Aldrich v. Campbell

• Decision Date: 06 November 1899
• Docket Number: 556.
• Citation: 97 F. 663
• Parties: ALDRICH v. CAMPBELL.
• Court: U.S. Court of Appeals — Ninth Circuit

97 F. 663

ALDRICH v. CAMPBELL.

No. 556.

United States Court of Appeals, Ninth Circuit.

November 6, 1899

This is an appeal by the defendant in the court below from two orders made by the circuit court of the United States for the district of Washington, Western division, overruling the demurrer of defendant to the bill of complaint, and granting an interlocutory injunction restraining the defendant, as receiver of the Tacoma National Bank, from proceeding further against the plaintiff in an action at law pending in the same court. It appears: That Louis D. Campbell, a citizen of the state of Washington, was a shareholder, to the extent of 100 shares, in the Tacoma National Bank, a national banking association organized under the national banking laws of the United States, with a capital stock of $200,000. That on December 4, 1894, said bank suspended payment and closed its doors. Thereafter, on the 14th day of December, 1894, the then comptroller of the currency of the United States, in accordance with the banking laws of the United States appointed one Philip V. Anderson as receiver of said banking association, who duly qualified and took into his possession all of the assets and effects of the said banking association, and served as such receiver until the 30th day of January, 1899, when he resigned from said receivership and the appellant in the present suit, J. Frank Aldrich, was appointed by the comptroller to serve in his stead. Aldrich thereupon qualified, and ever since has been the duly appointed, qualified, and acting receiver of said Tacoma National Bank of Tacoma. About the 27th day of April, 1895 upon a proper accounting made by the receiver of said bank to the comptroller, and upon a valuation of the uncollected assets remaining in said receiver's hands, it appeared to the satisfaction of the comptroller of the

currency that in order to pay the debts of said bank it would be necessary to enforce the individual liability of the stockholders thereof, as prescribed by sections 5151 and 5234 of the Revised Statutes of the United States, to the extent of $130,000, or $65 per share of the capital stock of said bank; and the comptroller accordingly levied an assessment in that amount upon the shareholders of said bank upon said 27th day of April, 1895, to be paid by them ratably on or before the 6th day of August, 1895, and directed said receiver to proceed, by suit or otherwise, to enforce to that extent the individual liability of the said stockholders. The appellee herein paid to said receiver $6,500 in compliance with said assessment. A further assessment was made upon the shareholders of said bank by the comptroller on January 30, 1899, of $34,000, or $17 per share, to be paid ratably on March 1, 1899, with the same direction to the receiver to take the necessary proceedings for its enforcement. The appellee, Louis D. Campbell, refused to comply with the demand of the receiver for the payment of his pro rata of this assessment; and thereupon the receiver commenced an action at law in said circuit court against said Campbell, demanding judgment for $1,700, with interest from January 30, 1899, and costs. Campbell then filed a bill in equity, stating the pendency of said action at law, and alleging that the total indebtedness of said bank at the time it suspended payment did not exceed $222,362.34; that the total amount collected by the receivers from the assets of said bank was $139,000; that the total amount of the assessment levied by the comptroller of the currency upon the shareholders was $130,000; and that the sum of these two amounts, $269,000, was at least $46,637.66 in excess of the total indebtedness of said bank at the time it suspended payment, and largely in excess of said indebtedness plus the interest thereon to the time of said indebtedness plus the interest thereon to the time of said assessment, August 6, 1895. He further alleged that he was debarred from interposing these facts as a defense to the action at law, and could not obtain full and complete justice in said action; that the comptroller of the currency, by said assessment of August 6, 1895, had collected from said Campbell $1,500 in excess of the amount lawfully assessable against him as a stockholder in said bank, wherefore he prayed that said comptroller and receiver be decreed to repay to him said sum of $1,500, and be enjoined from further prosecuting the said action at law. The comptroller filed a plea to the jurisdiction of the circuit court for the district of Washington, and the bill was dismissed as against him. The receiver of said bank, J. Frank Aldrich, demurred to the bill on the ground of want of jurisdiction, for the reason that the amount in controversy was less than $2,000, and the further ground that complainant had not in and by his bill stated such a cause as entitled him, in a court of equity, to any discovery from the respondent, or to any relief against him as to any of the matters contained therein. The court overruled the demurrer, and, in accordance with such ruling, entered an interlocutory order restraining the said Aldrich, as receiver of the Tacoma National Bank, until the hearing and determination of said cause, from proceeding further against said Campbell in the action at law pending in said court. From these orders an appeal is taken to this court.

