HOBART V. GOULD.
The want of analogy between the two cases, it seems to me, is made even more apparent by further la.nguage used by Judge Drummond in his opinion. He says, speaking of the bond:
"It is an ,indemnity given in pursuance of a law of .the United States: the measure of the liability of the party, and the rights both of the plaintiffs and the defendants, depend upon a law of the United States. and a rule of the supreme court of the United States. It is impossible to take a step in the progress of the cause, in order to determine the rights of the parties, without looking at the law and the rule as the guidance of the court, and controlling its judgment in the determination of the case."
Not so with the case at bar; and, on the whole, without further discussion of the question, I am of the opinion that the jurisdiction of this court over the present bill cannot be maintained on either of the grounds urged by the. learned cOUDsel for the complainant, and. therefore that the present proceeding in the nature of a motion for an attachment for contempt cannot be entertained.
HOBART, Receiver, etc., 1).
(District Oourt, D. New Jer88Y. July 11, 1881.)
NATIONAL BANK-INSOLVENCY-STOCKHOLDER A. (''REDITOR-AssESSJmNT-SET-
OFF-REV. ST. § 515!.
A stockholder of an insolvent national bank, who happens also to·be()neof its creditors, cannot cancel or diminish the assessment to which the provisions of section 5151, Rev. St., make him liable, by offsetting his individual claim against it.
Section 5151 of the Revised Statutes of the United States, among other things, provides that the shareholders of. every national banking assocation shall be held individually responsible for all contracts, etc., to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. Held, that, upon the insolvency of such a bank, a shareholder who happens to be one of its creditors cannot cancel or diminish the assessment to which the provisions of this section make him liable, by offsetting his individual claim against it.
Demurrer to Plea. A. J. Keasbey, for the receiver. C. F. a C. E. Hill, for defendant. NIXON, D. J. Section 5151 of the Revised Statutes of the United States, among other things, provides that the shareholders of every national banking association shall be held individually responsible, equally and ratably,and not one for another, for all contracts, debts, and engagements of such associations, to the ex.tent of the amount
of their stock therein, at the par value thereof, in addition to the amountiIivested in, such shares; and section 5234 authorizes the comptroller of the currency, on proof of the existence of certain conditions, notneceasaryto be specified here, to appoint a receiver, whose duty it shall be to enforce such individual liability of the stockhoIaers. ' The plaintiff is the receiver of the First National Bank of Newark, and has brought this suit against the defendant to recover the amount due to the receiver, upon the assessment made by the comptroller upon the defenllant as one of the shareholders, of the association. the plaintiff has demurred generally, seta,The third plea, to forth that the First National Bank of Newark, of which the plaintiff is receiver, ie in(lebted to the defendant in large sums of money,. Which exceed the damages Bustained by the pllt,intiff by reason, etc., out of which sum the defendant is ready and, willing, and offers, to set off and allow the ful'!' amount of the damages claimed. The demurrer raises the question whether such set-off is allowable; i. e., whether a stockholder of a national bank, who happens also to be a creditor, may or diminish his by offsetting his individual claim. against the association. Considering the ends plainly in contemplation by the foregoing pr6visionsof the statute, it' would seem, upon principle, that no such' escape from liability should be permitted by the shareholder. The object of the act was to make the holders of the stock responsiblQ for a trust fund, equal, if necessary, to the amount of the capital of the bank, and to be devoted to the payment of all the creditors alike. If .the receiver, in his appeals to the shareholders for the payment of the assessments against them, may be met by their claims as creditors of the association, it is not difficult to imagine cases in which the beneficent object of the law might be wholly defeated. Besides, the right to a set-off in pleading is a creature of the statute, and applies only to mutual dealings, and no such relations exist between the parties here. The liability to be enforced against the shareholder is not a debt due to the bank, but is a sum of money equal to the par value of his stock, payable by him to the receiver as an officer of the government by force of the law, and the assessment authorized and made by the comptroller. The effect of allowing such a set-off is to give the shareholder an advantage over other creditors. It practically pays his debt in full, and, by leaving so much less for others, diminishes his liability as a stockholder, whic!:} it was clearly the design of the law to impose.
ROBART V. GOULD.
