Зображення сторінки

bank or other moneyed corporation constitutes a trust fund pledged to secure the payment of its creditors. It is a breach of that trust to divert any portion of this fund from the creditors of the corporation to pay dividends to its stockholders, when it is insolvent, and any funds so diverted may be followed by the creditors, or by their proper representative, and recovered from any one, but a bona fide purchaser or a creditor, who has received them. Finn v. Brown, 142 V. S. 56, 70, 12 Sup. Ct. 136; Wood v. Dummer, 3 Mason, 308, Fed. Cas. No. 17,944; Bank v. Douglass, 1 McCrary, 86, 90, Fed. Cas. No. 14,375; Mumma v. Potomac Co., 8 Pet. 281, 286; Curran v. Arkansas, 15 How. 304; Sawyer y. Hoag, 17 Wall. 612; Hornor v. Henning, 93 U. S. 228; Cook, Stock, Stockh. & Corp. Law, SS 546, 548; Beach, Priv. Corp. $S 609, 610. It is a suit to undo a fraud, for it is a fraud upon the creditors of a corporation for its officers to commit such a breach of trust, and to divert a portion of the fund pledged for its creditors to the payment of dividends to its shareholders, when no profits have been earned, and the corporation is insolvent. Beach, Priv. Corp. $ 610. It avoids a multiplicity of suits, for, if this suit cannot be maintained, the receiver must bring a separate action at law, and have a separate trial by jury, of 24 actions, one against each of the shareholders who are appellees herein, to recover the dividends for which this suit was brought. These 24 lawsuits constitute the adequate remedy at law, which, it is argued, prohibits the main tenance of this suit in equity. But the remedy at law which will preclude the maintenance of a suit in equity must be "plain and adequate, or, in other words, as practical and efficient to the ends of justice and its prompt administration as the remedy in equity." Boyce's Ex’rs v. Grundy, 3 Pet. 210, 215; Delrichs v. Spain, 15 Wall. 211, 221, 228; Preteca v. Land Grant Co., 4 U. S. App. 326, 330, 1 C. C. A. 607, and 50 Fed. 674; Foltz v. Railway Co., 19 U. S. App. 576, 8 C. C. A. 635, 641, and 60 Fed. 316. Would these 24 actions at law be as efficient, as practical, and as prompt to attain the ends of justice as this suit in equity? The question is its own answer. The fund which the complainant seeks to recover in this suit was paid to the appellees in 16 semiannual dividends. The trial of this suit involves finding and stating the value of the assets, excluding bad debts, under section 5204, Rev. St., the amount of the liabilities, and the net profits of this bank, or the lack of them, at 16 different periods in its existence, and the determination of the extent of the liability of the appellees for each dividend by the state of this account at the time when the dividend was paid. It involves finding and stating the value of the assets, exclusive of these dividends, and the amount of the liabilities of this bank at the present time, and the determination from that statement of the amount of these dividends that will be required to pay the debts of the bank. The recovery of this fund by actions at law might, and probably would, involve taking each of these 17 accounts of the assets and liabilities of this bank as many times and before as many juries as there are shareholders interested in these accounts, respectively. When it is considered

how difficult it is for a judge and jury, in a trial according to the strict rules of the common law, where the evidence must be pre. sented to 12 men, who must hastily agree upon their verdict be. fore they separate, to correctly take and state any account which contains numerous items, that for this reason the taking of mutual accounts has become an acknowledged ground of equity jurisdiction (Gunn v. Manufacturing Co., 13 C. C. A. 529, 66 Fed. 382, 384; Kirby v. Railroad Co., 120 U. S. 130, 134, 7 Sup. Ct. 430), and that the trial of the claims of this complainant in separate actions at law against these several shareholders involves the taking of 80 many accounts by so many juries, the conclusion is irresistible that the complainant's remedy at law is not only inadequate and inefficient to reach the ends of justice, but that it is impracticable and useless for that purpose. These long and complicated accounts can be properly taken and stated, and the just deductions can be drawn from them only in a court in which a careful, patient, and extended examination of all the evidence can be made after it is submitted, by a mind trained in the science of accounting and familiar with the law which governs it. A court of equity, with its authority to select and appoint a suitable master, and to refer any or all of these accounts to him for examination and statement, and with its ample power to adapt its proceedings to the require. ments of the case as it progresses, is the only tribunal fit to fairly try and justly decide the issues that may be presented in this case. The complainant, then, has no adequate remedy at law for the wrongs of which he here complains. By this suit he seeks to avoid a multiplicity of actions, to recover in one suit misappropriated trust funds, to set aside the fraudulent diversion of them and to restore them to their equitable owners. Why should this suit not be maintained?

