Title 12 U.S.C. § 91, which prohibits an "attachment,
injunction, or execution" from being issued against a national bank
or its property before final judgment in any state or local court,
held, when read in context, merely to prevent prejudgment
seizure of bank property by creditors, and not to apply to a
mortgagor debtor's action seeking a preliminary injunction to
protect its real property from wrongful foreclosure. The
legislative history indicates that, when the statute was originally
enacted in 1873, it was aimed at preventing preferences by
creditors. In the provision itself, the word "injunction" is
sandwiched in between the words "attachment" and "execution," both
of which are writs used by creditors to seize bank property,
strongly implying that Congress intended only to prevent state
judicial action, prior to final judgment, which would have the
effect of seizing the bank's property. Moreover, no reason has been
given for assuming that Congress intended to give national banks
engaged in making real estate mortgage loans a privilege not
available to competing lenders, it being especially unlikely that
Congress intended to give national banks a license to inflict
irreparable injury on others, free from the normal constraints of
equitable relief. Pp.
432 U. S.
318-324.
541 S.W.2d 139, affirmed.
STEVENS, J., delivered the opinion of the Court, in which
BRENNAN, STEWART, MARSHALL, POWELL, and REHNQUIST, JJ., joined.
BLACKMUN, J., filed a dissenting opinion, in which BURGER, C.J.,
and WHITE, J., joined,
post, p.
432 U. S.
324.
MR. JUSTICE STEVENS delivered the opinion of the Court. A
federal statute enacted in 1873 provides that certain
Page 432 U. S. 313
prejudgment writs shall not be issued against national banks by
state courts. [
Footnote 1] The
question presented by this case is whether that prohibition applies
to a preliminary injunction restraining a national bank from
holding a private foreclosure sale, pending adjudication of the
mortgagor's claim that the loan is not in default. We conclude that
the prohibition does not apply.
I
Only the essentials of the rather complex three-party
transaction giving rise to this dispute need be stated. Respondents
borrowed $700,000 from petitioner, a national bank, to finance the
construction of an office building. The third party, a mortgage
company, agreed to provide permanent financing to replace the bank
loan upon completion of the building. The loan was secured by a
deed of trust, which granted a first lien on respondents' property
to the bank while the construction loan was outstanding. A dispute
developed between respondents and the long-term lender over whether
respondents had satisfied certain preconditions of the long-term
loan. Petitioner contends that respondents are in default because
of their failure to close the long-term loan. Respondents deny
Page 432 U. S. 314
that they are in default, and contend that petitioner's remedy
is against the long-term lender. On September 4, 1975, petitioner
notified respondents that foreclosure proceedings would be
commenced unless the loan, plus accrued interest and an extension
fee, was paid in full in 10 days.
On September 23, 1975, petitioner published a notice of
foreclosure. Under Tennessee practice, foreclosure of a deed of
trust is not a judicial proceeding, but is routinely consummated by
private sale unless restrained by judicial action initiated by the
mortgagor. On September 26, 1975, respondents commenced this
litigation by filing a sworn complaint in the Chancery Court of
Davidson County, Tenn. seeking to restrain the foreclosure on the
ground that the loan was not in default. The chancellor ordered the
petitioner to show cause why an injunction should not issue.
Petitioner's answer set forth the basis for its claim of
default, but did not question the court's power to restrain the
foreclosure. Based on the pleadings, the exhibits, and extensive
arguments of counsel, the chancellor found
"the existence of issues which should be determined upon a full
hearing of this cause and that [respondents] would suffer
irreparable harm if the foreclosure occurred prior to such full
hearing."
App. 56. He therefore temporarily enjoined the foreclosure.
Two days later, petitioner filed a supplemental answer alleging
that the state court lacked jurisdiction to enter a temporary
injunction against a national bank. In due course, the chancellor
concluded that 12 U.S.C. § 91 removed his jurisdiction to grant an
injunction "prohibiting the foreclosure of property in which the
bank has a security interest." App. 69. He therefore dissolved the
preliminary injunction, granted an interlocutory appeal, and
"stayed" the bank from foreclosure until the appeal to the
Tennessee Supreme Court could be perfected.
The Tennessee Supreme Court reversed. 541 S.W.2d 139 (1976). It
concluded that the federal statute was intended
"to
Page 432 U. S. 315
secure the assets of a bank, whether solvent or insolvent, for
ratable distribution among its general creditors and to protect
national banks in general."
