Gordon v. Spray Beach Hotel, Inc.

• Decision Date: 06 March 1933
• Citation: 165 A. 82
• Parties: GORDON v. SPRAY BEACH HOTEL, Inc.
• Court: New Jersey Court of Chancery

165 A. 82

GORDON

v. SPRAY BEACH HOTEL, Inc.

Court of Chancery of New Jersey.

March 6, 1933.

Syllabus by the Court.

It appearing that the secretary of banking of the state of Pennsylvania became vested, in his official capacity, with all of the property of the banking corporation taken over by him, said corporation being the owner in fee of a tract of land in this state, he can, under the conditions of this case, make title to said premises by a conveyance executed by him.

Suit by William D. Gordon, Superintendent of Banking of the Commonwealth of Pennsylvania, against the Spray Beach Hotel, Incorporated.

Decree in accordance with opinion.

Thompson & Hanstein, of Atlantic City, for complainant.

Robert E. Steedle, of Atlantic City, for defendant.

INGERSOLL, Vice Chancellor.

This cause is heard upon the following stipulations:

"It is hereby stipulated by and between the parties hereto by their respective counsel that:

"1. William D. Gordon, the complainant in the above entitled cause, was on January 20th, 1931 duly appointed Secretary of Banking of the Commonwealth of Pennsylvania and that he has duly qualified as such.

"2. That by reason of the involved financial condition of the Glenside Bank and Trust Company, a banking corporation of the Commonwealth of Pennsylvania, doing business in Glenside, County of Montgomery, State of Pennsylvania, the complainant, as Secretary of Banking, on October 3rd, 1931, under and by virtue of the statutes of the State of Pennsylvania relating thereto, took possession of the business and property of the Glenside Bank and Trust Company, filing his certificate of such action in his office at Harrisburg, Pennsylvania, and also filed a certified copy of the said certificate of possession in the Court of Common Pleas of the County of Montgomery No. 14 as of September Term, 1931, in accordance with the Statutes of the State of Pennsylvania relating thereto.

"3. That on and prior to October 3rd, 1931 said Glenside Bank and Trust Company was the owner of the following described premises, to which it had a good and marketable title:

"All that lot with the apartment building thereon erected situate in Spray Beach in Long Beach Township, Ocean County, New Jersey, being lots numbered 2 and 3 in section "E" on a map or plan of lots of the Spray Beach Land Company, duly filed in the Ocean County Clerk's office, more particularly described as follows:

"Beginning at the distance of 40 feet south-westwardly from the corner of Twenty-fourth Street in said Spray Beach, containing from thence south-westwardly in front or breadth on Atlantic Avenue 80 feet and extending of that width in length or depth northwestwardly between parallel lines at right angles with said Atlantic Avenue, 100 feet.

"4. That on February 15, 1932, complainant entered into an agreement of sale with The Pitcairn Company, a Delaware corporation, covering the above described premises, a copy of which agreement is annexed hereto and made a part hereof and marked Exhibit A.

"5. That on March 8th, 1932, complainant filed a petition to sell the aforesaid premises, under the laws of the State of Pennsylvania, in the Common Pleas Court No. 14 of Montgomery County, Pennsylvania, a copy of which said petition is annexed hereto and made a part hereof and marked Exhibit B.

"6. That on April 1st, 1932 the complainant herein, by virtue of an order of said Court of Common Pleas #14 of the County of Montgomery was directed and authorized to sell said premises herein described to The Pitcairn Company, or its assigns, a copy of which said order is annexed hereto and made a part hereof and marked Exhibit C.

"7. That on March 31st, 1932 said The Pitcairn Company made, executed and delivered an assignment of the agreement referred to in paragraph 4 hereof to the defendant herein, Spray Beach Hotel, Inc., a corporation of the State of New Jersey, a copy of which said assignment is annexed hereto and made a part hereof and marked Exhibit D.

"8. That although said agreement of sale called, under its terms, for settlement to be held on or before April 15th, 1932, the parties thereto, to wit, the complainant herein and Spray Beach Hotel, Inc. have, by mutual consent, continued the time for settlement, so that the same is still open.

"9. The defendant herein on October 29, 1932 refused to settle for the land above described in accordance with the terms of the agreement of sale above referred to, alleging at that time as its reason for such refusal that the complainant did not own and could not deliver to this defendant a good and marketable title to said premises described in the bill of complaint. The defendant waived a tender of a deed.

