In re Manufacturers' National Bank.

bility clause, or obtain possession of the government bonds deposited to secure the circulation, or any surplus of those bonds after fully redeeming the circulation. Those assets are beyond the reach of this court or its officers, and can only be approached by the way of the Comptroller and his receiver. Then why should this court take cognizance of a case that it cannot administer?

Why not, rather, say that Congress has acted upon the subjectmatter of insolvent National banks and made specific provisions for administering their affairs, and inasmuch as the general bankrupt law has not expressly repealed these specific provisions, nor necessarily suspended them, the courts will presume it was the intention of Congress to except this class of corporations from the operation of the later statute? Such conclusion seems to me consistent with authority, and is, in fact, the only conclusion that will not lead to inextricable complication and conflict.

But it is urged that the Currency Act makes these corporations liable to all suits and actions which might be brought against natural persons, and that they can, therefore, be proceeded against in bankruptcy.

A sufficient answer to this might be found in the fact that when the Currency Act was passed there was no bankrupt law in force, and therefore the general language must be held subject to this limitation. But, I take it, there is no doubt that the legislative power which creates an artificial person or corporation can also prescribe what remedies shall be had against it, and that such remedies would be held to be exclusive, and that the provisions of the general bankrupt law would not be held to apply to corporations at all, but for the express terms of the act. Should they, then, bet held to apply to a class of corporations which have, as it seems, a bankrupt law of their own ingrained into their own constitution. and part of their organic law, by the same authority which enacted the bankrupt law? I think not. Nor does it seem to me that there is any necessary hardship in denying the remedies of the bankrupt law to the creditors of this corporation. There is no evidence that either this petitioning creditor, or any other creditor, has applied to the Comptroller to take possession and administer the assets. Additional force is also given to this consideration from the fact that in the very latest amendment to the Currency Act it is expressly provided that no attachment, injunction or execution shall issue against a bank until judgment is obtained.

Main v. Second National Bank of Chicago.

It is well known that in many of the States proceedings by attachment may be taken by a creditor in the first instance, and, as a matter of course, and in nearly or quite all the States, attachments can issue upon affidavits showing the existence of certain facts, while injunctions are almost universally issued before judgment or decree in equity cases when a case is made for one. And yet these corporations are, probably, for reasons of public policy, exempted from liability to all this class of summary proceedings. Here we have a restriction upon the powers of the bankrupt court, almost, if not wholly, incompatible with the jurisdiction. For of what use would it be to proceed in bankruptcy against a debtor, in a large number of cases, unless he could be enjoined and his property seized by process of the court? Before adjudication or judgment could be obtained, the property of the debtor might be wasted or spirited away, so that the adjudication would be barren of results.

I do not say that the prohibition to enjoin or attach property necessarily implies want of jurisdiction, but only that it goes far to show that it was never the intention of Congress to clothe a bankrupt court with jurisdiction as against these corporations.

I am, therefore, of the opinion that the rule to show cause should be denied, and the petition dismissed for want of jurisdiction.

MAIN, Assignee, v. SECOND NATIONAL BANK OF CHICAGO.

(6 Bissell, 26.)

Jurisdiction of Federal courts.

A National bank cannot be sued in the Federal court, outside of the district where it is located. Service on the cashier when found within another district, does not give jurisdiction.* Manufacturers' National Bank v. Baack, post.

The Practice Act of June 1, 1872, does not change this rule, nor enlarge the jurisdiction of the Federal courts.

(District Court, Western District of Wisconsin, March, 1874.)

64

*The act of Congress of March 3d, 1875, extends the jurisdiction of United States Circuit Courts to controversies between citizens of different States," and, therefore, in such courts it is no longer necessary that one of the parties be a citizen of the State where the suit is brought. Osgood v. Chicago, etc., R. R. Co., 6 Biss. 330.-REP.

Main v. Second National Bank of Chicago.

OTION to dismiss for want of jurisdiction, the defendant being

MOTI

a National bank, located and doing business in the city of Chicago, State of Illinois, and service having been had upon John P. McGregor, the cashier, who was found within the district.

Tenneys, Flower & Abercrombie, for the motion, cited Crocker v. The Marine National Bank of New York, 101 Mass. 240; Cook v. State National Bank of Boston, 50 Barb. 339.

H. S. Orton and W. F. Vilas, contra.

HOPKINS, J. In the argument filed in support of the motion it is claimed that a National bank cannot be sued in any court out of the judicial district where it is "located" or "established." I do not think the general banking law admits of such an interpretation. The eighth section of the act of June 3d, 1864 (13 U. S. Statutes at Large, 101), provides that such corporations "may sue and be sued in any court of law and equity as fully as natural persons.'

