WEBER'll. SPOKANE NAT. BANX.
the teste of the chief justice. It is defective·. Is thisfatal?'Section
954, St.,·proVides that "no summons, writ, etc., in civil cases,in any court of the: United Sw:tes, shall be abated, arrested, quashed, or reversed for or want of forln." Judge CHOATE, in Brown v. Pond, 5 Fed. Rep., 'at page 40, says that this power of amendment can only be exercised in cases where' the court has acquired jurisdiction over the defendant,or he has submitted himself to the jurisdiction; or, as Judge BLATCHFORD puts'it in Dwighiv. Merritt,4 Fed. Rep. 614, the 'power is powertqamend a defect in process. But there must first be 11' process to be amended,--'"Something to amand and to amend by. The summons in this case bears the seal of the district: court, and issued froin the court. This gives us something to amend'andto amend by. Peaslee v. Haber8tro, 15 Blatchf. 472. See, also, Chamberlain v. Bitter8ohn, 48 Fed. Rep. 42. This being the case, the irregularity can 'be amended, as the summonswa.s, sufficient to bring the defendant into court; deed,there can be no question as to Hughes; for when he came in by attorney, imdmoved for a new trial, he 'submitted himself to the jurisdiction. The motions in arrest of judgment are refused.
WEBER et al.
SPOKANE NAT. BANK et al.
(Ctrcuit Court.D. WasMngwn, E. D. May 27, 1892.)
NATJONAL BANKs-LIMITA.TION OF INDEBTEDNIlSs-CONSTRUCTION OF STATUTB.
Rev. St..5 5202, providing that national banks shall not contract liabilities In exc8ssof paid-up capital stock, excel?t upon \lotes of circulation, accounts for deposits, etc., does not intend that such Items of liability shall be excluded in determining whether the indebtedness of a bank exceeds its paid-up capital stock a' the time it incurs a liability as guarantor.
In an action against a national bank and its receivel' on 8 promissory note, defendants may avail themselves of the defense that the note was executed in violation or Rev. St. § 5202, providing that national banks shall not contract liabilities In eXQeSs of their paid-up capital stock. The note being void as to tile bank, it is not estopped to set up the defense in question. A business D)an, accepting the note of a national bank, Is presumed to know the financiai condition of the bank, and that at the time of the execution of the note it had alreadylncnrredtndebtedness ill excess of the limit prescribed by law.
S.SAME-NoTICE TO CREDITOR-PRESl:MPTIONS.
At Law. Action by C. F. Weber & Co. against the Spokane National Bank and H. L. Chase, receiver, upon three promissory notes. Jury instructed to find for the defendant. Motion for a new trial denied. The. other facts fully appear in. the following statement by HANFORD, District Judge: The notes in suit were drawn in favor of the plaintiffs, as payees, and signed by Charles Hussej,'as maker. The defendant the Spokane National Bank is an anomalous indorser, having signed the notes upon the backs thereof before delivery. Said notes were given in payment of an account for bankfurnitnte and fixtures supplied by the plaintiffs for a
FEDERAL REPORTER, vol. 50.
,building owned by said Hussey, and occupied by said defendant as his tenant. The receiver defends on the ground that the bank is not marily liable as a maker of the notes; that it could not legally become bound as a surety; and, if bound, inasmuch as the principal debtor has not been proceeded. against, and no reasons are assigned for not having collected from him, nor for the failure to join him as a party defendant, its liability as a guarantor of the notes cannot be enforced in this action. n was shown by the evidence that the furniture was supplied at the instance of the officers of the bank, and that credit was given by the plaintiffs to the bank, and not to Hussey, but,.as between the bank and Hussey, said furnitUl'e and fixtures belonged to Hussey, and the same are not assets of the.insolvent bank in the hands of.thereceiver. The receiver in his answer also pleads, as a special defense, that at the times of the making of the notes, and sale of the furniture in consideration. for which they were given, the bank had already incurred indebtedness, and become liable for amounts aggregating a Bum much greater than the amount of its paid-up capital stock; sothat by section 5202, Rev. St.,it was then prohibited from becoming liable upon said notes, either as maker or guarantor, or upon an account as purchaser of the furniture upon credit. The case was tried by the court and a jury, and, after introduction of the evidence for both contesting parties, the receiver's attorney moved the court for a peremptory instruction to the jury to render a verdict for the defendants, which motion was granted, and under instructions from the court the jury returned a verdict for the defendants. A motion for a new trial was