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Vol. II.)

FIRST NATIONAL BANK OF SELMA v. COLBY.

(No. 6.

upon some portion of the face or front thereof, or on the face of the substance on which the same shall be mounted, the following words : Entered according to act of Congress, in the year. ... by A B, in the office of the Librarian of Congress, at Washington.'” But the difficulty in adopting the complainant's view is, that a cause of action must exist before an action can be maintained ; and there can be no cause of action till a right exists, and that right has been violated.

Under sections 4952 and 4986 the plaintiff can have no copyright till he has performed the prescribed conditions ; and until he has acquired his copyright, there can be no violation of that right at all which can afford a ground of action. Instead of section 4962 being a limitation of the acts to be performed, or alleged in order to entitle a party to maintain an action, it imposes an additional duty upon him as a prerequisite to its maintenance. He must first acquire a copyright under the other provisions of the act, and then, in order to enforce his right against infringers, he must also give notice of his right by the means prescribed by section 4962, so that other parties may not copy his work in ignorance of his rights. This seems to be the object of the provision. An analogous provision, and for a similar purpose, copied from previous acts, is found in section 4900, relating to patent rights.

The complainant's claim can derive no argumentative support against the express negative provisions of the statute already cited and discussed, from section 4960, providing for a penalty to be recovered from the author on failure to perform all the conditions prescribed. This seems to be intended to furnish additional guarantees against attempts of parties to avail themselves of the benefits of a copyright without first performing all the conditions prescribed in order to confer the right.

The demurrer must be sustained, and it is so ordered, with leave to amend on the usual terms.

nafits of a copnfer the rigdered, wit

SUPREME COURT OF THE UNITED STATES.

[OCTOBER, 1874.]

NATIONAL BANK. — INSOLVENCY. — ATTACHMENT. — RECEIVER. — EF

FECT OF DECREE DISSOLVING CORPORATION UPON PENDING SUIT.

FIRST NATIONAL BANK OF SELMA v. COLBY.

The property of a national bank organized under the Act of Congress of June 3, 1864, Vol. II.)

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. A suit against a national bank to enforce the collection of a demand is abated by a de

cree 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.

[No. 6.

FIRST NATIONAL BANK OF SELMA v. COLBY.

MR. Juwestions are bl a national at Larges

rights is abated against a nati the bank sis demand, me inso

one the act I be cailure

MR. JUSTICE FIELD delivered the opinion of the court.

Two questions are presented in this case for our determination : 1st, whether the property of a national bank organized under the Act of Congress of June 3, 1864 (13 Stat. at Large 99), attached at the suit of an individual creditor, after the bank has become insolvent, can be subjected to sale for the payment of his demand, against the claim for the property by a receiver of the bank subsequently appointed ; and 2d, whether a suit against a national bank to enforce the collection of a demand is abated by a decree dissolving the corporation and forfeiting its rights and franchises.

To the first question the act of Congress furnishes an answer in the negative; to the second, the general law respecting corporations gives one in the affirmative.

The act of Congress prescribes the conditions upon which national banks shall be created, the powers they shall possess, and the consequences of their failure to meet their obligations. All persons dealing with these institutions can only acquire and enforce rights against them under the limitations there designated.

The object of the act, as its title imports, was to create a national currency secured by a pledge of the bonds of the United States. And to that end it requires security in government bonds for all notes issued; and in case any bank fails to redeem its notes on demand, it provides for their payment on presentation at the treasury of the United States.

To make good any deficiency which may exist in the proceeds of the bonds to meet the amount expended in paying the notes of a bank, the act declares that “the United States shall have a first and paramount lien upon all the assets” of the association. Whatever disposition, therefore, may be made of the property of an insolvent bank, the lien of the United States thereon must exist until the government is fully reimbursed.