I do not think the provision in the fifty-seventh section of the act restrictive of this general authority, but that it was intended rather to enlarge the operations of the twenty-first section of the Judiciary Act of 1789 (1 U. S. Statutes at Large, 78), and to confer upon such organizations the right to sue and be sued in the Federal courts, in the district where located, by a citizen of the same district; and I fully concur with Judge BLATCHFORD'S views expressed in his opinion in the Manufacturers' National Bank of Chicago v. Baack, 8 Blatchford's C. C. Rep. 137,* that the banks organized under the general banking act of Congress are to be deemed residents or inhabitants of the State and district where they are located" and "established." The provisions of the act referred to by him are sufficient to warrant that conclusion, and if this were the only point I should have no hesitancy in overruling the motion.

66

But there is a question arising under the provision of the eleventh section of the Judiciary Act of 1789, which, as interpreted by numerous decisions of the Federal courts, seemed to me to constitute an insuperable objection to the plaintiff's right to prosecute this defendant in this court.

That section provides that "no civil suit shall be brought before

*Post.

Main v. Second National Bank of Chicago.

either of the courts (Circuit or District) against an inhabitant of the United States, by an original process, in any other district than whereof he is an inhabitant, or in which he shall be found at the time of serving the writ." That the defendant was not an "inhabitant" of this district when this suit was commenced, is too plain for discussion. The remaining question is, was the defendant found here at that time ?"

:

The defendant, as before stated, was "located" at Chicago; that was its habitation; that does not move around with the person of its officers; the corporation is not migratory. It could not of its own will, and without authority of law, change its location to this State. Therefore, I must hold that this court has no jurisdiction over this defendant; that it was not "found " here within the meaning of that statute. In the case of The Bank of Augusta v. Earle, 13 Peters, 519, the court says, in speaking of locality of corporation "It must dwell in the place of its creation; it cannot migrate to another sovereignty." This, it is true, was said of a State bank, but the same may with equal propriety be said of a National bank. They have a local habitation, an office, and place of business within a State or district as much as a State bank. Justice NELSON, in Day v. Newark India Rubber Manufacturing Co., 1 Blatchford, 628, and in Pomeroy v. New York & New Haven R. R. Co., 4 id. 120, examined this question very fully, and arrived at the conclusion in both cases, notwithstanding there was a statute of the State of New York authorizing service to be made upon officers of such foreign company within the State, which would give the State courts jurisdiction of the corporations, that the corporations were not "inhabitants" of the State, and were not "found" there because their officers and agents resided or came into that district; that the officers were not the corporations, and the corporations were not, therefore, found within the district.

This is a jurisdictional question, and "State laws can confer no authority on this court in the exercise of its jurisdiction, by the use of State process, to reach either person or property, which it could not reach within the meaning of the law creating it." Toland V. Sprague, 12 Pet. 328.

I do not think the Practice Act of June 1st, 1872 (17 U. S. Statutes at Large, 196), changes the rule. That relates to the practice and proceedings in suits against parties, who may be prosecuted in the Federal courts, but does not profess to enlarge their jurisdic

Irons v. The Manufacturers' National Bank.

tion or to extend it over persons or cases not before within the cognizance of the court. As said in Toland v. Sprague, 12 Peters, 330,"the acts of Congress adopting the State process, adopt the form and mode of service only so far as the persons are rightfully within the reach of such process, and did not intend to enlarge the sphere of the jurisdiction of the Circuit Courts."

I think the same construction should be given to the act of 1872 above mentioned, and so construed, it does not relieve the case of the question of the habitat of this defendant being without the district, and not therefore subject to the process of this court. The motion is therefore granted and this suit dismissed.

IRONS V. THE MANUFACTURERS' NATIONAL BANK.

(6 Bissell, 301.)

Insolvent National banks - When court may appoint a receiver.

In cases not within the special provisions of the National Banking Act, a National bank may be proceeded against in the same manner as any other debtor or corporation.*

A bill in equity by a judgment creditor of a National bank alleged that the judgment was for moneys deposited with the bank; that the bank had gone into voluntary liquidation: that it had withdrawn its bonds on deposit with the Treasurer of the United States; that the officers had fraudulently applied the funds of the bank to the payment of other persons than the complainant, and that there was no property subject to seizure on execution. Held, a proper case for the appointment of a receiver by the court.

(Circuit Court, Seventh Circuit, Northern District of Illinois.)

BILL

ILL in equity filed in the Circuit Court for the Northern District of Illinois. The opinion states the case.

Gardner & Schuyler, for complainant.

J. Hutchinson and Tenneys, Flower & Abercrombie, for defendant.

BLODGETT, J. This is a creditor's bill, setting forth in substance that the complainant was a depositor in the Manufacturers'

*See Wright v. Merchants' National Bank, post.