Opinion of the court.

couragement of useless and expensive litigation, and perhaps to the subversion of justice."

It has been held in Arkansas that "a judgment at law will not be enjoined merely on account of the negligence, unaccompanied by fraudulent combination or connivance, of the defendant's attorney." Wynn v. Wilson, Hempst., 698.

The law upon the subject has been very clearly laid down in a number of cases by the Virginia Court of Appeals, and especially in two recent decisions by that court. In the case of Enquirer Company v. Robinson et als., 24 Gratt., 548, it is held that "equity will only relieve against a judgment at law, if the omission of the defendant to avail himself of his defence at law was unmixed with any negligence in himself or his agents." In the same case, at page 552, the court says: "This rule is absolutely inflexible, and cannot be violated, even when the judgment is manifestly wrong in law or fact, or when the effect of allowing it to stand will be to compel the payment of a debt which the defendant does not owe, or which he owes to a third person."

In the case of Wallace v. Richmond, Assignee, a case like this, in which relief from a judgment at law was prayed for, on the ground of the negligence of defendant's attorney in not pleading and making defence at law, and in which the facts seem to be stronger in favor of complainant than in the case at bar, the Virginia Court of Appeals refused to grant the relief prayed for, and affirmed the decree of the court below dismissing the bill. 26 Gratt., 67.

See all the authorities upon the subject referred to and commented upon in 2d volume L. Cases in Equity, 1335, etc. "A party cannot have relief in equity because he has lost the benefit of a good defence in consequence of the ignorance, mistake, or negligence of his attorney, however clearly it may appear that a cause was sacrificed which might have been successfully defended." L. C. in Equity, p. 1335, and cases there cited.

From these authorities it will appear that the mere fact of the insolvency of the agent by whose neglect the judgment at law complained of was rendered will not suffice to give jurisdiction to a court of equity to grant an injunction. And the reason is

Opinion of the court.

obvious. Parties can select whom they please as counsel. If they, therefore, choose to retain a negligent attorney, who is at the same time insolvent and unable to respond in damages for his neglect, they have no one but themselves to blame for their choice and its consequences.

The case of Holland and Wife v. Trotter, 22 Gratt., 136, is not an authority in this case. There the defendant at law was prevented from employing counsel and making defence to the action in consequence of the promises and representations made to him by the plaintiff's attorney, who induced him to believe that the plaintiff would abandon the suit, and that it would therefore be unnecessary for him (the defendant) to make defence or trouble himself further about the matter. Notwithstanding, judgment was afterwards, without notice or retraction of these promises, rendered against him. To have held otherwise, would have been a shock to all sense of propriety and fair dealing. It would have been judicially declaring the plaintiff entitled to the fruits of his fraud upon an innocent party. Such is not this case. The bill contains no allegation of imposition or fraud practiced upon the complainants by the attorney of the United States who obtained the judgment, and who now, as attorney for the complainants, seeks to have it perpetually enjoined. See also the decisions in Scott v. Hore and In re Ferguson, reported elsewhere in this volume.

2. As to the second ground upon which relief is prayed for in this case.

It is alleged in the bill that the commander of the confederate forces at Norfolk, in 1861, demanded of the collector the moneys of the United States in his hands, and that there was at hand an ample force to compel obedience to the demand. Nevertheless no attempt to use force was made, or even threatened, to compel the payment of the money, and the collector himself did substantially what General Huger required, viz., surrendered the fund to a hostile government at war with the United States, to wit, the de facto State government at Richmond. It thus appears that no steps were taken to enforce the demand of General Huger, and that, therefore, the question of "forcible seizure" does not arise in this case, as in the case of United

Statement of the case.

States v. Thomas, 15 Wall., 341, upon which the complainants' counsel relies. Moreover, in the case just referred to stress is laid by the court on the fact that Thomas, the surveyor of customs at Nashville, and the principal defendant, was shown to have been loyal, and not one of the insurrectionists willingly cooperating with the public enemies. No such allegation is made with respect to Simpkins, and the presumption is the other way. This case, therefore, comes strictly within the rule laid down by the Supreme Court in the case of United States v. Keiler, 9 Wall., 87, and the demurrer to the bill must be sustained.

Circuit Court of the United States for the Eastern District of Virginia, at Norfolk, May Term, 1877.

GEORGE L. BOWDEN, RECEIVER FIRST NATIONAL BANK OF NORFOLK, v. C. A. SANTOS et al.

