in the case of Twin Lick Oil Co. v. Marbury, 91 U. S. 587, such contracts are not absolutely void, but are voidable at the election of the parties affected by the fraud. It may often occur that, notwithstanding the vice of the transaction,—namely, the directors or trustees, or a majority of them, being interested in opposition to the interest of those whom they represent, and in reality parties to both sides of the contract,—that it may be one which those whose confidence is abused may prefer to ratify or submit to. It is therefore at the option of these latter to avoid it, and, until some act of theirs indicates such a purpose, it is not a nullity.

In the present case the stockholders of the corporation, whose of ficers accepted those benefits at the hands of the parties, with whom they were, in the name of the corporation, making a contract for over a million of dollars, do denounce and repudiate that contract. The conduct of these directors is utterly indefensible. The case of Wardell v. Union Pac. R. Co. 103 U. S. 651, is,in precise analogy to this. See, also, same case in 4 Dill. 330. The original contract being such that the contractors can maintain no suit on it, the bonds which they received are affected with the same vice, and cannot be enforced unless they are negotiable instruments in the hands of innocent holders for value. This principle is set up and relied on to reverse the decree, on the ground that the bonds are in the hands of the Burlington & Missouri River Railroad Company. This company is no party to the suit, but it appears in evidence that, while it has possession of these bonds, it did not receive them by any purchase in the ordinary course of business. They came into their possession as part of a transaction in which they purchased the consolidated Nebraska Company's railroad, and these bonds were probably taken as security against their being used to injure the title. It is also shown that, as further security in the same direction, the Burlington & Missouri Railroad Company yet retains $400,000 of the price of the road, which they agreed to pay. Under these circumstances we do not see that that company is in condition to avail itself of the doctrine of bona fide holders for value.

But we are asked to reverse the decree so far as to permit the trustee in this case to recover such a sum as the construction company actually earned in building the road. The matter was referred to a master, who, on this hypothesis, reported that the contractors had done work for the railroad company, which it had accepted, to the value of $205,947.66 beyond what they had received payment for, except as it was paid by these bonds. He also reported that this work was of that much advantage to the company, and its value or cost is estimated as on a quantum meruit, without regard to the prices fixed by the contract. We are of opinion that appellant's view of this part of the transaction is sound. The bonds and mortgage in the hands of the trustee were issued in payment for this work. To the extent of $205,947.66 the consideration is good, and no sound prin

ciple is seen on which they cannot to that extent be enforced. To this extent they do not rest on the original contract, but on work, labor, and material actually furnished to the company and received by it. These services and materials are not estimated by the prices named in the contract, but by their real value to the company.

In the analogous case of Wardell v. Union Pac. R. Co. 4 Dill. 339, the circuit court, after rejecting the fraudulent contract on the same grounds that we reject this one, said:

"By what rule shall we measure Mr. Wardell's rights? He has spent time and labor and money in discovering the mines, and in placing them in conditlon to be profitably worked. * * * Apart from the contract, and if it had never existed, he is entitled to a fair and reasonable compensation for his labor and time and skill. The fraud gives the railroad company no right to these without just compensation."

This ruling was affirmed in this court on appeal in the same case. 103 U. S. 659. See, also, Gardner v. Butler, 30 N. J. Eq. 702.

There is another principle of equity jurisprudence which leads to the same conclusion. The stockholders who have resisted complainant's claim were not parties to the original suit for foreclosure, nor were they either necessary or proper parties as the case then stood. The decree and sale were made in a suit where all the usual parties to such a suit were agreed. These stockholders had no legal right to interfere. It was only by permission of the court that they were allowed to come in and contest. the validity of the mortgage. In doing this they became actors. They filed their cross-bill. In this condition of the case they are amenable to the rule that they who seek equity must do equity. It is just that they should pay a fair price for what they have received; that this mortgage, given for the construction of the road, though excessive by reason of the fraud in the contract, should stand for the reasonable value of what the company actually received in the way of construction. To permit these intervenors to defeat the mortgage on any other terms would be unjust, and would make the court the instrument of this injustice.