interposed and submitted upon the arguments made upon the motion to instruct. F(Yf$ter, Wakefield &' Wikoff, for plaintiffs. P. H.Winston, U. S. Atty., H. M. Herman, and J. W. Feighan, for receiver. HANFORD, District Judge, (after stating the facts as above.) The evidence introduced upon the trial was sufficient to have warranted the submission of the case to the jury upon the question whether the bank was in fact the purchaser of the furniture, and liable as the principal debtor and maker of the notes, or a mere guarantor; but, in my opinion, the special defense pleaded by the receiver is fully sustained by the evidence, and there was no error in the instruction given to return a verdict for the defendants. The bank was fully orgAnized and in operation more than a year before the inception of the indebtedness constituting the consideration for the notes, and it was at that time liable to its depositors and creditors for sums amqunting in the aggregate to at least four times th.e amount of its capital stock; and by section 5202, Rev. St.,l its powers
IRev. Bt. § 5202, provides as follows: "No association shall at any time be indebted, or in any way liable, to an amount exceeding the amount of its capital stock at such t,ime actually paid lU and remaining, undiminished by losses or otherwise, except on demands of the nature following: . Fi/r8t, notes of circulation; 8.econd, moneys deposned with or oollected by the assooiation; third, bills of exchange or drafts drawn against money actually on deposit to. the oredit of the association, or due thereto; fcrurth. liabilities to the stockholders of the association for dividends and reserved profits. I,
w"re so limited that it become legally bound for any additional lum, either upon an open account. or as maker or guarantor of these notes. The section of the statute referred to is Dot ambiguous, and I find no warrant for the construction of it contender,l for by counsel fOI' the plaintiffs. I cannot assent to the proposition that congress has, in fixing a limitation of indebtedness, intended to exclude from the computation thereof liabilities upon notes of circulation, accounts for deposits, and fOl:moneys collected, bills of exchange drawn against actual credit, and surplus accumulations belonging to stockholders, and to authorize the incurring of liabilities for other purposes equal to the entire no surplus whatever as a margin for safety or basis for confidence. The insist that the violation of the statute by contracting debts in excess of the limit is not a defense available to the bank or the receiver who represents it. The receiver, however, represents,not only the bank, but also all of its creditors and the government of the United States as well. If the govermuent can, by any proceeding, enforce this law, the receiver .can in this suit apply its provisions for the protection of the innocent depositors. Furthermore, there is no ground for estoppel, even againstthe bank. Contracts, of corporations creating debts in excess of limitations fixed by their charters are void, and such debts are not 001lectible by law. Crampton v. Zabriskie, 101 U. S. 601; Davie88 00. v. Dicki1l8O'T/.,1.l7U.S. 657,6'Sup. Ct. Rep. 897; Litchfieldv· .l:!allou,1l4 U. S. 190, 5 Sup. Ct. Rep. 820, and 7 Amer. & Eng. Corp. Cas. 378, note. men are presumed to. the financial condition of corporations to whom they give credit, and, if one voluntarily becomea a creditor for an additional, amount after a statutory limit ,has been reached, his position in a court of law is no better than that olone who knowingly becomes a party to an illegal contract. 15 Amer. & Eng. Ene. lAw, 1138. Motion for a new trial denied.
of 4tlJ')6az". E1,ghth. oircuit.Hay 2S, 189J.) .
Jl!:aO:aS-DISQUALIJ'ICATION-PJUOR SERVICB AS TALESMAN.
th'der Rev. St. 5 812, amended by Act Congo June 30, 1879, 5 2, a juror called talesman is not SUbJect to challenge merely because he has served as a talesman in. another cause in the same court and term.
8.ul:B-.A.noPTING STATB PRACTICB.
Aet Cong. IB72, requiring federal courts to conform to state practice "as near as maybe, " only adopts such rules. of state practice as are not inconsistent with any act of congress upon the Sllome subject; and hence Code Civil Proo Kan I 270, e?-acting that prior service as a talesman in the same court and term shall btl sU.ftlClent .ground for challenge, is not binding on federal courts, It being other. WIse prOVIded by Rev. St. U. S. 5812.
.. OPDlIO.BVlDBlWB-VALU. OJ' GOOD&
The pur<:haser of a stock of goods is competent to testify as to its value \0 a. aotionagamst a J!1arsh!11 for wrongful attachment, where it appears that the hM aSSIsted in taking the invoice at the time of the purchase, and had been sellmg from the three days at the time of the seizure, and sUbaequentlT BOld the balance not seIZed,