# Opposition Brief — Wheeler v. Greene > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0282%3A05 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1929 - **Citation:** 280 U.S. 49 ## Text eee APR 1 1929 FILE COPY CHARLES ELMGRE GRO ———————_=>=>—_—e—e————— Supreme Court of the United States OCTOBER TERM, 1928 No. a 39 J. R. WHEELER, PETITIONER, vs. HOWARD GREENE, RECEIVER OF THE BANKERS JOINT STOCK LAND BANK OF MILWAUKEE, WISCONSIN. RESPONDENT. Brief for the respondent in opposition to the peti- tion for a writ of certiorari in the case of Howard Greene, receiver of The Bankers Joint Stock Land Bank of Milwaukee vs. J. R. Wheeler, reported in 29 Fed. (2d) 468. y EDWIN 8. MACK, ‘ ARTHUR W. FAIRCHILD, Counsel for Respondent. © (34,020) SUBJECT INDEX TO BRIEF. Objections to granting of writ ................. Ne Oe TNO COND 6 iki cake eit idees cneus Gs NEE Bd be e KONE Lae hod Kos OS Ae eee y OF GTEuMONt . 0... ee cessccvvencss EE id dU NaN Kes CLA Kees eev er ished cHkay is I, The question involved is one of procedure IL. il. - and the real question in issue is one of delay in enforcing the liability .......... The construction of the Act is plain ..... The Federal Farm Loan Board has wide general powers ...... Oe Pe rt | Petitioner’s construction of the Farm Loan Act, if adopted will involve dupli- cation of receivership, together with in- creased expense and delay, and will neces- sitate ancillary equity suits in thirty states. The Congress could not have intended so unreasonable an interpretation .......... The fundamental question is the scheme intended by Congress; and an express grant of power to levy an assessment is unnecessary, being implied, as necessary, to effectuate the scheme of the Act ...... The differences in structure of the Na- tional Bank Act and Farm Loan Act make inferences from the phraseology of the former inapplicable to the latter. 11 12 17 VI. 7 Subject Index to Brief—Continued. Page The structure of the National Bank Act, adopted in 1864, should not control the in- terpretation of the Federal Farm Loan Act, adopted in 1916 ..............06.-- 20 The Joint Stock Land Banks are constitu- tional agencies of Government; and their administration under the direction and control of the Federal Farm Loan Board necessarily implies a single receivership and enforcement of the personal liability of stockholders under direction of that EN os VEC RAEG GENES Rhee eR Whee ens 24 1. Joint Stock Land Banks were created by the Congress to serve as fiscal agents of the Government; they were created for public and not private pur- RR en Pere eer ce tS Pree 24 2. Proper and expeditious administration of the affairs of Joint Stock Land Banks is essential to the fiscal policies of the Government ................-. 25 3. The Congress intended to continue gov- ernmental control through insolvency Ser erry ere eee rere 26 4. The Farm Loan Board’s powers are ERS ORG NER OSES Nie hee a 26 5. The stockholders’ liability is to be ap- plied with and in aid of the assets of the Bank toward the satisfaction of its oS Pree re rey sor eres 27 6. Purpose indicated in heading of Sec- PN ee Oe snes sckiecs ved oucains 28 Subject Index to Brief—Continued. Page 7. Payment of assessments without suit should be possible ...............0.. 29 8. Right of offset against dividends on bonds held by stockholders should be UOOEVNG y -c 6 i Sis bia Pokw es babes 29 VII. Construction of Act by Farm Loan Board 30 VIII. Cases under other statutes .............. 31 1. Cases arising under state statutes are practically irreconcilable and are not OOMEVONARE BOGS 5 oi bv si owes wen eons 31 2. The Federal authorities cited by peti- tioner, so far as they are in point, sus- tain the right of the statutory receiver Oe Ui pad vine co nswibas eaneeeeneee 32 Conclusion... ... WN SEHETEP ODN KD ORNS) PaaS s Lbs 33 Appendix (Opinion in Krauthoff v. Kansas City Joint Stock Land Bank et al., decided Feb. 20, MRR RPS RS nee een ee Res Fie 35 CASES CITED. Page Altman v. McClintock, 20 Fed. (2d) 226 ........ 27 Butterworth v. Hill, 114 U. 8.128 .............. 15 Blamset v. Cardin, 256 U. 8. 319 ............... 30 Bushneli v. Leland, 164 U. 8S. 684 .............. 19 Casey v. Galli, 94 U. B. 678 . ooo. cece ccwscces 19 Christopher v. Norvell, 201 U. 8.216 ........... 19 Commercial National Bunk v. Weinhard, 192 U. PE ay Sc cad aed ded Wve dw Randa Ventanas 18 ——. Index of Cases Cited—Contimued. Page Cook County National Bank v. Umted States, BU fis We UE Ki Ra Varga dk Cbs st tenees cece 26 Farmers’ & Mechanics’ National Bank v. Dearing, MC I She ie sod Ak cog Maviny Fass us eet © 25 Gockstetter v. Williams, 9 Fed. (2d) 354 ........ 27 Great Western Mining Co. v. Harris, 198 U. 8. ase Sa ate nad ghe ie EON SET PRIOR PE PN EN 14 Hale v. Allinson, 188 U.S. 56 ...........0065-- 15 Hynes v. Illinois Trust & st aac Bank, et al., De PE ahve dss th cannhass chabeeeh es 29 Jacobs v. Prichard, 223 U.S. 200 .............. 30 Kennedy v. Gibson, 8 Wall. 498 . .9, 10, 13, 14, 18, 19, 33 King, et al. v. Armstrong, 50 Ohio State 222.... 29 King v. Pomeray, 121 Fed. 287 .............+65 33 Knowlton v. Moore, 178 U.S. 41 ..... 6. eee eee 17 Korbly, Receiwer, v. Springfield Institution for Savings, et al., 245 U. S. 330 ............-- 10, 13 Krauthoff v. Kansas City Joint Stock Land Bank, et al., 23 Fed. (2d) 71 ....... 2, 10, 14, 26, 29 Krauthof v. Kansas City Joint Stock Land Bank, etal., (Decided Feb. 20, 1929) ...... 2, 10, 16 Liberty National Bank of South Carolina, et al., v. McIntosh, 16 Fed. (2d) 906 ............-- 27 McNeill v. Pace, 69 Fla. 349 ..........0 ee eeees 28, 31 National Lead Co. v. United States, 252 U.S. 140 30 Osborn v. Bank of the United States, 9 Wheat. Bs has COR PPR EROTAs CENA ORDO RA CODD Cae 25 Pattotion v. Lynde, 106 U.S. 519 ............-- 31 Rankin v, Barton, 199 U. S. 228 ...........54-- 19 Richmond v. Irons, 121 U. 8. 27 ........--45 27, 32, 33 Smith v. Kansas City Title € Trust Company, BEG UW. Bi IGD eiie eee ccete cere ecesvenes _—— Index of Cases Cited—Continued. Page State ex rel. Stone v. Union Stock Yards etc. ma, €F Gh, 108 1a, BAB 0.6. os vivid bxbos ccckk 29, 32 Steele v. Randall, 19 Fed. (2d) 40 ............. 14 Swigart v. Baker, 229 U. 8. 187 ............000. 30 zerry v. Lattice, 101 U. B. S16... . oe ccinweccncn 31, 32 Umted States v. Hermanos y Compania, 209 U. 8. BES ONE So Se Te SF Caen eae CEL NSD 30 United States v. Kate, 271 U. 8. 364... 3. es cs 17 United States v. Knox, 102 U. 8. 422 ........... 19 United States v. Weitzel, 246 U. S. 583 ......... 14 Van Reed v. Peoples National Bank of Lebanon, ERs Oh ON, ope ww bina Un boas bw aahes Loe 25 Wilson, et al. v. Book, 13 Wash. 676 ............ 29, 31 ‘ STATUTES CITED. Page Federal Farm Loan Act (U. 8. C. Title 12 §$641- 1021) Particular Sections Discussed .............. 21-24 Se SOON ae Ea Ree 4 eee 2 CU. BO. $681) ooh Ss. 4,7, 11, 18, 22, 30 wee 2 EU. BO. GGL) oi ae 4, 7, 11, 30 ee Seay es URED on a ees 4,27 Sec. 16-21 (U.S. C. §§814, 816-821, 841-864).. 27 Ses. 17 (U. 8. C. $881) ........... 