Id. at 141. It did not believe this purpose justified
an application of the statute when
"a debtor of a national bank is seeking, by interlocutory
injunction, to protect his property from wrongful seizure and
foreclosure sale by the bank."
Ibid. The court acknowledged that the bank had a
security interest in respondents' property, but did not believe
that the statute was intended to give additional protection to an
interest of that kind which was already amply protected. [
Footnote 2] One member of the court
read the statute as absolutely forbidding the issuance of any
temporary injunction against the national bank before judgment, and
therefore reluctantly dissented from what he described as the
majority's "just result."
Id. at 143. We granted
certiorari to decide whether the Tennessee Supreme Court's
construction of the statute is consistent with the congressional
mandate. 429 U.S. 1037. We affirm.
The critical statutory language reads as follows:
"[N]o 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."
12 U.S.C. § 91.
At least three different interpretations might be placed on that
language. Most narrowly, because the rest of § 91 relates
Page 432 U. S. 316
to insolvency, this language might be limited to cases in which
a national bank is insolvent, or at least on the verge of
insolvency. Secondly, regardless of the bank's financial
circumstances, it might be construed to prohibit any prejudgment
seizure of bank assets. Most broadly, it might be given a
completely literal reading and applied not merely as a shield for
the bank's assets, but also as a prohibition against prejudgment
orders protecting the assets of third parties, including debtors of
the bank.
Although there is support for the narrowest reading in the
history of the statute, both that reading and the broadest literal
reading have been rejected by this Court's prior cases. Before
discussing those cases, we shall review the available information
about the origin and revisions of the statute.
II
The National Currency Act of 1864 authorized the formation of
national banks. [
Footnote 3]
Section 52 of that Act contained the first part of what is now 12
U.S.C. § 91. It prohibited any transfer of bank assets in
contemplation of insolvency or with a view to preferring one
creditor of the bank over another. The 1864 statute did not,
however, include the prohibition against the issuance of
prejudgment writs now found in 12 U.S.C. § 91.
That prohibition was enacted in 1873 as § 2 of "An Act to
require national Banks to restore their Capital when impaired, and
to amend the National-currency Act." 17 Stat. 603. If the
prohibition had been added to § 52 of the 1864 Act, [
Footnote 4] the
Page 432 U. S. 317
amended section would have been virtually identical with the
present 12 U.S.C. § 91. It was, however, added to § 57 of the 1864
Act, which authorized suits against national banks in the state
courts. Petitioner therefore infers that the amendment was intended
to qualify the jurisdiction of state courts over national banks,
and that the amendment should be given its full, literal
meaning.
There is no direct evidence of the reason for the amendment. It
was passed without debate, Cong.Globe, 42d Cong., 3d Sess., 870,
2117-2118 (1873), and does not seem to have been recommended by the
administration. [
Footnote 5]
However, the historical context in which the bill was passed may
offer some clue as to its purpose. We may take judicial notice of
the historical fact that 1873 was the year of a financial panic.
Moreover, a number of reported cases involved attachments against
national banks and attempts by creditors to obtain a preference by
attaching assets of an insolvent bank. [
Footnote 6]
When the first edition of the Revised Statutes of the United
States was prepared in 1873, the prohibition against prejudgment
writs was combined with the provision concerning preferential
transfers and acts in contemplation of insolvency to
Page 432 U. S. 318
form § 5242, which is now 12 U.S.C. § 91. [
Footnote 7] Respondents argue that this revision
placed the provision in the context which was originally
intended.
For the past century, the prohibition against prejudgment writs
has remained in the preferential transfer section.
III
This Court has construed this prohibition only three times.
[
Footnote 8] In two cases, the
Court held that assets of a national bank could not be attached; in
the third, the Court held that property of a third party in the
custody of the bank was subject to attachment by a creditor. None
of the three involved a preliminary injunction.
Petitioner contends that the earliest of the three,
Pacific
Nat. Bank v. Mixter, 124 U. S. 721,
"squarely controls" this case. Brief for Petitioner 13. Actually,
however, the holding in
Mixter was quite narrow. The
question before the Court was "whether an attachment can issue
against a national bank before judgment in a suit begun in the
Circuit Court of the United States," 124 U.S. at
124 U. S. 724.
Although the statutory prohibition was not directly applicable to
federal suits, the federal courts were authorized to issue
attachments only as provided by state law. The Court concluded:
"In our opinion, the effect of the act of Congress is to deny
the state remedy altogether so far as suits against national banks
are concerned, and in this way operates as
Page 432 U. S. 319
well on the courts of the United States as on those of the
States. Although the provision was evidently made to secure
equality among the general creditors in the division of the
proceeds of the property of an insolvent bank, its operation is by
no means confined to cases of actual or contemplated insolvency.
