People's Bank of the City of New York v. Mechanics' Nat. Bank of Newark. v. Trust Co., 93 U. S. 321. Its right to hold the bonds continued so long as any part of the debt against Capron & Merriam remained unpaid. The plaintiffs' intestate could undoubtedly at any time have established his equitable right to a return of the bonds, and procured their surrender, by paying the amount for which they were pledged; but this he not only refrained from doing, but impliedly denied any right in the defendant, by demanding the unconditional surrender of the bonds. This he never became entitled to, and of course is not authorized to recover their possession in this action.

The judgment should be affirmed, with costs.
All concur.

PEOPLE'S BANK OF THE CITY OF NEW YORK V. MECHANICS' NATIONAL BANK OF NEWARK.

A receiver of a National bank situated in another State, though not a party, may move to vacate an attachment.

In an action against a National bank of another State, an attachment issued against its property in this State will be vacated upon proof of its insolvency.

Gray & Davenport, for plaintiff.

Martin & Smith, for defendants.

LAWRENCE, J. It was held by the Court of Appeals, in the case of Robinson v. National Bank of Newberne, 81 N. Y. 385; 59 How. Pr. 218; 2 Nat. Bank Cas. 309, that the Supreme Court of this State has jurisdiction of an action ex contractu, brought by a citizen of this State against a National bank located in another State, and that the provisions of the National Banking Act (U. S. R. S., § 5242), prohibiting the issuing of an attachment, injunction or execution against such an association or its property, before final judgment, applies only to an association which has become insol

People's Bank of the City of New York v. Mechanics' Nat. Bank of Newark. vent, or to one about to become so, as specified in the preceding part of the section. In that case the cases of Central National Bank v. Richland National Bank, 52 How: Pr. 136, 137, and of Rhoner v. First National Bank, 14 Hun, 126, were cited upon the brief of the appellant's counsel, and must have been considered by the court, and in so far as those cases lay down a doctrine which differs from that enunciated in Robinson v. First National Bank of Newberne, they must yield to the latter case. In this case it is sought to sustain the jurisdiction of the court and to bring the case within the doctrine of Robinson v. National Bank of Newberne, supra, by denying the insolvency of the defendant, and it is claimed that the question should be disposed of by a reference. I regard it as a sufficient answer to this point to say that the affidavits submitted on the part of the plaintiffs do not meet or overcome, in my judgment, the very positive proofs of the insolvency of the defendant, which are presented on behalf of the receiver, and therefore a reference is unnecessary. It is further urged that as the receiver appears only specially for the purposes of this motion, and has not submitted himself generally to the jurisdiction of the court, his application ought not to be entertained. But this position cannot be maintained. Under the old Code it was held that a subsequent attaching creditor could not move to set aside a prior attachment. See § 241 of the Code of Procedure; Ketchum v. Ketchum, 1 Abb. Pr. (N. S.) 157.

But under section 682 of the Code of Civil Procedure:

"The defendant, or a person who has acquired a lien upon, or interest in his property, after it was attached, may at any time before the actual application of the attached property, or the proceeds thereof, to the payment of a judg ment recovered in the action, apply to vacate or modify the warrant, or to increase the security, given by the plaintiff, or for one or more of those forms of relief, together, or in the alternative."

The receiver of the defendant in this case certainly brings himself within the language of this section. He has acquired "a lien upon or interest in the defendant's property," since the attachment was issued. There is nothing in the section which requires the applicant to become a party to the action. And it is every-day · practice to allow such motions to be made without imposing upon the applicant the condition that he shall ask to be made a party to the action in which the attachment was granted. Furthermore, it

Market National Bank of New York v. Pacific National Bank of Boston.

is quite apparent that this section was intended to put subsequent creditors or parties subsequently acquiring a lien upon or interest on the defendant's property upon the same footing as that occupied by the defendant under the old Code. See Mr. Throop's note to § 682 of the Code of Civil Procedure.

And under the old Code it was held that the defendant was entitled to make a motion to set aside the attachment without putting in a general appearance in the action. Manice v. Gould, 1 Abb. Pr. (N. S.) 255. The cases of Tracy v. First Nat. Bank of Selma, 37 N. Y. 524, and Allen v. Scandinavian Nat. Bank, 46 How. Pr. 71, were decided prior to the passage of the Code of Civil Procedure, and therefore have no bearing on this case. I am therefore of the opinion that the motion to vacate the attachment should be granted, but under the circumstances, without

costs.

