of himself and all other creditors of the American Bank the extra liability imposed by Rev. Stat. § 5151, a case was presented arising under the laws of the United States, and of which, independently of the matter of diverse citizenship, the Circuit Court had jurisdiction.

The bill is not multifarious. "The two subjects of applying the assets of the bank and enforcing the liability of a stockholder, however otherwise distinct, are by the statute made connected parts of the whole series of transactions which constitute the liquidation of the affairs of the bank." Richmond v. Irons, 121 U. S. 27, 50.

It is suggested that no judgment had been obtained upon the note prior to this suit in equity, but as one object of the suit was to subject to the 'satisfaction of the debt certain property conveyed to a trustee as security therefor, no judgment at law was a prerequisite. Day v. Washburn, 24 How. 352; Case v. Beauregard, 101 U. S. 688, 691, in which the court said:

"Without pursuing this subject further, it may be said that whenever a creditor has a trust in his favor, or a lien upon property for the debt due him, he may go into equity without exhausting legal processes or remedies. Tappan v. Evans, 11 N. H. 311; Holt v. Bancroft, 30 Alabama, 193."

We come then to the final question in the case, and that is whether the notes executed by the American Bank were its valid obligations. And in reference to this question these are the significant facts: The demands against the American Bank were pressing. It had not the money with which to meet them. It arranged with the Union Bank to advance the money for the payment of all its outstanding obligations. When the Union Bank paid these obligations of the American Bank it was the same as though it advanced money to that bank to pay them. To reimburse and secure the former the latter bank turned over certain property, and executed these notes for the balance, securing them by a pledge of all its other assets which were placed in the hands of its president, as trustee.

All the stipulations and agreements made by the directors of the two banks were carried out in good faith; and, with full knowledge of what had been done, the stockholders voted for a voluntary liquidation. The borrowing of the money by the American Bank did not necessarily put it into liquidation. It had a large amount of assets, and if the real had equaled the nominal value of these assets it would have been enabled after discharging its obligation to the Union Bank to continue business. But on an examination the stockholders felt that it was wiser to stop at once. But that decision did not at all impugn the wisdom or bona fides of the transaction by which the money was obtained to pay off the pressing demands of the American Bank. The question, therefore, is, whether a national bank, finding itself embarrassed, with a large amount of assets, much in excess of its obligations, yet without the cash to make payment of those which are due and urgent, can borrow to meet those pressing demands. A very natural answer is, why not? It is not borrowing money to engage in new business. It simply exchanges one creditor for others. There may be wisdom in consolidating all its debts into the hands of one person. At least such a consolidation cannot be pronounced beyond its powers. When time is obtained by the new indebtedness (in this case a year) it gives the borrowing bank and its officers and stockholders time to consider and determine the wisdom of attempting a further prosecution of business. In the case of an individual it would be a legitimate and often a wise transaction. It is not in terms prohibited by the national banking act. Aldrich v. Chemical National Bank, 176 U. S. 618, is very clearly in point. The opinion in that case is quite lengthy and considers many authorities, but the gist of the decision is expressed in these words (p. 635): "Without further citation of cases we adjudge, both upon principle and authority, that as the money of the Chemical Bank was obtained under a loan negotiated by the vice president of the Fidelity Bank who assumed to represent it in the transaction, and as the latter used the money so obtained in

its banking business and for its own benefit, that bank having enjoyed the fruits of the transaction cannot avoid accountability to the Chemical Bank, even if it were true, as contended, that the Fidelity Bank could not consistently with the law of its creation have itself borrowed the money."

We are of the opinion that the notes given by the American Bank for the money advanced by the Union Bank were its valid obligations and can, therefore, be enforced against its stockholders. The decree of the Circuit Court of Appeals is

Affirmed.

FRENZER v. WALLACE.

MORSMAN v. SAME.

MCCLELLAN v. SAME.

APPEALS FROM THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH

CIRCUIT.

Nos. 192, 193, 195. Submitted March 6, 1906-Decided April 2, 1906.

