New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-06-30
THE ST. NICHOLAS BANK WINS.
JUDGMENT OF THE REFEREE AGAINST
THE MADISON SQUARE RECEIVERS.
HE SAYS THAT THE ST. NICHOLAS HAD THE
RIGHT TO CLEAR THE DISPUTED CHECKS
AND WAS ENTITLED TO THE ASSETS

HE SAYS THAT THE ST NICHOLAS HAD TIE
RIGHT TO CLEAR THE DISPUTED CHECKS
AND WAS ENTITLED TO THE ASSETS
FOR WHICH SUIT WAS BROUGHT
William G. Choate. the referee. yesterday after
noon filed his opinion in the suit OF the receivers
of the Madison Square Bank against Hugh J.
Grant the receiver Of the st. Nicholas Bank. His
opinion is against the Madison Square Bank. Tho
case involved the title to securities amounting
to S372.cO0 and also questioned the legality OF
certain rule OF the Clearing House Association.
The opinion OF the referee is an exhaustive one.
II first recites how the St. Nicholas Bank became
the agent to clear for the Madison Square Bank.
I'm accordance with the constitution ard rules OF
the Clearing House Association, well known to
the Madison Square Bank. on August s. 1898. the
St. Nicholas Bank gave due notice that 1t would
cease make clearances for the Madison Square
Bank This notice took effect upon the completion
OF the exchanges at the Clearing House on August
O. SThe sole question In this case" says tho re-
ceiver is whether the plaintiffs have "A right to
recover from the ST. Nicholas Bank the securi-
ties remaining in the hands Of the ST. Nicholas
Bank August S. 1893. and the proceeds thereof.
The claim OF the defendant is that said securities
and proceeds are rightfully withheld as security
for the repayment the st. Nicholas Bank Of
the 1872 0o0 in checks upon the Madison Square
Bank which we're paid through the Clearing House
August by the ST. Nicholas Bank. 1t
is obvious that the securities In question came
rightfully to the St. Nicholas Bank"
The opinion further says that there seems to be no
doubt. that the St Nicholas. in making cearances
for the Madison Square the morning OF August
g. the Madison Squares agent for the payment
OF Its checks The real controversy In this case,
struction and effect Rule % OF the Clearing House
and the nature OF the contract which, in view OF
that rule existed on August g. 1898 at the time Of
The making OF these exchanges between the Madison
Square Bank and the banks OF the Clearing House
ASSOCIATION.
that the fair and reasonable construction TO be
placed on Section % did not require the payment
OF these checks by the st. Nicholas Bank after the
insolvency Of the Madison Square Bank had become
known. The first question is What did the 81.
Nichoas Bank undertake to do and did its under
taking extend 70 obligation 10 pay checks drawn
upon the Madison Square Bank which pre-
scented TO II at the Clearing House on August Q.
It to the referee that the obvious purpose OF
Section % TO the associated banks the
payment Of checks up to and including the day fol-
lowing the giving Of notice OF the termination Of
AS between the st. Nicholas and its associates
valid consideration. and bound the St. Nicholas
them 70 receive and pay, as II was 10 pay It's own,
is contended that II the agreement extended so
soivency Of the Madison Square should happen it
agreement which the parties had no right
The opinion devotes considerable space to the
forth ire referee saws that while it was true
that Mr. Blaut, the president OF the Madison
squire and Mr.. Mcdonald. one of the directors
of the bank. were sureties upon Mr. Danforths
bond. he was unable to find from the evidence that
the bank Through its officers directors actively
promoted the drawing OF these checks. or their
further says that he believes that Mr.. panforth's
acts were solely voluntary; ,.. , T.,
that the plaintiffs cannot maintain action. and
that the defendant is entitled to have judgment
and the dismissal OF the complaint upon the
The case will be taken to the Court of Appeals