may sue and be sued by its corporate name, for the purpose of winding up its business.1

§ 7269. Effect of Judgments against National Banks in the Hands of Receivers. — If judgment is rendered against a national bank in the hands of a receiver, execution cannot issue upon the judgment; but, under the operation of the statute,2 it is to be paid by the Comptroller from the assets in his hands, ratably with other claims. For this purpose the judgment should be certified by the receiver to the Comptroller. Where a judgment is rendered against a receiver of a national bank in a Circuit Court of the United States, upon a demand against the bank, "it requires neither argument nor authorities to show" that it is competent for the court to make an order upon the Comptroller of the Currency to provide for its payment.

§ 7270. Right of Action of Receiver in Federal Courts. The appointment of a receiver of a national bank, made by the Comptroller of the Currency as provided by the National Bank Act, is presumed to be made with the concurrence or approval of the Secretary of the Treasury, and is, therefore, in theory, made by the head of a department, within the meaning of section 2 of article II. of the constitution of the United States. Such a receiver is therefore an agent or officer of the United States, and an action brought by him in his representative capacity is an action at common law, brought by an officer of the United States, under the authority of an

act of Congress, of which action the Circuit Court of the United States has concurrent jurisdiction with the District Court, without regard to the amount sued for. A receiver of a national bank might, accordingly, sue either in the Circuit or District Court of the United States within the district in which the national bank was situated. The law stood in this way until it was restrained by an act of Congress passed July 12, 1882, by which it was provided "that the jurisdiction for suits hereafter brought by or against any association established under any law providing for national banking associations, except suits between them and the United States, or its officers and agents, shall be the same as, and not other than, the jurisdiction for suits by or against banks not organized under any law of the United States, which do or might do banking business where such national banking association may be doing business when such suits may be begun; and all laws and parts of laws of the United States inconsistent with this proviso be, and the same are hereby, repealed." The purpose of this statute was to put national banks in the same situation as State banks, for the purposes of suing and being sued. Under its operation, a court of the United States will ordinarily have no jurisdiction of an action between a national bank and a citizen of a State within which the national bank is situated. A receiver of a national bank, for the general purposes of his rights of action, stands on the footing of the bank itself; and where jurisdiction would attach in case the bank were suing or being

1 Price v. Abbott, 17 Fed. Rep. 506; Armstrong v. Ettlesohn, 36 Fed. Rep. 209; Frelinghuysen v. Baldwin, 12 Fed. Rep. 395. See also Platt v. Beach, 2 Ben. (U.S.) 303; 8. c. 1 Nat. Bank Cas. 182; Stanton v. Wilkeson, 8 Ben. (U.S.) 357; Kennedy v. Gibson, 8 Wall. (U.S.) 498; s. c. 1 Nat. Bank Cas. 17; Bank v. Kennedy, 17 Wall. (U.S.) 19; 8. c. 1 Nat. Bank Cas. 87; United States v. Hartwell, 6 Wall. (U. S.) 385; Armstrong v. Trautman, 36 Fed. Rep. 275.

Frelinghuysen v. Baldwin, 12 Fed.

Rep. 395.

Act Cong. July 12, 1882, proviso to 4; 22 U. S. Stat. at Large, ch. 290, § 4; Supp. to Rev. Stats. U.S. (2d ed.), p. 354, § 4, proviso. See the modfied statute, infra, in this section.

Hendee v. Connecticut &c. R. Co., 26 Fed. Rep. 677; s. c. 23 Blatchf. (U.S.) 451.

sued, the same jurisdiction will attach in case the receiver is suing or being sued.' But where Federal jurisdiction depends upon citizenship, the general rule is that it is governed by the personal domicile of the receiver, and not by that of the corporation of whose assets he is receiver. The act of July 12, 1882, was subsequently re-enacted, in a modified form, as follows: "That all national banking associations established under the laws of the United States shall, for the purposes of all actions by or against them, real, personal, or mixed, and all suits in equity, be deemed citizens of the States in which they are respectively located. And in such cases the Circuit and District Courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same State. The provisions of this section shall not be held to affect the jurisdiction of the courts of the United States in cases commenced by the United States or by direction of any officer thereof, or cases for winding up the affairs of any such bank."

8

§ 7271. Statute Forbidding Transfers after Insolvency. The National Bank Act provides that "all transfers of the

1 Argument in Hendee v. Connecticut &c. R. Co., supra. That a receiver of a national bank represents the rights of the bank for the purposes of bringing and defending actions,see Bank v. Kennedy, 17 Wall. (U. S.) 19; 8. c. 1 Nat. Bank Cas. 87; Bank of Bethel v. Pahquioque Bank, 14 Wall. (U. S.) 383; 8. c. 1 Nat. Bank Cas. 77.

