A judgment of the highest court of a state reversing the
judgment of the state court below upon the ground that the case
made out by the findings was a different case from that presented
by the pleadings, and that the variance was fatal to the validity
of the judgment, and on the further ground that as the defendants
in error were sued jointly for a tort, a withdrawal of the action
in favor of two of them also operated to release the third,
presents no federal question for the consideration of this
Court.
This was an action sounding in tort, but styled "A Bill of
Complaint in Equity," for an accounting and settlement of a trust
by Richard P. Thomas, Robert R. Thompson, and Robert A. Wilson. The
action was instituted in the Superior Court of San Francisco by
John Chetwood, Jr., for himself and as the representative of all
the stockholders of the California National Bank, which bank had
failed and was at the time in the hands of a receiver.
The bill alleged that the failure was due to the negligence of
Richard P. Thomas, president, Robert R. Thompson,
vice-president,
Page 171 U. S. 442
and Robert A. Willson, a director, composing the executive
committee of the corporation, who had, as such committee, contrived
together to injure and deceive the said corporation by neglecting
to conform to its bylaws, and, as such committee, had made
worthless loans whereby the money of the corporation was wasted,
misused, and lost to the amount of about $200,000.
Among the duties and powers of the committee as set forth in the
bylaws adopted by the bank were an immediate supervision of all the
officers and business of the bank, auditing all bills for current
and other expenses, discounting and purchasing bills, notes, and
other evidences of debt, and reporting to the directors at each
regular meeting all bills, notes, and other evidences of debt
discounted or purchased by them for the bank. It was further
provided by the bylaws that the president should have general
control and supervision of the bank, and be responsible for its
condition to the directors. The vice-president was to assist the
president in the discharge of his duties.
The bill alleged that
"it was the duty of each of said members of the executive
committee to exercise, concurrently with his associates on said
committee, diligence and fidelity in performing the duties of said
committee,"
but that
"they negligently permitted the cashier of said bank to control
and manage the whole business of the said bank as he saw fit, and
without consulting or in any wise informing said defendants,"
and that, by reason of the negligence of said defendants and the
acts and misconduct of the cashier, negligently permitted as
aforesaid, the bank suddenly failed on December 15, 1888, owing
about $450,000, and the Comptroller of the Currency had placed a
receiver in charge of said bank and its affairs, and thereafter
levied an assessment of $75,000 upon the stockholders, which sum
was all paid except $20,000 assessed against Richard P. Thomas, the
president of the bank.
The prayer of the bill was that a decree might be entered
holding Richard P. Thomas, Robert R. Thompson, and Robert A. Wilson
to an accounting of their trust, and that a joint and several money
judgment be entered against them for the sum
Page 171 U. S. 443
of $400,000, with legal interest thereon from the time of such
loss.
The defendants answered the bill, denying the allegations as to
negligence on their part.
Upon the cause's being submitted to the court, a judgment was
"entered in favor of the plaintiff and against Richard P. Thomas,
Robert R. Thompson, and Robert A. Wilson," and the case was
referred to a master, who found the actual loss of the bank to be
$166,919. Before a final judgment was rendered by the court,
however, the suit was dismissed by the plaintiff as to Robert R.
Thompson and Robert A. Wilson, from whom had been collected the sum
of $27,500, thus leaving a net loss to the bank of $139,419, and
judgment for this amount was rendered against Richard P.
Thomas.
Thereupon Thomas appealed to the Supreme Court of the State of
California, by which court the judgment was reversed, and the case
remanded to the trial court, with directions to enter a judgment in
favor of the defendant Thomas. 113 Cal. 414.
The plaintiff thereupon sued out a writ of error to this Court
assigning as the principal ground to give this Court jurisdiction
that the judgment of the supreme court of the state was rendered
without due or any process of law, and deprived the plaintiff of
its property without due process of law, contrary to the
Constitution, etc., and Rev.Stat. § 5136, relating to national
banks.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the court.
Unless the plaintiff in error was denied some right under the
Constitution or statutes of the United States, "specially
Page 171 U. S. 444
set up and claimed" by it, this writ of error must be
dismissed.
