Edgerton v. Hood

• Decision Date: 24 January 1934
• Docket Number: 143.
• Parties: EDGERTON et al. v. HOOD, Commissioner of Banks.
• Court: North Carolina Supreme Court

172 S.E. 481

205 N.C. 816

EDGERTON et al. v. HOOD, Commissioner of Banks.

No. 143.

Supreme Court of North Carolina

January 24, 1934

Appeal from Superior Court, Rutherford County; Schenck, Judge.

Action by J. H. Edgerton and others against Gurney P. Hood Commissioner of Banks, in charge of liquidation of the Rutherford County Bank & Trust Company. Judgment for plaintiffs, and defendant appeals.

Reversed.

This is an action instituted under the provisions of chapter 102 Public Laws of North Carolina 1931, to determine the rights and duties of the parties under the provisions of chapter 344, Public Local Laws of North Carolina 1933, as amended by chapters 540 and 541, Public Laws of North Carolina 1933, and for judgment in accordance with such rights and duties.

The action was tried on a statement of facts agreed which are substantially as follows:

(1) The Rutherford Bank & Trust Company, a corporation engaged in the banking business under the laws of this state, in Rutherford county, closed its doors and ceased to do business on February 4, 1930. Its assets are now in the possession of the commissioner of banks of North Carolina and are in process of liquidation for the payment of its liabilities as provided by statute. N.C. Code of 1931, section 218(c), chapter 113, Public Laws of N.C. 1927, as amended. The claims of its depositors and other creditors have not been paid in full. The assets now in the possession of the commissioner of banks are not sufficient in value to fully pay and discharge said claims.

(2) All the preferred claims of creditors of the Rutherford County Bank & Trust Company have been paid and fully discharged by the commissioner of banks out of the assets of said bank. No payments have been made on claims of depositors and other creditors of said bank who are not entitled to preferences. These claims as filed with the commissioner of banks amount to $568,203.18, of which claims amounting to $109,785.44 are for notes and accounts due by said bank, at the date of its closing, and claims amounting to $458,417.74 are for deposits in said bank, at said date.

(3) At the date of the closing of the Rutherford County Bank & Trust Company, Mrs. S. R. Morgan, one of the plaintiffs in this action, had on deposit with the said bank the sum of $310.26, and J. H. Edgerton, another plaintiff, had on deposit with said bank the sum of $473.51; both said deposits making a total of $783.77, due by said bank to said plaintiffs, as depositors. Claims for said deposits have been duly filed and allowed by the commissioner of banks. Both these claims have been sold and assigned for value by the said plaintiffs, since the closing of said bank, to the plaintiff G. E. Morgan, who by virtue of said purchase and assignments is now the owner of both said claims.

(4) At the date of the closing of the Rutherford County Bank & Trust Company, the plaintiff G. E. Morgan was indebted to said bank in the sum of $600 and accrued interest, as evidenced by his promissory note payable to said bank. This note has not been paid, and is now held by the commissioner of banks as an asset of the Rutherford County Bank & Trust Company.

(5) The plaintiff G. E. Morgan has tendered to the defendant, commissioner of banks, in payment and discharge of his note for $600 and accrued interest, now held by the said commissioner as an asset of the said bank, the claims against the Rutherford County Bank & Trust Company, aggregating the sum of $783.77, which were sold and assigned to said plaintiff, since the closing of said bank, by the plaintiffs Mrs. S. R. Morgan and J. H. Edgerton, and has demanded that the said commissioner of banks accept said claims and apply the amount due thereon in discharge of his said note and accrued interest, as provided by chapter 344, Public Local Laws of North Carolina 1933, as amended by chapters 540 and 541, Public Laws of North Carolina 1933. The defendant, commissioner of banks, has refused and still refuses to accept said claims and to apply the amount due thereon as demanded by the plaintiffs, for the reason that he has been advised that the statute under which said demand was made is unconstitutional and void.

The court was of opinion that, by virtue of the provisions of chapter 344, Public Local Laws of North Carolina 1933, as amended by chapters 540 and 541, Public Laws of North Carolina 1933, the plaintiff G. E. Morgan has the right to have the claims sold and assigned to him by his coplaintiffs, Mrs. S. R. Morgan and J. H. Edgerton, applied to the payment and discharge of his note and accrued interest, and that it is the duty of the defendant, commissioner of banks, to accept said claims, and apply the amount due thereon to the payment and discharge of said note and accrued interest.

In accordance with said opinion, it was ordered and adjudged by the court that the defendant, commissioner of banks, accept from the plaintiff G. E. Morgan the said claims, and apply the amount due thereon to the payment and discharge of said note and accrued interest, and that the plaintiffs recover of the defendant the costs of the action. The defendant excepted to the judgment and appealed to the Supreme Court.

B. T. Jones, Jr., of Forest City, for appellant.

Edwards & Edwards, Stover P. Dunagan, and Quinn, Hamrick & Hamrick, all of Rutherfordton, for appellees.

CONNOR Justice.

This action was instituted in the superior court of Rutherford county under the provisions of chapter 102, Public Laws of North Carolina 1931 (N. C. Code of 1931, § 628(9) et seq.), which is entitled, "An Act to Authorize Declaratory Judgments." The purpose of the action is to have the rights of the plaintiffs and the duties of the defendant, with respect to the administration of the assets of the Rutherford County Bank & Trust Company, under the provisions of chapter 344, Public Local Laws of North Carolina 1933, as amended by chapters 540 and 541, Public Laws of North Carolina 1933, determined by the court, to the end that a judgment may be rendered in the action, to enforce such rights and to compel the performance of such duties. It is conceded that, on the facts agreed, the plaintiffs are entitled to the relief provided by the statute and demanded by them, and that it is the duty of the defendant to comply with the provisions of the statute, unless, as contended by the defendant, the statute is void because its enactment by the General Assembly was in violation of certain provisions of the Constitution of North Carolina and of the United States. The sole question, therefore, presented by this appeal, is whether chapter 344, Public Local Laws of North Carolina 1933, as amended by chapters 540 and 541, Public Laws of North Carolina 1933, is unconstitutional and for that reason void.

The statute now reads as follows:

"The General Assembly of North Carolina do enact:

"Section 1. That any person, firm or corporation, society or organization, by whatsoever name designated, having any moneys or funds on deposit in any bank in Buncombe Cherokee, Craven, Edgecombe, Halifax, Haywood, Henderson Jackson, Johnston, Macon, Robeson, Rutherford, Sampson, Stanly, Wilson, Transylvania, Alexander, Avery, Beaufort, Bertie,...