TEXAS

«

PAC. RY. CO. V. INTERSTATE. TRANS. CO.

5

standing on the tracks and crossings for delivery purposes, for no such obstruction is hindered by the ordinance. The title is against but not one word is there in the ordinance against itinerant sellers, or vending from place to place. In short, the ordinance is not in aid of the prevention of any public harm or the promotion of any public good, but, on the contrary, is alike to the restriction of the rights of the importer, as usually recognized, and the inconvenience of the citizens; and, as was practically admitted on the hearing, seems to have no other pose than to hinder competition between non-resident shippers and dealers in certain perishable articles and the resident licensed dealers in the same line.. Our conclusion,. therefore, is that the ordinance is a regulation of commerce; and, not being in aid of any of the objects properly intrusted to the municipal government, falls within the class of unrea.sonable ordinances. See Horr & B. Mun..Ord. §§ 131, 132, and cases there cited. ). The injunction pendente lite is granted.

TEXAS

&

PAC.

Ry. Co.

'II. INTERSTATE TRANS.

Co.

(Oircuit Oourt, ]il. D. Louisiana. . January 16,1891.)
NAVIGAllLllI

rily impair the usefulness of the river to the public, but is required to construct a. draw in any bridge over a naVigable stream, an injunction will not be granted tQ prohibita water transpo.rtation company from taking its tow-boats through the draw at high water with more than two barges in tow, in the absence of more spe-: cillc legislative 'authority, unless it first be made to appear in proceedings at law, where the defendant c.an. have a trial by juryl that the bridge with its draw as now constructed does not "unnecessarily impBll"" the public convenience of the river. .

I 7, subd; 6) to erect a bridge ofer any river, prOVided that it does not

W ATIlR-BBIDGllI-INroNCTlON. Where a railroad company is authorized by its charter (Act La. 1876, No. 14, p. 81,

In. :Equity. Bill fodnjunction. W. W. Howe, for complaimmt. J. P. Hornor, for defendant.
BILLINGS, J. This cause has been heard on a demurrer. The com.. plflinant, under the permission given by the legislature of Louisiana,' (Acts 1876, No. 14, p. 31, § 7, subd. 6,) has erected a bridge over the Atchafalaya river, as part of its railway bed. It is contended by the that the Atchafalaya river is wholly within the state of Louisi... aua,and that it was competent for the legislature of that state to give permission, so all question as to the authority of the state legislature is taken out of this case. The act of the legislature is a part of the com.pill. Theaet .is a general one,· authorizing the complainant to maintain itaroad over any river, and provided it does not unnecessarily impair the usefulness and convenien,ce of the river to the p.ublic, and

6

FEDERALnEPORTER,

vol.

.

:provided that" it sha,ll not' required to construct a draw inlmy bridge ,ovar'and. across any stream or bayou, except streams navigable by enTOlled· and licensed vessels." As the Atchafalaya river is navigable by enrolled and licensed vessels, it follows that under the last the complainant is required to establish and maintain a draw. The bill is -an injunction bill, and falls under the head of bills to a privilege from invasion from other parties. The thing averred to be ous to the complainant's bridge,and which is sought to be enjoined, is the passing of any tow-boats through the draw at high water with more than two barges in tow. It is Clear that such a regulation of commerce cannot be enforced, unless it has been authorized by the charter. The charter makes the right to build the bridge to be conditioned upon its not impairing the usefulness or convenience of the stream to the public unnecessarily. According to the charter, this question of unnecessary interruption of commerce must be negatived before the compl3.inant can ask the court to grant any such injunction. The bridge with its draw as at present constructed is clearly an interruption of commerce. Is it an unreasonable one? The bill avers that the bridge is lawful, and complies with the statute authorizing it, and that the draw is ample. This is the general statement. But the bill to state that the defendant in a stage of high water desired and attempted to pass,and did, with injury to the bridge, pass, through the draw with six tows or barges; and to prevent a repetition of such attempt the injunction is asked. This shows that the cOlllplainaHt, in order to preserve its bridge with the draw as now constructed, must have an interruption of existing commerce. Whether this is an unnecessary iFlterruption or not will depend upon the ability of the complainant to reasonably make an ampler draw; in other words, the question is whether the answer to .the complainant's allegation of grievance is not this: "Enlarge your draw, or obtain more specific grant from the IE'gislature." The bill is admirably drawn, and presents with completeness the complainant's rights. If the injury came from a trespass outside of the prosecution of commerce itself, the relief could be afforded. But the whole right of the complainant here to provoke any interference with the movements of defendant's boats, if it exists, springs from such a state of facts as would compel the court to act upon the conclusion that, considering the commercial transportation over the railroad as compared with that upon the navigable stream, the interference was not unnecessary. The order or decree sought by the complainant, while it affects only the parties, resembles a general regulation of commerce in this: that it is based upon a balancing of the public convenience of thoroughfares of commerce. I think the claim of the complainant to such interference is one ofthosedoubtful or imperfectly defined rights which, in the absence of more specific legislative designation, must at least be first established at law,where the defendant may have a trial by jury, before the party asserting the right can invoke the aid of injunction through the court 01 eqpity. Let the demurrer be maintained.

