Hoffman v. Van Nostrand — 42 Barb. 174

Majority

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Hoffman vs. Van Nostrand and others.

Headnote

The statute declaring that the directors and managers of any corporation shall, upon its dissolution, be the trustees of the creditors and stockholders, expressly limits their liability to the extent of the property and effects that shall come into their hands.

Where, upon the expiration of the charter of a bank, the president and directors assigned all its property and assets, for a valuable consideration, to a new corporation formed under the general hanking law, the latter-assuming specially certain debts and liabilities, as a part of the consideration of the transfer; Held that the directors and managers of the old corporation were not liable, as trustees, to one who had deposited stock with the old corporation as collateral security, and which it had sold previous to its dissolution, for the value of such stock.

THIS is an action brought by the plaintiff against the defendants as surviving trustees of the late Merchants’ Exchange Bank for an accounting; claiming a right to redeem certain shares of stock of the Firemens’ Insurance Company of the city of New York, left by Edwin Wilcox, one of the assignors of the plaintiff, with the late Merchants’ Exchange Bank to secure the payment of a note of Wilcox for nine hundred dollars. On the 16th of October, 1844, Wilcox borrowed of the corporation styled “President, Directors, &c. of the Merchants’ Exchange Bank,” $900 for ninety days, depositing with them as collateral security, “with authority to sell the same,” on the non-payment of the money, forty shares of the stock of the Firemens’ Insurance Company. This note was renewed by another

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note which became due 17th January, 1845. On the 16th ¡November, 1844, after the first note was given and before its renewal, Edwin Wilcox assigned all his property to William H. Wilcox, in trust, for the benefit of his creditors, to convert the property assigned into money and pay the creditors. On the 2d day of June, 1849, the “President, Directors and Company of the Merchants’ Exchange Bank” assigned and transferred all its property and assets, making no mention of Wilcox’s stock, for a valuable consideration, to “James Van ¡Nostrand, president of the Merchants’ Exchange Bank,” a new and distinct corporation, formed under the general banking law; the latter assuming specifically certain debts and liabilities as a part of the consideration of the transfer. Among the debts and liabilities so assumed, no mention whatever was made of any debt or liability to the plaintiff. On the 28th day of ¡November, 1857, William H. Wilcox, the assignee, executed and delivered an assignment to the plaintiff. Just previous to the commencement of this action, which was January 7th, 1859, one Charles S. Webb called upon Mr. ¡Robinson, one of the defendants, (who are sued as directors and trustees of the old bank,) and offered to pay the note, and demanded the return of the stock pledged as collateral, and also the premiums paid on it; to which Mr. Thompson answered that he could not return the stock, as he understood the stock had been sold by the old bank before it sold out to the new bank. This is all the demand made. There was no tender. The charter of the old bank expired on the first Monday, (4th) of June, 1849. The action was referred to a referee. The plaintiff proved the above facts; also the value of the stock and the dividends, and rested. The defendants thereupon moved for. a dismissal of the complaint, on various grounds. The referee dismissed the complaint on the second point taken by the defendants—the statute of limitations; and from the judgment entered on his report, the plaintiff appealed.

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2?. J. Pattison, for the appellant.

A. B. Dyett, for the respondent.

By the Cowt,

I think the referee erred in the reasons upon which he based his decision; although the decision itself is correct. The statute of limitations has nothing to do with this case. If fhe.defendants were liable at all, no cause of action accrued until the plaintiffs tendered payment of the note, and demanded' a return of the stock, which had been given as collateral security. The defendants refused to receive the money, and to return the stock, on the ground that they could not comply with the demand, as the stock had been sold by the old bank before it had sold out to the new bank. Having thus absolutely declined to receive the money, it mattered not whether the person making the demand had the money in his possession at the time or not; and if these defendants were liable at all, a right of action accrued -immediately on this refusal.

Assuming, then, that the demand and tender were properly made, are they liable ?

The defendants are sued as trustees of the late banking corporation known as the President, Directors and Company of the Merchants’ Exchange Bank. The charter of this association having expired, the president and directors assigned all its property and assets, for a valuable consideration, to a new and distinct corporation, formed under the general banking law; the latter assuming specifically certain debts and liabilities as a part of the consideration of the transfer.

The old association, previous to its dissolution, sold the stock, the value of which the plaintiff seeks to recover from the defendants. There is no proof that the defendants ever received any assets, or that they ever received any amount sufficient to pay this claim, or any other claims against the old bank. The statute declaring that the directors and managers of any corporation shall, upon its dissolution, be

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the trustees of the creditors and stockholders, fixes no such liability as is claimed on behalf of the plaintiff in this case; on the contrary, it expressly limits the liability to the extent of the property and effects that shall come into their hands.

[New York General Term,

May 2, 1864.

Even if a right of action against the new bank could be deemed property and effects, within the meaning of the statute, still no such right of action relating to the stock in question can accrue to the defendants. The debts and liabilities of the old bank, assumed by the new, are specifically set forth in the bill of sale; and the plaintiff’s claim is not among them. So that, whether the sale of the plaintiff’s stock was rightfully or wrongfully made by the old bank, the defendants are not liable as trustees, or in this form of action.

The judgment should be affirmed, with costs.

Leonard, Clerlce and George G. Barnard, Justices.]