Court Opinion

ID: 5244633
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:55:40.467695+00
Date Added: 2024-06-11T08:27:50.943962
License: Public Domain

Putnam, J. (concurring):
The Legislature in 1908, confronted with the fees and system of allowances for court receivers and their counsel, determined to confer the duty of a liquidator on a public salaried official.* It might have devolved this work on the Attorney-General. Such liquidation'is a duty quite distinct from the normal official character of the Superintendent of Banks, who as to organization, conduct of banking officials and supervision by means of reports and examination of such institutions, remains a public official answerable to the Legislature. But in winding up a banking corporation he is not left independent of judicial control. He compounds debts and sells the bank’s real and personal property by order and direction of the court. The slight verbal changes in section 19 of the Banking Law of 1909 (Consol. Laws, chap. 2 [Laws of 1909, chap. 10], as amd. by Laws of 1910, chap. 452), as reproduced in section 69 of the present Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), only emphasize the court’s power to prescribe the terms and conditions of such sales. (See Matter of Superintendent of Banks, 207 N. Y. 11.) Even payments in the course of administration, like those to his own deputies, counsel and employees, and his expenses of supervision and liquidation, must be subject to the approval of the Supreme Court in the judicial district in which was the principal office of such corporation. (§ 63.)
It is the court which orders payment of dividends, and makes provision for unproved or unclaimed deposits. (§ 78.)
Within ten days after the Banking Department takes possession the aggrieved bank can come to the court, which may cite the Superintendent before it, and may stop his proceedings and direct him to turn back the bank’s property. (§ 60.) As Mr. Justice Woodward succinctly said: “ All doubtful questions are left for the court to dispose of, or at least to supervise.” (Matter of Union Bank, No. 2, 147 App. Div. 593, 619.) Regarding sales of assets, the Court of Chancery, and later the Supreme Court, had the responsible direction in banking liquidations. The Laws of 1846 (Chap. 97, § 2) provided: “It *489shall be lawful for the receiver of any such bank who shall have omitted to sell the real estate of any such bank within the time heretofore limited for that purpose, to sell such real estate under the advice and direction of the chancellor at public auction upon such notice as the chancellor shall require.”
Under the Laws of 1849 (Chap. 226, § 12) the receiver of an insolvent bank had to sell at auction the effects and demands of such corporation, “which any justice of the Supreme Court shall authorise to be sold.” He had to declare a cash dividend within ninety days from his appointment “unless such time be enlarged by a justice of the Supreme Court, which may be done for a period not exceeding ninety days.”
In Matter of Hollister Bank (23 N. Y. 513) the power to delay sales by bank receivers was considered. Judge Selden held that under the act of 1849, before a receiver could proceed against stockholders, “his report must show, either that all the assets not in litigation have been converted by sale or otherwise, or that a judge has deemed it expedient that a sale of the whole or some portions of the demands due to the bank should be postponed beyond the period within which a dividend must be made.” (Pp. 513, 514.)
The Federal Comptroller of the Currency has quite different powers. He is not subject, save in a limited degree, to any judicial supervision. I think all the changes in the Hew York Banking Law emphasize the court’s duty of direction and supervision, not over the Superintendent of Banks in general, but in so far as he takes on the functions of a liquidator of an insolvent banking corporation.
In this judicial district, where the Union Bank had its principal office, the Supreme Court cannot shift or escape its responsibility to the depositors and to the public. The statute does not say, and the Legislature could not have intended, that in matters of liquidation the court should wait on the initiative of the Superintendent of Banks. Statute provisions for an order of court may often be complied with by an approval, quite formal, of what the Banking Department has planned. When, however, the depositors have waited over five years the statute should mean that real property held on increasing charges may be ordered to be converted into cash to pay those entitled. *490Hence, I cannot agree that since 1908 the court has been relieved of a'responsibility to the depositors hitherto conferred on and exercised by the chancellor and by the Supreme Court. But on this view I think a notification to the depositors and to the Superintendent, followed by a full public hearing and consideration of what the department may be doing in the way of liquidation of assets, should precede an order for an auction sale. Suppose, for illustration, that the Banking Department were in the midst of a negotiation to sell and convert the property, but had not yet come to the precise terms to be recommended to the court, plainly it might not be right to order an immediate auction sale. On this ground I concur to reverse the part of the order appealed from.
Order in so far as appealed from reversed, without costs.

 See Laws of 1908, chap. 143, amdg. Banking Law (Gen. Laws, chap. 37; Laws of 1893, chap. 689), § 18.— [Rep.