Hood ex rel. United Bank & Trust Co. v. Richardson Realty, Inc.

• Decision Date: 19 May 1937
• Docket Number: 669.
• Citation: 191 S.E. 410,211 N.C. 582
• Parties: HOOD, Com'r of Banks, ex rel. v. RICHARDSON REALTY, Inc., et al. UNITED BANK & TRUST CO. et al.
• Court: North Carolina Supreme Court

191 S.E. 410

211 N.C. 582

HOOD, Com'r of Banks, ex rel. UNITED BANK & TRUST CO. et al. v. RICHARDSON REALTY, Inc., et al.

No. 669.

Supreme Court of North Carolina

May 19, 1937

Appeal from Superior Court, Guilford County; Frank M. Armstrong Judge.

Action by Gurney P. Hood, State Commissioner of Banks, on the relation of the United Bank & Trust Company and another against Richardson Realty, Incorporated, and others. From a judgment dismissing the action on demurrer, plaintiffs appeal.

Affirmed.

In considering demurrer, all material facts alleged, except deductions, are deemed admitted, and pleading will be liberally construed.

Action to recover of defendant Richardson Realty, Inc., the stock assessment on one hundred shares of stock in the closed and liquidated United Bank & Trust Company. It was alleged that defendant was the real owner of the shares of stock certificate for which had been issued in the name of W. F Ross and against whom assessment had been levied and judgment docketed.

The defendant Richardson Realty, Inc., demurred ore tenus to the complaint, on the ground that sufficient facts were not alleged to constitute a cause of action as to it. The demurrer was sustained, and from judgment dismissing the action, plaintiffs appealed.

J. S. Duncan and R. M. Robinson, both of Greensboro, for appellants.

Frazier & Frazier and Huger S. King, all of Greensboro, for appellees.

DEVIN Justice.

The appeal from ruling of the court below in sustaining the demurrer requires an examination of the allegations of the complaint, together with the exhibits attached and connected therewith, in order to determine the sufficiency of the pleading to constitute a cause of action against the demurring defendant.

In the consideration of a demurrer it is the established rule that all the material facts alleged, aside from the deductions of the pleader, are deemed admitted, and that the pleading shall be liberally construed. Blackmore v. Winders, 144 N.C. 212, 56 S.E. 874; Ramsey v. Furniture Co., 209 N.C. 165, 183 S.E. 536.

The facts, as they appear from the complaint and exhibits, are substantially these: On December 30, 1931, United Bank & Trust Company (hereinafter called the old bank) closed its doors on account of insolvency, and Gurney P. Hood, Commissioner of Banks, took charge of its affairs, and thereafter levied an assessment of 100 per cent. on all stockholders of record of said bank. On the stock books of the bank appeared the name of W. F. Ross as the holder of one hundred shares of the par value of $100 per share. The assessment roll was subsequently docketed in the superior court of Guilford county, in accordance with the statute, on June 28, 1932.

About June 14, 1932, a new banking institution was organized under the laws of North Carolina, under the name of "The United Bank & Trust Company." This last-named bank will be hereinafter styled the new bank. Shortly after its organization the new bank submitted to the Commissioner of Banks in charge of the old bank a proposal to pay a sum sufficient to discharge all preferred claims and the claims of all depositors and creditors of the old bank and to release the commissioner from all further liability on account of unproven claims, in consideration of the conveyance, transfer, and assignment to the new bank by the Commissioner of Banks of all the property and assets of the old bank, including judgments now docketed or to be docketed representing stockholders' liability. This offer the Commissioner of Banks, on the relation of the old bank, petitioned the court for authority to accept, stating that the proposition had been approved by unanimous vote of the directors and the stockholders of the old bank.

Thereupon on June 27, 1932, an order of court was signed by H. Hoyle Sink, judge presiding in the Twelfth judicial district, authorizing the Commissioner of Banks "to convey, assign and transfer to The United Bank & Trust Co. of Greensboro (new Bank) all the property and assets of every kind and nature of United Bank & Trust Co. (old Bank) including judgments now docketed or to be docketed in the office of the Clerk of the Superior Court of Guilford County representing stockholders' liability." The Commissioner of Banks was also authorized to distribute the proceeds from such sale in accordance with the agreement of the creditors of the old bank, and the commissioner was further directed, after making such sale and distribution, to file his final report in accordance with Code 1935, § 218(c)(18); the order declaring that "the filing of such report shall act as a full and complete discharge of the Commissioner of Banks from all further liability by reason of the liquidation of said United Bank & Trust Co."

