but who is apprehensive of losing it, and they, at the time of making the pledge to the depositor, realize that the bank is approaching failure, and make the pledge to keep the note out of the assets to be distributed, the pledge will be void; but that if they make it to avert the threatened failure, and with the expectation that it will enable them to do so, by retaining the use of the deposit to pay other depositors, the transaction will be valid under the statute.' The plain distinction is between transferring assets in the expectation of a failure and to defeat the ratable distribution intended by the statute, and the using of the assets to avert a threatened failure." While this reasoning seems sound, yet on a rehearing of the case, the conclusion of the court was different, and the transfer was held fraudulent and was set aside. On the rehearing, the view was taken that a transfer is presumptively fraudulent when the affairs of the bank reach such a crisis that it becomes reasonably apparent to its officers that it will presently be unable to meet its obligations, and will be obliged to suspend its ordinary operations. And it was held that the intent to give a preference is presumed when a payment is made to a creditor at the time when the officers of the bank know of its insolvency, and that it cannot pay all its creditors in full; and, moreover, that the motive of giving the preference is immaterial, and that it will be void under the statute, even where it is made for the mere purpose of postponing failure,' clusion which is believed to be unsound. 8 a con - § 7273. Further of This Statute. In determining the question of priorities among creditors, the receiver should proceed upon the principle that, after a vote of the directors to close the bank and go into liquidation, any transfer of the assets of the bank to a creditor, whereby he secures a preference, is presumed to be fraudulent. The receiver must also proceed upon the principle that preferences given by national banks to particular creditors are presumed to be fraudulent, when, at the time of giving the preference, the officers of the bank knew that it was insolvent; and that, where property is transferred by such a bank to a creditor, to avoid paying the amount due him, and thus postpone the failure of the bank, it is none the less fraudulent and void. The statute above quoted does not extend so far as to exclude the right of a bank, which is a customer of a national bank, to assert its banker's lien upon funds collected for the national bank. When, therefore, a bank, holding paper deposited by a national bank for collection, accepted a draft drawn on the national bank, and the national bank thereafter failed and went into the hands of a receiver, it was held that the accepting bank might retain, for its own reimbursement, the proceeds of such paper of the national bank, although the moneys may have been collected subsequently to the failure of the national bank. By accepting the draft drawn on the national bank, the collecting bank made itself the principal debtor in respect of that draft, and this gave it a lien upon the funds and securities in its hands belonging to the payee of the draft, which lien ran from the date of the acceptance.3 1 National Security Bank v. Price, 22 Fed. Rep. 697; Case v. Citizens' Bank, 2 Woods (U. S.), 23; s. c. affirmed, 100 U. S. 446; 2 Nat. Bank Cas. 47; Re Silverman, 4 Nat. Bank. Reg. 523; s. c. 1 Sawy. (U. S.) 410; Sawyer v. Turpin, 2 Lowell (U. S.), 29, 33. For a transfer which was held not to be made after a commis § 7274. Statute Prohibits Attachments after Insolvency. Under this section it has been adjudged that a creditor cannot acquire a lien upon the property of a national bank, after it has become insolvent, by an attachment of its property, although no receiver of the bank has been appointed; and that such an attachment should be vacated upon the application of a receiver subsequently appointed, because it would be subversive of the policy of the statute to permit the attaching creditor thus to obtain a preference over other creditors.1 § 7275. Further of Attachments against National Banks. The National Banking Act, after providing for suits against national banking associations in the courts of the State and of the United States, contained a further provision that "no attachment, injunction, or execution shall be issued against any such association or its property, before final judgment in any such suit, action, or proceeding, in any State, county, or municipal court." This proviso was held to relate only to actions against such banks commenced in the venue where the national bank is situated, and not to attachments against such banks or their funds in other States. In other words, it did not apply to foreign attachments against such banks. This construction, which was at obvious variance with the policy of the statute, seems to have preceded an amendment of it; so that, as it now stands in the Revised Statutes, the word "such" before "attachment" is omitted, and it reads as follows: "No attachment, injunction, or execution shall be issued against such association or its property, before final I National Bank v. Colby, 21 Wall. (U. S.) 609; 8. c. 1 Nat. Bank Cas. 109; Harvey v. Allen, 16 Blatchf. (U.S.) 29; 8. c. 2 Nat. Bank Cas. 439. Funds held by national bank as depositary of bankruptcy