Crum v. Patterson

• Decision Date: 13 March 1933
• Docket Number: No. 4887.,4887.
• Citation: 64 F.2d 263
• Parties: CRUM v. PATTERSON et al.
• Court: U.S. Court of Appeals — Third Circuit

64 F.2d 263 (1933)

CRUM v. PATTERSON et al.

No. 4887.

Circuit Court of Appeals, Third Circuit.

March 13, 1933.

Edward J. Harkins and Scanlan & Hawkins, all of Johnstown, Pa., for appellant.

George W. Griffith, of Ebensburg, Pa., for appellee Holsing.

A. A. Nelson and Philip N. Shettig, both of Ebensburg, Pa., for appellee Patterson.

Before WOOLLEY, DAVIS, and THOMPSON, Circuit Judges.

THOMPSON, Circuit Judge.

The appellant, plaintiff below, filed a bill in equity in the court of common pleas of Cambria county, Pa., against James G. Patterson, individually, and R. G. Holsing, as receiver of the First National Bank of Portage, Pa. The bill set out that Patterson was the president of the bank and was the owner of ten shares of its capital stock; that Patterson induced the appellant to purchase these shares of stock at the price of $225 per share, in reliance upon Patterson's statements as to the value of the stock and the good financial condition of the bank, which statements, it was averred, were untrue and known by Patterson to be untrue; and that thereafter the bank was closed by the Banking Department and Holsing appointed its receiver by the Controller of the Currency.

The bill prayed for a decree to rescind the agreement and purchase of the stock in controversy, to cancel the stock certificate, to strike out the name of the appellant as the owner of the stock from the registry books of the bank, to replace the name of Patterson as the actual owner of the stock, and to require Patterson to repay to the appellant the sum of $2,250, the amount paid for the stock. The bill named Holsing, the receiver, as a codefendant.

Holsing filed a petition in the court of common pleas averring that the suit was one for winding up the affairs of a national banking association, in which the United States District Courts have original jurisdiction, and prayed for the removal of the cause to the United States District Court for the Western District of Pennsylvania. The judge of the state court denied the petition for an order of removal, holding that the real controversy did not involve the winding up of the affairs of the bank and that jurisdiction was not vested in the federal court under section 24, subd. (16), of the Judicial Code (28 USCA § 41, subd. 16). Thereafter Holsing, with the written consent of Patterson, caused the proceeding to be removed to the District Court for the Western District of Pennsylvania. The appellant's petition to the District Court for an order remanding the cause was denied.

When the cause came on for hearing upon pleadings and proofs, the appellant moved for leave to call Holsing and Patterson as for cross-examination. Both motions were denied. At the conclusion of the appellant's testimony, the court entered a decree dismissing the bill.

The following grounds of error are assigned: First, the dismissal of the petition to remand the proceedings to the state court; second, the denial of the appellant's motion to be allowed to call Holsing as for cross-examination; and, third, the denial of the appellant's motion to be allowed to call Patterson as for cross-examination.

The first question for determination is whether the District Court had jurisdiction of the cause as one for winding up the affairs of a national banking association under the provisions of section 24, subd. (16), of the Judicial Code, supra. It is obvious upon examination of the pleadings that the appellant's suit had, as one of its purposes, the avoidance of the assessment of the stock standing in his name upon the books of the bank, and that that was his purpose in summoning Holsing, the receiver, as a defendant. If the appellant should prevail and the receiver should be required to cancel the certificate and transfer the registration to Patterson, Holsing would clearly be discharging his duties as a receiver in winding up the affairs of the bank. We therefore regard the suit as being clearly one within section 24 of the Judicial Code, above cited. International Trust Co. v. Weeks, 203 U. S. 364, 27 S. Ct. 69, 51 L. Ed. 224; Larabee Flour Mills v. First National Bank (C. C. A.) 13 F.(2d) 330; McCartney v. Earle (C. C. A. 3) 115 F. 462; Guarantee Co. of North Dakota v. Hanway (C. C. A.) 104 F. 369.

Our conclusion is that the court below did not err in dismissing and denying the petition to remand.

The remaining question is whether the court erred in denying the appellant's motions to call Holsing and Patterson as for cross-examination under the provisions of the Pennsylvania Act of March 30,...