Kansas Valley National Bank v. Rowell. publication of the proceedings in insolvency. Brown v. Lamb, 6 Metc. 203. Reason and analogy favor the application of the rule to the present case. Judgment is accordingly ordered for the plaintiff in each action, as against the bank. E. Platt Johnson and Richard M. Henry, for plaintiff. Edward H. Smith (assistant district attorney), for defendants. KANSAS VALLEY NATIONAL BANK V. ROWELL. (2 Dillon, 371.) Power of National banks to take mortgages on real estate. A National bank may take a mortgage on real estate to secure a debt previously contracted, but not to secure either a contemporaneous loan or future advances.* (Circuit Court, Eighth Circuit.) BILL ILL in equity for the reformation of a mortgage executed by one Schuyler, a bankrupt, to the complainant, a National bank, to secure the payment of the sum of $3,000 then owing from said Schuyler to the complainant, and also to secure any moneys advanced to said Schuyler by said complainant within one year from the date of the mortgage. The ground for reformation was, that the mortgage was so drawn as not to cover the property intended. The 8th section of the National Banking or Currency Act, of June 3d, 1864, in enumerating the powers of associations formed thereunder, provides that they "may make contracts * * as fully as natural persons," and "exercise under this act all such incidental power as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, *See National Bank v. Mears, post; also the following cases hereinafter reported Matthews v. Skinner, 62 Mo. 329; Ornn v. Merchants' National Bank, 16 Kaus. 341; Spafford v. First National Bank, 37 Iowa, 181; First National Bank v. Haire, 36 Iowa, 443; Fowler v. Scully, 72 Penn. St. 456; Woods v. People's National Bank, 83 Penn. St. 57.-REPORTER. Kansas Valley National Bank v. Rowell. drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; by obtaining, issuing, and circulating notes according to the provisions of this act; and its board of directors shall also have power to define and regulate, by by-laws, not inconsistent with the provisions of this act, the manner in which its general business shall be conducted, and all the privileges granted by this act to associations organized under it shall be exercised and enjoyed," etc. The 28th section enacts "that it shall be lawful for any such association to purchase, hold, and convey real estate as follows: First. Such as shall be necessary for its immediate accommodation in the transaction of its business. Second. Such as shall be mortgaged to it in good faith by way of security for debts previously contracted. Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth. Such as it shall purchase at sales under judgments, decrees, or mortgages, held by such association, or shall purchase to secure debts due to the said association. "Such association shall not purchase or hold real estate in any other case, or for any other purpose, than as specified in this section. "Nor shall it hold the possession of any real estate under mortgage, or hold the title and possession of any real estate purchased to secure any debts due it for a longer period than five years." The cause came before the court on a general demurrer to the bill for want of equity. C. C. Clemens, for plaintiff. John K. Cruvens, for assignee. DILLON, Circuit Judge. The mortgage, of which a foreclosure is sought, was made by the bankrupt for the double purpose of securing a debt to the plaintiff previously contracted, and to secure further advances, which are alleged to have been subsequently made. The mortgage is upon real estate. The bill alleges a mistake in the description of the property, and asks that this mistake be corrected and the mortgage foreclosed. The assignee files a general demurrer, and insists that under the National Banking Act of June 3d, 1864 (§§ 8 and 28), the plaintiff, Kansas Valley National Bank v. Rowell. as a corporation organized under that enactment, has no right to take, hold, or foreclose a mortgage upon real estate, except as a security for a debt contracted before the taking of such mortgage; that the mortgage here in question was made upon but one consideration, part of which, to wit, that part which related to future advances, is illegal, and being so, the mortgage is wholly void. Upon the averments of the bill it is my opinion that the mortgage was made for the two purposes above mentioned, namely, to secure a precedent debt to the bank, and also to secure future advances to be made by the bank. I am also of the opinion (under §§ 8 and 28 of the National Banking Act), that a mortgage upon real estate is clearly authorized as "a security for debts previously contracted," and as clearly unauthorized when made as a security for money to be thereafter advanced by the bank, on the strength of such security. The mortgage in