FEDERA.L REPORTER» voL 50.
et all V. BA.NK OJ' BRITISH NORTH AMERICA.
NtnthCf.rcuit. April 28, 1892.)
(Circuit Coun of
Theaet of the OtlUfomfa legislature of April 1, 1876, entftled"An act coneeming corl>orations and perionsengllged in the business of banking," does not prohibit such corporations or persons ffom maintaining actions in the national C(lurts. nor has the legislature the 80 to do; nor does the act apply to blislness done by a foreign corporation without the state.
IN NA.TlON,A.L COlTB'l\S,
NOTE . A.·.D. o$i!made
by a California corpora.tion.. payable to itself and indorsed in blank, and delivered to another, is a note .pay.able to bearer; and a foreign corporation, Wbtoli subsequently becomea the holder thereof, may maintain an action thereon in ,t.heJj.ational court, sitting in. California, a/otainst a citizen ·thereof. and mavalso I!1lllntaln.such action against such citizen who is a stockholder In such corporation1 on the ground of his statutory liability for the debts of the corporation. even If saia is payable to order.
.. .. .. . ·
A party against whom a judgment Is in a district or circuit court may take the case to the supreme court directly on the question of jurisdiction, if the Ilame.is at issue, or to the circuit court of appeals on the whole case, and the court Of appeals may, if it sees proper, certify atIyquestion arising therein to the supreme .' ,court. . . 46 Fed. Rep. 857. amrmed.
by the Court.)
M ,Lltw. Affirmed.
'Carter P. Pomeroy,
to the Circuit Court of the Northern District of California.
Titu8, for plaintiflsin erroJ;.,
for defendant in error. Before McKENNA apd Circuit Judges, and DEA.DY, District Judge. DEA»'¥, District Judge. On April 5, 1888, the Alaska Improvement COmpany,.a corporation formed under the laws of California, drew three billBo! exchange on William T. Coleman & Co., citizens of the state of Californiaj payable to itself, the· first two in 60 days, and the third in 90 days, 'after date, for the sum of $2,740, $2,500, and $4,000, respectively, and on the same day indorsed the same in blank, and, before rna· turity thereof, transferred and delivered the same to said Coleman & Co., who subsequently, and before maturity thereof, in consideration of the amount of the face of said bills, paid them by the plaintiff, transferred and delivered the same to it in the state of Oregon; and on April 27, 1888,said bills were duly accepted by said Coleman & Co., who failed to pay them,upon due presentation for that purpose, of all which the Alaska Company had notice and neglected to pay the same. On April 8, 1890, this, action was commenced in the circuit court by the plaintiff against the defendants Earling and Eva, citizens of California, and stockholders of said Alaska Company, under section 322 of the Civil Code of California, which provides thatiltookholder of a corporation is individuallyand personally liable for such proportion of ita debts and liabilities as the amount of stock or sbares
BARLING f1. BANK OF BRITISH NORTH AMERICA.
owned by him bears to the whole of the subscribed stock or shares of the corporation, and for a like proportion only of each debt or claim agai nst the corporation." The defendant Eva interposed a plea in abatement, to the effect that the plaintiff could not maintain the action, because it had failed to file the statements concerning its business, required by the California act of April 1, 1876, entitled "An act concerning corporations and persons engaged in the business of banking," which provides that no corporation or person "who shall fail to comply with the provisions of this law shall maintain or prosecute any 4ction or proceeding in any of the courts of this state," to which plea the plaintiff demurred, and the court sustained the demurrer. 44 Fed. Rep. 641. , In this there was no error. The statute only prohibits an action in the courts of the state. Neither does it prohibit the transaction of banking business in thestate,but'simply provides that the parties failing to file the required statement shall be denied access to the courts of the state. Noris it in the power of the state legislature to prohibit the tiff from maintaining an action in this court if it would. While it is admitted that such legislature may limit the right or capacity of a foreign corporation to do business or acquire property within the limits of the state absolutely, or except upolloompliance with conditions precedent thereto, it is well established that it cannot in any way limit or restrain the jurisdiction of the national courts. Bank v. Traver, 7 Fed. Rep. 146; Phelps v. O'Brifm 00., 2 Dill. 518; Rauroad Co. v. WhiUon, 13 Wall. 270. But the defimdant, having pleaded over under rule 9 of the circuit court, is deemed to have waived the matter in abatement. Besides, the business of the purchase of these bills of exchange took place in the state of Oregon, and beyond the jurisdiction of the state· of California. The act is intended to regulate business done in the l!ltate, and not otherwise. . Aftetwards, on Janua,ry 2, 1891, a demurrer was taken to the complaint onthe. ground that the court had not jurisdiction of the defendants, because the plaintiff sued as assignee of certain bills of exchange, in which the drawer, drawee, and payee are citizens of California. ' The circuit court overrwedthe demurrer, (46 Fed. Rep. 357;) and in' this we find no error. The demurrer was based on the provision in section 1 of the judiciary act of 1888, which provides as follows: "Nor shall any circuit or district court have cognizance of any suit, except upon foreign bills of exchange. to recover the contents of any promissory note or other chose in actioD in favor of any assignee, or of any subseqnent holder.if such instrument be made payable to bearer, and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the s.aid contents if no assignment or transfer had been made." And first, if this action is to be considered an action by an assignee to! recover the contents of a chose in action, the circuit court, nevertheless, had jurisdiction, because. thEl bills were made by a corporation,and pay-' able tQbearer.