The reported' cases, so far as they go, sustain this view. It was upon this principle that the chancellor of New Jersey, in the recent case of The Attorney General v. The Mechanics' ltjLaborers' Saving. Bank, (5 Stew. 163,) held that a depositor who borrowed moneyfrbin the bank, secured by his note or mortgage, could not offset' his deQt against the amount of his deposit at the time when the decree of insolvency was made. In reaching this result he was following the well-considered case of Osborn v. Byrne, 43 Conn. 155, in which the supreme court of Connecticut, in answer to the petition of the reo of an insolvent savings bank, praying for instructions, decides that the borrower of the funds of the corporation should not be allowed to offset his deposits against his indebtedness. The question, so far as I know, has never been before the supreme court of the United States for decision; but the cognate one, whether ·a ,stockholder, who had given his notes for his stock subscription, and who was sued thereon after the insolvency of the institution, might offset debts due to him from the corporation in the ordinary course of business, has received full discussion, and the court has refused to allow such offset, on the ground that the money arising from the unpaid shares was a trust fund, to be equally divided among all the creditors. Sawyer v. Hoag, 17 Wall. 610. If there be any difference in principle between that case and, this, I am not .able to perceive it. The whole object of the individual liability of the shareholder provided for in the act, was to create a fund in case of insolvency for the payment of the general creditors equally and ratably; and if the capital must be regarded and treated as a sacred trust for such a purpose, much more so, the equivalent sum to be derived from the enforcement of the liability provision. The court of appeals of New York (In t'e Empire Gity Bank, 18 N. Y. 199) examined the same question, arising under the general banking law of that state; and the· provisions of the two banking systems are so nearly alike in ,regard to the personal liability of the shareholders that the judgment of the learned court is entitled to great weight and consideration here. Judge Denio, in answer to the claim of one of the appellants that, being a creditor of the bank as' well as a stockholder, he was entitled to set off the indebtedness of the bank to him against his liability, speaking for the. court, said:
"Under a proceeding for winding up a corporation, where an account of all the debts and of all the effects, including the aggregate liabilities of the stockholders, is required to be taken, there is no reason why a creditor should be in any better situation on account of being at the same time a stockholder.
In the latter character the constitution and the statute make him HallIe to the creditors. to an amount equal to his stock, or to his just proportion of that amount, if the w\lOle is not required; but as a creditor he is entitled only to a dividend in proportion to the other creditors. In case of a deficiency in means to pay all the debts, he must take his dividend pro 1'ata, Rut if he could set off his claim as a creditor against his liability as a stockholder, he might be paid in full, while the other creditors would receive only a part of the amount due them."
And Morse, in his excellent treatise on Banks and Banking, (p. 500,) in stating the different defences in suits against shareholders, says:
"Where one is a creditor as well as a stockholder he cannot avail himself of the debt owing to him by the bank by way of set-off to diminish his contributory share. His liability as a contributor for the benefit of creditors must be distinguished from his character as a simple contract debtor to the bank upon ordinary transactions."
Upon authority, as well as principle, the demurrer to the plea is sustained.
V. CENTRAL RAILROAD OF IOWA.
(Circuit OOU?'t, D. Iowa. May 26, 1881.)
. In case the duties of a receiver prove to be more than he or the expected. or in case he performs duties in addition to those ordinarily required of a receiver, in either case, provided he has faithfully administered bis trust without intentional error or fraud, he is entitled to compensation in addition to that fixed by the order under whicb he was appointed.
2. SAME-SALE BY, OF HIS OWN PROPERTY, TO CORPORATION. Under the circumstances surrounding the sales, held, that certam sales by
the receiver to the corporation, of of which he was a sale or part owner, were not fraudulent in such a sense as to deprive him of just compensation fol'" servit:es rendered.
SAME-INSTRUCTIONS TO, CONSTRUED.
Instructions in writing accompanying the order of apportlOnment, which directed as follows: "It is not expected that you will serve as superintendent. You will continue the present superintendent, or employ another, as your judgment dictates, on the best terms that will secure a good man,"-were not in tended to prohibit the receiver from dischargmg, in person, the duties of supeI intendent.
Before MOCRARY and NELSON, JJ. MOCRARY, C. J. J. B. Grinnell, petitioner, was appointed by this court receiver of the Central Railroad of Iowa on or about the fifteenth day of January, 1876, to succeed one D. M. Pickering, and his compensation was fixed by the order of appointment at $3,000 per annum. Accompanying the order of appointment were instructions