P. Tillinghast, for appellant.

Campbell & Powell, for appellee.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

MORROW Circuit Judge, after stating the facts as above, .

The principal question in the proceedings under review is the action of the court below in overruling the demurrer of the respondent (appellant) to the bill in equity filed by the complainant (appellee). The first ground of this demurrer was the want of jurisdiction of the circuit court, for the reason that the amount in controversy was less than $2,000. It has been repeatedly decided that a receiver appointed by the comptroller of the currency to close up the affairs of an insolvent national bank may sue in the federal court without regard to his citizenship, or the amount in controversy. Price v. Abbott (C.C.) 17 F. 506; Platt v. Beach, 2 Ben. 303, 19 F. Cas. 836; Stanton v. Wilkeson, 8 Ben. 357, 22 F. Cas. 1,074; Kennedy v. Gibson, 8 Wall. 498; Bank v. Kennedy, 17 Wall. 19; Myers v. Hettinger (C.C.A.) 94 F. 370. It is also a well-settled principle of law that a bill filed in the equity side of a court to restrain or regulate a judgment or a suit at law in the same court is not an original suit, but ancillary and dependent, and merely supplementary to the original suit. Cortes Co. v. Thannhauser (C.C.) 9 Fed. 226; Id., 21 Blatchf. 552, 18 F. 667; Jones v. Andrews, 10 Wall. 327; Krippendorf v. Hyde, 110 U.S. 276, 4 Sup.Ct. 27; Johnson v. Christian, 125 U.S. 642, 8 Sup.Ct. 989, 1135. The bill demurred to here was ancillary to the common-law action brought by the receiver in the circuit court, and the jurisdiction of the court in the dependent case is founded upon the jurisdiction of the court over the original case.

The real controversy in the case at bar arises, however, on the second ground of demurrer, which presents this question: Does the bill state facts entitling complainant (appellee) to any relief or discovery in equity against said receiver? The bill alleges the total indebtedness of the bank at the time of suspension of payment; the amount collected by the receiver from the assets, and upon the first assessment levied by the comptroller; that these collections were in excess of the total indebtedness of the bank, including interest; and that the second assessment levied by the comptroller was for this reason unnecessary and unlawful. It is well established that the comptroller of the currency is vested, by virtue of the national banking law, with authority to determine when it is necessary, in winding up the affairs of an insolvent bank, to enforce the liability of the stockholders, and power to levy assessments accordingly; that such determination and any action thereon are conclusive upon the stockholders, and not to be questioned in any litigation that may ensue. Kennedy v. Gibson, 8 Wall. 498; Casey v. Galli, 94 U.S. 673; Bank v. Case, 99 U.S. 628; Richmond v. Irons, 121 U.S. 27, 7 Sup.Ct. 788; Bushnell v. Leland, 164 U.S. 684, 17 Sup.Ct. 209; Bank v. Mathews, 29 C.C.A. 491, 85 F. 934; Nead v. Wall (C.C.) 70 F. 806; Young v. Wempe (C.C.) 46 F. 354; Welles v. Stout (C.C.) 38 F. 67; Aldrich v. Yates (C.C.) 95 F. 78.

It is admitted by the appellee that the comptroller's action in levying the first assessment was conclusive upon the shareholders, but he contends that, under the facts stated, the second assessment was a wrongful and illegal one, and exceeded the jurisdiction of the comptroller.

Section 5151 of the Revised Statutes of the United States provides as follows:

The shareholders of every national banking association shall be held individually responsible, equally and ratably and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. * * * ' Section 5234 provides:

'On becoming satisfied * * * that any association has refused to pay its circulating notes * * * and is in default, the comptroller of the currency may forthwith appoint a receiver. * * * Such receiver, under the direction of the comptroller, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues and claims belonging to it * * * and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders.'

In Kennedy v. Gibson, supra, a bill...