The New Orleans crescent. [volume] (New Orleans, La.) 1866-1869, 1869-03-16
SIXTH DISTRICT COURT.


In the Sixth District Court, Judge W. 81. Cooley,
the following decision WAS rendered yesterday:
1t appears that in 1861, NJ. A. Becnel and L.
Becnel subscribed promissory note TO their own
order and Endorsed il, for the sum Of twenty thou
sand three hundred and forty-hve dollars eighty
cents. That said note was the property OF the
Bank Of Louisiana the time the forfeiture of its
charter was judiciaIy declared, and is now In pos
session of the commissioners appointed TO hquldate
the affairs of the insolvent bank. M. A. Becnel
having spilled TO the commissioners TO pay said
note rendered them bills of the Bank of Lousis
ma, which they refused to receive in payment OF
the note due by him. Hence the present proceed.
ing on the part of BecDel to compel the commits
soDers to receive the bills rendered by him in pay
ment OF his note and the delivery TO him OF the
note.
The commissioners thus brought into court. be-
fore urging any defense TO the merits, have
thought proper TO take exception to the form or
the proceeding. / cannot conceive what interest
these commissioners who are presumed to be
acting for the benefit of the creditors and not for
themselves, can have in contesting the mere form
of the proceeding.
1t is the interest of the creditors and the holders
of the bills of the bank are preferred ones that
there be sDy doubt on the point raised by the
rule, II should be decided promptly and without
any Unnecessary delay. Those who hold the
notes of the Bank OF Louisiana entitled TO know
at once whether the bills they have can be used
as effects against the debts due to the bank, and
this appesrs to be matter of vital importance to
them, as the law under which the commissioners
act makes the bill holders creditors by preference.
IL does seem TO me that skirmishing on the out
side, when il can accomplish no other purpose
than that of delaying the decision of the main and
only important question involved is in conflict
with the best interests of the bill holders.
The question raised by the rule is whether the
commissioners are obliged TO receive the bills of
the Bank of Louisiana In payment of the notes
due TO II. and the question can be met and salts
factorily argued and decided on rule as well as
in any other form of proceeding. But the techni'
cal plea besides being in fact TO some extent pre-
judicial to those whose interests it is the first duty
of the commissioners TO protect, is ia law totally
untenable. Ii is predicsted upon the idea that
debtors of the Bank Of Louisiana are third per-
Sons TO the insolvent proceedings.
Considering for the sake Of argument that they
are third parties, they have none the less inter.
ests involved in the matter, and whenever it
becomes necessary for their protection, like all
others, they may make themselves parties to the
suit. But without any act of theirs they are par
ties and necessary; parties to the proceedings for
the liquidation of the bank; which sre nothing
but insolvent proceedings after all. In the letter
and spirit Of the act of 1872 all thescreditors aud
debtors of the bank become parties in the pro.
ceedipgs instituted with the view Of its Hquida.
ton. So much for the technical objection.
The denial of the commissioners that they are
bound 10 receive the notes of the Bank of Louis.
lana in payment of notes due to the bank, and the
corresp ending assertion that they have the power
TO compel the payment OF such debts due the bank
in legal currencysof the United States, is not only
unfounded IN law, but considering how plain the
law is TO the contrary, the claim put forth by
them is strange in the extreme.
The whole contest finds ready and easy solu-
ton by the following words contained in the act Of
18th March, 1872 amendatory Of another act of the
same year:
:" Prouided That nothing contained in the act
to provide for the liquidation Of banks or other
laws of the State, shall be so construed as to deny
to persons hdUi'sg notes to pay in banks IN Hqut-
dalton the right of paying sad notes ia the bank
notes Of sdtdttqulddtsng banks, except when said
notes may have been transferred to the other banks
as security for receiving the circulation Of the
said hquidating banks"
See Sess. acts of 1912, page 454.
1t is not pretended that the note due by Becnel
is in the possession of the other banks security
for receiving the circulation OF the Bank Of Lou
isisna. Icsnuot conceive what language the Leg.
stature Of 1872 could have employed to make the
obligation of liquiisting bank to receive its own
notes, more clear, plain and emphatic.
But If this law be not explicit enough the act of
the 5th April. 1913, certainly is. The erOviso in
the second section of this act ssys;s And
that il shall be the duty Of each Of the banks of
the State at all times TO receive in Offset or part
Offset OF debts due to 1t, its own debts when lqui
dated and past due, whether for circulation, de-
posts, or arising from any other source whatever
and whether such banks be or not in liquidation,
and without reference to the date at which the
the claim offered by him in Offset. ~
The object Of the Legislature vas to insure the
payment Of the bill holders. and the lswgver
so solictous TO accomplish this object that in the
act Of 1912 reviving the charters of the several
banks which had suspended specie payment, one
of the conditions imposed upon the several banks
as consideration for the revival granted was that
they should receive each others circulation. The
language is plain and full of meaning "And it
shall be the duty OF the banks not in liquidation
under the provisions Of this act, and as a cOndi
Tho, of laj,- oh IN
oetUe at par at their respective counters IN pay
meHt Of all debts and Obligations due and OlciItg
them respectively The circulation Of the bank or
banks that may enter into liquidation voluntarily
or otherwise under the provisions of this act"
See sth section of the article OF 5th Feb. 1912,
Sess. acts page As.
This act was subsequently amended, but only
to limit the amount of the circulation of liquid
atDg bank which the others were bound TO re-
ceive, and to tx the terms OF their reception.
The extent of the first obligation was limited, bat
the obligation pro tallto still exists. Thus, when
il is very plain that the other banks may, for
a certain amount and upon certain conditions, be
compelled to receive at their counters at par the
circulation of the liquidating bank, Is is con-
tended that the iqudatiug bank itself is not
bound 10 receive its own notes. The language Is
not only plain, but has received the sanction OF
judicial Interpretation by the Supremel Court 10
several cases. The first is that of Sc The Com
missioners of the Exchange and Banking Compa-
ny of New Orleans VS.. Nudge ct dL.," reported in
6 Robinson's reports, page S97. In that case it
was urged that the intent of the Legislature
that the bank should be hquidsted in the same
manner an insolvent estate was administered;
that the rules governing The last were applicable
TO the first; and that II the commissioners we're
compelled TO receive Of the liquIdsting bank in
payment, that the bill holders would be the only
creditors paid, as the bank was VIGOROUSLY
insolvent
These objections were met and refuted in very
able manner. | quote one of the concluding
paragraphs of the very able opinion delivered by
Judge Billiard, as the organ of the court: :" IL
appears to u.s. therefore, clear that the Legislature
intended to make special provision for the bill
holders, and 10 make the circulation of the bank
alWaya good ssf-st %. debts duo to the liqoide
ting banks. The justice or policy of particular
laws does not concern the judicial department:
but 1t would appear but just that those who
received the bank notes as money, under the
sanction of the Legislature, should be particularly
favored"
The obligation to receive its own notes in pay.
meDt on the part Of the liqudstng banks, 80 de.
cided in the case already quoted. has been uni.
fofnly adhered to by oGr Supreme Court. See
cases of Citizens Bank of New Orleans va. the
Levee Steam Cotton Press Company, ii Rob-, 1885,;
Saunders ct ais, commissioners. vs.. Smith, sd.
ministratriX. A. T.. 232. I