in the particular charter under consideration, and that, when the property had been exempted by reason of the exemption of the capital, it had been because, taking the whole charter together, it was apparent that the legislature so intended. "Thus, the capital stock of a bank usually consists of money paid in to be used in banking, and an exemption of such capital stock from taxation must alinost necessarily mean an exemption of the securities into which the money had been converted in the regular course of a banking business. And, in general, an exemption of capital stock, without more, may, with great propriety, be considered, under ordinary circumstances, as exempting that which, in the legitimate operations of the corporation, comes to represent the capital." It was held, however, that in that particular case it could not have been understood that the property was to represent the capital for the purposes of taxation, and that such property was taxable under the original charter at the expiration of 20 years from the completion of the road.

The same construction was given to a similar provision of the charter of the Cairo & Fulton Railroad Company in Railroad Co. v. Loftin, 98 U. S. 559. So, in Bank of Commerce v. Tennessee, 104 U. S. 493, where a bank was required to "pay to the state an annual tax of one-half of one per cent. upon each share of capital stock, in lieu of all other taxes," and was also allowed to "purchase and hold a lot of ground" for its place of business, and hold such real property as might be conveyed to it to secure its debts, it was held that the immunity from taxation extended only to so much of the building as was required by the actual wants of the bank to carry on its business. See, also, Wiggins Ferry Co. v. City of East St. Louis, 107 U. S. 365, 2 Sup. Ct. 257, and Tennessee v. Whitworth, 117 U. S. 129, 6 Sup. Ct. 645.

From a review of these cases, it is evident that while, in the absence of any words showing a different intent, an exemption of the stock or capital stock of a corporation may imply, and carry with it, an exemption of the property in which such stock is invested, yet, if the legislature uses language at variance with such intention, the courts, which will never presume a purpose to exempt any property from its just share of the public burdens, will construe any doubts which may arise as to the proper interpretation of the charter against the exemption.

In the eighteenth section of the charter under consideration there are three clauses which cover the question of taxation. First, the railroad and its appurtenances shall not be subject to be taxed higher than one-half of 1 per centum upon its annual net income; second, no municipal or other corporation shall have the power to tax the stock of said corporation; third, but such municipal or other corporation may tax any property, real or personal, of the said company, within the juris

diction of said corporation, in the ratio of taxation of like property. The first clause was obviously intended as a limit upon state taxation; the second, as a prohibition upon the powers of municipalities to tax the shares of stock held by its citizens; the third, as an express permission to tax any property of the company within its jurisdiction for local purposes. If, as insisted by the defendants, this permission were limited to the taxation of property, belonging to the company, other than the railroad and its appurtenances, the clause would be meaningless, since the first clause, limiting taxation to a percentage upon the income, applies only to the railroad and its appurtenances, and leaves to the state itself, as well as to its municipalities, the power to tax property received by the corporation in satisfaction of debts, or otherwise, for purposes disconnected with the business operations of the railroad. Full effect can be given to these three clauses only by sustaining the right of the municipalities to tax any property of the company within their jurisdiction. Indeed, the argument made here was the very one made in connection with the somewhat similar clause in Railroad Cos. v. Gaines, 97 U. S. 697, and held to be unsound.

In the state of Georgia there seems to have been, prior to the act of 1889, some efforts made to subject the property of this road to municipal taxation, which were ineffectual by reason of the legislature failing to provide the proper machinery for the assessment and collection of such taxes; and, as late as 1883, it, was held that its system of taxation virtually excluded counties and municipal corporations* from levying a tax upon it for county or municipal purposes by making no provision for the assessment and collection of such taxes. County of Houston v. Central R. R., 72 Ga. 211. This defect seems to have been supplied by the Acts of 1889 and 1890, and we see no reason why the system of taxation provided by these acts is not valid, and consistent with the charter.

We regard it as quite immaterial that, when the act of 1835 was passed, a county was not a municipal corporation, or, indeed, a corporation at all. The power given by the eighteenth section not only extends to municipal but to other corporations, by which was evidently intended other corporations with power to tax for local purposes. If, for instance, cities were reorganized under the names of boroughs or taxing districts, the power of taxation, so far as this section is concerned, would pass to the same corporation under its new name, if the legislature so directed; and the fact that no corporations existed in 1835 under the names of boroughs or taxing districts, would not affect the question. The essential thing reserved was the power to tax for local purposes, by whatever corporation then existed, or should thereafter be called into being, for municipal purposes. The legislature could not then foresee what corporations might thereafter be established for municipal pur

2

poses, and it would be frittering away its whole object to limit it to corporations then existing.

