Court Opinion

ID: 5555302
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:40:03.686903+00
Date Added: 2024-06-11T08:35:18.598811
License: Public Domain

Warner, J.,
dissenting.
On the 31st day of March, 1866, the Bank of Columbus made and executed a deed of assignment of all its property and assets, in trust, for the payment of its debts “according to the priorities established by law, in cases where bank charters are surrendered or forfeited,” the bank being insolvent. The Act of 1841, providing for the forfeiture of bank charters (the substance of which is incorporated into the Code,) declares “that the issues of such bank or banks shall first be paid off and redeemed, and the Receiver shall hold over and retain a sufficient sum to pay off said .issues for a' term not exceeding twelve months from the date of their appointment.” The time, as it will be seen, is limited by the Code to six months. The 1493d section of the Code declares that when a bank charter is forfeited it shall be the duty of the Receiver “ to pay the creditors pro rata, semiannually, according to the dignity of their claims, unless *403there is sufficient to pay all; to pay the holders of the bills before other creditors, if they give notice of their claims within six months.” When the charter of an insolvent bank is forfeited or surrendered the bill-holder creditors thereof are entitled to priority of payment out of the assets of such bank so forfeited or surrendered, if they givé notice of their claims within six months from the date of such surrender or forfeiture, and are entitled to be paid before the other creditors of such bank. It was the true intent and meaning of the Bank of Columbus, in making the deed of assignment, that its bill-holder creditors who had given the six months notice should be first paid, inasmuch as their priority of payment is established by law ; and as the claimants on the fund arising from the assets of the bank claim under the deed of assignment, they are bound to conform to its terms and stipulations, in the distribution of that fund. Inasmuch as the bill-holder creditors of an insolvent bank, the charter of which has been surrendered or forfeited, who have given notice of their claims within six months, are entitled under the law to priority of payment before the other creditors of the bank, a depositor being á general creditor of the bank is not entitled to share in the distribution of the fund with the bill-holder creditors, he being one of the “ other creditors,” before whom the bill-holder creditor is entitled to be paid upder the law. The bill-holder creditor who has given the six months notice being entitled to priority of payment under the law, the 1495 and 1499th sections of the Code, were not intended to, and do not alter or defeat that priority of payment, but on the contrary preserve and protect it, in the latter part of both sections. '
The debts of an insolvent, bank are to be paid in the order prescribed in cases of administration to the extent applicable, except where special preference or postponement is given by law ; here, special preference is given by law, as well as by' the deed of assignment, and therefore the general law in cases of administration is not applicable to this case.
*404By the ninth section of the Columbus Bank charter it is declared that, “ in case said bank should suspend payment of its bills on demand, oi*'shall cease to do business, or said charter should become forfeited, the stockholders in said bank shall be personally, individually and severally bound ,for thp payment of said bills, without suit against the bank, to any creditor holding bills unpaid, in the proportion that his stock subscribed for bears to the whole stock of said bank.” The stockholders of said bank who may have redeemed and taken up the bills of the bank, to protect themselves from liability as such stockholders, under the provisions of the hinth section of- the bank charter, arq not such bill-holders as the law contemplates, who are entitled to be paid out of the fund arising from the assets of the bank, before other creditors, unless they are the holders of the bills of the bank to an amount over and above their liability as stockholders. In that event they stand upon the same footing as other bill-holders, as to the excess of bills held by them over and above the amount for which they were bound to redeem, as such stockholders, under their contract when they accepted the charter. To allow the stockholders who' have taken up the bills of the bank in discharge of their personal liability, to take the larger portion of the fund in Court, as bill-holders in that capacity, and then to turn the real bona fide bill-holder over to a suit against the stockholders for .the deficiency which may be due them on 'their bills, whether solvent or insolvent, is not within either the reason or spirit of the law which gives to bill-holders special preference in payment thereof. The bill-holders who are entitled to participate in said futid are entitled to be paid therefrom only the value they paid therefor, in good money, at the time they became the holders and bona fide owners of said bills, and should be required to show the time when, they became such holders and bona fide owners thereof. .
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