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Argument for Appellants.

it is no longer able to continue business; that the purpose of the section is to secure the effectual winding up of the bank's affairs; that such liability cannot be prolonged; and that there can be no liability on the part of shareholders unless the contracts, debts and engagements of the bank have been contracted duly, and in the ordinary course of the business of banking. They further show that the fact, that the new obligation takes the place of an old obligation for which the shareholders may have been liable, does not make them liable for such new obligation. Richmond v. Irons, 121 U. S. 27; Schrader v. Mfrs. Nat. Bank, 133 U. S. 67; Ward v. Joslin, 186 U. S. 142, 152.

The "business of banking" is defined in Mercantile Bank v. New York, 121 U. S. 138 (1887), and the transaction between the two banks does not fall under that definition.

The debt represented by the note sued on was not duly contracted because the transaction was ultra vires not only the board of directors but the bank itself, and because the debt was not incurred in the ordinary course of the business of banking, and because the transaction was such as to increase and prolong the liability of the shareholders as it existed on December 21, 23, 1895.

Such a transaction and the debt arising therefrom cannot be said to have been within the "legal contemplation" of the shareholders of the American National Bank at the time they purchased the shares held by them.

Appellants have not done anything to estop them to deny their liability to make good the balance remaining unpaid upon the notes.

Assuming that a contract ultra vires a corporation can be rendered enforceable against its shareholders by the principle of estoppel, the doctrines of estoppel can be applied only to persons individually, not en masse. No official action was taken by the shareholders in meeting assembled and none of these appellants did or failed to do anything from which ratification could be implied. Their silence could not affect their

Argument for Appellees.

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rights, as the duty to speak was not imposed on them. There was no express ratification such as could give validity to the original transaction. Scovill v. Thayer, 105 U. S. 143; Thomas v. West Jersey R. R. Co., 101 U. S. 71; Bloomfield v. Charter Oak Nat. Bank, 121 U. S. 121, 135; Mutual Life Ins. Co. v. Mowry, 96 U. S. 544, 547.

But a contract ultra vires a corporation cannot be rendered enforceable against its shareholders by ratification or by estoppel. Central Trans. Co. v. P. P. C. Co., 139 U. S. 24; Cal. Nat. Bank v. Kennedy, 167 U. S. 362; First Nat. Bank v. Conrad, 174 U. S. 364, 372; Ward v. Joslin, 186 U. S. 142, 151.

To hold that the notes represented contracts, debts and engagements of the American for which its shareholders were liable and that for that reason the Union should recover against appellants, would be to overrule in effect the cases cited last above. Such a conclusion is not based upon any averment in the bill or the amended bill; is opposed to Richmond v. Irons, Schrader v. Mfrs. Nat. Bank and Ward v. Joslin, supra, and would deprive the shareholders of their right to contest their liability for such claims.

The transaction was an entirely new deal and the Union National Bank was under no prior obligation to pay the debts of the American National and was a volunteer. Etna Life Ins. Co. v. Middleport, 124 U. S. 548.

Mr. James M. Woolworth and Mr. R. S. Hall for appellees in this case and in Nos. 192, 193, 194 and 195, submitted:

The jurisdiction of the Circuit Court did not depend upon citizenship but on sec. 2 of the act of June 30, 1876, which has never been repealed. King v. Pomeroy, 121 Fed. Rep. 287; Williamson v. American Bank, 115 Fed. Rep. 793.

A suit arises under the Constitution and laws of the United States whenever its correct decision depends upon the construction of either. Cohens v. Virginia, 6 Wheat. 262; Tennessee v. Davis, 100 U. S. 258; Starin v. New York, 115 U. S. 249; Union National Bank v. Miller, 15 Fed. Rep. 703.

A contract by a national bank to assume and pay the liabilities of another bank in consideration of the transfer to it by the other bank of its office furniture and its cash and cash assets, and the further assignment to a trustee for its benefit of bills receivable and securities is not ultra vires but is within its power conferred by statute to conduct a general banking business. Schofield v. State National Bank, 97 Fed. Rep. 282.

The doctrine of ultra vires, when invoked for or against a corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong. Railway Co. v. McCarthy, 96 U. S. 258; Benseik v. Thomas, 66 Fed. Rep. 104; American National Bank v. National Wall Paper Company, 77 Fed. Rep. 85; Aldrich v. Chemical National Bank, 176 U. S. 611. See also Western National Bank v. Armstrong, 152 U. S. 346; Ditty v. Dominion National Bank, 22 C. C. A. · 376; S. C., 75 Fed. Rep. 769.

