Evening star., 1938-10-31
bankCreditors
Are Victorious
In Court Ruling
District, Commercial
National Funds
Are Affected

Creditors of the Commercial Ma
tional Bank will receive about $780,.
900 while those of the District Ma.
tional Bank will get about $4,000,
If decisions of the United States
Court of Appeals, rendered today,
are affirmed under possible attack
in the Supreme Court. The appel
liant semi-governmental agencies
Will share as general creditors in
about IS per cent of these judg-
ments, officials declared.
The appellate tribunal ruled that
the Inland Waterways Corp. would
have to pay more than 5000, 900, the
United States Shipping Board
Merchant Fleet Corp more than
Sl75,000 and the purchasing Officer
OF the Panama Canal would have to
pay more than $400000 to the re-
celver Of the insolven<Commercial
National Bank. Cary A. Hardee. In
another case, the purchasing officer
OF the Panama Canal is required
to pay s207 ,361 to the receiver of
the insolvent District National Bank.
Justus S. Wardell. Interest is pro-
vlded in all cases on these District
Court judgments, which were af-
firmed today.
The lawyers interested in the cases
explained that the appellant agen-
cles will share in these judgments
as general creditors to the extent of
about 85 per cent. They pointed
out that the judgments theoretically
Will be paid into the general pot and
then the general creditors will share
in these proceedings.
Dep0sitors' Victory Seen.
I'VE consider it a substantial VIC
tory for the depositors, said GEORGE
b. SprlngSton, who was of counsel
IN the Commercial National Bank
case
Other counsel appearing in the
Commercial National Bank case,
with Mr.. Springston. were Swagar
Sherley, Charles F. Wilson, Henry
B. Weaver and George P. Barse.
Attorneys in the District National
Bank case were Mr.. Barse, Brice
Clagett and Charles E. Wainwright,
who also won their case.
! Chief Justice D. Lawrence Groner
wrote the opinions in each of the
two bank cases. In the first case
the Inland Waterways Corp. the
United States Shipping Board Mer-
chant Fleet Corp, Secretary Harry
H. Woodring and H. A. A. Smith,
purchasing Office of the Panama
Canal, appealed the findings of the
District Court in the case of the
/ Commercial National Bank. In the
second case, Secretary Woodring
and Mr.. Smith appealed in the
case of the District National Bank.
In the lower court the receivers
OF the banks brought suit to recover
what they claimed were preferen-
tial payments made by the bank
to the defendants. The appellant
court held in the Inland Water
ways case. which was also followed
in the District National Bank case,
that there was preferential con-
version OF the banks assets and ex-
! pressed the opinion that the receiver
| could maintain a suit to recover
the pledged securities, or where
they have been transferred, is en-
titled to decree for their value.
Agents Liability Fixed.
"And in this respect we think
/ it is no defense to the wrongdoer
to say that the securities were sold
and the proceeds turned over to
the United States" said the court,
! pointing out that an agent cannot
/ escape liability.
I'VE think there is no substance to
the contention that this is a suit
against the United States" asserted
the court.
The practice shown to have
existed in this case did not create a
custom or usage which legalized the
pledge, said the appellant tribunal,
adding that while the pledge was
made and taken in good faith. it
violated the provisions of the Ma
tional Bank Act designed to secure
uniformity in the treatment of. de-
positors."