Ordway v. Central Nat. Bank of Baltimore

• Decision Date: 19 June 1877
• Citation: 47 Md. 217
• Parties: ALBERT ORDWAY, R. SNOWDEN ANDREWS and JAMES GREEN, late co-partners, trading as ANDREWS, ORDWAY & GREEN v. THE CENTRAL NATIONAL BANK OF BALTIMORE.
• Court: Maryland Court of Appeals

47 Md. 217

ALBERT ORDWAY, R. SNOWDEN ANDREWS and JAMES GREEN, late co-partners, trading as ANDREWS, ORDWAY & GREEN v. THE CENTRAL NATIONAL BANK OF BALTIMORE.

Court of Appeals of Maryland

June 19, 1877

JURISDICTION.

APPEAL from the Baltimore City Court.

This was an action of debt brought for the recovery of twice the amount of the interest paid on certain loans or discounts, on the ground that the interest so taken was at a rate exceeding that allowed by the laws of the State of Maryland; and it is grounded on the 30th sec. of the Act of Congress, 1864 Session 1, ch. 106, under which the corporation named as defendant was incorporated. The suit was instituted on the 19th November, 1875, when the original declaration was filed but by agreement, stands as if it had been commenced on 25th July, 1874.

On the 11th March, 1876, a suggestion was made that the Central National Bank of Baltimore, the National Banking Association intended to be sued, had been dissolved, pursuant to the laws of the United States, and became finally extinct at the end of six months, from the 15th day of July, 1874. And the evidences of such dissolution and extinction of the corporation were produced and filed in support of the suggestion; whereby, as it was claimed, the action necessarily abated.

The evidence of said dissolution consisted of the organization certificate; the articles of association; the letter of July 15th, 1874, from the cashier of said bank to the Comptroller of the currency, at Washington, D. C., informing him that the shareholders of said bank, had by vote determined to go into liquidation and close the affairs of the said bank; the notices published from time to time by the authority of said bank, notifying their creditors of the determination to close up business, and warning them to present their notes and other claims for payment; and various certificates from said Comptroller of currency; among others a certificate from said Comptroller, dated "Washington, Jan'y 15th 1876," and certifying that the Central National Bank of Baltimore, Md., went into voluntary liquidation on July 15 1874, under sections 5220 and 5221 of the Revised Statutes of the United States, and on Jan'y 8, 1875, deposited legal tender notes with the Treasurer of the United States, for the full amount of its outstanding circulation, as provided in sec. 5222 of said Revised Statutes; whereupon the bonds deposited by the association, for the purpose of securing its circulating notes, were delivered to the bank, thus finally closing its connection with the Treasury Department of the United States. And it was contended by the defendant that the said banking association had gone into said voluntary liquidation in conformity with the statute in such cases made and provided.

On March 25, 1876, the following exceptions to the evidence of said dissolution, as offered by defendant, were filed.

Plaintiff excepts to the evidence of defendant, as follows:

1st. To the certified copy

of letter of acting cashier of the bank to the Comptroller dated July 15, 1874, as not being legally admissible to prove the adoption by the stockholders of the bank, of the resolution therein referred to.

2nd. To the certificate of the Comptroller, dated Jan'y 15, 1876, as to compliance by the bank with the law, to enable it to liquidate, and of the termination of its connection with the Treasury Department, as not being sufficient to prove such compliance, or to prove the dissolution of the defendant's bank, or to prove that the bank had deposited money to take up its circulation.

3rd. To the proof of compliance by the bank with the law to go into liquidation.

Whereupon the suggestion of dissolution was overruled and the Court decided that the action had not abated.

On behalf of the defendant, a demurrer was then filed to the declaration, showing as cause for demurrer various matters; among other things the following:

1st. That whereas, it appears by the said declaration that the alleged cause and causes of action for which this action of debt has been brought, is a debt or cause of action, or are debts or causes of action of certain Albert Ordway, R. Snowden Andrews and James Green, late co-partners, trading under the name of Andrews, Ordway and Green, and none of whom are averred to be dead, the said Albert Ordway has alone brought this suit as plaintiff.

2nd. That by the Statute Law of the United States, the Courts of the United States are alone competent to take cognizance of the said alleged causes of action.

