Deweese v. Smith

• Decision Date: 25 February 1901
• Docket Number: 1,371.
• Parties: DEWEESE v. SMITH et al.
• Court: U.S. Court of Appeals — Eighth Circuit

106 F. 438

DEWEESE v. SMITH et al.

No. 1,371.

United States Court of Appeals, Eighth Circuit.

February 25, 1901

Syllabus by the Court.

The statutes and the settled law of the land at the time a contract is made became a part of it, and must be read into it.

The liability of the shareholders of national banks for their debts under section 5151 of the Revised Statutes is based upon contract.

The contract of the shareholder of a national bank with the bank and its creditors regarding its debts is that, to an amount not exceeding the par value of his shares of stock, and not exceeding his equal and ratable proportion, he will pay, at such times and in such amounts as the comptroller of the currency shall demand, the debts and obligations of his bank.

A judgment for a part of an entire, indivisible demand, all of which is due when the action is commenced, is an election to take the part in satisfaction of the whole, and it estops the plaintiff from recovering the residue.

But a judgment for a part of such a demand which is due does not estop the plaintiff from maintaining another action for another part of the demand, which becomes due subsequent to the commencement of the first action.

A judgment in favor of the receiver of an insolvent national bank for the recovery of an assessment made by the comptroller upon a shareholder does not estop him from maintaining a second action against the same shareholder for another assessment which had not been made or was not due when the first action was commenced.

While the construction of statutes by the officers to whom congress has intrusted their execution and the uniform practice of such officers are persuasive, and entitled to careful consideration, yet a court cannot lawfully renounce its judicial powers; and it is its duty, if satisfied upon reason or authority that a correct determination of the question before it requires a decision contrary to such construction and practice, to render that decision.

The decision of the comptroller of the currency that it is necessary to collect, and his requisition of a certain percentage of the liability of the shareholders of a national bank, in order to pay its debts, is not a decision that a larger percentage will not be necessary, and he has plenary power to make successive assessments until the full liability of the shareholder is exhausted.

Under the acts of congress the comptroller of the currency is constituted a quasi judicial tribunal to determine at what times and what amounts, not exceeding the full liability of the stockholders, it is necessary to collect from them to pay the debts of the bank. His decisions of these questions are impervious to collateral attack, and open to avoidance by a court only in a direct attack upon them for error of law fraud, or mistake.

One who would attack in a federal court the decision of a quasi judicial officer for mistake of fact must proceed in equity and must allege and prove the evidence before the officer from which the mistake resulted, the way in which it was made, and the fact that in its absence his decision would have been otherwise, before a court can enter upon a reconsideration of the issue before the officer.

The statute of limitations does not commence to run against the enforcement of the entire liability or against the enforcement of any particular portion of the liability of the shareholder of a national bank to pay its debts until the time when the comptroller has declared the entire liability or the particular portion of it in issue to be due.

This is an action at law by the receiver of an insolvent national bank to collect a second assessment made by the comptroller of the currency upon its stockholders. In his petition the receiver alleged that the comptroller made an assessment of 75 per cent. of the par value of the stock on April 13, 1895 payable May 15, 1895: that he subsequently found that the amount so assessed was insufficient to pay the debts of the bank; that an additional amount equal to 25 per cent. of the par value of the stock was required for that purpose; and that on February 7, 1899, he made a further assessment of that amount, payable March 7, 1899, and demanded payment thereof from the defendants, who are stockholders. The defendants answered: (1) That the amount of the first assessment was sufficient to pay all the obligations of the bank, and that the second assessment was solely to supply a deficiency caused by the unauthorized investment and loss by the receiver of $80,000 of the money of the bank; (2) that the receiver was appointed on May 10, 1894, and this action was barred by the statute of limitations of the state of Missouri, because it was not commenced until more than five years after that date; and (3) that the receiver brought an action at law against the defendants for the amount of the first assessment, and on October 19, 1896, recovered a judgment therefor, which they paid; that their liability respectively as stockholders was a single and indivisible demand, and that the judgment was a conclusive adjudication of the amount due from them on account of this liability. The receiver made a motion for judgment on these pleadings, and the circuit court sustained the third defense, and denied the motion. The plaintiff refused to plead further. Judgment was rendered for the defendants on the opinion of the court, which is reported in 97 F. 309, and the receiver sued out this writ of error to reverse that judgment.

F. F. Oldham (William S. Shirk, on the brief), for plaintiff in error.

James T. Montgomery (W. M. Williams, on the brief), for defendants in error.

Before CALDWELL and SANBORN, Circuit Judges, and ADAMS, District Judge.

SANBORN Circuit Judge, after stating the case as above.

Can the comptroller of the currency lawfully make and collect by actions at law in the name of the receiver more than one requisition or assessment upon a stockholder of an insolvent national bank in order to pay its debts? This is the chief question in this case. It is earnestly contended on the part of the defendants that this question must be answered in the negative, (1) because the liability of the stockholder is contractual, indivisible, and cannot be split into several causes of action; (2) because this was the construction and practice of the treasury department for 33 years before the installation in office of the comptroller who made this assessment; and (3) because the power of the comptroller to determine the amount required to pay the debts of the association is quasi judicial, and, when once exercised, is thereby exhausted. Before entering upon a consideration of these arguments, let us call to mind for a moment the acts of congress and the rules of law applicable to this subject which have been established by the decisions of the national courts. The acts of congress provide:

'Sec. 5151. 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.'

'Sec. 5234. On becoming satisfied as specified in sections fifty-two hundred and twenty-six and fifty-two hundred and twenty-seven, that any association has refused to pay its circulating notes as therein mentioned, 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, upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like order may sell all the real and personal property of such association, on such terms as the court shall direct; and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders of such association.'

Under these sections of the Revised Statutes the following propositions have by repeated decisions of the national courts become the settled law of the land: No portion of the liability of a stockholder of a national bank for the payment of its debts, under these statutes, becomes due or enforceable before the comptroller of the currency decides that it is necessary to collect it, and fixes the time for its payment. His decision and call or assessment are conditions precedent to the collection or the enforcement by suit or otherwise of any portion of this liability. When he has decided that it is necessary to assess the shareholders for the purpose of paying the debts of the bank, and has called a part of the liability, a suit in equity may be maintained for the part so called; but no decree can be rendered for any other portion of the liability, and no more of it becomes due or collectible, until the comptroller has decided that it is necessary to collect, and has demanded such portion. The suit in equity upon the first assessment however, may pass to an interlocutory decree for contribution, may then be held over, and upon proper supplementary proceedings subsequent assessments may be enforced in that suit. The acts of congress confer the power and impose the duty upon the comptroller to determine within the statutory limit the amounts that shall be paid by each stockholder upon his individual liability, and the times when he shall pay these amounts. The liability of the shareholder does not mature-- does not become due-- until the comptroller adjudges it to be payable and demands it, and it falls due in such amounts and...