It is again decided that, to render a federal question available
on writ of error from a state court, it must have been raised in
the case before judgment, and cannot be claimed for the first time
in a petition for rehearing.
This was a motion to dismiss or affirm. The case is stated in
the opinion of the Court.
Page 180 U. S. 88
MR. JUSTICE McKENNA delivered the opinion of the Court.
The commercial firm of M. Schwartz & Company, of the City of
New Orleans, was indebted to the American National Bank of that
city on the 5th of August, 1896, in the sum of $88,600.16. To
secure this indebtedness, certain shares of the Schwartz Foundry
Company and other securities were pledged to the bank.
Schwartz & Company became insolvent, and, after proper
proceedings in the civil district court of the Parish of Orleans,
Sumpter Turner and Edward Weil were elected syndics of the firm and
of the individual members thereof. Weil subsequently died, and
Turner was elected sole syndic, and is plaintiff in error here.
The bank also failed, and F. S. Richardson was appointed
receiver by the Comptroller of the Currency. He attended the
meeting of the creditors of the insolvent firm, proved the claim of
the bank, voted to accept the cession, and for the appointment of
the syndics. Subsequently be applied to the civil district court to
have the claim recognized and his rights as pledgee enforced by a
sale of the securities pledged and the proceeds applied to the
payment of the claim. Exceptions to his petition were filed and
overruled, and an answer was then filed. The case was tried and
judgment rendered in favor of the receiver for $74,045.16, being
the greater part of the claim, and the securities pledged were
ordered to be sold, and the proceeds applied to the payment of the
indebtedness adjudged. A suspensive appeal was taken to the Supreme
Court of Louisiana, and the judgment was affirmed. 52 La.Ann. 1613.
This writ of error was then sued out.
One of the assignments of error in the state supreme court was
"That it is not averred nor proved by plaintiff, nor does the
record show the averment and proof, that the receiver of the
American National Bank was authorized to sue and stand in judgment
herein, nor that the receiver was authorized to have sold the
collaterals set up as pledged at public auction in the manner
demanded by the receiver or ordered by the court; that without the
direction and authorization required under section
Page 180 U. S. 89
5234 of the United States Revised Statutes, the receiver was
incompetent to stand in judgment herein and to have sold or to
cause to be sold the stocks, bonds, and securities belonging to or
pledged to the American National Bank, and that therefore his
demand for a judgment for the amount claimed, with recognition of a
pledge, and his demand to have the alleged pledged collaterals
sold, should be rejected at his costs."
In his brief for rehearing filed in the supreme court of the
state, plaintiff in error urged
"that the jurisdiction over and affecting the liquidation of
national banks was vested exclusively in the United States circuit
courts and the federal courts, and that the state courts were
without jurisdiction in the said cause to grant and order the sale
authorized under section 5234 of the United States statutes and its
provisions; said defendant and plaintiff in error citing paragraphs
3, 10, and 11 of section 629 of the United States statutes, and the
proviso of section 4 of the Act of Congress adopted August 13,
1888; that said paragraphs and said proviso vested the courts of
the United States with exclusive jurisdiction in cases commenced by
the United States by direction of any officer thereof, or cases for
winding up the affairs of such [national] banks."
It is assigned as error here that the Supreme Court of Louisiana
erred in holding --
"1. That the defendant and plaintiff in error was not entitled
to the right and privilege, under sec. 5234 of the United States
statutes and its provisions, to have the direction and authority of
the Comptroller of the Currency for the application to sell such
securities, the sale, and the time, manner, and terms thereof;"
"2. That defendant and plaintiff in error was not entitled to
have the proceedings for the sale instituted and prosecuted by a
person competent to stand in judgment, and that the receiver was
competent to make such application to sell and to prosecute the
same and stand in judgment;"
"3. In holding that the Supreme Court of Louisiana and the state
courts had jurisdiction ratione materia,
and in denying
the exclusive jurisdiction of the United States courts:"
"4. That the court further erred in not setting aside the
Page 180 U. S. 90
judgment of the lower state court and rejecting the demand of
the defendant in error."
