Schram v. Schwartz

• Decision Date: 08 January 1934
• Docket Number: No. 20.,20.
• Parties: SCHRAM v. SCHWARTZ.
• Court: U.S. Court of Appeals — Second Circuit

68 F.2d 699 (1934)

SCHRAM v. SCHWARTZ.

No. 20.

Circuit Court of Appeals, Second Circuit.

January 8, 1934.

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Morton Lexow, of Suffern, N. Y. (Alton W. Teale, of Suffern, N. Y., of counsel), for defendant-appellant.

Edward A. Smarak, of Union City, N. J. (Hugh S. Williamson and Breed, Abbott & Morgan, all of New York City, of counsel), for plaintiff-appellee.

Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge (after stating the facts as above).

The receiver of the National Bank of North Hudson was appointed under the power given to the Comptroller of the Currency by the National Banking Act (U. S. Code, title 12, § 191 12 USCA § 191) to appoint a receiver whenever "satisfied of the insolvency of a national banking association * * * after due examination of its affairs * * *." The same act authorizes the receiver "under the direction of the comptroller" to enforce the individual liability of the stockholders if necessary to pay the debts of the association. It has long been held by the Supreme Court that the determination of the Comptroller that an assessment is necessary in order to pay the debts of a national bank which he has placed in the hands of a receiver is conclusive upon its stockholders and cannot be questioned in the litigation that may ensue. Kennedy v. Gibson, 8 Wall. 498, 505, 19 L. Ed. 476; Casey v. Galli, 94 U. S. 673, 681, 24 L. Ed. 168; Germania National Bank v. Case, 99 U. S. 628, 634, 635, 25 L. Ed. 448; United States ex rel. Citizens' Nat. Bank v. Knox, 102 U. S. 422, 426, 26 L. Ed. 216; Bushnell v. Leland, 164 U. S. 684, 17 S. Ct. 209, 41 L. Ed. 598; Deweese v. Smith, 187 U. S. 637, 23 S. Ct. 845, 47 L. Ed. 344, affirming without opinion 106 F. 438, 66 L. R. A. 971 (C. C. A. 8). The National Banking Act affords a complete and adequate administrative remedy unfettered by judicial ascertainment as to the wisdom or necessity of the action of the Comptroller provided the latter proceeds in accordance with the terms of the statute.

It has likewise been held that a stockholder could not interpose a defense to an action of a receiver of a defunct national bank on the ground that the Comptroller had no sufficient evidence to warrant the appointment of a receiver or to justify the making of an assessment. The Circuit Court of Appeals for the Third Circuit so held in Miller v. Stock, 65 F.(2d) 773, where another stockholder was sued by a receiver of the National Bank of North Hudson. The defendant's counsel argues that the decision in the Third Circuit arose only upon an affirmative defense to a complaint seeking to attack the receiver's suit collaterally and says that the court did not have to deal, as we do, with an equitable counterclaim that attacks the appointment of the receiver and the imposition of the assessment directly. But in Crawford v. Gamble (C. C. A.) 57 F.(2d) 15, a stockholder who was sued by the receiver of a national bank attempted to question the solvency of the bank and the propriety of the assessment and to assert his rights by means of an equitable counterclaim. The Court of Appeals of the Sixth Circuit affirmed an order striking out the counterclaim and said, at page 17 of 57 F.(2d): "He must pay promptly when called upon, and,...