question rests upon a valid consideration, and is authorized by the law, so far as it secures a debt previously due to the bank, by the mortgagor, and it is invalid so far as it undertook to secure a debt then or thereafter to be created. The line which separates that which is good from that which is bad, is plain; and I am of opinion that the defendant's counsel are mistaken in supposing this to be a case in which the consideration is indivisible and the whole mortgage void. The two parts of the security are easily separable, and the result is that the good stands, and the bad must fall. It follows that the court may correct the mistaken description in the mortgage in suit and enforce the same, so far, and so far only, as it was given to secure a debt to the bank previously contracted. The demurrer being general, it is overruled. Judgment accordingly First National Bank of Omaha v. County of Douglas. FIRST NATIONAL BANK OF OMAHA V. COUNTY OF DOUGLAS. (3 Dillon, 298.) National banks may sue in the Federal courts · Tax on capital - When a court of equity will restrain. National banks may, by reason of their character as such, sue in the Federal courts. Where there is no means of recovering back from the State taxes illegally assessed and paid into the treasury, a court of equity will enjoin their collection; and when both State and county taxes are included in one warrant and are for a common reason illegal, the court will at the same time determine the validity of both the State and the county taxes. State authorities will be enjoined from collecting a tax on the capital stock of a National bank, invested in United States securities. (Circuit Court, Eighth Circuit.) ILL for an injunction to restrain the collection of State and B county taxes levied on the capital stock of the plaintiff. J. M. Woolworth, for plaintiff. J. C. Cowin, for defendant. MILLER, Circuit Judge, held: 1. National banks may, by reason of their character as such, sue in the Federal courts. 2. A part of the taxes sought to be restrained being for the State of Nebraska, and the county treasurer being by the revenue law of the State required to pay the same into the treasury when they are collected, and no provision being made by law for an execution or other proceedings against the State for the recovery of them back if illegally exacted, the plaintiff has no adequate remedy at law, and equity will intervene by injunction to restrain the collection of such illegal taxes. 3. When a county treasurer holds one warrant in which he is commanded to enforce payment of both State and county taxes, which for a common reason are illegal, equity, having jurisdiction to restrain the treasurer from enforcing the payment of the State First National Bank v. Douglas County. taxes, may proceed to the determination of the validity of the county taxes as well and restrain them also. 4. The First National Bank of Omaha filed its bill against the county of Douglas and its treasurer, to have it declared that the taxes of 1870 and 1871, levied by the State of Nebraska and the county of Douglas upon the capital stock of the bank, were illegal, and to restrain that officer "from making distress upon the property of the plaintiff, as he threatened to do, and from all other proceedings to enforce the payment" of the taxes. On motion for an injunction the defendant objected to the jurisdiction of the court as a Federal court, and also as a court of equity. Held, that there was jurisdiction to entertain the bill and allow an injunction. Injunction allowed. FIRST NATIONAL BANK V. DOUGLAS COUNTY. Taxation of National bank shares (3 Dillon, 330.) Distraint of bank property to enforce payment of tax. A State statute provided that "the stockholders of every National bank located in this State, or of any bank incorporated under the laws of the State, shall be assessed and taxed on the value of their shares of stock therein, subject to the restriction that taxation of such shares shall not be at a greater rate than is assessed upon any other moneyed capital in the hands of individual citizens of this State in the county or precinct where such bank is located. The taxes against such shares shall be levied against the holder of the same, and shall be paid by the bank." Held, that a tax so imposed on the shares of a National bank was valid, and that payment thereof could be enforced by distraint of the property of the bank. (Circuit Court, Eighth Circuit.) ILL in equity to restrain the collection of a tax. The opinion states the case. BIL J. M. Woolworth, for plaintiff. J. C. Cowan and J. M. Thurston, for defendant. DILLON, Circuit Judge. This is a bill by the First National Bank of Omaha, to restrain the collection of a tax assessed and levied under the revenue laws of the State, for the year 1873, upon the shares of the shareholders in the bank, and which tax, it is |