Court Opinion

ID: 6862878
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:50:49.651005+00
Date Added: 2024-06-11T16:05:16.395956
License: Public Domain

McDERMOTT, Circuit Judge
(dissenting).
Three reasons prevent me from concurring in the opinion of the majority. I set them down, confessing some doubt as to their soundness.
1. There is something manifestly wrong with a situation where a hopelessly insol*18vent bank is permitted to remain open, receiving deposit's, for months after its insolvency is found to exist, and for days after its president, had written that “it was impossible to pay the assessment and that unless it was withdrawn or modified the bank would have to close” — to quote the language of the majority opinion — and then to permit its receiver to recover from a depositor on the ground that the bank was known to be hopelessly insolvent while he was depositing his money.
Note this: During the period when the Comptroller and the bank officials knew the bank’s condition was hopeless, as they now say, Mr. Bradbury deposited $70,322.80 of honest, hard-earned money. Leaving the bank open was an invitation to him to deposit this money coupled with an assurance by the Comptroller that the bank was solvent to the best of his knowledge and belief. Having induced him to make these deposits by this assurance, the Comptroller recovers $13,346.56 from Bradbury upon proof that the assurance given Bradbury was false, and known to be false, all the while.' Bradbury knew nothing of 'the city’s unsuccessful effort to get its money out. He relied, as depositors generally rely, upon the fact that banks are regularly examined, and if left open, will repay deposits on demand.
I realize that a Comptroller is often faced with a serious dilemma; if a bank is closed the moment it is found to be insolvent, depositors .and communities suffer irreparable losses. If it is kept open a while, those losses may be averted by stock assessments or by consolidations or by getting in new capital and new management. There is a value to bank deposits, not shown on the books, which is irretrievably lost when the bank is closed but which may be salvaged if left open. I do not criticize the Comptroller, charged with such heavy responsibilities, when he leaves a bank open in an effort to avert a calamity to a community and to salvage for the depositors the intangible good will of a going concern, even if later events prove his hope to have been groundless. But it does seem to me that he ought to be estopped to set up affirmatively as a ground of recovery, against a depositor who has deposited money relying upon the assurance of solvency implied by the open doors of the bank, that the assurance was false. Bradbury got back $13,-000 of securities on January 16th; he had deposited $70,000 after the bank was known by the Comptroller to be insolvent. Why should the Comptroller be permitted to assert, as a ground of recovery, that the assurance given when the money was deposited, was false and known by him to be false ? The ordinary rules of estoppel would prevent an individual from thus playing fast and loose with his neighbor to his detriment. Why such a rule should not operate against a bank receiver, I do not know.-
2. I agree that it is not an ordinary bank transaction to permit a depositor to select securities from the note case. The. statute voids such transactions if made with a view to prefer a depositor or to prevent a ratable distribution of its assets. Judge Vaught’s general finding amounts to a finding that this transfer was not made for such a purpose. Probably the real purpose was to satisfy a depositor with the hope that a failure might in some way be averted. The majority hold, and I agree, that where the necessary result is a preference, its effect cannot be avoided by a mere assertion of a contrary purpose. The majority hold that the proof is conclusive that the bank’s condition was then beyond hope, for if there were any reasonable prospect of restoring its solvency, it could hardly be said, as a matter of law, that the bank intended to prefer Bradbury. If its condition was then hopeless, why didn’t the Comptroller close it? Why was it left open until a run closed it two days later? The Comptroller was in close touch with the situation; he knew, better than we, whether there remained a fair chance of saving the bank by consolidation, new capital, or a sale. We ought to assume, in the absence of contrary evidence, that he did his duty, for that presumption attaches to the acts of public officers. Unless there was such a reasonable prospect, the Comptroller was in duty bound to close the bank, and not let depositors continue to deposit their savings therein. On this record, and with a general finding of a trial court, I cannot ascribe to the Comptroller the gross dereliction of inviting deposits in a bank when he knew there was no shadow of a hope of repaying them. If there was such a prospect, then we cannot say, as a matter of law, that the bank’s intent was to prefer Bra'dbury; without that intent, the transfer is not voided by the statute.
3. The Comptroller, his counsel advises us, has acquiesced in the decision of the Second Circuit Court of Appeals in Nelson v. Lewis, 73 F.(2d) 521. There a bank was insolvent, although the Comptroller *19and none of its officers except its cashier, knew it. There a depositor asked for his money and was told'that the bank could not pay his check. There the depositor took securities for his balance. The Circuit Court of Appeals held the transaction was in the ordinary course of business and unassailable. The rights of a depositor in a national bank in Oklahoma ought to be the same as the rights of a depositor in a national bank in New York. While it seems to me that taking securities instead of cash for a deposit is not done in the ordinary course of banking business, yet that is the law in the Second Circuit; it ought to be the law as to all national banks until the Supreme Court says to the contrary.