The decree of the court below was clearly right, and it is therefore affirmed.

(164 U. S. 282)

UNITED STATES v. DELANEY.
(November 30, 1896.)
No. 493.

REGISTER AND RECEIVER OF LAND OFFICE-COM-
PENSATION-SERVICES IN ESTABLISHING OFFICE.

Where one appointed register and receiver of a newly-created land office engages, at request of the commissioner of the general land office, in the work of securing and fitting up rooms to be occupied by the office, advertising the date of its opening, as required by law, and doing such other work as is necessarily incidental to the opening of the office, he has "entered upon the discharge of his duties," within the meaning of Rev. St. § 2243, which provides that the compensation of registers and receivers shall be computed from the time they enter upon the discharge of their duties.

Appeal from the Court of Claims.

Asst. Atty. Gen. Dodge and George H. Gorman, for the United States. John C. Chaney, L. T. Michener, and W. W. Dudley, for appellee.

Mr. Justice PECKHAM delivered the opinlon of the court.

This is an appeal from the court of claims. It involves simply the question as to the right of the appellee to compensation as register and receiver of the land office at the city of Oklahoma, in the Territory of Oklahoma, from the 18th of July to the 1st of September, 1890.

It appears from the findings of fact by the court of claims that the land office at Oklahoma City was first established by an executive order of the president on the 6th of June, 1890. The appellee, John C. Delaney, was duly appointed and commissioned as receiver of public moneys at Oklahoma City on the 23d of June, 1890, and on the 7th of July, 1890, he qualified by taking the oath of office and giving the bond required by law. On the 10th of July, 1890, the claimant was verbally directed by the commissioner of the general land office to go to Oklahoma as speedily as possible, and make the necessary preparations to open the office at that place. He left his residence in Harrisburg, Pa., on the 15th, and arrived at Oklahoma City on the 18th, of July, 1890. The land district at Oklahoma City was taken from parts of the two districts of Guthrie and Kingfisher, and on the 18th of July, 1890, the commissioner of the general land office wrote to appellee, at Oklahoma City, stating to him that the officers at Guthrie and Kingfisher had been directed to turn over to him all the plats and records, of every description, relating to the lands forming his district, and asking him to at nce confer with those officers upon the subject. The letter also contained the following:

"As soon as the records are received, you will proceed to give notice by publication, as an advertisement, at regular advertising rates, in the newspaper having the largest circulation in your district, once a week for four weeks, of the precise date when your office will be open for the transaction of public business, when the officers at Guthrie and Kingfisher will cease transacting business relating to the lands transferred." Between the 18th day of July (the date of the arrival of the appellee at Oklahoma City) and the 1st day of September, 1890 (the date on which the office was formally opened for the transfer of land and the receipt of money), the appellee was engaged in attending to business pertaining to his office, which had necessarily to be transacted before the date of the formal opening of the office in accordance with the published notice.

Upon this subject the court of claims found: "The nature of the services performed by claimant after his arrival, and before the 1st of September, is as follows: Conferring with the officers of other districts in the territory from which his district was formed, to determine what date to open the office; preparing and issuing thirty days' notice of the day fixed for opening the office; overseeing and superintending the preparation of rooms for the office; getting estimates for the manufacture of cases for the office; superintending the constructing of fixtures, and having them put into the office; giving Information and receiving instructions from the inspector; attending to the transfer of the records from the other offices of the territory to that of the Oklahoma office. During said time there was a continuous arrival of letters from different parts of the district, as well as letters from the department, which required the attention of claimant up to the 1st of September, 1890."

The land office of which the claimant was receiver was in fact opened for the transaction of business the 1st day of September, 1890, pursuant to the published notice to that effect 30 days prior to that time; and the claimant insists that he commenced his services as receiver upon his arrival at Oklahoma, on the 18th day of July, 1890, while the defendant, the appellant, urges that his term of office commenced when the office was opened for the entry and sale of land, September 1, 1890, and from that time it has allowed him compensation.

