Opinion
Argued April 15, 1896
Decided April 28, 1896
Charles E. Hughes and Seward Baker for appellant. George M. Mackellar for respondent.
This action was brought to recover the amount of a promissory note.
In November, 1893, the chief examiner of the banking department investigated the condition of the Harlem River Bank. He objected to certain securities which he found among its assets, and required the directors to make good the amount which he deemed the capital had been impaired. The defendant was a stockholder and one of the directors of the bank. He gave the note in suit in order that the bank might continue business. The note, with others executed by the directors of the bank, was received and placed in its vault. The bank was permitted by the superintendent to continue its business until the 26th day of April, 1894, at which time he took possession and closed its doors. An action was then brought for its dissolution and liquidation, and pending such action the plaintiff was appointed temporary receiver and subsequently brought this action.
The defendant in his answer, by way of counterclaim, asked to have the amount on deposit in the bank, to his credit, offset as against any amount that might be found due and owing by him upon the note.
We are quite content with the disposition of the case made below, for the reasons stated by DALY, Ch. J., except as to the question of interest. The deposit standing to the credit of the defendant did not draw interest and such deposit did not become due until demand, unless circumstances arose which rendered a demand unnecessary, such as the actual insolvency of the bank, or its refusal to pay. This case is distinguishable from one in which the officers of the bank voluntarily close its doors and refuse to continue its business, or from one where there has been an adjudication that the bank was insolvent. Here the superintendent of the banking department took possession of the bank and caused the action to be instituted in which the plaintiff was appointed receiver. The officers of the bank do not appear to have in any manner consented. Insolvency is neither admitted nor proven. It is the chief question to be determined by the trial in that action. In case it should turn out that the bank was solvent and that the superintendent improperly took possession, it might be inequitable to impose upon the stockholders the liability to pay interest upon all of the deposits.
We think, therefore, that in the absence of proof of or an admission of insolvency on the part of the officers, it will not be inferred from the mere appointment of a temporary receiver pending the trial so as to excuse a demand. The bringing of an action, however, is in effect a demand, and the interposing of a counterclaim by way of answer by analogy is of the same effect. It consequently appears to us that when the defendant served his answer asking to have the amount of deposit standing to his credit applied as a set-off against the plaintiff's claim, that that should be treated as a demand and that he should be allowed interest thereon from that date.
The judgment should be modified accordingly, and as so modified affirmed, without costs of this appeal to either party.
All concur.
Judgment accordingly.