Opinion of the Court.

defendant by the procurement of an insurance upon Hillmon's life with the view of ultimately collecting the amount of the policies by a false pretense of his death would be sufficient to avoid the policies as having been obtained by fraud, without proof that such conspiracy had been consummated by compassing the death of another party and passing off the body of the deceased as that of Hillmon, the fact still remains that there was evidence of a conspiracy to procure a large amount of insurance upon the life of Hillmon and to procure in some way the body of another man to pass off as that of Hillmon, and thereby to obtain the amount of these policies, nominally, at least, for the benefit of Hillmon's wife. It is true the plaintiff is not alleged to have been a party to such conspiracy, although she was named as beneficiary in the policies, but her husband is alleged to have been a party, and any fraud perpetrated by him at the time the policies were taken out was available as a defence by the company in an action by her.

These questions and declarations of Baldwin to the four witnesses above stated were made either just before or just after the policy was taken out. They were not so much narratives of what had taken place as of the purpose Baldwin had in view, and we know of no substantial reason why they do not fall within the general rule stated by Greenleaf, 1 Greenleaf on Ev. sec. 111, that every act and declaration of each member of the conspiracy, in pursuance of the original concerted plan, and with reference to the common object, is, in contemplation of law, the act and declaration of them all, and is therefore original evidence against each of them. The conspiracy then existed and was still pending. Smith v. National Benefit Soc'y, 123 N. Y. 85.

These declarations taken together tend to show that Baldwin, who seems to have taken the most active part in the transactions connected with this policy, was heavily indebted, and being pressed by his creditors; that he expected in some way to obtain a large part of Hillmon's insurance, and that he was also desirous of going into a sheep ranch with Hillmon, with whom he declared he had a scheme under consideration by which they could raise the necessary funds; that such scheme consisted in

Opinion of the Court.

obtaining insurance upon Hillmon's life, and then going South and getting the body of some other person and passing it off as the body of the insured, and thus recovering the amount of the policy. This testimony was certainly corroborative of other testimony in the case, which both courts below agreed as establishing prima facie evidence of a conspiracy, and which was to the effect that Baldwin and Hillmon had been intimate acquaintances for eight or ten years prior to 1879; that Baldwin, who appears to have been a man of considerable means, had employed Hillmon in various capacities connected with his farm, and that during his visits at Lawrence Hillmon generally stayed at his house. Hillmon there first met his wife, who was a cousin of Baldwin's and worked at his house. Hillmon was a man of no property, and after his marriage he and his wife occupied a single room in the house of one Mary Judson, and did their cooking upon her stove. Baldwin and Hillmon became interested in life insurance, and consulted various agents as to their companies and about methods of collection in case of loss. In a conversation with one Wiseman in February, 1879, Hillmon stated that he was going West on business and might get killed; asked about proofs of death; what the widow must do to get her insurance money and what evidence she would have to furnish if he were killed. Under these circumstances he took out insurance for $25,000, the annual premium for which amounted to $600. There were various other items of testimony of the same character, which the courts below regarded as sufficient prima facie evidence of a conspiracy.

Under the circumstances we think the evidence of the four witnesses in question should have been submitted to the jury, and that such testimony was admissible as against the plaintiff, though she was not alleged to be a party to the conspiracy, upon the theory that any fraudulent conduct on the part of the insured in procuring the policy, or in procuring the dead body of another to impersonate himself, was binding upon her. It is well settled that the fraud of the insurer's agent in the procurement of the policy is binding upon the principal. Millville &c. Ins. Co. v. Collerd, 38 N. J. Law, 480; Nat. Life Ins. Co. v. Minch, 53 N. Y. 144; Oliver v. Mut. &c. Ins. Co., 2 Curt. 277; Burruss v. Nat. Life Ass'n, 32 S. E. Rep. 49.

Statement of the Case.

A number of other alleged errors are embraced in the assignments, but we see none to which we find it desirable to call attention. For the error in the instruction regarding Brown's affidavit and in ruling out the declarations of the four witnesses named,

The judgment of the Court of Appeals is reversed and the case remanded to the Circuit Court for the District of Kansas with instructions to grant a new trial.

MR. JUSTICE BREWER and MR. JUSTICE WHITE dissented.

EASTON v. IOWA.

ERROR TO THE SUPREME COURT OF THE STATE OF IOWA.

No. 92. Argued January 14, 15, 1903. -Decided February 2, 1903.

