Court Opinion

ID: 6869732
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:59:22.920765+00
Date Added: 2024-06-11T16:05:23.111865
License: Public Domain

■BUFFINGTON, Circuit Judge
(dissenting) :
These cases involve the levying by the Comptroller of a 100 per cent, assessment on the shareholders of two national banks in the hands of receivers. In each case the court below dismissed a bill in equity brought by a stockholder praying an injunction restraining the receiver from collecting such assessment.
The facts of the case are that the Penn National Bank & Trust Company of Reading, hereafter called Penn, and the Reading National Bank & Trust Company, hereafter called Reading, were national banks. On February 17; 1933, these two banks entered into a written agreement with the Farmers National Bank & Trust Company, also a national bank, and hereafter called Farmers, for a consolidation of Penn and Reading with Farmers; the latter agreeing to pay all obligations of Penn and Reading. This agreement was followed by a transfer by. Penn and Reading of all their assets to Farmers and the latter assumed control of them. Thereafter Penn and Reading ceased doing business. On ■March 18, 1933, the Comptroller appointed a conservator for Farmers, who administered the assets of all three banks until October 10, 1933, when the Comptroller directed that the agreements of consolidation should be disregarded and then appointed conservators for Penn and Reading. 'The bill alleges he had no power at law to so order and that he has disregarded and •failed to enforce the claim of Penn and Reading against Farmers — for which latter a receiver was appointed — as have also the receivers of Penn and Reading. The receivers of Penn and Reading have proceeded to collect and administer the returned assets and on January 15, 1935, the Comptroller made the assessment complained of, in which he recited (italics mine) : . “Whereas, upon a proper accountr ing by the Receiver heretofore appointed to collect the assets of The Penn National Bank and Trust Company, .of Reading, Pennsylvania, and upon a valuation of the uncollected assets remaining in his hands, it appears to my satisfaction that in order to pay the debts of such association it is necessary to enforce the individual liability of the stockholders therefor to the extent hereinafter mentioned, as prescribed in section 5151 and 5234 of the Revised Statutes of the United States, section 1, c. 156, Act of June 30, 1876, and section 23, Act approved December 23, 1913, known as Federal Reserve Act.”
It therefore appears the receivers have collected the assets of said banks and on the basis of what has been collected and the valuation of those not collected (which would include the alleged claims of Penn and Reading against Farmers) it was necessary to assess the shareholders 100%. In that regard the court below stated: “Granted that the Comptroller should have taken the situation as it existed when the Bank closed instead of proceeding to undo and unscramble the assets, there is absolutely npthing to show that, as a matter of assets and liabilities, these stockholders have suffered by the method adopted by the Comptroller. Whether the agreement of the Farmers Bank to pay deposit liabilities was worth more or less than the assets which were allocated in its place is not shown. Inferentially, it would not appear to have been worth its face value since the Farmers Bank was also in receivership and is now in.process of reorganization.” And accordingly held: “It is perfectly clear from the later decisions that it was never meant that the stockholders could institute an inquiry into the correctness of the Comptroller’s determination, and proceed to fix the amount of their liability as on an accounting, by a proceeding in equity, pending which, suits are to be stayed. Such interpretation would utterly defeat the whole purpose of the policy involved which is to ‘expeditiously and justly wind up the affairs and the paying of debts of National Banks’ ”.
Its so holding was in line with decision of this court in Miller v. Stock, 65 F.(2d) 773, 90 A.L.R. 1061, and the Supreme Court cases there cited. Regarding the dismissal of the bill was rightly ordered by the court below; I am "constrained to dissent.