ket or "true value in money" for the purposes of taxation is, pro hac vice, a conversion into money. And this is true, notwithstanding there may be a value beyond this arising, while the concern is in business, out of the good-will, or out of the franchise granted, which may or may not be taxable according to circumstances, and whatever latitude be allowed for diverse schemes of taxation, or whatever constitutional or statutory restrictions be imposed on any particular scheme. Bank of Commerce v. New York City, 2 Black, 620; Van Allen v. Assessors, 3 Wall. 573; Farrington v. Tennessee, 95 U. S. 679, 686; Delaware Tax Case, 18 Wall. 206, 229; Frazer v. Seibern, 16 Ohio St. 615, 619, 620. The effect of the wrong plan on this Toledo state bank was to assess it at very near the face value of its returns for taxation, or about 96 per cent. Of course, we have nothing to do with this particular inequality, but it illustrates that the inequalities were "gross, if not scandalous," to use the phrase of the chief justice. of Ohio. The system is essentially vicious, and necessarily results in discriminations as applied in this particular assessment, though not necessarily in all assessments; for, as the supreme court of the United States says in the cases cited, it may be that it is possible to so work it that no discrimination will take place in fact against any given national bank. Certainly, the conspicuous and intelligent officials constituting this state board of equalization understood, as we do, that inequalities and discriminations were the necessary outcome of their "rules;" and they found their justification, no doubt, and not unnaturally, in the decision of the state supreme court that, as long as they kept below the "true value in money" in all cases, there was no violation of the constitution and laws of the state of Ohio, and discriminations were immaterial. But they certainly overlooked the act of congress as interpreted by the supreme court of the United States. For, although their action in the premises did not necessarily, nor in fact, result in taxing any national bank at a valuation higher than its true value in money, as shown by the bank's own return, or, perhaps, not higher than its true value in money, as shown by the selling prices in the market, it did result, as we can see in a general way, if we take the state of Ohio as the unit of locality, in assessing the national banks, on the average, higher than the "other moneyed capital" invested in state banks.

Counsel for complainants attack this report vigorously as inherently void on its face, because of the violations of the statute we have mentioned, and insist that any increase arising from it should be enjoined as illegal. Not being in violation of the Ohio rule of equality by going above the true value in money, we cannot assent to this, nor say that it is void; but, under the federal or congressional rule of equality, we do think that, systematically, the national banks have been, by this action of the board of equalization, designedly assessed at a relatively higher value than other moneyed capital in state banks. The "rules" were discriminating within themselves, according to that

test, and each of the complainants here shows that it was assessed at a valuation higher than the average applied to state banks, and therefore suffered by the discrimination in this general way.

But, when we apply still another test of equality, the discrimination becomes more glaring. Under the Ohio system of taxation, the state is not the unit of territorial locality for the valuation of all "moneyed capital in the hands of individual citizens" of that state. It is the unit for real estate and for incorporated banks; but for that vast field of investment of "moneyed capital" not employed by incorporated banks, the counties and cities are the units of locality, and it is there that equalization takes place, and not throughout the state. But the act of congress does not at all limit the standard of comparison to "moneyed capital" invested in the incorporated banks of Ohio, but extends it to all "moneyed capital in the hands of individual citizens" of that state. Hence we must look also to the counties and cities, and examine the allegations of these bills as to discriminations according to that comparison. There is no doubt of the fact, however it may have occurred, that in Lucas county all personal property was placed, or intended to be placed, upon the duplicate by the taxing officials at six-tenths of its value. So thoroughly was the rule carried out that money, about the value of which there was no room for any differing "official judgment" as to its value, was placed at sixtenths, like the rest. The auditor, who was the primary assessor of bank shares, impartially assessed all shares at six-tenths of the value as shown by their own returns, and deducted the real estate as required by statute. But the equalizing board, whose action we have been examining, disturbed this assessment by increasing the values of the complainants here about as follows:

