or until with reasonable diligence it might have been discovered, will be applied irrespective of the provisions of the State statute.

APPEAL from the Circuit Court of the United States for the Southern District of New York. Suit for an accounting. Judgment for defendant below upon demurrer.

J. E. Burrell, for appellees, Lake Shore & M. S. R. Co. and others.

HARLAN, J. [Omitting facts.] The case made by the plaintiff is clearly one of which a court of equity may take cognizance. The complicated nature of the accounts between the parties constitutes itself a sufficient ground for going into equity. It would have been difficult, if not impossible, for a jury to unravel the numerous transactions involved in the settlements between the parties, and reach a satisfactory conclusiou as to the amount of drawbacks to which Alexander & Co. were entitled on each settlement. 1 Story Eq. Jur., § 451. Justice could not be done except by employing the methods of investigation peculiar to courts of equity. When to these considerations is added the charge against the defendant of actual concealed fraud, the right of the plaintiff to invoke the jurisdiction of equity cannot well be doubted. Did the Circuit Court err in adjudging that the suit was barred by the statute of limitations? By the Code of Civil Procedure of New York in force prior to September 1, 1877, the period of six years was prescribed as the limitation for “(1) an action upon a contract, obligation, or liability, express or implied, except a judgment or sealed instrument; (6) an action for relief, on the ground of fraud, in cases which heretofore were solely cognizable by the Court of Chancery-the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud." Voorhees' Code (4th ed.), p. 86, § 91.

* *

#

The Code which went into operation September 1, 1887, prescribed the like limitation for actions upon contracts, obligations or liabilities, express or implied, other than judgments or sealed instruments; but in place of subdivision 6 of section 81 of the old Code was substituted the following: "(5) An action to procure a judgment, other than for a sum of money, on the ground of fraud, in a case, which on the 31st day of December, 1846, was cognizable by the Court of Chancery. The cause of action is not deemed to have accrued until the discovery, by the plaintiff or the person under whom he claims, of the facts constituting the fraud." Code of New York as amended in 1877, $ 382.

The Circuit Court, deeming the jurisdiction in equity and at law to be concurrent in cases like this, was of opinion that the question of limitation is controlled by the local statute and upon the authority of Carr v. Thompson, 87 N. Y. 160, adjudged that this action was not, within the meaning of section 382 of the Code, one "to procure a judgment other than for a sum of money, on the ground of fraud;" and that consequently the cause of action accrued upon the commission of the alleged frauds (which was in 1871), and not at the date of their discovery, on the 16th of April, 1873. As this view is controverted by the appellant, and is the main ground upon which appellees rely for an affirmance of the judgment below, it must be examined.

It is not clear that the decision in Carr v. Thompson goes as far as the Circuit judge supposed. That was an action against an agent to recover moneys obtained from his principals, and converted to his own use, by

plaint and answer was whether the agent properly performed his duty. It also was careful to say: "It is to be observed that the complaint is not framed for the

purpose of opening an account stated. It does not allege the existence of such an account as an obstacle to a recovery, which require the aid of equity to remove; nor indeed does the answer set up any such defense." These remarks, in connection with the further declaration that the words "an action to procure a judgment other than for a sum of money on the ground of fraud," sufficiently describe "a case in which judgment for an accounting is sought in addition to, and as a means of reaching, a judgment for money," lead us to doubt whether that court would hold, in a case like the present, that the time for commencing the action begins to run from the commission, not from the discovery, of the fraud.

Be that as it may, it is an established rule of equity, as administered in the courts of the United States, that where relief is asked on the ground of actual fraud, especially if such fraud has been concealed, time will not run in favor of the defendant until the discovery of the fraud, or until with reasonable diligence it might have been discovered. Meader v. Norton, 11 Wall. 442, 458; Prevost v. Gratz, 6 Wheat. 481; Michoud v. Girod, 4 How. 503, 561; Veazie v. Williams, 8 id. 149, 158; Brown v. Buena Vista, 95 U. S. 157; Rosenthal v. Walker, 111 id. 180; S. C., 4 Sup. Ct. Rep. 382; 2 Story Eq., § 1521a; Ang. Lim.

