In these cases certiorari was granted, 293 U.S. 553, 55 S.Ct. 347, 79 L.Ed. --, to review a decree of the Court of Appeals for the Third Circuit, 73 F. (2d) 577, which affirmed a decree of the District Court overruling motions to dismiss the bills of complaint and to vacate the appointments of receivers. The questions involved are of public importance. See Pennsylvania v. Williams, 294 U.S. 176, 55 S.Ct. 380, 79 L.Ed. 841; Gordon v. Ominsky, 294 U.S. 186, 55 S.Ct. 391, 79 L.Ed. 848; No. 431, Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189, 55 S.Ct. 386, 79 L.Ed. 850, decided February 4, 1935.
On February 14, 1933, petitioner, the secretary of banking of the commonwealth of Pennsylvania, took possession of the business and property of the Chester County Trust Company, a Pennsylvania banking corporation. By section 21 of the Banking Act of 1923, P.L. 809, as amended by Act May 5, 1927, P.L. 762, § 7 (7 PS Pa. § 21), he is authorized to take possession of and to liquidate the business and property of banking corporations of the commonwealth which are in 'an unsafe or unsound condition.' Pursuant to section 22 (7 PS PA. § 22), he filed a 'certificate of possession' in his office, and on the following day filed a certified copy of the certificate with the prothonotary of the court of common pleas of Chester county. When this is done, he has, by section 29, as amended by Act May 5, 1927, P.L. 762, § 11 (7 PS Pa. § 29), the status of a receiver appointed by any court of equity of the commonwealth.
Included in the business and property taken over by the secretary were two trust funds, or 'mortgage pools,' consisting of mortgages held by the trust company as fiduciary, against which it had issued participation certificates entitling the holder to an undivided share in the principal and interest of mortgages aggregating in excess of $2,900,000 in one pool and of $1,700,000 in the other. The Department of Banking Code of May 15, 1933, P.L. 565 (71 PS Pa. §§ 733-1 to 733-1203), which became effective July 3, 1933, provides in section 701 (71 PS Pa. § 733-701) that the secretary, when in possession of the business and property of a banking corporation, shall have the status of a general receiver and be responsible to the court in which his certificate of possession is filed, in this case the court of common pleas of Chester county, and that he shall exercise all the rights, powers, and duties of the corporation and succeed to its title and right to possession of all property and securities. Article 9 of the Code, §§ 901-906 (71 PS Pa. §§ 733-901 to 733-906), provides for the disposition of the trust funds and mortgage pools of a trust company taken over by the secretary. After he has filed a notice of his intention to proceed with its liquidation, any certificate holder of a mortgage pool is authorized to apply to the court for the appointment of a substituted fiduciary of the pool. The secretary is required, 'as soon as it may be convenient,' to file in court an account of the securities in any mortgage pool conducted by the trust company, and he is directed to apply for the appointment of a substituted fiduciary of the mortgage pool if, within thirty days after the filing of the account, no certificate holder has made such an application. The Code thus provides for the secretary's possession and administration of the mortgage pools of a closed bank until such time as a substituted fiduciary is appointed.