§ 39:1235 — Termination of contracts; set-off by depository

Whenever the contract of any depositing authority with any fiscal agent or depository terminates by limitation or otherwise, or when any fiscal agent or depository fails or suspends payment, the fiscal agent or depository or the receiver or liquidator thereof, as the case may be, may charge against the balance of the depositing authority the amount due on any promissory note or evidence of participating in any promissory note of the depositing authority owned by fiscal agent or depository. However, in no case shall the right of set-off be effective as against the rights of any pledgee or transferee in due course for value of any such promissory note or evidence of participating in any promissory note of the depositing authority.