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Great Western Mining & Manufacturing “This cause coming on to be heard upon Company, in his possession, that, in connec- the application of L. C. Black, receiver heretion with the floating of the loan of $300,- in, asking for instructions as to his duty in 000 in the year 1889, upon the property of the matters and things set forth in the said the Great Western Mining & Manufacturing application, and wherein said receiver repreCompany, situate in Lawrence county, Ken- sents to the court that, in certain transactucky, certain stockholders and officers of tions connected with the floating of a loan said company combined to obtain for them- of $300,000 upon the property of the Great selves, and did so obtain, proceeds resulting Western Mining & Manufacturing Comfrom the sale of said bonds in the sum of pany, apparently $75,000 was withdrawn by $75,000, which money belonged to, and certain stockholders and officers of the said should have been paid into, the treasury of company, whereas the same should have been said company

paid into the treasury of the said company; “Your receiver says that he finds shares and wherein said receiver further represents of capital stock of the Great Western Min- that apparently certain stock was issued to ing & Manufacturing Company were issued the stockholders and officers of the said comat the instance of, and through the action pany without consideration, and that apof, certain of said stockholders and officers parently, by reason of the inattention and of said company, to the amount of $150,000, negligence and mismanagement of the board which said stock was distributed among of directors of the said company, and the said stockholders and officers; that, as your misappropriation of the funds of the said receiver is informed and believes, there was company, said company has been greatly no consideration for the issue and distribu- damaged and its assets depreciated. tion of said stock; that the said stock was “And it appearing to the court that it sold by said stockholders, so as aforesaid re- will be for the advantage of the said comceiving it, to the defendant, The Great pany that suit shall be instituted against Western Mining & Manufacturing Company, the stockholders and directors of the same and, by means of said sale, moneys to the for the recovery of the sums so represented amount of $75,000 were abstracted from the to be lost, it is, therefore, directed that treasury of said company; that the issue said receiver proceed in his own name as reand distribution of said capital stock was, ceiver, or in the name of the company, as he as your receiver believes, a mere device or may be advised, to recover said sums." instrumentality to abstract said moneys from the treasury of said company; that

Mr. Harlan Cleveland for petitioner. said company, as your receiver believes, has Messrs. Brainard Tolles and Julien T. a valid claim against said persons to re- Davies for respondents. cover said moneys; that some of said parties are solvent and able to repay said mon

Mr. Justice Day delivered the opinion of eys, and proceedings should be taken to re- the court: cover it for said company and its creditors. The theory of the complainant's case

“Your receiver further says that he has seems to be that the transfers of the stock discovered from the books of the company of the defendant and other directors and that apparently, by reason of the inatten- stockholders, paid for out of the proceeds tion and negligence of the board of directors of the bonds, in view of the allegations of of the said Great Western Mining & Manu- the bill as to the condition of the company, facturing Company, and apparently by rea- and the purposes in view by the defendant son of the mismanagement and misappro- and associates, amounted to a breach of priation of the funds of the company, by duty upon the part of the defendant and certain members of said board, that the said other directors, and a conversion to their company has been greatly damaged, and its own use of the property of the company, for assets depreciated in value in a large which they should be held to account in an amount, the exact sum of which is unknown action brought by the company, through its to your receiver, and that said losses should receiver, under the order of the circuit now be made part of the said company's court of Kentucky. The particulars of the assets; and that the same is, in the opinion suit in which the receiver was appointed are of your receiver, a valid claim against the not very fully set forth, but enough appears said board of directors, and that proceed to show that he was appointed in a suit to ings should be taken to recover the same for adjudicate and enforce liens, and subject the said company and its creditors.

the property to the payment of the claims “Wherefore your receiver prays the direc-of creditors. In the brief of the learned tion of your honorable court as to his duty counsel for complainant, it is styled a "genin the premises."