The written communication to the claimant from the commissioner of the general land office, dated Washington, July 18, 1890, inclosed to the claimant the notice of the establishment of the office at Oklahoma City; and the letter, in general terms, defines certain services which were necessary to be performed before the opening of the office for the entry and sale of lands, and in pursuance of that letter the claimant commenced the performance of those services preliminary to the opening of the office. The character of the service has already been stated.

Section 2243, Rev. St., provides that "the

compensation of registers and receivers, both for salary and commissions, shall commence and be calculated from the time they respectively enter upon the discharge of their duties." The sole question in this case, therefore, is, when did the claimant, within the meaning of the above section, "enter on the discharge of his duties"? The claimant had been duly appointed on the 23d of June, 1890. On July 7, 1890, he had qualified by taking the oath of office and giving the bond required by law. The office was newly established, and was taken from parts of two other land offices. Pursuant to the directions of the commissioner of the general hand office, the claimant had left his home in Pennsylvania on the 15th day of July, 1890, and arrived at Oklahoma City on the 18th of the same month. He at once entered upon the performance of the duties which it was essential should be performed, which pertained to the establishment of, and the transaction of business at, the new office, which were official in their nature, and solely connected with the discharge of the duties of the office to which claimant had been appointed. What is the reason that he had not then, within the meaning of the statute, entered upon the discharge of the duties of his office? It is said that receiving applications and making entries in the public records of the office in regard to the transfer of public lands within the district, and receiving the moneys of applicants for the purchase of such lands, comprise the duties of a register and receiver of a land office at each land district established by law. These are undoubtedly the main duties of an already established land office. Here, however, the office had been but just established by order of the president. The location of chambers in which the business was to be done was part of the duty of the appointee. It was his official duty to see to their being properly furnished and prepared for the transaction of the public business. He had to see, or to correspond with, the officials of the two land offices from which the one in question had but just been taken. That correspondence was not personal. It was official, and it was necessarily connected with the performance of his duties as register and receiver for the newly-made district. All of the services performed by the claimant, as found by the court of claims and above set forth, were wholly official in their nature, connected solely with the performance of the claimant's duties as an officer, and, to our minds, were just as much official as would be the entry of an application in the books of the land office, or the receipt of money in payment for any portion of the public lands within the district. Doing that which it is necessary to do in order that a newlycreated land office may be in a proper and fit condition at the time appointed for opening it for the transaction of public business ts, as it seems to us, a part of the official du

ties of the person who is appointed to the office. While it is true that he cannot earn commissions until money has been paid for lands transferred, and that no transfer can be made until after the formal opening of the office for the entry of applications, that fact can have no legitimate bearing upon the question as to when the register and receiver enters upon the discharge of the duties of his office in a newly-created land district. It is said that the salary and commissions of a register and receiver commence at the same time, which is the time when they, respectively, enter upon the discharge of their duties, and that as commissions cannot be earned until work is done upon which commissions can be charged, which is not until after the formal opening of the office, it follows that the salary cannot commence until that time. The argument is not sound. The right to both salary and commissions, it is true, commences when the registers and receivers, respectively, enter upon the discharge of their duties; but a register may enter upon the discharge of his duties under such circumstances as the claimant did in this case, before the time arrives for the formal and official opening of the land office to the public, and before the receipt of any moneys upon which commissions might be earned. Otherwise, if the salary could not commence to run until the receipt of such moneys, the office might have been formally opened for the transaction of public business, and the register have been in attendance thereat, for a long time before any moneys were received in payment for any part of the public land, and so he would be without a right to compensation by salary during the time succeeding the opening of his office, and up to the time of the receipt of such moneys.

It is unnecessary to enlarge upon the question, as it seems quite plain to us that upon the facts found by the court of claims the services performed by claimant after the creation of the new land district, and before the formal opening of the land office, were official services, and that as early as the 18th of July, 1890, he had entered upon the discharge of the duties of his office, and was in the continuous performance of such duties until after the 1st of September, 1890. The judgment of the court of claims was right, and it is affirmed.

(164 U. S. 347) MCCLELLAN v. CHIPMAN. TRADERS' NAT. BANK v. SAME. (November 30, 1896.) Nos. 35, 36.