he

CONSOLIDATED TANK

LINE CO. tI.

KANSAS

VARNISH

CO.

7

CoNSOLIDATED TANK LINE Co. et al.

11.

KANSAS CITY VARNISH Co. et al.

(O£rcuit COUrt, W. D.MiBsoun, W. D. February 9, 1891.)
1.

INSOLVENT CORPORATION-PREFERENCE TO DIREOTORS-FRAUDt;LBNT CONVEYANOES.

a.

Directors of an embarrassed corporation, holding claims· against it wbich they wished to protect, hild the notes of the companY'.payable to themselves drawn and antedated, arid procured th'em to be discounted l;Iy defendant bank. They then caused to be executed a deed of trust conveying all the assets of the company as security for these notes, among others. flew:, in a proceeding ·by unsecured creditors to set It aside, that, being a security for debts upon which.the directors were themselves liable as Indorsers, it was in effect a preferende' to themselves, and fraudulent and void.

I

SAME,..-NoTIOEOF FRAUD.

a.

, Nor is such preference valid as to another creditor, a corporation, on whose claim the directors were not liable as sureties, when it appears that tbl!lsecretary thereof, the insolvent corporation, who, as an attorney, was prosecuting its claim was employed' to draw the deed of trust, and adVised concerning it, and was fully aware of all tbe. circumstances, and declined to act unless his client's claim was in· . cluded in the seC\1rity. .A!s the directors of an Insolvent corporation beoame trustees for the oreditors a bill to set.aside .as fraudulent a deed of trust of corporateasse,ta to secure debts for Which the directors are themselves liable as sureties need not shOW that the complainanthas established his claim by judgment. '

SAME-TRUST·

In Equity. This is a creditors' bill on the part of the complainants and othercreditors who may com,e in to set aside a deed of trust made by the Kansas City Varnish Company, a business corporation, preferring as creditors the German National Bank for $16,205, Harkness, Wyman & RUSSell, bankers, for $5,500, and the Kaw Valley Paint & Lead Company for $974.50. The deed of trust was executed August 25,1890. The <lase, . on prelimina.ry hearing for writ of in.junction and the appointmentdfa receiver, is reported in 43 Fed. Rep. 204. It has now been heard on the pleadings and full evidence. The principal facts will appear from the opinion of the court. Henry WoUman, for complainants Tank Line Company and Heath & Milligan Manufacturing Company. Harwood &c Meredith, for National Linseed Oil Company and L. C. Gillespie, intervenors. Lathrop, Smith &c Morrow, for defendants L. V. Harkness, W. F. Wyman, L. D. H. Russell, William Peet, James W. White, and Charles N. Howard. J. L. Wheeler,for defendants Kaw Valley Paint & Lead CQmpany, Nellie F. Benton, and Robert E. Benton. Ounningham &c Dolan, for defendants Kansas City Varnish Company, O. H. Brown, and David C. Howey.· HajJ &c Van Valkenburgh, for defendants German American Bank.
f

Pmups, J. The question to be decided is as to the right of an insolvent business corporation to make a deed of trust for the benefit of certain of its to which debts the directors sustain the relation of indorsers, and especially whether the directors may thus prefer them-