In re La Fayette Bank & Trust Co. of Fayetteville

• Decision Date: 06 June 1930
• Docket Number: 292.
• Citation: 153 S.E. 452,198 N.C. 783
• Parties: In re LA FAYETTE BANK & TRUST CO. OF FAYETTEVILLE.
• Court: North Carolina Supreme Court

153 S.E. 452

198 N.C. 783

In re LA FAYETTE BANK & TRUST CO. OF FAYETTEVILLE.

No. 292.

Supreme Court of North Carolina

June 6, 1930

Appeal from Superior Court, Cumberland County; Sinclair, Judge.

Proceedings for the liquidation of the La Fayette Bank & Trust Company of Fayetteville, N.C. Petition by the Corporation Commission for an order authorizing the sale of the assets of the insolvent banking corporation. From an order denying the petition, the Corporation Commission appeals.

Affirmed.

This is a proceeding begun and prosecuted under the provisions of Code 1927, § 218 (c), for the liquidation of the LaFayette Bank & Trust Company, an insolvent corporation organized under the laws of this state, and, prior to its insolvency engaged in the banking business at Fayetteville, Cumberland county, N. C.

After the corporation commission had taken possession of the assets and business of said insolvent corporation, pursuant to the provisions of the statute, and after it had filed the inventory required by its provisions, and while it was engaged in the administration of the estate of said corporation, the said commission filed its petition before the resident judge of the superior court for the judicial district in which the place of business of said corporation is located, praying that the said judge make an order authorizing and empowering the said commission to sell the assets of said insolvent banking corporation, then in its possession, upon the terms and conditions set out in said petition.

Upon the hearing of said petition, an order was made as follows:

"This cause coming on to be heard before His Honor, N. A. Sinclair, Resident Judge of the 9th Judicial District, in which is located Cumberland County, and being heard upon the petition of the Corporation Commission, and the Court finding as a fact:

"First That on the 13th day of January, 1930, the Corporation Commission of the State of North Carolina took possession of the LaFayette Bank & Trust Company, of Fayetteville North Carolina, under and by virtue of the provisions of section 218(c) of the Consolidated Statutes, and now has the assets of said bank in its hands for liquidation under the provisions of said act; and,

"Second: That at the time the Corporation Commission took possession of the assets they totalled $572,307.70, with a total liability to depositors of $450,749.65, and a

total of bills payable $2,238.55, which said liabilities are still outstanding and to be liquidated out of the assets which came into the hands of the Corporation Commission on January 13th, 1930; and

"Third: That interested parties in the City of Fayetteville propose to organize the La Fayette Bank and purchase in bulk the assets of the LaFayette Bank & Trust Company, and pay for said assets the sum set out in Exhibit A, attached to the petition, making said payments according to the terms of said exhibit; and

"Fourth: That of the creditors including depositors of said bank those representing a total of $321,023.51 have signed the agreement attached to the petition and marked Exhibit A, and those representing $139,726.12 have not signed said agreement attached to the petition and marked Exhibit A; and

"Fifth: That by the terms of the agreement the LaFayette Bank proposes to purchase in bulk from the Corporation Commission of the State of North Carolina the assets of the La Fayette Bank & Trust Company and pay the creditors of the LaFayette Bank & Trust Company seventy per cent. in equal monthly installments of ten per cent, and thirty per cent in stock in the LaFayette Bank; and

"Sixth: That in addition to the stock to be purchased with thirty per cent of the deposits and claims of the LaFayette Bank & Trust Company, additional amount in cash is to be paid in for the capital stock of the LaFayette Bank so as to total $100,000.00 capital stock account; and

"Seventh: That the Corporation Commission, in accordance with the requirements of the Exhibit A, has approved the agreement and method employed by the LaFayette Bank in organizing and in proposing to purchase the assets of the LaFayette Bank and Trust Company; and

"Eighth: That the Corporation Commission recommends the approval of said sale and purchase according to the terms of the agreement and, in accordance with the facts hereinbefore set out; and

"Ninth: That as to the creditors including depositors of the LaFayette Bank & Trust Company who have not signed the agreement attached to the petition and marked Exhibit A, the sale of the assets and liquidation of the claims of the LaFayette Bank & Trust Company in a way and manner set out in the petition, including the exhibit attached thereto and marked Exhibit A, is to the best interest of the creditors of said bank, including the depositors and including those creditors and depositors who have failed to sign the agreement attached to the petition and marked Exhibit A; and

"Tenth: That in the opinion of the Court the sale of the assets to the LaFayette Bank and the discharge by it of the claims of the creditors of the LaFayette Bank & Trust Company in the way and manner set out in the petition, including the agreement attached thereto and marked Exhibit A, will be to the benefit of the creditors, including the depositors of the LaFayette Bank & Trust Company and will net to them a greater or as great a return as would be possible in liquidation by the Corporation Commission; and

"Eleventh: That the creditors, including the depositors, are not parties to this action, it being an ex parte action to secure from the Court approval of the sale of the assets of the LaFayette Bank & Trust Company in accordance with the terms hereinbefore set out, said creditors including depositors not having been notified of the presentation of this petition and have not been served with summons or notice in the action pending in the Superior Court of Cumberland County under the provisions of section 218(c); and

"Twelfth: That the provisions of sub-section 7 of 218(c) do not authorize and empower the sale in bulk of the assets of a banking institution taken possession of by the Corporation Commission for the purpose of liquidation under and by virtue of the provisions of section 218(c), Consolidated Statutes.

"Now, therefore, the motion of the Corporation Commission for order approving the sale of the assets of the LaFayette Bank & Trust Company to the LaFayette Bank for the purpose of permitting the LaFayette Bank to discharge the claims or liabilities of the LaFayette Bank & Trust Company in accordance with the terms of the agreement attached to the petition is hereby denied.

"N. A. Sinclair, Judge, etc."

Exhibit A, attached to the petition, and referred to in the order, is as follows:

"Exhibit A.

"Feb 7th, 1930.

"North Carolina, Cumberland County.

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