Evening star., 1943-05-21
3% Compromise Plan
OF U. 5. Savings Bank
Depositors Reversed
Appeals Court Decision
Cites 1850 Award
To Non-Assieners

peals yesterday reversed a District
Court decision of last June which
had held valid compromise plan
under which depositors of the de-
funct United States Savings Bank
were to receive 3 per cent interest
on paidup deposit claims while
others were to receive interest
amounting to 1855 per cent on
the claims.
Under the compromise plan, some
1000 of the banks approximately
1000 depositors had assigned over
all interest above per cent, that
might be due them, to Sharehold-
ers Committee of the bank.
Yesterdays opinion pointed out
these 1000 depositors acted after re-
ceiving letters from the receiver
and the Shareholders Committee
stressing uncertainty, delay and ex-
pense of the pending litigation. The
opinion also pointed out that the
letters stressed quick payments de-
positors would receive who executed
the assignment, or agreed to sign
over all interest due them above the
3 per cent.
Edgerton Writes Opinion.
The Court of Appeals opinion,
written by Justice Henry w. Edger-
ton, declared
"Depositors who preferred to &C
cept 3 per cent in order to avoid
litigation would hardly have agreed
to accept 3 per cent if they had
known others were to get 1855 per
cent and still avoid litigation. We
think the agreement Is invalid and
should be set aside"
In connection with the interest
payments. the controller of the cur
rency had levied an assessment of
100 per cent on the banks share
holders to meet an alleged liability
of 1855 per cent interest on deposit
balances.
OF the agreement with the de-
positors who had made the assign
ments, and the assessments by the
controller, yesterdays opinion said:
The District Court, in a single
decree, sustained the agreement and
dismissed the assessment proceed
ings The dismissal was evidently
based on an implicit finding that
the assessment was unnecessary
because the agreement was enforce
able. The dismissal did not go to
the merits of the assessment and
cannot stand when its basis Is de-
stroyed."
VinSon Dissents.
Besides Justice Edgerton the case
IN the higher tribunal was before
Chief Justice D. Lawrence Groner
and Justice Fred M Vinson The
latter dissented. believing the Dis
trict Court decree should have been
affirmed.
Wade H. Cooper. former presi-
dent OF the bank, was appellant In
one Of two appeal suits combined
before the higher tribunal while
stockholders were the appellees be-
fore the Court Of Appeals. Other
appellants were depositors George
r. Fraser, David Karrick and the
Fidelity Storage Co. In outlining
the case, the Court of Appeals
opinion said:
The United States Savings Bank
uas closed by Presidential proclama-
tion on March 6, 1893. On March
Ia. 1888, the controller of the cur
rency placed a conservator in charge
and on February 10. 1884, a receiver
replaced the conservator. Deposit
claims were afterwards paid in full,
but on February 27, 1887, the con-
troller levied an assessment of 100
per cent on the banks shareholders
to meet an alleged liability for in
terest payment"
Litigation has continued over
period Of years. Attorneys for the
appellants before the Court Of Ap-
peals were Robert H. McNeill. S.
Wallace Dempsey and Bruce Fuller.
Mr.. Mcneil said the money involved
In interest payment would equal
about S50.000 if all depositors were
given 3 per cent and about 100000
II all were paid the 1885 per cent.