As to the general creditors, the act evidently intends to secure equality among them in the division of the proceeds of the property of the bank. The 50th section provides for the appointment of a receiver of an insolvent bank, who shall take possession of its assets, collect its debts, and upon the order of a court of record sell its real and personal property, and pay over the money to the treasury of the United States, subject to the order of the comptroller of the currency ; that the comptroller shall then advertise for creditors to present their claims against the association, and after making provision for refunding to the United States any deficiency in redeeming its notes, shall make a ratable dividend of the money on all claims proved to his satisfaction or adjudicated in a court of competent jurisdiction.

The 52d section, further to secure this equality, declares that all transfers by an insolvent bank of its property of every kind, and all payments of money made after the commission of an act of insolvency, or in contemplation thereof, with a view to prevent the application of its assets in the manner prescribed by the act, or “ with the view to the preference of one creditor over another, except in the payment of its circulating notes, shall be utterly null and void.”

There is in these provisions a clear manifestation of a design on the part of Congress : 1st, to secure the government for the payment of the

Vol. II.)

First NationAL BANK OF SELMA v. COLBY.

[No. 6.

notes, not only by requiring in advance of their issue a deposit of bonds of the United States, but by giving to the government a first lien for any deficiency that may arise on all the assets subsequently acquired by the insolvent bank; and, 2d, to secure the assets of the bank for ratable distribution among its general creditors.

This design would be defeated if a preference in the application of the assets could be obtained by adversary proceedings. The priority of the United States and the ratable distribution among the general creditors, so studiously provided for in the act, would in that case be lost. As justly observed by counsel, if preference was left to the race of diligence, creditors living remote from the location of the bank would always be distanced in the contest, and the equality promised to them by the act would be a mere mockery.

In the present case the record shows that on the 15th of April, 1867, a treasury draft of the United States was presented to the bank and its payment was refused ; that on the morning of the following day, the 16th, the bank did not open for business ; that during that day possession was taken of the bank — by which we suppose is meant its place of business, its property and effects, and its books and papers — by the military authorities of the United States, under instructions from the secretary of the treasury; that on the 17th its president absconded ; that an examination had that day into its affairs showed a deficiency in its cash account of two hundred thousand dollars ; and that, on the 30th of April, a receiver of its effects was appointed by the comptroller of the currency. Subsequently, on the 1st of June, 1867, on an information filed by the comptroller, a decree was entered in the district court of the United States forfeiting all its rights, franchises, and privileges, and adjudging its dissolution.

Whilst the bank was in possession of the military authorities, namely, on the 17th of April, 1867, the plaintiff sued out an attachment 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 gristmill. 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.

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 we have 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. This instruction the court refused, and the jury gave a verdict for the plaintiff for the full amount claimed.

It is too late for counsel to question in this court the right of the re

$4,800. which its realet Mayed an in of deporch, 189ed, witle statele bank oved

imed., and i) must ence, the

Vol. II.)

FIRST NATIONAL BANK OF SELMA v. COLBY.

[No. 6.

ceiver to appear in the state court and move the discharge of the attachment and the abatement of the suit, or to contest the case at the trial. Whatever informality may have existed in the proceeding, it was waived by the silence of the parties. Objections in matters of form to modes of procedure in the court below cannot be argued here for the first time.

But independently of this consideration we are of opinion that it was a proper proceeding on the part of the receiver to apply to the court below to discharge the attachment, on proof of the facts presented by him, and the production of his appointment and the decree dissolving the association. Invested with the rights of the bank to the possession of the property by his appointment, it was his duty to take the necessary steps to remove the levy. That levy was void as against his claim to the property; and, in our judgment, it was error for the court to refuse to discharge it on his application.

