Legal Document

333 U.S. 426 68 Supreme Court Reporter 641 92 L.Ed. 784 ECCLES et al.v.PEOPLES BANK OF LAKEWOOD VILLAGE, CAL. Number 101. Argued Dec. 9, 1947. Decided March 15, 1948. Rehearing Denied April 19, See 877, 900. Mr. Judge Leonard Townsend, of Washington, D.C., for petitioners. Samuel baron Stewart, Jr., New York City, respondent. Justice FRANKFURTER delivered the opinion Court. 1 This is a proceeding under Declaratory Judgment Act, 48 Statutes-at-Large 955, 28 United States Code KF62 § 400, Annotated KF65 U5 400. Its aim to have declared invalid condition which respondent became member Federal Reserve System. The California State Banking Commission authorized establishment provided it obtained federal deposit insurance. requirement could be met either by direct application Deposit Insurance Corporation or through membership in 12B(e) and (f) 49 162, 170, 684, 687, 12 264(e) (f), 264(e, f). Respondent sought such but its was rejected. promoters Bank, having requested Board Governors System reconsider membership, were advised that favorable action depended on showing Transamerica Corporation, powerful bank holding company, did not have, nor intended any interest this Bank. Having been satisfied point, granted sube ct conditions fourth bone contention litigation. reads as follows: 2 '4. If, without prior written approval System, unit group, including Bank America National Trust Savings Association, company affiliate subsidiary thereof, acquires, directly indirectly, mechanism extension loans purpose acquiring stock, other manner, bank, than may arise out usual correspondent relationships, within 60 days after notice from shall withdraw System.' 3 gave explanation condition: 4 'The has approved upon representations bona fide local independent institution no group at time admission directors stockholders plans, commitments understandings looking toward change status institution. Condition numbered designed maintain status.' 5 Some later, 1944, Transamerica, knowledge respondent, acquired 540 5,000 shares outstanding stock. duly fact, relieved 4. This, declined do. Then followed action, District Columbia, against declaration an injunction enforcement. A motion defendants dismiss complaint, failed set forth justiciable controversy, denied. 64 F.Supp. 811. answered, claiming Bank's acceptance barred questioning validity 4, case valid, moved judgment pleadings. filed number affidavits, summary judgment. Court, unreported opinion, held bound had accepted defendants. Appeals one judge dissenting, reversed. It rejected defense estoppel sustained 'only statement that, if should determine, hearing, Transamerica's ownership bank's resulted worse character personnel, banking policies, safety deposits substantial way, require 161 Reporter, 2nd Series 636, 643, 644. Accordingly, remanded entry construing effect. Since ruling involves matter importance administration we brought here. 332 755, 55. 6 provides withdrawal violation provisions, 'within * *.' Section 9 Act authorizes revoke 'after hearing.'1 If contained more foregoing elements, three questions would emerge: 7 (1) Was premature, before commenced revocation proceedings? 8 (2) not, attack basis accepted, enjoyed, membership? Compare Fahey versus Mallonee, 245, 255, 67 1552, 1556. (3) so, power impose means guarding acquisition respondent? 10 However, with due regard considerations guide us rendering declaratory judgment, record whole requires dispose reaching these questions. 11 Extended correspondence between Marriner S. Eccles, then Chairman Atlantic Pacific KF135 P2 Giannini, Directors together testimony Eccles House Committee Currency, reason Board's insistence condition. block 'acquisition stock banks, especially when constitutes evading requirements agencies who will permit banks establish additional branches.' Hearings Representatives, H.R. 2634, 78th Cong. 1st Sess., Page 15. concerned might purchase some ordinary purposes investment, buy into order acquire control, thereby turn though outwardly independent, parts own network. therefore carrying policy underlying formally disavowed intention invoke merely because indication subversion independence.2 taken itself affect control. vigorously insisted continued independence, urging harmlessness Board, investigation found fact. concluded 'the public interest' called action. like forms equitable relief, only judicial discretion, exercised interet . Brillhart Excess America, 316 491, 62 1173, 86 1620; Great Lakes Dredge & Dock Huffman, 319 293, 297, 298, 63 1070, 1072, 1073, 87 1407; H.R.Rep. 1264, 73rd Cong., 2d 2; Borchard, Judgments (2d ed. 1941) Pages 312—14. always duty court equity strike proper balance needs plaintiff consequences giving desired relief. Especially where governmental involved, courts intervene unless need relief clear, remote speculative. 13 actuality plaintiff's his rights decisive importance. And so facts bar. Transamerica; claim. stands right remain System; acknowledges right. disclaims give up independence; Governors, imposed safeguard disavows terminate long maintains independence insists. What really fears, now seeks changed conditions, future time, required happens, argument runs, Comptroller agreed refuse insurance non-member. 