Opinion ID: 1547681
Heading Depth: 1
Heading Rank: 1

Heading: jurisdiction

Text: The jurisdiction of the court to entertain the first and third causes of action is challenged by various appellants. There is no diversity of citizenship, so that federal jurisdiction must be based on other grounds. The jurisdiction of the court was invoked under that part of 28 U.S.C.A. § 41(16) which reads as follows:    and cases for winding up the affairs of any such bank. Is this a proceeding to wind up the affairs of a national bank? Our conclusion is that the answer must be in the affirmative. The bank had sold its assets and had ceased functioning as a banking institution. By appropriate resolution it had voted to liquidate and had appointed a liquidating agent. An attempt had been made to publish the statutory notice required in such event. In George v. Wallace, 8 Cir., 135 F. 286, it was held that a suit against an insolvent bank which had gone into voluntary liquidation to enforce a specific lien or to enforce and judicially administer a trust previously created by contract or arising from the insolvency and liquidation proceeding was a suit arising under the laws of the United States within the jurisdiction of the Federal court, as prescribed by statute. In Richmond v. Irons, 121 U.S. 27, 49, 7 S.Ct. 788, 798, 30 L.Ed. 864, the court said: In the case of involuntary liquidation under the supervision of the comptroller of the currency, the receiver appointed by him is authorized and required, not only to collect and apply the proper assets of the bank to the payment of its debts, but also, so far as may be necessary, to enforce the individual liability of the shareholders. It thus appears that the enforcement of this liability is a part of the liquidation of the affairs of the bank; at least, so closely connected with it as to constitute but one continuous transaction. When, in the case of voluntary liquidation, the proceeding is instituted by one or more creditors for the benefit of all, by means of the jurisdiction of a court of equity, there seems to be no reason why the nature of the proceedings should be considered as changed. The intention of congress evidently was to provide ample and effective remedies in all the specified cases for the protection of the public and the payment of creditors, by the application of the assets of the bank and the enforcement of the liability of the stockholders. Admitting that this liability is not strictly an asset of the bank, because it could not be enforced for its benefit as a corporation nor in its name, yet it is treated as a means of creating a fund, to be applied with and in aid of the assets of the bank towards the satisfaction of its obligations. The two subjects of applying the assets of the bank and enforcing the liability of the stockholders, however otherwise distinct, are by the statute made connected parts of the whole series of transactions which constitute the liquidation of the affairs of the bank. In Brown v. O'Keefe, 300 U.S. 598, 604, 57 S.Ct. 543, 547, 81 L.Ed. 827, it was held that: If the bank is in course of liquidation by a voluntary liquidator, the liability is enforcible by a creditor or creditors, suing for themselves and for others similarly situated. The liability to the stockholders for the liquidation dividend they had received, their liability for assessment on their stock, and the liability of the directors, if any, for dereliction of duty, were all liabilities primarily due to the bank for the benefit of creditors. Had a receiver been appointed to wind up the affairs of the bank, he could have enforced all three classes of rights for the benefit of the creditors of the bank. The action by the appellees was in the nature of a creditor's bill to enforce rights belonging to the corporation for the benefit of creditors. The action was a part of the process of winding up the affairs of the bank. The court had jurisdiction of all three causes of action under 28 U.S.C.A. § 41(16).