4, 7, 11, 18, 22, 30 Sec. 29— Care MMe MRD hak eS a sven eons 5, 14, 24, 28, 30 Pas OW Ree WORE recon cat suwavbaceuces 5, 14, 30 ECT We WOOT oaks cacdiesesvunscs eee 6, 14 PC OO) 2a 6 Statutes Cited—Continued. BUMMAARY oc 5 ccc cece ccc cevevecncevoneess 21-23 Particular Sections Discussed (References to U. S. C. Title 12) NR ee aids Ue ke SAG ua keh beaee ens 18 PE Duke lids vias hw adn yada tesa 23 ee ek hea da p aban eae 22 Ee Saad s dhe cseecabiekens< eens 22 LEONE eer 22, 23 ee el ee ete i ans bie & bi 22 ee eae te tee hw he neke 22, 23 ee 22, 23 _ Supreme Court of the United States OCTOBER TERM, 1928 No. 711 J. R. WHEELER, PETITIONER, vs. HOWARD GREENE, RECEIVER OF THE BANKERS JOINT STOCK LAND BANK OF MILWAUKEE, WISCONSIN. RESPONDENT. > Brief for the respondent in opposition to the peti- tion for a writ of certiorari in the case of Howard Greene, receiver of The Bankers Joint Stock Land Bank of Milwaukee vs. J. R. Wheeler, reported in 29 Fed. (2d) 468. Respondent opposes the granting of a writ of cer- tiorari upon the following grounds: 1. The construction of the statute here involved is plain; administration is proceeding promptly and efficiently and there is no reason why this court should assume jurisdiction. 2. The question involved is one of procedure and the reversal of this decision will not change or affect the substantive rights of the parties. 3. The decision by the Circuit Court of Appeals for the Seventh Judicial Circuit in this case and the similar decisions by the Circuit Court of Ap- peals for the Eighth Judicial Circuit in the case of Krauthoff v. Kansas City Joint Stock Land Bank, et al., decided February 20, 1929,* and Krauthoff v. Kansas City Joint Stock Land Bank, et al., 23 Fed. (2d) 71, are in accord with each other and with applicable decisions of this court. Statement of the Case. The Bankers Joint Stock Land Bank of Milwaukee was organized under the provisions of the Federal Farm Loan Act, and had a capital of $1,200,000, div- ided into 12,000 shares of the par value of $100 each. Operating with this capital, the Bank issued and there were outstanding in the hands of the public on July 1, 1927, $15,771,600 par value of farm loan bonds, secured by farm mortgages and other collateral on deposit with the Farm Loan Registrar for the Seventh Land Bank District, at St. Paul, Minnesota. The Bank was unable to meet the interest matur- ing on its bonds on July 1, 1927, and, inasmuch as it was clearly insolvent, the Federal Farm Loan Board, proceeding under Section 29 of the Farm Loan Act, (U. S. C. $961) declared the Bank insolvent and ap- * A copy of this decision is printed as an Appendix to this brief infra pp. 35-45) pointed the respondent, Howard Greene, its statutory receiver. Following an investigation of the affairs of the Bank, by order of the Federal Farm Loan Board, dated January 11, 1928, a 100% assessment upon the shares of stock in the Bank was levied payable March 1, 1928, and the respondent, as statutory receiver, was direct- ed to enforce collection. It was determined from initial examination that the liabilities of the bank (not including as such its capital stock) exceeded its assets by more than $1,- 500,000 and that this deficiency would be increased in liquidation. A reappraisal of the properties covered by the mortgages showed the deficiency must mate- rially exceed this figure; and there is no question, therefore, as to the necessity for a 100% assessment of the stockholders’ liability for payment of the Bank’s obligations. There has been a 15% payment made on the bonds in liquidation; and with 85% of both principal and in- terest unpaid, the bonds of the Bank are heing traded in at less than 40% of par, thus confirming the neces- sity for a 100% assessment. Stockholders of the Bank have shown their appre- ciation of the necessity for a full assessment upon their stock and 256 stockholders of the total of 482 have paid their assessment in whole or in part in the sum of $507,925. The year and a half which has elapsed since the ap- pointment of respondent, as statutory receiver, has . shown the dangers of stockholders dying, moving away or becoming insolvent, Under the circumstances, the delay incident to the granting of a writ of cer- tiorari must increase the difficulties incident to en- forcing the rights of the creditors of the Bank. 4 Statutes. The enacting clause of the Federal Farm Loan Act provides in part: ‘‘Anact... . to furnish a market for United States bonds, to create Government depositaries and financial agents of the United States, and for other purposes.’’ Section 1 of the Act (U. S. C. §641)* provides: ‘‘That this Act may be cited as the ‘Federal Farm Loan Act.’ Its administration shall be under the direction and control of the Federal pcg Loan Board hereinafter created.’’ [Italics ours. Section 3 of the Act (U. 8. C. §651) provides: ‘‘That there shall be established at the seat of government in the Department of the Treasury a bureau charged with the execution of this Act and of all Acts amendatory thereof, to be known as the Federal Farm Loan Bureau, under the neral supervision of a Federal Farm Loan rd.’’ [Italies ours.] Section 16 of the Act (U. 8. C. §812) provides: ‘‘Shareholders of every joint stock land bank organized under this Act shall be held indivi- dually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such bank to the extent of the amount of stock owned by them at the par value thereof, in addition to the amount paid in and represented by their shares.’’ Section 17 of the Act (U. S. C. $831) provides in part: * Foot Note: For convenience references to Title 12 United States Code are herein given as “U. S. C.” and references to Federal Farm Loan Act as “F. L. A.” 5 **That the Federal Farm Loan Board shall have power— ... (i) To exercise general supervisory au- thority over the Federal land banks, the nation- al farm loan associations, and the joint stock land banks herein provided for. [Italics ours. ] (j) To exercise such incidental powers as shall be necessary or requisite to fulfill its duties and carry out the purposes of this Act.” Section 29 of the Act provides in part: [U. S. C. § 961] That upon receiving satisfac- tory evidence that any national farm loan asso- ciation has failed to meet its outstanding obli- tions of any description the Federal Farm an Board may forthwith declare such asso- ciation insolvent and appoint a receiver and re- quire of him such bond and security as it deems proper: Provided, That no national farm loan association shall be declared insolvent by said board until the total amount of defaults of eur- rent interest and amortization installments on loans indorsed by national farm loan associa- tions shall amount to at least $150,000 in the Federal land bank district, unless such associa- tion shall have been in default for a period of two years. Such receiver, under the direction of the Federal Farm Loan Board, shall take pos- session of the books, records, and assets of every description of such association, collect all debts, dues, and claims belonging to it, and, with the approval of the Federal Farm Loan Board or upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like approval or order, may sell all the real and personal property of such association on such terms as the Federal Farm Loan Board or said court shall direct.’’ [Italics ours.] [U. 8S. C. § 962] “ . . . . Such receiver shall pay over all money so collected to the Treasurer of the United States subject to the order of the Federal Farm Loan Board and also make report to said board of all his acts and proceedings. The Secretary of the Treasury shall have authority to deposit at interest any money so re- ceived.”’ [Italics ours.] [U. 8. C. §963] ‘* . . . Upon default of any ob- ligation, Federal land banks and joint stock land banks may be declared insolvent and placed in the hands of a receiver by the Federal Farm Loan Board, and proceedings shall thereupon be had in accordance with the provisions of this section regarding national farm loan associa- tions.”’ [U. S. C. §965] ‘*.. . No national farm loan association, Federal land bank or joint stock land bank shall go into voluntary liquidation without the written consent of the Federal Farm Loan Board, but national farm loan associations may consolidate under rules and regulations promulgated by the Federal Farm Loan Board.’’ Summary of Argument. The question involved is one of procedure. Two Cireuit Courts of Appeals in three decisions have ap- proved the procedure adopted by the Farm Loan Board. 256 stockholders, of a total of 482, have paid their assessment in whole or in part in the aggregate ~ gum of $507,925. Delay will increase the difficulty of further collections due to insolvency or other simi- lar cause. The construction of the Act is plain. Administration of the Farm Loan Act is expressly placed under ‘‘the direction and control’’ of the Farm 7 Loan Board; the Board is ‘‘charged with the execu- tion’’ of the Act, and broad supervisory and incidental powers are expressly vested in it. (F. L. A. §§1, 3, 17 (i) (j); U. 8. C. §§641, 651, 831.) The National Bank Act contains no such broad grant of general powers as the Farm Loan Act vests in the Farm Loan Board, yet the power to levy an as- sessment upon stockholders of an insolvent national bank is implied in the comptroller as essential to the efficiency and utility of the law. Similar considerations require the implication of such a power in the Farm Loan Board under the much broader provisions of the Farm Loan Act. The procedure suggested by petitioner would bur- den creditors of the bank with the expense and delay of a double receivership including a statutory receiver to liquidate the assets and a judicial receiver to take over the proceeds, give notice to creditors, determine claims, enforce the stockholders’ liability and make distribution. Stockholders of the bank are located in over thirty states and a court receivership would re- quire ancillary proceedings in each of these states. It is plain that this duplication of receivership, with its accompanying expense and delay, cannot have been intended by the Congress. Petitioner proposes to negative any implied power in the Farm Loan Board because the receivership pro- vision of the Farm Loan Act has no express clause such as set forth in the National Bank Act, for en- forcement of the stockholders’ liability. The National Bank Act was adopted in 1864 and the Farm Loan Act in 1916. One great change in this interval was the development of legislation conferring increasingly large powers on administrative boards. Due to this 8 change, what was accomplished by one method under the National Bank Act (the vesting of powers in the Comptroller by a series of specific details) was ac- complished in the Farm Loan Act by a different meth- od (the vesting in the Farm Loan Board of broad ad- ministrative powers). It follows, naturally, therefore, that the National Bank Act has more specific provi- sions as to a receivership than the Farm Loan Act; and omission of the detailed provisions found in the Na- tional Bank Act from the receivership provisions of the Farm Loan Act does not, by any implication, nega- tive the existence of such powers. Joint stock land banks are public corporations created for governmental purposes. The Congress has deemed supervision of such agencies by the Farm Loan Board essential to the fiseal policies of the Government and such supervision and control, being necessary dur- ing periods of operation of such banks, the Congress must have intended to continue such control through insolvency. The construction here maintained is that adopted by the Farm Loan Board and it should be given great weight. Cases arising under state statutes are irrecon- cilable and are not controlling here. The governmen- tal interest in these constitutional agencies is not pres- ent in the case of ordinary state corporations. Every -presumption is in favor of complete administration of these constitutional agencies by the Government. The Federal authorities, cited by petitioner, so far as they are in point, sustain the right of the statutory receiver to sue. ARGUMENT. I. The Question Involved Is One of Procedure and the Real Question in Issue Is One of Delay in Enforcing the Liability. The substantive rights of the petitioner will not be affected by a reversal of the lower court, except to the extent that delay may increase the practical difficulties encountered by the statutory or court receiver, as the case may be, in enforcing the stockholders’ liability. At the time a similar power of assessment was im- plied in the comptroller in the case of a national bank, the court, in Kennedy v. Gibson, 8 Wall. 498, saic f8 Wall. 505] ‘‘ . . . It would be attended with injurious consequences to forbid action against the stockholders until the precise amount neces- sary to be collected shall be formally ascertain- ed. This would greatly protract the final set- tlement, and might be attended with large losses by insolvency and otherwise in the intervening time. The amount must depend in part upon the solvency of the debtors and the validity of the claims. Time will be consumed in the appli- cation of these tests, and the results in many cases cannot be foreseen. The same remarks apply to the enforced collections from the stock- holders. A speedy adjustment is necessary to the efficiency and utility of the law; the inter- ests of the creditors require it, and it was the obvious policy and purpose of Congress to give it. If too much be collected, it is provided by the statute, that any surplus which may remain after satisfying all demands against the asso- 10 ciation, shall be paid over to the stockholders. It is better they should pay more than may prove to be needed than that the evils of delay should be encountered.’’ [Italics ours.] Similarly in Korbly, Receiver, v. Springfield Insti- tution for Savings, et al, 245 U. S. 330, 333, the court held that the National Bank Act should not be giv- en a technical construction which would so restrict the powers of the Comptroller as to delay and impede the settlement of the affairs of a bank and that the Act should be given a liberal interpretation to promote the expeditious winding up of a bank’s affairs. As pointed out in Kennedy vs. Gibson, 8 Wall. 498, 506, if by error of the assessing authority too large an assessment were made, the amount would not be lost to the stockholders, for the excess would be returned to them. In the natural course of events, delay in en- forcing assessment agains the stockholders will result in insolvency of some and inability to collect from others because of changes of address, death, or otherwise. The method of procedure adopted by the Farm Loan Board and approved by the Circuit Court of Appeals for the Seventh Circuit in this case also has been similarly approved by the Circuit Court of Ap- peals for the Eighth Circuit in the case of Krauthoff v. ’ Kansas City Joint Stock Land Bank of Kansas City, et al., (Appendix pp. 35-45, before Judges Kenyon, Johnson and McDermott, and Krauthoff v. Kansas City Joint Stock Land Bank, 23 Fed. (2d) 71, (Before Judges Lewis, Pollock and Scott). Under the circum- stances, there would seem no justification for continued litigation. ll IT. The Federal Farm Loan Board has Wide General Powers. The Federal Farm Loan Act rests fundamentally on the grant to the Farm Loan Board of comprehen- sive general powers, so far reaching as necessarily to be exclusive. Section 1 of the Act (U. 8. C. §641) provides: ‘‘That this Act may be cited as the ‘Federal Farm Loan Act.’ Its administration shall be under the direction and control of the Federal Farm Loan Board hereinafter created.’’ [Ital- ics ours. ] Section 3 of the Act (U. 8. C. §651) provides that the Federal Farm Bureau is ‘‘charged with the execu- tion of this Act.’’ Section 17 of the Act (U.S. C. $831), provides: ‘That the Federal Farm Loan Board shall have power— ..., (i) To exercise general supervisory au- thority over the Federal land banks, the nation- al farm loan associations, and the joint stock land banks herein provided for. [Italics ours. | (j) To exercise such incidental powers as Shall be necessary or requisite to fulfill its duties and carry out the purposes of this Act.’’ a III. Petitioner’s Construction of the Farm Loan Act, if Adopted, Will Involve Duplication of Receivership, Together With Increased Expense and Delay, and Will Necessitate Ancillary Equity Suits in Thirty States. THE CONGRESS COULD NOT HAVE IN- | TENDED SO UNREASONABLE AN INTER- | PRETATION. . Counsel for the petitioner attempt, by a compari- son of the provisions of the Federal Farm Loan Act with those of the National Bank Act, to establish an intention to vest all rights and duties, subsequent to sequestration of the assets of an insolvent Joint Stock Land Bank, in a court receiver, saying with reference to the statutory receiver appointed by the Farm Loan Board: [Petitioner’s Brief, p. 21] ‘‘The receiver is simply a collector or conservator of the assets of the bank. He takes possession of the books, records and assets . . . collects all debts, .. . sells all of the asse’s of the association . . . and pays over all money collected to the treasurer of the United States . . . His work is then per- formed, . . . There is no suggestion anywhere in the law that the receiver has anything what- ever to do with the shareholders or their per- sonal liability, or with the creditors of the bank and their claims against it.’’ [Petitioner’s Brief, p. 25] ‘‘The Banking Act has a complete system for the enforcement of the individual liability of stockholders. . . . . 13 [Reviewing provisions for notice to creditors, allowance of claims, payment of dividends, ete., in National Bank Act, U. S. C. §§191, 192, 193, 194,] . . . In the Farm Loan Act all of these pro- visions are missing. No provision is made for giving notice to creditors of the bank for a lim- itation of the time of filing claims, for the allow- ance of claims, or the payment thereof, for the return of any surplus to the shareholders, or for the payment of the expense of the receivership. It is therefore perfectly apparent from the stat- utes that the receiver of the Farm Loan Asso- ctation was not intended to have any powers or duties whatever with regard to the enforcement of the individual liability of the stockholders, the proof of claims against the association, their a and the final distribution.’’ [Italics ours. Petitioner’s brief thus assumes that the Congress intended to make the creditors of the Bank bear the ex- pense of a double receivership including: first, a pro- ceeding by the statutory receiver appointed by the Farm Loan Board to collect and liquidate the assets, paying the proceeds over to the Treasurer of the United States; and secondly, a proceeding by a judicial receiver appointed at the instance of a creditor in a court of equity to take over the fund in the hands of the Treasurer, give notice to creditors, enforce the stockholders’ liability and make all distributions to the creditors. This suggested interpretation of the Farm Loan Act is expressly contrary to the principles governing the liquidation of such institutions established in Ken- nedy v. Gibson, 8 Wall. 498, 505, (supra pp. 9-10) and Korbly, Receiver, v. Springfield Institution for Sav- ings, et al., 245 U. S. 330, 333. 14 The expense of un additional receivership in itself seems controlling on the question of intention. The duplication of procedure and expense seems an absurdity inasmuch as the Receiver appointed by the Farm Loan Board is an officer of the United States subject to the order of the Board and represents cred- itors as well as the corporation. Under the provisions of Section 29 of the Farm Loan Act (U.S. C. §§961, 962, 963), such receiver : (1) Executes bond to the United States for the faithful performance of his duties; (2) Assumes control as an officer of the United States :— United States v. Weitzel, 246 U. S. 533, 540, 541; Krauthoff v. Kansas City Joint Stock Land Bank, et al., 23 Fed. (2d) 71, 73; Steele v. Randall, 19 Fed. (2d) 40, 42. (3) Pays all moneys collected to the Treasurer of the United States ‘‘subject to the order of the Federal Farm Loan Board.”’ (4) Represents creditors as well as the corpor- ation :— Kennedy v. Gibson, 8 Wall. 498, 506. In addition to the double receivership, it will be necessary, if the statutory receiver is without author- ity to enforce the stockholders’ personal liability, to have ancillary proceedings in more than thirty states in order that the liability may be enforced. Great Western Mining Co. v. Harris, 198 U. S. 561, 574. 15 The difficulties and expense incident to the enforce- ment of the stockholders’ personal liability by a court receiver is illustrated by the history of attempted en- forcement by such a receiver in Minnesota. Hale v. Allinson, 188 U. 8. 56, 65. How the court receiver could acquire possession of the fund collected by the statutory receiver and which is, under the statute, deposited with the Treasurer of the United States ‘‘subject to the order of the Federal Farm Loan Board’ is a question of considerable com- plexity. The members of the Board reside for pur- poses of territorial jurisdiction at their official resi- dence, to-wit: The District of Columbia. Butterworth v. Hill, 114 U. 8. 