Omaha Nat. Bank v. Federal Reserve Bank

• Citation: 26 F.2d 884
• Decision Date: 21 May 1928
• Docket Number: No. 7992.,7992.
• Parties: OMAHA NAT. BANK OF OMAHA, NEB., v. FEDERAL RESERVE BANK OF KANSAS CITY, MO., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

26 F.2d 884 (1928)

OMAHA NAT. BANK OF OMAHA, NEB., v. FEDERAL RESERVE BANK OF KANSAS CITY, MO., et al.

No. 7992.

Circuit Court of Appeals, Eighth Circuit.

May 21, 1928.

Halleck F. Rose, of Omaha, Neb. (Arthur R. Wells and Paul L. Martin, both of Omaha, Neb., on the brief), for appellant.

Edgar M. Morsman, Jr., of Omaha, Neb. (Morsman & Maxwell, of Omaha, Neb., on the brief), for appellee Wyoming Nat. Bank of Casper.

Stout, Rose, Wells & Martin, of Omaha, Neb., for appellee Omaha Nat. Bank of Omaha.

Before LEWIS and KENYON, Circuit Judges, and KENNEDY, District Judge.

LEWIS, Circuit Judge.

This suit was brought under section 118, tit. 28, USCA (Judicial Code, § 57), by the Omaha National Bank of Omaha, Nebraska, against Federal Reserve Bank of Kansas City, Missouri, Wyoming National Bank of Casper, Wyoming, First National Bank of Cheyenne, Wyoming, and T. E. McClintock, receiver of the First National Bank of Cheyenne, Wyoming, and was dismissed on the ground that the court was without jurisdiction. That section deals with local actions or suits, and there are two indispensable requirements to give the court jurisdiction: (1) The complaint must show that the subject-matter, the res, is within the territorial jurisdiction of the court, and (2) there must be diverse citizenship and residence between the plaintiff and all defendants who are necessary parties; and it does not matter that plaintiff is or is not a citizen and resident of the State in which the suit is brought. Its purpose is to enable him to obtain a judgment or decree that will bind the res, though the defendants are all nonresidents and cannot be personally bound unless they enter general appearance or should be served within the district.

That we may have in mind the relevant terms of section 118 we copy here those parts:

"When in any suit commenced in any District Court of the United States to enforce any legal or equitable lien upon or claim to, or to remove any incumbrance or lien or cloud upon the title to real or personal property within the district where such suit is brought, one or more of the defendants therein shall not be an inhabitant of or found within the said district, or shall not voluntarily appear thereto, it shall be lawful for the court to make an order directing such absent defendant or defendants to appear, plead, answer, or demur by a day certain to be designated, which order shall be served on such absent defendant or defendants, if practicable, wherever found, and also upon the person or persons in possession or charge of said property, if any there be; or where such personal service upon such absent defendant or defendants is not practicable, such order shall be published in such manner as the court may direct, not less than once a week for six consecutive weeks. In case such absent defendant shall not appear, plead, answer, or demur within the time so limited, or within some further time, to be allowed by the court, in its discretion, and upon proof of the service or publication of said order and of the performance of the directions contained in the same, it shall be lawful for the court to entertain jurisdiction, and proceed to the hearing and adjudication of such suit in the same manner as if such absent defendant had been served with process within the said district; but said adjudication shall, as regards said absent defendant or defendants without appearance, affect only the property which shall have been the subject of the suit and under the jurisdiction of the court therein, within such district."

The allegations of the bill of complaint in reference to the property involved, its situs, and the basis of plaintiff's equitable claim thereto are in substance as follows: Plaintiff sues to enforce an equitable title and claim to a credit or funds on deposit in the Omaha Branch at Omaha, Nebraska, of Federal Reserve Bank of Kansas City, Missouri; about July 7, 1924, plaintiff received through the mail from the First National Bank of Cheyenne two drafts each for the sum of $50,000, drawn by said bank of Cheyenne on the First National Bank of Boston, Mass., for deposit to the credit of the drawer, subject, however, to final payment; thereafter on that day, and after banking hours, plaintiff received a telegraphic dispatch from said bank of Cheyenne requesting that plaintiff transfer the sum of $60,000 from the credit created by said two unpaid drafts to the credit of Wyoming National Bank of Casper in the Federal Reserve Bank of Kansas City, Missouri, Omaha Branch; on the opening of said Federal Reserve Bank, Omaha Branch, on the next day, July 8, 1924, plaintiff pursuant to said telegraphic request caused the sum of $60,000 to be debited by said Federal Reserve Bank to plaintiff's account and a like sum credited in said bank to the said Wyoming National Bank of Casper, and said sum of $60,000 so transferred now stands as a credit on the books of defendant Federal Reserve Bank as a deposit and credit in favor of said Wyoming National Bank and is a charge and debit to the account of plaintiff; previous to and at the time of the delivery by mail of the two drafts for $50,000 each drawn on the First National Bank of Boston and the transmission by telegraph and delivery of said request for the transfer of $60,000 to the credit of the Wyoming National Bank in the Omaha Branch of the Federal Reserve Bank of Kansas City, a National bank examiner had been and then was engaged in the examination of the affairs of said First National Bank of Cheyenne, and had under the direction of the Comptroller informed the officers and directors of said bank that said bank was insolvent and had ordered and notified the officers and directors of said Cheyenne bank that it would not be permitted to continue in business and that said bank and all its assets would be taken into the possession of the Comptroller by his agent and a receiver appointed to liquidate said bank unless a large sum of money should be at once contributed and paid into said bank by its stockholders, officers and directors to make good deficiencies of its capital and assets, which facts were unknown to plaintiff; one or more of the officers and directors of the First National Bank of Cheyenne were also stockholders, officers and directors of said Wyoming National Bank of Casper, and at the dates of the transactions aforesaid with plaintiff the First National Bank of Cheyenne was indebted to the Wyoming National Bank of Casper in a sum the particular amount of which is to plaintiff unknown but which plaintiff charges and alleges exceeded the sum of $60,000; the First National Bank of Cheyenne, with knowledge of its insolvency, and that it was about to be liquidated because thereof, transmitted the said telegraphic dispatch to plaintiff, causing the plaintiff to so transfer said $60,000 to the credit of the Wyoming National Bank out of the credit so obtained on account of said two $50,000 drafts that were then unpaid and in the ordinary course of transportation could not possibly have then been presented to the First National Bank of Boston for payment, in contemplation of immediate liquidation of said First National Bank of Cheyenne and of its insolvency and with a view to preventing the application of its assets in the manner prescribed by the National Banking Act, and with a view to the preference of said Wyoming National Bank over its other creditors, and with the intent to cheat and defraud the plaintiff out of said $60,000 so to be transferred; that said First National Bank of Cheyenne did not at that time have sufficient credit balance with the First National Bank of Boston to pay said two drafts, and by the aforesaid acts and means the said First National Bank of Cheyenne intended to and did cheat and defraud plaintiff in the manner aforesaid out of the sum of $60,000 represented by the transfer so made in the Federal Reserve Bank to the credit of the said Wyoming National Bank of Casper; that said telegraphic order of transfer was made at the instance and upon the request of said Wyoming National Bank with knowledge of the insolvency of said First National Bank of Cheyenne, for the purpose of preventing the application and distribution of the assets of said insolvent National Bank of Cheyenne in accordance with the National Banking Act and of preferring said Wyoming National Bank over other creditors of said First National Bank of Cheyenne; that at the times of the acts complained of George E. Abbott, president of the First National Bank of Cheyenne was also vice-president and director of said Wyoming National Bank of Casper, B. B. Brooks, president of Wyoming National Bank of Casper, was a stockholder of said First National Bank of Cheyenne and was fully informed of said proceedings then being taken by and under the direction of the Comptroller of the Currency; that said Wyoming National Bank had at the opening of business on July 1, 1924, on deposit with the First National Bank of Cheyenne a credit of $273,478, on account of which and for the purpose of obtaining a preference over other creditors of said First National Bank of Cheyenne, with knowledge of its insolvency, the said Brooks, in behalf of the Wyoming National Bank had obtained daily transfers of the funds and credits of said Wyoming National Bank with said First National Bank of Cheyenne, including the $60,000 herein complained of, sufficient to reduce its credit balance at the close of business on July 8, 1924, when said First National Bank was permanently closed, to the sum of $12,041.06; that because of the insolvency of said First National Bank of Cheyenne it was closed under orders of the Comptroller and was not permitted to open again or conduct business after banking hours on July 8, 1924, the defendant T. E. McClintock was appointed by the Comptroller as its receiver and as such he has ever since been in possession of its assets; on July 9, 1924, the Comptroller's agent in charge of...