The remedy is taken away altogether, and cannot be used under any
circumstances."
Id. at
124 U. S. 727.
[
Footnote 9]
The statement in
Mixter that the remedy of attachment
cannot be used against a national bank "under any circumstances"
makes it clear that the statutory prohibition is applicable to
solvent, as well as insolvent, national banks. The financial
circumstances of the bank are not of controlling importance. That
Mixter did so hold was settled by this Court's most recent
decision concerning this statute,
Van Reed v. People's Nat.
Bank, 198 U. S. 554:
"Since the rendition of that decision [
Mixter] it has
been generally followed as an authoritative construction of the
statute holding that no attachment can issue from a state court
before judgment against a national bank or its property. It is
argued by the plaintiff in error that
Page 432 U. S. 320
the decision in the
Mixter case,
supra, should
be limited to cases where the bank is insolvent; but the statement
of facts in that case shows that, at the time when the attachment
was issued, the bank was a going concern and entirely solvent so
far as the record discloses. The language of Chief Justice Waite,
above quoted, is broad and applicable to all conditions of national
banks, whether solvent or insolvent; and there is nothing in the
statute, which is likewise specific in its terms, giving the right
of foreign attachment as against solvent national banks."
Id. at
198 U. S. 559
(citations omitted).
Between
Mixter and
Van Reed, this Court
rendered its only other decision in this area,
Earle v.
Pennsylvania, 178 U. S. 449. In
that case, the Court held that an
"attachment sued out against [a] bank as garnishee is not an
attachment against the bank or its property, nor a suit against it,
within the meaning of that section."
Id. at
178 U. S. 454
(emphasis omitted). The holding in
Earle forecloses a
completely literal reading of the statute. [
Footnote 10] It also demonstrates that the
"under any circumstances" language in
Mixter had reference
to the financial condition of the bank, rather than to any possible
case in which a prejudgment writ issues against a national
bank.
Speaking for the Court in
Earle, the first Mr. Justice
Harlan stated that the ban on prejudgment writs must "be construed
in connection with the previous parts of the same section"
concerning preferential transfers. 178 U.S. at
178 U. S. 453.
This statement was consistent with the Court's earlier comment in
Mixter:
"The fact that the amendment of 1873 in relation to attachments
and injunctions in state courts was made a
Page 432 U. S. 321
part of § 5242 shows the opinion of the revisers and of Congress
that it was germane to the other provision incorporated in that
section [concerning preferential transfers], and was intended as an
aid to the enforcement of the principle of equality among the
creditors of an insolvent bank."
124 U.S. at
124 U. S. 726.
[
Footnote 11] Thus, the
statute can be given its full intended effect if it is applied to
actions by creditors of the bank. As always, "[t]he meaning of
particular phrases must be determined in context"; [
Footnote 12] read in context, the
anti-injunction provision has only a limited scope. [
Footnote 13]
Petitioner argues, however, that the Court erred in
Earle by reading the anti-attachment and preferential
transfer provisions together. It contends that the two were simply
combined by mistake in the Revised Statutes. The burden is on
petitioner, we think, to show that the present form of the statute
-- which, after all, constitutes the legal command of Congress --
does not reflect congressional intent. If any mistake occurred, it
seems at least as likely that the 1873
Page 432 U. S. 322
amendment was incorrectly added to § 57 as that the revisers,
that very year, made an error which has gone undetected for over a
century. [
Footnote 14] But
there are three stronger reasons for rejecting the argument.
