First Nat. Bank of Oakland v. Superior Court

California Court of Appeal Feb 10, 1966 No. Civ. 23250Published

Before: Draper

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Holding. The court held that 12 U.S.C.A. § 91 prohibits state courts from issuing temporary restraining orders or injunctions against national banks before final judgment, rendering the trial court's order and subsequent contempt finding void. However, the court affirmed the trial court's authority to vacate the sale as a matter of general state jurisdiction not barred by federal law.

Issues

Whether 12 U.S.C.A. § 91 prohibits state courts from issuing temporary restraining orders against national banks before final judgment.
Whether a temporary restraining order constitutes an injunction under the federal prohibition.
Whether the trial court had jurisdiction to vacate the sale of property by a national bank.

Disposition. Temporary restraining order and contempt order annulled; alternative writ of prohibition discharged.

Quotations verified verbatim against the opinion

“The federal statute bars any injunction before final judgment, and to seek to sustain interim injunctive relief because of the name given it by the state would be but to quibble with the clear federal purpose.”

“The trial court acted beyond its jurisdiction in issuing the temporary restraining order. Since that order must fall, all contempt proceedings based upon its violation fall with it.”

“The order vacating the sale, however, is not similarly affected.”

[110]

DRAPER, P. J.

Petitioner is a national banking association. It and real party in interest are beneficiaries of separate deeds of trust upon all or part of the same property. Defaults occurred under both deeds, and the beneficiaries differed as to their respective priorities.

Real party filed an action in the superior court. That court issued temporary restraining order prohibiting sale by petitioner under its deed of trust. Petitioner’s request for dissolution of the order was heard shortly before the scheduled hour of sale. The court asked petitioner to postpone the sale for two hours to permit completion of other matters already set and to review petitioner’s authorities. The request was denied and the court then refused to dissolve its restraining order. Petitioner nonetheless conducted the sale under the deed of trust, and bid in the property. After hearing on an order to show cause, the court held petitioner in contempt and assessed fine of $500. It also vacated the sale. Upon petition, writ of review and alternative writ of prohibition issued.

Federal statute provides that “no attachment, injunction, or execution, shall be issued against [a national banking association] or its property before final judgment in any . . . action ... in any State . . . court” (12 U.S.C.A., §91).

Although the earlier clauses of the same section deal with insolvent banks, the legislative history makes clear that this qualification does not limit the last clause, that quoted above. The proscription of state court attachment or injunction before final judgment “is by no means confined to cases of actual or contemplated insolvency.” Rather, it bars the interim remedy in state courts as to any national bank

(Pacific Nat. Bank

Mixter,

124 U.S. 721, 727 [8 S.Ct. 718, 31 L.Ed. 567; see also

Dennis

First Nat. Bank of Seattle,

127 Cal. 453 [59 P. 777, 78 Am.St.Rep. 79]). It should be noted that assets of another, in possession of such a bank, are not immune to garnishment in an action against their owner

First Nat. Bank of Oakland v. Superior Court

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DRAPER, P. J.

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