The decree of the ciretit court must therefore be reversed, and the case remanded to that court, with directions for a decree in favor of the plaintiff for the sum of $205,947.66, with interest. If a sale becomes necessary this sum must be paid out pro rata on the bonds secured by the mortgage, on their being produced and canceled, or surrendered for cancellatián, provided the road sells for so much.

Mr. Justice FIELD and Mr. Justice MATTHEWS took no part in the hearing or decision of this case.

(109 U. S. 426)

SMITH and another v. McNEAL and others.

(December 3, 1883.)

STATUTE OF LIMITATIONS-ACTION DISMISSED FOR WANT OF JURISDICTION-NEW ACTION-TENNESSEE CODE, ARTS. 2765, 2755.

Where an action commenced within the time limited by article 2765 of the Code of Tennessee has been dismissed for want of jurisdiction, it is within the saving of section 2755 of the Code, and a new action may be brought within one year from the date of such dismissal.

In Error to the Circuit Court of the United States for the Western District of Tennessee.

On December 31, 1873, the plaintiffs in error brought suit against defendants in the circuit court of the United States for the western district of Tennessee to recover 40 acres of land. The declaration described the land, and averred that the plaintiffs were possessed thereof, claiming in fee through a certificate of the United States district tax commissioners, naming them, under an act of congress entitled "An act for the collection of taxes in insurrectionary districts within the United States and for other purposes," and the acts amending the same, of January 1, 1865, and that after such possession accrued the defendants, on December 1, 1865, entered upon the premises and unlawfully withhold and detain the same, etc. Two of the defendants, NcNeal and Caruthers, demurred to the declarationFirst, because it did not sufficiently describe the property sought to be recovered; and, second, because it did not show that the plaintiffs were not citizens of the state of Tennessee so as to give the court jurisdiction of the cause. On February 24, 1877, the court sustained the demurrer upon the ground that it had "no jurisdiction of the cause of action in plaintiffs' declaration alleged and set forth," and dismissed the suit. Afterwards, on October 20, 1877, the plaintiffs in error brought the present suit against the same defendants in the same court to recover the same tract of land. The declaration in this cause was identical with that in the former action, except that in this case the following averment was added:

"Defendants do not claim under, but adversely to, and deny the validity of plaintiffs' claim of title under the aforesaid acts of congress; and the validity of plaintiffs' claim of title under the aforesaid acts of congress is the only question in controversy between the plaintiffs and defendants."

The defendants pleaded the seven-years' limitation prescribed by the statute of Tennessee, to which the plaintiffs pleaded the following replication:

"Now come the plaintiffs, by attorneys, and as to defendants' plea herein pleaded say, that on the thirty-first of December, 1873, and within seven years from the time the plaintiffs' cause of action accrued, the plaintiffs brought suit against defendants in this court to recover possession of the same premises whereof plaintiffs here now seek to recover possession; and the said

suit was commenced upon the same cause of action that the plaintiffs' now writ and action are founded; that the said action, so commenced as aforesaid, was duly prosecuted by plaintiffs until the first of September, 1877, upon which day a judgment (which said judgment remaining of record in this court is referred to) was therein rendered by said circuit court upon a ground not concluding their said right of action. The record of said former suit remains in this court, and plaintiffs here make profert of the same; all of which plaintiffs are willing to certify."

The defendants demurred to this replication on two grounds: First, because it appeared, by the judgment referred to and made a part of the replication, that said judgment was upon the merits; and, second, because it appeared from the record of said former suit that the court in which it was brought had no jurisdiction thereof, and said suit was dismissed for want of jurisdiction. The cause was heard upon this demurrer, which the court sustained, and entered judgment dismissing plaintiffs' suit. To reverse that judgment this writ of error is prosecuted.