First the historical evidence supports the revisers. It appears
likely that, when originally passed the provision barring
prejudgment writs actually was aimed at preventing preferences by
creditors. As noted earlier, the threat of insolvency was a serious
national problem in 1873, and there had been a number of cases just
before in which state courts had allowed creditors to obtain
preferences in this manner. There does not seem to have been any
similar problem with actions by noncreditors. It seems improbable,
for instance, that there were many actions by mortgagors to enjoin
foreclosures by national banks, because, at that time, national
banks were allowed to accept mortgages only in very limited
circumstances. [
Footnote
15]
Second, the anti-injunction provision itself bears strong signs
that it was meant to have a limited scope. It is a familiar
principle of statutory construction that words grouped in a list
should be given related meaning. [
Footnote 16] The word "injunction" is sandwiched in
between the words "attachment" and "execution." Both are writs used
by creditors to seize bank property. On the other hand, the word
"garnishment"
Page 432 U. S. 323
is conspicuously absent from the list. [
Footnote 17] That writ is directed at the bank,
but is used to seize property belonging to others which happens to
be in the hands of the bank. The implication is strong that
Congress intended only to prevent state judicial action, prior to
final judgment, which would have the effect of seizing the bank's
property. [
Footnote 18]
Third, petitioner completely fails to identify any national or
local interests which its reading of the statute would serve. That
reading would give national banks engaged in the business of making
loans secured by mortgages on real estate a privilege unavailable
to competing lenders. No reason has been advanced for assuming that
Congress intended such disparate treatment. We cannot believe that
Congress intended to give national banks a license to inflict
irreparable injury on others, free from the normal constraints of
equitable relief. It is true that Congress has consistently and
effectively sought to minimize the risk of insolvency for national
banks, and to protect bank creditors from disparate treatment. But
those interests are fully vindicated by our construction of the
Act.
Even though petitioner's reading of the Act can be supported by
its text and by fragments of history, accepted principles of
construction require that the provision in question
Page 432 U. S. 324
be construed in its present context and given a rational
reading. Fairly read, the statute merely prevents prejudgment
seizure of bank property by creditors of the bank. It does not
apply to an action by a debtor seeking a preliminary injunction to
protect its own property from wrongful foreclosure.
The judgment of the Supreme Court of Tennessee is affirmed.
It is so ordered.
[
Footnote 1]
Title 12 U.S.C. § 91, entitled "Transfers by bank and other acts
in contemplation of insolvency," now reads 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."
(Emphasis added.)
[
Footnote 2]
"In the instant case, appellee is not using the statute as a
shield to protect its assets, but is using it to preclude appellant
from protecting its own property. True, appellee has a security
interest of $700,000 in the property. However, the property is in
the form of an office building allegedly worth in excess of
$1,000,000 which cannot be sold, or assigned, or spirited away in
the dark of the night so as to defeat appellee's security interest.
The Chancellor predicated the temporary injunction (before it was
dissolved) upon the condition that appellant continue to pay
interest on the $700,000 at the contract rate until a final
determination on the merits could be made. In short, appellee's
security interest in appellant's property was completely
protected."
541 S.W.2d at 142.
[
Footnote 3]
13 Stat. 99, 100-101. The full title of the statute was
"An Act to provide a National Currency, secured by a Pledge of
United States Bonds, and to provide for the Circulation and
Redemption thereof,"
but subsequent amendments refer to it as the "National Currency
Act."
See 17 Stat. 603. The 1864 statute replaced the
National Banking Act of 1863, 12 Stat. 665.
[
Footnote 4]
The only difference would be that the provision on prejudgment
writs would be preceded by the phrase "And provided further, That.
. . ."
[
Footnote 5]
It was not mentioned in the Reports of the Comptroller of the
Currency for 1872 or 1873.
[
Footnote 6]
One,
First Nat. Bank of Selma v. Colby, 46 Ala. 435
(1871), later reached this Court,
88 U. S. 21 Wall.
609.
See n 8,
infra. Colby was typical in that it involved an
attempt by creditors to obtain a preference by attaching assets of
an insolvent bank. This attempt was successful in the Alabama
Courts, and similar attempts had met with success in New York.
See Allen v. Scandinavian Nat. Bank, 46 How.Pr. 71, 82-83
(Sup.Ct., General Term, 1873);
Bowen v. First Nat. Bank of
Medina, 34 How.Pr. 408 (Sup.Ct., General Term, 1867).
See
also Cadle v. Tracy, 4 F. Cas. 967 (No. 2,279) (SDNY 1873).
Moreover,
Bowen and another case,
Cooke v. State Nat.
Bank of Boston, 50 Barb. 339 (Sup.Ct., Special Term, 1867),
raised the possibility that bank assets would be routinely attached
by creditors. These cases allowed attachment on the basis that a
national bank, wherever it does business, is, by definition, a
"foreign corporation."
[
Footnote 7]
Section 5242 was included in c. IV entitled "Dissolution and
Receivership." The legislative history is sketched in
Pacific
Nat. Bank v. Mixter, 124 U. S. 721,
124 U. S.
724-726.
