In Re Bank Of Clinton.

• Decision Date: 01 November 1933
• Docket Number: No. 327.,327.
• Parties: In re BANK OF CLINTON. UNDERWOOD et al. v. HOOD, Com'r of Banks.
• Court: North Carolina Supreme Court

171 S.E. 364

205 N. C. 399

In re BANK OF CLINTON.UNDERWOOD et al.

v.HOOD, Com'r of Banks.

No. 327.

Supreme Court of North Carolina.

Nov. 1, 1933.

Appeal from Superior Court, Sampson County; Grady, Judge.

Proceeding by Dr. O. E. Underwood, administrator with' the will annexed of John J. Cannady, deceased, and others, against Gurney P. Hood, Commissioner of Banks, as liquidating agent of the Bank of Clinton. Judgment for petitioners, and respondent appeals.

Reversed.

The following are the findings of fact and judgment of the court below:

"This cause came on for hearing before the undersigned, Resident Judge of the Sixth Judicial District, at Clinton, N. C, on this August 22, 1933, all parties being represented by counsel, a jury trial was waived, and it was agreed that the Court might find the facts and enter judgment such as, in his opinion, the facts would warrant. The facts are:

"1. Prior to October 5, 1917, the Bank of Clinton was a domestic banking corporation, located at Clinton, N. C, with the usual powers incident to a general banking business; but said Bank was not empowered by its charter to act as executor, administrator, guardian or trustee, and maintained no trust department as a part of its banking business.

"2. John J. Cannady, a citizen of Sampson County, died prior to October 5, 1917, leaving a last will and testament, which was admitted to probate and appears in Book of Wills No. 6, at pages 16-21, of Sampson County. The material parts of the said will and the codicil thereto, are as follows:

" 'Item 2. I devise and bequeath all of my property, real and personal, after paying my just debts and funeral expenses, to my beloved wife, Mary C. Cannady, the same to be held and used by her during her natural life.

" 'Item 3. I give, devise, and bequeath to my beloved children, Eddie Cannady, Herman Cannady, Tommie Cannady, Lebbius Cannady, Emma Lee Cannady, Effie Pearl Cannady, Vonnie May Cannady, and to such other children as may hereafter be born, all of my real estate, and also all of my personal property, which shall not be used or disposed of by my said wife during her life time, to take effect after the death of my said wife, and said property both real and personal to be held and owned by all of my above named children, share and share alike, and to the exclusion of all others, and should any of said named children, or after born child, die before the death of my said wife, and without leaving issue, then the share of such child or children so dying shall be held by said other named children and after born children.'

"A codicil attached to said will, bearing date April 28, 1915, and duly probated at the same time with the foregoing will, is in the following language:

" 'Codicil. I, John J. Cannady, being now of sound mind and memory, do make the following codicil to my last will and testament, made by me on August 16, 1912, as codicil No. 1 to said will:

" 'First: I hereby constitute and appoint the Bank of Clinton, of Clinton, N. C, financial agent of my estate, after my death, for the following specific purposes, to wit: The said Bank shall at my death at once take charge of all cash, notes, mortgages, accounts, and other evidences of debt belonging to my estate, and shall proceed to collect said notes, mortgages, accounts, and evidences of debt, and out of the proceeds of said collections and cash pay all debts due by my estate and my funeral expenses and expenses of settling up my estate, and the remainder of said funds said Bank shall place at interest during the life time of my wife, Mary C. Cannady, and pay her the interest upon said funds, as often as once each year as long as she lives, and at her death, pay said funds to those of my children named and provided for under Item three of my will, including my daughter Rosa Belle, born since said will was executed, and any other child or children that I may have born hereafter, and said Bank shall not be required to make any bond as such financial agent. Witness my hand and seal, this 28 day of April, 1915. (Signed) John J. Cannady (Seal). Witnesses: Cyrus M. Faircloth, James R. Bass.'

"3. No executor was named in said will, and on October 5, 1917, said Bank of Clinton presented said will and codicil to the Clerk of the Superior Court of Sampson County, and caused the same to be probated, and thereupon undertook to execute the provisions of the trust therein and thereby created. The record of the proceedings before the Clerk, under which the Bank of Clinton undertook to execute the provisions of the will, was recorded on said Oct. 5, 1917, in Book of Wills No. 6, page 16, et seq., of the office of the Clerk of the Superior Court of Sampson County, and duly indexed.

"4. On April 12, 1919, the said Bank of Clinton filed with the Clerk of the Superior Court a paper writing entitled 'Annual Statement of Account of the Bank of Clinton, Financial Agent appointed under the will of John J. Cannady, deceased', which account is recorded in Book of Annual Accounts No. 10, at pp. 120 to 122, inclusive. A copy of said Annual Account is hereto attached, marked Exhibit A, and made a part of this finding of fact. Said account shows a net principal of cash in hand of $1,365.55, after deducting commissions of 5%, and a note executed by C. S. Royal of $500.00, which note was afterwards collected by the Bank.

"5. On April 12, 1919, said Bank of Clinton issued to itself a certificate of deposit, in the following words and figures: 'The Bank of Clinton, No. 13127. Not subject to check. Clinton, N. C, April 12, 1919. There is deposited in this Bank $1,365.55, Thirteen Hundred Sixty-five Dollars Fifty-five Cents, payable to the order of the Bank of Clinton, Financial Agent of Mary C. Cannady, upon return of this certificate properly endorsed. Interest will be allowed hereon at the rate of 4 per cent per annum for whole months if allowed to remain three months or longer. J. A. Stewart. Ass't Cashier.'

"On the back of this certificate are memoranda showing payment of interest up to January 12, 1931. Said memoranda show that the interest was paid periodically from the date of the certificate until January 12, 1931.

"6. On April 26, 1920, the Bank of Clinton issued to itself another certificate of deposit, No. 14968, for $500.00, representing the collection of the C. S. Royal note, said certificate being in the same form as the one referred to in Finding No. 5. On the back of this certificate there are memoranda showing that interest was paid thereon up to April 26, 1931. The memoranda on the back of the said certificate show that the interest was paid periodically from the date of the certificate until April 26, 1931.

"7. Said two certificates of deposit represented the net principal in the hands of the said Bank of Clinton from collections made by it, and cash belonging to the estate of John J. Cannady, after deducting commissions of 5%; and the Court finds that the said money so collected and held by said Bank augmented the assets...