Bank of Bethel v. Pahquioque Bank
Decision Date | 01 December 1871 |
Citation | 14 Wall. 383,20 L.Ed. 840,81 U.S. 383 |
Parties | BANK OF BETHEL v. PAHQUIOQUE BANK |
Court | U.S. Supreme Court |
IN error to the Supreme Court of Connecticut; the case being thus:
On the 3d of June, 1864, Congress passed its well-known 'act to provide a National currency, secured by a pledge of United States bonds;'1 under which act numerous new banks were organized, and numerous State ones, availing themselves of power given by the act, were converted into National ones, and like those first created by the act placed under the control of the laws and officers of the United States, including specially a Comptroller of the Currency, under whose directions a limited amount of notes were to be given to the banks; these notes being the only ones that the banks could issue.
The act, after providing for the mode in which the new banks were to be organized under articles of association, enacts:
SECTION 8. That every association formed pursuant to its provisions shall 'be a body corporate,' and 'have succession by the name designated in its organization certificate for a period of twenty years from its organization, unless sooner dissolved.
(3d.) Unless the franchise shall be forfeited by a violation of this act.'
'By such name,' continues the section, 'it may sue and be sued, complain and defend as fully as natural persons.'
The 32d section, after enacting that all the banks in certain cities of the United States shall redeem their circulating notes at par in New York, provides:
'That nothing in this section shall relieve any association from its liability to redeem its circulating notes at its own counter, at par, in lawful money on demand.'
The 46th section enacts:
The 50th section enacts:
A proviso to this section says, however,
'That if such association against which proceedings have been so instituted on account of any alleged refusal to redeem its circulating notes as aforesaid, shall deny having failed to do so, such association may . . . apply to the nearest circuit or district or territorial court of the United States to enjoin further proceedings in the premises, and such court . . . after the decision of the court or the finding of a jury that such association has not refused to redeem its circulating notes . . . shall make an order enjoining the comptroller or any receiver from all further proceedings on account of such alleged refusal.'
The 45th section enacts:
'That all associations under this act when designated for that purpose by the Secretary of the Treasury, shall be depositories of the public money (except receipts from customs), under such regulations as may be prescribed by the secretary; and they may also be employed as financial agents of the government; and they shall perform all such reasonable duties as depositories of the public moneys and financial agents of the government as shall be required of them.'
The 52d section enacts:
'That all transfer of the notes, bonds, bills of exchange, and other evidences of debt owing to any association, or of any deposits to its credit; all assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money for either, made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner prescribed by this act, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void.'
The 53d section enacts:
The 57th section ( and this is an important one to be noted in the case) enacts:
In this state of statutory law about National banks, the First National Bank of Bethel, in Connecticut, on the 21st of February, 1868, failed to redeem some of its circulating notes. They were protested, and on the 26th of February a receiver was appointed under the above-quoted 50th section of the Currency Act, who immediately entered on the duties of his office.
The National Pahquioque Bank of Danbury, Fairfield County, in the same State, asserted that it was a creditor of the Bethel Bank, and presented its claim to the receiver. The receiver, however, disallowed it.
The Pahquioque Bank thereupon, on the 30th of May, 1868, brought assumpsit in the Superior Court of Fairfield County, a court of Connecticut having jurisdiction in similar cases, against the Bethel Bank. The Bank of Bethel defended itself against the claim on these, in substance, among other grounds:
1. That the courts of the United States alone had jurisdiction after the appointment and acceptance of the receiver.
2. That prior to the suit brought the Bank of Bethel had forfeited its charter by a violation of the Currency Act, in not paying its notes, and could not be sued anywhere.
3. That it could not be sued because it was, at the time, under the control and in possession of a duly appointed receiver, 'incapable of self-defence, and entitled to the legal protection and guardianship thrown about it by the law.'
4. That the decision of the receiver on the presentation of the claim was conclusive on the parties to the suit as an adjudication, unless set aside by the Comptroller of the Currency, or by some court of the United States having jurisdiction.
But the court give judgment for the Pahquioque Bank for the full amount of its claim. The Bethel Bank then took the case on error before the Supreme Court of the State, where the judgment of the Superior Court of Fairfield County was affirmed. To review this final judgment of the Supreme Court this writ of error was brought.
Messrs. C. B. Goodrich, Roger Averill, and L. D. Brewster, for the Bank of Bethel, plaintiff in error:
1. The National banks, under the act of 3d June, 1864, have been established as instruments by which the government may perform some of its trusts. They are controlled by the Treasury department. They are allowed to receive from the Comptroller of the Currency notes which they may circulate as money. They cannot issue any instrument for circulation or use as money, or as a substitute for money, except the notes intrusted to them by the comptroller. Their existence, as bodies corporate, can be sustained under the Constitution, only, because they may be employed by the government in the execution of its functions. The act imposes upon the Comptroller of the Currency certain duties of a public character, to perform which he is clothed with certain powers. The legality and propriety of the supervision and control which is exercised by the Comptroller of the Corrency of the United States over National banking associations, and the effect of his acts in relation thereto, are to be determined, exclusively, by the laws of the United States; the...
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