Hood ex rel. North Carolina Bank & Trust Co. v. North Carolina Bank & Trust Co.

• Decision Date: 26 February 1936
• Docket Number: 667.
• Parties: HOOD, Commissioner of Banks, ex rel. v. NORTH CAROLINA BANK & TRUST CO. et al. NORTH CAROLINA BANK & TRUST CO.
• Court: North Carolina Supreme Court

184 S.E. 51

209 N.C. 367

HOOD, Commissioner of Banks, ex rel. NORTH CAROLINA BANK & TRUST CO. v. NORTH CAROLINA BANK & TRUST CO. et al.

No. 667.

Supreme Court of North Carolina

February 26, 1936

Appeal from Superior Court, Guilford County; Clement, Judge.

Suit by Gurney P. Hood, Commissioner of Banks of the State of North Carolina, on the relation of the North Carolina Bank & Trust Company, against the North Carolina Bank & Trust Company and Margaret E. Brand, executors of the last will and testament of R. A. Brand, deceased. From a judgment affirming an assessment levied against defendants, defendant Margaret E Brand appeals.

Affirmed.

Plaintiff commissioner of banks, under the authority conferred by the statute, levied an assessment against all the stockholders of the failed North Carolina Bank & Trust Company for the amount of stock held by each, and among them against the defendants executors of the last will and testament of R. A. Brand deceased, for the stock liability on 500 shares, of the par value of $10 each, and docketed judgment against them for $5000. From the assessment so levied, the defendant Margaret E. Brand in apt time appealed to the superior court.

In the superior court the case was submitted without a jury upon the following agreed facts:

"1. The North Carolina Bank & Trust Company was a banking corporation organized under the laws of the State of North Carolina, with its principal office in Greensboro, Guilford County, North Carolina, and a branch office in Wilmington, New Hanover County, North Carolina, and as such was authorized to do a trust business. On May 20, 1933, the plaintiff declared said bank insolvent, took possession thereof, and filed in the office of the Clerk of the Superior Court of Guilford County notice of his action and of the reason therefor. On June 22, 1933, the plaintiff levied an assessment equal to the stock liability of each stockholder against all of the stockholders of the North Carolina Bank & Trust Company, and on July 3, 1933, filed a copy of said levy in the office of the Clerk of the Superior Court of Guilford County; that said assessment was recorded and docketed in said office as a judgment for $5,000.00 in favor of the plaintiff and against the defendants; that a transcript of said judgment was also docketed in the office of the Clerk of the Superior Court of New Hanover County. Thereafter Margaret E. Brand requested the North Carolina Bank & Trust Company, as her co-executor and co-trustee under the will of R. A. Brand, deceased, to appeal from said levy and assessment, but it refused so to do, and an appeal was thereupon filed by said Margaret E. Brand within the time prescribed by law.

2. R. A. Brand died a resident of New Hanover County on or about June 24, 1930, leaving a last will and testament, a copy of which is hereto attached as Exhibit A, and made a part hereof as if fully set out herein. Said will was duly admitted to probate in the office of the Clerk of the Superior Court of New Hanover County on or about June 28, 1930, at which time the North Carolina Bank & Trust Company and Margaret E. Brand qualified as Executors of the Estate of said decedent.

3. R. A. Brand died, leaving and surviving him the following children, to-wit: Robert A. Brand, Jr., Etta Brand Adams and Margaret Brand Taliaferro; and the following grandchildren, to-wit: Margaret Brand and Martha June Brand, children of Robert A. Brand, Jr.; Margaret Blanding Taliaferro, Lucy Taliaferro and Carolyn Davis Taliaferro, children of Margaret Brand Taliaferro; and Lawrence Adams, III, a child of Etta Brand Adams. All of said children and grandchildren are now living, and all of said grandchildren are now minors under the age of twenty-one years.

4. Margaret E. Brand is now and was at all times herein mentioned wholly inexperienced in business, and the North Carolina Bank & Trust Company, through its Trust Department, at Wilmington, held itself out as competent and qualified to manage the estate of her deceased husband, R. A. Brand, and to advise the said Margaret E. Brand in all matters connected therewith in which she was interested as co-executor and co-trustee, and except as hereinafter stated said bank, through its Trust Department, at all times handled the active management of said estate, kept all records, and received and disbursed all funds, merely calling upon the said Margaret E. Brand for her signature whenever same was necessary.