NATIONAL BANKS-EFFECT OF STATE LAWS. 1. Pub. St. Mass. c. 157, 88 96, 98, which in validate transfers of property made with a view to a preference by any one insolvent or in contemplation of insolvency, where this fact is known to the transferee, in no way conflicts

with Rev. St. U. S. § 5137, which grants to a national bank the right to hold such real estate as "shall be mortgaged to it in good faith by way of security for debts previously contracted," and such as "shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings"; nor does it impair any function of national banks as instrumentalities of the federal government.

2. A statute declaring invalid all transfers of property by an insolvent debtor, with a view to a preference, to one knowing or having cause to believe him insolvent, and providing that, if the transfer "is not made in the usual and ordinary course of business of the debtor, that fact shall be prima facie evidence of such cause of belief," does not attach the presumption of such knowledge or belief to the mere taking of property as security for an antecedent debt, but limits it to cases where the particular nature of the transaction renders it one not in the ordinary course of the debtor's business.

In Error to the Supreme Judicial Court of the State of Massachusetts.

A. A. Strout and Wm. H. Coolidge, for plaintiffs in error. Wm. B. French, for defendant in error.

* Mr. Justice WHITE delivered the opinion of the court.

Although these two cases were brought here by separate writs of error, they depend on the same facts, and involve the same legal question, and were passed upon by the court below in one opinion. 159 Mass. 363, 34 N. E. 379. We shall therefore consider them together.

'The Traders' National Bank, a corporation organized under the banking laws of the United States, carried on its business in the city of Boston. The firm of Dudley Hall & Co., composed of Dudley Hall and Dudley C. Hall, were likewise engaged in business in Boston, and were customers of the bank, having a deposit account therein. By an understanding between the bank and the firm, made to induce the latter to keep its deposit account with the former, the firm was to be consid ered as entitled to a line of discount on its paper to the extent of $20,000. On the 16th of October, 1890, the partnership then being in the enjoyment of its full agreed-on discount, borrowed from the bank an additional sum of $12,500, which was evidenced by a note of Dudley C. Hall at one month, indorsed by the firm, and secured by the pledge of certain shares of the Aetna Mining Company and by two notes of that company, amounting to about $2,500. When this note matured, on the 16th of November, 1890, a new demand note in an equal amount was given in renewal thereof, and was secured by the same collaterals. On the 17th of December, 1890, payment of this note was demanded, and, the debtor being unable to meet it, a new note at two months was given, the sum thereof was passed to the credit of the firm, and the old note was debited, canceled, and surrendered. This new note was drawn, like the preceding one, by Hall, and indorsed by the firm, and was secured, not only by the same collaterals, but also by a conveyance of

two pieces of land made by Dudley C. Hall to A. D. McClellan, a director of the bank, he giving to Hall a writing, in which it was declared that the conveyance was made for the sole purpose of securing the note held by the bank, and that on its payment the land would be retransferred. In March, 1891, the firm suspended payment, and the membersthereof were adjudged to be insolvent under the insolvency laws of the state of Massachusetts, and made to their assignees an assignment of all their property, as required by the statutes of the state. In May the assignees brought a writ of entry against McClellan to recover the two pieces of land.

Sections 96 and 93 of chapter 157 of the Public Statutes of the state of Massachusetts, relied on by the assignees to sustain their action to recover the land, are as follows:

"Sec. 96. If a person, being insolvent or in contemplation of insolvency, within six months before the filing of the petition by or against him, with a view to give a preference to a creditor or person who has a claim, against him, or is under any liability for him,) procures any part of his property to be "at-" tached, sequestered or seized on execution, or makes any payment, pledge, assignment, transfer or conveyance of any part of his property, either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer or conveyance, or to be benefited thereby, having reasonable cause to believe such person is insolvent or in contemplation of insolvency, and that such payment, pledge, assignment or conveyance is made in fraud of the laws relating to insolvency, the same shall be void; and the assignees may recover the property or the value of it from the person so receiving it or so to be benefited."

"Sec. 98. If a person, being insolvent or in contemplation of insolvency, within six months before the filing of the petition by or against him, makes a sale, assignment, transfer or other conveyance of any description of any part of his property to a person who then has reasonable cause to believe him to be insolvent or in contemplation of insolvency, and that such sale, assignment, transfer or other conveyance is made with a view to prevent the property from coming to his assignee in insolvency, or to prevent the same from being distributed under the laws relating to insolvency, or to defeat the object of, or in any way to impair, hinder, impede or delay the operation and effect of, or to evade any of said provisions, the sale, assignment, transfer or conveyance thereof shall be void, and the assignee may recover the property or the value thereof as assets of the insolvent. And if such sale, assignment, transfer or conveyance is not made in the usual and ordinary course of business of the debtor, that fact shall be prima facie evidence of such cause of belief."

