Ex parte Chetwood, 7

• Citation: 41 L.Ed. 782,165 U.S. 443,17 S.Ct. 385
• Decision Date: 15 February 1897
• Docket Number: No. 7,7
• Parties: Ex parte CHETWOOD
• Court: United States Supreme Court

165 U.S. 443

17 S.Ct. 385

41 L.Ed. 782

Ex parte CHETWOOD.

No. 7.

February 15, 1897.

The facts necessary to be considered appear to be as follows:

In October, 1886, the California National Bank of San Francisco was organized under the national banking laws, with a paid-up capital stock of $200,000, and petitioner became and remains a stockholder therein. In December, 1888, the bank became insolvent, and the comptroller of the currency on January 14, 1889, appointed one S. P. Young receiver thereof.

July 19, 1890, petitioner began his suit in equity in the superior court of the city and county of San Francisco against the bank, Richard P. Thomas, Robert R. Thompson, Robert A Wilson, and S. P. Young, as receiver, 'and therein and thereby, on behalf of said bank and himself, as a representative stockholder therein, specially set up and claimed the right to hold said defendants Thomas, Thompson, and Wilson, as officers and trustees and directors of said bank, accountable to it in equity, under and in pursuance of the statutes and laws of the United States, for sundry breaches of their trust as such officers, directors, and trustees,' etc.

Thomas was the president, and, with Thompson and Wilson, formed the executive committee of the board of directors, of the bank. The complaint set forth the by-laws with respect to the separate duties and liabilities of the president and said executive committee, and charged gross negligence against each of them in discharge thereof, whereby the bank, through the fraudulent acts of its cashier in making excessive and unsecured loans and advances, was rendered insolvent; and plaintiff prayed a 'joint and several money judgment against them, the said Richard P. Thomas, Robert R. Thompson, and Robert A. Wilson, for the sum of $400,000, with legal inter- est thereon from the time of such loss, and costs herein, be rendered and entered by this court in this case in favor of said corporation, the California National Bank of San Francisco, and that said corporation and this plaintiff do have such further order, decree, judgment, and relief as may be meet and agreeable to equity.'

The complaint further averred, and it was so found on the hearing of the case, that Chetwood had, prior to the commencement of such suit, requested the officers of the bank, the receiver thereof, and the comptroller of the currency, severally, to bring and prosecute the same against the alleged delinquent officers, which requests were refused.

It appears from an affidavit attached to the return that 'the receiver when so made a defendant, and as such served with process, answered, and followed his refusal to bring the suit by opposition and hostility thereto.'

On April 27, 1894, the trial court ordered judgment in favor of the plaintiff, for the benefit of the bank, against Thomas, Thompson, and Wilson, and referred the case to a referee to examine and report in respect of the amount for which judgment should be entered. The referee reported to the court a total loss of $166,919 suffered by the bank by reason of the acts and omissions of the defendants, but not the amount for which each was severally responsible. Thereafter Thompson and Wilson paid into court $27,500, whereupon the court made an order dismissing them from the suit, and on November 20, 1894, rendered judgment for the plaintiff for the use and benefit of the bank, against Thomas, for $139,419, with interest at 7 per cent. per annum from December 15, 1888; being for the sum of $166,919, reported by the referee, less the $27,500 paid by Thompson and Wilson. Thomas appealed from this judgment to the supreme court of California, and that court held that the dismissal of Thompson and Wilson was a retraxit, and operated in law as a full satisfaction of the cause of action, and upon that ground reversed the judgment against Thomas, and entered a personal judgment against Chetwood for costs, etc. 45 Pac 704. To review that judgment a writ of error was sued out from this court, bearing date September 24, 1896. This writ of error was allowed by Mr. Justice Field, who approved a bond and signed a citation running in the name of the California National Bank of San Francisco, as plaintiff in error, to Richard P. Thomas, as defendant in error, service of which on Thomas, Stateler, S. P. Young, and R. A. Wilson was accepted. Chetwood also accepted service, but asked that he be entered as a plaintiff in error, and that for that purpose the writ of error be amended. The case was docketed by the clerk of this court as No. 673, under the title of 'California National Bank of San Francisco v. Richard P. Thomas.'