In Bailey v. Glover, 21 Wall. 347, it was said that "in suits in equity, where relief is sought on the ground of fraud, the authorities are without conflict in support of the doctrine that where the ignorance of the fraud has been produced by affirmative acts of the guilty party in concealing the facts from the other, the statute will not bar relief, provided suit is brought within proper time after discovery of the fraud. We also think that in suits in equity the decided weight of authority is in favor of the proposition that where the party injured by the fraud remains in ignorance of it, without any fault or want of diligence or care on his part, the bar of the statute does not begin to run until the fraud is discovered, though there be no special circumstances or efforts on the part of the party committing the fraud to conceal it from the knowledge of the party." In the same case it was said: "To hold that by concealing fraud, or by committing a fraud in a manner that concealed itself, until such time as the party committing the fraud could plead the statute of limitatious to protect it, is to make the law, which was designed to prevent fraud, the means by which it is made successful and secure.' See also Traer v. Clews, 115 U. S. 538; S. C., 6 Sup. Ct. Rep. 155.

These observations were made with reference to an act of Congress prescribing a fixed time within which a suit between an assignee in bankruptcy and persons asserting adverse rights in property conveyed to such assignee should be brought. They are peculiarly applicable to a local statute, which if followed would impair the power of the courts of the United States to enforce the settled principles of equity in suits of which they have, by the Constitution and the laws of the United States, full jurisdiction. While the courts of the Union are required by the statutes creating them to accept, as rules of decision in trials at com

mon law, the laws of the several States, except where the Constitution, laws, treaties and statutes of the United States otherwise provide, their jurisdiction in equity cannot be impaired by the local statutes of the different States in which they sit.

In U. S. v. Howland, 4 Wheat. 108, 115, Chief Justice Marshall, speaking for the court, said that as the courts of the Union have a chancery jurisdiction in every State, and the judiciary act confers the same chancery powers on all, and gives the same rule of decision, its jurisdiction must be the same in all the States. The same view was expressed by Mr. Justice Curtis in his work on the jurisdiction of the courts of the United States (page 13), when he observed that "the equity practice of the courts of the United States is the same everywhere in the United States, and they administer the same system of equity rules and equity Jurisdiction throughout the whole of the United States without regard to State laws." So in Payne v. Hook, 7 Wall. 430, it was said: "We have repeatedly held 'that the jurisdiction of the courts of the United States over controversies between citizens of different States cannot be impaired by the laws of the States which prescribe the modes of redress in their courts, or which regulate the distribution of their judicial power.' If legal remedies are sometimes modified to suit the changes in the laws of the States, and the practice of their courts, it is not so with equitable. The equity jurisdiction of the courts of the United States is the same that the High Court of Chancery in England possesses, is subject to neither limitation nor restraint by State legislation, and is uniform throughout the different States of the Union." See also Robinson v. Campbell, 3 Wheat. 221, 222; Boyle v. Zacharie, 6 Pet. 658; Livingston v. Story, 9 id. 656; Stearns v. Page, 7 How. 819; Russell v. Southard, 12 id. 147; Neves v. Scott, 13 id. 272; Barber v. Barber, 21 id. 592; Green v. Creighton, 23 id. 105.

