Leather Manufacturers' National Bank v. Cooper, Jr.

visions were carried into section 5198 of the Revised Statutes by the amendatory act of February 18, 1875, chap. 80 (18 Stat. 320). The removal of this class of cases from a State court to a Circuit Court was first provided for by the act of March 3, 1875, in that clause of section 2 which relates to suits "arising under the Constitution or laws of the United States," as construed in Pacific Railroad Removal Cases, 115 U. S. 1. Thus the Federal and State courts had concurrent jurisdiction for suits brought by or against National banks, and a suit of that character begun in a State court could be removed by either party to a Circuit Court of the United States, if the value of the matter in dispute exceeded $500, because, as a National bank is a Federal corporation, a suit by or against it is necessarily a suit arising under the laws of the United States. But the act of 1882 provided, in clear and unmistakable terms, that the courts of the United States should not have jurisdiction of such suits thereafter brought, save in a few classes of cases, unless they would have jurisdiction under like circumstances of suits by or against a State bank doing business in the same State with the National bank. The provision is not that no such suit shall be brought by or against such a National bank in a Federal court, but that a Federal court shall not have jurisdiction. This clearly implies that such a suit can neither be brought nor removed there; for jurisdiction of such suits has been taken away, unless a similar suit could be entertained by the same court by or against a State bank in like situation with the National bank. Consequently, so long as the act of 1882 was in force, nothing in the way of jurisdiction could be claimed by a National bank because of the source of its incorporation. A National bank was by that statute placed before the law in this respect the same as a bank not organized under the laws of the United States.

A suggestion was made in argument that the case is one arising under the laws of the United States, for the reason that the cause of action is identical with that sued on in Leather Manufacturers' Nat. Bank v. Morgan, 117 U. S. 96, decided by this court at the last term, and in which the principles of law which govern the rights of the parties were determined. Nothing of the kind however appears in the record, and if it did, it would not authorize a removal. This is not that suit, and a case does not arise under

Richmond v. Irons.

the laws of the United States simply because this court, or any other Federal court, has decided in another suit the questions of law which are involved.

A case is not removable because a colorable assignment has been made to give a State court exclusive jurisdiction. Provident Sav., etc., Soc. v. Ford, 114 U. S. 635, followed in Oakler v. Goodnow, 118 id. 43.

Order to remand is affirmed.

BLATCHFORD, J., did not take part in the decision of this case.

RICHMOND V. IRONS.*

(121 U. S. 27.)

Liquidation — fraud-bill for relief — amendment —parties — creditors' bill — changing parties — limitations — liability of stockholders — revival ·

fer not on books— powers in liquidation — guaranty demand

· costs — receiver — creditor not appearing.

trans

A bill filed against a National bank and its president, H., alleged that the voluntary liquidation of the bank was fraudulent; that H. had fraudulently appropriated the funds of the bank; and prayed that all sales or transfers by the bank or its president be set aside. The evidence showed that certain of the stockholders had fraudulently conveyed their stock to H., receiving therefor property of the bank. The complainants amended their bill, bringing in all the stockholders, alleging a conspiracy between certain stockholders and H. to commit this fraud, and asking relief, and an accounting of the indebtedness of the bank, and the amounts due from the stockholders to the complainants under the National Banking Act. Held, that the allow ance of the amendment was within the discretion of the courts. The act of Congress of June 30, 1876, sec. 2, provided that when any National bank went into voluntary liquidation, the statutory liability of the stockholders could be enforced by a bill in equity, in the nature of a creditors' bill, brought by a creditor on behalf of himself and all other creditors. The original bill was brought before this section; but it was in force at the time of the amendment. Held, that the act warranted the amendment. All the creditors having been permitted to join complainant, and the bill having been subsequently amended so as to allege expressly that it was made on behalf of complainant and all other creditors of the bank, held, not error, since under the original bill it would have appeared that there were other

*Reversing 27 Fed. Rep. 591.

Richmond v. Irons.

creditors, and the distribution would have been to each creditor his proportionate share.

The statute of limitations ceased to run against all creditors who came in under the bill, at any time.

Under the National Banking Act, the individual liability of the stockholder survives as against the personal representatives of a deceased stockholder.

A stockholder sold certain stock several months before the insolvency of the bank, but the transfer was not made on the books till the date of the bank's failure. Held, that the stockholder incurred the statutory liability. After the bank went into voluntary liquidation, several creditors took in payment of their claims paper belonging to the bank, with the bank's guaranty of payment, which paper was not paid. Held, that such creditors were not ontitled to distribution of the assets obtained by enforcement of the statutory liability of the stockholders, because the bank, after liquidation, could not guarantee payment.

Interest on the contracts, debts and engagements of the bank may be allowed as against the stockholders.