[
Footnote 8]
National Bank v.
Colby, 21 Wall. 609, was decided after the passage
of the 1873 amendment, but the attachment had been issued before
the amendment. The Court invalidated the attachment without relying
on the amendment. It based its decision, instead, on the ban
against preferential transfers and the paramount lien given the
United States in the assets of insolvent national banks.
Id. at
88 U. S.
613-614.
[
Footnote 9]
The Court then added:
"It was further said that, if the power of issuing attachments
has been taken away from the state courts, so also is the power of
issuing injunctions. That is true. While the law as it stood
previous to the act of July 12, 1882, 22 Stat. 163, c. 290, § 4,
gave the proper state and federal courts concurrent jurisdiction in
all ordinary suits against national banks, it was careful to
provide that the jurisdiction of the federal courts should be
exclusive when relief by attachment or injunction before judgment
was sought."
124 U.S. at
124 U. S. 727.
This was simply dictum, as no injunction was involved in
Mixter. Moreover, in
Mixter, the Court was not
presented with a situation in which the requested relief related to
assets not belonging to the bank. The
Mixter dictum is
therefore not controlling now that "the very point is presented for
decision."
Cohens v.
Virginia, 6 Wheat. 264,
19 U. S. 399.
See generally Barrett v. United States, 423 U.
S. 212,
423 U. S.
223.
[
Footnote 10]
In support of its literal reading of the statute, petitioner
relies heavily on Mr. Justice Holmes' opinion in
Freeman Mfg.
Co. v. National Bank of the Republic, 160 Mass. 398, 35 N.E.
865 (1894); but that opinion preceded
Earle, in which this
Court adopted a contrary approach.
[
Footnote 11]
The Court went on to say that "however that may be," the
provision as originally enacted in 1873 completely barred all
prejudgment attachments, and "[t]he form of its reenactment in the
Revised Statutes does not change its meaning
in this
particular." 124 U.S. at
124 U. S. 726
(emphasis added). After
Earle, this statement must be read
to apply only to attachments against the bank's property.
[
Footnote 12]
SEC v. National Securities, Inc., 393 U.
S. 453,
393 U. S. 466;
see also Haggar Co. v. Helvering, 308 U.
S. 389,
308 U. S.
396.
[
Footnote 13]
"The statutory policy seems to be to prevent all preference or
priority in claims against these banks sought to be acquired by
seizure of effects under State authority before the final
adjudication of such claims, and to protect the banks from being
weakened or crippled by such antecedent seizures. The national
banks created by Congress are to control their own assets and
resources, as against State interference at the instance of
creditors, or of pretended creditors, until the real existence of
the alleged debts has been ascertained by final judgment."
Planters Loan & Sav. Bank v. Berry, 91 Ga. 264,
265, 18 S.E. 137 (1893).
[
Footnote 14]
We do not imply that the original reference to § 57 was a
typographical error. We merely suggest that the context in which
the amendment was originally placed may not have accurately
reflected the meaning its draftsmen intended.
[
Footnote 15]
It was only much later that national banks were allowed to make
loans secured by real estate mortgages.
See First Nat. Bank v.
Anderson, 269 U. S. 341,
269 U. S.
353-354. National banks were, however, allowed to accept
mortgages as "security for debts previously contracted." 13 Stat.
108.
[
Footnote 16]
"One hardly need rely on such Latin phrases as
ejusdem
generis and
noscitur a sociis to reach this obvious
conclusion."
United States v. Feola, 420 U.
S. 671,
420 U. S. 708
(STEWART, J., dissenting).
[
Footnote 17]
Moreover, the provision does not forbid other ways in which a
state court might exercise
in rem jurisdiction over the
property of a debtor of the bank, such as a state receivership
involving the debtor. Yet such state court jurisdiction might
prevent any other court from exercising
in rem
jurisdiction, as in a judicial proceeding by the bank to judicially
foreclose its mortgage.
See 1A J. Moore, Federal Practice
� 0.214 (2d ed.1974).
[
Footnote 18]
Such uses of injunctions before final judgment were not unknown
at the time the statute was passed. For example, creditors were
sometimes able to enjoin a transfer of a debtor's property which
they alleged to be a fraud on creditors.
See Reubens v.
Joel, 13 N.Y. 488, 492 (1856) (describing New York
statute).
MR. JUSTICE BLACKMUN, with whom THE CHIEF JUSTICE and MR.