The action was tried before a jury, and there was a verdict in favor of the surviving

assignee, and exceptions were filled and allowed. While these exceptions were pending before the supreme judicial court, the Traders' Bank filed its bill in equity against the surviving assignee of the estate of Dudley C. Hall and Dudley Hall and A. D. McClellan, setting up its right under the conveyance made to McClellan, the bringing of the writ of entry, and the fact that the bank had not been made party defendant therein. The bill charged that the complainant, as a national bank, was entitled to take the conveyance of the real estate to secure the debt of Hall, and that the provisions of the statutes of Massachusetts which were relied on by the assignees were in conflict with sections 5136, 5137, Rev. St. U. S. The bill prayed that the assignee and McClellan be permanently enjoined from proceeding under the writ of entry and the exceptions filed therein; that McClellan be ordered to apply the proceeds of the property to the payment of the note and loan secured thereby. After due pleading, the issues tendered were reported by the presiding justice for the consideration of the full court upon certain questions of law reserved, and the full court affirmed the verdict of the jury and judgment thereon in the writ of entry case, and dismissed the bill in equity.

So far as concerned the federal question, the court held that there was no conflict be tween sections 5136 and 5137 of the Revised Statutes of the United States and sections 96 and 98 of chapter 157 of the Public Statutes of Massachusetts. Both cases were brought here by writ of error.

*The only federal question for our consideration is whether there was conflict between the statutes of the United States and the provisions of the general law of the state of Massachusetts referred to, and heretofore fully set out. Two propositions have been long since settled by the decisions of this court:

First. National banks "are subject to the laws of the state, and are governed in their daily course of business far more by the laws of the state than of the nation. All their contracts are governed and construed by state laws. Their acquisition and transfer of property, their right to collect their debts, and their liability to be sued for debts, are all based on state law. It is only when the state law incapacitates the banks from discharging their duties to the government that it becomes unconstitutional." National Bank v. Com., 9 Wall. 362.

Second. "National banks are instrumentalities of the federal government created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties, or control the conduct of their affairs, is absolutely void, whenever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates

the purpose of the national legislation, or impairs the efficiencies of these agencies of the federal government to discharge the duties for the performance of which they were created." Davis v. Bank, 161 U. S. 283, 16 Sup. Ct. 502.

These two propositions, which are distinct, yet harmonious, practically contain a rule and an exception,-the rule being the operation of general state laws upon the dealings and contracts of national banks; the exception being the cessation of the operation of such laws whenever they expressly conflict with the laws of the United States, or frustrate the purpose for which the national banks were created, or impair their efficiency to discharge the duties imposed upon them by the law of the United States. The provisions of the statutes of the United States upon which the plaintiffs in error rely are as follows:

"The national banking association may purchase, hold and convey real estate for the following purposes, and for no others:

The argument is that, as this statute permits national banks to take real estate for given purposes, therefore the Massachusetts law, which forbids a transfer of property, with a view to a preference, in case of insolvency, where the transferee has reasonable cause to believe that the transferror is insolvent or in contemplation of insolvency, in no way controls the contracts or dealings of a national bank. But this position denies the general rule just referred to, and amounts to asserting that in every case where a national bank is empowered to make a contract such contract is not subject to the state law. In the case in hand there is no express conflict between the grant of power by the United States to the bank to take real estate for previous debts and the provisions of the Massachusetts law, which, although allowing, as a general rule, the taking of real estate as a security for an antecedent debt, provides that it cannot be done under particular and exceptional circumstances. Nor is there anything in the stat utes of the state of Massachusetts, here considered, which in any way impairs the efficiency of national banks, or frustrates the purpose for which they were created. No function of such banks is destroyed or hampered by allowing the banks to exercise the power to take real estate, provided only they do so under the same conditions and restrictions to which all the other citizens of the state are subjected. one of which limitations arises from the provisions of the state law which, in case of insolvency, seeks to forbid preferences between creditors. Of course, in the broadest sense,