Herrmann v. Edwards
238 U.S. 107 (1915)

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U.S. Supreme Court

Herrmann v. Edwards, 238 U.S. 107 (1915)

Herrmann v. Edwards

No. 222

Argued April 14, 1915

Decided June 14, 1915

238 U.S. 107




The rule that, in the absence of diversity of citizenship, jurisdiction of the district court over a suit depends upon whether there is a federal cause of action stated in the bill applies to suits against national banks and their directors.

Under the Act of August 13, 1888, the federal courts have not, in the absence of diverse citizenship, jurisdiction of a suit by a stockholder against directors of a national bank and the bank to compel the directors to reimburse the bank for wrongfully investing its funds, nor has the district court any jurisdiction of such a suit under paragraph 16 of § 24, Judicial Code.

The intention of Congress to make such a radical change in the rule

Page 238 U. S. 108

prevailing for many years as to confer jurisdiction on the federal courts of all suits by and against national banks will not be presumed in the absence of clear manifestation of such purpose.

The facts, which involve the jurisdiction of the district court of a suit against a national bank and its directors under the Act of August 13, 1888, and paragraph 16, § 24 of the Judicial Code, are stated in the opinion.

Page 238 U. S. 111

MR. CHIEF JUSTICE WHITE delivered the opinion of the Court.

If the statutes which control the question for decision in this case and their significance as settled by the decisions of this Court long prior to the commencement of this suit be at once stated, it will serve to clarify and facilitate the analysis of the issue to be decided. Section 4 of the Act of Congress of August 13, 1888, c. 866, 25 Stat. 433, provided as follows:

"That all national banking associations established under the laws of the United States shall, for the purposes of all actions by or against them, real, personal or mixed, and all suits in equity, be deemed citizens of the states in which they are respectively located, [and in such cases, the circuit and district courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same state.] The provisions of this section shall not be held to affect the jurisdiction of the courts of the United States in cases commenced by the United States or by direction of any officer thereof or cases for winding up the affairs of any such bank."

(Certain words are enclosed in brackets for reasons hereafter referred to.)

This section was but a reenactment of an identical provision contained in the § 4 of the Act of Congress of March 3, 1887 (c. 373, 24 Stat. 552), and again this was but the reenactment of an identical provision contained in the

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