"10. Glenside Bank and Trust Company was a banking corporation of the Commonwealth of Pennsylvania. The business of said company was conducted entirely in the State of Pennsylvania. It did no business in the State of New Jersey and has no creditors resident in or located in New Jersey.

"11. The following being sections of the Banking Act are set forth herein as the law of the Commonwealth of Pennsylvania with relation to the subjects covered thereby. Said sections provide as follows:

"'Section 21. Power to Take Possession.

"'The Secretary may, after hearing had upon notice given, with the approval and consent of the Attorney General, take possession of the business and property of any corporation or person subject to the supervision of the Department, whenever it shall appear to him that such corporation or person:

"'I. Has violated any law regulating its or his business, and has persisted in such violation in disregard of an order duly made by the Secretary;

"'II. Is conducting business in an unauthorized or unsafe manner and has persisted in disregard of an order duly made by the Secretary "III Is in an unsafe or unsound condition to continue business: Provided, in such case, that the Secretary may forthwith, without such hearing and consent of the Attorney General, take possession of the business and property of any such corporation or person receiving moneys on deposit, when and if, in his opinion the protection of depositors and the public requires such peremptory action;

"TV. Has an impairment of capital, which has not been restored or made good within the time fixed by order of the Secretary;

"'V. Has suspended payment of obligations;

"'VI. Has neglected or refused to comply with the terms of any lawfully issued order of the Secretary;

"'VII. Has refused, upon proper demand, to submit the records and affairs of the business to the Secretary, a deputy, or any duly authorized examiner or agent of the Department;

"'VIII. Has refused to be examined upon oath or affirmation regarding such affairs;

"'IX. Is in the hands of a receiver appointed by any court, or in any bankruptcy proceeding, or of an assignee or trustee for creditors appointed by such corporation or person.

"'The Secretary may, in like manner, take possession of the business and property of any private or unincorporated bank, or the estate of any private banker, otherwise exempt from the supervision of the Department, whenever such private or unincorporated bank shall have made an assignment for the benefit of creditors or for any of the causes mentioned hereinbefore in this section.' Pa. Banking Act of 1923, as amended by P. L. 1927, 762, sec. 7 (7 PS § 21).

"'Section 29. Status of Secretary as Receiver.

"'Except as herein otherwise provided, the secretary shall, when he has taken possession of the business and property of a corporation or person, have all the rights, powers and duties of a receiver appointed by any court of equity in this Commonwealth; and he shall be vested, in his official capacity, with all the rights, powers, and duties of such corporation or person and with all the property of such corporation or person, including debts due, liens, or securities therefor, and rights of action or redemption, whether or not the property of such corporation or person, including debts due, liens, or securities therefor, and rights of action or redemption, are held in the name of such corporation or person, or in the name of some other corporation or person, hut actually the property of the corporation or person of which or of whom the secretary has possession.

"'He shall be the representative of the creditors of the corporation or person, and entitled, as such, to have vacated and set aside, for the benefit of the creditors, any judgment, execution, attachment, sequestration, payment, pledge, assignment, transfer, conveyance, or incumbrance, which could have been avoided by the creditors or any of them, or by which it is attempted to give any creditor unlawful preference over another.

"'He may, with leave of court obtained on petition after notice to all creditors of whom he has knowledge, surrender to the corporation or person any assets, including choses in action, whether the subject of pending proceedings or not, which are burdensome and of no advantage to creditors.

"'He may enter into leases for real estate belonging to the corporation or person for a period not to exceed three (3) years, upon such terms as may be acceptable to him, without leave of court; and with leave of court may enter into leases for such property for a term not exceeding ten (10) years.

"'He may by agreement in writing with the mortgagor, and without leave of court, extend the period for the payment of a mortgage on real property for a period not to exceed three years upon such terms as may be acceptable to him.

"'He may without leave of court borrow money from the Reconstruction Finance Corporation and any other agency of the United States Government or Commonwealth of Pennsylvania, for the purpose of assisting him in the liquidation of the corporation or person, and to expedite the distribution of the assets thereof to the depositors and creditors of such corporation or person and pledge as security for the loan of such...