Cadle v. Tracy.

The 29th section of the act of 1863 (in terms such as are found re-enacted in the 50th section of the act of 1864), provided that the association might "apply to the nearest circuit, district or territorial court of the United States," to enjoin the Comptroller of the Currency, and the 50th section of the act of 1863 (in terms such as are found re-enacted in the 53d section of the act of 1864, except that the latter act requires the suit to be brought by the Comptroller of the Currency), provided that the franchise of the association might be adjudged to be forfeited, and it might be declared to be dissolved by a proper circuit, district or territorial court of the United States." But the terms "the nearest ' court and the proper" court, were entirely vague. Therefore, it is said, the 59th section of the act of 1863 was enacted, giving jurisdiction to particular Federal courts, of the suits by the association provided for by the 29th section of that act, and of the suits against the association, provided for by the 19th and 50th sections of that act.

Passing, now, to the act of 1864, the same reasons, it is urged, existed for Congress to so enact in terms, if it desired to give jurisdiction to the Federal courts of proceedings under that act. Hence, it is said, the 57th section of the act of 1864 was enacted, giving jurisdiction to particular Federal courts of the suits against the association, provided for by the 41st and 53d sections of that act.

The difficulty in giving such a restricted meaning to the words, "under this act," in the first part of the 57th section of the act of 1864, as will confine their meaning to proceedings arising out of the provisions of that act is, that the provision of that section. allowing such proceedings to be taken "in any State, county or municipal court in the county or city in which said association is located, having jurisdiction in similar cases," can have no scope for operation, except in respect to a suit under the 41st section of the act of 1864, against the association, to collect a penalty for not making a return a penalty to the United States, and one which it would not be likely to sue for in any court but a court of the United States, and one which it could sue for in such court.

The 53d section of the act of 1864 requires, that a forfeiture shall be adjudged by a court of the United States, and the suit by the association, to enjoin the Comptroller of the Currency (even if the word "against," in the 59th section of that act, is, under the

Cadle v. Tracy.

intimation in Kennedy v. Gibson, 8 Wall. 498, 506, to be read, "by and against," as in the 59th section of the act of 1863), must, under the 50th and 57th sections of the act of 1864, be brought in a court of the United States.

In addition to the fact, that, on this restricted meaning of the words, "under this act," there is, practically, no field for the operation of the jurisdiction given to the State courts by the 57th section of the act of 1864, it is to be observed, that Congress was creating corporations which were to have business connections with vast numbers of persons, and were expected to take the place of State institutions of a like character. It was, therefore, to be expected, that Congress, in clothing such corporations with all their functions, would prescribe in what tribunals, not only proceedings against them, taken under the act, but all suits against them, should be brought. As the corporations are created by Congress suits against such corporations are cases arising under a law of the United States, within the meaning of the Constitution (art. 3, § 2), and it was competent for Congress to confer on the Federal courts jurisdiction over such suits. Osborn v. The Bank of the United States, 9 Wheat. 738. It was, also, competent for Congress to make jurisdiction of such suits exclusive in the Federal courts. Martin v. Hunter's Lessee, 1 Wheat. 304, 336, 337; The Moses Taylor, 4 Wall. 411, 429. Under that power could allow such suits to be brought in certain specified Federal courts, in terms which would, by necessary intendment, exclude all other Federal courts, and exclude all State courts; and it could qualify the exclusion of State courts, by allowing such suits to be brought in certain specified State courts, in terms which would, by necessary intendment, exclude all other State courts. The question in the present case is, as to what Congress has done in that regard, by the enactments in the 8th and 57th sections of the act of 1864. The language of the opinion of the Supreme Court in Kennedy v. Gibson (before cited) treats the 59th section of the act of 1863, and the 57th section of the act of 1864, as providing for suits generally, and not merely for proceedings arising under the statute, although the point was not involved in that case. That is, also, the view of the Supreme Court of Massachusetts, in Crocker v. The Marine National Bank of New York, 101 Mass. 240. [See post] A suit against any association under this act" means, a suit against any association created under the act. An "association

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under this act " means, properly interpreted, and in ordinary speech, "an association existing or formed under this act," because, if an association at all, it is one under the act, and, having no existence except from the act, it is an association under, that is, by virtue of the act.

Now if the 8th section stood alone, the association might be sued in any court which had authority to exercise jurisdiction over it. But the 57th section must be regarded as intended to regulate the whole subject of jurisdiction over suits against associations. It gives jurisdiction to the Federal courts of the district in which the association is established.

