Thomas v. President of the Farmers' Bank

| Md. | Mar 1, 1877

Alvey, J.,

delivered the opinion of the Court.

The Farmers’ Bank of Maryland recovered judgment in' the Circuit Court for St. Mary’s County in 1864, for $1250, against Henry W. Thomas and others. After the recovery of this judgment, the hank was converted into a national hanking association, under the provisions of the Act of Congress, entitled “ An Act to provide a national currency,” &c., approved June 3rd, 1864, (U. S. R.-St., sec. 5154, p. 1002,) with the name and title of “ The Farmers’ National Bank of Annapolis.” In addition to the authority for the conversion contained in the currency Act, to which we have referred, the Legislature of the State, hy the Act of 1865, ch. 144, expressly authorized the several hanking institutions incorporated hy the laws of the State to become hanking associations under the laws of the United States; and by the third section of this Act of 1865, provision is made for the surrender and extinction of the State charters of the hanks so converted, with a proviso, “that said hank, savings institution or savings hank, may continue to use its corporate name for the purpose of prosecuting and defending suits instituted hy or against it, and of enabling it to close its affairs, hut not for the purpose of continuing under the laws of this State, the business for which it was established,” etc. The conversion of the original plaintiff in the judgment from a State to a national hank, took place in June, 1865, after the passage, and in pursuance of the Act of the State authorizing the conversion, and in May, 1874, a scire facias was issued on the judgment against the original defendants, and certain terre-tenants of the lands which had belonged to the defendants at the time or since the rendition of the judgment; the plaintiff using its original corporate name, in which the judgment was recovered, instead of the "name acquired under the law of the United States.

To this scire facias, various defences were taken by two of the terre-tenants named in the writ; and among these defences, the plea of nut tiel record was interposed, and also the plea of nul tiel corporation, or that the corporation named as the plaintiff in the writ had been dissolved, and its charter surrendered and abandoned.

As to the plea of nul tiel record, we understand the appellants as making no question on that in this Court; and we therefore pass it over without further remark. But the question of the supposed disability of the appellee to sue by its former corporate name has been strongly urged by the appellants ; and as it is preliminary to all other questions that can arise in the case, it is proper that it. •should be first decided. The question is raised by demurrer to the rejoinder by the defendants to the replication to the defendant’s second plea.

1. It is laid down in 1 Bac. Abr., 33, as a settled principle in pleading, that if the existence of the person or corporation suing be denied, the plea is in bar; for if there be no such person or corporation, there is an end of the action ; and this principle has been sanctioned by this Court, in the case of the Bank of Metropolis vs. Orme, 3 Gill, 444. But the question here is, not whether the particular corporation recovering the judgment is still in existence, but whether there be competent authority delegated to the existing corporation, organized under the law of the United States, and by a name different from that derived from the State, to prosecute and defend suits in the name of the former corporation, that is to say, in the name of the corporation that recovered the original judgment?

By the fourth section of the Act of 1865, ch. 144, it is declared that whenever any bank in this State shall have surrendered its charter, and become an association for the purpose of banking under the laws of the United States, all its assets, real and personal, without other transfer, shall vest in and become the property of such association, and that such association shall be responsible for all the debts and liabilities of said bank, incurred prior to the surrender of its charter. From the terms of this Act, as well as those found in the Act of Congress, it is manifest that, by the act of conversion from a State into a national bank, all the assets of the former, including all judgments, were, by operation of law, transferred and assigned to tbe latter ; and such being the case, it is clear that the present national bank would have the right to sue as assignee. But it was supposed that there might be suits depending, liable to abate, or judgments recovered remaining to be executed or reviewed, and where it would be convenient and proper that the proceedings should be carried on to final termination without the necessity of a change in the name of the party upon the record ; and hence the proviso in the third section of the Act of 1865, ch. 144.

