McDonald v. State of Nebraska

• Decision Date: 19 March 1900
• Docket Number: 1,336.
• Parties: McDONALD V. STATE OF NEBRASKA.
• Court: U.S. Court of Appeals — Eighth Circuit

101 F. 171

McDONALD V. STATE OF NEBRASKA.

No. 1,336.

United States Court of Appeals, Eighth Circuit.

March 19, 1900

G. M Lambertson and A. E. Harvey (Frank M. Hall, on the brief) for plaintiff in error.

C. J Smyth, for defendant in error.

The state of Nebraska, by and through her state treasurer deposited in the Capital National Bank of Lincoln, Neb., in money which belonged to the state, the sum of $285,351.85, and took from the bank certificates of deposit for the sum, payable to the state treasurer in his official capacity. The incumbent of the office of treasurer of state was changed from time to time. On the 16th day of January, 1893, the then state treasurer returned to the bank the certificates of deposit for the money of the state previously deposited by his predecessor in office, and the amount thereof was placed to the credit of the treasurer of state on the books of the bank. On the 20th of January, 1893, the bank failed. Prior to its failure, the sum of $48,990.02 of the state money deposited in the bank had been checked out, leaving the sum of $236,361.83 belonging to the state in the bank on the date of its failure. Soon after the failure of the bank, the comptroller of the currency, in pursuance of the powers conferred on him by the act of congress in that behalf, appointed a receiver for the bank. The treasurer of the state, in his official capacity and on behalf of the state, twice presented to the receiver of the bank for allowance the claim for the money of the state which the bank held at the date of its failure, namely, $236,361.83. That officer refused to allow the claim. After the receiver refused to allow the same, the treasurer of state, in his official capacity, brought this suit against the receiver to recover this sum of money for the state. The term of office of the treasurer who brought the suit expired, and his successor in office, John B. Meserve, was substituted as plaintiff. Demurrers to the petition and amended petition were filed, one ground of which was that the treasurer of state had no legal capacity to sue for the money, but that the suit should be brought by and in the name of the state. This ground of demurrer was sustained by the court, and thereupon, by leave of the court, the name of the state of Nebraska was substituted as plaintiff in the action for that of her treasurer, and the petition was amended accordingly. A demurrer was filed to this amended petition, which was afterwards, by leave of the court, withdrawn, and the defendant filed a motion to strike the amended petition from the files for various reasons, which was overruled; and a demurrer was then filed to the amended petition substituting the state as the plaintiff in the action, which was also overruled. Afterwards the defendant filed an answer, and the case was tried to a jury, resulting in a verdict and judgment for the plaintiff for $236,361.83, this being the balance of the state money deposited in the bank by the treasurer of the state, and remaining there at the date of the bank's failure; and thereupon the defendant sued out this writ of error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

CALDWELL Circuit Judge, after stating the case as above, .

The indisputable facts having relation to the merits of this case are: That the state of Nebraska, by her treasurer, deposited in the Capital National Bank of Lincoln, Neb., money of the state amounting to the sum of $285,351.85. There is no pretense that this deposit was not made, or that it was not the money of the state. There is no pretense that the bank ever paid this money back to the state, or to any officer of the state, or to any person whomsoever, except the sum of $48,990.02; and there is no pretense that the bank was not indebted to the state, at the time of its failure, on account of the money of the state thus deposited in the bank, in the sum of $236,361.82.

In view of these indisputable facts, the attitude of the receiver in this case is not one which commends itself to the court. He is a public officer, charged with the duty of collecting the assets of the insolvent bank and disbursing the same pro rata among its honest creditors. Why a public officer charged with such a trust should refuse to allow the claim of the state of Nebraska for the actual money of the state deposited in the bank by her treasurer in his official capacity, and remaining therein at the date of the bank's failure, passes our comprehension. Why should the assets of the bank, already grossly inadequate to discharge its obligations, be further diminished by incurring costs and attorney's fees in resisting such a confessedly just and meritorious claim?