JUSTICE WHITE join, dissenting.
I fear that the Court in this case is driven by sentimentality
to reach for what it perceives to be a "just result." In so doing,
in my view, it invades the domain of Congress.
The statute provides in unambiguous terms that
"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."
12 U.S.C. § 91. The Court today holds that the statute does not
mean what it says: debtors of a national bank may now obtain
injunctions in a state court before final judgment. Perhaps the
Court holds, as well, that the statute should apply only to protect
banks that are insolvent or nearly so.
See ante at
432 U. S. 317,
432 U. S. 322.
But see ante at
432 U. S.
315-316,
432 U. S. 319,
432 U. S. 321.
Since the Court rides roughshod over the language of the statute,
the legislative history, and a century of consistent interpretation
by this Court and others, I cannot join either the Court's opinion
or its judgment.
I
At its core, the opinion for the Court rests on a postulated
connection between the provision barring prejudgment state writs
and certain preceding language of § 91 relating to preferential
transfers and acts in contemplation of bankruptcy. From the
supposed connection, the Court justifies its
Page 432 U. S. 325
construction that the provision imposes a bar only on the
creditors of the bank. Also from this postulated linkage flows the
Court's somewhat ambiguous suggestion -- one explicitly repudiated
in the decided cases -- that the statute is limited to the context
of bank insolvency. The legislative history, however, is clear that
the presence of the provision in a section dealing otherwise with
bank insolvency is the result of the revisers' accident. No
limitation such as the Court today constructs was ever intended by
Congress, or, indeed, has ever before been imposed.
The provision at issue was originally enacted in 1873 as an
amendment to § 57 of the National Currency Act of 1864. Section 57
originally read:
"
And be it further enacted, That suits, actions, and
proceedings, against any association under this act, may be had in
any circuit, district, or territorial court of the United States
held within the district in which such association may be
established; or in any state, county, or municipal court in the
county or city in which said association is located, having
jurisdiction in similar cases:
Provided, however, That all
proceedings to enjoin the comptroller under this act shall be had
in a circuit, district, or territorial court of the United States,
held in the district in which the association is located."
13 Stat. 1 16. And the 1873 amendment to this section
provided:
"That section fifty-seven of said act be amended by adding
thereto the following: '
And provided further, That no
attachment, injunction, or execution shall be issued against such
association, or its property, before final judgment in any such
suit, action, or proceeding in any State, county, or municipal
court.' Act of Mar. 3, 1873, § 2, 17 Stat. 603."
Thus, as originally enacted by the Congress, the provision
Page 432 U. S. 326
had no connection whatsoever with the insolvency of national
banks. It was sweeping in scope, barring all writs before final
judgment in a state court. It is obvious that the statute in its
original 1873 form would require reversal of the decision reviewed
today.
As it happened, the amendment of 1873 was separated from the
remainder of § 57 in a subsequent compilation of the federal
statutes. At the hands of the revisers, the provision barring
prejudgment writs found its current resting place as an addendum to
what had been § 52 of the National Currency Act of 1864, a section
dealing with preferential transfers. Rev.Stat. § 5242 (1874). The
Court seizes upon the revisers' accidental reconstruction to limit
the amendment's scope. It justifies its action by suggesting that
Congress really intended to amend § 52, rather than § 57. The Court
states:
"If any mistake occurred, it seems at least as likely that the
1873 amendment was incorrectly added to § 57 as that the revisers,
that very year, made an error which has gone undetected for over a
century."
Ante at
432 U. S.
321-322. Thus, the Court, by sleight-of-hand, transforms
a simple clerical error into an error made by Congress in the
original placement of the amendment. This attempt to refashion the
legislative history will not stand scrutiny.
First, although Congress in 1873 could have amended either § 57
or § 52, there is ample internal evidence that the addition of the
amendment of § 57 reflects its considered choice. There can be no
question, as the Court seems to acknowledge,
ante at
432 U. S. 322
n. 14, that the reference to § 57 in the 1873 amendment was not a
typographical error. The amendment was in "
And provided
further" form; § 57, unlike § 52 of the 1864 statute, already
contained one proviso and so the use of "further" was grammatically
proper only with respect to § 57. And the broad reading that is
compelled by the language of the amendment attaches logically to
the other provisions of § 57. The body of § 57 established venue
"in
Page 432 U. S. 327
any state, county, or municipal court . . . in which said
association is located," and it was natural to place in the very
same section any limitation on the power of those courts. Section
57 also contained a limitation on injunctions directed at the
Comptroller of the Currency, and it therefore also was natural to
place an amendment imposing a related restriction in the same
section. In short, there is nothing to suggest that the amendment
was placed by Congress in an unintended context.
