US SUPREME COURT DECISIONS

1. The property of a national bank organized under the Act of Congress of June 3, 1864, attached at the suit of an individual creditor, after the bank has become insolvent, cannot be subjected to sale for the payment of his demand, against the claim for the property by a receiver of the bank subsequently appointed.

2. A suit against a national bank to enforce the collection of a demand is abated by a decree of a district court of the United States dissolving the corporation and forfeiting its rights and franchises, rendered upon an information against the bank filed by the Comptroller of the Currency.

On the 15th of April, 1867, a Treasury draft of the United States was presented to the First National Bank of Selma, chanrobles.com-red

Page 88 U. S. 610

a bank organized under the Act of Congress of June 3, 1864, entitled "An act to provide a National currency secured by a pledge of United States bonds and to provide for the circulation and redemption thereof," [Footnote 1] the act commonly known as the National Banking Act. Payment of the draft was refused. On the morning of the following day, the 16th, the bank did not open for business, and during that day possession was taken of the bank -- meaning, of course, by this term its place of business, its property, effects, books, and papers -- by the military authorities of the United States under instructions from the Secretary of the Treasury. On the 17th, its president absconded. An examination had that day into its affairs showed a deficiency in its cash account of $200,000, and on the 30th of April, a receiver of its effects was appointed by the Comptroller of the Currency. Subsequently -- that is to say on the 28th of May -- an information was filed by the comptroller charging violation of its charter, and a summons issued to the directors to appear; the day of appearance (by a clerical error apparently) being put as "the 13th day of this instant." On the 1st of June, a decree was entered on nonappearance, pro confesso, in the District Court of the United States forfeiting all the rights, franchises, and privileges of the bank and adjudging its dissolution.

Whilst the bank was in possession of the military authorities -- namely on the 17th of April, 1867 -- one Colby sued out an attachment in one of the state courts of Alabama against it upon an affidavit alleging that it was indebted to him in the sum of $4,800, and that it had moneys, property, or effects liable to satisfy its debts which it fraudulently withheld. The attachment was levied the same day on its real property, consisting of a dwelling house and grist mill. On the 22d of May following, a declaration was filed in the case in which the plaintiff alleged an indebtedness of the bank to him in the amount stated on three certificates of deposit. chanrobles.com-red

Page 88 U. S. 611

Nearly two years afterwards, in March, 1869, the attachment suit came on for trial. The receiver was then allowed, without objection, to appear by counsel and make proof of the facts above stated and produce his appointment as receiver, and the decree dissolving the bank and forfeiting its rights, privileges, and franchises. And thereupon he moved the court to dissolve the attachment and discharge the levy, and that the suit abate. This motion was overruled. The receiver then offered, without objection, the same evidence to the jury, and requested the court to instruct them, among other things, that if they believed the evidence, the suit could not be maintained by the plaintiff, and that they must find for the defendant.

No objection was taken to the accidental error as to return day.

The court refused the instruction asked for, and the jury gave a verdict for the plaintiff for the full amount claimed. Judgment being rendered accordingly, the case was taken to the supreme court of the state. That court said:

"The act of insolvency does not dissolve the liability to be sued, nor the liability to be sued by attachment. The act of Congress does not so declare, nor is it necessary for the purposes of that statute so to infer it. By the practice of our courts, attachments are only abatable when they have been issued without affidavit or without bond, as required by law. These being the only causes enumerated, others are excluded by their omission. And matter of abatement cannot be given in evidence on an issue upon the merits, a default or a failure to plead."

The circuit court accordingly affirmed the judgment of the inferior state court, and the case was now here for review under section 709 of the Revised Statutes, the modern substitute of the second section of the Act of February 5, 1867, repealing and replacing the old twenty-fifth section of the Judiciary Act chanrobles.com-red

Page 88 U. S. 612