Something is said in the record and briefs about the certificates of deposit issued by the bank for the money of the state when it was deposited in the bank. Concerning these certificates, it is enough to say that they were returned to the bank by the treasurer of state, but the money they represented-- and they represented an actual deposit of money-- was not repaid to the state or her treasurer, but remained in the bank to the credit of the treasurer of state in his official capacity. Whatever bearing these certificates of deposit may have on the question of the liability of the different treasurers of state through whose hands they passed, or on the liability of the sureties on the bonds of these treasurers, or on the liability of the sureties on the bonds of these treasurers, or on the liability of the sureties of the bank on the bond given to the state to secure money deposited in the bank by the state, they cut no figure at all in the case against the bank or its receiver. With or without certificates of deposit, and without regard to what may be the liabilities of others to the state for this money, the bank and its receiver are unquestionably liable therefor. No defenses going to the actual merits of the cause of action are interposed. Certain technical defenses are set up, which will now be considered.

It is contended that the court had no jurisdiction of the action; that the receiver was not liable to be sued in the circuit court. But the action is one arising under the laws of the United States, and for that reason was properly brought in the federal court. A receiver of a national bank appointed by the comptroller of the currency in pursuance of the act of congress is charged by the laws of the United States with the execution of certain duties in the performance of which he acts as an agent and officer of the United States. His office is created and his duties defined by an act of congress. In contemplation of law every action brought by or against him in his contemplation of law every action brought by or against him in his official capacity arises under the laws of the United States. This action is brought against the receiver in his official capacity for an alleged breach of his official duty to the plaintiff imposed on him by the laws of the United States, and the circuit court had undoubted jurisdiction of the case. Myers v. Hettinger, 37 C.C.A. 369, 94 F. 370; Price v. Abbott (C.C.) 17 F. 506 (opinion by Mr. Justice Gray); Platt v. Beach, 2 Ben. 303, Fed. Cas. Co. 11,215; Stanton v. Wilkeson, 8 Ben. 357, Fed. Cas. No. 13,299; Kennedy v. Gibson, 8 Wall. 498, 19 L.Ed. 476; Bank v. Kennedy, 17 Wall. 19, 21 L.Ed. 554; U.S. v. Hartwell, 6 Wall. 385, 18 L.Ed. 830; Armstrong v.

Ettlesohn (C.C.) 36 F. 209; Stephens v. Bernays (D.C.) 41 F. 401; Bock v. Perkins, 139 U.S. 628, 11 Sup.Ct. 677, 35 L.Ed. 314; Hot Springs Independent School Dist. v. First Nat. Bank (C.C.) 61 F. 417. If the action had been brought in the state court, it scarcely admits of a doubt that the receiver would promptly have removed it into the federal court. Costs and delay were saved by bringing it in that court in the first instance.

Other contentions of the plaintiff in error are that the substitution of the state of Nebraska as plaintiff in the action was a change of the cause of action, and was equivalent to the bringing of a new action, and that, as the statute of limitations had run against the plaintiff's claim before the substitution was made, the cause of action is barred. It is not now material to inquire whether the suit was not properly brought, in the first instance, in the name of the treasurer of the state. The receiver insisted that the treasurer of state, in his official capacity, was not, and the state was, the proper party to maintain the suit on the cause of action set out in the petition. Having assumed that position, and succeeded in maintaining it, he cannot now assume a contrary position.

The state of Nebraska early adopted the reformed system of pleadings, and there is probably no state in the Union whose courts have given to that system a more liberal and enlightened interpretation, or one more in harmony with its obvious, and, we may say, expressed, purpose and intent. The Code of that state abolishes all common-law forms of actions, and, in common with the Codes of many other states, contains these provisions:

'Sec. 144. The court may, either before or after judgment, in furtherance of justice, and on such terms as may be proper, amend any pleading, process, or proceeding, by adding or striking out the name of any party, or by correcting any mistake in the name of a party, or a mistake in any other respect, or by inserting other allegations material to the case, or, when the amendment does not change substantially the claim or defense, by conforming the pleading or proceeding to the facts proved. And whenever any proceeding taken by a party fails to conform, in any respect to the provisions of this Code, the court may permit the same to be made conformable thereto, by amendment.

'Sec. 145. The

...