5. At the time of his death, R. A. Brand owned five hundred shares of stock of the North Carolina Bank & Trust Company of the par value of $10,00 per share. Immediately after his death said stock came into the possession of the Executors of his estate, and was transferred on the books and records of the bank to 'North Carolina Bank & Trust Company and Margaret E. Brand, Executors of the Last Will and Testament of R. A. Brand, Deceased,' in which name it has remained at all times since.

6. On numerous occasions during a period of approximately two years prior to the beginning of the liquidation of the North Carolina Bank & Trust Company, Robert A. Brand, Jr., one of the legatees under his father's will, acting on behalf of himself and of his mother and the other beneficiaries under said will, consulted the Trust Officer of the North Carolina Bank & Trust Company at Wilmington and urged the sale of said stock and a reinvestment of the proceeds therefrom in Government Bonds or other similar securities, but said Trust Officer, who had assumed the active management of said estate on behalf of said bank, stated to the said Robert A. Brand, Jr., that said stock was a good and safe investment and should be retained, and in spite of protests by the said Robert A. Brand, Jr., on behalf of himself, his mother and the other beneficiaries under his father's will, said trust officer, acting on behalf of said bank, declined to sell or dispose of said stock.

7. On or about May 23, 1933, at the suggestion of the North Carolina Bank & Trust Company, said bank and Margaret E. Brand filed in the office of the Clerk of the Superior Court of New Hanover County a final accounting as Executors of the Estate of R. A. Brand, deceased, and thereupon all of the property and assets of said estate were transferred and delivered to the North Carolina Bank & Trust Company and Margaret E. Brand as trustees, upon the terms, conditions and uses set forth in the Last Will and Testament of R. A. Brand, deceased, and the North Carolina Bank and Trust Company and Margaret E. Brand qualified and are now acting as Trustees of said estate.

Upon the foregoing facts, the plaintiff contends that the estate and funds in the hands of North Carolina Bank & Trust Company and Margaret E. Brand, as Executors and Trustees under the will of R. A. Brand, deceased, are liable for the payment of the $5,000.00 assessment herein referred to, and the defendant, Margaret E. Brand, contends that said estate was not a stockholder in the North Carolina Bank & Trust Company at the time it suspended business or within sixty days prior thereto, and that said estate is not liable for said assessment."

The material portions of the will of R. A. Brand are as follows:

"Second: I give, devise and bequeath unto my said Executors all of the rest and residue of my estate, of whatsoever nature, kind, description, whether real, personal, or mixed, and wheresoever situate, in trust nevertheless for the following uses and purposes, and none other, that is to say: That my said Executors shall have and hold said property for the sole use and benefit of my beloved wife, Margaret E. Brand, for and during the term of her natural life and pay the net income arising therefrom unto my said beloved wife, Margaret E. Brand, for and during the said term, in quarterly installments."

"Third: After the death of my beloved wife, Margaret E. Brand, I direct my said Executors to pay, in equal proportions, to my said three (3) children, (Etta S. Brand Adams, Margaret E. Brand Taliaferro, and Robert A. Brand, Jr.), in quarterly payments, the net income, rents, profits and interest arising from my estate, and at the death of my said three children, I direct my said Executors to divide the property remaining in my said estate between my grandchildren, share and share alike, absolutely, unconditionally, and in fee simple forever."

"Fourth: I hereby authorize, direct and empower my said Executors, in their sound discretion, both concurring, to sell or otherwise dispose of, any or all of the real estate, except my present dwelling, save as hereinafter provided, that I may die seized or possessed of, and hold and reinvest the proceeds arising from said sale, or other disposition, of my said real estate to and for the same uses, trusts, and purposes that they held said property in its unconverted state, as hereinbefore set forth."

"Fifth: I hereby constitute and appoint my wife, Mrs. Margaret E. Brand, and North Carolina Bank & Trust Company of Wilmington, North Carolina, my lawful Executors."

Upon the foregoing facts judgment was rendered in the court below that the assessment levied against the defendants be affirmed and that the appeal therefrom be dismissed. From this judgment defendant Margaret E. Brand, executrix, appealed to this court.

STACY, C.J., and CLARKSON, J., dissenting.

Principle that equity will sometimes consider that property has assumed certain forms with which it ought to be stamped or that parties will perform certain duties which they ought to fulfill will not be to injury of innocent third parties.

Stevens & Burgwin, of Wilmington, for appellant.

Brooks, McLendon & Holderness, of Greensboro, for appellee.

DEVIN Justice.

It is admitted that the shares of stock in question belonged to defe...