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United States Supreme Court


Argued: Decided: March 25, 1940

Rehearing Denied April 22, 1940

See 309 U.S. 698 , 60 S.Ct. 884, 84 L.Ed. --.

Mr. Francis M. Shea, Asst. Atty. Gen., for petitioners.

Messrs. Brice Clagett, George P. Barse, and Charles E. Wainwright, all of Washington, D.C., for respondent.

[309 U.S. 527, 529]  

Mr. Justice FRANKFURTER delivered the opinion of the Court.

This is a companion case to Inland Waterways Corporation v. Young, 309 U.S. 517 , 60 S.Ct. 646, 84 L.Ed. --, decided this day. The District National Bank pledged some of its assets to secure deposits made by the Secretary of War on behalf of the Panama Canal Zone. The Bank became insolvent in 1933, and the pledged assets were sold. Respondent, the Bank's receiver, brought this action to recover that part of the proceeds which represented an amount in excess of dividends paid to the ordinary depositors. The District Court held that the pledges were ultra vires and gave judgment for the respondent. The Court of Appeals affirmed. 69 App.D. C. 280, 100 F.2d 690.

For the reasons stated in Inland Waterways Corporation v. Young, supra, we are of opinion that the pledges given by the Bank were valid, and that the judgment below should be reversed.

The CHIEF JUSTICE, Mr. Justice McREYNOLDS and Mr. Justice ROBERTS, for the reasons set forth in their dissenting opinion in Inland Waterways Corp. v. Young, 309 U.S. 517 , 60 S.Ct. 646, 84 L.Ed. --, dissent here.

Mr. Justice REED and Mr. Justice MURPHY took no part in the disposition of this case.

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