Decided on authority of Wyman v. Wallace, ante, p. 230.

Mr. W. W. Morsman and Mr. Howard B. Smith for appellants in Nos. 192 and 193. Mr. Charles Battelle and Mr. Richard S. Horton for appellants in No. 195.1

Mr. James M. Woolworth and Mr. R. S. Hall for appellees.1

Mr. JUSTICE BREWER: These are separate appeals by other stockholders from the same decree, and present no questions other than those considered in the former opinion, and the same decrees of affirmance will be entered.

1 For abstracts of briefs see Wyman v. Wallace, ante, p. 230.

201 U. S.

Syllabus.

POPPLETON v. WALLACE.

APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH

CIRCUIT.

No. 194. Argued March 6, 1906.-Decided April 2, 1906.

Decided on authority of Wyman v. Wallace, ante, p. 230.

Mr. Richard S. Horton for appellant.1

Mr. James M. Woolworth and Mr. R. S. Hall for appellees, submitted.1

Mr. JUSTICE BREWER: This case is also an appeal by a stockholder from the same decree, and presents only this difference: This stockholder voted against the resolutions passed by the stockholders looking to a voluntary liquidation. There is, therefore, nothing of a personal estoppel to be adjudged against him, but we do not think that that is material. The requisite amount of stock was voted in favor of what was done in the way of voluntary liquidation, and he as a stockholder is bound by that, although personally he dissented from the action. The same decree of affirmance will be entered in this case.

MICHIGAN

CENTRAL

RAILROAD COMPANY v.

POWERS, AUDITOR GENERAL OF THE STATE OF MICHIGAN.2

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF MICHIGAN.

No. 397. Argued February 21, 23, 26, 1906.-Decided April 2, 1906.

A state statute may be unconstitutional because conflicting with the constitution of the State or with that of the United States, but all objections 1 For abstracts of arguments see Wyman v. Wallace, ante, p. 230. 2 For docket titles of cases, in which other railroad companies were

to its validity whether state or Federal may be presented in a single suit and call for consideration and determination; and as a Federal court has the jurisdiction it may be its duty, when the question is properly presented, to pass upon an alleged conflict between a state statute and the state constitution even before the question has been considered by the state tribunals. It will however be reluctant to do so especially when the statute is one affecting public revenues of the State. There is no general supervision by the Nation over state taxation, in regard to which the State has, generally speaking, the freedom of a sovereign both as to objects and methods.

While there is always a possibility of misconduct on the part of officials, legislation may proceed on the assumption of their properly discharging their duties.

Where a legislature enacts a specific rule for fixing a rate of taxation, by which rule the rate is mathematically deduced from facts and events occurring within the year, and created without reference to the matter of that rate, there is no abdication of the legislative function, but on the contrary there is a direct legislative determination of that rate. Unless there is some specific provision in the state constitution compelling other action a State may treat its entire territory as composing but a single taxing district, and deal with all property as within the district and subject it to taxation accordingly.

This court may in a case of this nature take judicial notice of the fact that the State of Michigan is traversed in almost every direction by railroads and that the county in which there are no railroads, if any there be, is an exception.

Nothing in the Federal Constitution prevents a State from separating a particular class of property and subjecting it to assessment and taxation in a mode and by a rate different from that imposed on other property and applying the proceeds to state rather than local purposes. One hearing is sufficient to constitute due process and a state statute giving a state assessing board power to correct valuations, naming time and place at which any person interested may be heard, does not deprive the persons assessed of their property without due process of law because those parties do not have further opportunities to be heard by a court or the legislature.

A legislature is not bound to impose the same rate of tax upon one class of property that it does upon another; it is sufficient if all of the same class are subjected to the same rate and the tax is administered impartially upon them.

This court generally accepts the finding of a trial court upon a question of fact when the evidence is conflicting; and so held in this case as to a charge of systematic under-valuation which the trial court found against. Act No. 173, Michigan Laws of 1901, imposing upon railroad and corporate

appellants against the same appellee, and submitted simultaneously with this case, see page 302, post.