97 F. 309 | U.S. Circuit Court for the District of Western Missouri | 1899
This is an action at law to recover of the defendants, as stockholders in the First National Bank oí Sedalia, the sum of $2,500 and interest, as a second assessment imposed by the comptroller of the currency upon the stockholders of said bank. The petition alleges that the bank became insolvent, closed its doors, and ceased to do business on the 4th day of May, 1894, and that on the 10th day of May, 1894, the comptroller of the currency appointed a receiver for said bank, who duly qualified, and began winding up the affairs of said bank; that on the 13th day of April, 1895, said comptroller determined that it was necessary to enforce the individual liability of the stockholders, and to collect from them an assessment equal to 75 per cent, of the amount of their stock; and that, said assessment proving insufficient to satisfy the debts of the bank, the comptroller on the 7th day of February, 1899, made a further assessment on said stockholders of $25 upon every share of the .capital stock held by them. This and other suits against said stockholders for the collection of this additional assessment, so called, were instituted in this court on the 5th day of September, 1899. This opinion is to apply to all of these cases, in so far as the questions herein involved are common to all of them. The defendants answered, pleading three facts as a defense to the action: First. That the sum of $187,000, which was the sum the stockholders were called upon to contribute under the first assessment, together with the other assets of the bank which came into the hands of the receiver, was sufficient to pay all the debts and engagements of the bank. But, after the failure of the bank and the appointment of the receiver, the sum of $80,000 of the assets in the receiver’s hands was wrongfully and without the authority of law diverted by an investment in property in the state of California, and subsequently lost, and that the last amount, 25 per cent, of the stock of said bank owned by the defendants, is called for solely to make good the losses sustained by said wrongful diversion and investment of the funds as aforesaid, and to supply the deficiency caused by the loss arising from such investments. Second. The facts respecting the first assessment aforesaid are recited, and the answer further alleges that, to enforce the collection of said 75 per cent, of stock, the said receiver on the 25th day of July, 1895, instituted in this court an action against the defendants, and on the 19th day of October, 1896, the receiver recovered judgment against them therein for the sum of $7,500, the amount of said demand, which judgment the defendants satisfied. The answer then alleges that the liability of the defendants, as such shareholders, for the contracts, debts, and engagements of the bank, was concluded by the judgment aforesaid. Third. The statute of limitations of five years, under the state statute, is pleaded against the demand. On this answer the plaintiff has filed motion for judgment on the ground that the matters pleaded in the answer constitute no defense to the plaintiff’s action.
The first matter of defense pleaded rests, as is inferred from the brief of defendants’ counsel, upon the act of congress approved March 29, 1886 (24 Stat. 8). This act prescribes the course to be
The second question to be decided is whether or not, after the comptroller of the currency has directed the receiver to proceed to enforce the collection of the 75 per cent, of the stockholders, and the receiver has recovered judgment therein at law, and the judgment has been satisfied, the receiver can, under the direction of the comptroller of the currency, proceed to enforce by suit the further assessment of 25 per cent? Section 5151, Rev. St. U. S. 1878, declares that “the shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such association to the extent of the amount of their stock therein at the par value thereof in addition to the a,mount invested in such shares.” (Section 5234 of this statute authorizes the comptroller, upon the declared insolvency of such bank, to appoint a receiver therefor. “Such receiver, under the direction of the comptroller, shall take possession of the books, records and assets of every description of such association; collect all debts, dues and claims belonging to it. * * * And may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders.” Early
“If too much be collected, It is provided by statute that any surplus which may remain after satisfying all the demands against the association shall be paid over to the stockholders. It is better they should pay more than may prove to be needed, than that the evils of delay should be encountered. When contribution only is sought, all stockholders who can be reached by process of the court may be joined in the suit.”
