Davis v. Elmira Sav Bank, 415
Decision Date | 02 March 1896 |
Docket Number | No. 415,415 |
Citation | 161 U.S. 275,40 L.Ed. 700,16 S.Ct. 502 |
Parties | DAVIS v. ELMIRA SAV. BANK |
Court | U.S. Supreme Court |
Action by the Elmira Savings Bank against Charles Davis, receiver of the Elmira National Bank. A judgment for plaintiff was affirmed by the New York court of appeals (142 N. Y. 590, 37 N. E. 646), and said Davis brings error. Reversed.
In March, 1893, the Elmira National Bank, a banking association organized under the laws of the United States, and doing business in the state of New York, suspended payment, and the comptroller of the currency of the United States appointed Charles Davis, plaintiff in error, the receiver thereof. The Elmira Savings Bank, which was incorporated under the laws of the state of New York, from November, 1890, kept a deposit account with the Elmira National Bank, and at the time of the appointment of the receiver of the latter corporation there was to the credit of this account of the savings bank the sum of $42,704.67. The opening of the deposit account by the savings bank was sanctioned by the general banking laws of the state of New York as expressed in sections 118 and 119, which were as follows:
2, 1898.
2, 1898.
In the process of liquidating the affairs and realizing the assets of the national bank all its circulating notes were provided for, and the receiver had on hand in cash for distribution among its creditors a sum exceeding the amount due as afore- said to the savings bank. Thereupon the latter demanded of the receiver payment of the sum to the credit of its deposit account in preference to the other creditors of the national bank, basing its demand on a provision of the general banking law of the state of New York, which is as follows:
2, 1903.
The receiver, under the authority of the comptroller of the currency of the United States, declined to accede to this demand, predicating his refusal on the provisions of sections 5236 and 5242 of the Revised Statutes of the United States, which are as follows:
In consequence of this refusal the savings bank brought an action in the supreme court of the state of New York to enforce the payment by preference, which action was resisted by the receiver. Ultimately the case was taken to the court of appeals of the state of New York, where the claim of preference asserted by the savings bank was maintained. The case is reported in 142 N. Y. 590, 37 N. E. 646. To that judgment the present writ of error is prosecuted.
Edward Winslow Paige, for plaintiff in error.
James C. Carter and Edward G. Herendeen, for defendant in error.
[Argument of Counsel from pages 278-282 intentionally omitted] Mr. Justice WHITE, after stating the case, delivered the opinion of the court.
National banks are instrumentalities of the federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt by a state to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the federal government to discharge the duties for the performance of which they were created. These principles are axiomatic, and are sanctioned by the repeated adjudications of this court.
The question which the record presents is, does the law of the state of New York on which the savings bank relies conflict with the law of the United States upon which the comptroller of the currency rests to sustain his refusal? If there be no conflict, the two laws can coexist, and be harmoniously enforced; but, if the conflict arises, the law of New York is, from the nature of things, inoperative and void as against the dominant authority of the federal statute. In examining the question it is well to put in juxtaposition a summary statement of the federal and state statutes. The first directs the comptroller 'from time to time, after full provision has been made for the refunding to the United States of any deficiency in redeeming the notes of such association, * * * to make a ratable dividend of the money paid over to him * * * on all such claims as may have been proved.' The second—the state law—directs 'the trustee, assignee or receiver' of 'any bank or trust company which shall become insolvent' to apply the assets received by him 'in the first place to the payment in full of any sum or sums of money deposited therewith by any savings bank, but not to an amount exceeding that authorized' by law.
It is clear that these two statutes cover exactly the same subject-matter. Both relate to insolvent banks; both ordain that the right of preference on the one side and the duty of ratable distribution on the other shall only result from insolvency; both cover the assets of such banks coming, after insolvency, into the hands of the officer or person authorized to administer them. It is equally certain that both statutes relate to the same duty on the part of the officer of the insolvent bank. The one directs the representative to make a ratable distribution; the other requires, if necessary, the application of the entire assets to payment in full, by preference and priority over all others of a particular and selected class of creditors therein named. We have, therefore, on the one hand, the statute of the United States, directing that the assets of an insolvent national bank shall be distributed by the comptroller of the currency in the manner therein pointed out; that is, ratably among the creditors. We have, on the other hand, the statute of the state of New York giving a contrary command. To hold that the state statute is operative is to decide that it overrides the plain text of the act of congress. This results not only from the fact that the two statutes, as we have said, cover the same subject-matter, and relate to the same duty, but also because there is an absolute repugnancy between their provisions; that is, between the ratable distribution, commanded by congress, and the preferential distribution directed by the law of the state of New York.
The conflict between the spirit and purpose of the two statutes is as pronounced as that which exists between their unambiguous letter. It cannot be doubted that one of the objects of the national bank system was to secure, in the event of...
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