as

things which may otherwise incidentally affect commerce, such the imposition of taxes upon all property within the State, mingled with and forming part of the great mass of property therein. But in making such internal regulations a State cannot impose taxes upon property imported. into the State from abroad, or from another State, and not yet become part of the common mass of property therein,

and no regulations can be made directly affecting interstate commerce." This case was affirmed in Asher v. Texas, 128 U. S. 129.

The same rule was applied in Welton v. Missouri, 91 U. S. 275, and Walling v. Michigan, 116 U. S. 446, to a statute requiring the payment of a license from persons dealing in merchandise, not the growth, produce or manufacture of the State, and requiring no such license from persons selling goods grown, produced or manufactured within the State. In McCall v. California, 136 U. S. 104, a license tax imposed upon the agent of a railroad between Chicago and New York soliciting business in San Francisco, was held to be void. To the same effect are Crutcher v. Kentucky, 141 U. S. 47; Brennan v. Titusville, 153 U. S. 289, and Stockard v. Morgan, 185 U. S. 27. Finally, in Caldwell v. North Carolina, 187 U. S. 622, another of the same line of cases, it was held that a city ordinance imposing a license upon every person engaged in the business of selling or delivering picture frames, etc., was an interference with interstate commerce, so far as applied to picture frames made in other States and shipped to an agent in the State of North Carolina; and that the transaction was not taken out of the protection of the commerce clause by the fact that the agent placed the pictures in their proper frames, and delivered them to the persons ordering them. Most of the prior cases are noticed. in this opinion.

Indeed, the cases upon this subject are almost too numerous for citation, and the one under consideration is clearly controlled by them. The sewing machine was made and sold in another State, shipped to North Carolina in its original pack

age for delivery to the consignee upon payment of its price. It had never become commingled with the general mass of property within the State. While technically the title of the machine may not have passed until the price was paid, the sale was actually made in Chicago, and the fact that the price was to be collected in North Carolina is too slender a thread upon which to hang an exception of the transaction from a rule which would otherwise declare the tax to be an interference with interstate commerce.

The judgment of the Supreme Court of North Carolina is therefore reversed and the case remanded to that court for further proceedings not inconsistent with this opinion.

MR. JUSTICE HOLMES did not participate in the decision of this case.

SCHUYLER NATIONAL BANK v. GADSDEN.

ERROR TO THE SUPREME COURT OF THE STATE OF NEBRASKA.

No. 50. Argued November 3, 1903.-Decided December 7, 1903.

Where usurious interest has been paid to a national bank the remedy afforded by sec. 5198, U.S. Revised Statutes, is exclusive and is confined to an independent action to recover such usurious payment. Hazeltine v. Central National Bank, 183 U. S. 118.

A claim that usurious interest has been paid on a debt to a national bank secured by mortgage on real estate given by the debtors to an individual for the benefit of the bank cannot be asserted under the state law in foreclosure proceedings in the state courts.

Where the state law does not forbid an agent from taking security for the benefit of a principal the taking of real estate security by the president of a national bank for a debt due to the bank is in legal effect the taking of such security by the bank itself.

The provisions of the United States statutes forbidding the taking of real estate security by a national bank for a debt coincidently contracted do not operate to make the security void but simply subject the bank to be called to account by the government for exceeding its powers. Logan County v. Townsend, 139 U. S. 67.

ON August 8, 1890, George Thrush, one of the defendants in error, being indebted to the Schuyler National Bank, one of the plaintiffs in error, for money then and theretofore lent, executed a note to the bank for the sum of $5000, payable six months after date. As collateral security for the payment of this note, Thrush and his wife executed a note and mortgage for $5000 to one Sumner, who was at that time the president of the bank. The collateral note and mortgage were delivered to the bank and by it retained. The note made to the bank was renewed by the bank from time to time, and various payments of interest and on account of the principal were made to the bank, the principal sum thereby being reduced in March, 1894, to $3000. In that month and year a new note was executed to the bank for the principal sum then due and interest, in all, $3229. No money dealings were had at any time between either Thrush and his wife and Sumner individually.