Second, the Court's confidence in the reliability of the
compilation is misplaced. It is hard to believe that the revisers,
faced with the task of compiling for the first time the mass of
congressional legislation from 1789 to 1873, could have performed
the delicate task of determining what Congress "really" intended in
adopting the 1873 amendment and of "correcting" its error. It is
far more likely that the revisers' "placement" of the provision
governing prejudgment writs was just one of the many errors that
marred the first compilation.
See M. Price & H.
Bitner, Effective Legal Research 29 (3d ed.1969); Dwan &
Feidler, The Federal Statutes -- Their History and Use, 22
Minn.L.Rev. 1008, 1014 (1938). Indeed, the portion of § 57 dealing
with venue in state courts was totally omitted in the first edition
of the Revised Statutes, and was rescued by inclusion in the second
edition at the end of a section dealing with usurious interest
rates. Act of Feb. 18, 1875, 18 Stat. 320; Rev.Stat. § 5198 (1878).
Just as the Court would not, and has not, construed the venue
provision established in § 57 as limited to cases involving
usurious interest rates, [
Footnote
2/1] so too it should not, in good conscience, construe the
amendment to § 57 as limited to cases involving bank insolvency and
preferential transfers.
Page 432 U. S. 328
II
If any doubts remain as to the intended scope of the provision,
they should be settled by a century of consistent interpretation by
this Court and other courts. The Court first construed the statute
in 1888 in
Pacific Nat. Bank v. Mixter, 124 U.
S. 721. The Court quotes the following sentence from
that opinion,
ante at
432 U. S.
320-321:
"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."
124 U.S. at
124 U. S. 726.
Since the Court confines its quotation to this solitary sentence,
it is able to draw from
Mixter the proposition that "the
statute can be given its full intended effect if it is applied to
actions by creditors of the bank."
Ante at
432 U. S. 321.
In its original context, however, the sentence was intended to
explain how it happened that the revisers misplaced the amendment
and that Congress acquiesced. The sentences immediately following
the Court's carefully selected single-sentence quotation are:
"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 reenactment
Page 432 U. S. 329
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."
124 U.S. at
124 U. S. 726.
As this passage conclusively demonstrates,
Mixter hardly
provides the support the Court attempts to derive from it. And the
revisers' error, far from remaining "undetected for over a
century," as the Court states,
ante at
432 U. S. 322,
was exposed and overcome in the very first case in which the Court
examined the statutory provision. The
Mixter court gave
the provision the broad scope that Congress intended.
The Court next considered the statute in
Earle v.
Pennsylvania, 178 U. S. 449
(1900). A national bank was holding a deposit of a customer who
happened to be a defendant in an action that otherwise had no
connection with the bank. The Court allowed the plaintiff in the
action against the defendant customer to attach the deposit, but
only because
"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 [§ 5242]."
Id. at
178 U. S. 454.
The bank itself had no interest in the fund, and it was immaterial
to it whether the deposit was considered the property of the
plaintiff or of the defendant. The attachment thus was allowed
because the bank was merely a stakeholder.
Earle offers no
suggestion of a distinction between debtors and creditors. In fact,
the Court dissolved that portion of the attachment that ordered the
sale, subject to the bank's interest, of certain securities the
defendant had pledged to the
Page 432 U. S. 330
bank as collateral for a loan.
Id. at
178 U. S. 455.
It is apparent that, unlike the deposit, the bank had an interest
in the collateral.
The most recent case,
Van Reed v. People's Nat. Bank,
198 U. S. 554
(1905), is consistent with this unbroken theme. The Court quoted
extensively from
Mixter, and summarized that case's
"authoritative construction of the statute" in simple and
unambiguous terms: "[N]o attachment can issue from a state court
before judgment against a national bank or its property." 198 U.S.
at
198 U. S. 559.
The Court specifically held, in vivid contrast to the intimations
of the Court's opinion today, that the provision was not limited to
cases in which the solvency of the bank was threatened.
Ibid.
Not surprisingly, in light of the consistent and expansive
interpretation of the statutory provision established by this
Court's cases, decisions of other courts are also consistent; they
hold with near unanimity that all prejudgment writs issued by state
courts and directed at the property of national banks cannot stand.
