Case ID: how-pr_58/html/0306-01.html
Source: Caselaw Access Project
Author: {"author": "Smith, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SUPREME COURT.
    William H, Robinson, respondent, agt. The National Bank of New Berne.
    
      Attachments against national hanks or their properly — Jurisdiction of state eou/rts—Code of Civil Procedure, sections 636, 707.
    
    The last clause of section 5242, United States Revised Statutes, forbidding . an attachment, injunction or execution to be issued against a national bank before final judgment in any proceeding in a state court, applies only to such banks as have committed or are contemplating an act of insolvency.
    An attachment can, therefore, issue against a national bank, except under the above circumstances, from a state court, as provided by the Code of Civil Procedure.
    
      Fourth Department, General Term, January, 1880.
    Appeal from an order of the Herkimer special term denying the defendant’s motion to set aside a warrant of attachment.
    The defendant is a national bank, incorporated and organized under title 62 of the Revised Statutes of the United States, and is located in New Berne, North Carolina.
    The plaintiff is a stockholder in the bank, and entitled to recover certain unpaid dividends. The defendant is a solvent corporation, and has no place of business, or agent within this state.
    The.stock claimed by plaintiff has been sold by the defendant by proceedings in the state of North Carolina against one John Satterlee, and for a merely nominal sum.
    Eor further facts see opinion.
    
      A. B. Dyett and- B. W. Townsend, for appellant,
    argued that this court has no jurisdiction to issue this attachment, and cited Farmers’ &c., Bank agt. Deering (19 U. S., 29), The Chesapeake National Bank' agt. First National Bank, of 
      
      Baltimore (40 Maryland, 269), Thompson's National Bank Cases, pages, 117, 503). In Southwick agt. First National Bank of Memphis (7 Hun, 96) the general term in the first department held that this court could issue an attachment against a non-resident national bank. But in that case the question arose under section 57 of the national banking act of 1864, as amended by act of March 3, 1873 (U. S. Statute at Large, vol. 17, chap. 269, sec. 2). Subsequently to this case of Southwick agt. First National Bank of Memphis, in Central National Bank agt. Richland National Bank (52 How. P. R., 136), justice Babbett, at special term in Bew York, held, that under section 5242 as now existing, no attachment could be issued against a national bank, and that the case of Southwick agt. First National Bank of Memphis is no longer applicable by reason of the amendment. This decision of Mr. justice Babbett is approved and the same doctrine announced in Rhoner agt. First National Bank of Pennsylvania (14 Hun, 126) by the same general. term which decided Southwick agt. First National Bank of Memphis. The power of congress to protect national banks from attachments and other process before judgment is unquestionable (Farmers’, &c., Bank agt. Deering, 19 U. S., 29; Central National Bank agt. Richland National Bank, 52 Row. P. R., 136, 137; Crocker agt. Marine National Bank, 101 Mass., 240, 242; Chesapeake Bank agt. First National Bank of Baltimore, 40 Maryland, 269; Cadle agt. Tracy, 11 Blatchf, 102; Osborn agt. Bank U. S., 9 Wheaton, 783; Martin agt. Hunter’s Lessee, 1 Wheaton, 304, 336, 337; The Moses Taylor, 4 Wallace, 411, 429).
    
      T. C. Cronin, for respondent.
    The defendant, as a corporation, is liable to attachment as a non-resident corporation, solvent, and with no proceedings pending against it for any act committed under section 5242 of the Laws of the United States, it is clearly subject to the laws of this state regulating attachments against non-residents and foreign corporations (Cooke agt. National Bank of Boston, 52 N. Y., 96; Bowen agt. First National Bank of Medina, 34 How., 409; Southwick agt. First National Bank of Memphis, 7 Hun, 96). The change made by the Revised Statutes of the United States, section 5242 and 5198 of the Laws of 1874, does not alter the above rule or apply to any banking corporations except insolvent ones. The attention of the court, in the cases of Rhoner agt. National Bank of Allentown, Penn. (14 Hun, 126), and the Central National Bank agt. Richland N. B. of M. (52 How. P. R., 136), was not called to the change of sections and the transpositions under another head of the statute and for other and wise purposes.
   Smith, J.

The defendant is a banking corporation, created under the national banking law of congress, and located and doing business at New Berne, in the state of North Carolina. Upon an affidavit showing these facts and showing that the defendant is indebted to the plaintiff on contract and has personal property within this state a warrant of attachment was issued by a justice of this court against the defendant before final judgment. The appellant contends that the attachment is void for want of jurisdiction in this court to issue it. The claim is based upon the last clause of section 5242 of the United States Revised Statutes (ed. of 1878), the whole of which section is as follows:

“ § 5242. All transfer of the notes, bonds, bills of exchange, or other evidence 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 any 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.”