James Gadsden, one of the defendants in error, sued Thrush and his wife in a Nebraska court to foreclose an asserted mortgage on real estate. Junior encumbrancers of record were made parties defendant, among them being Sumner, to whom the mortgage for $5000, securing the collateral note previously referred to, had been executed. He answered, and by crosspetition asserted the lien of the mortgage, which he alleged was made to him as trustee, for the benefit of the Schuyler National Bank; he prayed foreclosure of such lien and the payment of the indebtedness to the bank, stated to be $3229 and interest. The Schuyler National Bank was subsequently made a party defendant; and, by answer and cross-petition, claimed the benefit of the mortgage to Sumner, securing the indebtedness just stated, and joined in the prayer for foreclosure. Separate answers, similar in tenor, were filed on behalf of Thrush and his wife, in which were averred, in numerous paragraphs, many payments to the bank of usurious interest during a period of five years, and in substance it was prayed that the amount of such payments might be deducted

from the principal sum claimed by the bank to be due. In each of the answers was contained the following paragraph:

"That the said note of $5000 of the defendants George Thrush and Mattie N. Thrush, together with the mortgage securing the same, were not executed and delivered to said William H. Sumner upon any consideration whatsoever, but the same are simply held by said defendant as collateral security to the amount owing by the defendant, George Thrush, on the said indebtedness now being evidenced by said $3229 note, in this, that the said note of $5000 and the mortgage securing the same were executed and delivered by this defendant and Mattie N. Thrush to said Sumner for the purpose that said Sumner might protect therewith said bank on account of the indebtedness of said George Thrush to said bank, and said note and mortgage were accepted by said Sumner with the knowledge and consent of said bank, and because said bank refused to take said mortgage and said Sumner in nowise protected said loan or advanced any money thereon and at the time of the maturity thereof, by virtue of the premises and the payments of usurious and illegal interest made thereon, as aforesaid, there was due and owing, after deducting the payments made upon the principal and the said payments of usurious interest, the small balance, to wit, of $252.20, and for the aforesaid balance the said defendant Sumner is entitled to a lien upon said premises under and by virtue of said mortgage and promissory note of $5000.”

A reply was filed to these answers. It was therein stated in substance that most of the alleged usurious interest had been paid to the bank more than two years before the commencement of the action, and that the remaining interest payments were not in excess of the rate allowed by law to be contracted for. The pleading concluded with the claim "that this court has no jurisdiction in this action to consider the question raised in said answer to each and every item of interest mentioned in said answer as paid to said Schuyler National Bank; that said items are not proper items of set-off or counter-claim and can

Argument for Plaintiff in Error.

191 U. S.

not be adjudicated except in a suit brought expressly for that purpose under the provisions of section 5198 of the Revised Statutes of the United States."

A decree was entered determining the priority of liens between the respective lienholders and providing for a foreclosure. Among other things it was adjudged that the mortgage to Sumner was executed and delivered for the benefit of the bank, and that the bank was entitled to the proceeds of the note and mortgage. As to the defence of usury set up in the answers it was decided that, as the transaction was one with a national bank, it was governed by the laws of the United States, and, therefore, recovery by way of set-off of the usurious interest alleged to have been paid was refused. Recovery of the interest embraced in the claim of the bank was, however, denied, and judgment was entered only for the principal sum found to be due and owing to the bank.

On appeal, the Supreme Court of Nebraska reversed the judgment of the District Court in the particular just noticed, and remanded the cause with directions "to ascertain the amount of money advanced to Thrush by the Schuyler National Bank, deduct therefrom all payments, whether of principal or interest, and award foreclosure for the remainder, if any." 56 Nebraska, 565. On a rehearing, the appellate court reaffirmed its previous decision. 58 Nebraska, 340. Thereupon a writ of error was allowed from this court, which was subsequently dismissed for want of jurisdiction. 179 U. S. 681. Subsequently the state District Court entered a judgment in conformity with the mandate of the Supreme Court of Nebraska, and such judgment was affirmed on appeal. 63 Nebraska, 881. The present writ of error was thereupon allowed.

Mr. Charles J. Phelps for plaintiff in error:

The penalties imposed by §§ 5197, 5198, U.S. Rev. Stat., are exclusive. F. & M. Bank v. Deering, 91 U. S. 29. A national bank may take real estate for a past due debt; State Nat.