The claim presented in the trial court and in the supreme court,
as expressed by the latter, was
"that it was necessary for the receiver to aver and prove he was
authorized by the Comptroller of the Currency, United States
Treasury Department, to institute the present action and to sell at
public auction the collaterals pledged to secure the indebtedness
declared on, and that without this authorization, the judgment
recovered cannot stand."
On that contention both courts passed. It was discussed at
length by the supreme court, and was held to have "no sufficient
basis of fact to rest upon." This conclusion was based on the
ruling in Bank v.
17 Wall.19. We think it was correctly
based on that decision.
Section 5234 of the Revised Statutes enacts:
"That, on becoming satisfied, as specified in this act, that any
association has refused to pay its circulating notes as therein
mentioned, and is in default, the Comptroller of the Currency may
forthwith appoint a receiver, and require of him such bond and
security as he shall deem proper, who, under the direction of the
Comptroller, shall take possession of the books, records, and
assets of every description of such association, collect all debts,
dues, and claims belonging to such association, and, upon the order
of a court of competent jurisdiction, may sell or compound all bad
or doubtful debts, and, on a like order, may sell all the real and
personal property of such association on such terms as the court
shall direct, and may, if necessary to pay the debts of such
association, enforce the individual liability of the stockholders
provided for by the twelfth section of this act, and such receiver
shall pay over all money so made to the Treasurer of the United
States, subject to the order of the Comptroller,"
This section was construed in Bank v. Kennedy,
Justice Bradley, speaking for the Court, after distinguishing
between stockholders and ordinary debtors of the national bank,
which was the ground of decision in Kennedy v.
8 Wall. 506, said:
Page 180 U. S. 91
"The language of the statute authorizing the appointment of a
receiver to act under the direction of the Comptroller means no
more than that the receiver shall be subject to the direction of
the Comptroller. It does not mean that he shall do no act without
special instructions. His very appointment makes it his duty to
collect the assets and debts of the association. With regard to
ordinary assets and debts, no special direction is needed; no
unusual exercise of judgment is required. They are to be collected,
of course; that is what the receiver is appointed to do. We think
there was no error in the decision of the court below on these
points, and that the action was properly brought by the
Expressing what it was necessary for the receiver to do to
collect the assets of the bank, the Supreme Court of Louisiana
"The receiver here could not sell the collaterals in his hands
without obtaining the order of a court of competent jurisdiction,
and this order must fix the terms of the sale."
"The object of this suit was to obtain such an order. The civil
district court of the parish of Orleans is a court competent to
grant the order. It did so."
The other point now made, to-wit, that the state courts had no
jurisdiction of the petition of the receiver because, under
paragraphs 3, 10, and 11 of section 629, and the proviso of section
4 of the Act of Congress adopted August 13, 1888, the courts of the
United States had exclusive jurisdiction, was not made in the trial
court nor in the supreme court at the original hearing. It was made
for the first time in the brief filed for rehearing. To maintain
its availability to plaintiff in error, it is claimed that
"if the state courts were utterly without jurisdiction, it was
their duty to dismiss the proceedings ex proprio motu,
such is the jurisprudence of Louisiana. Where there is a want of
jurisdiction ratione materia,
it is not too late to
suggest or raise it on rehearing, or at any time."
Whether such was the duty of the state courts and what questions
could be suggested or raised on rehearing the supreme court was
undoubtedly competent and able to decide. For this Court, we need
only say that we have decided too often to make
Page 180 U. S. 92
it necessary to do more than announce the rule that to render a
federal question available on writ of error from a state court, it
must have been raised in the case before judgment, and cannot be
claimed for the first time in a petition for rehearing. Meyer
v. Richmond, 172 U. S. 82
172 U. S. 92
and cases cited.
As there is no error in the record, judgment is
MR. JUSTICE BROWN took no part in this decision.