Case Name: In the Matter of the Application of Eagle Savings and Loan Company for an Order Reducing Its Liability to Its Members
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1914-12-11
Citations: 164 A.D. 867
Docket Number: 
Parties: In the Matter of the Application of Eagle Savings and Loan Company for an Order Reducing Its Liability to Its Members.
Judges: 
Reporter: Appellate Division Reports
Volume: 164
Pages: 867–868

Head Matter:
In the Matter of the Application of Eagle Savings and Loan Company for an Order Reducing Its Liability to Its Members.
Second Department,
December 11, 1914.
Banking—savings and loan association—application under section 404 of the Banking Law for an order reducing liability of association to its members.
Application to the Appellate Division by a savings and loan association, under section 404 of the Banking Law, approved by the Superintendent of Banks, for an order reducing the liability of said association to its members, so as to distribute the loss equitably among them, granted, without prejudice to any present right of action which any member has against the officers or directors of the association for misfeasance or malfeasance in office.
Putnam, J., dissented, with opinion.
Application for relief made directly to the Appellate Division.
Almet Reed Latson, for the petitioner.

Opinion:
Per Curiam:
Upon the petition of this association, approved by the Superintendent of Banks and pursuant to the provisions of section 404 of the Banking Law, we have ordered a reduction of the liability of the said association to its members so as to distribute the loss equitably among them. While it is not entirely clear that this statute properly devolves such power upon the court, we feel that we should not pass upon that question upon an ex parte application. Not only has the Superintendent of Banks formally approved of this petition, as required by the statute, but in attendance upon us he states that it is his best judgment that this is a wise measure, because the alternative is immediate winding up of the association by the Department of Banks, which would entail great loss to those interested in the association.
The order is experimental. If it is ultra judicial, no rights of any of the members are affected. In any event, it is made without prejudice to any present right of action which any member has against the officers or directors of the association for misfeasance or malfeasance in office. The Superintendent of Banks has given to the court his assurance that he will subject the association to frequent visits, which will involve almost constant scrutiny into the future conduct of the association.
Jenks, P. J., Burr, Thomas and Bich, JJ., concurred; Putnam, J., read for denial of motion.
See Consol. Laws, chap. 2 (Laws of 1914, chap. 369), § 404.—[Rep.