Opinion of the Court.

The whole matter turns upon the question whether Krieger, who acted almost alone for the bank, had reasonable ground to believe that Melter was insolvent at the time the mortgages were made.

The district judge, who decided that he nad such reasonable ground, does not seem to have given due weight to the principles of the case of Grant v. The National Bank, decided by this court, and reported in 97 U. S. 80, a case which was fully considered, and which has since been followed by us as a leading one on the subject.

That case establishes the doctrine that a creditor dealing with a debtor whom he may suspect to be in failing circumstances, but of which he has no sufficient evidence, may receive payment or security without violating the bankrupt law. He may be unwilling to trust him further; he may feel anxious about his claim and have a strong desire to secure it, yet such belief as the act requires may be wanting. Obtaining additional security or receiving payment of a debt under such circumstances is not prohibited by law.

In the case before us the testimony of Krieger himself, as the one who best knows the strength of the suspicion, if any, on which he acted, and what evidence was before him, must chiefly control.

We have examined his deposition very carefully. We think it bears the impress of candor, and it negatives the idea that he had reasonable ground to believe Melter insolvent, or that he actually did believe it.

The evidence, outside of this, as to the various estimates of the value of Melter's property and the amount of his debts, while it shows that Melter was probably insolvent, does not show that this was known to Melter himself or to Kreiger, or that the latter had reasonable grounds to believe him so.

It would serve no useful purpose to give in this opinion a full examination of all the evidence. It is sufficient to say that in looking it all over we concur with the circuit judge, and his decree dismissing the bill is

Affirmed.

Satement of Facts.

NEW HAMPSHIRE v. LOUISIANA and Others.

NEW YORK v. LOUISIANA and Others.

ORIGINAL.

Decided March 5th, 1883.

Constitutional Law-International Law―Jurisdiction-Sovereign State. 1. The history of article XI. of the amendment to the Constitution which provides that the judicial power of the federal courts shall not extend to suits against a State by a citizen of another State, or by citizens or subjects of a foreign State, and the causes which led to its adoption, reviewed. 2. Unless the State prosecuted consents, that amendment prohibits the court from entertaining jurisdiction of a cause in which one State seeks relief against another State on behalf of its citizens, in a matter in which the State prosecuting has no interest of its own. One State cannot create a controversy with another State, within the meaning of that term as used in the judicial clauses of the Constitution, by assuming the prosecution of debts owing by the other State to its citizens.

3. The relation of one of the United States to its citizens is not that of an independent sovereign State to its citizens. A sovereign State seeking redress of another sovereign State on behalf of its citizens can resort to war on refusal, which a State cannot do.

4. The qualifications of the duty of a sovereign State to assume the collection of the debts of its citizens from another sovereign State considered and stated.

The case on which the opinion is given is thus stated by the

court.

On the 18th of July, 1879, the general court of New Hampshire passed an act, of which the following is a copy:

"AN ACT to protect the rights of citizens of this state, holding claims against other States.

"Be it enacted by the Senate and House of Representatives in General Court convened.

SECTION 1. Whenever any citizen of the State snall be the owner of any claim against any of the United States of America, arising upon a written obligation to pay money issued by such State, which obligation shall be past due and unpaid, such citizen holding such claim may assign the same to the State of New Hampshire, and deposit the assignment thereof, duly exe

Statement of Facts.

cuted and acknowledged in the form and manner provided for the execution and acknowledgment of deeds of real estate by the laws of this State, together with all the evidence necessary to substantiate such claim, with the attorney-general of the State.

"SEC. 2. Upon such deposit being made, it shall be the duty of the attorney-general to examine such claim and the evidence thereof, and if, in his opinion, there is a valid claim which shall be just and equitable to enforce, vested by such assignment in the State of New Hampshire, he, the attorney-general, shall, upon the assignor of such claim depositing with him such sum as he, the said attori, y-general, shall deem necessary to cover the expenses and disbursements incident to, or which may become incident to the collection of said clain, bring such suits, actions or proceedings in the name of the State of New Hampshire, in the Supreme Court of the United States, as he, the said attorneygeneral, shall deem necessary for the recovery of the money due upon such claim; and it shall be the duty of the said attorney general to prosecute such action or actions to final judgment, and to take such other steps as may be necessary after judgment for the collection of said claim, and to carry such judgment into effect, or, with the consent of the assignor, to compromise, adjust, and settle such claim before or after judgment.

