37 Barb. 225 | N.Y. Sup. Ct. | 1861
Inasmuch as the receiver is an officer of the court and subject to its direction, and is charged with responsible and often embarrassing duties, it is proper that he should, on suitable occasions, apply to the court for instructions.
I. The most important subject on which the aid of the court is invoked is in regard to cases of mutual claims between the bank and parties dealing with it. These are of various characters. 1. Where, at the time of the appointment of the receiver, debts exist owing to, and owing by, the bank, and both due. 2. Where such debts exist, but on the one side or the other the debt has not become due, and more
In case of debts actually due both from the bank to a customer or other party, and from such customer or other party to the bank, I do not see any reason why in equity, at the instance of either,- and especially at the instance of the solvent party, who is most interested in making the application, the one claim should not be applied upon the other to extinguish the same, either wholly or as far as it will go. The real debt is only the difference between the two; and if a suit were brought, the application would be a matter of course, within the doctrine of sét-off. Nor do I see that either (the demand being over due) could assign the claim held by him or it, so as to vest a superior title in the ‘ assignee. It would still be subject to the equities between the original parties. Such an application of the one demand upon the other is moreover, I think, directly within the provisions of law in regard to insolvent corporations. The receiver has all the powers and authority conferred by law upon the trustees of insolvent debtors, and is subject to .all the duties and obligations imposed upon them. (2 R. S. 469, 470, §§ 68, 74. Laws of 1849, ch. 26, § 11.) One of these powers and duties is, that “ where mutual credit has been given by a debtor and any other person, or mutual debts have subsisted between such debtor and any other person, the trustees may set off such credits or debts, and pay the proportion or receive the balance due.” (2 R. S. 47, § 36.) The provision, though in terms permissive, was intended, I think, to be mandatory, upon the requisition of either party. So understood, I do not see why it will not embrace all cases of debts actually due at the time of the appointment of the receiver, to and from parties in the same capacity. They are
The case of debts not yet due, or where on the one side or the other—and especially in regard to the debt due from the dealer or customer to the bank—the debt is not due, is not identical in principle. In the case of negotiable paper thus situated, held by the bank, it is plain that the bank, before its failure, could successfully transfer it to a third person for value, if done bona fide; and I do not see why it could not legally be done by its assignee or receiver. It might not be considered a discreet or commendable exercise of the powers of a receiver, and yet it seems to me a legal and effective title would pass to abona fide purchaser. Nevertheless, demands of this character seem also to be embraced within the description of mutual debts and mutual credits, before enumerated. And where the creditor of the bank, whose debt to the bank is not due, notifies the receiver of his wish to apply the same in partial or total satisfaction, as the case may be, of his claim arising from his deposit in the bank, and insists upon the same, I think the receiver should yield to it and make the application. In such an event, upon the receiver’s refusal, I think the creditor would be entitled to commence an action for the purpose of compelling such application, and
If it should so happen (which is doubtful and must be of very unfrequent occurrence) that the debt owing by the bank . was not yet due, and the debt owing to the bank was by a debtor who was himself insolvent, which would present a case where it might be to the interest of the receiver to make the application, and to the interest of the other party not to do so, I do not think the receiver could make the application, or insist upon it; for it is not the province of the party whose debt is not due to insist upon having the benefit of the payment before maturity, which would be equivalent to altering ' the contract of the-parties, and in effect allowing a party to commence a suit for the recovery of his demand before it was due. (Bradley v. Angel, 3 Comst. 475. Keep v. Lord, 3 Duer, 78.) There must in such case be some special circumstances—an agreement between the parties, express or implied, or a course of dealing between the parties leading clearly to the inference that such was their intention or expectation—or some other1 controlling equities—to justify such a course.
Where the debt is unliquidated and incapable of liquidation without the aid of a jury or of extrinsic evidence, the right of set-off is not absolute, but in equity must depend upon the circumstances of the case. It does not come within the statute of set-off. At the same time the receiver would not be justified in interposing any unconscientious obstacles to the liquidation of the demand, or with unseasonable haste ‘ to press the collection of the claim due to the bank, with a view of excluding the set off. He must act in good faith, and adopt all proper and prudent measures to put the creditor’s claim in the way of liquidation before the period of distribution. This is conscientious and just. * (Holbrook v. Receivers of American Fire Insurance Co., 6 Paige, 220.)
Where the debts are not due to and from the same persons in the same capacity, the right of set-off does not exist.
II. The other subjects upon which the directions of the court are sought present no real difficulty. The' Commercial Bank of Albany is represented to be in good standing and of unquestionable soundness, and may therefore be regarded, until further order, as a proper place of deposit for the trust funds in the hands,, of the receiver.
The prosecution of debts due to the bank, and the determination which and when to prosecute may, except in spe
The present and prospective disposition of the real estate, which the receiver proposes to make, seems to be dictated by a sound discretion, and is approved.
Ho further special instructions seem, for the present, to be necessary.
Hogeboom, Justice.]