MARKET NATIONAL BANK OF NEW YORK V. PACIFIC NATIONAL BANK OF BOSTON.

(30 Hun, 50.)

Insolvency act of — attachment.

The defendant, a National bank at Boston, Mass., on November 18, 1881, closed its doors, and was put in charge of a government bank examiner, and thus continued till March 14, 1882, when the Comptroller allowed it to resume. It transacted business till May 22, 1882, when it was placed in the hands of a receiver. An attachment was issued in this action, Nov. 19, 1881, against defendant's property in this State. At that time its assets would have paid its debts and liabilities exclusive of its capital, but it had refused to pay various legal obligations then due. Held, that defendant had committed acts of insolvency, within U. S. R. S., § 5242, and the attachment should be vacated.

A

PPEAL from an order of the Special Term denying a motion to vacate an attachment.

Willard Bartlett, for appellant.

Abraham Wakeman, for respondent.

Market National Bank of New York v. Pacific National Bank of Boston.

DANIELS, J. The attachment was issued upon the ground that the defendant was a banking corporation formed and existing in the State of Massachusetts. Its credit in the State of New York was attached by means of an attachment and finally applied by an execution to the payment of the judgment. This payment was made on the 3d day of October, 1882, while the appeal was not taken from the order until the 2d of November, 1882. For that reason a motion was made with the argument of the appeal itself, to dismiss the appeal.

But by section 682 of the Code of Civil Procedure, a motion to vacate an attachment may be made at any time before the actual application of the attached property, or the proceeds thereof, to the payment of the judgment recovered in the action.

The motion itself to vacate the attachment was made and decided before this application of the attached property to the payment of the judgment. It was accordingly within the time for that purpose prescribed by this section of the Code, and having been decided adversely to the defendant, the absolute right was given to it of appealing from the order, and that appeal has not been subjected to the contingency that the judgment should not in the meantime be paid by the appropriation of the attached property. It was sufficient that the motion was made within the time for that purpose allowed. And having been so made, the defendant was authorized afterward to prosecute its appeal from the order. The appeal cannot be dismissed, but must under these circumstances be disposed of upon its merits. The application to discharge the attachment was made upon the ground that the defendant being a National banking association, formed under the laws of Congress, was not liable to be proceeded against in that manner, after it had committed an act of insolvency. And in support of the motion it was claimed that acts of this nature had been committed by the defendant before the attachment itself was issued. The action was brought to recover the amount of five certificates of deposit, upon which the sum of $24,390 appeared to be due and payable. This attachment was issued and served on the 19th of November, 1881. The day before its service the doors of the bank had been closed, and it had been placed in the possession of an examiner, under the authority of the bank VOL. III-85.

Market National Bank of New York v. Pacific National Bank of Boston.

department of the United States, and it so continued until the 14th of March, 1882, when, by the permission of the Comptroller of the Currency, it was allowed to resume its business, and after that it continued in the management and transaction of its affairs until the 22d of May, when it was finally found incapable of proceeding with its business, and was placed in the hands of a receiver. By the affidavits, reports and statements produced and read upon the hearing of the motion, the assets of the bank appear to have been sufficient to pay its debts and liabilities, excluding its capital stock, amounting to the sum of $961,370. This was the probable state of its affairs at the time when the attachment was issued, and in a general sense, without reference to the state of its capital, it may be said to have been solvent; that is, by a proper management and disposition of its property the debts and liabilities existing against it might be paid. But this ability, by careful management, to pay its indebtedness is not what the statute required to protect the corporation against the charge of having committed an act of insolvency, and by reason of such act to be exonerated from the seizure of its property by attachment. For the statute has provided upon the commission of an act of insolvency, or in contemplation thereof, that all transfers or assignments of its property, or securities, or demands, made by it with a view to prevent the application of its assets, as that has been directed by law, or to give a preference to one creditor over another, except in payment of its circulating notes, shall be void, and that no attachment, injunction or execution shall be issued against such association or its property before final judgment. U. S. R. S., § 5242.

The object of this section was to prevent any creditor from acquiring a preference over the other creditors of the association, either by the voluntary act of the association or the instrumentality of legal process of the description of that now in controversy, after any act of insolvency shall be committed. Its pur pose was to promote equality among the creditors of the associa tion, and that is not permitted to be evaded or prevented by the attachment of its property. The proper construction of this section was considered in Robinson v. Nat. Bank of Newberne, 81 N. Y. 385, and 19 Hun, 477.