eral creditors' and foreclosure suit.” It does Upon this application the court made the not appear that, by order of the court or following order:

otherwise, there has been any conveyance of

the property and assets of the company to creditor himself might have done, where his the receiver, nor has the corporation been debtor may be amenable to the tribunal dissolved, and the receiver made its succes- which the creditor may seek.” sor, entitled to its property and assets. The Mr. Justice Wayne, who delivered the minute books of the company, in evidence, opinion of the court in Booth v. Clark, do not show any authority by the corpora- stated, among others, the following reasons tion for the filing of this bill in the name for refusing to recognize the powers of a of the Great Western Mining & Manufactur- receiver in foreign jurisdictions: ing Company or otherwise, although meet- “We think that a receiver could not be ings were held after the appointment of the admitted to the comity extended to judgreceiver. Nor is our attention called to any ment creditors without an entire departure statute vesting the title of the corporation from chancery proceedings as to the manner in the receiver. So far, then, as the receiver of his appointment, the securities which are is concerned, his right to prosecute the ac- taken from him for the performance of his tion must depend upon his powers as such duties, and the direction which the court officer of the court and the order of the has over him in the collection of the estate court, set forth in the statement of facts, of the debtor, and the application and disauthorizing him to bring suit against the tribution of them. If he seeks to be recogstockholders and directors for the purpose nized in another jurisdiction, it is to take of realizing the assets, either in his own the fund there out of it, without such court name or that of the corporation, as may be having any control of his subsequent action proper. This condition of the record brings in respect to it, and without his having even up for consideration at the threshold of this official power to give security to the court, case the question of the extent of the power the aid of which he seeks, for his faithful of the receiver to maintain this action un conduct and official accountability. All that der the order of the court, either in his own could be done upon such an application from name or that of the company. As to the a receiver, according to chancery practice, power of the court to authorize the receiver would be to transfer him from the locality to sue, we think the case is ruled by Booth of his appointment to that where he asks v. Clark, 17 How. 338, 15 L. ed. 170, in to be recognized, for the execution of his which case the authority of the court to au- trust in the last, under the coercive ability thorize a receiver appointed in one jurisdic- of that court; and that it would be difficult tion to sue in a foreign jursdiction was the to do, where it may be asked to be done, subject of very full consideration. In that without the court exercising its province to case it was held that a receiver is an officer determine whether the suitor, or another of the court which appoints him, and, in the person within its jurisdiction, was the absence of some conveyance or statute vest- proper person to act as receiver.” ing the property of the debtor in him, he It will thus be seen that the decision in cannot sue in courts of a foreign jurisdic- Booth v. Clark rests upon the principle that tion upon the order of the court which ap- the receiver's right to sue in a foreign jupointed him, to recover the property of the risdiction is not recognized upon principles debtor. While that case was decided in of comity, and the court of his appointment 1854, its authority has been frequently rec- can clothe him with no power to exercise ognized in this court, and as late as Hale his official duties beyond its jurisdiction. v. Allinson, 188 U. S. 56, 47 L. ed. 380, 23 The ground of this conclusion is that every Sup. Ct. Rep. 244, it was said by Mr. Jus- jurisdiction, in which it is sought, by tice Peckham, who delivered the opinion of means of a receiver, to subject property to the court:

the control of the court, has the right and “We do not think anything has been said power to determine for itself who the reor decided in this court which destroys or ceiver shall be, and to make such distribulimits the controlling authority of that tion of the funds realized within its own case.”

jurisdiction as will protect the rights of In that case the following language, as to local parties interested therein, and not pera receiver's powers, from Booth v. Clark, 17 mit a foreign court to prejudice the rights How. 338, 15 L. ed. 171, is quoted with ap- of local creditors by removing assets from proval:

the local jurisdiction without an order of "He has no extraterritorial power of of the court, or its approval as to the officer ficial action; none which the court appoint- who shall act in the holding and distribuing him can confer, with authority to enable tion of the property recovered. In Quincy him to go into a foreign jurisdiction to take M. & P. R. Co. v. Humphreys, 145 U. S. possession of the debtor's property; none 82, 36 L. ed. 632, 12 Sup. Ct. Rep. 787, the which can give him, upon the principle of powers of a receiver were under consideracumity, a privilege to sue in a foreign court tion, and the following language was quoted or another jurisdiction, as the judgment with approval (p. 98, L. ed. p. 637, Sup.