The court further in this opinion said:
“Where the whole amount is sought to be recovered [by the receiver], the proceedings must be at law. Where a less amount is required, the proceedings may be in equity; and in such ease an interlocutory decree may be taken for the contribution, and the case may stand over for further action of the court —if such action should subsequently prove to be necessary — until the full amount of the liability is exhausted.”
There is nothing in this postulate, it seems to me, to enforce the conclusion that the court .meant to give countenance to the proposition that the comptroller might malte a provisional assessment, and, after enforcing its collection in an action at law, repeat the process until the 100 cents on the dollar of the shares should be reached. What did the court mean by saying that, if the demand be for the whole amount, the proceeding must be at law? It is inferable that the learned justice had in mind certain well-established principles of the common law applicable *to the enforcement of this statute. Among these principles the following summary is deducible from the best text writers on the construction of statutes: Where the statute directs that an act be done by a given officer, without pointing out the special manner of doing it, it is presumed that the method shall be according to the course of the common law; and, where a statute affirms or supplements or supersedes the rule of the common law, the legislative act “must be construed with reference to the common law”; and, in so far as it is reasonable, the interpreta
“There are no maxims of the law more firmly established, or of more value In the administration of justice, than the two which are designed to prevent repeated litigation between the same parties in regard to the same subject of controversy, namely, ‘Interest rcipublicae ut sit finis litium,’ and ‘Nomo debet bis vexari pro una ei eadam causa.’ ”
Accordingly Chief Justice Waite, in Baird v. U. S., 96 U. S. 432, said:
“It is well settled that where a party brings an action for a part only of a.n entire, indivisible demand, and recovers judgment, ho cannot subsequently maintain action for another part of the same demand. Thus, if there are several sums due under one contract, and suit is brought for a part only, a judgment in that suit would be a bar to another action for recovery of the residue.”
Judge Napton, in Transportation Co. v. Traube, 59 Mo. 362, said:
“It is now well settled that a judgment concludes the rights of the parties in respect to the cause of action stated in the pleadings on which it was ren.~*314 dered, whether It includes the whole or only part of the demand sued on, upon the ground that an entire claim, arising either upon a contract or wrong, cannot be split up into several actions. * * * And even where several claims, payable at different times, arise out of the same contract or transaction, separate actions may be brought as each liability accrues; but in this case it has been held that, if no action is brought until more than one is due, all that are due must be included in one action, and, if an action is brought when more than one is due, a recovery in that suit will be a bar to a second suit brought to recover the other claims that were due when the first was brought.”
The reason of this rule is very succinctly and clearly expressed by Judge Thompson in Laine v. Francis, 15 Mo. App. 108, in which it was held that, where a party took a decree charging a portion of the separate estate of a married woman with the payment of his promissory note, it was a bar to a second action to charge other of her separate estate for the payment of an unpaid balance thereon:
“It is the general rule that where a party has chosen his ground, and litigated the subject-matter of an action to its final conclusion, he has exhausted his remedy, except for the purpose of such supplemental proceedings as the statute law or principles of equity may give him for the enforcement of his judgment. * * * The rule rests upon two reasons. The one is technical, ' and the other substantial. The technical reason is that, where a party having a causé of action prosecutes it to judgment, his cause of action is thereafter merged in the judgment, and whatever further remedy he may have under the law must be founded on the judgment, and not on the original cause of action. The substantial reason is that the law, on the grounds of obvious justice and convenience, discountenances splitting of causes of action and multiplying of suits.”
Freem. Judgm. § 238, asserts that:
“It may be laid down as a general rule that each separate agreement or transaction will give rise to one entire and independent cause of action, and to but one.”
Bliss, Code PL § 118, expresses the rule thus:
“It is a rule that a cause of action, as one springing from a single contract, cannot be so split as to authorize more than one action; and the same rule would make it improper to so divide a. single cause of action by separate statements in one complaint as to show more than one cause of action.”