The auditor, however, took the responsibility of violating the instructions of the state board of equalization, and did not add the values of the real estate, but placed the complainants on the duplicate at the increase of that board of "assessed value, exclusive of real esstate," not deducting the real estate from those values. The result was they went upon the duplicate at something less than the foregoing figures, but all in excess of the six-tenths of other property. The defense against this is, as before, that these officials, one and all, were charged with the duty of assessing complainants at the true value in money of their shares; and, being below that value, by whatever imperfect processes they may have arrived at the figures, there can be no complaint that other property has been assessed at less than their own. What we have already said is an answer to this, because the six-tenths valuation was "a rule" so inherently uniform

in its application that to increase the per centum was, ipso facto, to discriminate injuriously.

But there was a "system" in it beyond that, if anything more be needed. There is conflict in the proof as to the fact whether the assessment at six-tenths was the result of formal action by the taxing officials, but none that there was a general understanding to that effect. It was not the result of accident, as is plainly shown by the proof. We shall not undertake to detail the testimony, but only to say that it establishes, we think, these facts.

(1) Prior to the year in controversy the taxing officials of Lucas county and the city of Toledo determined by formal resolution that, inasmuch as the decennial assessment of real estate in 1850 had fixed the taxable value of that class of property at about one-half its value, it was only fair to assess personal property at six-tenths, as nearly as could be done. (2) In 1883 the local board of equalization determined, in consultation, to assess it in the same way; but, objection being made that perhaps there was no power or was danger in taking a formal resolution to that effect, they agreed to let the action rest in a “mutual understanding" to so assess it, and without such formal action. Some witnesses say a motion was put and carried, but this was, perhaps, not quite correct; and the matter was left to a mere "understanding" among the members that they would direct the auditor to so instruct the local assessors, and when it came to equalization they would themselves act on that "understanding." (3) When the assessors assembled under the call of the auditor, pursuant to section 2749, Rev. St. Ohio, some witnesses say he gave them the instruction to assess at six-tenths,-he says he did not, and we think that he is the most accurate; and that, while he and they agreed that it should be so assessed, to make all property equal in taxation, he declined to so instruct them, but referred them to the laws of Ohio for their duty. (4) Nevertheless, the assessors themselves determined to assess at six-tenths, and, again, some witnesses say that a motion was made and carried, but it was not to be made a matter of record; but we think this is not, perhaps, quite accurate, but they did "mutually agree" that they would so assess the property, and without such formal action. (5) The county auditor, yielding to the popular will in that behalf, himself determined to so assess the banking capital within his jurisdiction. (6) The assessors did assess all personal property at six-tenths, as nearly as could be; the board of equalization corrected all assessments according to their mutual understanding, and equalized the returns in pursuance of that simple mathematical process; and the auditor did the same for the banks. (7) Thus, all personal property, except the "moneyed capital" employed in the incorporated banks, went upon the tax duplicate at sixtenths, without more ado, and the returns of the banks were made to the state board of equalization, with the results already mentioned. It needs only a statement of the facts to show that this action of

the taxing officials was as effectual to invoke the operation of the legal principles we have referred to as if their action had been of the most formal character and made a matter of record; as effectual, indeed, as if the "usage," "custom," "agreement," "mutual understanding," "tacit consent," etc.,-by all of which names it is called by the witnesses, had been embodied in a statute of the state of Ohio. The evasion attempted cannot be permitted. The method adopted was a "systematic rule" of assessment that should have been applied, and was, by the local assessors to all alike; and any departure from it would amount to an illegal discrimination. Now, then, even if it be admitted that the state board of equalization had, throughout the state, exactly equalized all "moneyed capital" invested in the "incorporated banks," state and national, and yet there was a discrimination against the national banks located in Lucas county or the city of Toledo in favor of "other moneyed capital in the hands of individ ual citizens," and this discrimination was the result of a "systematic rule," necessarily producing the discrimination, it would be unlawful and should be restrained; and this, for the plain reason that, whatever be the test of inequality under the laws of Ohio, the act of congress has not said that the standard of comparison for the discrimination prohibited, shall be confined to the moneyed capital invested in the incorporated banks of the state of Ohio, but extends to all "moneyed capital in the hands of individual citizens" of that state. To equalize the national banks with a part only of the "other moneyed capital" is not to equalize them with the whole, which is necessary to comply with the act.