99

Ct. Rep. p. 792): "The ordinary chancery | receiver, the court might direct the calls or receiver, such as we have in this case, is assessments upon delinquent shareholders clothed with no estate in the property, but who had not paid for their shares, thereby is a mere custodian of it for the court, and using the authority the directors might by special authority may become an officer have exercised before the appointment of the of the court to effect a sale of the property, receiver. In that case, a receiver appointed if that be deemed necessary for the benefit by the circuit court of Cook county, in Illiof the parties concerned.” There are excep- nois, under the direction of that court tional cases, such as Relfe v. Rundle (Life brought an action in the name of the Great Asso. of America v. Rundle), 103 U. S. 222, Western Telegraph Company, an Illinois 26 L. ed. 337, in which the entire property corporation, by its receiver, against Purdy, of the insolvent company was vested in the a citizen of Iowa, to recover a sum alleged superintendent of insurance of the state, to be due from him upon an assessment where his authority did not come from the upon his stock subscription, and it was held decree of the court, and his right to sue was that the Illinois court might make the asmaintained. In Hawkins v. Glenn, 131 U. sessment and calls necessary to collect the S. 319, 33 L. ed. 184, 9 Sup. Ct. Rep. 739, stock which would be binding in another it appeared that Glenn had derived title by court. The jurisdiction of the Iowa court assignment and deed, and he was permitted was not called in question in the state court to sue. In the case now before us it does of Iowa, where the original action was not appear that the receiver had any other brought, nor was the question of jurisdictitle to the assets and property of the com- tion raised in this court, or passed upon in pany than that derived from his official re- deciding the case. While not detracting lation thereto as receiver under the order from the authority of that case as to the of the court. In such a case we think the matter decided, we see nothing in it to indoctrine of Booth v. Clark is fully appli- dicate that, had the question herein presentcable. It is doubtless because of the doc-ed been made, it would have been decided trine herein declared that the practice has otherwise than herein indicated. become general in the courts of the United There are numerous and conflicting deci. States, where the property of a corporation sions in the state courts as to the rights of is situated in more than one jurisdiction, a receiver to sue in a foreign jurisdiction to appoint ancillary receivers of the prop-. upon principles of comity, which it is not erty in such separate jurisdictions. It is necessary to review here. In this court, true that the ancillary receiverships are since the case of Booth v. Clark, 17 How. generally conducted in harmony with the 338, 15 L. ed. 170, we deem the practice to court of original jurisdiction, but such re- be settled, and to limit a receiver who deceivers are appointed with a view of vesting rives his authority from his appointment as control of property rights in the court in such, to actions, either in his own name or whose jurisdiction they are located. If the that of an insolvent corporation, such as powers of a chancery receiver in the Federal may be authorized within the jurisdiction courts should be extended so as to author- wherein he was appointed. ize suits beyond the jurisdiction of the We think the Circuit Court of Appeals court appointing him, to recover property was right in holding that the Circuit Court in foreign jurisdictions, such enlargement had no jurisdiction of this action. of authority should come from legislative, This view of the case renders it unneces. and not judicial, action.

sary to consider the other questions made Nor do we think the jurisdiction is es in the record. tablished because the action is authorized

Decree affirmed. to be instituted by the receiver in the name of the corporation. Such actions subjecting

Mr. Justice Brewer concurs in the de local assets to a foreign jurisdiction and to a foreign receivership would come within the reasoning of Booth v. Clark. If a re

(198 U. S. 554) covery be had, although in the name of the corporation, the property would be turned

HENRY VAN REED, Piff. in Err., over to the receiver, to be by him administered under the order of the court appoint- PEOPLE'S NATIONAL BANK OF LEBing him.

ANON, PENNSYLVANIA. It is urged that jurisdiction in this case is sustained by the case of Great Western Attachment against national banks—cannot Teleg. Co. v. Purdy, 162 U. S. 329, 40 L. ed.

issue from state court before judgment. 986, 16 Sup. Ct. Rep. 810, in which it was

1. A national bank, whether solvent or insole held that the assets and affairs of an in

vent, is within the exemption from the issue solvent corporation being in the hands of a of attachment before judgment, which U. &

cree.

