Defendants Brief — Auten v. United States Nat. Bank of NY

Naprete Court of the {ited States,

§. R. COCKRILL, Recerver or First Nationa Bank,

oF LittLe Rock, Plaintiff in Error,

v.

UNITED STATES NATIONAL BANK, or New York,

Defendant in Error.

Brief for Defendant in Error, on Motion to Dismiss the

Writ of Error.

This case has been three times tried by the Circuit

Court. On the first and second trials, the judgment was

against the United States National Bank. These were

each reversed by the Court of Appeals for the Eighth

Circuit. (64 Fed., 985-992 and 79 Fed., 296). The third

trial resulted in a verdict and judgment for the United

States National Bank. The receiver took a writ of error

to the Court of Appeals, where this judgment was af-

firmed, on the authority of the two former opinions, and

the receiver has brought error to this Court.

Sai ai

The United States National Bank, the defendant in

error, has filed the following motion to dismiss the writ

of error:

SuPREME CourRT OF THE UNITED STATEs.

S. R. Cocxritt, Receiver of First National Bank of

Little Rock, Plaintiff in Error,

v.

UnirTep States Natronat Bank, of New York, Defend-

ant in Error.

The United States National Bank, defendant in error

in this cause, moves the Court to dismiss the writ of error

to this Court in this cause, because it says the jurisdic-

tion of the Circuit Court in which the case was tried, de-

pended alone upon the diverse citizenship of the parties

and the judgment of the Court of Appeals is final, as will

appear from a copy of the complaint in this case,

and one of the notes sued on (all the notes being of

like nature), as follows:

\

“Unitep States Crrcvir Court WEsTERN Division,

EAsTeERN District OF ARKANSAS.

UnitepD STatTEs NATIONAL BANK, oF City or NEw York,

Vv.

First NATIONAL BANK oF LITTLE Rock and

STERLING R. Cockrity, Receiver.

The said plaintiff United States National Bank, states

that it is a corporation duly incorporated under the

—_ Po

Jaws of the United States and resident, located, and

doing business in the city of New York, State of New

York; that the defendant First National Bank of Lit-

tle Rock is a corporation organized under the laws

of the United States, resident and located and lately

doing business in the ciy of Little Rock, in the

Western Division of the Eastern District of Arkansas.

Said defendant bank has become insolvent and the

defendant, S. R. Cockrill, who is a citizen of Arkan-

sas and resident of said city of Little Rock, has been

appointed receiver of said bank.

On December 7, 1892, The City Electric Street

Railway Company, a corporation organized and doing

business under the laws of Arkansas, in the city of Lit-

tle Rock, Arkansas, executed and delivered to G. R.

Brown and H. G. Allis, citizens of the State of Missouri.

its three promissory notes each for $5,000, payabie four

months from date, with interest at the rate of ten per

cent per annum from maturity until paid. Said Brown

and Allis afterwards indorsed and delivered said notes

to the defendant First National Bank, and said bank

before maturity and for a valuable consideration in-

dorsed, rediscounted and delivered said notes to

plaintiff.

That on December 7, 1892, the McCarthy & Joyce

Co., a corporation resident in the city of Little Rock,

Pulaski County, Arkansas, executed and delivered to

James Joyce, a citizen of the State of Missouri, its two

—

promissory notes each for $5,000, payable to his order

at four and five months respectively after date with in-

terest from maturity at the rate of ten per cent per an-

num until paid; said Joyce afterwards indorsed said

notes to the defendant First National Bank and said

bank before maturity and for a valuable consideration

indorsed, rediscounted and delivered said notes to

plaintiff. Said notes were each at maturity presented

at the First National Bank in Little Rock, Arkansas,

for payment and payment being refused, they were each

duly protested for nonpayment, the fees for which

amounting to $25 were paid by plaintiff. Copies of the

said notes with the indorsements thereon, are hereto at-

tached, marked ‘1 to 5 inclusive, and made a part

hereof. No part of said notes have been paid and the

same have been presented to the receiver of said bank

for allowance, which he refused to do.

Wherefore, plaintiff prays judgment for its debt

and for all other relief.

RaTcLiFFE & FLETCHER.

For Plaintiff.”

$5,000. 34,131.

‘Little Rock, Ark., December 7, 1892.

‘‘Four months after date we, or either of us, promise

to pay to the order of G. R. Brown and H. G. Allis five

thousand dollars for value received, negotiable and pay-

able without defalcation or discount, at the First

National Bank of Little Rock, Arkansas, with interest at

ia Te

the rate of ten per cent per annum from maturity until

paid.

“Crry Evectric Street Raitway Co.,

“H. G. Braprorp, Pt.,

“W. H. Surron, Secretary.”

No. A, 73,485. Due April 7-10, 1893.

The following indorsements appear on the above

note: ‘‘Geo. R. Brown, H. G. Allis, First National

Bank, Little Rock, Ark., H. G. Allis, Pt. Pay W.

D. Hearn, cashier, or order for collection, H. G. Hop-

kins, cashier. Protested for nonpayment, April 10,

1893, A. S. Reaves, Notary Public. Fees, $4.94.’’

The above is a copy of note marked 1 and its

indorsements, which is attached to complaint.

W. C. Rarcrirre,

JoHN FLETCHER,

For Defendant in Error.

It has been settled by this Court that in cases of this

kind the jurisdiction must clearly and affirmatively

appear from the statements contained in the complaint.

The test is whether or not the complaint on its face

would be good on demurrer or motion to dismiss for

want of jurisdiction. No question subsequently raised

in the progress of the case will give the Court jurisdiction.