Congress having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regulate and control the exercise of their operations. Congress having dealt directly with the insolvency of national banks by giving control to the Secretary of the Treasury and the Comptroller of the Currency, who are authorized to suspend the operations of the banks and appoint receivers thereof when they become insolvent, or when they fail to make good any impairment of capital, and full and adequate provision having been made for the protection of creditors of national banks by requiring frequent reports to be made of their condition, and by the power of visitation of Federal officers, it is not competent for state legislatures to interfere, whether with hostile or friendly intentions, with national banks or their officers in the exercise of the powers bestowed upon them by the general government. While a State has the legitimate power to define and punish crimes by general laws applicable to all persons within its jurisdiction, and it may declare, by special laws, certain acts to be criminal offences when committed by officers and agents of its own banks and institutions, it is without lawful power to make such special laws applicable to banks organized and operated under the laws of the United States.

IN 1899, in the District Court of Wenneshiek County, State of Iowa, James H. Easton, who had been previously indicted,

Argument for Plaintiff in Error.

was tried, found guilty, and sentenced to imprisonment in the penitentiary of Iowa at hard labor for a term of five years, under the provisions of a statute of that State, for the offence of having received, as president of the First National Bank of Decorah, Iowa, a deposit of one hundred dollars in money in said bank, at a time when the bank was insolvent and when such insolvency was known to the defendant.

At the trial it was contended, on behalf of the defendant, that the statute of Iowa, upon which the indictment was found, did not, and was not intended to, apply to national banks, organized and doing business under the national bank acts of the United States, or to the officers and agents of such banks; and that, if the state statute should be construed and held to apply to national banks and their officers, the statute was void in so far as made applicable to national banks and their officers. Both these contentions were overruled by the trial court, and thereupon an appeal was taken to the Supreme Court of the State of Iowa, and by that court, on April 12, 1901, the judgment of the District Court was affirmed. 113 Iowa, 516. The cause was then brought to this court by a writ of error allowed by the Chief Justice of the Supreme Court of Iowa.

Mr. Charles F. Brown and Mr. H. T. Reed, with whom Mr. John J. Crawford and Mr. C. W. Reed were on the brief, for the plaintiff in error.

National banks are agencies of the National Government created by Congress to enable it to exercise and conduct its fiscal powers and operations. They are instruments of the Federal Government created for public purposes and as such neces sarily subject to the paramount authority of the United States. McCulloch v. Maryland, 4 Wheaton, 425; Osborn v. U. S. Bank, 9 Wheaton, 738; Legal Tender Cases, 110 U. S. 421.

The necessity for the incorporation and regulation of such institution theretofore being a matter solely within the jurisdiction of Congress, the whole subject is a matter out of the plane of state control and jurisdiction. The States cannot legislate upon such a matter, and statutes enacted by state legislatures cannot, by judicial interpretation and construction, be

Argument for Plaintiff in Error.

made applicable to such institutions. Davis v. Elmira Savings Bank, 161 U. S. 275, 283.

The National Banking Act does not prohibit or forbid the receipt of deposits by a bank when insolvent at any time before it is taken out of the control of its officers by the Comptroller of the Currency, acting under the provisions of the National Banking Act. State v. Fields, 98 Iowa, 74; McDonald v. Chemical Nat. Bank, 174 U. S. 610; Rev. Stat. sec. 5205.

A State has no power to legislate in reference to national banks, or to alter or supplement any of the provisions of the National Banking Act. Farmers' National Bank v. Dearing, 91 U. S. 29; Prigg v. Pennsylvania, 16 Peters, 539; Hall v. De Cuir, 95 U. S. 499; Leisy v. Hardin, 135 U. S. 100.

The statute of Iowa violates the fundamental propositions in that it attempts to supplement the National Banking Act and to regulate and control and limit the business of national banks within the State of Iowa, and directly invades the jurisdiction conferred by Congress upon the Secretary of the Treasury and the Comptroller of the Currency. McClellan v. Chipman, 164 U. S. 356; Fuzz v. Spaunhorst, 67 Missouri, 256.

This case falls within the principles laid down in McCulloch v. Maryland, and in Osborn v. United States Bank, that the States have no power to tax a national bank. It is also within the principle applied in Prigg v. Pennsylvania, Ohio v. Thomas, In re Waite and Cunningham v. Nagle. The means and agencies provided and selected by the Federal Government as necessary and convenient to the exercise of its functions cannot be subject to the taxing power of the States, and so also the Federal Government is without power to tax the corresponding means and agencies of the States. Cooley on Taxation, chap. 1, p. 7, chap. 3, pp. 56-58, cases already cited; Weston v. Charleston, 2 Peters, 499; Bank of Commerce v. New York, 2 Black, 620; Palfrey v. Boston, 101 Massachusetts, 329; Dobbins v. Commissioners of Erie Co., 16 Peters, 435; Ward v. Maryland, 12 Wall. 418-427; Collector v. Day, 11 Wall. 117; Freedman v. Sigel, 10 Blatch. 327; Moore v. Quirk, 105 Massachusetts, 49; Carpenter v. Snelling, 97 Massachusetts, 455; People v. Gates, 43 N. Y. 40; Green v. Holway, 101 Massachusetts, 293; State