D. E. Myers, W. M. Sneed, S. P. Walker, S. Shellabarger, and J. M. Wilson, for plaintiffs in error.

P. Phillips and W. Hallett Phillips, for defendants in error.

WOODS, J. The question presented by the record is the sufficiency of the plaintiffs' replication to the defendants' plea of the sevenyears' statute of limitation. The limitation relied on by defendants is that prescribed by article 2765 of the Code of Tennessee, which is as follows:

"No person, or any one claiming under him, shall have any action, either at law or in equity, for any lands, etc., but within seven years after the right of action has accrued."

The plaintiffs in error contend that their present action is saved from the bar of this statute by the provision of article 2755 of the Code, which is as follows:

"If the action is commenced within the time limited, but the judgment or decree is rendered against the plaintiff upon any ground not concluding his right of action, or when the judgment or decree is rendered in favor of the plaintiff and is arrested or reversed on appeal, the plaintiff or his representatives or privies may commence a new action within one year after the reversal in arrest."

The question of law upon which the parties are at issue is whether the judgment rendered February 24, 1877, by which the suit begun December 31, 1873, was dismissed, the dismissal being on the ground that the court had no jurisdiction of the cause of action set out in the declaration, falls within the saving of this section as being rendered on a ground not concluding the plaintiffs' right of action. It is well settled that the judgment of a court dismissing a suit for want of jurisdiction does not conclude the plaintiffs' right of action.

In Walden v. Bodley, 14 Pet. 156, it was said by this court: "A decree dismissing a bill generally may be set up in bar of a second bill having the same object in view, but when the bill has been dismissed on

the ground that the court had no jurisdiction, which shows that the merits were not heard, the dismissal is not a bar to the second suit."

So in the case of Hughes v. U. S. 4 Wall. 232, this court declared: "In order that a judgment may constitute a bar to another suit it must be rendered in a proceeding between the same parties or their privies, and the point of controversy must be the same in both cases, and must be determined on its merits. If the first suit was dismissed for defect of pleadings or parties, or a misconception of the form of proceeding, or the want of jurisdiction, or was disposed of on any ground which did not go to the merits of the action, the judgment rendered will prove no bar to another suit." See also, Greenl. Ev. §§ 529, 530, and cases there cited.

These cases would seem to settle the question against defendants in error, for they decide that the dismissal of a suit for want of jurisdiction is upon a ground not concluding the right of action. Defendants in error, however, contend that the bringing of a suit in a court having no jurisdiction thereof was gross negligence, and that the current of authority is against extending the terms of the statute to let in one guilty of it. Cases might be supposed, perhaps, where the want of jurisdiction in the court was so clear that the bringing of a suit therein would show such gross negligence and indifference as to cut the party off from the benefit of the saving statute, as if an action of ejectment should be brought in a court of admiralty, or a bill in equity should be filed before a justice of the peace. But the suit between these parties, which was begun December 31, 1873, is far from being such a case. There is nothing in the record to show that' it was dismissed for any inherent want of jurisdiction in the court in which it was brought. We think that on December 31, 1873, when said first suit was brought, the circuit courts of the United States, under the second section of the act of congress of March 3, 1833, entitled "An act further to provide for the collection of duties on imports," (4 St. 632,) had jurisdiction of a suit brought to recover lands purchased at a sale for taxes made under authority of the act of June 7, 1862, for the collection of taxes in insurrectionary districts, where the title so derived was disputed by defendants. The defect was in the declaration, which, although it averred that plaintiffs claimed title under the revenue laws of the United States, did not aver that their title in that respect was disputed by defendants. Had such an averment been made, the jurisdiction of the court would have appeared on the face of the declaration. Ex parte Smith, 94 U. S. 455. The first suit was therefore dismissed, because the declaration did not state the jurisdictional facts upon which the right of the court to entertain the suit was brought.. In other words, the case was dismissed for a defect in pleading. In the present suit the defect of the declaration in the first suit is supplied. We are of opinion, therefore, that the plaintiffs in error are entitled to the benefit of article 2755 of the Code of Tennessee, for their judgment in the first suit was not upon any ground concluding their right of action, nor have they been guilty of