In view of those authorities, it is clear that the statute of New York upon the subject of limitation does not affect the power and duty of the court below-following the settled rules of equity-to judge that time did not run in favor of defendants, charged with actual concealed fraud, until after such fraud was, or should with due diligence have been, discovered. Upon any other theory the equity jurisdiction of the courts of the United States could not be exercised according to rules and principles applicable alike in every State. It is undoubtedly true, as announced in adjudged cases, that courts of equity feel themselves bound, in cases of concurrent jurisdiction, by the statutes of limitation that govern courts of law in similar circumstances, and that sometimes they act upon the analogy of the like limitation at law. But these general rules must be taken subject to the qualification that the equity jurisdiction of the courts of the United States cannot be impaired by the laws of the respective States in which they sit. It is an inflexible rule in those courts, when applying the general limitation prescribed in cases like this, to regard the cause of action as having accrued at the time the fraud was or should have been discovered, and thus withhold from the defendant the benefit, in the computation of time, of the period during which he concealed the fraud.

It results that even if this be not an action "to procure a judgment other than for a sum of money, on the ground of fraud," within the meaning of the New York Code of Procedure, the limitation of six years, being applied here, does not, as adjudged below, commence from the commission of the alleged frauds.

Can the suit be maintained if the cause of action is to be deemed to have accrued from the discovery of the fraud?

In Burke v. Smith, 16 Wall. 401, where the local stat

ute prescribed six years for the commencement of actions for fraud, the court, after observing the equity acts or refuses to act in analogy to the statute, said: "We think a court of equity will not be moved to set aside a fraudulent transaction at the suit of one who has been quiescent during a period longer than that fixed by the statute of limitations, after he had knowledge of the fraud, or after he was put upon inquiry with the means of knowledge accessible to him." Without inquiring whether the plaintiff was not guilty of such gross laches, in applying for relief, as deprived him of all right to the aid of equity, and giving him the benefit of the limitation of six years to be computed from the discovery of the fraud, there seems to be even then no escape from the conclusion that the suit was not brought in time. Seven years, lacking only seven days, elapsed after the discovery of the frauds by the plaintiff's testator before suit was brought.

The plaintiff however contends that he had seven years within which to sue. This position is supposed to be justified by the New York statute of September 13, 1883, which declares that "the time which shall have elapsed between the death of any person and the granting of letters testamentary or of administration on his estate, not exceeding six months, and the period of six mouths after the granting of such letters, shall not be deemed any part of the time limited by any law for the commencement of actions by executors of administrators." 2 Rev. Stat. N. Y. (Banks & Bros.' ed.) 733, ch. 8, tit. 3, art. 1, § 9.

If this statute has any application to a case where the cause of action accrued in the life-time of the testator or intestate, it cannot avail the plaintiff. It does not give the party claiming the benefit of its provisions, both of the two periods of six months therein mentioned, but only such time, not exceeding six months, as elapsed after the death of the testator or intestate before the granting of letters, and the additional time of six months after the granting of letters. Here only sixteen days intervened between the death and the granting of letters testamentary. In computing the time for suing there must be excluded only these sixteen days, and the six months immediately succeeding that period. In other words, applying the statute of 1873 to the case in hand, the plaintiff had only six years, six months and sixteen days, after the discovery, on Apil 16, 1873, of the alleged frauds, within which to sue; whereas this action was not brought until seven years, lacking only seven days, after the alleged frauds were discovered.

We do not conceive that the time of granting the ancillary letters testamentary in New York can affect the question. The will having been proved in Illinois, the place of domicile, there was nothing to prevent the immediate issue of letters upon it in New York. By the laws of that State no further probate was necessary. A certified copy deposited in the office of the surrogate was all that was required. As this was in the executor's power to have done at any time, he can hardly claim that his own voluntary delay should extend the period which equity considers reasonable for the institution of a suit. 2 Rev. Stat. N. Y. (2d ed.) marg. page 67. § 82; Code Civ. Proc., § 2695. The decree is affirmed.

MORTGAGE-ASSIGNMENT AS COLLATERAL FORECLOSURE-RIGHTS OF PARTIES.

NEW YORK COURT OF APPEALS.

GILBERT V. THAYER.