The book accounts of depositors draw interest from the date of suspension. The master allowed twenty per cent of the amount of the debts, for expenses of the receiver, appointed under the original bill, against the stockholders. Held, error.

It was error to charge the stockholders with claims of persons who failed to appear and prove their claims.

A

PPEAL from the Circuit Court of the United States for the Northern District of Illinois.

H. B. Hurd, Henry G. Miller and M. W. Fuller, for appellants.

Edward G. Mason D. J. Schuyler, for appellees.

Jas. H. Roberts, for Ira and Edgar Holmes.

MATTHEWS, J. The original bill in this case was filed February 3, 1875, by James Irons, the defendants being the Manufacturers' National Bank of Chicago, organized under the National Banking Act, and Ira Holmes, its president. The bill alleged that the complainant had recovered a judgment against the bank for the sum of $12,408.51 damages, besides costs, an execution on which had been returned unsatisfied; that on or about October 11, 1873, the bank had suspended payment and business, and in pursuance of section 44 of the Banking Law, had gone into vol

Richmond v. Irons.

untary liquidation, its affairs having been put into the hands of the defendant Holmes, its president, for that purpose; that the defendant Holmes had thereafter settled a large amount of the indebtedness of the bank by giving notes, made by him as president of the bank, and guaranteed by him as such, and by using the assets of the bank in payment of its indebtedness; that he had also converted and appropriated to his own use an amount of the assets of the bank charged to be not less than $250,000; that he also had in his possession and control a large amount of the personal and real property purchased with the funds and moneys of the bank, but which he had fraudulently withheld and disposed of for his own use; "that the said voluntary liquidation aforesaid, and the proceedings thereunder by the said defendant Holmes, were a pretense and sham, and were suggested, instituted and carried on for the sole and only purpose of concealing and covering up the transactions of the said bank and of dissipating and disposing of its assets in such a way and manner most agreeable to the wishes and interests of the said defendant Holmes and those in his interest, and in fraud of the rights of your orator and the other creditors of the said bank;" that the capital stock of the bank actually paid in amounted to the sum of $500,000, owned by twenty-four stockholders, a schedule of the names of whom, with their respective places of residence, and the number of shares owned by each, are set out in an exhibit to the bill.

The bill prays for a discovery under oath of "what moneys, cash, notes, bills receivable, United States bonds and other property and effects the said bank had in its possession and was the owner of at the time of the said snspension thereof, and at the time the same went into voluntary liquidation in the manner as aforesaid, or what moneys, cash, notes, bills receivable, United States bonds and other property the said bank has since had in its possession or control, or been the owner of, or the said Holmes, as president thereof or otherwise, has since had in his possession or control belonging to the said bank, and what disposition, payment, sale or transfer has been made of the property and effects of the same, and every part thereof.". It also prays that all sales and conveyances inade by the bank or by the defendant Holmes of property belonging to the bank may be set aside as fraudulent,

Richmond v. Irons.

and that all the property and effects of the bank in its possession, or in the possession of Holmes, may be delivered up into the possession and control of the court, and applied, so far as necessary to the payment of the complainant's judgment; that the defendants may be enjoined from making any further transfers of the property of the bank; and that a receiver may be appointed of all the property and effects of the bank, and for general relief.

At various times subsequent to the filing of the bill, other judgment creditors of the bank filed petitions for leave to be made parties, and were allowed to join in the bill as co-complainants. On the 12th of February, 1875, the defendants interposed a demurrer to the bill. The grounds of demurrer were, among others, that a creditors' bill in behalf of one or more creditors would not lie, because the assets must be equally distributed among all; that a receiver of a National bank could only be appointed and the assets distributed by the Comptroller of the Currency under the act of Congress, and that the court had no power to enjoin a National bank from disposing of its assets in voluntary liquidation. On the 26th of February, 1875, the demurrer was overruled, and Joel D. Harvey was appointed a receiver, with full power and authority to take and receive possession and control of all the property of the bank, with directions to collect and convert the same into money, to be applied according to the order and direction of the court. On the 1st of April, 1875, the defendants filed a joint and several answer to the bill. They admit that the bank went into voluntary liquidation on September 26, 1873, and between that time and the time of filing the bill, that it settled a large amount of its indebtedness, so that there remained due to its depositors only $39,000; and alleges that these settlements were made mainly by paying out to creditors the assets of the bank in some cases the defendant Holmes giving his personal obligations, which in a few instances were indorsed by him as president of the bank. The defendant Holmes denies all the fraud charged in the bill, and particularly that he had converted and appropriated to his own use any of the assets of the bank, and denies that he has any of such assets in his possession or under his control, and alleges, on the other hand, that he had given his private obligations in payment of the debts of the bank, which had