128, 132. Any attempt of the United States Court for the Eastern District of Wisconsin to subject the Treas- urer of the United States to its jurisdiction for the purpose of exercising control over the fund specifical- ly vested by Congress in an executive branch of the Government would inevitably result in ‘*inextricable confusion and chaos.’’ In the light of the above authorities illustrating the complicated and expensive procedure necessary to en- force the stockholders’ personal liability through a court receiver, it is plain that the Congress could not have intended to burden the creditors of insolvent joint stock land banks: (a) with the expense of two receiverships, (b) with the expense and uncertainty of ancil- lary proceedings, 16 (c) with the delay incident to appointment of a court receiver in a case where a statutory receiver is already in existence acquainted with the facts and competent to determine claims and enforce the stockholders’ liabii- ity under the direction of an executive de- partment of the Government charged with the execution of the law and the direction and control of its administration, and with the uncertainty, delay and expense arising out of the necessity for a creditor applying to a court for the appointment of a judicial receiver to continue the liquida- tion following sequestration of the assets of the bank by its statutory receiver. As stated by the Circuit Court of Appeals for the Eighth Circuit in Krauthoff v. Kansas City Joint Stock Land Bank (Appendix; infra, pp. 35-45) : ‘Tt is hardly to be presumed that Congress in- tended in carrying out the purposes of this Act to have various receivers for different kinds of assets, resulting merely in inextricable confu- sion and chaos. The Act should be carried out according to its terms and not lose its efficiency in a maze of philosophical technicalities. It seems to us the Act is perfectly plain, that the Farm Loan Board is charged with carrying out its provisions and to see ‘that the moneys are applied toward the satisfaction of the bonds.’ ”’ _ The interpretation suggested by counsel for the pe- titioner would ignore the rule that all laws are to be given a sensible construction and that where a literal application of a statute would lead to absurdity or where a particular construction of a statute would oc- casion great inconvenience or produce inequality and 17 injustice, that view is to be avoided if a reasonable in- terpretation can be given to it consistent with the leg- islative purpose. United States v. Katz, 271 U.S. 354, 357. Knowlton v. Moore, 178 U. 8. 41, 77. IV. The Fundamental Question is the Scheme Intended by Congress; and an Express Grant of Power to Levy an Assessment is Unnecessary, Being Implied, as Necessary, to Effectuate the Scheme of the Act. Petitioner contends (Petitioner’s Brief, pp. 4 to 18) that the particularization of powers granted the Farm Loan Board and the failure expressly to vest power in the Board to levy an assessment upon stock- holders negatives the existence of such a power in the Board and, therefore, none can be implied. The fact that the Farm Loan Act vests specific du- ties in the Farm Loan Board with reference to matters upon which it is intended to have the Board act per- sonally and not by delegation of its authority, should hot prevent implication of a power of assessment. It was wise to give form to the Act by vesting certain du- ties specifically in the Farm Loan Board and this was done without intending thereby to limit the general powers of the Board. The powers given to the Farm Loan Board under the Farm Loan Act are much broader than those given 18 to the Comptroller under the National Bank Act. The National Bank Act vests a large number of specific duties in the Comptroller of the Currency (see sum- mary thereof, infra page 21) ; and it grants no general powers such as Section 1 and Section 17 (i) and (j) of the Farm Loan Act (U. S. C. §§641, 831) confers. There therefore is much greater reason for implying powers in the Farm Loan Board than in the Comp- troller. The National Bank Act contains no provision au- thorizing the Comptroller to make an assessment upon stockholders in the case of an insolvent bank; yet this court held such a power clearly implied. Kennedy v. Gibson, 8 Wall. 498. The statutes (U. S. C. Sec. 55) make express pro- vision for assessment of stockholders of a national bank only for payment or restoration of the capital either because the capital is not paid up as required by law or the capital stock has been impaired by losses. This express statutory provision for assessment has no relation to the stockholders’ personal liability for debts of the bank. Commercial National Bank v. Weinhard, 192 U. S. 243, 247, 252. There is no express statutory provision in the Na- tional Bank Act for the important function of deter- mining the amount of the stockholders’ liability and making an assessment. On the petitioner’s theory (Petitioner’s Brief, p. 27) this absence of express grant of power in the National Bank Act would re- quire judicial proceedings for an assessment, presum- ably by a proceeding in equity brought by the statutory receiver. 19 However, this Court definitely settled the law to the contrary, holding power implied in the comptrol- ler to make a conclusive assessment. Kennedy v. Gibson, 8 Wall. 498, 505. Casey v. Galli, 94 U.S. 673. U. 8. v. Knox, 102 U. 8. 422. Bushnell v. Leland, 164 U. 8. 684. Rankin v. Barton, 199 U. 8. 228. Christopher v. Norvell, 201 U. 8. 216. In reaching the conclusion that power to levy the assessment must be implied in the Comptroller, this court, in the Gibson case, 8 Wall. 498, laid most stress on the delay which would result, the ‘‘large losses by insolvency and otherwise in the intervening time’’; the ‘‘time’’ which would be ‘‘consumed in the apyplica- tion of these tests,’’ the necessity for a ‘‘speedy ad- justment’’ as essential to ‘‘the efficiency and utility of the law,’’ the fact that the interests of creditors re- quired it, and that it ‘‘was the obvious policy and pur- pose of Congress to give it.’’ These considerations apply equally in the case at bar; but the reasons for implying power to levy a con- clusive assessment apply much more strongly to the Farm Loan Board than to the Comptroller because of the wide general powers conferred on that Board. 