Where the mortgage of a third person has been assigned by the mortgagee as collateral security for his own debt, the foreclosure of the mortgage by the assignee and his pur

chase at the sale, as against the assignor, assuming that the assignor's equity of redemption had not been foreclosed by making him a party, works no other result than to substitute the land for the mortgage in the hands of the assignee, and leaves it subject to the assignor's right by payment of the debt to reclaim and hold the property discharged of the assignee's lien.

In such case the rights of the assignor attach to the land if the assignee becomes a purchaser, and to the purchasemoney if the title goes to a stranger.

APPEAL from order of General Term, fifth depart.

ment, reversing an order of the surrogate of Ontario county, directing defendant to account as administrator for the proceeds arising from the sale of real estate.

E. G. Lapham, for appellant.

W. F. Cogswell, for respondent.

FINCH, J. [Omitting question of practice.] The main question involved in the appeal was carefully considered by the General Term, and but for its interest and importance and the alleged doubt clouding the opinions of this court upon the subject, might justly be allowed to rest upon the argument which prevailed with that tribunal. It is quite necessary, at the outset, to clear the facts of a possible ambiguity. The contention of the appellants depends largely upon the theory that Gilbert stood as creditor of the Little Falls Company for a loan of $1,000, secured by a mortgage of that company upon the lands in controversy, and Thayer was simply a guarantor of that loan, in consideration of a certain proportion of a large rate of interest agreed to be paid. If that was the conceded situation, it is not impossible that the doctrine of subrogation might reach far enough to leave us still confronting the question principally discussed, but we need not pursue that inquiry since we are thoroughly satisfied that the case must stand upon a different relation of the parties which was deliberately fixed and chosen by themselves.

Three persons, Gideon Pitts, Perez R. Pitts and Edwin Gilbert, the defendant's intestate, loaned to George Thayer, the defendant, $3,000, taking his two notes, one for $1,000, dated October 1. 1859, payable in two years, with interest, and one for $2,000, dated November 1, 1859, payable in three years from date, with interest. It is undoubtedly true that Thayer borrowed this money to lend it in turn to the Little Falls Company. He had made application for a loan to that corporation which the leuders had refused, but at the same time intimating a willingness to take him as their debtor for the amount. This fact the surrogate expresses in his second finding in a somewhat ambiguous form, but not at all inconsistent with the further facts which he finds and with the papers executed to carry out the arrangement. The original proposition for a loan to the company was for $5,000. This the surrogate says, was refused, but he adds that the lenders "were willing to loan the sum of $3,000 provided the said Thayer would guarantee or become responsible for the same. How that responsibility was to be assumed, or what form it should take, the surrogate does not determine, except as he finds the form that it did take, and that form is a direct loan to Thayer in the first instance, making him the primary sole debtor to the lenders, and leaving him to deal with the corporation as he pleased, save that the finding may leave room for a possible inference that if Thayer secured on his loan to the corporation an interest of fifteen per cent, he should allow to the lenders an interest of ten per cent. The defendant made such loan and took from the Little Falls Company their notes corresponding with those given by Thayer to this creditors in dates and amounts and periods of maturity, but pro

viding for interest at fifteen per cent, payable semiannually. These notes were secured by the company's mortgage to Thayer of their real estate on the east side of the river, dated two days earlier than the date of the October note. There the matter rested, with the rights and relations of the parties thus fixed, for a period of more than four months. On the 4th of February, 1860, Thayer assigned his notes and mortgages against the company to his lenders as collateral security for his own debt to them. The assignment is in writing, and is proved to have been prepared by Gilbert and written by him. There is no room for misunderstanding the fact it establishes. It recites the debt of Thayer to the original lenders, describing by dates and amounts the notes he had given and transfers as security for that debt the mortgage and notes of the company, expressly providing that on payment of his own notes the assignment should be void and of "none effect." It is not possible in the face of this deliberate, instrument, in the handwriting of Gilbert himself, to transform the declared relation into a primary indebtedness of the corporation to him and his associates, simply guaranteed by Thayer; and there is no equity in this claim which has slept for almost a quarter of a century until changing values have given it great value, such as to justify a struggle to turn it into something different from the form which it deliberately assumed.