If the directors of the American National Bank possessed the authority to protect its depositors and to borrow money to discharge the obligations as held in the case of Schofield v. State National Bank, 97 Fed. Rep. 282, then the stockholders, of course, will be liable and if the American is liable upon the theory of money had and received to its use and benefit, then the stockholders are liable also.

The bank is clearly liable for money had and received even assuming that the directors did not act in due form. Cary v. Curtis, 3 How. 236; Kennedy v. Baltimore Ins. Co., 3 H. & J. 367. Assumpsit will lie whenever the defendant received money which is the property of the plaintiff, and which the defendant is obliged by natural justice and equity to refund. Byrne et al. v. United States, 93 U. S. 642, 643. And the form of the indebtedness or the mode in which it was incurred, is immaterial, and the obligations arising in this manner are binding even on the United States. United States v. State Bank, 96 U. S. 30.

There is no statutory authority for the borrowing of money. The courts, however, hold that it can do so. State v. First

Nat. Bank of Orleans, 88 Fed. Rep. 947; First Nat. Bank v. Exchange Nat. Bank, 92 U. S. 127; Western Nat. Bank v. Armstrong, 152 U. S. 347; Armstrong v. Chemical Nat. Bank, 83 Fed. Rep. 565.

The transaction was a loan and not a sale.

If the language in this contract is at all ambiguous, the way in which the parties understood it and acted upon it will be of aid to the court.

The practical interpretation given to it by the parties themselves, when engaged in the performance of the agreement, and before any controver y has arisen concerning it, is one of the best indications of its true intent. Schofield v. State National Bank, 97 Fed. Rep. 285. Also Topliff v. Topliff, 122 U. S. 121; Chicago v. Sheldon, 9 Wall. 50, 54.

The Federal court on the equity side has jurisdiction to sustain a bill brought by a general creditor under the statute. The statute plainly says "any creditor." Without this statute the judgment creditor or lien holder might maintain his bill in equity. This statute did not take away any equitable rights. But because to exhaust the remedy at law, in cases like these of national banks, would practically destroy the benefit to the creditor, this statute was passed giving to "any creditor" the right to file a bill in the nature of a creditor's bill, thus affording a speedy and efficient remedy to a creditor. Darrigh v. H. Wetter Mfg. Co., 78 Fed. Rep. 7; Nat. Security Co. v. State Bank, 120 Fed. Rep. 593; Jones v. Mutual Fidelity Co., 123 Fed. Rep. 508.

MR. JUSTICE BREWER, after making the foregoing statement, delivered the opinion of the court.

A matter of jurisdiction is first presented. The note, which is the foundation of plaintiff's suit, is one made by the American Bank to the Union Bank, both located in Nebraska, and under the statute, for the purpose of jurisdiction, to be considered citizens of Nebraska. 25 Stat. 436; sec. 4. The plaintiff is a citizen of New Hampshire. He could not main

tain an action against the maker of the note, although a citizen of a State other than that of the maker and payee. 25 Stat. 434; sec. 1. But if diverse citizenship was the sole basis of the jurisdiction of the Circuit Court, the decision of the Court of Appeals would be final and there would be no appeal to this court. 26 Stat. 828, § 6. The jurisdiction of the Circuit Court, however, was not invoked on the ground of diverse citizenship-at least, not on that alone. The case presented was one arising under the laws of the United States. It was a suit to enforce a special right given by those laws. Section 5220, Rev. Stat., reads: "Any [national banking] association may go into liquidation and be closed by the vote of its shareholders owning two-thirds of its stock."

By section 5151, Rev. Stat., stockholders in national banks are made liable for "all contracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares." Section 2 of the act of June 30, 1876, 19 Stat. 63, is as follows:

"SEC. 2. That when any national banking association shall have gone into liquidation under the provisions of section five thousand two hundred and twenty of said statutes, the individual liability of the shareholders provided for by section fifty-one hundred and fifty-one of said statutes may be enforced by any creditor of such association, by bill in equity, in the nature of a creditor's bill, brought by such creditor on behalf of himself and of all other creditors of the association, against the shareholders thereof, in any court of the United States having original jurisdiction in equity for the district in which such association may have been located or established."

More than two-thirds of the stock voted, on February 25, 1896, for a voluntary liquidation, and on April 27, 1896, the Comptroller of the Currency formally approved the liquidation and notified the cashier of the American Bank to that effect. In proceeding, therefore, by this suit to enforce in behalf VOL. CCI-16