A bank opens a safe deposit box under Banking Law §335 and finds securities inside. At the time of opening, some interest and dividends on those securities are already due, and additional amounts become due while the bank still possesses the contents. Under the statute, what may the bank do with those payments?
Banking Law §335(3) provides that if principal, interest, or dividends on securities found in a safe deposit box are due and payable at the time of opening or become due thereafter while the contents remain in the lessor's possession, the lessor may, at its election, collect them. From those proceeds, the lessor may deduct sums due for box rental to the time of opening, the cost of opening, the notary's fees for the certificate, and further charges and costs of safekeeping from the time of opening, including reasonable expenses for notices, advertising, sale, and destruction. Any balance remaining is deemed abandoned property only after the expiration of three years from the time of opening.
§335(3) expressly authorizes the lessor to collect principal, interest, and dividends due at opening or thereafter.
§335(3) covers amounts due at opening and those that become due thereafter while the contents remain in the lessor's possession.
The balance is deemed abandoned property three years after opening, not one year.
Explanation
When securities from a safe deposit box have principal, interest, or dividends due at opening or while the lessor still holds them, the lessor may collect those amounts and apply the proceeds to specified charges before any remaining balance is treated as abandoned property after three years.
Memory Aid
Think: "Collect, deduct, then 3-year abandoned check" — collect due payments, deduct authorized costs, and any leftover is abandoned property after three years.