The opinion of the court was delivered by: WALKER
This matter, by agreement of counsel, comes before the Court on final hearing.
1. The New Jersey National Bank and Trust Company of Newark, New Jersey, was and is a national banking association, organized and existing under the laws of the United States of America.
2. On or about June 11, 1932, the then Comptroller of the Currency of the United States of America, pursuant to authority (Title 12 U.S.C. § 191 et seq., 12 U.S.C.A. § 191 et seq.), appointed a receiver for said association and thereafter the receiver and his successors undertook and proceeded with the necessary steps to close up such association.
3. An assessment of 100% upon all the outstanding capital stock has been levied and a substantial part thereof collected. Full provision has been made for refunding to the United States of America any deficiency in redeeming the circulating notes of the association. The principal sum due on each creditor's claim (except those of shareholders, who are also creditors), proved or adjudicated as required under the terms and provisions of Title 12 U.S.C. § 194, 12 U.S.C.A. § 194, has been paid in full and the Comptroller has paid or has in his possession sufficient monies to pay the expenses of the receivership.
4. At the time each creditor presented his receiver's certificate of proof of claim for a fifth dividend of 5%, which 5% made a total payment of 100% on account of principal due, the receiver's office attached to each certificate of proof of claim a written notice that, a further dividend representing all or part of the accrued interest on the claim would be paid when liquidation of the remaining assets warranted.
5. On March 2, 1940, the plaintiffs, as shareholders, on behalf of themselves and all other shareholders similarly situated,
filed herein their complaint under Rule 23, Federal Rules of Civil Procedure for District Courts, 28 U.S.C.A. following section 723c, and thereby seek the following relief; (a) a preliminary injunction and the appointment of a receiver which need not be considered, because of a stipulation stated in open court; (b) that the Comptroller be ordered to call a meeting of the shareholders for the purposes specified and set out in Title 12 U.S.C. § 197, 12 U.S.C.A. § 197; (c) that interest upon obligations held by former creditors be disallowed. (Certain other relief is sought; however, counsel have limited their argument to (c) and decision thereon determines whether the complaint stands or falls.)
6. The summons issued pursuant to Rule 4, Federal Rules of Civil Procedure for District Courts, was served upon the Comptroller of the Currency at Washington in the District of Columbia on the 6th day of March, 1940, and said Comptroller appears specially and moves to quash same on the grounds that he is a resident, citizen and inhabitant of the District of Columbia and is not and was not subject to service of process in this, an action instituted in the District of New Jersey, and said service is without authority of law.
The first question is: Should the service of a summons in this, an action in the District of New Jersey, be quashed when it appears that it was made at Washington in the District of Columbina upon the Comptroller of the Currency of the United States of America, a resident, citizen and inhabitant of said District of Columbia?
The long established and general rule regarding jurisdiction in personam should be varied only in case of expressed statutory authorization.
The expressed statutory authorization upon which the plaintiffs rely is: "All proceedings by any national banking association to enjoin the Comptroller of the Currency, under the provisions of any law relating to national banking associations, shall be had in the district where such association is located." Section 49 of the Judicial Code, Title 28 U.S.C. § 110, 28 U.S.C.A. § 110.
The proceedings herein are by persons who happen to be shareholders in a national banking association. The end they seek is a ratable distribution of the proceeds of the assets or property of the association remaining in the hands or subject to the order and control of the Comptroller, and the receiver appointed by him, 12 U.S.C. § 197, 12 U.S.C.A. § 197, without deduction of interest on the approved or adjudicated claims of creditors. The fruits of the litigation, if successful, will inure directly to their benefit, and while it can be admitted for the purposes hereof that they and those they represent collectively own all the stock of the institution, it does not follow that in an action such as this, they prosecute as the owners of said institution or for its benefit. This cannot be called a proceeding by a national banking association, and therefor it is not expressly authorized by Section 110, supra. See Wilson v. Awalt, Acting Comptroller of the Currency, et al., D.C., 2 F.Supp. 465; Nagle et al. v. O'Connor, Comptroller of the Currency, et al., 3 Cir., 88 F.2d 936; Adams ...