Court Opinion

ID: 7939762
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:13:33.710974+00
Date Added: 2024-06-11T16:33:40.591855
License: Public Domain

Montgomery, J.
(dissenting). I can see no good reason for denying to the claimant the rights of a depositor. It is conceded that a bank may become a depositor *274in another bank. Elmira Savings Bank v. Davis, 73 Hun, 357. There can be no question in this case that the People’s Bank attempted to confer upon the claimant the rights of a depositor. It issued the certificate of deposit in the usual form. The only possible distinction between this and the ordinary case of paying money over the counter of the bank, and receiving a certificate of deposit, is that in • this case, instead of going through the form of paying the money into the People’s Bank, the cashier of that bank was permitted to draw on the claimant to the amount of the certificate of deposit. The funds of the People’s Bank were increased by the amount of the certificate of deposit. The money was available to meet its liabilities. The case, in my view, is not different than if a draft or check had been given, drawn upon a third bank, and treated as the equivalent of cash, and the certificate of deposit given for it. It is no answer to say that this was a loan of money. So is a deposit a loan. In case of a general deposit, the money becomes the property of the bank, and the bank merely the debtor to the depositor. 1 Morse, Banks, § 186; Cate v. Patterson, 25 Mich. 191; Beardsley v. Webber, 104 Mich. 88.
Counsel for the respondent make this suggestion as to the distinction between the case presented and the case of an actual deposit, within the meaning of the banking act. Sections 3208c3 and 3208c6, 3 How. Stat., provide for a certain reserve to be kept in commercial and savings banks, and therefore counsel say:
“Will it be seriously contended that for the money received from the State Savings Bank the People’s Savings Bank was obliged, within the meaning of the statute, to maintain a cash reserve ? Suppose the banking commissioner finds that in a given bank the cash reserve is deficient $20,000, reference being had to actual deposits. He orders this made good, and threatens, in case of default, to close the bank. The bank borrows of the petitioner $20,000, and issues its certificate of deposit therefor. If this $20,000 is to be held to be a deposit, the reserve is still short, because every dollar of increase of deposits re*275quires 15 cents increase of reserve; and it must therefore be held that the legal accompaniments of loans and deposits are not the same.”
The case suggested by counsel illustrates, it seems to me, the danger of holding that this claimant is not a depositor. If it be held not a depositor, within the meaning of these sections, it follows that a bank might borrow of another bank the entire of its reserve, issue a certificate of deposit entitling the holder to demand immediate payment, and thus evade wholly the provisions of these two sections. It is very clear that it was not the purpose of the legislature to leave open such a possibility; and either we must hold that the word “depositor” is used in a different sense in the various sections of the statute, or we must sustain the contention of the claimant here. I see no reason for any such distinction, or for holding the contract to be anything different than the parties undertook to make.
I think the decree should be reversed, and a decree entered in favor of claimant.