Norwich bulletin., 1914-04-30

day afternoon in the case entitled Nor ris s. Lippitt and others, bank com missioners. vs. the Thames Loan and Trust company, thereby giving answer Ing the receivership and the winding | up of the affairs of the bank, which | were asked by Receiver Charles F. | Thayer and hoters The bank was put under a restrain ! ing order on April 18th. 1913, and on | June a7th the court appointed Charles | F. Thayer as receiver, and he qualified | on July 3d. 1913.
 Opinion by Judge Wheeler.
 The opinion is written by Judge George w. Wheeler. As preliminary | to the opinion given in the decision, | Judge Wheeler makes these statements | regarding the trust company:
 The Thames company was chartered | in Connecticut in 1869, and since 1903 | has done in Norwich a general bank | ing and trust company business, talk | ing general and special deposits, and | has also conducted a savings depart | ment in which it had three classes of | savings dopoSitors, called a savings l department, a home department and a | school savings system.
 Its commercial deposits were evil | Genced by passbooks and certificates l of deposit. and it's savings department | deposits by passbooks. All of the | business was conducted in the same | rooms, and by the same persons, and | all moneys were paid in and out over the same counter, and by the same | clerks, and when paid in moneys were | mingled in the same till or drawer. Moneys received in the commercial | department were entered Tn separate books and so far as the bookkeeping was concerned kept separate from the savings deposits. Moneys received from the depositors in the three classes of the savings department were entered in separate books and an account kept with each depositor.
 Money Shown on Books.
 On April 16. 1913, the credit balance in the savings department was $5S9,- 536.59, and the company had set aside for the savings depositors assets ag- gregating $5OS, ,5OO.93. The balance, ss1, ,o35.66, was uninvested and in the general fund. The appraisal value of these Is $399,2 ,22543. The appraisal value of all other assets Is s322, 2,9T2.37. | The total liabilities are $8S4, 4,1S5.SS.
 The Decision.
 The following Is the decision:
 The questions on which advice is asked, together with the special facts relating to them, are sufficiently stated in the opinion, which follows in part:
 The application of the receiver, joined in by number of the parties in interest asks the advice of the court upon many questions arising in 1 the course of the receivership.
 Those which we will discuss first, concern the relation of the Thames company to its various classes of de- positors and the relation of these classes of depositors to each other.
 Two Questions Asked.
 Among the questions upon which our advice is sought are these: Are the savings department depositors en- titled to be paid out of the assets "set aside for savings depositors, and if rl,. l., Fsx.f<. fl,Oyr | titled as to the balance to share in the other assets?
 And is the said sum of ss1 ,OS5.66 to be included in the investments set aside for savings depositors?
 Upon insolvency of a corporation. a court of equity will, unless the rules of law. or statute law, forbid, place all creditors upon an equality. Certain prioritieS are generally recognized in the distribution of the avails of the in- ministration are first paid, and all taxes have priority of payment. Ere quently the order of payment of cred F itors is prescribed by statute in whole in the case of a bank or trust company in the hands of a receiver.
 Statute That Applies.
 G. S. Section S4S2. provides: "The aVails of the property of any bank or trust company in the hands of a re- ceiver or receivers shall be appropri- ated ratably to the payment of CD h its affairs; CD the circulating notes, if any; (3) all deposits; (4D all sums {; which have been subscribed and paid 1 in for its stock by the state or the school fund; (5) all other liabilities; and the surplus shall be distributed among the stockholders.
 This statute has been in force since 1887, long prior to the granting of the 1 charter to the Thames company.
 Under 1t all deposits of a trust com pany, whether in savings or a com I mercial department, are to be treated alike and payable from the avails af- ter payment of the charges and ex- |; penses of settling the reoeivership (in- cluding taxes) and of any outstanding notes
 Savings deposits and commercial de- posits are referred to as deposits in the statutes in force at and prior to the granting of it's charter to the , Thames Co
 Our statute In treating all depositors alike whether savings or commercial, appears to have followed the general rule of the law.
 People vs. Mechanics & T. $. Inst,
 First Nat. Bank vs. Armstrong, Ss F., 231;
 Receivers of Corporations. Ghuerick & Baaker. (2nd Ed.l sSs. $40.
 Thames Co. Charter.
 Unless repealed or modified by the charter of the Thames company or by subsequent sta atute sec. 34S2 provides i the method of distribution of the ayails of the company in the hands of the re- ceiver.
 The charter authorizes the company to accept and execute all trusts and receive money on commercial or say ings deposits. Section 5 provides: "All the capital stock, property and estate of every kind belonging to said com pany shall be and stand charged with the fuihllment of said trusts, and the payment of said deposits, and said trusts and other funds as the first, i and prior lien thereon, in case of the failure of said corporation"
 In terms the section inpresses a prior lien upon all the assets of the company for the payment of all trusts aid deposits with it.
 The relation of debtor and creditor entered into between the depositors and the company was additionally | protected by the preference accorded i deposits in the assets. In the event i of failure their prior ienu was to be | satisfied ahead of the general liabil- | ties of the company.
 G. s, Section 34S2 should be con- strued in connection with Section 5 of | the charter.
 Both egect the same purpose to | give all deposits and funds entrusted l to it priority of payment over all gen