Dunn v. McCoy
United States Court of Appeals for the Third Circuit
113 F.2d 587 (1940)
- Written by Robert Cane, JD
Facts
Shillington Bank (plaintiff) was a struggling state-chartered bank in Reading, Pennsylvania. To help stabilize the distressed bank, eight banks each guaranteed $12,500 in credit for Shillington Bank for a total guarantee of $100,000. With the extension of credit, Shillington Bank was able to stay open. Preventing the closure of a bank was in the best interests of all banks because bank closures hurt consumer confidence in the banking industry generally, and each closure inspired withdrawals from the banks that remained open. At some point, Shillington Bank was owed a dividend by Farmers National Bank & Trust Company (Farmers Bank) (defendant), but Farmers Bank refused to pay. In turn, Shillington Bank sued Farmers Bank. Farmers Bank counterclaimed for the dividends that it had already paid to Shillington Bank. The district court entered judgment in favor of Shillington Bank. Farmers Bank appealed.
Rule of Law
Issue
Holding and Reasoning (Clark, J.)
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