And the supreme court of this state, in Hoffmann v. Hoffmann’s Ex’r, 126 Mo. 497, 29 S. W. 606, said:
“Undoubtedly we think the liability of the trustee under the marriage contract would constitute but a single demand, though the items with which he is chargeable came into his hands at different times and from different sources.”
The court of appeals of New York, in Secor v. Sturgis, 16 N. Y. 548, states the distinction between demands which are single and entire and those which are seyeral to be that the former arise immediately out of one and the same contract, and the latter out of different contracts. This rule of law is so inflexible that it has been applied to a suit for the foreclosure of a mortgage; so that if the mortgage covers several tracts of land, and the mortgagee proceeds to foredose as to a portion of the land, it is a waiver of the lien as to the rest of the tract, and he cannot foreclose as to the residue in a second suit. Mascarel v. Raffour, 51 Cal. 242; Sedam v. Williams, 4 McLean, 51, Fed. Cas. No. 12,609. It has also been applied to the instance of the vendor having a lien for the purchase money on lands. If he enforces the lien as to a portion of the land, he
While the term “assessment” is employed conventionally to desig nate the- action taken by the comptroller looking to the enforce ineut of the liability of the stockholders, no such term as “assess ment” or “assessments” is found in the statute. The statute simply declares that the liability of the stockholder is to the extent of hiu stock, and in case of a deficiency of general assets the receiver “may enforce the individual liability of the stockholders.” The court:, in Kennedy v. Gibson, supra, pointed out the very path to be pursued in enforcing this liability, to avoid the risks of either prema turely fixing the amount to be collected at law from the stockholders, as also of improviden+ly waiting too long in calling upon the stockholders to respond, as also how to avoid hardships upon the stockholders by exacting from them more than might be necessary to meet the demands of the creditors. Tf he sues at law, it is for the whole amount to be collected under the stockholders’ contract; or he may proceed in equity against all of the stockholders, to avoid a multiplicity of suits, for contribution; “and in such case an interlocutory decree may be taken for contribution, and the case may stand over for further action of the court — if such action should subsequently prove to be necessary — until the full amount of the liability is exhausted.”
It is suggested that the supreme court, in the later case of U. S. v. Knox, 102 U. S. 422, took it for granted that the right of successive assessments by the comptroller, and consequently the right of separate actions for their enforcement, exist, from the following paragraph in the opinion:
“Although assessments made by the comptroller under the circumstances of the first assessment in this case, and all other assessments, successive or other*316 wise, not exceeding the par value of all the stock of the hank, are conclusive upon the stockholders, yet if he were to attempt to enforce one made, clearly and palpably, contrary to the views we have expressed, it cannot be doubted that a court of equity, if its aid were invoked, would promptly restrain him by injunction.”
The language of courts in the course of an opinion must be “re strained unto the fitness of the matter.” The question, and the only question, under consideration in that case, was whether or not, after the receiver, under the direction of the comptroller, had proceeded to enforce the assessment against the stockholders, which, if paid by all the stockholders, would have been sufficient to liquidate the debts of the bank, he could proceed against the stockholders to contribute their quota on the balance of the amount of their stock to make up the deficit occasioned by the failure to collect from the other stockholders. It is to be observed that the original proceeding in that cause was in equity, to enforce the demand against all the stockholders, in which an interlocutory decree might have been taken, and the cause continued subject to supplemental decree or further proceeding, according to the course suggested in Kennedy v. Gibson, supra. The question decided was that the additional assessment could not be made, because the liability of the stockholders is several, and not one for another. Mr. Justice Swayne wrote the opinion in both of said cases, and, in employing the language in the paragraph above quoted, he did not have in mind the case here at bar, but the instance of “assessments made by the comptroller under the circumstances of the first assessments in this case, and all other assessments, successive.or otherwise”; that is, under-circumstances where, in conformity to what had been suggested in the Kennedy Case, the receiver proceeded in equity, under whose flexible rules the court could enter an interlocutory decree, and continue the case for additional orders in the controversy as the equities of the case might require; so that if the receiver sought in the name of equity to do inequity, the court could restrain him, as was done, by denying the writ of mandamus.