Let the complainants have decrees restraining the collection of the excess of taxation levied upon them, they having paid all that they admit to be due. If the parties cannot agree upon the amounts of the excess, there should be a reference to the master to settle it. So ordered.

WELKER, J., concurred.

METROPOLITAN TRUST CO. OF NEW YORK v. PENNSYLVANIA, S. & N. E. R. Co.

(Circuit Court, D. New Jersey. October 17, 1885.)

1. RAILROAD MORTGAGES-WHERE RECORDED-NEW JERSEY STATUTE.

Railroad mortgages, when conveying the franchises, and including personal chattels then or afterwards to be acquired, are not embraced in the New Jersey statute requiring the recording of chattel mortgages in the counties where the property may be situated, but are governed by section 86 of the "Act respecting railroads and canals."

2. SAME-REPEAL-SECTION 86 OF RAILROAD AND CANAL ACT.

Section 86 of the act respecting railroads and canals has not been repealed,

either in terms or by implication, by section 13 of the act of March 25, 1881, (Pam. L. 229,) entitled "A further supplement to the act entitled an 'Act concerning mortgages,' approved March 27, 1874.

On Petition of Thomas Moore.

Chas. T. Glen, for petitioner.

Thomas G. Hillhouse, for complainant.

M. I. Southard, for receivers.

NIXON, J. The Pennsylvania, Slatington & New England Railroad Company, a corporation existing under the laws of the state of New Jersey, made and executed to the Metropolitan Trust Company of the city of New York, as trustee, an indenture of mortgage bearing date July 1, 1882, upon all their property, real, personal, and mixed, in the counties of Warren and Sussex, in the state of New Jersey, then owned by the said corporation, or afterwards to be acquired. The said mortgage was duly acknowledged on the twenty-sixth of September of the same year, and recorded as a real estate mortgage in the clerk's office of the said counties on the twenty-ninth day of September, 1882. On the ninth day of June, 1885, a bill of complaint to foreclose the mortgage was filed in this court by the said trust company; and an order was entered appointing William V. McCracken receiver, upon his giving the required security, and directing him to take into his possession all the real estate and personal chattels of the said railroad company, and to hold the same pending the suit; and on the nineteenth of June, 1885, his bond being approved, all the said property was placed in his hands as receiver. On July 3, 1885, Thomas Moore, of the city of Elizabeth, filed a petition in this court, setting forth, in substance, that he was a judgment and execution creditor of the said railroad company; that on the proceedings in the court of chancery of New Jersey he had obtained on the fourth of August, 1884, a final decree against the said corporation; that subsequently, to-wit, on May 7, 1885, he had filed and docketed an abstract of the decree in the clerk's office of the supreme court of the state, by virtue of the laws of the state in such case made and provided; that under an order of the court of chancery he caused a writ of fieri facias to be issued thereon, dated May 19, 1885, directed to Roderick Byington, Esq., one of the masters of said court, commanding him to levy and make of the goods and chattels of the said railroad company the sum of $3,163.73, with interest from March 13, 1885, and $40.08 costs; that the writ was delivered to the master, May 20, 1885; and that on the fourth and eleventh days of June, 1885, he levied upon and took in his possession a large amount of personal property, particularly described in said petition, in the counties of Warren and Sussex, and belonging to said corporation.

The petitioner claims that he has the first lien upon the property levied on; that the mortgage, not having been filed in accordance with the requirements of the statutes of the state respecting chattel mortgages, is void as against the creditors of the mortgagor, and prays