Ante, § 6985. It was held by Mr. District Judge Wheeler, in 1886, that the effect of the Act of 1882, in connection with the other applicatory statutes, as they then stood, was to leave the State courts with jurisdiction arising out of the ability of such a receiver to sue and be sued, where the other party to the action was a citizen of the same State with the national bank, but without power over

purely administrative proceedings, taken or to be taken by the receiver, who is an officer of the United States, and who proceeds under the laws of the United States. By more or less specious reasoning, it was therefore held that the receiver of a national bank, in Vermont, might maintain an action in the Circuit Court of the United States against a railroad company, which was, for the purposes of Federal jurisdiction, a citizen of the State of Vermont, to restrain such company from prosecuting an action in Canada to determine the title to certain bonds which had been pledged to the national bank. Hendee v. Connecticut &c. R. Co., 26 Fed. Rep. 677; s. c. 23 Blatchf. (U. S.) 451.

Act of Cong. Aug. 13, 1888, § 4; 25 U. S. Stat. at Large, 433.

notes, bonds, bills of exchange, or other evidences of debt owing to any national banking association, or of deposits to its credits; all assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor; all deposits of money, bullion or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, made with a view to prevent the application of its assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void." The "act of insolvency," mentioned in this section, is an act which would be an act of insolvency on the part of an individual banker, that is, the closing of the doors, refusing to pay depositors on demand, refusal to go on in the due course of business, to transact its business as a bank and discharge its liabilities to its creditors.2 The return of an execution nulla bona is sufficient evidence of such insolvency. The word "insolvency," as here used, is synonymous with the same word in the late bankrupt act. It means present inability to pay in the ordinary course of business. For the purposes of this statute, it is only necessary that insolvency should be in the contemplation of the bank making the transfer: the party receiving the transfer need not know of such insolvency, or contemplate that the transfer is made with the view of its happening.

Wheelock v. Kost, 77 Ill. 296; s. c.

1 Nat. Bank Cas. 406.

Case v. Citizens' Bank, 2 Woods (U. S.), 23; 8. c. 1 Nat. Bank Cas. 276; Roberts v. Hill, 24 Fed. Rep. 571; citing and following Wager v. Hall, 16 Wall. (U. S.) 584, 599; Vennard v. McConnell, 11 Allen (Mass.), 555; Thompson v. Thompson, 4 Cush. (Mass.) 127.

Case v. Citizens' Bank, 2 Woods (U. S.), 23; s. c. 1 Nat. Bank Cas. 276.

§ 7272. Fraudulent Preferences under This Statute. To render a transfer void under this section, it must have been made either with a view to prevent the application of the assets in the manner prescribed by the National Bank Act, or with the view to the preference of one creditor over another.' The "preference" mentioned in the statute is a preference given to an existing creditor for a pre-existing debt, and does not refer to a case where one makes a loan to a bank and receives a concurrent transfer of property as security therefor. When, therefore, a national bank, being embarrassed, receives a loan of money, or other valuable material aid, from a person who knows its embarrassed state, on condition that the party making the loan or giving the aid shall be secured therefor, and the security is accordingly given by pledging a part of the assets of the bank, this is not giving him a preference over other creditors, within the meaning of this section. But where such a bank, being embarrassed, received a loan of money upon depositing with a certain commercial firm a portion of its assets as security, it was held that the fact that one of the members of the firm was president of the bank did not render the transaction illegal; and that the bank could not escape liability for the loan upon the ground that the president had no authority to effect it, where it appeared that it was effected with the knowledge of the directors, and that the money was used by the bank. It has been reasoned that if the officers of such a bank pledge a note to secure a depositor who has been allowing the bank to use his money,

1 Casey v. Credit Mobilier, 2 Woods (U. S.), 77; 8. c. 1 Nat. Bank Cas. 285. Substantially to the same effect, see Armstrong v. Chemical Nat. Bank, 41 Fed. Rep. 234. Analogous cases under the late bankrupt law are: Tiffany v. Lucas, 15 Wall. (U. S.) 410; Cook v. Tullis, 18 Wall. (U. S.) 332; Clark v. Iselin, 21 Wail. (U.S.) 360.

Casey v. Credit Mobilier, 2 Woods (U. S.), 77: s. c. 1 Nat. Bank Cas. 285.

Ibid. The court held that a national bank, which enters into a contract not authorized by its charter, cannot repudiate the contract, and at the same time retain the fruits of it. Ibid. See ante, § 6016. For special instances of unlawful transfers under this section, see Tuttle v. Frelinghuysen, 38 N. J. Eq. 12; 8. c. 3 Nat. Bank Cas. 576; National Securrity Bank v. Butler, 129 U. S. 223; 8. c. 3 Nat. Bank Cas. 320; affirming 8. c. 22 Fed. Rep. 697.