A' further potential consideration enforcing the conclusion reached on this question is the fact, attested by the report of the present comptroller of the currency for 1898 (volume 1, p. 86), that, for 33 years after the adoption of the national banking act, by all of his predecessors in office this statute had received the construction, in practice, that but one assessment was enforceable, “notwithstanding further developments in the administration of a trust may demonstrate error in the assessment.” In other words, during all that period the officers of the government intrusted with the execution of this statute proceeded upon the construction that, after they had enforced the per cent, ascertained to be necessary, they had exhausted their power under the statute, and never directed a further action against the stockholders. It is one of the fundamental rule» in the interpretation of a statute to ascertain what has been its contemporary construction; the sense of the legal profession in regard to it; the course and usages of business thereunder. “A contemporaneous is generally the best construction of a statute. It gives
The further question, not less worthy of consideration, is, did not the comptroller, in ordering one assessment, and the enforcement thereof, exhaust his power and jurisdiction in the case? “When the law, in words or by implication, commits to any officer the duty of looking into the facts, and acting upon them, not in a way which it specifically directs, but after a discretion in its nature judicial, the function is termed ‘quasi judical.’ ” Bish. hToncont. Law, § 786, So the acts of assessors in determining what property is liable to, and what is ex?mpt from, taxation, and the value of the taxable property, “and otherwise in making up the assessment roll, are essentially judicial in character, and the assessment roll, when finally completed by the supervisors, stands as a judgment.” Throop, Pub. Off. § 541; Barhyte v. Shepherd, 35 N. Y. 238; Weaver v. Deven
“Their powers were at an end. These were quasi judicial. The adoption of a specific plan was hut another name for the rendition of a judgment by a court of limited jurisdiction. The judicial power is limited to a single act, and has become functus officio by its performance.”
See, also, People v. Board of Sup’rs of Schenectady Co., 35 Barb. 408.
_ It is on this ground that the action of the comptroller, under the national bank act, in determining the necessity of an assessment, and directing the proceeding against the stockholders, is conclusive, as he acts quasi judicially. His power in this respect is wholly derivative. It comes' from the statute. Why, then, is not this judicial determination “limited to the single act,” and why does it not “become functus officio by its performance” in making the first assessment? Is he authorized by this statute to either recall and revise his determination, or to repeat the exercise of power by supplemental judicial determinations, especially where the first judgment has been executed?
The statute of limitations: It is to be conceded to the defendants that the period of limitation fixed by the statute of the state of Missouri is applicable to this case. Butler v. Poole (C. C.) 44 Fed. 586; Thompson v. Insurance Co. (C. C.) 76 Fed. 892; Campbell v. City of Haverhill, 155 U. S. 610, 15 Sup. Ct. 217. It is the established rule that the statute of limitations begins to run the instant the cause of action arises, and there is a person competent to institute suit, or as soon as the party has the right to apply to the proper tribunal for redress. Tapley v. McPike, 50 Mo. 589. The contention of the learned counsel for defendants is that the liability of the stockholder is complete, and subject to proceedings for its enforcement, when the banking association becomes insolvent and suspends business, that the comptroller merely directs when and to what extent the liability shall be enforced, and that the mere fact of his having to make investigation of the condition of the affairs of the bank, to enable him to determine whether resort shall be had to the stockholders, does not suspend the running of the statute,— it merely postpones the proceeding. In support of this contention, reference is made to the decision of the supreme court of Ohio in King v. Armstrong (Ohio) 34 N. E. 163, which is, it must be conceded, a very able presentation of this view of the law. The supreme court, in Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. 739, Glenn v. Liggett, 135 U. S. 533, 10 Sup. Ct. 867, and Glenn v. Mar-
