Manufacturers National Bank v. Hall

Emery, J. This action is upon a contract made and to be performed in Massachusetts. The defendants, residents of that State, have pleaded in bar a decree of the proper Court of Insolvency in Massachusetts, discharging them from their debts. That court admittedly had jurisdiction of the subject matter and of the person of the defendants. The proceedings and decree seem to be regular and to include this debt, although the plaintiff bank did not appear in the court. If then the plaintiff bank, located in Massachusetts, was within and subject to the jurisdiction of the courts of Massachusetts, the decree pleaded is valid and effectual as a bar. Full faith and credit would be given to it in Maine. It would bar this action. Stone v. Tibbetts, 26 Maine, 110; Felch v. Bugbee, 48 Maine, 9; Clark v. Cousins, 65 Maine, 42. The plaintiff bank, however, is a National Bank, incorporated solely under the statutes of the United States, and it contends that hence it is not subject to the jurisdiction of the State Courts in Massachusetts, and so not bound by their decrees. The United States statutes do not support this contention. Act of Cong. July 12, 1882, § 4, and Act of Cong. August 13, 1888, expressly subject national banks to the jurisdiction of the courts of the state in which they are located, and forbid the federal courts exercising any other jurisdiction over them, than such as they might exercise over State banks, except of course in official suits. These statutes make the plaintiff bank subject to the jurisdiction of the courts of Massachusetts. Should it be sued in one of those courts by a citizen of Massachusetts, it could not [110] remove the suit to the federal courts on the ground of diversity of citizenship. National Bank v. Cooper, 120 U. S. 778 ; Whittemore v. National Bank, 134 U. S. 527. The plaintiff further contends that, if the decree does bar its claim to recover a personal judgment, it does not bar the claim to recover a special judgment against the real estate of the defendants situated in Maine and attached on the writ. The argument is, that the debtors’ real estate in Maine cannot be disposed of by the Massachusetts court even for distribution among their creditors; that such real estate remains the property of the debtors after the conclusion of the insolvency proceedings, and hence should be subject to seizure by their non-participating creditors upon process from the courts of Maine. There is force in the argument, but the decree of the Massachusetts court has full effect upon the parties even when they come into Maine. Its effect is not merely to bar actions against the persons of the defendants, but is to discharge the debt and deprive it of all legal obligation. It prevents any recognition of the debt by the courts without a new promise. It prevents a recovery of any judgment founded on the contract declared on in this action. While v. Cushing, 30 Maine, 269 ; Everett v. Henderson, 150 Mass. 411. Plaintiff nonsuit.