"SEC. 3. Nothing in this act shall authorize the expenditure of any money belonging to this State, but the expenses of said proceedings shall be paid by the assignor of such claim; and the assignor of such claim may associate with the attorney-general in the prosecution thereof, in the name of the State of New Hampshire, such other counsel as the said assignor may deem necessary, but the State shall not be liable for the fees of such counsel, or any part thereof.

"SEC. 4. The attorney-general shall keep all moneys collected upon such claim, or by reason of any compromise of any such claim, separate and apart from any other moneys of this State which may be in his hands, and shall deposit the same to his own credit, as special trustee under this act, in such bank or banks as he shall select; and the said attorney-general shall pay to the assignor of such claims all such sums of money as may be recovered by him in compromise or settlement of such claims, deducting therefrom all expenses incurred by said attorney not before that time paid by the assignor.

Statement of Facts.

"SEC 5. This act shall take effect on its passage."

Under this act six of the consolidated bonds of the State of Louisiana, particularly described in the cases of State ex rel. Elliott v. Jumel and Elliott v. Wiltz, 107 U. S. 711, were assigned to the State of New Hampshire by one of its citizens. This assignment was made for the purposes contemplated in the act, and passed to the State no other or different title than it would acquire in that way. After the assignment was perfected a bill in equity was filed in this court in the name of the State of New Hampshire, as complainant, against the State of Louisiana and the several officers of that State who compose the board of, liquidation provided for in the act authorizing the issue of the bonds. The averments in the bill were substantially the same as those in Elliott v. Jumel, save only that in this case the ownership of the bonds specially involved was stated to be in New Hampshire, while in that it was in Elliott and his associates. The prayer was in substance for a decree that the bonds and the act and constitutional amendment of 1874 constitute a valid contract between Louisiana and the holders of its bonds; that the defendants and each of them might be prohibited from diverting the proceeds of the taxes levied under the act from the payment of the interest, and that the provisions of the debt ordinance of 1879 might be adjudged void and of no effect, because they impaired the obligation of the contract. The bill was signed in the name of New Hampshire by the attorney-general of that State and also by the same counsel who appeared for Elliott, Gwynn & Walker in their suit in equity reported in 107 U. S.

On the 15th of May, 1880, the legislature of New York passed the following act :

"AN ACT to protect the rights of citizens of this State owning and holding claims against other States.

"The people of the State of New York, represented in Senate and Assembly, do enact as follows:.

"SECTION 1. Any citizen of this State, being the owner and holder of any valid claim against any of the United States of

Statement of Facts..

America, arising upon a written obligation to pay money, made, executed, and delivered by such State, which obligation shall be past due and unpaid, may assign the same to the State of New York, and deliver the assignment thereof to the attorney-general of the State. Such assignment shall be in writing, and shall be duly acknowledged before an officer authorized to take the acknowledgment of deeds, and the certificate of such acknowledgment shall be duly indorsed upon such assignment before the delivery thereof. Every such assignment shall contain a guaranty, on the part of the assignor, to be approved by the attorney-general, of the expenses of the collection of such claim, and it shall be the duty of the attorney-general, on receiving such assignment, to require on behalf such assignor, such security for said guaranty as he shall deem adequate.

"SEC. 2. Upon the execution and delivery of such assignment, in the manner provided for in section one of this act, and furnishing the security as in said section provided, and the delivery of such claim to him, the attorney-general shall bring and prosecute such action or proceeding, in the name of the State of New York, as shall be necessary for the recovery of the money due on such claim, and the said attorney-general shall prosecute such action or proceeding to final judgment, and shall take such proceedings after judgment as may be necessary to effectuate the

same.

"SEC. 3. The attorney-general shall forthwith deliver to the treasurer of the State, for the use of such assignor, all moneys collected upon such claim, first deducting therefrom all expenses incurred by him in the collection thereof, and said assignor, or his legal representatives, shall be paid said money by said treasurer upon producing the check or draft therefor of the attorneygeneral to his or their order and proof of his or their identity. "SEC. 4. This act shall take effect immediately."

On the. 20th of April, 1881, E. K. Goodnow and Benj. Graham, being the holders and owners of thirty coupons cut from ten of the consolidated bonds of Louisiana falling due January 1st, 1880, July 1st, 1880, and January 1st, 1881, assigned them to the State of New York by an instrument in writing, of which the following is a copy: