is the inadequacy, and not the utter futility, of the remedy at law, which conditions the jurisdiction in this class of cases; and the return of an execution unsatisfied is neither the sole nor the best evidence of this inadequacy. In many cases this inadequacy cannot be shown at all by the return of the execution, because it is possible to levy the same upon the property upon which the lien is fastened, and to sell this property thereunder, notwithstanding the fraudulent incumbrance or conveyance. The difficulty is that the fraudulent mortgage, trust deed, or other obstruction compels the purchaser under the execution to buy a lawsuit, and so depreciates the value of the property at the sale that the creditor's remedy is rendered insufficient, and sometimes without any practical value. In such a case he is not required to proceed with this sale, and thus sacrifice both his own interest and that of his debtor, but he may successfully appeal to equity to remove the fraudulent obstruction before he proceeds to the sale. Bank v. Newton, 13 Colo. 249, 250, 22 Pac. 444, and cases there cited. Moreover, the inadequacy of the remedy is generally measured by the value of the property upon which the lien has attached or in which the right is vested, and the depreciation in the value of this lien or right caused by the fraudulent obstruction. The issue and return of an execution unsatisfied have no tendency to establish either of these facts. It would be a mere form, which neither law nor equity would require. Whenever a creditor has a vested right in or a lien upon property, the enforcement of which is hindered or rendered inadequate by a fraudulent conveyance or incumbrance, he may maintain a suit in equity to remove it, without showing an execution or return of it unsatisfied, or without exhausting his other legal remedies. Case v. Beauregard, 101 U. S. 688, 690, 691; McCalmont v. Lawrence, 1 Blatchf. 232, 15 Fed. Cas. 1249 (No. 8,676); Kittel v. Railroad Co., 65 Fed. 862; Tappan v. Evans, 11 N. H. 311; Wadsworth v. Schisselbauer, 32 Minn. 84, 87, 19 N. W. 390; Bank v. Newton, 13 Colo. 245, 249, 250, 22 Pac. 444; Loving v. Pairo, 10 Iowa, 282, 289; Cornell v. Radway, 22 Wis. 260; Beck v. Burdett, 1 Paige, Ch. 305, 308; Clarkson v. De Peyster, 3 Paige, Ch. 320; Newman v. Willetts, 52 Ill. 98.

The case in hand falls within the latter class of cases, in which a judgment creditor may successfully invoke the aid of a court of equity. The filing of the transcript of the judgment in La Plata county fastened a lien securing its payment upon the interest of the coal and coke company in its real estate in that county, under the statutes of Colorado. Mills' Ann. St. Colo. §§ 2529, 2530, 2531, 4185 (5); Stephens v. Clay, 17 Colo. 489, 491, 30 Pac. 43; Bank v. Newton, 13 Colo. 249, 250, 22 Pac. 444. The argument that this lien was insufficient upon which to base a suit in equity to remove the fraudulent trust deed, because it was a general lien created under the statutes, and not a specific lien fixed by the levy of an execution, finds no support in the authorities, and fails to appeal to the reason with persuasive force. There are, indeed, opinions in which it is pertinently said, as in Jones v. Green, 1 Wall. 330, that a right of a judgment creditor rests upon the fact that the execution has been

issued, and a specific lien has been acquired upon the property of the debtor by its levy. That is a true statement where the lien which the creditor seeks to enforce is acquired by such a levy, but no case has been called to our attention in which it has been held that it was necessary to issue an execution and make a levy which would create no lien before a suit could be maintained to remove a fraudulent obstruction to the enforcement of a lien already created without the levy. Under the statutes of Colorado, and under those of many other states, the lien of a judgment attaches to the real estate of the debtor when the judgment, or a transcript of it, is recorded or filed in the proper office in the county where the land is situated. The issue, levy, and return of an execution without the collection and payment of any part of the judgment neither increase nor diminish the force and efficacy of that lien. In the case at bar all the property which the judgment debtor has is real estate in La Plata county. The judgment is a lien upon all this property. The levy of an execution upon it could not make this lien more specific or more efficient, and the conclusion is irresistible that the general lien upon real estate created by entering a judgment or filing a transcript of it in the county where the lands of the debtor are situated, in accordance with the statutes which provide therefor, is a sufficient basis for the maintenance of a suit in equity to remove a fraudulent obstruction to the enforcement of that lien. Bump, Fraud. Conv. 535; Black, Judgm. § 400.

According to the averments of the bill, the property upon which the receiver has fastened his lien is the only property of his debtor. It is not worth $20,000, and the appellees made and recorded a trust deed upon it before the receiver obtained his lien, by which the debtor apparently incumbered his title to secure an indebtedness of $20,000. The debtor, however, did not owe this debt, and the trust deed and the notes it apparently secured were made and taken for the purpose of hindering and defrauding the receiver in the collection of the debt evidenced by his judgment. These allegations are admitted by the demurrers, and they make a perfect case for the avoidance of the deed, and the removal of the cloud which it creates upon the title. The issue and levy or the issue and return unsatisfied of an execution would have added nothing and taken nothing away from the conclusive effect of these admissions. It would not have established a stronger and more effective lien than that fixed upon the land under the statute. It would not have shown more clearly the inadequacy of the receiver's remedy at law, or the inequity of the fraudulent trust deed which he seeks to remove. It would have been nothing but an idle and meaningless ceremony, whose performance neither courts of law nor courts of equity require. When a claim to an interest in or lien upon land appears to be valid upon the face of the record, and its invalidity can only be made to appear by extrinsic evidence, it constitutes a cloud upon the title, which any one who has a title to or interest in the land may invoke the aid of a court of equity to remove. Ormsby v. Ottman, 56 U. S. App. 510, 29 C. C. A. 295, 302, and 85 Fed. 492, 499; Crooke v. Andrews, 40 N. Y. 547; Corey v.

Schuster, 44 Neb. 269, 273, 62 N. W. 470; Lick v. Ray, 43 Cal. 83. The decree below is reversed, and the case is remanded to the court below for further proceedings not inconsistent with the views expressed in this opinion.

CITY AND COUNTY OF SAN FRANCISCO v. CROCKER-WOOLWORTH NAT. BANK OF SAN FRANCISCO.

(Circuit Court, N. D. California. February 25, 1899.)

No. 12,522.

TAXATION OF NATIONAL BANKS-POWERS OF STATE.

The personal property of a national bank cannot be directly assessed for taxation by state authorities.

This is an action to recover taxes assessed against a national bank. Heard on demurrer to complaint.

Alfred Fuhrman, for plaintiff.
Lloyd & Wood, for defendant.

DE HAVEN, District Judge. The defendant is a national banking association, organized and existing under and by virtue of the laws of the United States, and having its principal place of business at the city and county of San Francisco, state of California. The action is brought to recover the sum of $7,754.64 and interest thereon, alleged to be due from the defendant for state, city, and county taxes on personal property, consisting of fixtures and money belonging to and assessed to it under the laws of the state for the purposes of taxation for the year 1896. The defendant has demurred to the complaint, and the single question arising thereon is whether personal property belonging to a national bank is subject to taxation by the state.

Congress, in the exercise of its undoubted power, has, in section 5219, Rev. St. U. S., declared what property of national banks may be thus taxed. It is therein provided that real property of national banks shall be subject to state, county, and municipal taxes, "to the same extent, according to its value, as other real property is taxed," and that the shares in any such association shall be assessed as other personal property, to the owner or holder of such shares. The effect of this statute is to exempt personal property belonging to national banks from direct assessment and taxation by the state; that is, the personal property of such banks cannot be directly assessed to them by the state for purposes of taxation. That this is so is so well settled as not to require discussion at this time. Rosenblatt v. Johnston, 104 U. S. 462; People v. Weaver, 100 U. S. 539-543; Covington City Nat. Bank v. City of Covington, 21 Fed. 484; People v. National Bank of D. O. Mills & Co. (Sup. Ct. Cal., Dec. 19, 1898) 55 Pac. 685. The demurrer will be sustained, and judgment thereupon entered in favor of the defendant, the defendant to recover costs.

92 F.-18

HADDEN et al. v. DOOLEY et al.

(Circuit Court of Appeals, Second Circuit. January 25, 1899.)

No. 25.

1. BANKS-OFFICERS AS AGENTS-ACTS AGAINST INTERESTS OF BANK.

A cashier of a bank, who was also a director of a manufacturing company, and as such director assisted in promulgating false statements as to the financial condition of the company, for the purpose of defrauding all of its creditors, including the bank, was not the agent of the bank in such matter so as to affect the validity of its claims against the company. 2. FRAUDULENT CONVEYANCE-BILL OF SALE AS SECURITY-CHANGE OF POSSESSION.

A bill of sale made by a debtor to a creditor, where no change of possession takes place, but the property is permitted to remain in the possession of the debtor, and to be sold by it, is void as to other creditors. 3. INSOLVENT CORPORATIONS-POWER OF OFFICERS-TRANSFER OF PROPERTY. A general manager of a corporation, though given by its by-laws the entire charge of its business and affairs, subject to the order and approval of its board of directors, has no power, after he knows the corporation to be insolvent and about to be placed in the hands of a receiver, to transfer the bulk of its property to one of its creditors in payment of a preexisting debt; and such a transfer, not authorized nor ratified by the directors, is void as to its other creditors.

4. ATTACHMENT-VALIDITY-ASSIGNMENT OF CLAIM FOR SUIT.

A colorable transfer of a just cause of action against a foreign corporation by a nonresident to a resident of the state of New York, for the purpose of enabling the assignee to maintain an action by attachment thereon in the courts of the state of New York for the real benefit of the assignor, does not render an attachment obtained by the assignee void, and it cannot be attacked by junior attaching creditors of the common debtor.

5. SAME-VALIDITY AS AGAINST SUBSEQUENT ATTACHING CREDITORS.

An attachment cannot be defeated by junior attaching creditors unless there has been some element of unfair dealing which entered into the conduct of the plaintiff in taking his judgment.

6. PROMISSORY NOTES-EFFECT OF RENEWAL.

The giving of a renewal note to a bank, where it retains the original, does not discharge the precedent debt for which it is given, unless such is the agreement and intention of the parties.

7. ATTACHMENT-VALIDITY-SETTING ASIDE IN EQUITY.

A corporation had been for a number of years becoming more and more heavily indebted to a bank of which one of its directors was cashier. Notes given by the company were from time to time renewed, merely as a matter of form, and without expectation of payment, as the company was hopelessly insolvent. Finally, both the company and the bank went into the hands of receivers. Held, that an attachment thereafter obtained on behalf of the bank against the company based on such notes would not be held invalid by a court of equity, merely because the renewal notes taken for a portion of the indebtedness lacked a few days of maturity. 8. SAME-UNFAIR PRACTICE AS BETWEEN CREDITORS

The removal and secretion of goods of a debtor by one creditor, who had an invalid bill of sale for the same, until he could obtain and levy an attachment thereon, is an unfair attempt to gain an advantage over a second creditor, who had procured an attachment, and served it on the custodian of the goods, and was engaged in securing an indemnity bond, required by the sheriff, before levying on the goods, when they were removed by the other creditors, who knew of such attempted attachment, and, as to such goods, the attachment of the second creditor will be given preference.

Appeal from the Circuit Court of the United States for the Southern District of New York.

This is an appeal from a decree fixing the priority of liens between certain attaching creditors of the Natchaug Silk Company.

80.

James L. Bishop and Wm. B. Putney, for appellants.
Edward W. Paige, for appellees.

Before WALLACE and SHIPMAN, Circuit Judges.

84 Fed.

SHIPMAN, Circuit Judge. The Natchaug Silk Company was a manufacturing corporation for the manufacture and sale of silk goods, was incorporated under the laws of the state of Connecticut, and had its principal place of business in Willimantic, in that state. Its capital of $200,000, in August, 1888, was increased to $250,000 in February, 1893. J. Dwight Chaffee was its president and general manager from its organization, in 1887, and managed entirely the manufacture and sales of goods, without any oversight by the directors. The by-law of the corporation, from and after February 3, 1891, was as follows:

"The board of directors shall annually elect a general manager, who shall have entire charge of the business and affairs of said company, subject to the order and approval of the board of directors."

O. H. K. Risley was cashier of the First National Bank of Willimantic, having a capital of $100,000, was a director in the silk company, and took care of its financial business so far as the raising of money was concerned, and before 1890 the company owed the bank beyond the limit of $10,000, allowed by law. On January 1, 1890, at the suggestion of Risley, and as security for the payment of this debt, Chaffee made an ordinary absolute bill of sale to the bank of silk goods amounting to $26,610.24. Those goods remained, as before, in the possession of the silk company, and were sold by it to its customers in the ordinary course of business. It was a part of the verbal agreement that the silk company could sell the goods and replace them by other manufactured goods. In the spring of 1892 the silk company owed the bank about $200,000. In January, 1894, the debt of the silk company to the bank had increased to about $300,000, and, upon request of Risley, Chaffee executed, as security for this indebtedness, two bills of sale to the bank, of manufactured goods of about $66,000 in value. Each bill contained the following statement:

"The goods represented by this bill are pledged to the First National Bank of Willimantic, as security for loans made by said bank to the Natchaug Silk Company. The Natchaug Silk Co.

"J. D. Chaffee, Prest.
"Charles Fenton, Treas."

The goods represented by these bills were placed in the storeroom and vault, respectively, of the silk company. It was said that the storeroom was built especially for this purpose, and that there were two keys, one of which was kept by Risley, who also had the combination of the vault safe. The goods were stored in the rooms or