See, e.g., Robinson v. First Nat. Bank of Plainview, 45
F.2d 613 (ND Tex.1930),
aff'd on other grounds, 55 F.2d
209 (CA5 1932);
Garner v. Second Nat. Bank, 66 F. 369 (CC
SDNY 1895),
appeal dismissed, 79 F. 995 (CA2 1896);
First Nat. Bank v. Superior Court, 240 Cal. App.
2d 109, 49 Cal. Rptr. 358,
cert. denied, 385 U.S. 829
(1966);
National Bank of Savannah v. Craven, 147 Ga. 753,
95 S.E. 246 (1918);
Meyer v. First Nat. Bank, 10 Idaho
175, 77 P. 334 (1904);
Chesapeake Bank v. First Nat. Bank,
40 Md. 269 (1874);
Freeman Mfg. Co. v. National Bank of the
Republic, 160 Mass. 398, 35 N.E. 865 (1894); [
Footnote 2/2]
First Nat. Bank v. La Due,
39 Minn. 415, 40 N.W. 367 (1888).
Page 432 U. S. 331
In short, in over a century of the application of the statute by
this Court and others, no distinction has been drawn between suits
by debtors and suits by creditors, and no limitation to bank
insolvency has been imposed. And, of course, Congress' continued
acquiescence in this interpretation of the statute only reaffirms
the correctness of the long-settled construction.
III
Even if the legislative history in the cases were less clear, I
could not accept the distinction the Court today draws between
applications for prejudgment writs by creditors and those by
debtors. If the purpose of the provision is to protect the bank's
property, no such distinction logically follows. Surely, it must be
acknowledged that an injunction interfering with a bank's security
interest in mortgaged property is as much an action against its
assets as an attachment of its funds or property. And a debtor's
injunction directed at a bank's security interest in a building is
just as harmful as an attachment of bank property of comparable
value by a creditor. [
Footnote
2/3]
Page 432 U. S. 332
I suspect that the only justification for the Court's decision
today is its belief that the statute is unfair in its application.
It should be noted in that regard, however, that any unfairness can
be traced at least as much to the Tennessee procedure governing
foreclosure as to the federal provision barring prejudgment writs
in state courts. For if Tennessee law required judicial approval
for a foreclosure, any perceived need for the instant preliminary
injunction would be eliminated. But even if any unfairness were
attributed solely to the federal law, the decision whether to alter
the statute remains with the Congress, not with this Court. Since I
do not feel free to amend the statute, I respectfully dissent.
[
Footnote 2/1]
Radzanower v. Touche Ross & Co., 426 U.
S. 148 (1976);
Mercantile Nat. Bank v.
Langdeau, 371 U. S. 555,
371 U. S.
558-562 (1963).
[
Footnote 2/2]
The Court suggests that. Mr. Justice Holmes' opinion in
Freeman Mfg. Co. is open to question because it preceded
Earle and because
Earle purportedly adopted a
"contrary approach."
Ante at
432 U. S. 320
n. 10. This Court's decision in
Van Reed, however, which
in turn succeeded
Earle, cited
Freeman Mfg. Co.
with approval as a case that followed the "authoritative
construction" of the statute. 198 U.S. at
198 U. S. 559.
And as to the "contrary approach" of
Earle, I note that
the
Van Reed Court stated: "We find nothing in the case of
Earle v. Pennsylvania, 178 U. S. 449,
which qualifies the decision announced in the
Mixter
case." 198 U.S. at
198 U. S.
559.
[
Footnote 2/3]
Thus, the Court's first reason for its construction of the
statute,
ante at
432 U. S. 322
-- the protection of national banks from insolvency -- in fact
supports the application of the statute to bar prejudgment state
court writs by both creditors and debtors. The other justifications
offered fare no better. The second reason,
ante at
432 U. S.
322-323 -- the failure to include garnishment among the
prohibited writs -- is easily explained by the fact that the
seizure of property in which the bank has no interest does not
adversely affect it.
See Earle v. Pennsylvania,
178 U. S. 449,
178 U. S. 454
(1900). Thus, the absence of mention of garnishment hardly
justifies a construction that would allow interference with a
bank's property by a debtor. The third reason,
ante at
432 U. S. 323
-- the alleged absence of an interest supporting the natural
reading of the statute -- is also easily answered. The statute's
obvious purpose of protecting the property of a national bank
requires that interference with that property by all, both debtors
and creditors, be treated alike.