Case ID: edw-ch_4/html/0287-01.html
Source: Caselaw Access Project
Author: {"author": "The Vice-Chancellor :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Bank Commissioners of the State of New York v. The La Fayette Bank.
    
      July 27. 1843.
    Interest allowed on bank notes from the day of demand out of the surplus effects of a bank in a receiver’s hands; such bank having been wound up through this court, but not on the ground of insolvency.
    
      Interest. Bank notes. Receiver.
    
    plus still remained in the receiver’s hands, which would go to the shareholders. A receiver had been appointed of the money, property and effects of The La Fayette Bank of the city of New York; and an order was, thereafter, entered, authorizing such receiver to pay in full, without interest, all the debts and demands of the bank. This had been done. A sur-
    A petition of the American Exchange Bank now came before the court, suggesting the right to interest. The petition showed that, on the nineteenth day of February one thousand eight hundred and forty-two, the petitioners were the bona fide holders and owners of divers bank bills issued by the La Fayette Bank, amounting to three thousand and eighteen dollars ; that on the said nineteenth of February, the petitioners caused due demand to be made at the banking house of the La Fayette Bank for the payment of the said bills and that payment thereof was then and there refused ; that they continued to be the holders; that, under an order, payment of the bills had been made by the receiver, exclusive of interest; that the petitioners received the principal monies without prejudice; and that there were still sufficient funds in the receiver’s hands to pay the interest. Prayer accordingly.
    Mr. Titus, for the petitioners.
    Mr. Bonney and Mr. Roe, contra.
    
    
      Sept. 26.
   The Vice-Chancellor :

This claim for interest is not within the 31st section of the act incorporating the La Fayette Bank, giving ten per cent, by way of damages in lieu of interest for the 'non-payment of their evidences of debt upon demand and refusal. That section is not intended to apply where the affairs of the bank come to be wound up under the general safety fund act.

Nor is this case within the.entire exemption from interest under the 14th section of the safety fund act, because this bank is not insolvent and has not been proceeded against as an insolvent institution. But it is a case, in my opinion, in which the petitioners and all other bill holders, who took the precaution to have the bills of the bank presented and payment demanded, are entitled to the ordinary lawful interest of seven per cent, from the time of demand until actual payment of the principal.

The receiver must, therefore, pay such interest on the bills in question.

Order accordingly.