Page:Federal Reporter, 1st Series, Volume 10.djvu/321

Rh Karns and others v. Atlantic & Ohio R. Co. and others.

(Circuit Court, E. D. Ptnnsylvania. October 19, 1881.)

1. Removal of Causes—Jurisdiction—Act of March 3, 1875.

The United States courts have no original jurisdiction under the act of March 3, 1875, (18 St. 470,) in suits between citizens of one state and citizens of the same and of another state.

Demurrer to Bill in Equity.

The bill was filed in the United States circuit court for the eastern district of Pennsylvania by Samuel D. Kams and George G. Howe, botb citizens of Pennsylvania, against the Atlantic & Ohio Railroad Company, the Royal Land Company, and the Potomac, Fredericksburg & Piedmont Eailroad Company, all three being corporations of the State of Virginia; six individual defendants being the stockholders of said Atlantic & Ohio Railroad Company, one of them being a citizen of Pennsylvania, and the remaining five being citizens of other states, and L. Harry Bichards, Jacob H. Walter, and P. Y. Hite, all citizens of Pennsylvania.

The complaint of the bill was, in brief, that complainants, who, as contractors, had built and completed the Potomac, Fredericksburg & Piedmont Railroad, had, on account of financial embarrassments, assigned their contract, together with a controlling interest which they owned in the stock of the Royal Land Company, a corporation which had purchased the railroad, to respondents Walter and Hite, as collateral security for money advanced, and in trust to sell the road, reimburse themselves and the complainants, and pay the surplus to the Royal Land Company; that Walter and Hite had, in conjunction with the Royal Land Company, which they controlled by means of complainants' stock, made, in fraud of the trust, a formal sale and transfer of the said road to respondent L. Harry Richards,for a nominal consideration, but upon a secret trust for their own benefit; that Bichards, acting as their agent, had contracted to sell the road to respondents, the Atlantic & Ohio Bailroad Company, for $300,000. Complainants prayed for an injunction to restrain the purchaser from paying the consideration to Richards, and for a receiver to receive the consideration money and hold it until final hearing.

The court, after hearing, granted a preliminary injunction and