court not subject to garnishment, because in custodia legis: Havens v. National City Bank, 6 Thomp. & C. (N. Y.) 346; 8. c. 1 Nat. Bank Cas. 783. Act. Cong. June 3, 1864, ch. 106, § 57; as amended by Act of 1873, 3d sess., ch. 269, § 2. Southwick v. First Nat. Bank, 9 Hun (N. Y.), 96; s. c. 1 Nat. Bank Cas. 789; Robinson v. National Bank, 81 N. Y. 385; 8. c. 58 How. Pr. (N. Y.) 306; 37 Am. Rep. 508; 2 Nat. Bank Cas. 309; Bowen v. First Nat. Bank, 2 Nat. Bank Cas. 316, n. judgment in any suit, action, or proceeding in any State, county, or municipal court." Subsequently to the introduction of this change in the phraseology of the statute, it was held that an attachment will not lie before final judgment against the property of a national bank situated in a different State from that in which the bank is located; and that is now the settled meaning of the statute, irrespective of the question whether or not the bank is insolvent.3 § 7276. Continued: Attempted Distinction in Cases where Bank not Insolvent. - The New York Court of Appeals attempted the distinction, that the language of the statute above quoted, even after this amendment, was intended to apply only in cases where the national bank was insolvent, and consequently that it did not prohibit an attachment for the purpose of seizing its funds and effectuating the remedies of a creditor in another State, where it was not insolvent, and where such seizure would not operate to the prejudice of the right of its general creditors to have its assets ratably distributed among them. But where the national bank was insol vent, the court held that an attachment could not be issued by a Rhoner v. First Nat. Bank, 14 Hun (N. Y.), 126; 8. c. 2 Nat. Bank Caɛ. 331. To the same effect is Central Nat. Bank v. Richland Nat. Bank, 52 How. Pr. (N. Y.) 136; s. c. 1 Nat. Bank Cas. 801. Pacific Nat. Bank v. Mixter, 124 U. S. 721; s. c. sub nom. Butler v. Coleman, 3 Nat. Bank Cas. 291, dicta of the court per Waite, C. J.; Safford v. First Nat. Bank, 61 Vt. 373; s. c. 17 Atl. Rep. 748; First Nat. Bank v. La Due, 39 Minn. 415; s. c. 40 N. W. Rep. 367. See also Bank of Montreal v. Fidelity Nat. Bank, 1 N. Y. Supp. 852. On the ground that such an attachment was merely void, the Supreme Court of Minnesota refused to enjoin, at the suit of a national bank, a party within its jurisdiction, from attaching its funds in the State of New York. First Nat. Bank v. La Due, 39 Minn. 415; s. c. 40 N. W. Rep. 367. Robinson v. National Bank, 81 N. Y. 385; 8. c. 58 How. Pr. (N. Y.) 306; 37 Am. Rep. 508; 2 Nat. Bank Cas. 309; Raynor v. Pacific Nat. Bank, 93 N. Y. 371; 8. c. 3 Nat. Bank Cas. 624. See also People's Bank v. Mechanics' Nat. Bank, 62 How. Pr. (N. Y.) 422; s. c. 3 Nat. Bank Cas. 670; Market Nat. Bank v. Pacific Bank, 2 Civ. Proc. Rep. (N. Y.) 330; 8. c. 30 Hun (N. Y.), 50; 3 Nat. Bank Cas. 672. Under this rule, it was held that the receiver of a national bank, situated in another State, might move to vacate such an attachment, although he was not a party to the suit, and that the attachment must be vacated on proof of the insolvency of the bank. People's Bank v. Mechanics' Nat. Bank, 62 How. Pr. (N. Y.) 422; 8. c. 3 Nat. Bank Cas. 670. State court. Pursuing this line of thought, the same court held that where a national bank had committed an act of insolvency, so that the attachment was prohibited at the time when it was levied, it was not restored to validity by the subsequent acquisition by the bank of further capital, especially where the resuscitation was of short duration; and, although the bank, after the issuing of the attachment, had paid a large amount of its debts in full, this did not estop it from questioning the validity of the attachment." - § 7277. This Distinction Repudiated. Subsequently the Supreme Court of the United States, in considering the question whether the statute operated to prohibit suits by attachment against national banks in the courts of the United States, expressed its opinion that the statute "stands now, as it did originally, as the paramount law of the land, that attachment shall not issue from State courts against national banks, and writes into all State attachment laws an exception in favor of national banks." And the court repudiated the doctrine of the Court of Appeals of New York, in the following language: "Although the provision was evidently made to secure equality among the general creditors in the division of the proceeds of the property of an insolvent bank, its operation 1 National Shoe &c. Bank v. Mechanics' &c. Bank, 89 N. Y. 467; 8. c. 3 Nat. Bank Cas. 601. Raynor v. Pacific Nat. Bank, 93 N. Y. 371; 8. c. 3 Nat. Bank Cas. 624. The court, however, conceded - what was too obvious for doubt that the above provision of the National Bank Act was not repealed by the act of Congress of July 12, 1882 (ante, § 7270), providing that the jurisdiction of suits thereafter brought against national banks shall be the same as for suits against State banks, and repealing laws inconsistent therewith. Ibid. Where a national bank closed its doors on November 18, 1881; was put in charge of the government bank examiner and thus continued until March 14, 1882, when the Comptroller of the Currency allowed it to resume; and it thereafter transacted business until May 22, 1882, when it Butler v. Coleman, 124 U. S. 721, 726; s. c. 3 Nat. Bank Cas. 291, 296. |