41 N.Y.S. 914 | N.Y. App. Div. | 1896
Lead Opinion
This was a special proceeding commenced under section 2419 of the Code of Civil Procedure for a voluntary dissolution of the Murray Hill Bank. A petition for such voluntary dissolution was presented to the court on the 28th day of August, 1896, and an order was then granted requiring the Attorney-General to show cause, on the first day of September, why an order should not be made as provided for by section 2423 of the Code, and why a temporary receiver of the property of the corporation should not be appointed. Due service of a copy of the order to show cause, with the petition and schedules, was admitted by the Attorney-General,' who appeared upon the return day of the order to show cause, in opposition to the motion. An affidavit was presented on behalf of the Attorney-General by the Superintendent of Banks and his deputy, from which it appeared that, in pursuance of section 17 of the Banking Act (Laws of 1892, chap. 689), the Superintendent of Banks took possession of the Murray Hill Bank and its property and business on the 11th day of August, 1896, and that he still retains possession of the same.
Upon the return day of such order to show cause the court granted the motion, appointed a referee before whom all persons interested were required to show cause why the corporation, the Murray Hill Bank, should not be dissolved; appointed two receivers of the property, assets and effects of the corporation; directed the said receivers to take possession of the property of the bank, collect and receive the debts, demands and other property of the corporation; to preserve the same and the proceeds thereof, and to collect and receive all demands owing to said bank, with full power to maintain any action, suit or special proceeding for either or all of said purposes without further leave, and enjoined the creditors and stockholders of said corporation from instituting or prosecuting any action or proceeding against the corporation. From this order the Attorney-General has appealed.
The right of the Attorney-General to appeal from such an order
The Attorney-General presents two groiinds for a reversal of this order. The first is that the petition and schedules, on which the order to show cause why the corporation should not be dissolved and a temporary receiver thereof appointed was granted, were insufficient to confer jurisdiction upon the court, upon the ground that a full list of the creditors of the corporation was not presented to the court, as required by section 2421 of the Code.
The petition stated that annexed thereto is a schedule containing the name and place of residence of each creditor and of each person with whom such an engagement was made,, and to whom it is to be performed, if known, or, if either is not known, a .statement of that fact, as far as the petitioners know or have the means of knowing the same, in view of the facts that the books of the corporation are not at present in their possession or under their control, but are in the possession of the State Superintendent of Banks.' And the schedule annexed to the petition states that it is a full and true account of all the creditors of the corporation and all unsatisfied engagements, with the name and place of residence of each.creditor, and of each person with whom such an engagement was made, and to whom it was to be performed, if known, or, if either was not known,, a statement of that fact, with a statement of the sum owing to each creditor, or other person specified, and the nature of each debt, demand or other engagement, and at the end of such schedule there is a statement as follows: “ A number of other depositors whose names are unknown to petitioners; the aggregate claims. of all depositors named and not named amounting to about $1,031,000.”
We think this was sufficient to give the court jurisdiction. Sec tion 2421 of the Code provides: “ A schedule must be annexed to the petition, containing the following matters, as far as the petitioner or petitioners know, or have the means of knowing the same.” There
The Attorney-General also claims that the directors were not authorized to apply for a voluntary dissolution, as the Superintendent of Banks, in taking possession of the bank’s property and business under section 17 of the Banking Law, took from the directors the property of the bank so that they were no longer in the management of the concerns of the corporation. The mere possession of the property and business of the bank, however, by the superintendent under this provision of the statute did not divest the trustees or directors of the management of the concerns of the corporation except so far as the action of the superintendent in taking such possession necessarily prevented the directors from disposing of the property of the corporation pending an application to the court to appoint a receiver. The directors were still the responsible officers of the bank, liable for the faithful performance of their duties as such directors, and the only ones who could act for the corporation-. There is nothing in the act itself nor is there any provision of law that divests them of their office or removes them from the position held by them. They were still the directors of the bank, and as such had the management of the concerns of the corporation. The corporation' exists until the final judgment is entered dissolving it, and they are the only persons who can act for the corporation and manage its concerns. There.is no provision, that authorizes the Superintendent of Banks to act for the corporation. He simply had power to take possession of the bank’s property and business, not to manage its concerns or
We think the order was right and should be affirmed, with ten dollars costs and disbursements.
Van Brunt, P. J., Patterson and O’Brien, JJ., concurred j Williams, J., dissented.
Dissenting Opinion
The facts are undisputed and are as follows: August 11, 1896, the Bank Superintendent, having examined the affairs of the bank, arrived at the conclusion, not only that there had been an impairment of the capital and that the bank was in an unsound and unsafe condition to do banking business, but that it was insolvent, its liabilities exceeding its assets by more than $230,000, and it had closed its doors and suspended its ordinary and lawful business. Thereupon- the Bank Superintendent on that day took possession of the property and business of the bank under the provisions of section 17 of the Banking Act of 1892 (Chap. 689). Thereafter and on the 28th of August, 1896, the directors instituted proceedings for the voluntary dissolution of the bank under the provisions of section 2419, etc., Code of Civil Procedure. A petition was made by the majority of- the directors, and upon such petition and accompanying papers an order was made by a justice of the court on that day, directing the Attorney-General of the State to show cause, Septem
The Banking Act is an act relating solely to banks, while the provisions of the Code of Civil Procedure relate generally to all corporations,, and provide proceedings for their voluntary dissolution. The Banking Act .was the later expression of the legislative will, and it provides a scheme especially for the care of banks. ■ So far as its provisions are inconsistent or in conflict with the general provisions of the Code, the latter provisions must be held to be modified, and must give way. Clearly the scheme of section 17 was to give the Bank Superintendent, in his discretion, the custody and control of the property of a bank pending proceedings by action or otherwise instituted by the Attorney-General.
He exercised -the discretion and took possession of this property, and had it in his custody when the proceedings for voluntary
■ It may be doubtful if the proceedings for voluntary dissolution could be instituted at all under the provisions of the Code, after the property and business of the bank had been taken possession of, and were held by the Bank Superintendent, the provision being “that a majority of the directors, trustees,-or other officers, having the management, of the concerns, of a corporation * * * may present a petition,” etc. But even if they could be, still the court had no power in such proceedings to appoint receivers or compel the the delivery, of the property and assets of the bank to such receivers without the consent of the Bank Superintendent. The Banking Law conferred the power upon the Bank Superintendent to determine whether he should hold the property to await, the determination of the proceedings instituted-by the Attorney-General, and the court could not in these proceedings interfere with the custody and control of the property by the Bank Superintendent without his consent.
The Bank Superintendent was regarded by the Legislature as more competent, from his position and knowledge of banking matters, to determine this question than the court, and the clear design of the Banking Act was to leave this question to him and not to the court.
For these reasons I am of the opinion that the order appealed from should be reversed, with costs,, and the motion denied, with costs, or that the order appealed from should be modified by striking out all provisions as to the receivers, and as modified affirmed, without costs.
Order affirmed, with ten dollars costs and disbursements.