:7Tbe :biUlQl'iDotettlade by a person payable to himsell ot tI0:hittr;ollderj whe'n:irrdornct: by him and 'deliV'ered to another, becomes, in legal effect, payahle to the bearer thereof, and may be so sued ()J;l:. It:'ifJ .:f!!:y!ply, .e,.r,out\:q¥rbqut the paper pa)"able to ·. D:aniel, Neg, lust. §,130; Bank v.
founded on ltn assignmlmt of the by said section ,322 of the Civil Code, bills of etcbange is a mereingredientor inducl'lUlellt- Byreas,on,or·means tharopf the plaintiff became and was a, preqitw\ qf .the. IJ;nprovement Company. In this condition the statute operated and gave it aright oJ ,action against the defendants, Qf th&QQrporation, fo,r, the amount of its claim against This was :anQriginal right, then created ,w hioB, did not exist before or otherwise.. It !;lever existed, in favor of William T. Coleman & Co., thE! assignor -of the plaintiff,but only inJavor oftheplaintiff against these defendants. Tlie case of Jilullardv. BeU;1:Mason, 243. is a strong case in point. An of ,certain c;:hoses in· action, to wit, bank notes, made by a banking'corporQ.tiou, bl'ought,a.n action against a stockholder of the bank to enforce alia.pility imposed,Ullonhim for the debts of the bank. The parties were citizeps of differeptsta,tes, but the defendant objected that the court was, without because it did not appear that the plaintiff's assignor could have maintained the action. In overruling this objection, Mr. "Justice StORY said: .. But the present action ,is not 'founded on any assignment. It is an original action, created by the statute between the present parties, and never had any existence between oth!'!' debt which the plaintiff claims from the defend.ant is a aum whh,h the never owed to any other person. It is a chose in actIon originallyvestfldundor the statutes in the present plaintiff, and which has never !Jeen a.ssignl'd. To be sure stitle to the bank notes stated in th&declaration forms an'ingredient in the case; but it is not all of his case. It is bllt matter of inducement to his action.' How, then, is it possible for the court to say that it has no jurisdiction of this case, when the parties are of different st;lotes. an!! there never has been any assignment of the cause of action, and the original parties in whom it first vested are before the court? Neither the district judge nor myself has the slight!38t hesitation in overruling the motion." . _.But th,e, bills, The defendants filed an answer, deuying the allegations of the complaint on informa.tion and belief. Said answer also contained a plea in bar of tbe wbich was nothing more than the demurrer filed to the complaint, to wit, that the plaintiff's assignor could not have maintained the action, and therefore the court, under section I of the judiciary act of 1888, was without .' '. . On the trial the court gave 'judgment for the plaintiff, and in this there was no error. It has been suggested by counsel for the plaintiff in error that, under section 5 of the act of 1891, we should certify this case to the supreme court... on the qnestion of jurisdiction; the same being put at issue in the
!lITCUoocte 11. QALVESTONWlIARI' 00.
case by the demurrer to the complaint, as well as the plea in bar. Said Section 5 provides. . "That aPP,eals or writs oterror may be taken trom the district courts or from the existing circuit courts direct to tbesuprElllie court In tblHoJlowing C3Se8': In any whiCh the jurisdictioDoNhedourt is at issue. .In such cases jurisdiction ",lone shall be CfrtiUed to the supreme court from the court below for decision." appea,ls cannot be the "court below" here meant. The statute is. providiJ;lg forappel11s or error from the district and circuit courts, and court of appeals, and the "court below" must be one ofthese. In Mclii8h v. Roff, 141 U. S. 968; 12 Sup. Ct. Rep. U8, the supreme !JaY: court, . .. When that judgment [final] is .rendered, the party against whom It Is rendered mUllt'electwhether he will take his writ of error or appeal to the supreme court .upon the question of jurisdiction alone, or to the circuit court ot appeals upon tbe.whole case.; If the latter, then the circuit court of appeals may, iHt deems proper, certifytihe question of jurisdiction to this court." -And this it would do undersectibn 6 of act of 1891, which gives this ,of law ,to the supreme court, concourt the power to certify cerning. which it desires for its decisiQn. We do not think it necessary to certif)' 80 plain a question 88 the Jurisdiction of the circuit court in thisdlSe to thesupremecourt'for instructitms. The plaintiff in error might haLve taken the case. to the supreme court on that question, instead of to this court upon the whole case. The judgtnent()f the court below is affirmed.
I concur in the judglnent.
/. , . . .. CCWwU Vourt, J1J. D., rp:aa. M$roh Term, 1880.)
When a corporatloa Is .18"ed,_ garnishee, under Bess. Laws Tex. 1875, P. 102, in respect to shares of its stock held by a judgment debtor, it may set up as a defense that'tllestoelt is'held by the lattsr as a trustee merely, and Is not subject . to sale,for:his debts, notwithstanding that such .defense is equitable In its 118ture. The property of the city of GalvestOn in its water front was held fortbe beDeftt of. 'the publio, and ,was not &lienable without the consent 'of the legislature, IlO.1' subject to be.taken under process for the olty's 'The sale by the cittof its property ill the water front to the Galveston Wharf in consideration of cortain shares of .tock iDsucb companJ', derived all its validity from the act of tbe state legislature, dated, June :l3, 1810; and as that act declared 'that the stock should be beld in trust for the hihabitant8 of the city, .and DOt subject .1;(1 .8llsignment, pledge, or mortgage, "or any liability for debt whatev.er," except by OODsent of four fifths of the qualified voter&, the stook is not subject tosaIo, under process of aarnishment, t.o satisf1 · again,at the oiljJ. .
.. It:1i/NIOIP.u,CORPOR4'J'IONs-PUULIO PBOPEB'lY-LuBILITYJOOR DUBTS.
.... li!J.ME-STOClt IN COBPOIUTIONSo