Brothers v. Girard National Bank

Citations

• 248 Pa. 148
• 93 A. 940
• 1915 Pa. LEXIS 533

Syllabus

<p>Corporations — Receivers—Actions by receivers — Bank deposits —Set-off—Contracts—Construction—Promissory notes.</p> <p>' 1. When receivers are appointed for an insolvent corporation, the rights of creditors are fixed by the facts as they then stand, and these rights cannot be enlarged by subsequent events.</p> <p>2. In such case the fact that the corporation was not definitely known to be insolvent at the time the receivers were appointed, and’ that they were given authority to conduct the business as a going concern ¡and to apply the money which should come into their hands from the sale of the whole or a p.art of the property, does not change the rule where the corporation was afterwards found to be insolvent at the time the receivers were appointed, and in such case banks who hold deposits of the corporation at the date of the appointment of the receivers cannot set off such deposits against the amount of notes of the corporation held by them, which were discounted before the appointment of the receivers, but did not mature until afterwards.</p> <p>3. In such case the claim of certain of defendants to an equitable lien on the deposits created by virtue of an alleged oral agreement that the corporation should always maintain in its deposit account a balance equal to at least twenty per cent, of the amount of its discounted notes, was properly disallowed, where it did not appear to have been agreed that the bank should have an option to appropriate the deposits for the payment of the discounted notes, or had ¡attempted to make such an appropriation before the appointment of the receivers, or that the bank under any circumstances should have a right to hold such deposits, or any part thereof, as collateral for discounted notes, or that any penalty should be paid for the failure of the corporation to keep twenty per cent, of its discounted notes on deposit with the bank.</p>