Merrimon v. City of Asheville

• Decision Date: 27 June 1931
• Docket Number: 595.
• Citation: 159 S.E. 413,201 N.C. 181
• Parties: MERRIMON et al. v. CITY OF ASHEVILLE et al.
• Court: North Carolina Supreme Court

159 S.E. 413

201 N.C. 181

MERRIMON et al. v. CITY OF ASHEVILLE et al.

No. 595.

Supreme Court of North Carolina

June 27, 1931

Appeal from Superior Court, Buncombe County; McElroy, Judge.

Suit by J. W. Merrimon and others against the City of Asheville and others. Judgment for defendants, and plaintiffs appeal.

Affirmed.

In absence of allegation Corporation Commission refused to recover failed bank's assets, petition of depositors instituting suit for such purpose held demurrable.

The plaintiffs brought this suit in behalf of themselves and such other parties as might desire to interplead, alleging that the Central Bank & Trust Company, was indebted to them in the sum of $1818, evidenced by certain certificates of deposit issued to plaintiffs on December 6, 1929, February 8, 1930 and October 24, 1930. It was further alleged that the Central Bank & Trust Company was closed on November 20, 1930, and all of its assets turned over to the corporation commission as provided by law, and that the defendant G. N. Henson, one of the officers of the banking department, was duly appointed liquidating agent for said bank. It was further alleged that the defendant city of Asheville had on deposit in said bank on the day it was closed, approximately $4,300,000. It was further alleged that the officers of the bank had turned over to the city of Asheville as security for said deposit certain collateral, consisting of notes, bonds, stock, etc aggregating $6,000,000.

It was alleged that the hypothecation of such collateral to secure the deposit of the city of Asheville was unlawful and wrongful, and constituted a fraud on the rights of plaintiffs and other depositors of said bank. It was further alleged that said bank had hypothecated other assets with out of town banks to secure loans. The plaintiffs further allege that they duly filed a claim in writing against the city of Asheville, and that said claim has been disallowed. The relief prayed for was that the plaintiffs have judgment against the bank and Henson, liquidating agent, for the amount of the certificates of deposit, and that the defendant city of Asheville be restrained from liquidating the collateral held by it, and further be required to surrender said collateral to the liquidating agent.

The defendants demurred to the complaint upon the ground that it appeared upon the face of the complaint that the Corporation Commission was in charge of the assets of said bank, and that it alone had the right to institute an action for...