20 ws The Differences in Structure of the Nation- al Bank Act and Farm Loan Act Make In- ferences From the Phraseology of the Former Inapplicable to the Latter. THE STRUCTURE OF THE NATIONAL BANK ACT, ADOPTED IN 1864, SHOULD NOT CON- TROL THE INTERPRETATION OF THE FED- ERAL FARM LOAN ACT, ADOPTED IN 1916. Petitioner proposes to negative any implied power in the Farm Loan Board because the receivership pro- vision of the Farm Loan Act has no express clause on stockholders’ liability such as is set forth in the Na- tional Bank Act (Petitioner’s Brief pp. 22-25). His argument rests essentially on a comparison of a single section of each of the Acts, and it disregards the grant of wide general powers to the Farm Loan Board and the consequent difference in the structure of the Acts. In considering the differences between the two Acts one must keep in mind that the National Bank Act was adopted in 1864 and the Farm Loan Act in 1916. One great change in this interval was the development of legislation delegating increasingly large powers to ad- ministrative boards. This change is reflected in the Farm Loan Act. Examined in the light of this change in the method of legislating, it will be seen that what was accomplish- ed by one method under the National Bank Act (the vesting of power in the Comptroller by a series of 21 specific details) was accomplished in the Farm Loan Act by a different method (the vesting in the Farm Loan Board of broad administrative powers). An examination of the provisions of the National Bank Act makes clear this difference in structure and corresponding necessity for difference in construction of the National Bank Act and the Federal Farm Loan Act. The fundamental duty of the Comptroller of the Currency is to require compliance with the Statutes regarding national bank notes and to keep accurate watch of them. (U.S. C. §§1, 26-28, 101-110, 124, 132- 134, 137, 138, 151-153, 168-178, 185). So far as the af- fairs of the bank are concerned, the Comptroller’s powers are granted in a series of specific details, such as approval of the bank’s name or location (U. S. C. §§22, 30) ; definition of purchasable investment securi- ties (U. S. C. §24); rules for acting as insurance or real estate broker (U. S. C. §92); approval of stock divi- dends or reduction of stock (U. S. C. §§58-59) ; ap- proval of conversion of state bank (U.S. C. §35); or action as to branches (U.S. C. §36); or consolidation (U. S. C. §§33, 34, 34a). Further the National Bank Act has great detail as to the general conduct of the bank’s business (U.S. C. §4$55, 56, 60, 62, 81-89, 94, 121, 122, 125, 127, 141-146, 161-164). No general grant of powers to the Comptroller is contained in the National Bank Act. — The Federal Farm Loan Act on the other hand con- tains a comprehensive general grant of powers to the Farm Loan Board (F. L. A. §§1, 17 (i) and (j) U. 8. ©. $§641, 831 see supra p. 11). It follows naturally, therefore, that the National Bank Act has more specific provisions as to a receiv- ership than the Farm Loan Act. Following out the scheme of specific powers, the National Bank Act expressly gives the Comptroller power, in the case of a receivership: 22 (a) To give notice to creditors (U. 8S. C. $193), (b) To approve claims (UU. 8. C. §194), (c) To make ratable dividend of the mon- ey paid over to him by the Receiver (U. S. C. §194), (d) To return any excess to the stockhold- ers (U.S. C. $194), (e) To pay the expenses of the receivership out of the assets’of the Association (U. 8. C. $196), (f) To call a meeting of stockholders after payment of claims for the purpose of determining whether liquidation shall continue (U. 8. C. §197), and (g) To protect equities in mortgaged or — property (U. S. C. §§198, 199, 00). In the Farm Loan Act none of these powers are ex- pressly set forth but that Act has provisions (lacking in the National Bank Act) which confer wide general powers on the Farm Loan Board. — 23 The petitioner disregards the wide grant of general powers to the Farm Loan Board; he bases his ar- gument solely on this difference in phraseology of the grants of specific powers in the National Bank Act and the Farm Loan Act and claims that lack of express specification of such powers in the Farm Loan Act evidences an intention to withhold them (See Pe- titioner’s brief, pp. 14-15). | Obviously application of such a rule of construction would lead to chaos. Powers essential to even the lim- ited receivership permitted by the petitioner’s theory would be lacking (U. S. C. $§196, 198, 199, 200). The impossibility of such a rule is evidenced by the costly and unwieldy double receivership which the petitioner is led to devise. It becomes apparent, therefore, that any limitation of the powers of the Farm Loan Board by reference to the phraseology of the National Bank Act would be en- tirely inconsistent with the purpose and tenor of the Farm Loan Act and contrary to the Act’s plain con- struction. Far from the Farm Loan Act conferring less power on the Farm Loan Board than the Comptroller has in a receivership, as contended by the petitioner, the fact is that the Farm Loan Act expressly shows an inten- tion to give the Farm Loan Board greater power than the Comptroller in such a case, because a national bank receiver may make sales of assets only on order of a court (U. S. C. §192) whereas a joint stock land bank receiver may make sale on order either of a court or the Farm Loan Board. 24 Section 29 of the Farm Loan Act (U. S. C. §961) provides :* [U. S. C. $961] ‘Such receiver, wnder the di- rection of the Federal Farm Loan Board, 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, with the approval of the Federal Farm Loan Board or upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like approval or order, may sell all the real and personal property of such association on such terms as the Federal Farm Loan Board or said court shall direct.’’ [Italics ours. ] VI. The Joint Stock Land Banks are Constitu- tional Agencies of Government; and their Administration Under the Direction and Control of the Federal Farm Loan Board Necessarily Implies a Sincle Receivership and Enforcement of the Personal Liability of Stockholders Under Direction of that Board. 1. Joint Stock Land Banks Were Created by the Congress to Serve as Fiscal Agents of the Gov- ernment ; They Were Created for Public and Not Private Purposes. The constitutionality of the Federal Farm Loan Act was definitely established in Smith v. Kansas City Title &€ Trust Company, 255 U. 8. 180, 209, 210, 211, * The statement of this section at page 33 of petitioner’s brief is inaccurate in omitting the words “with the approval of the Federal Farm Loan Board or” and in substituting a capital for a lower case initial letter in the following word: “upon.” 25 where the court held that the designation of joint stock land banks as depositaries of public money and author- ization of their employment as financial agents of the Government brought them within the constitutional power of the Congress to facilitate the fiscal operations of the Government and that whether technically banks or not, these organizations may serve the government- al purposes declared by the Congress for their crea- tion. In accord: Osborn v. Bank of the United States, 9 Wheat. 738, 860, 861. Van Reed v. Peoples National Bank of Le- banon, 198 U. §. 