One objection is that the bill does not allege that the comptroller of the currency has ever ordered or directed the receiver to bring this suit. Kennedy v. Gibson, 8 Wall. 498, is cited in support of this objection. That was a suit to enforce the individual liability imposed upon the shareholders of a national bank by section 5151. Rev. St., which provides that the shareholders "shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares, except," etc. Section 5234, Rev. St., provides, in the case of the appointment of a receiver of a national bank, that:

“Such receiver, under the direction of the comptroller, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues and claims belonging to it, and, upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like order, may sell all the real and personal property of such association, on such terms as the court .shall direct; and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders.”

In Kennedy v. Gibson, the supreme court held that the comptroller of the currency must first decide, upon an examination of the assets and liabilities of the bank, that it was necessary to enforce the individual liability of the stockholders in order to pay the debts of the association, and must order the receiver to enforce this liability, before the latter could maintain a suit for that purpose. The term, "individual liability of the stockholders,” in this section, in the acts of congress, in the statutes of the states, and in the decisions of the courts, generally refers to the liability incurred under the acts of congress and the statutes by the mere ownership of stock. It has no reference to the liability which stockholders may incur by borrowing money of a bank, by indorsing notes held by it, by unlawfully taking or receiving its funds without consideration, and in many other ways. In U. S. v. Knox, 102 U. S. 422, the remark of Mr. Justice Swayne, at page 424, upon which much stress has been laid in argument in this case, that "by the common law the individual property of the stockholder was not liable for the debts of the corporation under any circumstances," was simply a declaration that at common law the mere ownership of stock imposed upon the stockholders no liability to pay the debts of the corporation. It was not, and was not intended to be, a statement that stockholders could not, by their contracts or by their torts, make their individual property liable, both at common law and under the acts of congress, to the amount of their contracts or to the amount of the damages caused by their torts, to pay the debts of an insolvent corporation to the same extent as if they were not stockholders. Now, this is not a suit to enforce the individual liability of these stockholders. It is a suit to follow and recover a part of the capital of this bank which was wrong. fully paid to and received by them. By receiving it they became liable to pay it back to the bank for the benefit of its creditors. This liability to repay this fund was an asset of the bank which passed to the receiver. Under the act of congress he was vested with the right of the bank, and also with the rights of the creditors of the bank, to recover this fund for the purpose of an equal distribution among the latter. After his appointment he was the proper party to, and the only party who could, maintain a suit for its recovery. Bailey v. Mosher, 11 C. C. A. 304, 63 Fed. 488, 491; Bank v. Colby, 21 Wall. 609; Hornor v. Henning, 93 U, S. 228; Stephens v. Overstolz, 43 Fed. 771; Bank v. Peters, 44 Fed. 13. The act of congress provides that, under the direction of the comp. troller, the receiver shall take possession of the books, records, and assets of the bank, collect all debts, dues, and claims belonging to it, and that, upon orders of the courts, or if necessary, he máy . take certain other proceedings. The basis of this suit is a claim of the bank for a part of its capital pledged to, but diverted from, its creditors to these appellees. It was one of the primary duties of the receiver to collect all the dues and claims of the bank. The claim on which this suit is based was one of these claims. It certainly was not the intention of congress that a special and sep. arate order should be issued by the comptroller, specifying each claim, and directing the receiver to collect or to sue upon it, speci


fying each book, record, and asset, and directing him to take possession of it, before he could discharge these duties; and in our opinion no special order of the comptroller was necessary to give him ample power to collect this claim and to maintain this suit. Bank v. Kennedy, 17 Wall. 19, 22.