The bill of complaint filed in the Superior Court of San
Francisco by a stockholder of the California National Bank sought
to charge three directors of the bank with negligence in the
performance of their trust, and particularly in failing to comply
with certain bylaws of the bank, by which large amounts of money
were lost to the bank, which the bill prayed that the defendants
might be decreed to make good and restore. The bank was chartered
under the National Banking Act, and the bylaws were adopted in
pursuance of Revised Statutes, section 5136, which authorizes
associations incorporated under the act to define the duties of the
president and other officers, and to regulate the manner in which
its general business shall be conducted. Certain transactions of
the directors are also alleged to be infractions of Revised
Statutes, section 5200, for which the directors are made liable in
section 5239, although no violations of this section are
specifically alleged in the bill.
Demurrers were interposed by the several defendants and
overruled, when answers were filed denying in general the
allegations of the bill. The court subsequently entered judgment
against the three directors, but, being unable to determine the
proper amount, appointed a referee to take proof of the amount
appearing to be due and owing to the bank from certain named
individuals. Upon such report's having been made, a stipulation was
entered into between the plaintiff stockholder and the defendants
Thompson and Wilson whereby the plaintiff renounced and withdrew
his action against such defendants and the court, upon stipulation,
entered a judgment dismissing the action as against them. The court
thereupon made a finding of all the facts in the case, among which
was one to the effect that there had been collected of the two
defendants Thompson and Wilson the sum of $27,500, leaving a net
loss to the bank of $139,419, for which judgment was entered
against the defendant Thomas. Thomas thereupon appealed to the
supreme court of the state from the judgment so entered.
Page 171 U. S. 445
That court was of opinion that the complaint, though entitled "A
Bill in Equity for the Accounting and Settlement of a Trust,"
contained nothing more that a charge
ex delicto against
the directors for a breach and nonperformance of their duties. It
did not consider it necessary to dispose of the objections to the
complaint, but assumed, without deciding, that the complaint was
sufficient to state a cause of action in its averments of
misconduct. It then proceeded to decide (1) that the complaint was
one sounding in tort, and that the defendants were charged as joint
tortfeasors; that their negligence was pleaded as their joint
neglect to perform duties not individually imposed upon them, but
collectively undertaken as members of the executive committee; that
in the findings of fact no mention was made of any dereliction of
duty on the part of Thompson and Wilson, and that there was an
absolute failure by the court to find upon the most material issues
of the case -- the joint negligence of the three defendants, which
alone, it was alleged, had occasioned loss to the bank. "Such,"
said the court,
"is the cause of action pleaded in the complaint. The findings,
if it be conceded that they give evidence of a meritorious cause of
action against the defendant Thomas, do so because of a showing
that he was negligent not with the other defendants and as member
of the executive committee, but that he was individually and
separately negligent in the performance of his duties as president.
But this is not the cause of action pleaded against him, and it is
well settled that where the case made out by the findings is a
different case from that presented by the pleadings, the judgment
will be reversed, for the relief decreed must be the relief sought,
and a variance, even if it be such as could have been cured by
amendment, is fatal to the validity of the judgment."
The court further held (2) that, as the defendants in error were
sued jointly for a tort, a withdrawal of the action in favor of
Thompson and Wilson operated also to release the defendant Thomas.
This was in fact the main reason given for its conclusion. The
court thereupon ordered the judgment to be reversed and the cause
remanded with directions to enter judgment in favor of the
defendant Thomas.
Page 171 U. S. 446
In all this record there was no federal right specially set up
or claimed by the plaintiff in error until after the judgment in
the supreme court, when a petition for writ of error was filed by
the California National Bank, a codefendant with Thomas in the
original action, in which various allegations were made of a denial
of federal rights. But, assuming that a federal question might be
extorted from the allegations of the complaint, it is sufficient to
say that the case was not disposed of upon the merits of such
complaint, which was treated as sufficient, but upon a variance
between its allegations and the proofs, and upon the settlement
made with the defendants Thompson and Wilson, and the withdrawal of
the action against them. These were purely questions under the law
of the state, as to which the opinion of the supreme court was
conclusive. Not only was no suggestion of a federal question made
to the trial court or to the appellate court, but there was nothing
to indicate that the judgment rendered could not have been given
without deciding a federal question. Indeed, the opinion shows that
the cause was decided, as it might well have been, solely upon
grounds not involving such question.
Whether a judgment should be ordered in favor of Thomas for a
dismissal of the action against him, or simply for a new trial,
involved merely a question of the procedure under the law of the
state. The court might have been, and probably was, of the opinion
that an action would lie upon the separate liability of Thomas, and
have reserved for future consideration the question whether the
dismissal of this action upon a joint liability would operate as
estoppel against a new action upon his individual liability.
There was no federal question involved in the disposition of
this case, and the writ of error is therefore
Dismissed.
