Stateler v. California Nat. Bank of San Francisco

• Decision Date: 19 November 1896
• Docket Number: 12,155.
• Citation: 77 F. 43
• Court: U.S. District Court — Northern District of California
• Parties: STATELER v. CALIFORNIA NAT. BANK OF SAN FRANCISCO et al.

77 F. 43

STATELER v. CALIFORNIA NAT. BANK OF SAN FRANCISCO et al.

No. 12,155.

United States Circuit Court, N.D. California.

November 19, 1896

Pierson & Mitchell (Robert Friedrich, of counsel), for complainant.

Joseph C. Campbell, for respondent E. G. Knapp.

John Chetwood, Jr., and A. W. Thompson, in pro. per.

MORROW District Judge (orally).

This is a proceeding for the punishment of the respondents for contempt of the authority of this court, by resisting the provisions of an injunction issued in this case by Judge Beatty on Feb. 24, 1896. The original action was brought Jan 4, 1896, to secure a judgment and decree of this court adjudging, among other things, that the complainant was the duly elected, qualified, and acting agent of the defendant the California National Bank of San Francisco, and as such exclusively entitled to have and receive in his custody and under his control all the moneys and property of said bank and to collect the outstanding indebtedness due to said bank whether the same be evidenced by open accounts, bills, notes, or judgments of record, to the end that the affairs of the bank might be wound up, its property converted into money, and its money distributed among its shareholders, as provided by the national banking laws of the United States; that all the acts of the defendant banking association through its alleged board of directors, as set forth in the bill, since the appointment of a receiver to take charge of its affairs, be adjudged null and void, and that its board of directors has no authority to take any action touching the affairs of the association; that the said bank, its board of directors, officers, and employes, and John Chetwood, Jr., his agents and servants, and each and every of their attorneys, solicitors, and counselors, be forever restrained and enjoined from denying the rights of the complainant to the said office of agent of said banking association, and from denying his right as such to the exclusive control of the assets of said bank, and from commencing any further litigation against him as such agent, and from prosecuting or defending any actions heretofore brought by them, or either of them, against the complainant, as such agent, touching his right to said office, and touching his exclusive right as such agent to collect the assets of said bank; and that the said bank, its board of directors, officers, and employes, and the said defendant Chetwood, his agents and servants, and each and every of their said attorneys, solicitors, and counselors, be forever restrained and enjoined from commencing any further suits to collect any outstanding debts due said bank, whether the same be evidenced by an open account, note, or judgment, and particularly from attempting in any manner to collect the judgment heretofore secured for said bank against one Richard P. Thomas, and referred to in the bill. Upon this bill an order was made by the court on January 6, 1896, requiring the defendants to show cause why an injunction should not issue pending the determination of the matter involved in the suit; and upon the hearing of the order to show cause the court issued an injunction pendente lite restraining and enjoining the California National Bank of San Francisco, its directors, officers, and employes, and said John Chetwood, Jr., his agents, servants, attorneys, solicitors, or any other representatives, from commencing any further litigation, and from commencing any further suits, to collect any outstanding debts due said bank, whether the same be evidenced by open accounts, bills, notes, or judgments, or otherwise, or from in any way whatever taking, or attempting to take, any control or possession of any of the funds or assets or property of the said bank, and from settling and allowing, or attempting to settle or allow, any attorney's charges, or any other fees, expenses, or costs, growing out of, or which it may be claimed grew out of, any past litigation in this matter, and from in any way disposing of or incumbering any of the assets, money, or property of said bank. But the defendants were not enjoined from prosecuting or defending to final determination any action in this matter then pending in the supreme court of the state of California, or in this court.

