UNITED STATES SUPREME COURT DECISIONS ON-LINE

1. Jurisdiction of the District Court of an action by the Federal Deposit Insurance Corporation to collect a note, part of the assets acquired by the Corporation as collateral securing a loan made by it to a state bank, is based upon the fact that the plaintiff is a federal corporation suing under an Act of Congress authorizing it to sue and be sued "in any court of law or equity, State or Federal," and providing that

"All suits of a civil nature at common law or in equity to which the Corporation shall be a party shall be deemed to

Page 315 U. S. 448

arise under the laws of the United States."

Federal Reserve Act, § 12B. P. 315 U. S. 455.

2. Whether the doctrine of Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, requiring a federal District Court to follow the conflict of law rules of the State in which it sits, is applicable where federal jurisdiction is not based on diversity of citizenship need not be decided where the issue is a federal question. P. 315 U. S. 456.

3. In view of the federal policy evinced by the Federal Reserve Act, § 12B(s) and former subdivision (y), to protect the Federal Deposit Insurance Corporation and the public funds which it administers against misrepresentations of the assets of banks which it insures or to which it makes loans, the maker of a note which was part of the assets of a state bank when the Corporation insured it and was acquired later by the Corporation as part of the collateral furnished by the bank for a subsequent loan is estopped to defend against the Corporation upon the ground that the note was accommodation paper, given without consideration and upon an understanding that it would not be collected, in order to enable the bank to carry it as a real asset in lieu of defaulted paper and thereby deceive the public examiners. Pp. 315 U. S. 459, 315 U. S. 461.

4. Although the maker of the note here involved did not know that it was to be used to deceive the Federal Deposit Insurance Corporation, which had not then been created, yet the permission which the maker gave the bank to carry the note as a real asset was a continuing one, and had not been revoked when the Corporation acquired the paper, and that permission must be presumed to have included authority from the maker to treat the note as genuine for the purposes of examination by public authorities, as well as for general banking activities. P. 315 U. S. 459.

5. Inasmuch as the Federal Deposit Insurance Corporation was authorized to insure a state bank only on a certificate from state authority that the bank was solvent, it is presumed that, in this case, such certificate was given. P. 315 U. S. 460.

6. The inability of the accommodation maker to plead the defense of no consideration does not depend upon the commission of a penal offense in violation of § 12B(s) of the Federal Reserve Act, but upon whether the note was designed to deceive the creditors or the public examining authority, or would tend to have that effect. P. 315 U. S. 460.

7. The fact that the note was charged off by the bank after the bank had been insured by the Federal Deposit Insurance Corporation and before the latter had acquired the note under the loan is immaterial, clubjuris

Page 315 U. S. 449

since a note may be nonetheless an asset though it is charged off, and the suit here is to protect the rights of the Corporation as insurer. The right to recover on the note is not dependent upon proof of loss or damage caused by the fraudulent practice. P. 315 U. S. 460. 117 F.2d 491, affirmed.

Certiorari, 314 U.S. 592, to review the affirmance of a judgment holding the present petitioner liable to the respondent on a promissory note. clubjuris

Page 315 U. S. 453