Claggett v. Metropolitan National Bank

The defendant, while a banking association under the laws of this state, and in 1865, having become a National Banking Association under the provisions of the act passed in that year, chap. 97, and desiring to retire its circulating notes issued whilst a state bank, proceeded to comply with the provisions of the act of 1859, chap. 236, relating thereto. In its conversion to a national bank, and in the proceedings under the act last mentioned to retire its notes, every requirement was observed ; and the question presented therefore in limine is whether the act of 1859, the conversion having taken place, is applicable.

The learned justice in the court below held that it was not, for the reason that the act of 1859 applied only to banks having an intention to close their business absolutely, and not to those intending to continue under any other form.

It is true that by § 1 of the act of 1865 it is declared that its provisions shall be taken and deemed as an amendment of the laws of this state in reference to the banking business, and therefore they were engrafted on those laws. And for this reason, if no other exists, it must be conceded that whether it was the intention of the legislature to provide that the two proceedings should go on pari passu, that is, the national organization, and the retirement of its notes by the bank whilst a state corporation, is a difficult'and troublesome question. .

The act of 1865, it must be observed, will be read in vain to discover any language, .except by remote implication, which tends " to express such a design. In the act of 1859, however, we find not only language indicating the expressed purpose of the statute to be to facilitate existing state banks to retire their circulation, but language from which that purpose and that purpose only is declared and quite manifest.

It provides amongst other things that there shall be a publication in the state paper by the superintendent of banking that the bank notes will be redeemed by him, and must be presented within six years from the date of the notice, and that upon the expiration of such six years (all proceedings "being regular), it shall be lawful for the superintendent to surrender to the banking association and it shall be entitled to receive from him all the money remaining in his hands after such redemption, except so much as may be necessary to pay the reasonable expenses chargeable against the accounts including the publication of the required notice. The money so to be refunded is whatever remains of the amount required to be deposited in order to fully meet the outstanding circulation at the time the proceeding is initiated, whatever that may be.

By § 5 it is further provided that a banking association after the payment of all the circulating notes issued by it which shall have been presented within the time required by the notice to be published as already stated and of all other lawful claims and demands against the bank, it shall divide the remaining property and effects of the bank among the "stockholders thereof or their personal representatives according to the respective shares and interests therein.

It will at once be perceived that if the bank continues in another form all its assets being transferred to the new formation by operation of the statute, the division contemplated by the section cannot be made; and in that respect at least, the object and design of the act is frustrated. A provision of this kind would by implication, if there were no express language leading to such a result, determine the character of the statute, and its purpose. It seems - to be a necessary corollary, if the distribution is to take place of any surplus, that the absolute death of the corporation is not only contemplated, but indispensable in order to carry out the provisions of the statute.

Yah Brunt, P. J., concurs; Bartlett, J., concurs in the result.