But, in addition to this, the suit had abated by the decree of the district court of the United States forfeiting the rights, privileges, and franchises of the corporation, and adjudging its dissolution. The act of Congress provides for such forfeiture whenever the directors themselves violate, or knowingly permit any officers, servants, or agents of the association to violate, any of the provisions of the act. The information filed against the bank by the comptroller of the currency disclosed several gross violations of the act by the directors ; and the justice and validity of the decree were not questioned in the state court. With the forfeiture of its rights, privileges, and franchises the corporation was necessarily dissolved, as the decrees adjudged. Its existence as a legal entity was thereupon ended ; it was then a defunct institution, and judgment could no more be rendered against it in a suit previously commenced than judgment could be rendered against a dead man dying pendente lite. This is the rule with respect to all corporations whose chartered existence has come to an end, either by lapse of time or decree of forfeiture, unless, by statute, pending suits be allowed to proceed to judgment notwithstanding such dissolution. The prolongation of the corporate life for this specific purpose as much requires special legislative enactment as does the original creation of the corporation. No such enactment is found in the act of Congress authorizing the creation of national banks and prescribing the powers, nor is there any provision elsewhere, that we are aware of, which would prevent the dissolution of a corporation from working the abatement of a suit pending against it at the time.

“ I cannot distinguish,” says Story, in Greeley v. Smith, 3 Story, 658, “ between the case of a corporation and the case of a private person dying pendente lite. In the latter case the suit is abated at law, unless it is capable of being revived by the enactment of some statute, as is the case as to suits pending in the courts of the United States, when, if the right of action survives, the personal representative of the deceased party may appear and prosecute or defend the suit. No such provision exists as to corporations, nor, indeed, could exist without reviving the corporation pro hac vice, and, therefore, any suit pending against it at its death abates by mere operation of law.” See also Farmers' of Mechanics Bank v. Settle, 8 Watts & Serg. 207, and Mansma v. The Potomac Co. 8 Peters, 281.

Some criticism is made upon the fact that the decree of dissolution was

Vol. II.]

UNDERWOOD v. THE PEOPLE.

(No. 6.

entered on the first of June, when the summons cited the directors before the court on a different day. It is a sufficient answer to this criticism that no objection of the kind was made to the entry of the decree in the court below, nor was its validity questioned. The presumption is, in the absence of such objection, that an answer existed which would have been made had the objection been taken. The decree was admitted in evidence, and the decision of the court was placed on the ground that the provisions of the act of Congress did not interfere with proceedings by attachment in the state court, nor affect the liability of an insolvent corporation to be thus sued, and " that matter of abatement could not be given in evidence on an issue upon the merits, a default, or a failure to plead," the court apparently considering the abatement of the attachment, and not the abatement of the suit, as the object sought by the production of the decree.

The judgment of the state court must be reversed, and the cause remanded, with directions to discharge the attachment levied on the property of the bank.

Ordered accordingly.

SUPREME COURT OF MICHIGAN.

[APRIL, 1875.]

INVALIDITY OF STATUTE PROVIDING FOR CONFINEMENT OF PERSONS

ACQUITTED OF MURDER ON GROUND OF INSANITY.

UNDERWOOD v. THE PEOPLE.

The Act 168 of Michigan of 1873, providing for the confinement in the insane hospital at the state prison of such persons as are acquitted of murder on the ground of insanity, does not furnish adequate means for its enforcement, and is unconstitutional as contemplating inquisitorial and ex parte proceedings which might result in restraining

personal liberty without due process of law. A jury in a criminal case may pass specially, if it choose, upon the sanity of the accused, but cannot be compelled to do more than render a general verdict on the merits, that is, " guilty” or “not guilty."

CAMPBELL, J. Underwood brings error upon a judgment of the recorder's court of Detroit, whereby he was committed to the state prison insane hospital as a person charged with murder and acquitted on the ground of insanity. He claims that the statute is invalid.

The statute in question, being Act number 168 of the laws of 1873, entitled an “ Act to provide for the custody and safe-keeping of persons who are tried for murder and other high crimes, and are acquitted by reason of insanity,” provides in substance that when the defence of insanity is set up in the cases provided for, the jury shall find specially whether the respondent was insane when the alleged crime was committed, and if acquitted on that ground the verdict shall so declare. In such case the court is to sentence him to confinement in the insane hospital of the state prison, until discharged in the manner pointed out. This

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