In May, 1861, Gilbert died and Thayer and the widow became administrators of his estate. In the inventory which they filed no mention is made of the Little Falls Company's notes and mortgages, but the debt of Thayer to Gilbert is included. In the original loan of $3,000, each of the three parties furnished onethird and Thayer's debt to the amount of $1,000 was the property of Gilbert. We find in the inventory accordingly one-third of the note of October, 1859, and one-third of that of November, 1859, credited to the estate as assets and due to the estate from Thayer. There was a third note of earlier date for $224.09 inventoried as due from him. The final settlement of the accounts shows that all three notes were paid to the estate, the one last mentioned in 1862, and the other two May 30, 1863. Soon after the death of Gilbert the Little Falls Company gave to Thayer another mortgage, but upon its property on the west side of the river, dated November 26, 1861, and conditioned to secure the payment of $1,000 in one year with interest at twelve per cent, payable semi-annually. The consideration of this mortgage was a new loan to the company by Thayer to about one-half of the amount, the remaining half securing arrears of interest on the existing debt to him, and this, the west side mortgage, was assigned to the three creditors of Thayer as collateral security for his debt to them precisely in the same manner as the first or east side mortgage. These transfers in legal effect were each a mortgage of a mortgage or a pledge of a mortgage. The assignees got only a defeasible title, subject to destruction by the payment of the debt at any time before the rights of the assignor were forcclosed or extinguished. Both mortgages were foreclosed, and on a sale the lands were purchased by the administrators of Gilbert. The second or west side mortgage was foreclosed by advertisement, the two Pitts and the representatives of Gilbert appearing as mortgagees, the sale taking place February 16, 1863, and under the law of Minnesota one year thereafter being allowed for redemption by the mortgagor, in default of which the equity became extinct. The east side mortgage was foreclosed by a suit in equity in the name of the Pitts as plaintiffs to whom for convenience the right of the estate had been transferred, but to neither foreclosure was Thayer a party in his individual character. In the equity suit he was not a party in any capacity, and in the fore

in different rights. We have recently affirmed that view of the doctrine. Smith v. Roberts, 91 N. Y. 475.

The contention that some unpaid interest should be accounted for by defendant cannot survive the settle. ment of the administrator's accounts by the surrogate. The notes were then paid with interest. If a greater rate was chargeable that was the time and occasion to have asserted the claim.

The order of the General Term should be affirmed with costs.

All concur.

Order affirmed.

STATUTE-CITIZENS-WOMEN AND MINORS.

MISSOURI SUPREME COURT, FEB 1, 1887.

STATE EX REL. MCCAMPBELL V. COUNTY COURT. In determining whether a majority of the "assessed tax pay ing citizens" have signed a petition for the granting of a dram shop license, as required by the statute of Missouri, before any such license can be granted, women and minors who are assessed and pay taxes must be counted. The word "citizens," as used in the statute,cannot be limited in its signification to such male persons as have the right to vote.

THIS

HIS was a proceeding by mandamus against the County Court of Howard county, to compel that court to grant a license for the keeping of a dram shop. Samuel C. Major and H. W. Cockrell, for relator. R. C. Clark, for respondent.

NORTON, J. It is provided in the acts of 1882, p. 86, as follows: 'Section 5442. It shall not be lawful for any County Court in this State, or clerk thereof in vacation, to grant any license to keep a dram shop in any town or city containing 2.500 inhabitants or more, until a majority of the assessed tax paying citizens in the block or square in which the dram shop is to be kept, shall sign a petition asking for such license to keep a dram shop in such block or square in such town or city, nor in any city containing less than 2,500 inhabitants, nor in any incorporated town or municipal township, until a majority, of both of the 'assessed tax-paying citizens' therein, and in the block or square in which the dram shop is to be kept, shall sign a petition asking for such license to keep a dram shop therein."