The Court sustained the demurrer. Before the entry of judgment, leave was asked and obtained by the plaintiff to file an amended declaration, and to the amended declaration so filed, in which Albert Ordway declared as sole plaintiff, the demurrer was renewed. This demurrer was also sustained by the Court on the ground that the Courts of the United States are alone competent to take cognizance of the said alleged causes of action. From the ruling of the Court, sustaining the demurrer, this appeal is taken.

The cause was argued before BARTOL, C.J., STEWART, BOWIE, GRASON, MILLER and ALVEY, J.

Charles Marshall, for appellant.

We think it clear that the mere vote of the stockholders to go into liquidation, and the deposit of money with the Treasurer of the United States to secure its circulation, did not dissolve the bank, so as to abate pending suits by or against it, or prevent the institution of other suits.

Sections 46 to 52 inclusive of the National Banking Act, provide for the compulsory liquidation of national banks, and the appointment of a receiver; yet it is not doubted that for the purpose of suing or being sued, as to causes of action which occurred before the bank goes into liquidation, its corporate existence still continues. The Supreme Court has so decided. Kennedy vs. Gibson, 8 Wallace, 506.

The defendant demurred to the amended declaration, assigning several grounds of demurrer; but the only one that it is necessary to consider is, that which denies the jurisdiction of the Court.

This demurrer was sustained for the reasons stated in the Court's opinion, which holds the Act of Congress to be unconstitutional, so far as it permits the State Courts to entertain jurisdiction of suits against national banks.

It is respectfully submitted that the decision of the Court below in this respect is erroneous.

This case is controlled by the provisions of the original Act of 1864, chapter 106, and not by the Revised Statutes, as the cause of action arose before the adoption of the latter.

See Revised Statutes United States, Tit. 74, page 1091, section 5597; also Title I, section 13. The causes of action all arose in 1873. The suit was brought July 25th, 1874, and the Revised Statutes went into operation June 22nd, 1874.

Section 57 of chapter 106, Acts of 1864, provides that actions against national banks, incorporated under that Act, may be brought in the Federal Courts, or in State Courts having jurisdiction in like cases. Section 8 of the Act provides, that such associations may sue or be sued in any Court of law or equity as fully as natural persons.

The Act, (section 30,) gives to the party aggrieved by the taking of usurious interest, the right to recover double the amount of interest unlawfully taken in an action of debt.

There is no doubt that the Baltimore City Court has jurisdiction in actions of debt, whether for penalties or otherwise, and the question is, can it entertain jurisdiction in a case where the right of action arises under the laws of the United States?

The Court below held that the liability in this case is in the nature of a penalty, and that under the principle laid down in the Bank of Plymouth vs. Price, 33 Md., 87, the Courts of this State will not enforce penalties imposed by the laws of other States, such penal laws having no extra-territorial effect. The laws of the United States are treated as being extra-territorial, so far as this State and its Courts are concerned.

The power of Congress to create these national banks is not questioned. They are necessary agencies for the conduct of the financial operations of the Government, and Congress has power to create them, and to define their duties, powers and liabilities. Chesapeake Bank vs. First National Bank of Baltimore, 40 Md., 269.

The right of action given by the statute, is a private and personal one which can be asserted only by the party aggrieved. The mode of enforcing it is by an action of debt.

An action of debt is one that can be maintained in the Court below, no matter where the contract or obligation that gives rise to it may have arisen.

If the cause of action arose in another State, or arose in another country, and the proper remedy be an action of debt, the Court from which this appeal was taken, would entertain jurisdiction of it, if the parties were properly before it, and would enforce the right as defined by the law of the place where it had its origin. The only exception to this rule is, that if the cause of action be a penalty created by foreign laws, our Courts will not enforce them, and the laws of other States in this sense, are foreign laws, as decided in Bank of Plymouth vs. Price, 33 Md., 487.

Now assuming the present case to be an action to recover a penalty in the sense in which that word is used in the case above referred to, the question arises, is the law that creates this penalty a foreign law, or is it a part of our law?

We submit that the laws of Congress, passed in pursuance of the Constitution, are part of the law of the State, as obligatory upon its Courts and people, as the Acts of its Legislature.

In no sense are these laws "foreign laws." On the contrary, if they be constitutional, our own laws are...