Another objection to the maintenance of this suit that is strenuously urged is that the remedies provided by the national banking act are exclusive. It is argued that section 5151, Rev. St., imposes upon stockholders an individual liability for the debts of the banking association to an amount equal to the par value of their stock; that section 5204, Id., provides that "no association, or any member thereof, shall, during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital"; that section 5239, Id., provides that if the directors of any national banking association shall knowingly violate, or knowingly permit any violation of, the banking act, the franchises of the association shall be forfeited after a violation has been determined by the proper court, and “every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation”; that all these appellees were stockholders, and many of them were directors, of this banking association; and that the only liabilities they could incur for the diversion of the capital of the bank are those imposed by these provisions of the acts of congress. This is not, as we have said, a suit to enforce the individual liability of these stockholders under section 5151. It is not a suit to recover damages from these directors for a violation of the national banking act under section 5239.

Hence the arguments presented, and the authorities cited at length, to show that the complainant has not properly proceeded to enforce the liabilities imposed by these sections require no consideration at our hands. This is a suit, we repeat, to recover diverted trust funds. It rests upon no statute or act of congress. Its foundation lies deeper. It rests on the fundamental principle of equity that he who has received moneys impressed with a trust, without consideration, ought to and must restore them. The right to recover such funds in chancery courts existed long before these acts of congress were passed, and we find no intimation in them of any intention to destroy or curtail it. On the other hand, the evident purpose of these acts was to increase, not to diminish, the liabilities of shareholders and directors. Sup-. pose the holder of 10 shares of a national banking association borrows $10,000 of the capital of the association on his promissory note. Suppose that the officers of an insolvent national bank take $10,000 out of its capital and give it to such a shareholder without consideration. Is the only remedy of the receiver of such an association to recover this money, in either case, to enforce the individual liability of the stockholder? Suppose the stockholder

was also a director, is the receiver limited to a suit to enforce his individual liability under section 5151, and to recover damages under section 5239? May he not sue him on his note in the one case, and for the diverted trust funds in the other, regardless of these provisions of the statutes? These questions are their answers. Sections 5151 and 5239, Rev. St., exclude banking associations and receivers from none of the remedies for the collection of debts, claims, and dues of the bank or its creditors provided by the general rules and principles of law and equity, but they impose upon shareholders and directors additional liabilities, and subject them to proper remedies for their enforcement.

Finally, it is insisted that this bill cannot be maintained because it is multifarious,—that some of the appellees participated in but one or two of the sixteen dividends, while some participated in more, and others in all. The answer is that this suit is brought to recover $213,708 of the capital of this insolvent bank, every dollar of which, according to the allegations of this bill, was held in trust for the creditors of the bank. To make a bill brought by a single complainant against several defendants multifarious, it must either unite several distinct causes of action the grounds of which are different, or the causes of action contained in it against at least some of the defendants must be separate and disconnected from those stated against other defendants. While it may be difficult, or perhaps impossible, to draw the definite line of demarcation between bills that are and are not multifarious, it may be safely asserted that no bill is multifarious which presents a common point of litigation, the decision of which will affect the whole subject matter, and will settle the rights of all the parties to the suit.

In Brinkerhoff v. Brown, 6 Johns. Ch. 139, Chancellor Kent, after an exhaustive review of the cases, said:

“The principle to be deduced from those cases is that a bill against several persons must relate to matters of the same nature, and having a connection with each other, and in which all the defendants are more or less concerned, though their rights in respect to the general subject of the case may be distinct.”

In Fellows v. Fellows, 4 Cow. 682, 700, 702, the court of errors of New York held that:

"Where several persons, although unconnected with each other, are made defendants, a demurrer will not lie if they have a common interest centering in the point in issue in the cause."

And the rule laid down by Chancellor Kent in Brinkerhoff v. Brown, supra, that a bill may be filed against several persons relative to matters of the same nature, forming a connected series of acts, all intended to defraud and injure the complainants, and in which all of the defendants were more or less concerned, though not jointly in each act, was approved. In Prentice v. Forwarding Co., 58 Fed. 437, 7 C. C. A. 293, 296, this court held that a bill in which several complainants who held title to separate lots of land under separate deeds from a common grantor, made at different times, sought to quiet their title against a single defendant, who

« НазадПродовжити »