The receiver of the bank never authorized or aided in the prosecution of the suit, nor claimed nor attempted to take control or possession thereof, nor of the judgment entered therein, nor of any part of the $27,500 paid into the state court by Thompson and Wilson.

The comptroller of the currency in July, 1894, had paid all the creditors of the bank whose claims had been proven or allowed, except shareholders who might have been creditors of the bank, together with all the expenses of the receivership; and, the redemption of the bank's notes having been provided for by deposit of lawful money therefor with the United States treasurer, a meeting of the stockholders of the bank was called pursuant to the act of August 23, 1892 (27 Stat. 345), at which Thomas, holding 960 shares of the stock, and controlling 60 shares more, threw, as is alleged, 1,020 votes—being a majority—in favor of discontinuing the receiver, and of the selection of T. K. Stateler, as agent of the bank, to succeed the receiver, Young, in the settlement of its affairs. Stateler was thereupon declared elected (Chetwood protesting), and on February 26, 1895, the comptroller and the receiver executed an assignment of all assets of said bank then in their hands, or subject to their order or control, to said Stateler.

On March 19, 1895, and pending the appeal of Thomas in the supreme court of the state, Stateler voluntarily appeared in the superior court of San Francisco, and moved for an order directing that so much of the $27,500 as then remained in that court be paid over to him, which motion was resisted by petitioner and denied by the superior court. From this order Stateler appealed to the supreme court of the state, which reversed it, and directed that the money be paid over to him. 45 Pac. 854. Petitioner thereupon sued out a writ of error from this court, which was allowed by the chief justice of California, citation duly issued and served, bond approved, and, as the money was in the custody of the superior court and drawing interest, the writ was made a supersedeas. The record was filed in this court, and the cause docketed as No. 674. This writ bears date October 17th, and appears to have been allowed October 22d.

January 4, 1896, while both the appeals of Thomas and Stateler were pending in the supreme court of the state, and undetermined, Stateler filed an original bill in the circuit court of the United States for the district of California against the bank and Chetwood; alleging that as such agent he was an officer of the United States, and that he had sole power to act for the bank and its shareholders, to the exclusion of the stockholders, directors, and officers thereof. This bill contained, among other allegations, the following:

'Your orator further avers that heretofore, to wit, on the 21st day of February, 1889, and prior to the commencement of any of the suits hereinbefore mentioned, S. P. Young, the receiver of the defendant banking association, did file in this honorable court a petition entitled 'In re Application of Receiver of the California National Bank for the Sale of Personal Property,' and which said petition, among other things, recited that said California National Banking Association had been duly adjudged insolvent by the comptroller of the currency of the United States; that the petitioner therein had been by said comptroller duly appointed the receiver of such association, and that said petitioner had duly qualified as such receiver, and entered upon the performance of the duties of his office, and that, as such receiver, there had come into his possession certain personal property of said banking association, and thereupon, in and by said petition, the said receiver of said banking association thereupon submitted himself and the affairs of said banking association to the jurisdiction of this honorable court, as provided by the national banking laws of the United States and the amendments thereof, and thereupon asked for and obtained from this honorable court an order authorizing him to sell the property described in said petition, and to apply the proceeds thereof as provided by law, and that the filing of said petition was a necessary step in the winding up of the affairs of said defendant banking association; that thereafter, and from time to time, the said receiver did obtain from this honorable court orders directing him to sell various pieces of property belonging to said banking association, and to compromise various debts due to said banking association, and did, as such receiver, institute in this honorable court suits to collect moneys due said banking association, all of which said proceedings and suits were necessary steps in the winding up of the affairs of said defendant banking association, and, as such receiver, did, in every way, and as provided by the Revised Statutes of the United States and the amendments thereto, hold himself amenable to the orders 'of this honorable court. And your orator avers that the jurisdiction of this honorable court over the affairs of said defendant banking association did attach on the 21st day of February, 1889, as aforesaid, and that the affairs of said defendant banking association have never been wound up, but that your orator is now engaged in winding up the affairs of said defendant...