Press Publishing Co. v. Monroe, 164 U. 8., 105.

Ex parte Jones, 164 U.S., 691.

,

we

ron

¢

G

a

Colorado Central Consolidated Mining Co. »,

Turck, 150 U. S., 138.

Metcalf v. Watertown, 128 U. S., 586.

Borgmeyer v. Idler, 159 U. 8., 412.

State of Tennessee v. Union & Planters’ Bank,

152 U. S., 454.

Postal Telegraph Cable Co. v. Alabama, 155

U. S., 482.

East Lake Land Co. v. Brown, 155 U. S., 488.

Chappel v. Waterworth, 155 U. S., 102.

St. Paul, M. & M. Ry. Co. v. St. Paul & N. P.

R. Co., 68 Fed., 2.

Caples v. Texas & P. Ry. Co., 67 Fed., 9.

Pacific Gas Co. v. Ellert, 64 Fed., 421.

The complaint specifically sets forth the diverse citi-

zenship of the parties and on that fact alone did the

plaintiff in the trial Court base the jurisdiction of that

Court.

The only issue presented by the complaint is one of

fact as to the indorsement of the notes sued upon by the

First National Bank and nonpayment. The determina-

tion cf these facts for or against the plaintiff settles the

question as to the liability of the bank, and ends the

suit. There is nothing in this upon which a disputed

question can arise as to the construction of the constitu-

tion or statutes of the United States.

aaa

Gold-Washing Co. v. Keyes, 96 U. S., 199.

Theurkauf v. Ireland, 27 Fed., 769.

Austin v. Gagan, 39 Fed., 626.

State of Iowa v. Chicago, M. & St. P. Ry. Co.,

33 Fed., 391.

Starin v. New York City, 115 U. 8., 248.

Murray v. Bluebird Mining Co., 45 Fed , 385.

Southern Pacific Ry. Co., v. Whittaker, 47

Fed., 529.

Butler v. Shafer, 67 Fed., 161.

In Starin v. New York, 115 U. S., 257, the court

said :

“Tf, from the questions, it appears that some title,

right, privilege or immunity on which the recovery de-

pends, will be defeated by one construction of the con-

stitution or a law of the United States, or sustained by

the opposite construction, the case will be one arising

under the constitution or laws of the United States,

within the meaning of that term * * * otherwise not.”

In the City of New Orleans v. Benjamin, 153 U. S.,

423, this court said: ‘‘When a suit does not really and

substantially involve a dispute or controversy as to the

effect or construction, upon the determination of which

the result depends, then it is not a suit arising under the

constitution. * * * The judicial power extends to

all cases in law and equity arising under the constitu-

ae Sen

tion, but these are cases actually and not potentially

arising, and jurisdiction cannot be assumed on mere

hypothesis.”

In State of Iowa v. Chicago, M. & St. P. Ry. Co.,

supra, Judge Shiras said: ‘The jurisdiction of this

court either by original process, or by removal, in the

class of cases under consideration, depends solely upon

the fact that the controversy between the parties

requires, for its final determination, the construction of

some provision of the constitution, laws, or treaties of

the United States, and the application thereof to the

facts of the particular case, in such sense that the ruling

thus made will materially affect the conclusion reached

upon the controversy between the adversary parties to

the litigation. Unless from the record it clearly appears

that the federal question must be met and decided, before the

issue or issues in the particular cause can be finally disposed

of, it cannot be said that the matter in dispute arises

under the constitution or laws of the United States

within the meaning of the statute.’’ (Italics are ours).

The fact that the receiver was made a party to the

suit does not give jurisdiction. To every intent and pur-

pose the suit was against the bank, and the only interest

which the receiver has in the case is to represent the

bank. When the questions involving the bank’s liabil-

ity are determined, but one result can follow.

— a

The bank and receiver were both proper, though

not necessary parties. The purpose of the suit, as shown

by the complaint, was simply to establish the claim of

the plaintiff against the First National Bank. Plaintiff

seeks to acquire no lien nor to establish any preference,

and the judgment in the case gives it none. It must

simply take its place with other creditors whose claims

are allowed or proven, and await the action of the

comptroller in the distribution of the assets realized by

the receiver.

Green v. Walkill National Bank, 7 Hun., 63.

“Tt is not sought to make the receiver liable, but to

make the bank liable through the receiver.’’

Turner v. Bank of Keokuk, 26 Iowa, 562, 568.

The case of Tehan v. First National Bank, 39 Fed.,

577, isin point. The court, in refusing to sustain the

jurisdiction, said: ‘‘The nature of the action is the

same as if the defendant Hayes were the receiver of a

state bank or of an individual.’’

“The receiver has no prerogative right to be sued in

oD

the United States Court.”’

Bird’s Exectuors v. Crockman, 2 Woods, 32.

Van Antwerp v. Hubbard, 8 Blackf., 282.

We have argued the case as if the complaint

showed that the receiver was appointed by the Comp-

troller of the Currency. While it is a fact that the

ens 16) ams

receiver was thus appointed, the complaint does not

show by whom the appointment was made.

Any court may appoint a receiver.

<j A, FMS Wright v. Merchants Nat. Bank, 3 Cent. Law

tas oP aa oe Journal, 351.

44 / YOZ Thompson’s Nat. Bank Cas., 321.

7 /' F 7 &

Irons v. Manufacturers Nat. Bank, 6 Biss., 301.

Respectfully submitted,

W. C. Rarcrirre,

JOHN FLETCHER,

For Defendant in Error,