554 2. Proper and Expeditious Administration of the Affairs of Joint Stock Land Banks ts Essential + to the Fiscal Policies of the Government. The rule was early laid down that national banks as instruments designed to be used to aid the govern- ment are within the discretionary power of the Con- gress; and that the power of the Congress over these banks is exclusive. Farmers ¢ Merchants Natl. Bank v. Dearing, 91 U. S. 29, 33, 34. The same principle applies to joint stock land banks. a non 3. The Congress Intended to Continue Govern- mental Control Through Insolvency Proceed- ings. No one disputes the necessity for supervision of joint stock land banks by the Federal Farm Loan Board prior to insolvency. If the Congress has deemed such supervision essential to furtherance of the fiscal policies of the Government while joint stock land banks are solvent, certainly the winding up and disso- lution of such banks should be no less important in its effect upon such policies. That was the principle given effect in Cook Coun- ty National Bank vs. United States, 107 U. S. 445, 448. 4. The Farm Loan Board’s Powers are Exclusive. On principle, it seems essential to preservation of the constitutional purpose of joint stock land banks to assist in the fiseal operations of the Government, that the courts refuse to interfere with the officers of the Government vested with authority to supervise and direct these agencies. Krauthoff v. Kansas City Joint Stock Land Bank, 23 Fed. (2d) 71, (C. C. A. 8th Cir. 1927). In similar cases involving the administration of in- solvent national banks the courts have held the admin- 27 istrative machinery established by Congress to be ex- clusive. Liberty National Bank of South Carolina v. McIntosh, 16 Fed. (2d) 906, 909-10 (C. C. A. 4th Cir. 1927). Gockstetier vy. Williams, 9 Fed. (2d) 354, 396 (C. C. A. 9th Cir. 1925). Altman v. McClintock, 20 Fed. (2d) 226, 229, 231 (Dist. Ct., Dist. of Wyo. 1927). 5. The Stockholders’ liability is to be applied With and in Aid of the Assets of the Bank Toward the Satisfaction of Its Obligations. As above set forth, we believe it clear that the Fed- eral Farm Loan Act intends the administration of joint stock land banks to be under the exclusive direction and control of the Federal Farm Loan Board. Such ex- elusive direction and control in the case of insolvency necessarily imports that the Farm Loan Board should have exclusive direction of the means of realizing pay- ment of the Bank’s obligations. This inclusion is em- phasized by the fact that the great mass of every joint stock land bank’s obligations necessarily are its bonds which are provided for specially and in detail by the Farm Loan Act. (F. L. A. §$16, 18, 19, 20, 21, U. S.C. §§814; 816-821; 841-864.) As stated by this Court with reference to the simi- lar stockholders’ liability of national banks in Rich- mond v, Irons, 121 U. 8. 27, 50: ‘‘ Admitting that this liability [of the stockholders] is not strictly an asset 28 of the bank, . . . yet it is treated as a means of ereat- ing a fund to be applied with and in aid of the assets of the bank toward the satisfaction of its obligations.” The case of McNeill v. Pace, 69 Fla. 349; 68 So. 177, (1915) evidences the tendency of the courts where the statute permits of such a construction to hold that a statutory receiver may enforce the stockholders’ per- sona! liability. The petitioner himself recognizes that the levy of an assessment upon stockholders and the enforcement of the collection of the stockholders’ liability by suit at law are among the powers which ‘‘all relate to the liquidation and winding up of the bank and are essen- tial to that operation.’’ (Petitioner’s Brief, p. 15). 6. Purpose Indicated in Heading of Section 29 of Act. Section 29 of the Farm Loan Act (U.S. C. $961) is designated as providing for ‘‘Dissolution and Appoint- ment of Receivers’. An examination of Section 29 discloses the purpose of the appointment of a receiv- er to be the winding up and dissolution of the corpora- tion. From this it would seem to follow that an in- terpretation which authorizes the receiver completely to administer the affairs of the bank should be favored over one which requires enforcement of the stock- holders personal liability and distribution of the as- gets of the bank in a separate proceeding in a court of equity. Krauthoff v. Kansas City Joint Stock Land Bank, 23 Fed. (2d) 71 (C. C. A. 8th Cir. 1927). State ex rel. Stone v. Union Stock Yards etc. Bank, et al., 108 Ia. 549; 70 N. W. 752. Wilson et al v. Book, 13 Wash. 676; 43 Pac. 939, -_~- 7. Payment of Assessments Without Suit Should be Possible. Certainly, there should be some place where a stock- holder can pay the assessment without suit, and the logical person for this purpose and for the enforce- ment of the liability is the statutory receiver, appoint- ed by the Federal Farm Loan Board . > 8. Right of Offset Against Dividends on Bonds Held by Stockholders Should be Preserved. Further if the statutory receiver is not the proper party to enforce the stockholders’ liability, then the right to offset dividends on bonds or other claims in the hands of stockholders may be lost. See— King, et al. v. Armstrong, 50 Ohio State 222 ; 34 N. E. 163. Hynes v. Illinois Trust & Savings Bank et al., 226 Til. 95; 80 N. E. 753; 10 L. RB. A. (N. S.) 472. VIL. Construction of Act by Farm Loan Board. The construction here maintained by the respond- ent is that adopted by the Federal Farm Loan Board (Ree. p. 4) and such construction should be given great weight, particularly where, as in this case, administra- tion of the law is under ‘‘the direction and control’’ (Farm Loan Act §1 U. S. C. 9641) of the Board, the Board is ‘‘charged with the execution of this Act’’ and broad supervisory and incidental powers are vest- ed in it by express provisions of the act. Federal Farm Loan Act, §§1, 3,17 (i) and (j) 29. (U. S. ©. §§641, 651, 831 (i) and (j), 961 and 962.) This court will, if possible, follow the construction placed on a statute by the department of the govern- ment charged with its execution, particularly where the statute itself directs such department to make the nec- essary regulations to carry it into effect. Jacobs v. Prichard, 223 U. 8. 200, 213. U.S. v. Hermanos y Compania, 209 U. 8. 337, Swigart v. Baker, 229 U. S. 187, Blanset v. Cardin, 256 U. 8S. 319, National Lead Co. v. U. S., 252 U. 8. 140. 31 VIII. Cases Under Other Statutes. 1, Cases Arising Under State Statutes are Prac- tically Irreconcilable and are not Controlling Here. Fundamentally in cases arising under state laws the essential question always is the scheme intended by the legislature; in other words, what liability did the legislature intend to create and what remedy did the legislature intend therefor? Terry v. Little, 101 U. 8. 216, 217. In considering decisions under state laws, the pe- culiar phraseology of the state act must be kept in mind, such as whether the liability is ‘‘to creditors’’ or ‘for debts,”’ ete., and what, if any, remedy the state statutes provide, expressly or impliedly. Patterson v. Lynde, 106 U. 8. 519 at 520. Where the law fails to provide for a statutory re- ceiver to administer the affairs of the insolvent cor- poration, a proceeding by creditors’ bill necessarily is the only available remedy and the authorities so hold- ing are not in point here. A statutory receiver ‘‘to close up the affairs of the company’’ has been held to have power to enforce the double liability under language similar to that here. McNeill v. Pace, 69 Fla. 349; 68 So. 177. In accord: Wilson v. Book, 13 Wash. 676, 43 Pac. 939. —ey This is so, even where the liability is ‘‘to cred- itors.’’ State ex rel Stone v. Union Stock Yards, etc., Bank, 103 Ia. 549, 70 N. W. 752, 753. In cases arising under state statutes, the federal courts deal with the matter as the construction of a state statute and follow the state rules, and that is the first point for consideration. Terry v. Little, 101 U. 8. 216, 217. The controlling governmental interest in admini- stration present in the case of constitutional agencies of the Government, such as joint stock land banks, is not present in the case of ordinary corporations form- ed under general state laws. Every presumption should be in favor of complete administration by the Government where, as in this case, such administra- tion is obviously in furtherance of the constitutional purpose. 2. The Federal Authorities Cited by Petitioner, so far as They are in Point, Sustain the Right of the Statutory Receiver to Sue. In Richmond v. Irons, 121 U. 8. 27 (cited in Peti- tioner’s Brief, p. 28) no statutory receiver had been appointed and a creditors’ bill was the only method for enforcement of the liability. a The case of King v. Pomeroy, 121 Fed. 287 (cited in Petitioner’s Brief, p. 21) is distinguishable on similar grounds. Both of these cases in fact lend their support to the interpretation of the law which, in a case where a stat- utory receiver has been appointed, would permit such receiver to enforce the personal liability of stockhold- ers. es 33 In both of these cases (Irons Case, 121 U. S. 27, 49 and Pomeroy Case, 121 Fed. 287, 291) the court speaks of the enforcement of the stockholders’ liability as a part of the liquidation of the bank, at least so closely connected with it as to constitute parts of one series of transactions. Further, these cases must be read in the light of the fact that a statutory receiver of a bank represents creditors as well as the corporation and should enforce all rights. Kennedy v. Gibson, 8 Wall. 498, 506. CONCLUSION. The whole argument of the petitioner reduces it- self to an inference from omission in the Farm Loan Act of the express provision for enforcement of the stockholders’ liability set forth in the National Bank Act. The argument overlooks the fact that even under the National Bank Act the Comptroller’s power of as- sessment of this liability is implied; it ignores the broad general powers given to the Farm Loan Board which are not given to the Comptroller; and it disre- 2 ——aeaeEEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeeEeEeEeEeEeEeEeEeEOeeee — eee eee ee EOE OOOO OOO —_ a, a a eh ene 34 gards the confusion, delay and waste that would result from this construction. No reasonable construction of the Act can justify a second receivership; the existence of the statutory re- ceiver acting under the direction of the Farm Loan Board, vested by statute with the broadest powers of administration and liquidation necessarily excludes any possibility of an accompanying judicial receiver- ship. The Congress certainly could not have intended so peculiar or unusual a result; on the contrary the in- tention of the Act is plain to vest the right to enforce the stockholders’ persona liability in the receiver ap- pointed by the Farm Loan Board. The question involved is essentially one solely of procedure. The construction of the Act is plain. The decisions of the Circuit Court of Appeal are in accord and in conformity with applicable decisions of this court; and the receivership ought not to be subjected to the expense and delay of continuance of the litiga- tion. We respectfully submit ‘that the petition for a writ of certiorari should be denied. EDWIN S. MACK, ARTHUR W. FAIRCHILD, Counsel for Respondent. 35 Appendix UNITED STATES CIRCUIT COURT OF APPEALS EIGHTH CIRCUIT. No. 8151.—December Term, A. D. 1928. EDWIN A. KRAUTHOFF, Appellant, Vs. KANSAS CITY JOINT STOCK LAND BANK OF KANSAS CITY, MISSOURI, et al., Appellees. Appeal from the District Court of the United States for the Western District of Missouri. Before Kenyon, Circuit J udge, and Johnson and Mc- Dermott, District Judges. KENYON, Circuit J udge, delivered the opinion of the court.* The Kansas City Joint Stock Lend Bank organ- ized, under the Federal Farm Loan Act, became in- solvent in 1927, and was by the Federal Farm Loan Board, under the provisions of the Federal Farm Loan Act (12 U.S. 0. A, Chap. 7, sections 961 and 963), placed in the hands of a receiver, who took possession * Foot Note: Inasmuch as the opinion of the court covers a number of questions, parts of the opinion bearing on the principles involved in the enforcement of the stockholders’ double liability have been printed in blackface type. ———ay of all the assets of the Bank of every description. Ap- pellant after that time purchased certain of the bonds of said bank for the express purpose, as admitted in his argument in this Court, of bringing suits thereon for himself and for clients whom he hoped to secure. Two of these he brought as plaintiff in the District Court of the United States for the Western District of Missouri, the numbers of which in this Court are 7874 and 7939, and will be designated herein by those numbers, one in the District Court of the United States for the District of Kansas (No. 7938, this Court), and one was brought by a stockholder named Raab in the District Court of the United States for the Western District of Missouri, in which appellant was attorney for the plaintiff (No. 7875. this Court). The defendants were substantially the same in all of these cases. The real object and purpose of these four suits was to oust the receiver appointed by the Fed- eral Farm Loan Board, and to substitute a receiver appointed by the Court to take charge of the assets. The previous suits were dismissed by the trial courts, and their action was affirmed by this Court (23 F. (2d) 71 and 73), with a modification in one of them upon petition for rehearing inat the dismissal by the Dis- tr ct Court be without prejudice. This Court decided in these cases that the Act - under which the Kansas City Land Stock Bank was created prescribed the manner in which it should be wound up in case of insolvency; that the situation was similar to the insolvency of a national bank; that the receiver appointed by the Board was a public offi- cer, and that he was in possession of the assets in dis- 37 charging his duty at the time the suits were brought, and that the Court had no right to interfere with such receiver in the proper discharge of his duties. In Cases numbered 7874, 7875 and 7939 (23 F. (2d) 71), argued and decided together, this Court said that questions might arise during receivership that would require judicial determination. 3 Appellees urge that every question involved in the present case has been determined in some of the previ- ous ones between substantially the same parties. We have examined appellant’s brief of 198 pages, which