It is, however, contended by the appellants, that because the Act of Congress under which the bank was organized provides that each banking association shall have a proper corporate name, and expressly authorizes it to sue and be used, complain and defend, in any Court of law, or equity, as fully as a natural person could do, therefore the State law, authorizing the prosecution or defence in the name of the former corporation, is in conflict with the provisions of the Act of Congress, and consequently void: — That a national bank can only sue by its proper corporate name, and that it is not competent to the State to authorize it to sue by any other. To this general proposition we cannot assent. If this were an attempt to defeat the right of a national bank to sue in its proper corporate name, and to require it to sue in a name different from its own, as a condition upon which it would be allowed to maintain its suit, under State statute, in such case, a real conflict would arise, and the State statute would have to yield to the right conferred hy the United States law. But the Statute of 1865, ch. 144, so far as the right to prosecute is involved, simply confers a privilege, and it is optional with the national bank either to prosecute in its proper corporate name,, or in that allowed hy the State law. It is certainly competent to the State to regulate the mode and manner of prosecuting suits in her own Courts, and if such regulation does not not hinder or impair the rights and powers conferred upon the hank hy the laws of the Union, it is not perceived upon what principle the State law should he denied its force and efficacy. These national hanks, as Federal agencies, are only exempted from State legislation, so far as that legislation may interfere with, or impair their efficiency in performing the functions hy which they are designed to serve the government of the United States. Any other rule, says the Supreme Court of the United States, in the case of the National Bank vs. Comm., 9 Wall., 362, would convert a principle founded alone in the necessity of securing to the government of the United States the means of exercising its legitimate powers, into an unauthorized and unjustifiable invasion of the rights of the States. And in speaking of the dependence of the national hanks upon the laws of the particular States where they may he located, the Court, in the case referred to, declared that such hanks are subject to the laws of the State, and are governed in their daily course of business far more hy those laws than hy the laws of the United States. All their contracts are governed and construed hy State laws. Their acquisition and transfer of property, their right to collect their debts,. and their liability to be sued for debts, are all based on State law. It is only when the State law incapacitates the hanks from discharging their duties to the government that it becomes unconstitutional. We can perceive no possible conflict, therefore, between the Act of 1865, ch. 144, and the Act of Congress under which the national banks are organized. “The Farmers’ National Bank of Annapolis” is in reality the party plaintiff in the present suit, though prosecuting in the name of the “Farmers’ Bank of Maryland;” and if there be a judgment for the defendants, the substantial plaintiff will be liable for costs.

It follows that the judgment on the demurrer in favor of the plaintiff was properly entered.

2. The next question to be decided is, whether the jdaintiff in this cause became a party to the proceedings in the case of Elizabeth Thomas vs. Henry W. Thomas, on the equity side of the Circuit Court for St. Mary’s County? That suit was instituted to enforce a vendor’s lien upon the land of the defendant Henry W. Thomas, and under the decree there passed, the parties named as the terretenants in the present scire facias became purchasers of the land now sought to be made liable for the judgment recited in the writ.

In the case of the Farmers’ Bank of Maryland vs. Thomas, 31 Md., 246, a scire facias on the judgment recited in the present writ, the terre-téijants appeared, and, with other pleas, pleaded that the'lplaintiff had notice of the suit in equity, and after the decree, and the sale thereunder, became a party by appearing and filing its claim as creditor of the said Henry W.' Thomas,-upon the judgment recited in the scire facias, and sought payment thereof, out of the proceeds of sale, &c. \

That case was decided by this Court upon the pleadings alone ; and it was held, upon the assumption of the truth of the allegations of the plea, that the plaintiff would be bound by the proceedings in equity, and estopped from enforcing the lien of its judgment against the land, the proceeds of which it had sought to have applied to the satisfaction of the judgment. If the Court erred in rejecting the claim, the plaintiff’s remedy was by an appeal.

But in this case, the facts are disclosed in proof, and according to which the only evidence furnished by the record in the equity cause that the present plaintiff became a party thereto, is the single fact that there appears to have been filed on the 20th of September, 1867, nine short copies of judgments against Henry W. Thomas and others, in favor of divers persons, and among this number a short copy of the judgment recited in the present scire facias. It does not appear by whom or for what purpose this short copy of the judgment was filed. The clerk of the Court cannot say by whom he was directed to make the copy or file it. He is positive, however, that none of the officers of the bank gave him any direction in regard to it; and Mr. Harris, the local attorney of the bank, swears positively that he did not have the short copy filed. And in such state of case, it is too much to say, that there is binding and conclusive record evidence of the fact that the plaintiff in the scire facias became a party to the equity proceedings, and there sought payment of its judgment from the proceeds of the sale of the lands of the debtor.

In the ordinary case of a general creditors’ suit, or where there is a fund in Court, and there is an order requiring creditors to come in to assert their rights and to participate in the distribution, in such and the like gases, the simple fact of a party’s appearing and filing his claim in the cause, gives rise to the presumption that he intends to make himself a party to the record ; for otherwise he would not be in a position to take the benefit of the proceeding. And this is the established practice. Strike’s Case, 1 Bl., 85, 86. But where the suit is instituted not for the benefit of creditors generally, but for the enforcement of some special right, as for the foreclosure of a mortgage, or the sale of mortgaged premises, or the enforcement of a vendor’s lien, there, if a third person be interested in the subject-matter, and desires to come in and to be made a party, or seeks payment of a claim from the fund in controversy, he should, by some appropriate allegation, make known the nature and character of his right, and the ground upon which he seeks to intervene. And this is required not only that the Court may he advised of the nature of the right, hut to enable parties against whom it is asserted to meet and repel it, if it he unfounded or improper to he brought into the cause. Ellicott vs. Welch, 2 Bl., 242 ; Hammond vs. Hammond, 2 Bl., 306, 345. For the practice in such cases, see Gaither & Warfield vs. Welch, 3 Gill & J., 259 ; Hays vs. Miles, 9 Gill & J., 193 ; Balch vs. Zentmeyer, 11 Gill & John., 282.

