Willing v. Binenstock
Court | United States Supreme Court |
Citation | 302 U.S. 272,58 S.Ct. 175,82 L.Ed. 248 |
Docket Number | No. 36,36 |
Parties | WILLING v. BINENSTOCK et al |
Decision Date | 06 December 1937 |
Messrs. James M. Kane and George P. Barse, both of Washington, D.C., for petitioner.
Mr. Robert T. McCracken, of Philadelphia, Pa., for respondents.
This is a suit brought by respondents in a federal district court in Pennsylvania seeking to have allowed as a set-off against the indebtedness of the partnership firm of Swinger and Binenstock to the Commercial National Bank the amount of a deposit in the bank by Swinger, now deceased, and so much of a deposit by Binenstock as might be necessary to cancel the indebtedness. The bank was organized under the National Bank Act of the United States (12 U.S.C.A. § 21 et seq.), and as such was engaged in business in Pennsylvania. On January 9, 1933, the partnership executed and delivered its promissory note to the bank in the sum of $10,000; and on February 28, 1933, executed and delivered to the bank its further promissory note in the same amount. Under date of January 25, 1933, one Luciano Cammarota executed and delivered to the partnership his promissory note for $300, which note was endorsed and discounted at the bank.
At the close of business on February 28, Swinger had on deposit in the bank the sum of $1,546.58, and Binenstock the sum of $32,323.76. At the same time, the partnership had on deposit the sum of $5,822.52. On that date the bank became insolvent and was taken over by the Comptroller of Currency, who appointed petitioner, Willing, receiver. Petitioner, when the suit was brought, had reduced the indebtedness of the partnership by allowing a set-off of the amount of the partnership deposit, but had failed and refused to allow as a set-off the amounts here in controversy.
Upon these facts the district court sustained the claim of respondents, 18 F.Supp. 262, and entered a decree allowing the set-off of the individual deposits against the joint indebtedness of the partnership, ordering a cancellation and return of the partnership promissory notes, and allowing a claim of Binenstock against the assets of the bank for the amount of his deposit, after making provision for the set-off. The decree also directed petitioner to endorse, without recourse, and deliver to Binenstock, the note of Cammarota for $300. Upon appeal, the court below affirmed. (C.C.A.) 88 F.2d 474. The decrees in both courts were based upon what was understood and declared by them to be the Pennsylvania rule upon the subject.
The case has been elaborately argued upon both sides; but, in respect of the partnership notes, we find it unnecessary to do more than consider and determine the question whether the courts below correctly stated the Pennsylvania law on the subject and were right in following it as the controlling rule of decision.
First. In Miller v. Reed, 27 Pa. 244, 67 Am.Dec. 459, the Supreme Court of Pennsylvania held that, whatever distinctions otherwise would exist between joint contracts and contracts joint and several, these distinctions, under the statutes of the state, had been obliterated. These statutes, it was said (27 Pa. 244, at page 249, 67 Am.Dec. 459), It, therefore, makes no difference here whether the Swinger and Binenstock notes were joint, or joint and several.
In the opinion of the federal district court in this case, Judge Kirkpatrick said: He held the law applicable and entered the decree accordingly. The court below affirmed on the authority of the opinion of the district judge.
Petitioner challenges this view of the district judge, albeit faintly. The judges of both courts below have had wide experience in the field of Pennsylvania law; and, even if the question were doubtful, as we think it is not, we should have little hesitation in accepting their determination as to the state law on the point here under consideration. We have, however, examined the decisions of the Pennsylvania courts, and fully agree with the courts below as to their interpretation.
Second. We have no occasion to consider whether section 721 of the Revised Statutes (28 U.S.C. § 725, 28 U.S.C.A. § 725) is applicable.* Under Swift v. Tyson, 16 Pet. 1, 10 L.Ed. 865, it would not be. That case has been much criticized, and the tendency of our decisions which have followed has been to limit it somewhat strictly. And one of the practical restrictions upon the principle of that case, which we have many times announced, is that, even where it applies, 'for the sake of harmony and to avoid confusion, the federal courts will lean towards an agreement of views with the state courts if the question seems to them balanced with doubt.' Burgess v. Seligman, 107 U.S. 20, 33, 34, 2 S.Ct. 10, 21, 27 L.Ed. 359; Sim v. Edenborn, 242 U.S. 131, 135, 37 S.Ct. 36, 61 L.Ed. 199, and authorities cited; Trainor...
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