This is an application for an order of the court authorizing the receiver of the California National Bank of San Diego to compound the statutory liability of certain of its stockholders. The petition for the order sets forth the insolvency of the bank, the appointment of the receiver by the comptroller of the currency, the qualification of the receiver, and his entry upon the duties of his office. It further sets forth that, at the time of the suspension of the bank, 781 shares of the capital stock of the association were owned by certain named persons, in certain stated shares, residing in the states of Maryland and Pennsylvania; that subsequently, it being made to appear to the comptroller of the currency that the assets of the bank were not sufficient to pay its liabilities, the comptroller, on the 5th day of May, 1892, levied an assessment of f 100 per share upon each and every share of the stock of the bank, and directed the petitioning receiver to take the necessary proceedings to enforce to that extent the individual liability of the shareholders. The petitioner states, upon information and belief, that many of the owners of the 781 shares are insolvent; that not more than 40 per cent, of the amount of the assessment against those shares could be collected by process of law, and that such collection would be at great cost and expensé; that among other information furnished the petitioning receiver is that contained in the petition to the comptroller, signed by H. H. Haines, David M. Taylor, and S. E. Dickey, (holders-of a portion of the 781 shares of stock,) a copy of which is attached to the petition of the *39 receiver; that the holders of the 783 shares, being 41 persons in number, have proposed to the receiver to pay a gross sum of $80,000 in satisfaction and discliarge of their liability as such shareholders; that the proposition to accept that tuto of money, and compound and settle the liability of the stockholders, has been submitted to the comptroller of the currency, who bus directed the receiver to petition the court for an order authorizing' the settlement, a copy of which instructions is annexed to the petition; that the comptroller, however, required that all claims which any of the holders of the 781 shares may have against the trust, a\ hether proven or unproven, should he assigned to the receiver for the benefit of the trust. The petitioner further represents that, in his opinion, it is for the best interests of the trust that the offer of $80,00h in cash from the holders of the 781 shares of stock, in addition to (lie assignment and transfer of all their claims against the trust, be accepted in full of their statutory liability.

The petition of Haines, Taylor, and Dickey, addressed to the comptroller of the currency, represented, among other things, that the 781 shares of stock of the insol ven I association are held by persons residing in the immediate vicinity of their residence; that of the 781. shares a large number are held by persons who are wholly insolvent, others by persons of very limited means, from whom nothing could be collected by execution, and others by persons wbo would resist the !assessment by litigation and otherwise; that they (Haines, Taylor, and Dickey) have carefully computed the amount which could probably he realized by the trust through adverse proceedings from these ¡781 shares, the holders of all of which are personally known to them, as well as their responsibility, and in (heir judgment it would he less ’than 20 per cent.; that they (Haines, Taylor, and Dickey) have interviewed the holders of the 781 sliares with a view of inducing them to join with the petitioners (Hail es, Taylor, and Dickey) in making an offer of compromise, and through their efforts they have induced the insolvent stockholders to consent to make partial payment, which, added to the sum to he contributed by the remaining stockholders, will make a sum largely in excess of any sum that could he collected from them all by adverse proceedings; that the acceptance of the offer of compromise would result in immediate payment to the trust of a large sum of money, and would bo a saving of time, trouble, and expense of litigation, which in some cases might be determined in favor of the stockholders; that this litigation would result in long-delay, and, even if successful, in the mean time those who are now thought to he solvent may become insolvent, or otherwise unable to pay any judgment that ultimately may he recovered against them; that the petitioners (Haines, Taylor, and Dickey) a,re authorized, on behalf of the 41 stockholders of the 781 shares whom they represent, to pay the sum of $80,000 in cash; and they ask that their proposition he accepted.

In his letter of instructions t< the receiver, the comptroller said:

Assuming that the court is authorized to grant the order asked for, it is unhesitatingly refused. To sanction proceedings "by which a stockholder in a national banking association fraudulently puts away his property for the purpose of avoiding his just and legal obligations as such stockholder, and is then permitted to compromise his liability by the payment of a less sum than is due, is to place a premium upon fraud. With such conduct there should be no compromise. Laws are made to be observed and enforced, and every one should be made to know that, in respect to every contract made pursuant to their pro *41 visions, the government will act ord and exact fair dealing and the utmost good faith. It is far better that the entire amount of the obligations of the stockholders in que stion should be lost to the trust fund than that the slightest judicial countenance should be given the proposed proceedings. The liability of the stockholders of the insolvent bank is several and not joint. Kennedy v. Gibson, 8 Wall. 505 . And There is no reason why the property of every one who has conveyed or may-convey it for the fraudulent purpose of avoiding his just and legal obligations arising Tinder the law should not he followed, and every reason why it should be.

What has been said is sufficient to dispose of the petition. It is, however, to say the least, extremely doubtful whether the court has the power to authorize the compounding of the statutory liability of a stockholder in a national bark. The provision of the statute upon the subject is found in section 5234 of the Eevised Statutes. By that section it is declared:

It is by no means clear that the statutory liability of the stockholders is a debt, within the meaning of the clause authorizing the court to sanction the compounding of all bad or doubtful debts. In the view I have taken of the case, however, it is not necessary to decide this point. Petition denied.