Henry Van Reed v. People National Bank of Lebanon, Pennsylvania

• Decision Date: 29 May 1905
• Docket Number: No. 229,229
• Citation: 3 Ann. Cas. 1154,198 U.S. 554,49 L.Ed. 1161,25 S.Ct. 775
• Parties: HENRY VAN REED, Plff. in Err. , v. PEOPLE'S NATIONAL BANK OF LEBANON, PENNSYLVANIA
• Court: U.S. Supreme Court

198 U.S. 554

25 S.Ct. 775

49 L.Ed. 1161

HENRY VAN REED, Plff. in Err.,

v PEOPLE'S NATIONAL BANK OF LEBANON, PENNSYLVANIA.

No. 229.

Submitted April 25, 1905.

Decided May 29, 1905.

The plaintiff, who was the owner of a claim against the defendant, the People's National Bank of Lebanon, Pennsylvania, commenced an action in the state of New York by levying an attachment upon the funds of the defendant in that state, upon the ground that it was a foreign corporation. The defendant, appearing specially for that purpose, moved to have the attachment vacated upon the ground that it was prohibited by the Revised Statutes of the United States. At special term the motion was denied; the appellate term reversed the judgment of the special term, and vacated the attachment. The court of appeals answered two questions certified to it by the appellate division, and affirmed the judgment of that court. The two questions propounded are as follows:

'1. Is the defendant exempt from attachment before judgment under § 5242, U. S. Rev. Stat. U. S. Comp. Stat. 1901, p. 3517?

'2. Are the rights claimed by plaintiff, to attachment against the defendant before judgment, and to the jurisdiction thereby acquired, preserved and given by § 4 of the act of Congress of July 12, 1882?'

The court of appeals, in affirming the judgment of the court below, answered the first question in the affirmative and the second question in the negative. The case was then brought to this court upon writ of error.

Mr. James W. M. Newlin for plaintiff in error.

[Argument of Counsel from pages 555-556 intentionally omitted] Messrs. Percy S. Dudley and George B. Woomer for defendant in error.

[Argument of Counsel from pages 556-557 intentionally omitted] Mr. Justice Day delivered the opinion of the court:

We deem the answer to the first question already determined by the decision of this court in Pacific Nat. Bank v. Mixter, 124 U. S. 721, 31 L. ed. 567, 8 Sup. Ct. Rep. 718. The right of Congress to determine to what extent a state court shall be permitted to entertain actions against national banks, and how far these institutions shall be subject to state control, is undeniable. National banks are quasi-public institutions, and for the purpose for which they are instituted are national in their character, and, within constitutional limits, are subject to the control of Congress, and are not to be interfered with by state legislative or judicial action, except so far as the lawmaking power of the government may permit. Section 5242 of the Revised Statutes of the United States (U. S. Comp. Stat. 1901, p. 3517) is as follows:

'All transfers of the notes, bonds, bills of exchange, or other evidences of debt owing to any national banking association, or of 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 to either, made after the commission of an act of insolvency, or in contemplation thereof, made with a view to prevent the application of its assets in the manner prescribed by this chapter, 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; and no attachment, injunction, or execution shall be issued against such association or its property before final judgment in any suit, action, or proceeding in any state, county, or municipal court.'

The language of the latter clause of this section would seem to be too plain to admit of discussion as to its meaning. It in terms forbids the issuing of an attachment, injunction, or execution against a national bank or its property before final judgment in any suit, action, or proceeding in any state, county, or municipal court. This way the view taken by this court in Pacific Nat. Bank v. Mixter, 124 U. S. 721, 31 L. ed. 567, 8 Sup. Ct. Rep. 718. The origin of § 5242, and its growth from previous enactments, were pointed out by Mr. Chief Justice Waite, who delivered the opinion of the court in that case:

'It is clear to our minds that, as it stood originally as part of § 57 [13 Stat. at L. 116, chap. 106], after 1873, and as it stands now in the Revised Statutes, it operates as a prohibition upon all attachments against national banks under the authority of the state courts. . . . It stands now, as it did originally, as the paramount law of the land, that attachments shall not issue from state courts against national banks, and writes into all state attachment laws an exception in favor of national banks. Since the act of 1873 all the attachment laws of the state must be read as if they contained a provision in express terms that they were not to apply to suits against a national bank.'

Since the rendition of that decision it has been generally followed as an authoritative construction of the statute holding that no attachment can issue from a state court before judgment against a national bank or its property. Freeman Mfg. Co. v. National Bank, 160 Mass. 398, 35 N. E. 865; Planters Loan & Sav. Bank v....