It appears that on the 14th day of January, 1889, the comptroller of the currency, after an examination into the condition of the California National Bank of San Francisco, declared the corporation insolvent, under section 1 of the act of congress authorizing the appointment of receivers of national banks, and for other purposes, approved June 30, 1876, and thereupon appointed Smith P. Young receiver to take charge of its affairs; that on February 21, 1889, the said receiver submitted himself and the affairs of said bank to the jurisdiction of this court by a petition asking for the authority of the court to sell certain property belonging to the bank; that on the 6th day of July, 1894, the comptroller of the currency, having paid to the creditors of the bank the full amount of their claims, and all expenses of the receivership, and the redemption of the circulating notes having been provided for, a meeting of the shareholders was called for the purpose of having the shareholders determine whether the receiver should be continued and wind up the affairs of the association, or whether an agent should be elected for that purpose. It is alleged that at this meeting 1,020 out of the 2,000 shares constituting the entire capital stock of said banking association were represented and voted, and that the said 1,020 shares voted in favor of electing an agent to succeed the receiver, and thereupon T. K. Stateler was elected agent of the bank for the purposes set forth in the statute, and entered upon the duties of his office. It appears further that at the time the bank suspended payment, and at the time the comptroller of the currency declared it to be insolvent, and at the time he appointed a receiver to take charge thereof, its board consisted of seven members, to wit, R. P. Thomas, president; R. A. Wilson, vice president; R. R. Thompson, George E. Whitney, William K. Vanderslice, Charles H. Holt, and B. Noyes; that on the 19th day of July, 1890, and while the receiver was in office, John Chetwood, Jr., holding 20 shares of the capital stock of said banking association, commenced a suit in the superior court of the city and county of San Francisco against the said California National Bank of San Francisco, Richard P. Thomas, Robert R. Thompson, Robert A. Wilson, and S. P. Young, receiver of the said bank, to recover from the defendants Thomas, Thompson, and Wilson, as to the executive committee of the board of directors of the bank, the sum of $400,000 as damages for negligence, being the amount claimed by the plaintiff to have been lost to the bank by reason of unfortunate investments made by the cashier, and which losses the plaintiff, Chetwood, claimed could not have occurred if the said three defendants in that action had properly supervised the acts of the cashier. All the defendants appeared in the action, and the case was tried on the 27th day of April, 1894, resulting in a judgment in favor of the plaintiff, Chetwood, for the benefit of the corporation, as against the defendants Thomas, Thompson, and Wilson, for an amount equal to the actual loss of the bank resulting from the bad investments made by the cashier. The matter was referred to a referee to ascertain the amount of such bad investments, who filed a report on the 17th day of August, 1894, from which it appeared that the loss sustained by the bank from such bad investments amounted to $197,092.91; that on the 24th day of September, 1894, a stipulation was filed in the action whereby the complainant, Chetwood, withdrew his cause of action against the defendants Thompson and Wilson, and directed a judgment of dismissal to be entered accordingly. Part of the consideration for such dismissal was the payment by the said Thompson and Wilson into court of the sum of $27,500. On the 20th day of November, 1894, findings were filed in the said superior court, in said action, in which it was found that the amount of the actual loss to the corporation through the negligence of the said three defendants was the sum of $166,919; that $27,500 had been paid thereon by Thompson and Wilson, leaving the net loss to the bank the sum of $139,419, for which amount the court ordered a judgment to be entered against the defendant Richard P. Thomas, who appealed from the judgment to the supreme court of the state, where the judgment of the lower court was reversed, with directions to the trial court to enter a judgment in favor of the defendant Thomas; the supreme court holding that, where several defendants are charged as joint tort feasors, a release of any one of the, by withdrawal of the action against him, or the payment of a sum agreed upon between him and the plaintiff, operated to release other defendants from all further liability. 45 P. 704.

It appears further that after the entry of the judgment in the superior court, as before mentioned, Stateler, as agent of the bank, petitioned the court for an order requiring Chetwood to turn over to him the $27,500 received by Chetwood in that action. The superior court refused to make that order, and Stateler appealed to the supreme court of the state, where the order of the superior court was reversed the supreme court holding that where an action brought by a stockholder in a national bank in behalf of the corporation while in the hands of a receiver, has terminated, an agent of the corporation elected to succeed the receiver, as provided by law, and charged with the duty of controlling and disposing of its assets and of...