Ferry v. Bank of Central New-York

New York Supreme Court

Ferry v. Bank of Central New-York

15 How. Pr. 445

CourtNew York Supreme Court

DecidedJanuary 15, 1858

StatusPublished

Cited by8 cases

This text of 15 How. Pr. 445 (Ferry v. Bank of Central New-York) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Ferry v. Bank of Central New-York, 15 How. Pr. 445 (N.Y. Super. Ct. 1858).

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Opinion

W. F. Allen, Justice.

The defendant asks for relief upon this motion, upon three principal grounds. 1st. That the injunction was irregular, having been granted without the giving of a bond or undertaking, against loss or damage to ensue from the injunction, if it should be finally adjudged that the plaintiff was not entitled to that process. 2d. That the provisions of the Revised Statutes for proceeding against corporations in equity, (2 R. S. 461,) were repealed by chapter 226 of the laws of 1849, (S. Laws, 1849, p. 340,) “ An act to enforce the responsibility of stockholders in certain banking corporations and associations, as prescribed by the constitution, and to provide for the prompt payment of demands against such corporations and associations.” 3d. That the defendant was not and is not “ insolvent,” within the intent of the provision of law under which the action is commenced and prosecuted. (2 R. S. 463, § 39 and seq)

Whether a bond.is necessary in a case like the present, upon the granting of an injunction by the court, upon notice to the corporation or association proceeded against, is not properly before me, or necessarily involved in this application.

It is not before me, for the reason that the provision regulating a bond in any case, is for the benefit of the party enjoined, and of course may be waived by him, and in this case, the giving of the bond, if one was necessary, was waived by the defendant, by consenting that the injunction issue upon the papers read and without requiring a bond. By this consent, the defendant is estopped from now objecting to this defect, if the proceedings are really objectionable for that reason. It is not necessarily involved, in the application, for the reason that the dissolution of the injunction will not restore the defendant to its property or corporate rights, without a discharge of the [448]*448receivership. The receiver having the possession of the property and rights in action of the defendant, a dissolution of the injunction for the irregularity complained of, would afford no substantial relief to the parties. '

Tire second question made, is one of more importance and of more difficulty. I am of the opinion that the design of the framers of the act of 1849, was to provide a cheap and expeditious way of winding up the affairs of an insolvent corporation or banking association, as a substitute for the more dilatory and expensive process by action, and to provide substantially a remedy for stockholders and creditors, which should reach every case that might arise, and for which provision should be made, for closing up of the affairs and dissolving a corporation or association for banking purposes, at the instance of stockholders and creditors.

Creditors for any amount, having judgment against the association not collectible by execution, may proceed under the provisions of the act, and creditors having demands exceeding in amount $100, can proceed summarily if their debts remain unpaid for ten days after demand; and preferences in the payment of debts by corporations insolvent or in contemplation of insolvency, are expressly prohibited by the act to prevent the insolvency of moneyed corporations. (1 R. S. 591, § 31; Leavitt agt. Tyler, 1 Sand. C. Rep. 207; Brower agt. Harbeck, 5 Seld. 588.)

In view of these statutory regulations assigned to secure equality among the creditors of insolvent corporations, there was no serious danger of loss to the general creditor by the delay of ten days after demand of payment of his debt.

In regard to stockholders, it was a question for the legislature, whether the owners of stock to an amount less than one-tenth, should be permitted to take steps for the dissolution of an association, into which they had voluntarily entered with their associates, so long as the corporation was prosecuting its ordinary business and actuallypaying its liabilities as they accrued. The bill was introduced by the present superintendent of the banking department, and in his report of the bill to the senate [449]*449as chairman of the committee to which it was referred, he says: “ One feature of the bill (in addition to the provision for the protection of the stockholders, and for whom there is little or none now offered by our laws against the fraudulent conduct of bank officers) is, that it prevents numerous and vexatious suits against stockholders in cases of insolvency.” “ This feature of. the bill is one that cannot but commend itself to the attention of the senate, as it entirely prevents numerous suits, not only of creditors against stockholders, but of stockholders against each other, while the creditor is protected, without the necessity of bringing perhaps several suits to satisfy his demand. The committee fully believe that delay in the final settlement of the affairs of insolvent corporations and associations, is fatal to the interests of both creditor and stockholder. The proverbial slowness with which our insolvent banks have been wound up, they trust will be fully obviated in this act.” “ The leading features of the bill are: 1st. To declare the liability which equitably exists under the constitution. 2d. The speedy remedy of both creditor and stockholder of insolvent institutions, &c.” (Senate Documents of 1849, No. 42.) The'act read in connection with the report of the committee, furnishes satisfactory evidence of the design of the originators of the bill to provide a substitute for the remedy given by the Revised Statutes to creditors and stockholders of insolvent corporations and associations for banking purposes.

Another reason for the inference that the framer of the act of 1849, designed and intended that act to provide a simple and uniform remedy for closing up insolvent banks and banking associations applicable to both, and which should super-cede all other remedies given by law, is, that at the time of the passage of that act, it was not as well settled as it now is, that banking associations are subject to all the provisions of law relating to moneyed corporations. The decisions in Gillett agt. Moody, (3 Comst. 485;) Talmadge agt. Pell, (3 Seld. 328,) and Gillett agt. Phillips, (3 Ker. 114,) settle the question that they are subject to all such provisions, excepting when they are inconsistent with tire “ act to authorize the business of [450]*450banking,” and the acts amending the same. It is not necessary that a subsequent act should be repugnant in all its provisions to a former one, in order to repeal the latter by implication. If the latter statute was clearly intended to prescribe the only rule that should govern in the case provided for it repeals the original act. (Davis agt. Fainlaine, 3 How. U. S. R. 636; Dexter agt. Limerick P. R. Co., 16 Barb. 15. See Commonwealth agt. Kimball, 21 Pick. 375; Leyster agt. Walker, 9 N. H. R. 61; Gage agt. Connor, 4 Pick. 399.) The judges of this court, in the first and second districts, have agreed' that the act of 1849 does supercede the provisions of the Revised Statutes in all cases in which the former act is applicable, and that a creditor of the bank who may have relief under that act, cannot proceed under the Revised Statutes. By parity of reason, a stockholder who could proceed under the act of 1849, would be precluded from availing himself of the remedy given by the Revised Statutes.

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