Steward v. Atlantic Nat. Bank

• Decision Date: 02 July 1928
• Docket Number: No. 5332.,5332.
• Citation: 27 F.2d 224
• Parties: STEWARD v. ATLANTIC NAT. BANK OF BOSTON.
• Court: U.S. Court of Appeals — Ninth Circuit

27 F.2d 224 (1928)

STEWARD v. ATLANTIC NAT. BANK OF BOSTON.

No. 5332.

Circuit Court of Appeals, Ninth Circuit.

July 2, 1928.

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Earl Anderson, Thomas W. Nealon, and Thomas A. Flynn, all of Phœnix, Ariz., for plaintiff in error.

Harold Baxter and W. W. Carpenter, Jr., both of Phœnix, Ariz., for defendant in error.

Before RUDKIN, DIETRICH, and HUNT, Circuit Judges.

HUNT, Circuit Judge (after stating the facts as above).

Plaintiff in error presents a question of jurisdiction by contending that inasmuch as the People's Bank, assignor of the defendant in error, went into voluntary liquidation before this suit was instituted, it was no longer a banking institution located at the place designated in its charter and was not a citizen of Massachusetts within the meaning of Judicial Code, section 24, subd. 16 (28 USCA § 41 16), and therefore that at the time of the institution of this suit there was no diversity of citizenship between plaintiff in error and the assignor of the defendant in error. But as the record contains a stipulation that the People's Bank, assignor of the defendant in error, was at the time of the trial in the course of voluntary liquidation, we are satisfied it retained its corporate status, capable of suing and being sued, with power to proceed by judicial process to collect its assets. The law was so declared in Bank of Bethel v. Pahquioque, 14 Wall. 383, 20 L. Ed. 840, when the Supreme Court decided that the act of Congress (13 Stat. 99), creating a national bank authorized the association to sue and be sued, complain and defend, in all cases where it might be necessary that the corporate name of the association should be used for that purpose "in closing its business and winding up its affairs under the provisions of the act which authorized its formation." That decision was followed in Central National Bank v. Connecticut Mut. Life Insurance Co., 104 U. S. 54, 26 L. Ed. 693, holding that a national bank in voluntary liquidation is not thereby dissolved as a corporation, but may sue and be sued by name for the purpose of winding up its business, and that it was the intention of the law that such an association should continue to exist as a person in law, capable of suing and being sued until the affairs and business of the association are completely settled. It must, therefore, follow that, as there never was a dissolution of the association, it necessarily, during the process of winding up its affairs, retained its status as a resident and citizen of Massachusetts, with power to sue as a plaintiff or to be sued as a defendant.

In argument that the Arizona statute of limitations bars this suit, counsel say that the notes sued upon were executed in Massachusetts, where they were delivered, and that all were due more than four years before this action was commenced. There were two classes of notes, the one evidencing loans or advances made on the cotton pledged; the other covering freight on cotton consigned. Each of the notes of the latter class contained a statement that it was secured by collateral previously pledged. Plaintiff in error cites the Civil Code of Arizona, subdivision 3 of paragraph 713, which provides that there shall be commenced and prosecuted within four years after the cause of action shall have accrued and not afterwards, all actions or suits upon a judgment or decree of any court rendered without Arizona, or upon an instrument in writing executed without Arizona.

We are of opinion, however, that the applicable provision is section 714, Laws of Arizona 1917 (c. 76, § 2), which provides that an action for debt where the indebtedness is evidenced by or founded upon any contract in writing executed within Arizona, shall be commenced and prosecuted within six years after the cause of action shall have accrued and not afterward. While we keep in mind that the notes sued upon are dated at Boston and that prima facie the notes were executed there, still such evidence may be overcome by parol proof that the notes were actually executed in Arizona. Elliott on Contracts, vol. II, par. 1117. The evidence upon the matter is that the People's Bank, through its agent in Arizona, offered to loan certain amounts on cotton, which offer Steward accepted; that in compliance with the offer of the bank Steward indorsed and delivered to the bank's agent at Phœnix the bale receipts and signed and delivered to such agent his notes, which the bank had authorized and directed its agent to accept. Steward then drew drafts upon the People's Bank in favor of a local bank in Phœnix, or in some instances, received drafts drawn in favor of himself by the bank's agent in Phœnix. Those notes and drafts were approved by the bank's agent at Phœnix, and thereafter trust receipts and notes were intrusted to Steward to be used in accordance with the instructions given to him and the agreement that had been entered into. The trust receipts were dated at Phœnix and recited that Calder & Richmond, for account of People's Bank at Boston had received cotton described belonging to Steward, which the Arizona bank agreed to hold until a full carload was obtained, when it was to be shipped to the People's Bank at Boston under order and bills of lading in the name of the Boston bank.

The contract thus became a binding one as between Steward and the People's Bank. Steward's acts, done after notes, drafts, and trust receipts were handed to him by the Arizona representative of Calder & Richmond, cotton brokers of Boston, in carrying out the plan which had theretofore been agreed upon, were performed as a bailee of the Boston bank's agent in Arizona. That it was the intention to enter into a binding contract in Arizona is made more apparent by the fact that the People's Bank had advised the bank in Arizona that, after the papers had been approved by its agent in Arizona, the amount of the drafts could be safely paid. Upon this point the testimony of the vice president of the People's Bank, who was also vice president of the Atlantic National Bank, was that the People's Bank instructed Smith, Arizona agent of Calder & Richmond, cotton brokers, to tell the bank in Arizona "that upon the drafts being accompanied by the papers mentioned, and I think his O. K. on the back of the draft, they could consider the transaction completed and honor the drafts. The notes were made payable in printed form, all the same way." It is also in evidence that Smith was instructed by the People's Bank to tell the grower "that upon completion of all the papers he could take them to his local bank and obtain...