Rev. Stat. $ 5242, 0. S. Comp. Stat. 1901, p. I judgment of the court below, answered the 3517, affords in suits in the state courts.

first question in the affirmative and the sec2. No right to attachment against a national ond question in the negative. The case was

bank before judgment in a suit in a state court is given by the act of July 12, 1882, s | then brought to this court upon writ of er4 (22 Stat. at L. 163, chap. 290, U. S. Comp. ror, Stat. 1901, p. 3458), making the jurisdiction for suits by or against national banks the Mr. James W. M. Newlin for plaintiff same as the jurisdiction for suits by or in error. against banks not organized under any law of the United States.t

Messrs. Percy S. Dudley and George B. 3. Jurisdiction over the person or property of a Woomer for defendant in error.

national bank is not acquired by the issue of an attachment out of a state court before Mr. Justice Day delivered the opinion judgment, which, by reason of U. S. Rev. of the court: Stat. § 5242, is beyond the power of the

We deem the answer to the first question court. [No. 229.]

already determined by the decision of this

court in Pacific Nat. Bank v. Mixter, 124 Submitted April 25, 1905. Decided May U. S. 721, 31 L. ed. 567, 8 Sup. Ct. Rep. 718. 29, 1905.

The right of Congress to determine to what

extent a state court shall be permitted to IN ERROR to the Court

of Appeals of the entertain actions against national banks, State of New York to review a judgment and how far these institutions shall be subwhich affirmed the judgment of the Appel-ject to state control, is undeniable. Nalate Division, First Department, of the Su- tional banks are quasi-public institutions, preme Court of that state, which, on appeal and for the purpose for which they are infrom the judgment of a Special Term of the stituted are national in their character, Supreme Court held in and for the County and, within constitutional limits, are subof New York, denying a motion to vacate an ject to the control of Congress, and are not attaehment against a national bank, re- to be interfered with by state legislative or versed such judgment and vacated the at- judicial action, except so far as the lawtachment. Affirmed.

making power of the government may perSee same case below in Appellate Divi- mit. Section 5242 of the Revised Statutes sion, 67 App. Div. 75, 73 N. Y. Supp. 514, of the United States (U. S. Comp. Stat. and in Court of Appeals, 173 N. Y. 314, 66 1901, p. 3517) is as follows: N. E. 16.

"All transfers of the notes, bonds, bills of

exchange, or other evidences of debt owing Statement by Mr. Justice Day:

to any national banking association, or of The plaintiff, who was the owner of a deposits to its credit; all assignments of claim against the defendant, the People's mortgages, sureties on real estate, or of National Bank of Lebanon, Pennsylvania, judgments or decrees in its favor; all decommenced an action in the state of New posits of money, bullion, or other valuable York by levying an attachment upon the thing for its use, or for the use of any of funds of the defendant in that state, upon its shareholders or creditors; and all paythe ground that it was a foreign corpora- ments of money to either, made after the tion. The defendant, appearing specially commission of an act of insolvency, or in for that purpose, moved to have the attach- contemplation thereof, made with a view to ment vacated upon the ground that it was prevent the application of its assets in the prohibited by the Revised Statutes of the manner prescribed by this chapter, or with United States. At special term the motion a view to the preference of one creditor to was denied; the appellate term reversed the another, except in payment of its circulatjudgment of the special term, and vacated ing notes,-shall be utterly null and void; the attachment. The court of appeals an- and no attachment, injunction, or execuswered two questions certified to it by the tion shall be issued against such association appellate division, and affirmed the judg- or its property before final judgment in any ment of that court. The two questions suit, action, or proceeding in any state, propounded are as follows:

county, or municipal court." “1. Is the defendant exempt from attach- The language of the latter clause of this ment before judgment under § 5242, U. S. section would seem to be too plain to admit Rev. Stat. U. S. Comp. Stat. 1901, p. 3517 ? of discussion as to its meaning. It in terms

“2. Are the rights claimed by plaintiff, forbids the issuing of an attachment, into attachment against the defendant before junction, or execution against a national judgment, and to the jurisdiction thereby bank or its property before final judgment acquired, preserved and given by § 4 of the in any suit, action, or proceeding in any act of Congress of July 12, 1882 ?”

state, county, or municipal court. This was The court of appeals, in affirming the 'the view taken by this court in Pacific Nat.

*Ed. Note. For cases in point, see vol. 6, Cent. Dig. Banks and Banking, $$ 1067-1069.
+Ed. Note.-For cases in point, see vol. 6, Cent. Dig. Banks and Banking, $$ 1068. 1069.