SAME v. W. H. TURNER et al.

The transfer of shares of the capital stock of a national bank, made with intent to exonerate the owner and transferror from liability as a stockholder to creditors, is void as against creditors of the bank.

IN equity.

These two cases are so nearly alike that it is only necessary to consider one of them, which will be the one first named.

This was a bill in chancery filed by the plaintiff as receiver of the First National Bank of Norfolk, to enforce the personal liability of the defendant, Santos, as the owner of thirty-nine shares of the capital stock of the said bank. On the 26th day of May, 1874, the bank suspended, and on the 3d day of June of that year the plaintiff was appointed its receiver by the Comptroller of the Currency, in pursuance of the provisions of the National Banking Act.

L. L. Lewis for the plaintiff.

Baker & Walke and W. H. C. Ellis for defendants.

Opinion of the court.

HUGHES, J.-The bill in this case is filed to set aside certain transfers of the shares of the capital stock of the First National Bank of Norfolk (of which the plaintiff is receiver) made by the defendant, Santos, to the defendants, Lamb and Williams, a few days before the suspension of the bank, in May, 1874. It also prays that Santos may be decreed to pay to the plaintiff the par value of the shares thus transferred.

As to the facts, the bank suspended on the 26th day of May, 1874, and is utterly insolvent. The defendants, Santos and Lamb, at the time of its suspension were directors, and for a long time prior thereto had been officers of the bank. The defendant, Lamb, was president up to a short time before its suspension. For some time before that event the bank had been in a critical condition, and it had been evident to the officers that its "suspension was a mere question of time." The defendant, Santos, aware of the condition of the bank (it was the subject of frequent discussion by the directors), and anxious to relieve himself of liability as the holder of the stock in question, transferred in due form, on the books of the bank to Lamb, nineteen of his shares on the 16th May, and his remaining twenty shares to Williams on the 21st day of May, 1874.

At the time of these transfers both Lamb and Williams were insolvent, and have ever since been unable to respond to the demands of the creditors on account of these shares. At the time of these transfers there were already standing in the name of Lamb on the books of the bank over 200 shares of its capital stock. The receiver has been unable to make anything out of either Lamb or Williams on account of their liabilities to the bank.

On the other hand, Santos, at the time of these transfers, was, and is, a man of high standing and credit in business circles, and of large means.

In his answer it is averred by Santos that the transfer of the shares was a bona fide transaction, and for valuable consideration; but the allegation in the bill that Williams was insolvent, and unable to respond to the demands of the creditors on account of these shares, is not denied. It is abundantly established by the

Opinion of the court.

evidence in the case that the transfers were made to exonerate the defendant, Santos, from his liability as a stockholder.

In his answer, Santos declares that he was never the purchaser or owner of the nineteen shares transferred to Lamb. And yet the testimony shows that he executed his note (which he has since been requested to pay) for these shares, and that they stood in his name on the books of the bank for a considerable number of months before he transferred them to Lamb.

The defence set up that these shares were formerly bought in by Lamb for account of the bank, and that it was agreed between them that if Lamb, acting for the bank, would buy the shares for the bank, he might place them in Santos's name, provided he would indemnify him, i. e., take a transfer of the shares when it should be desired by Santos, is invalid. Under the provisions of the National Currency Act (Rev. Stats., sec. 5201) a national bank is prohibited from purchasing or holding its own shares. What is forbidden to be done directly the law does not allow to be done indirectly. Consequently the promise on the part of Lamb to take the shares when requested, if it could be sustained on any ground under the circumstances of this case, certainly cannot be sustained on the ground upon which it is placed in the answer. It is founded upon an illegal agreement, and the case comes strictly within the ruling of the judges in the case of Ex parte Walker, 39 English L. & Eq. Reports, p. 579.

Plain as these facts are, they are no plainer than the law of the case.

Indeed, there is no serious defence set up against the prayers of the bill, except the technical one that a bill does not lie, no discovery being sought, and there being adequate remedy at law. Counsel for defence rely, as to the doctrine that there is no such thing as fraud per se, on Davis v. Turner, 4 Rand., 422, and as to jurisdiction of equity where no discovery is sought, on Home Ins. Co. v. Stanfield, 1 Dill., 424, and Medyl v. Mayes, 6 Rand., 658.

But this is a case of trust, and equity has jurisdiction in all matters of trust.

That the capital stock of an incorporated company is a trust