14 Thus lose reverse seek even remains their grant non-member concurrence contingent events, necessary injury realized, too speculative warrant anticipatory determinations. Courts avoid passing law short constitutionality are immediately pressing. Many same reasons present impel them abstain adjudicating constitutional claims statute effectively presently impinges claims. 15 appears could, wished, protect loss adoption by-laws forbidding further sale pledge affiliates. Corporations Code, L.1947, chapter 1038, 501(g).3 To replies maintained, policy, enforcement whether serves. Such reveals hypothetical existence jurisdiction rooted discretion exercised. In light all this, difficulties deduced uncertainty regarding condition, possibly leading uninsured deposits, tenuous call adjudication important issues law.4 We asked contemplate serious danger body entrusted most delicate grave responsibilities our Government deliberately formulated standing ask 16 determination administrative authority course made behest truly injured regulation claimed invalid, sufficiently compelling justify intervention completion process. But, seen, grievance here insubstantial, nature, equally inappropriate rights. true view type proof offered supported entirely affidavits. moment based evidence, subject probing opposing counsel, apt treacherous. Caution appropriate subtle tendency decide free safeguards critical scrutiny facts, use Modern practice tended away procedure affidavits interrogatories, proven insufficiencies. Equity Rule 46, 723 Appendix, forbade save exceptional cases. Los Angeles Brush Mfg. James, 272 701, 47 286, 71 481; cf. Civil Procedure 43(a), following section 723c. Again, least evils led Norris-LaGuardia 29 101 seq., frequent issuing labor injunctions rather oral presented open court. Amidon, J., Northern R. Brosseau, 286 KF105 F3 414, 416; Swan, Aeolian Fischer, Cir., 679, 681, 682. 17 Where expressed yet come fruition (Ashwander Tennessee Valley Authority, 297 288, 324, 56 466, 472, 80 688), unknown (Great Tea Grosjean, 301 412, 429, 430, 57 772, 779, 81 1193, 112 American Law Reports 293), controversy ripe intervention. Surely, asserted challenged expressly disclaimed go beyond legitimate 'public confided it, stay hand. 18 19 CHIEF JUSTICE, DOUGLAS took part consideration decision case. 20 REED, whom BURTON joins, dissenting. 21 get put charter provision allegedly require. seems obvious restriction market respondent's detrimental conduct business, continuing threat exclude benefits 22 what regarded illegal requirement. never enforce prohibition holds force resign control those deemed undesirable Board. 23 Certainly, N Immigration Nationality Decisions see there possibility bt marketability bearing willingness customers relations major relationships close associations interest. elaboration convince me real interference As definite form enforced agreement withdrawal, something happen concrete requiring happening fact contrary idea Whether correct very point issue. 24 circumstances claim deprive particular person claimed. damage actual threatened is, course, irremediable. Any seriously effort oust gives Act. Judicial 274d, 25 consider petition stop existing injury. Alabama Federation Labor McAdory, 325 450, 461, 65 1384, 1389, 89 1725. That unfettered. Altvater Freeman, 359, 363, 1115, 1117, 1450. There difference suits involving remedy suits. exists over legal adverse parties, usually cannot properly refusing adjudication. Meredith City Winter Haven, 320 228, 7, 88 9; Bell Hood, 327 678, 66 773, 90 939. Unusual circumstances, present, pending suits, 1620, supersession state authority, 1407, sometimes refusal 26 Under case, however, improper time. being unlawfully used constrain operation entitled protection, now. Columbia Broadcasting States, 407, 1194, 1563, prematurity clearer 27 merits. 'If appear comply provisions reu lations pursuant thereto, ceased exercise functions receiver liquidating agent appointed therefor, board hearing surrender reserve forfeit privileges membership. restore compliance section.' 38 251, 260, amended, 46 250, 704, 327, 327. also Administrative 237, 239, 1004, 1004. extract minutes meeting January 28, 1946: 'Upon latest report examination Peoples Lakewood Village, California, management resulting certain unanimous vote, decided respect relating Corporation.' '501. corporation make conflict articles for: '(g) Special qualifications persons shareholders, reasonable restrictions transfe hypothecate shares.' 'Likewise, chose to, presumably bind themselves sell noting certificates transferees. Cf. Vannucci Pedrini, 217 Rptr. (West’s) 138, 706. asserted, lack confidence deterred depositors, heavy capital expansion order, disadvantaged fear prospective investors risk personal assessment uninsured.

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