quently presented and denied. The court reasoned that the property of the corporation is intrusted to the receiver, by the authority of the law, for the purpose of distribution among the creditors of the corporation, and not among the creditors of those creditors; and that, for the court to undertake to determine, as incidental to the administration of the estate of the corporation, the validity and equity of the claims of every creditor of a creditor of the corporation, would unreasonably embarrass and delay the distribution of the estate, and the settlement of the accounts of the receivers. It is believed that these objections are not sufficient to warrant the establishment of a rule of exclusion which practically cuts off all remedy of the creditor of the creditor; and there are certainly many cases in which they would have no application at all.

1 Com. v. Hide & Leather Ins. Co., 119 Mass. 155. In a case involving the question of priorities in the distribution of the assets of an insolvent life insurance company in the hands of a receiver, a number of claims were set up for preferences which were severally disallowed, and the court held that the holders of claims for death losses, and the assignees of such claims who stood on the same footing as the original holders, were entitled to be paid first, and that the balance remaining in the hands of the receiver was to be divided pro rata among all the other creditors. One who had subscribed for stock on the formation of the company and had paid his subscription, who never had received any stock, but had allowed his money to remain for several years in the hands of the company, became thereby a general creditor of the com

pany, and was not entitled to any preference. Those who advanced money to pay for losses incurred on particular policies, and who appeared on the books of the company as credited with so much money to be applied toward the payment of losses incurred on the particular policies, did not, for that reason, stand on a footing different from that of general creditors, and were hence not to be preferred. Judgment creditors were not to be preferred over general creditors, for the reason that they had acquired no lien upon the assets of the company in the hands of the receiver by the recovery of their judgments. But it was not held that, if the lien of a judgment had attached to such assets before it went into the hands of a receiver, the judgment would not be preferred. Kitchen . Conklin, 51 How. Pr. (N. Y.) 308.

5769

CHAPTER CLXXV.

RECEIVERS OF NATIONAL BANKS.
SECTION

7262. Power of courts to appoint re-
ceivers of national banks.

7263. Cases in which courts will ap

7300. The question how viewed by 7316. Enjoining proceedings by Comp

other courts.

7301. The same subject continued.

7302. Continued.

7303. Waiver of right of set-off.

7304. Voluntary liquidation of national banks.

7305. When stockholders may elect agent to wind up.

troller and receiver.

7317. Actions against national banks after commencement of liquidation.

7318. Defenses available to the receiver against actions.

7319. State courts no control over receiver.

7306. Receiver authorized to purchase 7320. Jurisdiction of State courts of

§ 7262. Power of Courts to Appoint Receivers of National Banks.-The act of Congress known as the National Banking Act provides for the winding up of national banks under the direction of the Comptroller of the Currency, who appoints a receiver for that purpose. The view has been frequently taken by the courts that these provisions are not exclusive, and were not intended to put it out of the power of the courts to appoint receivers upon a judgment creditor's bill, or even upon a bill filed by a stockholder; and this jurisdiction has been exercised by State courts. A creditor's

1 Rev. Stat. U. S., § 5226, et seq. • Wright v. Merchants' Bank, 1 Flipp. (U.S.) 568; s. c. 1 Nat. Bank Cas. 321; Irons v. Manufacturers' Nat. Bank, 6 Biss. (U. S.) 301; 8. c. 1 Nat. Bank Cas. 303.

3

Elwood v. First Nat. Bank, 41 Kan. 475; 8. c. 21 Pac. Rep. 673; Merchants' &c. Bank v. Trustees, 63 Ga. 549.

Elwood v. First Nat. Bank, supra.

bill will lie, in the Circuit Court of the United States, for the appointment of a receiver for such a bank. It has been held that, until a Federal court acts, neither law nor comity requires a State court to suspend its equitable jurisdiction to reach the assets of such a bank and to enforce its own final process against the same. The pendency of a bill brought by a stockholder in a Federal court to which the judgment creditor has not been made a party, will not therefore oust the State court of its power to appoint a receiver, nor make the exercise of such power a violation of comity.

§ 7263. Cases in Which Courts will Appoint Receivers. Coming now to cases in which the courts will appoint a receiver of a national bank, we find that it was held proper to appoint a receiver, under a bill in equity by a judgment creditor, which alleged that his judgment was for moneys deposited with the bank; that the bank had gone into voluntary liquidation; that it had withdrawn its bonds which had been deposited with the Treasurer of the United States; that its officers had fraudulently applied the funds of the bank to the payment of persons other than the complainant; and that there was no property of the bank subject to seizure on execution. In another such case the bill set forth, in substance, that the complainant had recently obtained a judgment for $10,000 against the defendant, a national bank, in a State court; that the complainant was unable to obtain payment of the same; that the bank had closed its doors, discontinued its business, and was insolvent; that, in contemplation of insolvency, it had transferred all its assets to one creditor, a correspondent bank in the city of New York, which was also a large stockholder in the defendant national bank; that

1 Wright v. Merchants' Nat. Bank, 1 Flipp. (U. S.) 568; 3 Cent. L. J. 351; 1 Nat. Bank Cas. 321.

Merchants' &c. Nat. Bank v. Trustees, 63 Ga. 549; s. c. 2 Nat. Bank Cas. 220. The United States District Court, as a court of bankruptcy, under the late bankruptcy act,

had no jurisdiction to wind up an insolvent national bank. Re Manufacturers' Nat. Bank, 5 Biss. (U. S.) 499; s. c. 1 Nat. Bank Cas. 192.

• Irons v. Manufacturers' Nat. Bank, 6 Biss. (U. S.) 301; s. c. 1 Nat. Bank Cas. 203.

this preferred creditor was appropriating all the assets to the satisfaction of its own debt; and that nothing would be left for the plaintiff, and that nothing could then be collected by legal process. It was held that this bill exhibited a proper case for the appointment of a receiver, subject possibly to the appointment being superseded by the action of the Comptroller of the Currency. Where a judgment had been rendered in a State court against a national bank, and an execution had been returned nulla bona within the county where the bank was located, and the bank had ceased to discharge its functions as a fiscal agent of the United States, and was disposing of its assets among its stockholders, it was held that a State court would, on a bill filed by the judgment creditor, grant the usual injunction and appoint a receiver.'

§ 7264. Appointment of Receiver by Comptroller of the Currency under Revised Statutes of the United States. - Until the act of 1876, quoted in the next section, this subject was governed by the following sections of the Revised Statutes of the United States: "Whenever any national banking association fails to redeem, in the lawful money of the United States, any of its circulating notes, upon demand of payment duly made during the usual hours of business, at the office of such association, or at its designated place of redemption, the holder may cause the same to be protested, in one package, by a notary public, unless the president or cashier of the association whose notes are presented for payment, or the president or cashier of the association at the place at which they are redeemable, offers to waive demand and notice of the protest, and, in pursuance of such offer, makes, signs, and delivers to the party making such demand, an admission in writing, stating the time of the demand, the amount demanded, and the fact of the non-payment thereof. The notary public, on making such protest, or upon receiving such admission, shall forthwith forward such admission or notice of protest to the

1 Wright v. Nat. Bank, 1 Flip. (U.S.) 583; 8. c. 3 Cent. L. J. 351; 1 Nat. Bank Cas. 321.

Merchants' &c. Bank v. Trustees, 63 Ga. 549; 8. c. 2 Nat. Bank Cas. 220.