N.Y. Banking Law § 617: Disposition of property held as bailee, or depositary; opening of safe deposit boxes; disposal of contents

§ 617. Disposition of property held as bailee, or depositary; opening

of safe deposit boxes; disposal of contents. 1. The superintendent may,

after he has taken possession of any banking organization, cause to be

mailed to each person claiming to be, or appearing upon the books of

such banking organization to be

(1) the owner of any personal property in the custody or possession of

such banking organization as bailee or depositary for hire or otherwise,

including the contents of any safe, vault or box theretofore opened for

non-payment of rental in accordance with the provisions of this chapter,

or

(2) the lessee of any safe, vault or box, a notice in writing directed

by registered mail to such person at his last address as the same

appears on the books of such banking organization or at his last known

address if no address appears on such books, notifying such person to

remove all such property or the contents of any such safe, vault or box,

within a period stated in said notice, which period shall be not less

than sixty days from the date of such notice, and further notifying such

person of the terms and provisions of this section. The contract of

bailment or of deposit for hire, or lease of safe, vault or box, if any,

between the person to whom such notice is mailed and such banking

organization shall cease and determine upon the date for removal fixed

in such notice. Such person shall have a claim against such banking

organization for the amount of the unearned rent or charges, if any,

paid by such person from the date fixed in such notice, if the property

or contents is removed on or before such date, or from the date of

actual removal, if the property or contents is removed after such date.

As used herein the phrase "personal property in the custody or

possession of such banking organization as bailee or depositary for hire

or otherwise" shall include, without limitation, securities, whether

held in custody directly or in book-entry form by such banking

organization, its nominee, subcustodian, clearing corporation or similar

entity.

2. If such property or contents shall not be removed, and all rent or

storage and other charges theretofore accrued, if any, shall not be

paid, within the time fixed by such notice, the superintendent may cause

such property to be inventoried, or such safe, vault or box, or any

package, parcel or receptacle in the custody or possession of such

banking organization as bailee or depositary for hire or otherwise, to

be opened and the contents, if any, to be removed and inventoried, in

his presence or in the presence of a deputy superintendent, a special

deputy superintendent, or an examiner and of a notary public, not an

officer or employee of such banking organization or of the department of

financial services. Such property or contents shall thereupon be sealed

up by such notary public in a package distinctly marked by him with the

name of the person in whose name such property or such safe, vault, box,

package, parcel or receptacle stands upon the books of such banking

organization, and a copy of the inventory of the property therein shall

be certified and attached thereto by such notary public. Such package

may be kept by the superintendent in such place as he may determine at

the expense and risk of the person in whose name it stands until

delivered to such person or until sold, destroyed or otherwise disposed

of as hereinafter provided. Such package may, pending final disposition

of its contents, be opened by the superintendent, a deputy

superintendent, special deputy superintendent or examiner, from time to

time for inspection or appraisal, or to enable the superintendent to

exercise any of the powers conferred or duties imposed upon him by this

article. Whenever such package is opened, the superintendent, deputy

superintendent, special deputy superintendent or examiner, shall endorse

on the outside of said package the date of opening and re-sealing, and

shall prepare an affidavit which shall be attached thereto, showing the

reason for opening and the articles, if any, removed therefrom, or

placed or replaced therein.

3. At any time prior to the sale, destruction or other disposition of

the contents thereof, the person in whose name such package stands may

require the delivery thereof upon payment of all rental or storage

charges accrued, and all other charges or expenses paid or incurred to

the date of delivery with respect to such package or the contents

thereof, including the cost of inventorying or of opening and

inventorying, the fees of the notary public, the cost of preparing and

mailing the notice, and advertising, if any. In case the superintendent

is in doubt concerning the person entitled to receive such package, or

there are conflicting claims thereto, he may require of the claimant an

order of the supreme court authorizing and directing the delivery

thereof, but for any delivery or transfer made by him in good faith to

the claimant appearing from the records in his office to be entitled

thereto, he shall be held harmless and shall not be liable to any

subsequent claimant. If the principal of, or interest, income, or

dividends on any bonds, stock certificates, promissory notes, choses in

action or other securities contained in such package, is or becomes due

and payable while it is in the possession of the superintendent, he may

at his election collect such principal, interest, income or dividends,

and from the proceeds thereof may deduct all such sums due for rental

and other charges, until the time of such collection. The balance, if

any, of the amount or amounts so collected shall be disposed of by the

superintendent as hereafter in subdivision five provided.

4. After the expiration of one year from the time of mailing the

notice in subdivision one hereof described, the superintendent may apply

to the supreme court for an order authorizing him to sell, destroy or

otherwise dispose of the contents of such package. In a proper case, the

court shall make such order upon such terms and conditions as justice

may require. The application for an order of the supreme court pursuant

to this subdivision shall be made upon an order to show cause, which

shall provide that notice thereof to the person in whose name such

package stands and to any other person claiming or appearing to have an

interest therein, shall be published, mailed or given in such other

manner as the court may prescribe. Whenever, pursuant to the provisions

of this subdivision, the superintendent is given the power to sell the

contents of any package, such power to sell shall be deemed a power to

sell in satisfaction of a lien for non-payment of rental or storage

charges accrued, and all other charges and expenses paid or incurred to

the date of sale with respect to such package and the contents thereof,

including the charges and expenses described in subdivision three

hereof. Such power to sell, or the power to destroy or otherwise dispose

of, when authorized pursuant to the provisions of this subdivision,

shall be deemed to include the power to sell, destroy or otherwise

dispose of, as the case may be, any bonds, stock certificates,

promissory notes, choses in action, or other securities, and any other

tangible or intangible property contained in any package, regardless of

whether or not it shall appear from such securities or properties that

the person in whose name the package stands, possesses title to or

interest in such securities or other properties, or power to transfer

such title or interest, and any sale of such securities or properties,

pursuant to this subdivision, shall vest good title thereto in the

purchaser thereof.

5. From the proceeds of any sale, the superintendent shall deduct all

rental or storage charges accrued, and all other charges and expenses

paid or incurred to the date of sale, including the charges and expenses

described in subdivision three hereof, and the expenses of sale. The

balance of such proceeds, if any, shall be credited to the person in

whose name such package stood and shall be paid over to such person, his

assignee or legal representative on satisfactory evidence of identity.

At the expiration of six months after the completion of the liquidation

of such banking organization, the superintendent shall deposit any

unclaimed amounts derived from such sale, as provided in article two of

this chapter.

6. The provisions of this section do not affect or preclude any other

remedy by action or otherwise for the enforcement of the claims or

rights of the superintendent, or of a banking organization of which he

is in possession, against the person in whose name any property, or any

safe, vault, box, package, parcel or receptacle stands, nor affect, nor

bar the right of the superintendent or the banking organization to

recover, before sale, any debt or claim due him or it, or, after sale,

so much of the debt or claim as shall not be paid by the proceeds of the

sale.