THE BANK AMALGAMATION.

Bay of Plenty Times, Volume XXII, Issue 3466, 23 October 1896, Page 6

THE BANK AMALGAMATION.

Litigation over the B list. The case of the Colonial Bank and Liquidators v. the Bank of i New Zealand was heard in the Court of Appeal on Wednesday last. The question involved is as to the liability of the Colonial Bank to the Bank of New Zealand for interest on accounts in the B list, which the Bank of New Zealand seem unable to recover from customers. The gross total debts in the B list on the 31st | August, 1895, vested in the Bank of New Zealand by agreement between the banks and by the Bank of New Zealand and Banking Act, 1895, was £604,69.5. Against this sum the Bank of New Zea-. land retained £272,072 of purchase money as seourity, and the agreement provided that this amount, less what was required to make good the losses on the B list, should ultimately be paid to the Colonial Bank with interest at o per cent. The Bank of New Zealand gets the benefit of all interest received from customers in the B list at full banking rates, paying the Colonial Bank 3 per cent only on the cover retained. The Bank of New Zealand claims in the case of particular account* where it fails to recover inter- st from customers, it can charge initerest against the Colonial Bank, and deduct it from the cover ret tamed. The Colonial Bank contends the cover was given Only for amounts owing on August list, 1895; that the Bank" of New Zealand obtained the whole management of the accounts, getting nearly the whole benefit of all interest received, and taking the risk of Any loss of interest. The contention for the Bank of New Zealand is that the Colonial Bank guaranteed the accounts in the 13 list up to £272,072 as current accounts, and that they being interest-bearing accounts, tlie guarantee was for principal and interest upto the limit mentioned. Argument was concluded that afternoon, and the Court reserved its decision. Messrs Haggitt and ' Bell are appearing for the Colonial Bank, and Sir R. Stout and Mr Theo. Cooper for the Bank of ' New Zealand.