Source: https://supreme.justia.com/cases/federal/us/238/107/
Timestamp: 2019-04-22 17:01:44+00:00

Document:
The rule that, in the absence of diversity of citizenship, jurisdiction of the district court over a suit depends upon whether there is a federal cause of action stated in the bill applies to suits against national banks and their directors.
Under the Act of August 13, 1888, the federal courts have not, in the absence of diverse citizenship, jurisdiction of a suit by a stockholder against directors of a national bank and the bank to compel the directors to reimburse the bank for wrongfully investing its funds, nor has the district court any jurisdiction of such a suit under paragraph 16 of § 24, Judicial Code.
prevailing for many years as to confer jurisdiction on the federal courts of all suits by and against national banks will not be presumed in the absence of clear manifestation of such purpose.
The facts, which involve the jurisdiction of the district court of a suit against a national bank and its directors under the Act of August 13, 1888, and paragraph 16, § 24 of the Judicial Code, are stated in the opinion.
"That all national banking associations established under the laws of the United States shall, for the purposes of all actions by or against them, real, personal or mixed, and all suits in equity, be deemed citizens of the states in which they are respectively located, [and in such cases, the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same state.] The provisions of this section shall not be held to affect the jurisdiction of the courts of the United States in cases commenced by the United States or by direction of any officer thereof or cases for winding up the affairs of any such bank."
This section was but a reenactment of an identical provision contained in the § 4 of the Act of Congress of March 3, 1887 (c. 373, 24 Stat. 552), and again this was but the reenactment of an identical provision contained in the ¢ 4 of the Act of July 12, 1882 (c. 290, 22 Stat. 162, 163).
rested is shown by the fact that, in the course of the opinion, it was pointed out that neither the provisions of § 5209, Rev.Stat., providing for criminal punishment of directors of national banks in certain cases, nor § 5239, Rev.Stat., giving certain powers to the Comptroller of the Currency in certain instances, were involved in the cause of action so as to give rise to a federal question upon which the jurisdiction could be based.
This ruling during the many years which have elapsed has never been questioned, and the fundamental principle upon which it rested has been applied in various aspects. Petri v. Commercial Bank, 142 U. S. 644; Ex Parte Jones, 164 U. S. 693; Continental National Bank v. Buford, 191 U. S. 119; Yates v. Jones National Bank, 206 U. S. 158; Thomas v. Taylor, 224 U. S. 73.
"Sixteenth. Of all cases commenced by the United States, or by direction of any officer thereof, against any national banking association, and cases for winding up the affairs of any such bank, and of all suits brought by any banking association established in the district for which the court is held, under the provisions of title 'National Banks,' Revised Statutes, to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by said title. And all national banking associations established under the laws of the United States shall, for the purposes of all other actions by or against them, real, personal, or mixed, and all suits in equity, be deemed citizens of the states in which they are respectively located."
The statutory law with the concluded interpretation affixed to it to which we have referred being in force, this suit was commenced in the court below in March, 1913.
was no diversity of citizenship, and jurisdiction over the suit therefore depended upon whether there was a federal cause of action stated upon which the authority of the court to entertain the cause could be based.
trust in that said defendants, Benjamin F. Edwards and George Lane Edwards, as directors of the National Bank of Commerce in St. Louis, were in duty bound to execute the trust which said office provided in such a manner as not to promote their own pecuniary and personal interest, and therefore their acts as aforesaid were in violation of the national banking laws of the United States as well as contrary to equity and good conscience, and for the consequences and damages resulting therefrom said Benjamin F. Edwards and George Lane Edwards were and are liable to the National Bank of Commerce for all damages ensuing on account thereof."
It is apparent that the general statements made in the bill to the effect that federal considerations were essential to the determination of the cause of action were but conclusions of law affording no jurisdiction apart from the right to entertain the cause which would arise from the substantive and essential facts upon which the bill was based. Indeed, when the averments of the bill are analyzed, there is no escape from the conclusion that the jurisdiction to entertain it could not have been exerted without disregarding the plain letter of the statute in force since 1882. In fact, this inevitable result does not depend upon the mere text of the statutes referred to, since there is an absolute legal identity between this and the Whittemore case, and that case hence forecloses every contention here relied upon.
But it is said that conceding these conclusions inevitably result from the statute law as it existed prior to the Judicial Code, the Judicial Code has made a radical change in the law, which now requires a different interpretation.
But we think the contention, on the face of the statute, is without foundation, and that a brief consideration of the text of the Act of 1888 and of paragraph 16 of § 24 of the Judicial Code will make this clear.
contemplation of the section, there should be no jurisdiction, thus making the lines clear and broad and leaving no room for controversy or doubt. Aside from this, it is to be, moreover, observed that the intention of Congress to make, by the adoption of the Judicial Code, so radical a change from the rule which had prevailed for so long a period is not to be indulged in without a clear manifestation of such purpose. Besides, as there is no ground for distinguishing between the restrictions as to jurisdiction imposed by paragraph 16 of § 24, it must follow that the argument now made, based upon the omission of the words which were found in the Act of 1888, would apply to all of paragraph 16, and therefore none of the restrictions as to jurisdiction in that paragraph would be operative. Thus, in both aspects, the contention must come to this: that, on the one hand, because the provisions of paragraph 16 are comprehensively all-embracing, they must be held to be restrictive, and, on the other hand, that because the provisions of the Act of 1888 were reenacted, they were repealed.

References: § 24
 § 24
 § 4
 § 5209
 § 5239
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 § 24
 § 24