If, however, as matter of fact, the plaintiff did file its judgment and seek payment thereof from the proceeds of sale of the land upon which its judgment was a lien, it would be estopped from enforcing its judgment against the land in the hands of the purchasers, notwithstanding its proceeding in making itself a party, lacked the form required by established practice. If formal proceedings had been adopted, or indeed any allegation or statement made of record, to show that the judgment had been filed by the plaintiff for the purpose of obtaining distribution from the proceeds of the land sold, the record itself would be conclusive evidence upon the subject. But as the record fails to furnish such conclusive evidence, the parol proof offered by the plaintiff was admissible, not for the purpose as supposed by the defendants, of contradicting the record, but for the purpose of preventing an improper conclusion being drawn from the fact that a short copy of the judgment was found filed in the equity case.

We think, therefore, there was no error in the ruling of the Court below as stated in the second bill of exception.

3.- The case was tried by a jury, and the verdict being for the plaintiff, there was a motion in arrest of judgment; and the particular ground assigned was, that there was no sufficient certainty appearing in the record as to the land sought to be made liable for the judgment.

The verdict rendered was simply for a certain sum of money due on the original judgment; there being no issue made in the pleading that required the jury to find of what particular lands the defendants were terre-tenants. The Court, however, upon overruling the motion in arrest, directed judgment to he entered upon the verdict for the amount found to he due, and costs, to he levied of certain lands which were of Henry W. Thomas, and which had been sold under a certain decree to the said Elizabeth Thomas, and then held by her as terre-tenant. In entering this judgment we think the Court was in error.

A scire facias against terre-tenants is either general or special. It is general when it issues against all the terretenants of the judgment debtor, without naming them in the writ, hut leaving them to he named in the sheriff’s return ; or it is special when the names of the terre-tenants are set forth in the writ. But the plaintiff, in the latter case, must he careful to name all the terre-tenants holding lands subject to the lien of the judgment, for if he omit to do so, those who are named may plead in abatement. Jeffreson vs. Morton, 2 Wms. Saund., 7, (4;) Proctor vs. Johnson, 2 Salk., 600.

In this case, the scire facias was issued in the special form, naming the terre-tenants to he warned, and commanded the sheriff to make known to the defendants in the judgment, and the terre-tenants named, being terre-tenants of all the lands of the defendants, etc. To this writ the sheriff simply returned, “ Made known to all except W. A. Lyon.”

The sheriff’s return to a scire facias against terre-tenants must always he of a special character. The proceeding, so far as the terre-tenants are concerned, is strictly in rem, and it is essential that the land to he affected by the judgment should he properly described. In 2 Tidd’s Prac., 1124, in speaking of the sheriff’s return to these writs,the author says that the return is either that there are no such tenants, or that he, the sheriff, has warned them to appear. “ In the latter case, if the writ he general, the sheriff should return that he has warned certain persons, being the tenants of all the lands in his bailiwick, describing them ; or the tenants of certain lands, and that there are no others: a return that he has warned the tenants of all the lands generally, or certain persons, tenants of lands in his bailiwick, being insufficient.” Whether the tenants he named in the writ or not, the particular lands of which they are tenants, remaining subject to the judgment lien, must he described in the sheriff’s return. To see with what particularity and fulness such returns are made, it is only necessary to refer to the precedent found in 2 Harris’ Ent., 174. If there he no question as to the seisin of the judgment debtor, or the holding by the alleged tenant, of the lands returned, the judgment is entered for whatever may he found due on the original judgment, to he levied and made of the particular lands mentioned and described in the return to the writ. For form of judgments in such cases, see 2 Harris’ Ent., 143, 258, and Jeffreson vs. Morton, 2 Wms. Saund., 19. And the fieri facias that issues upon the judgment, must give a sufficient description of the land to enable the sheriff to levy upon and seize it, to satisfy the judgment. 2 Harris’ Ent., 690.

In this case, as we have seen, the sheriff makes no mention of or reference to any land whatever in his return. There are three terre-tenants mentioned in the writ; hut of what particular lands these parties are tenants, — what quantity or where located, — -nowhere appears. In the defendant’s third plea, it is alleged that a part of the land of Henry W. Thomas was purchased by each of two of the parties named in the writ as tenants, under a decree for the enforcement of a vendor’s lien which was, as it is alleged, prior in date to the rendition of the judgment recited in the scire facias. But it is clear that no identity or sufficient description of the land can he derived from such allegation. It does not appear what particular part of the land each tenant purchased, or that any part of such land was subject to tbe lien of tbe judgment. The judgment rendered upon tbe verdict should be supported by tbe record. The Court could not resort to tbe evidence that had been offered to the jury, for tbe purpose of obtaining a description of the land against which to render the judgment. There .was no sufficient description of the lands appearing of record, either by the sheriff’s return or in the pleadings, to justify the entry of the judgment by the Court; and therefore the motion in arrest should have prevailed.

(Decided 1st March, 1877.)

Judgment reversed.