For the plaintiff, it is contended that the prohibition of the last clause applies only to such national banks as are described in the preceding part of the section, that is to say, such as have committed or are contemplating an act of insolvency. We are inclined to think that construction correct, and that the purpose of the clause is to prevent creditors of insolvent national banks from obtaining preferences before final judgment. The language certainly admits of that construction,, and we should be unwilling to infer, from doubtful and ambiguous language, an intention on the part of congress to divest the state courts of a pre-existing jurisdiction, even as to a provisional remedy merely. But, under our present Code, it would seem that if our state courts have not jurisdiction to attach the property of a foreign, bank within the states, there is no mode in which jurisdiction can be acquired of such bank, unless one of its officers can be found within the state, for the purpose of making personal service. Section 636 provides that a warrant of attachment may be issued against a foreign corporation (sub. 2); and a bánk created by act of congress is a foreign corporation (Temp. Act, L. 1876, O. 449, sec. 2, sub. 16). Section 707 provides that where a defendant, who has not appeared, is • a foreign corporation, and the summons was served without the state or by publication, the judgment can be enforced only against the property which has been levied upon by virtue of the warrant of attachment at the tune when the judgment is entered; so that i'f the claim under consideration applies to all national banks located without the state, it divests the courts of the state of all jurisdiction over such banks, so long as their officers keep without the limits of the state, a construction leading to that result ought not to be given to doubtful language (Cooke agt. State National Bank of Boston, 52 N. Y., 96).

This view of the proper construction of the clause is strengthened by the course of the legislation of congress in respect to it. The original national bank act (L. 1863-’64, No. 85) did not contain the clause in question. But section 57 of that act provided that suits against any association under the act might be had in any circuit, district or territorial court of the United States, held within the district in which such association was established; or in any state, county or municipal court in the county or city in which said institution was located, having jurisdiction in similar cases ; that section has been held by our court of appeals to be permissive and not mandatory (Cooke agt. N. B. of Boston, supra). In March, 1873, section 57 was amended by adding to it the words: “ Provided, further, that no attachment, injunction or execution shall be issued against such association or its property before final judgment in any such suit, action or proceeding in any state, county or municipal court.” It was held by the general term in the first department that the prohibition contained .in that amendment related only to suits, &e., against associations located where the suit is brought, and not to cases where the action is against a non-resident corporation (Southwick agt. The First National Bank of Memphis, 7 Hun, 96). By the revision of 1874 the clause in question was detached from the section to which it was originally appended and was placed in section 5242 above quoted, and the word “ such, ” above italicized, was omitted. The remainder of section 57 has been added to section 5198 of the Revised Statutes (Stat. at Large, 1873- ’75, app. p. 1437; U. S. R. S. [2d ed] sec. 5198).

It is a circumstance of no little importance in determining the question of construction under consideration, that the section in which the clause referred to is now placed forms a part of that chapter of the title relating to national banks, which treats of their “ dissolution and receivership; ” and the remainder of the section clearly relates to insolvent associations only. Thus the allocation of the clause in question, as well as its verbiage, and the general rule of interpretation, above-mentioned, seem to indicate, very clearly, that the construction contended for by the plaintiff is the true one.

The appellant’s counsel cites the case of The Central National Bank agt. The Richmond National Bank of Mansfield (52 How. Pr. R., 163), decided at special term by Mr. justice Babbett, and the general term case of Rhoner agt. The First National Bank of Allentown (14 Hun, 126), which hold that an attachment cannot be issued against a national bank before final judgment even though it has property within this state, and is located and carries on business in another state. In the latter case the court seems to have followed the reasoning of the judge at special term in the former case. In neither of the cases does it appear that the attention of the court was called to the fact that section 5242 is placed in the chapter relating to dissolution and receivership.” The opinions delivered do not advert to that circumstance nor to the language of the remainder of the section in which the clause is found.

Furthermore, in each case, stress is laid upon the consideration that the prohibition did not interfere with the general jurisdiction of the state courts over national banks.

Those cases seem to have arisen under the Code of Procedure, which did not contain the provision of section 707 of the present Code already adverted to. That section contains the substance of Buie 34 referred to by judge Babbett. It is also to be observed that for ought that appears in the report of those cases, the defendants were insolvent. We think, therefore, those cases do not aid us in disposing of the present question.

Our conclusion is, that the order refusing to vacate the attachment should be affirmed, with ten dollars costs and disbursements.

Talcott, P. J., and Habdut J., concur.