1886, in the chancery court of Lee County, Mississippi, against R. C. Cates, L. L. Cates, D. Andrews, and the assignees mentioned in the assignment, alleging an indebtedness to the complainants of more than $16,000 on open account, and charging that the assignment above mentioned was fraudulent in law and in fact; made without any valuable consideration; and with the fraudulent intent to hinder, delay, and defraud the complainants and other creditors; and that the same ought to be set aside and the property assigned subjected to the payment of complainants' demand. The bill also charged that one of the assignees, who at the time of the filing of the bill was in possession of a large part of the assigned property, was insolvent, and that it would be dangerous to allow him to remain in the possession and control thereof; that he was in possession of the books of account and choses in action of the assignors, and was proceeding to collect the same; that there was danger that they would be lost to complainants and the other creditors; and that irreparable injury might thereby result. The bill prayed for answers under oath, and that on final hearing the assignment might be decreed to be void and set aside; that all the property

Counsel for Appellants.

covered by the assignment might be subjected to the payment of complainants' debts and then to the payment of such other demands as might be brought before the court; for an injunction; for a writ of sequestration; for a receiver; that the filing of the bill be held to give complainants the first lien on the effects of the said debtors in the hands of the assignees, or either of the parties or any other person; and for general relief. A writ of sequestration was issued and the sheriff took possession of the property, and a number of other creditors were subsequently admitted as co-complainants.

On December 15, 1886, Allen, West, and Bush and their co-complainants filed their petition to remove the cause into the United States District Court for the Northern District of Mississippi, exercising the jurisdiction of a Circuit Court of the United States, and bond was given and the cause removed accordingly. Receivers were thereafter appointed, and on April 15, 1887, the Tishomingo Savings Institution, a preferred creditor, was made a defendant. A demurrer was filed alleging as grounds that there was no equity on the face of the bill; that the claims of complainants had not been reduced to judgment; that they had no lien and were not entitled to file a bill under the law; and for want of proper parties. This demurrer was overruled and defendants answered. Evidence was taken and hearing had, and on October 28, 1887, the court adjudged the assignment to be fraudulent and void, and set the same aside; found the sum of $17,732.71 to be due Allen, West, and Bush; decreed that indebtedness to be a first lien and charge on the assets of Andrews, Cates & Co.; and ordered. the receiver to pay said sum out of the proceeds of the sales and collections of and from the assets of that firm. Various other orders were entered in that behalf and with reference to other funds and appropriations for the claims of other creditors, which it is unnecessary to notice. The report of the receiver showed amounts paid to Allen, West, and Bush of nearly $14,000.

Mr. E. H. Bristow, with whom was Mr. W. B. Walker on the brief, for appellants.

Argument for Appellees.

Mr. John M. Allen for appellees.

The first question presented in this case is one not altogether free from difficulty, and one which has not, so far as I am aware, been directly passed upon by this court. That is the question as to whether or not the United States equity court will entertain a suit properly begun in a state chancery court, and removed in accordance with the laws for removal of causes from state to Federal courts, where the Federal Court would not have taken original jurisdiction. I am aware that since the final decree in the case under consideration that in the case of Scott v. Neely, 140 U. S. 106, this court has decided that a simple contract creditor cannot avail himself of the rights given by sections 1843 and 1845 of the code of Mississippi by filing a bill in the United States court. If the principles laid down in this case are applicable to removed cases, it would seem to settle the jurisdictional question against us. I cannot believe, however, that this case is necessarily controlled by the reasoning in the case of Scott v. Neely. We have here a case properly brought and cognizable in the chancery court of Lee county, Mississippi. If the allegations of the bill were true it entitled us not only to have the assignment set aside but gave us a lien on all the property assigned from the filing of the bill, and entitled us to a decree for the amount of our debt, to be satisfied out of this property.

Now, then, being citizens of different States, from the appellants, the defendants below, and having a controversy with a sufficient amount in controversy, we were entitled under the removal statute to remove the case to the United States Circuit Court, and this we did. Now the question is did we forfeit any of our rights by this removal?

Does the law give us the right to remove and then destroy every right we had in the state court by the removal? I am sure this cannot be the law. Counsel for appellants admit that there are some cases of which the Federal Court would not have had original jurisdiction, but of which they can acquire jurisdiction by removal, and they cite the following

Argument for Appellees.

cases in support of this position: Barney v. Bank, 5 Blatchford, 107; Sayles v. Ins. Co. 2 Curtis, 212; Warner v. Railroad, 13 Blatchford, 231. I have examined these cases, but I do not find that they disclose a distinction in principle between them and this case.

This court has said time and again that a person loses no right by coming into the United States court. If this be true, we have certainly lost none. We have the right in the state court to try the issues raised by our bill and to have a decree condemning the property and giving us our money if we proved our case. Now we had the right of removal. Did we loose our other rights by exercising the right of removal? Suppose the petition for removal had been made by the defendants in the court below. Who can say they were not entitled to remove their case to the United States court? Then if they had the right of removal, could they remove a case from a court in which their adversary had a good case to a court where by the act of removal the case was destroyed? This could not be. If such were the case it would furnish a new method of defence. Then so far as the proceeding in the United States court is concerned, it makes no difference which party removed the case.

The conclusions reached by this court in the case of Scott v. Neely were founded on the judiciary act of 1789, defining the jurisdiction of equity courts and the further reasoning that to enforce the Mississippi statute in the United States equity court would be to deprive parties of their constitutional right to a trial by jury. I recognize the soundness of the reasoning in that case, based on the Federal statutes defining the jurisdiction of equity courts; but it does seem to me that the removal statute being an enactment of equal dignity, and of a later date amounts to a modification of the act of 1789, which would give the United States equity court jurisdiction. to try and dispose of this case.

So far as the constitutional objection, that the appellants were deprived of the right of trial by jury is concerned, I do not think it can avail the appellants in this case. I do not understand that because a case is tried on the equity side of