Adams v. Daunis.

the next in rank was that under which the bank and Barnsley claimed. The price of the adjudication was not sufficient to pay the amount due these creditors in the second rank. Of course the junior mortgagees were cut off, and the creditors in the first and second ranks were the only persons who were interested in the distribution of the proceeds of the sale.

The sheriff, in his return, after the usual recitals, states that the property was adjudicated to the last and highest bidder, A. W. Cummings, "for and in consideration of the sum of $13,025, paid as follows, to wit.

"First. The purchaser retained in his hands the sum of $1,851.10," the amount due to the first mortgage creditors, Gaubert and Richard, "which amount remained secured by same mortgage."

* * *

"Second. The balance of adjudication, $11,173.90, is applied to the settlement of the claim of the plaintiff and Godfrey Barnsley, each holding a five-thousand-dollar note, secured by the second mortgage in the following proportions, the fund being insufficient to extinguish these claims, viz.: to the bank, to cover principal, interest, and costs, pro rata, $6,269.50; to G. Barnsley, pro rata, $4,904.40; as will more fully appear by act of compromise and agreement between the parties, etc."

The agreement referred to in the return is of the same date as the sale. It begins with the declaration by Cummings "that he has this day purchased at sheriff's sale, in the case entitled the Bank of New Orleans v. Tucker Brothers, for cash;" and then follows a description of the property and statement of the price of the adjudication. The agreement then recites: "That the purchase-price was not in reality paid in cash; but the purchaser compounded and compromised with the mortgage creditors hereinbefore named, who agreed to give him time without, however, impairing or novating their original claims, the right to enforce which they expressly reserve.”

The payments were to be in three installments. With respect to Gaubert and Richard, declared to be the creditors first in rank, after dividing the $1,851.10, to be paid them, into three parts, as agreed upon, and fixing the dates from which they are respectively to bear interest, the agreement states:

"It is distinctly understood, however, that if any of these installments should not be paid at maturity the whole amount shall be

Adams v. Daunis.

exigible, and Gaubert and Richard shall be and are hereby authorized and expressly empowered to enforce the aforesaid judgment in case No. 487 on the tract to them mortgaged specially by privilege, the said Cummings binding himself to interpose no objection or obstacle thereto."

After dividing the $4,905.40 to be paid to Barnsley and the $6.269.50 to be paid the bank into three parts each, and fixing the dates of payment and the time from which they are to bear interest, the agreement proceeds:

"It is understood, as above stated, that the parties hereto do not by these presents impair, affect, or novate their existing claims, and that in case of non-payment they will be entitled to enforce the judgments which may be held by them, and, furthermore, that the original mortgages and privileges remain in full force and effect, and are not hereby novated, and, if need be, for the purpose of avoiding all doubt the said privileges and mortgages are hereby recognized as operating on the said property in the proportions aforesaid and to secure the debts aforesaid, with the rank above stated.

"The mortgage of the said Barnsley and the bank results from an act executed before the undersigned recorder on 24th February, 1860, inscribed in this office on the same day, as will more fully appear by suit No. 578, entitled Bank of New Orleans v. Tucker Brothers, and No. 793, entitled Godfrey Barnsley v. Tucker Brothers, on file in the Third District Court of Lafourche." This agreement was recorded in the book of conventional mortgages on the day of its date, 7th September, 1867.

Pursuant to the sale and adjudication of the 7th September, the sheriff on the 9th September made a deed to Cummings, in which he recites all that he had done touching the sale, and copies his return in full. He then proceeds to "sell, set over, transfer, and convey unto the purchaser, A. W. Cummings, for the sum above stipulated and paid as aforesaid, all the rights, title, and interest which defendants, Tucker Brothers, had in or on the aforesaid property."

The sheriff treated the sale as having been made for cash, and reserved no mortgage on the property. The deed was registered on the 30th September in the book of conveyances.

In December, 1868, Cummings sold the property to Mrs. Tucker, who assumed to pay the debts for which Cummings had bound

Adams v. Daunls.

himself; and on the same day she sold half of it to Thomas J. Daunis, with whom she formed a planting partnership. Daunis assumed the same debts, but neither he nor Mrs. Tucker gave any mortgage to secure the payment.

On the 2d of April, 1870, Daunis and Mrs. Tucker mortgaged the property to John I. Adams & Co., and on the 1st of April, 1871, Mrs. Tucker sold her half to Daunis, who assumed all the debts for which she had bound herself, but he gave no mortgage to secure the payment.

On the 25th of July, 1875, Adams & Co. required the recorder to cancel and erase the inscription of the conventional mortgage of the 24th of February, 1860, on the ground that more than ten years had elapsed after the date of this inscription when they on the 2d of April, 1870, acquired their mortgage on the property, and this inscription had not been renewed.

