Citation Numbers: 147 Misc. 363
Judges: Harris
Filed Date: 4/25/1933
Status: Precedential
Modified Date: 1/12/2023
This is an action brought by the State Superintendent of Banks for the purpose of enforcing the collection of an assessment levied on certain stockholders of the Bank of Angola, by reason of the provisions of sections 80 and 120 of the Banking Law of the State. On the 27th day of November, 1931, the plaintiff herein, being satisfied that such bank could not with safety and expediency continue its business, did, pursuant to the provisions of section 57 of the Banking Law, take possession of such bank and is now engaged in the liquidation thereof. In the process of such liquidation the plaintiff has determined that the reasonable value of the assets of such bank are not sufficient to pay its creditors and depositors in full and that there is due and owing by such bank to such creditors and depositors a sum in excess of $169,000 over and above the value of the assets of the bank. Following such determination, the plaintiff levied an assessment of $100 against each stockholder for each share of stock held by bim and made a demand for the payment of such assessment. At the time of the commencement of this action the defendants
The names of certain defendants should be stricken from the proceedings herein because such defendants have not been served. The defendants who fall into this class are Amelia L. Chevreux, Loretta Wanda and Harry Weston. This provision is made, of course, without prejudice to the plaintiff beginning a similar action if and when he can get service on such named defendants.
Certain other defendants have appeared herein, but are not defending this action, and as the plaintiff has made prima facie proof against them, judgment should be granted as against them in favor of the plaintiff herein as demanded in the complaint. Such defendants are Allen J. Bundy, Lola Brocksopp, Leroy Dibble, Ilona C. Dougherty Kempton, Robert J. Laverty, Bion E. Smith and Clarence R. Schultz.
Certain defendants herein have paid part or the whole of the claim of the plaintiff herein as alleged in the complaint. Of these defendants John C. Glas, against whom the assessment was originally $1,400, has paid $600, and judgment should be granted against him for the remainder of the assessment, amounting to $800. John Henry has paid his assessment in full and he is entitled to a discontinuance of the suit. George A. Britting paid his assessment before suit was commenced and no service was made on him, and his name should be stricken from the papers and proceedings.
The claims against the remaining defendants are contested, and such contests present differing questions. However, such questions fall into three general groups. In the first group come the claims against the defendants (1) Robert W. McNulty, as trustee for St. Paul’s Episcopal Church, (2) DeForest Earl, individually, as a beneficiary under the will and/or as executor under the will of Lydia Earl, deceased, and (3) Catherine M. Widmer, individually or as executor of Christian G. Widmer, deceased. The question involved in each one of these claims is whether or not the defendant proceeded against was a stockholder of the bank at the time that the plaintiff took possession thereof. (Bank
The second group of defendants, who make active defense herein, include (1) T. Chauncey Williams and (2) Flora N. Barrett Winters. Each of these defendants proves that he and that she has been discharged in bankruptcy, and that the claim made herein was listed in the schedules in such bankruptcy proceeding, and that the plaintiff had notice of such proceeding. An assessment against a stockholder similar to that involved in this action is a provable and dischargeable debt in bankruptcy (Van Tuyl v. Schwab, 174 App. Div. 665; affd., 220 N. Y. 661), and so this action will not lie against these two defendants and each one of them is entitled to a dismissal of the complaint, so far as he and she are concerned.
This leaves undiscussed and undisposed of the claim of the plaintiff against the defendant Pius L. Schwert. Mr. Schwert, during the life of the bank and for some time preceding its going into liquidation, was a depositor, large stockholder, director and president of the Bank of Angola. Just prior to July 1, 1931, George W. C. Egbert, a Deputy Superintendent of the State Banking Department, made an examination of the Bank of Angola, and following such examination he informed the officers and directors of the bank that the condition of its affairs was dubious and that if the bank was to continue in business other security was to be provided for the protection of its depositors. In response to this information and demand, the defendant Schwert brought to the bank certain bonds and mortgages aggregating in amount the sum of $51,356.47, which bonds and mortgages he deposited in the bank’s vaults under and by virtue of an agreement which read as follows:
“ Agreement, made and executed this 1st day of July, 1931, between Bank of Angola, a domestic banking corporation of the State of New York, having its principal office in the Village of Angola, New York, and Pius L. Schwert, of the Village of Angola, New York,
“ Witnesseth, that whereas it is desired that additional security be given to the depositors of said Bank of Angola;
“ Now, Therefore, in consideration of the premises and of the sum of One ($1.00) Dollar paid by said Bank of Angola to the said Pius L. Schwert, the said Pius L. Schwert has, by nine (9)*368 assignments, copies of which are attached hereto and made a part hereof, assigned nine (9) mortgages in the aggregate amount of Fifty-one thousand three hundred fifty-six and 47/100 ($51,356.47) Dollars which mortgages are to be held by the Bank of Angola for the better security of the depositors of that institution.
“ It is further agreed that all or any part of the above mentioned mortgages shall be assigned to the said Pius L. Schwert at such time as the Superintendent of Banks of the State of New York believes that the assets of said Bank of Angola have appreciated in value in such an amount as to make it no longer necessary for the said Bank of Angola to continue to hold the said mortgages, and consents that the same be reassigned to the said Pius L. Schwert.
“ It is further agreed that in case of liquidation of the said Bank of Angola, the aforementioned mortgages shall be applied, if necessary, to the payment of the depositors of the said Bank of Angola, and that any balance from the proceeds of said mortgages remaining after said depositors have been paid in full shall be returned to the said Pius L. Schwert.
“ It is further agreed that any amounts collected from the stockholders of the said Bank of Angola as a result of an assessment upon them, shall be applied toward the payment of depositors prior to any payment to depositors from the proceeds of the mortgages above mentioned.
“ It is further agreed that the said Bank of Angola shall not release to the said Pius L. Schwert any of the above mentioned mortgages without first obtaining the consent of the Superintendent of Banks of the State of New York and that this agreement shall not .be modified or altered in any manner whatsoever without first obtaining the consent of the said Superintendent of Banks of the State of New York.
“ This agreement shall bind the heirs, representatives and assigns of the respective parties hereto.
“ In witness whereof, the parties hereto have set their hands and seals, the day and year first above written.
[l. s.] “ BANK OF ANGOLA,
“ Signed by P. L. Schwert,
“ President.
“ Attested:
“ T. C. Williams,
[l. s.] “ Cashier, Bank of Angola.”
These bonds and mortgages, although in the vaults of the bank, were held separate from its assets and were never entered upon its books as assets. It is evident that they were segregated as a trust
“ Whereas it is desired that additional security be given to the depositors of said Bank of Angola * * * for the better security of the depositors of that institution.
“ It is further agreed that in case of liquidation of the said Bank of Angola, the aforementioned mortgages shall be applied, if necessary, to the payment of the depositors of the said Bank of Angola, and that any balance from the proceeds of said mortgages remaining after said depositors have been paid in full shall be returned to the said Pius L. Schwert.
“ It is further agreed that any amounts collected from the stockholders of the said Bank of Angola as a result of an assessment upon them, shall be applied toward the payment of depositors prior to any payment to depositors from the proceeds of the mortgages above mentioned.”
A decision and judgment in accordance with the above to be presented to me for signature.