Nolan Motors, Inc. v. Ghingher

Mitchell, J., delivered the opinion of the Court. The single question involved in this appeal is whether a set-off is allowable under the undisputed facts in the case. The case was heard upon petition and answer, and the facts are as follows: On March 4th, 1933, the Nolan Motors Corporation had on deposit with the Hagerstown Bank & Trust Company, hereinafter designated as the bank, the sum of $2,380.05. At the same time the corporation was, and for some time prior thereto had been, the lessee of a garage property owned by the bank and located in the City of Hagerstown, Maryland.

Upon that date, under the provisions of chapter 46 of the Acts of the General Assembly of Maryland, passed at the session of 1933, commonly known as the “Emergency Banking Act,” John J. Ghingher, as bank commissioner for the State of Maryland, assumed charge of the custody, control, and management of said bank. He continued to exercise such authority over its affairs until December 3rd, 1934, when, in the exercise of the general power and authority vested in him by section 9 of article 11 of the Annotated Code of Maryland, title “Banks and Trust Companies,” as supplemented by section 7 IF of the Emergency Act, he assumed control of its affairs as receiver. All rent due prior to March 4th, 1933, had been paid by the appellant, but after that date it ceased to pay rent, although it continued to use and occupy the premises. On November 2nd, 1934, the amount of overdue rent became equal to the deposit hereinbefore mentioned.

Since the latter date, the petition alleges and the answer admits, the corporation has resumed the payment of its rent, and the receiver has been collecting it. Section 9, to which reference is above made, clothes the state bank commissioner with general authority, upon obtaining the written consent of the Governor and Attor ³⁴² ney General, to take possession of the property and business of any financial institution found conducting its business in an unsafe or unauthorized manner, or the capital of which is impaired. It further provides that the commissioner, upon assuming control of such institution, shall forthwith give notice of such action to all individuals or institutions holding or in possession of assets belonging to the impaired institution. Upon giving such notice, it is provided that: “The property, assets and business of such institution shall be considered to be in the possession of the Bank Commissioner, which fact shall operate as a bar to any and all attachments, liens, executions or distraints of any kind, and shall also operate to place the assets of said institution in the hands of said Bank Commissioner, as receiver, the same as if he had been appointed by an order of court.

Such institution may with the consent of the Bank Commissioner, or with the consent of the court, resume business upon such conditions as the Bank Commissioner may approve. Immediately upon taking possession of the property and business of said institution thé Bank Commissioner shall forthwith cause proper proceedings to be instituted in the name of the State of Maryland versus said institution, in a court of competent jurisdiction, for the purpose of having the court assume jurisdiction over its property and business for final liquidation.” Such was the law prior to the passage of the Emergency Banking Act, which supplemented article 11 by adding 17 new sections thereto. As is shown by sections 71A and 71B of this latter act, the bank commissioner was required to take custody, control, and management of all financial institutions then doing business under the provisions of article 11; and all remedies at law and in equity against such institutions were suspended, until such time as the Governor, by proclamation, within the period of one year or an extension thereof, under the provisions of the act, might terminate such control and suspension of remedies. ³⁴³ Section 71B further provides as follows: “Provided, however, that nothing herein contained shall be construed to prevent any