Thereafter Gurney P. Hood, Commissioner of Banks, as statutory Liquidator Receiver of United Bank & Trust Co., pursuant to the order of Judge Sink and in accordance with the statute, filed his final report. In this report the Commissioner of Banks stated that he took possession of the old bank for the purpose of liquidation under the statute December 30, 1931, and "that the affairs of said bank remained in the hands of the Commissioner until 30 June, 1932," and, after reciting the offer of the new bank and the order of Judge Sink, he reported compliance with all the terms and requirements of said order, together with detailed statement of the items of account showing payment of all claims in full or discharge in accordance with depositors' agreement. The Commissioner of Banks concluded the report with the following official statement: "That all of the assets of the trust have been collected, compromised or sold. Such compromises or sales have been either approved or ordered by the Resident or Presiding Judge of the Superior Court. There now remain, in the hands of the said Gurney P. Hood, statutory liquidator as aforesaid, no assets for further disposal and all of the liabilities have been legally discharged. That the filing of this final report and accounting completes all proceedings required under the laws of North Carolina to be taken by the Commissioner of Banks as statutory liquidator and receiver of United Bank & Trust Co."

The plaintiffs in their complaint further allege that the shares of stock appearing on the books of the old bank in the name of W. F. Ross, and upon which assessment was levied and judgment docketed, were really the shares of stock of defendant Richardson Realty, Inc., and that this defendant was the real or beneficial owner thereof. The complaint sets out in detail the methods and subterfuges by which it is alleged the defendant concealed its ownership and sought to evade liability. Admitting, for the purposes of the demurrer, the material facts set out in the complaint, the allegations in this respect are sufficient to make it appear, in the light most favorable for the pleader, that Richardson Realty, Inc., was the real or beneficial owner of the shares of stock.

That brings us to the consideration of the question whether a stock liability, which originally might have been capable of enforcement against the defendant under the facts alleged in the complaint, may now constitute a cause of action for recovery by the plaintiffs in this suit.

The double or additional liability of a stockholder in a bank imposed by the statute has been uniformly held to constitute a trust fund for the benefit of the depositors and creditors of the bank. The phrase "trust fund" means that this liability in case of insolvency of the bank should constitute a fund to be equitably distributed for the benefit of all creditors. Hood v. Trust Co., 209 N.C. 367, 184 S.E. 51; Bank v. Cotton Mills, 115 N.C. 507, 20 S.E. 765. This liability arises by reason of the statute and is contractual in its nature. Admittedly the Commissioner of Banks on the relation of the old bank could have brought suit to enforce this liability for the benefit of the creditors of the old bank. This liability, while not strictly and in all respects an asset of the bank, is regarded as a contingent asset to be collected by the receiver for distribution among all the creditors, and, if more than sufficient for that purpose, to be repaid to the stockholders.

But it appears here that there are now no creditors of the old bank. They have all been paid in full. The statutory receiver has so reported. His final report has been filed, and upon such filing he was discharged, as provided by the previous order of the court. If there are no creditors, the additional stock liability is no longer enforceable. The reason for the imposition of the liability by the statute has failed. The statute imposes the liability only for the payment of the debts of the bank in which the stock is held. The relation of the Commissioner of Banks to the institution being liquidated is that of a statutory receiver. Doubtless he could, even after final report, again come into court upon showing additional uncollected assets and unpaid creditors and continue his administration to final conclusion. But here all the creditors have been paid, and thereupon additional assets, if any, would belong to the stockholders.

The appellants contend, however, that there is an unsatisfied creditor of the old bank, to wit, the new bank; for that the new bank acquired, among other things, a judgment against W. F. Ross which has not been paid, and is uncollectible, and that it has sustained a loss rendering collection of the liability sued on necessary for the reimbursement of the new bank; or on the ground that the new bank, having paid the debts of the old bank, is entitled to occupy the position of creditor of the old bank by reason of that fact.

This position cannot be maintained in view of the fact that it is alleged...