43 F. 771 | U.S. Circuit Court for the District of Eastern Missouri | 1890
We have heretofore held in this case that the cause of action did not abate with the death of the director, but survives against his executrix. Since then the petition has been amended, and a demurrer, and also motions to compel an election as between causes of action, have been filed and argued, which present some questions not explicitly decided on the former hearing.
First in order of importance is the demurrer, and it presents two propositions in the alternative.
It is said, in the first place, that the remedy under section 5239 is statutory, in the sense that, before a recovery can be had against a bank director under that section, on account of an excessive loan, it must be averred and proven that the charter of the bank has been forfeited in a proceeding taken by the comptroller, because of the excessive loan in question, and that, inasmuch as the Elliottville Mill’s loan was not counted upon in the comptroller’s proceeding, there can be no recovery of the damage sustained by that loan. On the hearing of the demurrer, we expressed the opinion, and further consideration of the subject has strengthened the conviction, that the right to recover, under section 5239, of a bank director the damages sustained in consequence of an excessive loan under section 5200, is in no wise affected by the fact that the comptroller has or has not procured a forfeiture of the charter. According to our view of section 5239, two results, in no respect dependent upon each other, may follow the making of an excessive loan; that is to say, the comptroller may, if-he thinks proper, proceed to have the charter revoked, alleging the excessive loan as a violation of law; but, whether he does so or not, a director of the bank, -who knowingly participates in or assents to the loan, may be compelled to make good whatever damage result? to the bank from making the same. This seems to us to be the obvious meaning of the law.
Failing on the proposition last mentioned, that the action is statutory in the sense above indicated, counsel for the executrix next insists that, if the right of action is not statutory in that sense, then the remedy for the alleged wrongful acts is in equity, and not at law, and that the demurrer should be sustained for that reason. This we regard as the most important point presented for consideration. ■
Under statutes imposing a liability on directors or stockholders of cor
Our conclusion is that, for the purpose of determining whether an action at law will lie in the case at bar, consideration ought to be given chiefly to the question whether the remedy at law, as compared with ' the remedy in'equity, is. as convenient and adequate, and not more burdensome to the party proceeded against. The suit before us is to recover whatever damages the Fifth National Bank may have sustained in consequence of excessive loans knowingly made or assented to by the defendant’s testator, while serving in the capacity of director. The suit is by a receiver duly appointed, in whom are now vested all claims of the bank; and, as whatever injury resulted from making the excessive loans in questi&n was a damage primarily done to, and recoverable by, the bank, it is not apparent that any stockholder or creditor of the institution can maintain a suit against the executrix for the alleged excessive loans either during the pendency or after the termination of the present action. There is no necessity, therefore, to resort to equity to avoid a multiplicity of suits.
Furthermore, the issues to be tried appear to be such as can be conveniently disposed of by a court of law. They are simply whether certain specified loans, made to four different parties, were made at a time when the several parties were already indebted to the bank in a sum equal to one-tenth of its capital actually paid in, and whether such loans were knowingly made or assented to by the testator, and what portion of the moneys so loaned were lost. We can foresee no inherent difficulty in trying all of these issues intelligently and fairly in a court of law. The case appears to be one in which there is no necessity for invoking the aid of a court of chancery, either because of the nature of the issues involved, or to avoid a multiplicity of actions. The demurrer will be overruled, in accordance with these views.
The several motions to compel an election between causes of action raise merely a question of pleading. In support of the motions, the contention is that plaintiff should be compelled to declare in a separate count for each excessive loan made to the several parties named in the petition, on the ground that each loan constitutes an independent cause of action. On the other hand, it is contended that plaintiff is entitled to state the aggregate amount of the excessive loans made to each party, and the damage resulting therefrom in each case, accompanying each allegation with an exhibit, showing the dates and amounts of the several loans that go to make up the aggregate sum stated in the petition.
We think the latter view is supported by the better reasons. The rule contended for by the executrix would render the complaint very prolix, without securing even to her any substantial advantage. The exhibits attached to the petition fully advise the defendant of the dates and amounts-of the several unlawful loans, and, in any event, the burden will be on the plaintiff to show that the several loans so specified were
Upon the whole, we conclude that the motions to compel an election should be overruled, and it is so ordered.
Miller, Justice. I fully concur in the foregoing opinion.