Messrs. J. Turner Butler, of Jacksonville, Fla., and George P. Barse, of Washington, D.C., for petitioners.
Mr. J. Compton French, of Tallahassee, Fla., for respondents.
Mr. Justice BLACK delivered the opinion of the Court.
The question presented is whether the National Bank Enabling Amendment of June 25, 1930 (12 U.S.C.A. 90), which granted power to national banks to secure deposits of public funds, validates or makes deposits of public funds, validates or makes enforceable previous pledge agreements made to protect such funds deposited before the enabling amendment became effective. [302 U.S. 369, 370] That Enabling Act1 provides:
Before and at the time this Enabling Amendment was passed, the laws of Florida authorized state banks to give security for public deposits and also imposed upon public officials a duty to obtain such security. 2 In 1929 and 1930, before the passage of this amendment, the First National Bank of Perry, Fla., by agreement with the officials of Taylor County, Fla ., pledged collateral security for the protection of county funds thereafter to be deposited from time to time in the bank.
This contractual relationship, established by the pledge agreement and deposits made thereunder, continued to exist until the bank was closed October 18, 1930. The receiver for the closed bank at first recognized the pledge agreement as valid and enforceable and accordingly paid the county the income he received from the pledged securities. In 1935, however, the receiver filed this suit in equity in the federal District Court for the Northern District of Florida, alleging that the pledge agreement was ultra vires and illegal and praying that it be canceled and annulled. Upon motion of the county, the District Court dismissed the bill. Ross v. Knott, 13 F.Supp. 963. The Circuit Court of Appeals for the Fifth Circuit affirmed. 87 F.2d 817. This Court granted certiorari. 301 U.S. 677 , 57 S. Ct. 930
[302 U.S. 369, 371] The issues raised require that we determine:
(1) Did Congress intend to validate existing ultra vires pledges?
(2) Could this pledge agreement be validated by changing the law which was in force when the transaction was initiated?
First. The language of the amendment, read in the light of the conditions that brought about the necessity for its passage, leads irresistibly to the conclusion that Congress did intend to make existing pledges enforceable.
The amendment does not expressly exclude existing contracts from its field of operation. On the contrary it extended a general grant of the broad power to give security for public deposits, with a single limitation relating to the kind of security given by state banks. If Congress had desired to limit the remedial grant to subsequent security contracts, it would doubtless have provided an additional limitation relating to prior agreements. This it did not do. Congress alone had the power to write such a limitation in the bill.