This is an action on an assigned claim to recover interest on a deposit by plaintiff’s assignor in the defendant bank.
On the 30th day of January, 1908, the firm of I. Wasserman. & Co. had on deposit in the Mechanics and Traders’ Batik $9,878.17. That account was a running check account with the privilege to the depositor to draw all or any part thereof at any time, either in person or by checks and was non-interest bearing. It was stipulated on the record that on the 30th day of January, 1908, or shortly prior to that time, the Banking Department stepped in, deetifing that the depositors’ interests were unsafe, and on that day the bank suspended payment; that temporary receivers were appointed of all *154the property of the defendant; that the defendant closed its doors on the morning of that day, and that no further payments were made to the firm of I. Wasserman & Co. or to any other depositors, until August 17, 1908, during all of which time the receivers were in possession and control of the affairs of the hank.
The answer sets up the appointment of temporary receivers, and attached a copy of the order, thereby making it a part of the answer. Said order inter alia recited: “ And it appearing that the said Superintendent of Banks duly made report to the Attorney-General of the State of New York that the said defendant had suspended payment and had reported to the Banking Department that it was unable to meet the demands of its depositors, and that it was unsafe and inexpedient for the said corporation to continue business.” It enjoined the defendant from disposing of its property. The answer avers that said injunction order continued in full forcé and effect until August 17, 1908.
It was- further stipulated that the action was voluntarily discontinued by the Attorney-General, the receivers discharged and the bank permitted to resume business on proof that it was not insolvent. It was also stipulated that the assets were sufficient to pay all the depositors in full, and that the entire amount of the principal of the deposit was paid by the defendant and received by the plaintiff on August 17, 1908.
This action was to recover the interest on said sum so deposited from the thirtieth of January, when the bank suspended payment, to the 17th of. August, 1908, when it paid the. principal. By direction of the court the jury found a verdict for $324.34 for the plaintiff..
The claim is made that by the receipt of the principal interest was waived. If there was a question of fact as to whether or not ■ the receipt of the principal under the circumstances disclosed was a. waiver of the right thereafter to claim interest, the ■ appellant cannot raise such question in this court because both sides asked for the direction of a verdict, and even after the court had said, “ There was nothing for the jury to decide as to waiveryou both moved for a direction and that left it for the court ;• I would have submitted that question to the jury had not both of you moved for a direction,” the defendant’s counsel answered, “It is a question of law,” and did not then ask to go to the jury.
*155Appellant claims that no interest is due and payable because the State Department of Banking stepped in and took possession of the bank and prevented payment, that receivers were appointed and an injunction granted and the bank should not be held responsible for such action.
Chief Justice Shaw, in Williams v. American Bank (4 Metc. 317), said: “ Interest is allowed not only on strict legal grounds where there is a contract for the payment of interest, or by way of legal damages where there is a tortious detention of a debt, but upon considerations of equity and natural justice when a party is entitled- to the payment of money which, owing to various causes, he cannot obtain.. * * * And in our own practice interest is, in many cases, allowed upon considerations of equity not only where the payment of a debt has been prevented by the debtor, but where judgment has necessarily been delayed to await the action of the law.”
I think this case is governed by People v. Merchants’ Trust Co. (116 App. Div. 41; affd., 187 N. Y. 293). In that case there were two classes of depositors, one of. whom by special contract with the trust company received interest at various rates, from two to four per cent, and the other class received no interest. Both classes of depositors had been paid the face of their claims in full. Thereafter it appearing that there was a surplus of about $175,000, a claim was made for interest. The question, therefore, arose whether this surplus should go to the stockholders or to the creditors. The court held that those depositors who had special contracts for the payment of interest at specified rates were entitled to such interest up to the date of suspension, and from that date all of the depositors were entitled to interest at six per cent down to the time of payment. The Court of Appeals said: “ The appointment of the temporary receiver and the taking possession of the assets by him operated to prevent the defendant from paying- the claims of the creditors and thereby obviated the necessity of a formal demand for payment on their part. (Richmond v. Irons, 121 U. S. 27, 64; Sickles v. Herold, 149 N. Y. 332.) That interest was chargeable at the contract rate upon the claims of depositors and certificate holders down to the date of the appointment of the receiver and of his taking possession pf the assets of the defendant does not appear to be questioned. *156But it is contended that after that event no interest whatever was chargeable as against, the defendant or its stockholders. . We think, however, that this court is- committed to the doctrine that interest is allowable' if the assets are' sufficient to pay the same. In the case of People v. American Loan, & Trust Co. [172 N. Y. 371] Vann,. J., in delivering the opinion of the court, said: ‘If the assets are sufficient to pay all, including interest, it must be paid, for, as against the corporation itself, interest should be allowed before the return of any surplus to the stockholders.’ It may be admitted that these remarks were' unnecessary .to the disposition of the case then under consideration, but the rule thus asserted appears to us to be so eminently just and so well supported by other authority that we now have no hesitancy in adopting it as the rule that should be adhered to in disposing of questions of. this character.”
In Richmond v. Irons (cited supra by the Court of Appeals) stockholders of a national bank were being sought to be held liable, the bank having become insolvent. The. court said: “As the liability of the shareholder is for the contracts, debts and engagements of the bank, we see no reason to deny to the creditor as against the shareholder the same right to recover interest which,according to the nature of the contract or debt, would exist as against the bank itself. * * • * In the case of book accounts in favor of depositors, which' was the nature of the claims in this case, interest would begin to accrue as against the bank from the date of its suspension. The act of going into liquidation dispenses with the necessity of any demand on the part of the creditors, and it follows that interest should be computed upon the amounts then due as against the shareholders to the time of payment.”
People v. American Loan & Trust. Co. (also cited supra) was a case of a dissolution of a corporation having preferred creditors. Such preferred creditors received the full principal in four dividend payments. The first dividend included interest at the rate provided for by the contract, of deposit to the date of suspension. On the final accounting a claim was made for interest at six per cent upon the amount of the claims from the date when the insolvent corporation suspended business. If paid it would have wiped out all of' the assets .so that there would have been nothing for the unpre*157ferred creditors. While the court held that “interest should not run in favor of one creditor at the expense of another, (Vhile the law, acting for all, is administering the assets,” it followed this by the statement “ if the assets are sufficient to pay all, including interest, it must be paid, for as against the corporation itself interest should be allowed before the return of any surplus to the stockholders.” ■
If, then, the receivers of a corporation,.having paid the depositors in full and subsequently having assets of the corporation in their hands, are required to apply such assets of the corporation to the payment of interest, it must be that where, after such a suspension of payment as is in evidence in this case, the corporation resumes and has possession of its assets and is going on doing business, it must, for that interruption of business and the detention of the depositors’ money in its hands, pay for that, delay.
I can see no difference in principle between the' two cases. In one the question is shall a surplus in'course of liquidation of a dissolved banking corporation be given to the stockholders or shall it be applied to the payment to creditors of interest on deposits from the time of suspension of business. In the other shall interest be paid to the depositor when the bank has been enabled to resume after a suspension. In each the question arises solely between the bank (for upon this question the bank and its stockholders are identical) -and its depositors. Shall the depositors suffer for the benefit of the bank ? It seems to me that the bank must be held responsible for such conduct of its officers as brought about its suspension and the depositor must be made whole.
It follows that the determination of the Appellate Term should be affirmed, with costs. ■ :
Dowling, J., concurred.
Determination, judgment and order reversed and new-trial ordered, costs to appellant to abide ¿vent.