Banke v. Mixter, 124 U. S. 721, 31 L. ed. 567, "That apv association so extending the 8 Sup. Ct. Rep. 718. The origin of § 5242, period of its succession shall continue to and its growth from previous enactments, enjoy all the rights and privileges and imwere pointed out by Mr. Chief Justice munities granted, and shall continue to be Waite, who delivered the opinion of the subject to all the duties, liabilities, and recourt in that case:

strictions imposed, by the Revised Statutes "It is clear to our minds that, as it stood of the United States and other acts having originally as part of § 57 [13 Stat. at L. reference to national banking associations, 116, chap. 106], after 1873, and as it stands and it shall continue to be in all respects now in the Revised Statutes, it operates as the identical association it was before the a prohibition upon all attachments against extension of its period of succession: Pronational banks under the authority of the vided, however, That the jurisdiction for state courts. ... It stands now, as it suits hereafter brought by or against any did originally, as the paramount law of the association established under any law proland, that attachments shall not issue from viding for national banking associations, exstate courts against national banks, and cept suits between them and the United writes into all state attachment laws an ex- States, or its officers and agents, shall be ception in favor of national banks. Since the same as, and not other than, the juristhe act of 1873 all the attachment laws of diction for suits by or against banks not the state must be read as if they contained organized under any law of the United a provision in express terms that they were States, which do or might do banking busi. not to apply to suits against a national ness where such national banking associabank.”

tions may be doing business when such suits Since the rendition of that decision it has may be begun. And all laws and parts of been generally followed as an authoritative laws of the United States inconsistent with construction of the statute holding that no this proviso be and the same are hereby attachment can issue from a state court be

repealed." fore judgment against a national bank or

There is nothing in this section enlarging its property. Freeman Mfg. Co. v. National the right of attachment against national Bank, 160 Mass. 398, 35 N. E. 865; Planters banks. Before the passage of this section Loan & Sav. Bank v. Berry, 91 Ga. 264, 18 circuit courts of the United States had S. E. 137; First Nat. Bank v. La Due, 39 Minn. 415, 40 N. W. 367; Safford v. First jurisdiction of suits against national banks Nat. Bank, 61 Vt. 373, 17 Atl. 748; Rosen

because they were corporations of Federal heim Real-Estate Co. v. Southern Nat. Bank origin. It was the purpose of this legisla(Tenn. Ch. App.), 46 S. W. 1026; Garner tion to deprive such banks of the right to v. Second Nat. Bank, 66 Fed. 369. It is invoke the jurisdiction of the Federal courts argued by the plaintiff in error that the de- simply upon the ground that they were cre. cision in the Mixter Case, 124 U. S. 721, 31 ated by and exercised their powers under L. ed. 567, 8 Sup. Ct. Rep. 718, should be the acts of Congress. Petrie v. Commercial limited to cases where the bank is insol- Nat. Bank, 142 U. S. 644, 35 L. ed. 1144, 12 vent; but the statement of facts in that case Sup. Ct. Rep. 325; Continental Nat. Bank v. shows that, at the time when the attach- Buford, 191 U. S. 119–123, 48 L. ed. 119, ment was issued, the bank was a going con- 120, 24 Sup. Ct. Rep. 54. It regulated the cern and entirely solvent so far as the rec- jurisdiction of the courts to entertain such ord discloses. The language of Chief Jus. actions against corporations of this charactice Waite, above quoted, is broad and ap- ter, and had nothing to do with the kind plicable to all conditions of national banks, and character of remedies which could be whether solvent or insolvent; and there is had against them. Certainly there is nothnothing in the state, which is likewise ing in the act repealing the prior provisions specific in its terms, giving the right of for- of § 5242, above quoted. eign attachment as against solvent national It is further insisted that, whether or not banks. We find nothing in the case of Earle the lien is absolute upon the property of the v. Pennsylvania, 178 U. S. 449, 44 L. ed. bank, jurisdiction is obtained of it by the 1146, 20 Sup. Ct. Rep. 915, which qualifies issuing of the attachment; but we cannot the decision announced in the Mister Case. take this view. There was no personal servWe therefore conclude that the Mixter Case ice in the court of original jurisdiction, and is applicable here, and the decision therein the attachment being without the power of announced meets with our approval.

the court by reason of the terms of the The answer to the second question in- Federal statute, no jurisdiction was volves a consideration of the act relating to quired in the case, either over the person or national banks of July 12, 1882, § 4 (22 property of the defendant. We see no error Stat. at L. 162, chap. 290, U. S. Comp. Stat. in the judgment of the Court of Appeals of 1901, p. 3458), which is as follows:

New York, and the same is affirmed.

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