The recorder complied with this demand, as he was bound to do by the act of 1843 (Revised Statutes, §§ 450, 3141), amending article 3333, now article 3369, of the Civil Code; and on the 28th of July Adams & Co. proceeded against Daunis on their mortgage by seizure and sale. The property was sold on the 2d of October, 1875, and the mortgagees became the purchasers for some $17,519, less than half the mortgage debt due them. The sheriff refused to complete the adjudication without payment of certain mortgage claims against Tucker Brothers, among others that of the Bank of New Orleans, resulting from the judgment recorded on the 28th of June, 1867.

Adams & Co. then took a rule on the recorder; N. W. Casey, receiver of the New Orleans National Banking Association, the successor of the Bank of New Orleans; Goodrich & Co., R. & E. L. Tanner, Gaubert and Richard, and the sheriff: the recorder and the several creditors to show cause why the mortgages appearing in the names of these creditors, respectively, in so far as they affect the property in question, should not be canceled and erased; and the sheriff to show cause why he should not complete the adjudication, and put the purchasers in possession.

Casey alone appeared and contested this rule. He pleaded want of jurisdiction; and that the proper and necessary parties were not before the court. He also pleaded a general denial; and set up the judgment against Tucker Brothers in favor of the Bank of New Orleans, recorded as a judicial mortgage on the 28th of

Adams v. Daunis.

June, 1867, which he alleged had not been paid, and was in full force.

The judgment of the court below made the rule absolute, and ordered the recorder to cancel and erase the several mortgages specified in the rule, and in accordance with its terms; and the sheriff to complete the adjudication, and to put the purchaser in possession. From this judgment Casey took a devolutive appeal.

The plea to the jurisdiction is twofold: 1. That the National banks cannot be sued in a State court, except in the county or parish in which they are located. 2. That the rights of the bank cannot be determined on a rule, but only by direct action.

First. As to this latter objection, it suffices to say that in such a case as this the law requires the proceeding to be summary. of Practice, 754, 755; Rev. Stats., §§ 1942, 2903.

Second. The other plea to the jurisdiction is based upon section 57 of the National Bank Act, which was omitted in the Revised Statutes of the United States; but is to be found in the appendix, p. 1437, as an amendment to section 5198, as follows:

"Suits, actions, and proceedings against any association under this title may be had in any circuit, district or territorial court of the United States, held within the district in which such association may be established, or in any State, county, or municipal court in the county or city in which said association is located, having jurisdiction in similar cases."

We do not understand this section as excluding all other jurisdictions than those specified. The State courts derive their jurisdiction from State law, not from the laws of the United States; and we must look to the State law to ascertain whether a State court has jurisdiction in any given case, except where exclusive jurisdiction is given to the Federal tribunals by the Constitution and laws of the United States.

Section 5136 of the Revised Statutes, section 8 of the National Bank Act, authorizes the banks "to sue and be sued, complain and defend, in any court of law and equity, as fully as natural persons." That is, these banks are corporations, and they proceed and are proceeded against as other corporations. Once vested with this power and capacity, they are amenable to the jurisdiction of the courts of the States in which they are respectively located, just as other corporations or natural persons are; and section 57 of the Bank Act is merely declaratory, and was not intended as an abridgment of the power and jurisdiction of the State courts, touch

Adams v. Daunis.

ing property or persons, natural or corporate, within their territorial limits. Of course these corporations, just as natural persons, may have causes in which they are parties heard and determined in the Federal courts, either on original process or by removal in the cases provided by the laws of the United States.

In Louisiana the jurisdiction of the courts depends upon the subject-matter in controversy and the domicile of the defendant. The New Orleans National Banking Association had its domicile at New Orleans; and, in an ordinary civil case, it could not have been sued out of the parish of Orleans. Casey, the receiver, has his domicile at the city of New Orleans; and in like manner he is not subject to the ordinary jurisdiction of the courts of other parishes.

The association was not made a party to this proceeding. The Bank of New Orleans no longer exists. It was converted into the New Orleans National Banking Association in 1871, and Casey, receiver of that association, administered the effects which formerly belonged to the Bank of New Orleans. If the association were a party it would be amenable to the jurisdiction of any State court in which a natural person, having his domicile at the city of New Orleans, could be sued. The case cited by appellant's counsel, Bank of Bethel v. Pahquioque Bank, 14 Wall. 383 (ante, p. 77), simply decides that a National bank does not lose its corporate existence by the appointment of a receiver, and that it may still be sued, just as a natural person, in a court of the State, precisely as if a receiver had not been appointed.

The question in this case is not whether this National Banking Association may be sued in a State court after a receiver has been appointed; but whether, a receiver having been appointed, he is amenable to the jurisdiction of a State court in a parish different from that in which the association was located, and in which also he has his domicile.

By the act of 1841, re-enacted in 1855, p. 497, § 37, and again in the Revised Statutes of 1870, §§ 1942, 2903: "Whenever a conflict of privileges arises between creditors, all the suits and claims shall be transferred to the court by whose mandate the property was first seized, either in mesne process or on execution, and the said court shall proceed to class the privileges and mortgages according to their rank and privilege in a summary manner after notifying the parties interested."