Van Reed v. People's National Bank of Lebanon, Pennsylvania

67 A.D. 75, 73 N.Y.S. 514
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 1, 1901
StatusPublished
Cited by1 cases

This text of 67 A.D. 75 (Van Reed v. People's National Bank of Lebanon, Pennsylvania) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Van Reed v. People's National Bank of Lebanon, Pennsylvania, 67 A.D. 75, 73 N.Y.S. 514 (N.Y. Ct. App. 1901).

Opinion

Laughlin, J.:

The action is brought to recover for legal services, the plaintiff being the assignee of the claim. The warrant of attachment was granted on the ground that the action is on contract to recover a sum of money from a foreign corporation. The defendant appeared specially and moved to vacate the warrant of attachment on the ground that it was issued in violation of section 5242 of the Revised Statutes of the United Státes, which provides as follows: “All transfers of the notes, bonds, bills of exchange or other evidences of debt owing to any national banking association, or of deposits to its credit, all assignments of mortgages, sureties on real estate, or of judgments or decrees in its favor; all deposits of money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, made with a view to prevent the application of its assets, in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null' and void; and no attachment, injunction, or execution shall be issued against such association or its property before final judgment in any suit, action, or proceeding in any State, county, or municipal court.”

There .-being no .evidence that the defendant is'insolvent its solvency is to be presumed. (Market Nat. Bank of New York v. Pacific Nat. Bank of Boston, 64 How. Pr. 1.)

It was held in Robinson v. National Bank of Newberne (81 N. Y. 385) that this statute does not prohibit the issuing of an attachment against a solvent national bank; and in Raynor v. Pacific [77]*77Nat. Bank (93 N. Y. 371) the court held that the effect of the statute was to prohibit an attachment against a national bank which was insolvent or had committed an act of insolvency.

Subsequent to these decisions, Chief Justice Waite, in delivering the opinion of the court in the case of Pacific National Bank v. Mixter (124 U. S. 721), in construing section 5242 of the United States Revised Statutes, after stating that said section was a re-enactment of section 52 of the original act (13 U. S. Stat. at Large, 115) and the amendment of section 57 adopted in 1873 consolidated, said: The fact that the amendment of 1873 in relation to attachments and injunctions in state courts was made a part of § 5242 shows the opinion of the revisers and of Congress that it was germane to the other provision incorporated in that section, and was intended as an aid to the enforcement of the principle of equality among the creditors of an insolvent bank. But however that may be, it is clear to our minds that, as it stood originally as part of § 57 after 1873, and as it stands now in the Revised Statutes, it operates as a prohibition upon all attachments against national banks under the authority of the state courts. That was evidently its purpose when first enacted, for then it was part of a section which, while providing for suits in the courts of the United States or of the State, as the plaintiff might elect, declared in express terms that if the suit was begun in a state court no attachment should issue until after judgment. The form of its re-enactment in the Revised Statutes does not change its meaning in this particular. It stands now, as it did originally, as the paramount law of the land that attachments shall not issue from state courts against national banks, and writes into all state attachment laws an exception in favor of national banks. Since the act of 1873 all the attachment laws of the State must be read as if they contained a provision in express terms that they were not to apply to suits against a national bank.”

That was a suit in equity by the receiver of a national bank against attaching creditors and sureties on bonds given by the bank, to dissolve attachments, to reduce to his possession securities held by the sureties for their protection against liability and to restrain the attachment creditors from enforcing the attachment bonds on the ground that the attachments were unauthorized, illegal and void. At the time the attachments were issued the bank was embarrassed, [78]*78its doors were closed and it was in charge of a bank examiner. It is, therefore, contended that the question as to whether this statiite prohibited attachments against solvent national hanks was not necessarily involved in the decision of the case. While this may be conceded, it is evident that the opinion relates to national banks generally, whether solvent or insolvent, and seems to have been intended as an authoritative construction of the statute. We do not find that this case has been modified or distinguished by the Supreme Court. In Earle v. Pennsylvania (178 U. S. 449); which was not an action against a national bank, but was a case where an attachment had been issued, against the bank as garnishee, Justice Hablan, in delivering the opinion of the court, said: “ Sections 5234, 5235 and 5236 abové quoted have reference to the affairs and property of national banks in the hands of receivers and the administration of its assets by the Comptroller; and the words in section 5242, ‘ no ■ attachment, injunction .or execution shall be issued against such association or its property before final judgment in any suit, action or proceeding in any state, .county or municipal court,’ are to be construed in connection with the previous, parts of the same section declaring null and void certain transfers, assignments, deposits and payments made after the commission by the bank ‘ of an act of insolvency, or in contemplation thereof,’ with the intent to prevent the application of the bank’s assets in the manner- prescribed by Congress, or with a view to the preference by the bank of one creditor to another. Whatever may be the scope of section 5242, an attachment sued out against the bank as garnishee is not an attachment against the bank or its property, nor a suit against it, within- the meaning of that section. It is an attachment to reach the property or interests held by the bank for others.”

In that opinion ho reference was made to the case of Pacific National Bank v. Mixter (supra), and we think, therefore, that the court did not intend to modify or limit its former decision. The appellant relies on the case of Bank of Montreal v. Fidelity Nat. Bank (49 Hun, 607; 112 N. Y. 667), which was - affirméd -by the Court of Appeals without, ah opinion on the authority of Pacific National Bank v. Mixter ; but it appears from an examination-of the record in the formér case that the bank was insolvent at the time the attachment was issued, and that the motion to vacate the attach[79]*79ment was made by its receiver. The case fell clearly within the doctrine previously announced by the Court of Appeals in Raynor v. Pacific Nat. Bank (supra). Under these circumstances the mere fact that the affirmance of the order vacating the attachment was placed upon the authority of Pacific National Bank v. Mixter (supra) is no indication that the Court of Appeals intended to overrule its former decision and acquiesce fully in the broad construction of the statute by the Supreme Court of the United States.

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Related

McBride v. Illinois National Bank
128 A.D. 503 (Appellate Division of the Supreme Court of New York, 1908)

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Bluebook (online)
67 A.D. 75, 73 N.Y.S. 514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/van-reed-v-peoples-national-bank-of-lebanon-pennsylvania-nyappdiv-1901.