The questions presented by the record before us involve a construction of the above act, and are as follows: Is it incumbent on the County Court in determining whether a petition presented for dram shop license in any town or city signed by a majority of the assessed tax payers, to count married or single women, who reside in the city or town and own property in their own right, and who are assessed thereon by the regular assessors of the city at the last assessment?

Second. Are minors resident in said city who have guardians and who own property regularly fassessed to be counted?

Third. Are citizens residing outside of the city and who own property in said city and who are regularly assessed to be counted?

The solution of these questions depends upon the meaning to be given to the word citizens, and ascertaining that, the usual canons of construction with reference to the construction of statutes must be applied. One of these rules is that statutes are to be read according to the natural and obvious import of the words without resorting to subtle or forced construction for the purpose of either limiting or extending their operation. "The fundamental reason for this rule is to be found in the consideration that unless

courts, as a general thing, construe language in the same sense in which it is used by the Legislature, that is, according to the ordinary and natural import, it would be in vain to attempt to preserve any harmony between the co-ordinate departments of the government, and the contrary doctrine would open the door to intolerable looseness of construction." Sedg. on Stat. L. 219.

This rule of construction forbids us to accept the proposition so earnestly and ingeniously contended for by counsel for the relator, viz.: That the word citizens as used in the above section only includes such male citizens as have the right to vote.

To give the word this meaning would be in plain disregard of the rule, by restricting its application to a fractional part of the persons falling within the customary and usual meaning of the term citizen. If the Legislature intended this, their intention could and doubtless would have been unmistakably expressed by making the section read "assessed tax paying voters" instead of "assessed tax paying citizens." This they have not done and we cannot by construction expunge the word citizens as the Legislature has written it, and write in its place the word voters.

A citizen is defined by Webster to be: "A person, native or naturalized, who has the privilege of voting for public officers and who is qualified to fill public offices in the gift of the people; also, every native born or naturalized person of either sex, who is entitled to full protection in the exercise and enjoyment of 80called private rights." Bouvier's definition of a citizen in American law, is: "One who, under the Constitution and laws of the United States, has a right to vote for representatives in Congress and other public officers, and who is qualified to fill offices in the gift of the people. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." Abbott defines it thus: A person who owes allegiance to the United States and may claim a reciprocal protection from a Government. One who is a member of a nation or of the body politic of a sovereign State. "Age or majority is not involved. The most important political rights are not indeed acquired until the age of twenty-one; but it is not the possession of those which constitutes citizenship, nor is citizenship in abeyance while they are. Nor is sex involved. Women are citizens fully and truly as men; nor does a recognition of women's citizenship involve a grant of political rights, such as are indeed usually conferred only upon citizens, but do not inhere in that status." 1 Abb. Law Dict.223-4. United States v. Anthony, 11 Blatchf. 200; Minor v. Happersett, 21 Wall. 162; United States v. Reese, 92 U. S. 214; 1 McArthur, 169; Volenburgh v. Brown, 43 Cal. 42.

Accepting the definition thus put upon the word citizen by the highest authority, we must return an affirmative answer to the first two questions propounded by the record.

If the design of the Legislature in requiring a petition signed by a majority of the assessed tax paying citizens to be presented as a condition precedent to the exercise by the County Court of the power to grant a license to keep a dram shop in a block of a city containing 2,500 or more inhabitants, was to afford protection to that extent to the property in the block, no reason is perceived why the word "citizen" should be restricted in its meaning only to those who are voters, inasmuch as the property of women and minors would be affected as well as that of the citizen clothed with the privilege of voting. If the location of a dram shop in such a block would affect injuriously the property, as to rental value or otherwise, belonging to a citizen voter it would also affect in the same way that owned