(dissenting).

I cannot agree with the majority holding that the Wells Fargo be required to pay a substantial sum of interest to the Bank. The judgment of the trial court should be affirmed.

The allowance of interest is predicated upon the assertion that Wells Fargo “chose not to rely upon the protection offered by Section 953 of the California Financial Code.” 1

The record affirmatively shows that Wells Fargo did not have, nor could it exercise, a choice of either fact or lav/ at the time the demand was made upon it. The code section referred to obviously could not afford any claimed protection, for the reason that it was designed and clearly intended to cover acts and conduct of only an agent or authorized person, as distinguished from the primary authority of the principal. The section is thus restricted by its plain terms.

The cases which have construed this section are distinguishable. They deal with specific agents who have acted without authorization or beyond the scope of their authority. Under such circumstances it has been held that a *478 bank incurs no liability for honoring demands of previously authorized agents; nor need the bank inquire into the destination of the proceeds. Boston Insurance Co. v. Wells Fargo Bank, 80 Cal.App.2d 59 , 181 P.2d 84 .

The problem facing Wells Fargo at the time of the demand, as well as the complexities of fact and law confronting the trial court, centered on the issue of internal corporate authority, contested by rival claimants and rival attorneys.

The following chronology is important in following the sequence of events:

Immediately after filing the first action, appellant moved for summary judgment. The District Court reserved ruling on the motion and ordered an early trial date. Thereafter, as indicated, appellant requested a postponement and a new trial date was indicated, to-wit February 1, 1950. However, before the •matter came to trial a motion was filed ■on behalf of the Chinese Communists by .a distinct and rival group of attorneys, 2 relying upon cabled instructions from Communist China, wherein it was sought to have the Complaint dismissed, or in •the alternative, to substitute themselves .as attorneys for the plaintiff. The basis ■of this claim was that the Communist government had succeeded by conquest to the rights in the Bank of China which had theretofore belonged to the National Government.

The issues presented to the trial court were without analogous precedent. Upon review from its interim decision, D. C., 92 F.Supp. 920 , this court observed, 9 Cir., 190 F.2d 1010, 1012 ; “In briefs and oral argument, the parties have made it clear that there is now available additional evidence of substantial significance. The District Court may deem it expedient to re-examine the case in the light of changing world conditions and such additional evidence as may be made available to it by the respective parties.”

Upon remand, extensive proceedings were engaged in: Appellant renewed its motion for summary judgment. The group of attorneys purporting to represent the Chinese Communists renewed their motion to dismiss, and the Wells Fargo moved the court to allow costs and attorneys’ fees. Upon the hearing of these motions appellant introduced new documentary evidence in support of its authority to represent the Bank of China. In the light of this new evidence and changing world conditions and after additional argument, Judge Goodman rendered his exhaustive opinion, D.C., 104 F.Supp. 59 , that appellant had at last established its authority to act for the corporate depositor, and it was only then that the court granted the motion for summary judgment.

Such being the posture of the case, how can it be said that the representatives of Wells Fargo at the outset could have reached a decision outlining a safe course of conduct for the bank in the light of the high standards of care demanded? Ogborn v. Bank of America, 28 Cal.App.2d 565 , 83 P.2d 44 .

Absent specific statutory authority, 3 Wells Fargo adopted the only course of *479 conduct which was then available and acted neither capriciously nor arbitrarily. The jurisdiction of the United States District Court was immediately invoked and upon the entry of the interim order, the funds were deposited in the registry of the court.

In requiring Wells Fargo to pay interest, the majority opinion has misconceived the application of Section 953 of the California Financial Code. This section cannot be applied as a legal abstraction.

The factual, as well as legal, issues confronting Wells Fargo were real and substantial as vividly depicted by the trial court, D.C., 104 F.Supp. 59, 65 , 67:

The trial court exercised a sound discretion in relieving Wells Fargo from any claimed liability for interest prior to deposit of the funds in the registry, pursuant to order of the trial court.

The account in question was a commercial account. It did not draw interest and there was no contract, either express or implied, on the part of Wells Fargo requiring the payment of any interest.

Interest is allowed by the majority in the nature of a penalty.

It is a recognized principle of law that a court has discretion to relieve an involuntary stakeholder from liability for interest on considerations of equity and justice. The California courts have likewise held that relief will be afforded an innocent stakeholder from liability for interest during the period before deposit of a disputed fund in court.

The lengthy legal contest waged before the trial court rendered it doubtful to whom the debt should be paid and the resolution of this judgment was not made until after an interim appeal to this Court. Under such circumstances it appears clearly inequitable to penalize the debtor.

A number of available remedies are suggested, any one of which it is claimed would have relieved Wells Fargo from the interest liability.

The several suggestions indicated by the majority, were apparently considered by Wells Fargo and found to be either inapplicable or inappropriate in the light of the unusual facts. In addition, it should be observed that the case of Republic of China v. American Express Co., 2 Cir., 195 F.2d 230 , had not been decided by the Appellate Court at the time Wells Fargo was obliged to institute its action.

There are several distinguishing features concerning the case, one of which is that it dealt with the Republic of China and Directorate General of Postal *481 Remittances and Savings Bank. The Bank of China, as such in the case at bar, is a corporate entity — it is not the Government of China. Obviously, recognition may have a different significance where a corporation is concerned.

Considerations of justice require that the judgment of the trial court be affirmed.

. “§ 953. Authorization of withdrawals by depositor. When the depositor of a commercial or savings account has authorized any person to make withdrawals from the account, the bank, in the absence of written notice otherwise, may assume that any cheek, receipt, or order of withdrawal drawn by such person in the authorized form or manner, including cheeks drawn to his personal order and withdrawal orders payable to him personally, was drawn for a purpose authorized by the depositor and within the scope of the authority conferred upon such person.”

. Robert W. Kenny, Esq., Martin Popper, Esq., Benjamin Dreyfus, Esq., and Francis J. MeTernan, Esq.

. Subsequently, in 1951, the California Legislature enacted a specific statute to enable California banks to meet comparable situations. California Financial Code

—Section 954: