Livingston County NyArchives Court.....Bradner, John Vs. Lauren Woodruff 1889
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Source: Reports Of Cases - New York
Written: 1889

Fifth Department, March Term, 1889.

ALONZO BRADNER and JOHN A. VANDERLIP, as Executors, etc., of CONRAD WELCH, 
Deceased, Appellants, v. LAUREN C. WOODRUFF and Others, as Surviving Trustees of 
the Bank of Dansville, Respondents.

Banks — sections 186 and 187 of chapter 409 of 1882 are applicable to banks.

Sections 186 and 187 of chapter 409 of the Laws of 1882, relating to conveyances 
and assignments by moneyed corporations, and to the giving of preferences to 
creditors thereof, are applicable to banks.

Atkinson, Recr., v. The Rochester Printing Company (43 Hun, 167) followed.

Leavitt v. Blatchford (17 N. Y., 521); Belden v. Meeker (47 id., 307) 
distinguished.

Appeal from an order of the Special Term requiring the plaintiff Alonzo Bradner 
to deliver to Reuben Whiteman, as receiver, etc., of the Bank of Dansviile, 
certain bonds, coupons and promissory notes, the property of said bank, which 
order was entered in the Livingston county clerk's office on the 23d day of 
September, 1887.

This was a proceeding brought by R. Whiteman, as receiver of the Bank of 
Dansville, to compel Alonzo Bradner to deliver to him certain securities 
belonging to him as receiver. Said Alonzo Bradner claimed the title to the bonds 
and notes under written transfers, one dated May 20,1884, and the other May 
21,1884. On the reference Alonzo Bradner claimed that he arranged with A. H. 
Bradner and Luther Grant for the transfers of these securities and received them 
two or three days before the nineteenth of May (the date of the receiver's 
appointment), and that the assignments were drawn at that time, but were signed, 
as had been agreed upon between him and the cashier Grant and A. H. Bradner, 
before the appointment of the receiver.

J. A. Vanderlip, for the appellants. 

M. W. Cooke, for the respondents. 

Adams, J.:

Very little conflict respecting the facts of this case is disclosed by the 
motion papers, and it was correctly assumed by the court below that certain 
questions had been so far settled as to admit of no further discussion. One of 
the questions thus referred to is the fact that the corporation known as the 
Bank of Dansville was not dissolved by the adoption of a resolution to close its 
business and the subsequent proceedings taken thereunder. It seems to be equally 
well established that at the time the receiver was appointed herein, to wit, May 
19, 1884, the Bank of Dansville was insolvent, and that while in this condition 
the bonds and notes in question were transferred to the plaintiff Bradner by 
Luther Grant, the cashier of the bank. The assignment of these securities was 
dated May twenty-first, but it is claimed that the arrangement for their 
transfer was concluded two or three days prior to the appointment of the 
receiver. This is a matter of slight consequence, however, inasmuch as the facts 
admit of no other conclusion than that the assignment was made in contemplation 
of the bank's insolvency. It is not claimed that this transfer was made in 
pursuance of any resolution of the directors of the bank, or that they, as a 
body, had any knowledge of it, and the only explanation offered for the 
cashier's action is that the transfer was designed to secure certain creditors 
of the bank, whose claims had been long existing. Upon this state of facts the 
Special Term held that the assignment was void and transferred no title to the 
transferee.

It is now contended by the learned counsel for the appellant that the conclusion 
reached by the court below was based upon the erroneous assumption that section 
4 of title 4 of chapter 18 of part 1 of the Revised Statutes was applicable to 
and decisive of the question here presented, whereas that section has been 
repealed by chapter 402 of the Laws of 1882. So far as the repeal of the section 
referred to is concerned, the learned counsel is doubtless correct; but he 
appears to have overlooked the fact that the same legislature which repealed 
that section consolidated and revised the various statutes relating to banks, 
banking and trust companies, with the obvious design of framing a general 
banking act for the government of all banking corporations and institutions. 
(Laws 1882, chap. 409.) Section 186 of this act provides that "no conveyance, 
assignment or transfer, not authorized by a previous resolution of its board of 
directors, shall be made by any such corporation of any of its real estate, or 
any of its effects, exceeding the value of one thousand dollars," and by the 
succeeding section it is further provided that "no such conveyance, assignment 
or transfer, nor any payment made, judgment suffered, lien created or security 
given by any such corporation when insolvent, or in contemplation of insolvency, 
with the intent of giving a preference to any particular creditor over other 
creditors of the company, shall be valid in law; and every person receiving, by 
means of any such conveyance, assignment, transfer, lien, security or payment, 
any of the effects of the corporation, shall be bound to account therefor to its 
creditors or stockholders, or their trustees, as the case shall require." The 
sections above quoted, prior to the act of 1882, formed a portion of the statute 
relating to moneyed corporations ; and the question of whether or not they were 
applicable to banks or banking institutions was the occasion of much dispute and 
contrariety of opinion in the Court of Appeals.

In some of the earlier cases no doubt seems to have been entertained but that 
they were thus applicable. (Gillet v. Moody, 3 Comst., 479 ; Talmage v. Pell, 3 
Seld., 328; Gillet v. Phillips, 3 Kern., 114.) This view of the question was 
subsequently reversed, however, in an elaborate opinion concurred in by a bare 
majority of the court (Leavitt v. Blatchford, 17 N. Y., 521), and the doctrine 
of the last-mentioned case has since been followed and approved. {Belden v. 
Meeker, 47 N. Y., 307-311.)

Had there been no intervening legislation affecting the subject, we should, of 
course, feel constrained to follow these later decisions, and hold, with the 
learned counsel for the appellant, that there was no statutory provision which 
inhibited the transfer of the securities in question, but, as has already been 
suggested, the act of 1882 (chap. 409) was evidently designed to codify all the 
statutes relating to banks and moneyed corporations, and thereby to bring what 
was before fragmentary and disconnected into a harmonious whole. To this end all 
previous statutes bearing upon the various subjects, mentioned in this chapter, 
including title 2 of chapter 18 of part 1 of the Revised Statutes, which relates 
to moneyed corporations, were repealed (chap. 402, Laws 1882, § 1, sub. 39), and 
chapter 409 of 1882, was substituted in lieu thereof. By the very first section 
of this last-mentioned chapter the bank department, which previously had been 
charged with the execution of the laws relating to banks only (chap. 164, Laws 
of 1851, § 1), is invested with jurisdiction relative to all other moneyed 
corporations, except insurance companies; then, again, the sections of the 
entire chapter are numbered consecutively, and still other circumstances might 
be pointed out all tending to show an intention on the part of the legislature 
to bring the various provisions of the act into relation with each other.  That, 
as thus amended and revised, sections 186 and 187 apply to banks was assumed by 
this court in a recent case {Atkinson, Recr., v. The Rochester Printing Co., 43 
Hun, 167), and a further examination of the question leads us to the conclusion 
that the assumption there indulged in was correct.

It follows, therefore, that the transfer of the securities in question having 
been made in contemplation of the bank's insolvency, if not while it was 
actually in that condition, and without any authority from the board of 
directors, was void within the letter as well as the policy of the statute, and 
the order appealed from must, consequently, be affirmed, with ten dollars costs 
and disbursements.

Barker, P. J., and Dwight, J., concurred.

Order appealed from affirmed, with ten dollars costs and disbursements.

Additional Comments:
Reports of Cases Heard and Determined in the Supreme Court of the State of New 
York. Marcus T. Hun, Reporter. Volume LIX, 1889, HUN 52. Banks & Company, 
Albany, NY. 1901.

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