Chemical Nat'l Bank v. Hartford Deposit Co. - 161 U.S. 1 (1896)
U.S. Supreme Court
Chemical Nat'l Bank v. Hartford Deposit Co., 161 U.S. 1 (1896)
Chemical National Bank v. Hartford Deposit Company
Submitted January 7, 1896
Decided February 3, 1896
161 U.S. 1
The legal existence of a corporation is not cut short by its insolvency and the consequent appointment of a receiver, and there is nothing in the statutes relating to national banks which takes them out of the operation of this general rule.
After passing into the hands of a receiver, appointed by the Comptroller of the Currency under the provisions of the Revised Statutes, a national bank remains liable, during the remainder of the term, for accrued and accruing rent under a lease of the premises occupied by it, although the receiver may have abandoned and surrendered them; but if the lessor, in the exercise of a power conferred by the lease, reenters and relets the premises, the liability of the bank after the reletting is limited to the rent then accrued and unpaid, and the diminution, if any, in the rent for the remainder of the term, after the reletting.
This was an action of assumpsit brought by the Hartford Deposit Company against the Chemical National Bank of Chicago and the receiver of the bank in the Superior Court of Cook County to recover damages for a failure to pay rent
alleged to be due under a written lease from August 1, 1893, to April 30, 1894. The cause was submitted to the court for trial on a stipulation as to the facts, of which the lease formed a part. The issues were found in favor of defendants, and judgment was rendered accordingly. Plaintiff took the case to the appellate court for the First district of Illinois, which affirmed the judgment as to the receiver, but reversed it as to the Chemical National Bank, and entered judgment for the sum of $9,000. 58 Ill.App. 256. An appeal was prosecuted to the Supreme Court of Illinois, and the judgment of the appellate court affirmed. 156 Ill. 522. This writ of error was thereupon brought.
The facts were thus stated by the supreme court:
"The Chemical National Bank of Chicago entered into a lease, dated November 18, 1892, with the Hartford Deposit Company, of a banking office of a certain building owned by the said Hartford Deposit Company. In accordance with its terms, the bank paid $2,500 on the delivery of said lease. The term was for a period of five years, from May 1, 1893 at an annual rental of $12,000, payable in equal monthly installments of $1,000, in advance, exclusive of and in addition to said first payment of $2,500. The bank entered into and took possession of said premises on May 1, 1893, the first day of said term, and the first installment of rent fell due and was payable on that day. This installment was not paid when due, nor had it, or any part of it, been paid when, on May 9, 1893, the bank became insolvent and a national bank examiner took possession of its assets and of said premises. On July 21, a receiver was duly appointed, and on July 27, he notified the Hartford Deposit Company of his election to terminate said lease after July 31, 1893, so far as he, as receiver, was concerned. On the same day, namely, July 27, said receiver paid to the Hartford Deposit Company the sum of $2,709.68, which was, as agreed, the ratable amount of rent due for the period to July 31, inclusive. No other or further rent was paid under said lease, by any other person or at any other time. The premises remained vacant until May 1, 1894, when they were relet at a reduced rental. "