Under this provision, a citizen of the State where the association is established, as well as a citizen of another State, may sue it in such Federal courts. So, also, the section provides that the association may be sued in any State court in the county or city in which it is located, which has jurisdiction in similar cases. It is true, that the word used is "may," and that that word is used, in the section, in reference to both Federal courts and State courts. But that word cannot, in regard to the State courts, be regarded as permissive or enabling, because under the 8th section, a State court in the county or city in which the association is located, having jurisdiction in similar cases, might have jurisdiction of a suit against the association if the State authority so provided; and, therefore, the provision of the 57th section, in regard to State courts, if merely permissive or enabling, is surplusage, and contains no more than was already contained in the 8th section. Under the 59th section of the act of 1863, Congress made the jurisdiction of suits against associations exclusive in the Federal courts of the district in which the association was established. Under the 57th section of the act of 1864, it extended such jurisdiction, also, to certain specified State courts. But there is a clear indication that the jurisdiction of such suits by State courts was intended to be confined to the State courts specified.

If this is not so, there was no need of saying any thing about State courts, in the 57th section of the act of 1864.

The State courts specified in that section are already covered by the 8th section of the same act. It cannot be supposed that Congress did not intend that the provision in the 57th section in regard to State courts should have some meaning, and it can have none

Cadle v. Tracy

unless as a restriction on the general provision in regard to jurisdiction found in the 8th section.

Moreover, Congress having provided for the creation of these associations, and having power to say where they may be sued, when, taking the 8th and 57th sections of the act together, we find that Congress has prescribed that they may be sued in certain designated courts, it is a proper construction of the language, to hold that they must be sued in those courts, and cannot be sued in any others.

The only reported decision to which I have been referred, which holds that the suit of Tracy against the Selma Bank could be maintained, is that of Cooke v. The State National Bank of Boston (before cited), in December, 1867, which holds that the provisions of the 57th section of the act of 1864 do not control or modify those of section 8 of the same act.

The subject is not discussed in the opinion delivered in that case, and the decision seems to be put principally on the ground that, unless the State courts of New York have jurisdiction of a suit against a National bank located in another State, such bank could, by removing its funds to New York, place them beyond the reach of any action that could be brought against the corporation. Congress must be presumed to have considered that question, when limiting the jurisdiction of the State courts by the 57th section, and to have regarded the provisions made by the act for obtaining possession of the assets of an insolvent bank as sufficient.

The Supreme Court of Massachusetts, in the case before cited, by the unanimous opinion of six judges in a suit brought in Massachusetts against a National bank located in New York, held that, notwithstanding the provision of the 8th section of the act of 1864, the 57th section of that act, in designating the locality of the Federal and State courts in which suits may be brought against associations, had regulated the whole subject of suits against them, and had excluded the power to bring suits against them in any courts except those designated in that section

The subject appears to have been carefully considered by that tribunal. In the suit against the Selma Bank by Tracy, no opinion by either the Special or the General Term is furnished to me. On a full consideration of the question, I must hold that the Supreme Court of New York had no jurisdiction of the suit of Tracy against the corporation, on the ground that such jurisdiction was forbidden to it by the 57th section of the act of 1864.

Cadle v. Tracy.

This conclusion makes it unnecessary to consider the point arising under the statute of New York, as to whether the cause of action on the drafts arose in New York.

I only desire to say that I do not mean to be understood as assenting to the view that such cause of action did arise in New York.

It is contended that Cadle, by procuring himself to be made a defendant, as receiver of the bank in the suit of Tracy, submitted himself to the jurisdiction of the State court, and that, however it may have been as to the jurisdiction of that court over the bank when the suit was brought, Cadle is estopped from questioning its jurisdiction over him, or its jurisdiction to render against him the judgment which it did render.

The answer to this view is obvious. By the order of the State court of May 13th, 1868, Cadle, as receiver, was substituted as defendant in the action, with the like effect as if the action were continued in the name of the bank. Such are the express terms of the order.

Therefore, the substitution of Cadle as defendant can have no effect in respect to the jurisdiction of the court in the action, over its subject-matter, and over the bank as defendant, to confer a jurisdiction in those particulars which the court would not have had if Cadle had not been substituted as defendant. Cadle, after being appointed receiver, moved in the State court, in the suit at Special Term, to discharge the attachment. The motion was denied. That decision was, on an appeal by Cadle, affirined by the General Term. Cadle then appealed to the Court of Appeals. That court held (37 N. Y. 523), that Cadle had no status to make such a motion, because he was not a party to the suit.

Cadle then procured himself to be made a party to it, in the manner stated.

But it was, at most, as representative and agent of the corporation that he became such party, if, indeed, he can be considered, as regards that suit, and as regards the plaintiff therein, as representing any thing except the funds attached therein.

Tracy had no cause of action against Cadle.

He proceeded in the suit, after Cadle was made defendant, to establish the original cause of action against the bank, on which the suit had been brought, and to establish it under a summons and complaint against the corporation, and under the same sum