North Carolina Corporation Commission v. Citizens' Bank & Trust Co.
| Citation | 137 S.E. 587 |
| Decision Date | 06 April 1927 |
| Docket Number | 291. |
| Parties | 193 N.C. 513, 51 A.L.R. 1350 v. CITIZENS' BANK & TRUST CO. NORTH CAROLINA CORPORATION COMMISSION FIDELITY & DEPOSIT CO. OF MARYLAND v. POISSON et al. |
| Court | United States State Supreme Court of North Carolina |
Appeal from Superior Court, New Hanover County; Grady, Judge.
Action by the North Carolina Corporation Commission against the Citizens' Bank & Trust Company, in which Louis J. Poisson and Norman C. Shepard were appointed permanent receivers. The Fidelity & Deposit Company of Maryland filed a petition in intervention. Judgment was rendered dismissing the petition and directing the receivers to accept petitioner's claim as one unsecured, and petitioner appeals. Affirmed.
Appeal by the Fidelity & Deposit Company of Maryland, intervening petitioner, from a judgment of Grady, J., given on December 4, 1926, denying the relief prayed. The petitioner asks that it be subrogated to all the rights, equities, and remedies of the state treasurer and given a priority of payment out of the effects of the insolvent Citizens' Bank & Trust Company which it is contended the state had by reason of its sovereignty. These are the agreed facts:
1. That the Citizens' Bank & Trust Company was a banking croporation under the laws of the state of North Carolina and that on or about the 15th of November, 1924, the said bank was closed by an order of the North Carolina corporation commission, and thereafter temporary receivers were appointed by an order entered in the above-entitled cause instituted for the purpose of appointment of receivers, and that on or about the 18th of December, 1924, these defendants were duly appointed permanent receivers in an order entered in the said cause, and have qualified according to law and are now acting in that capacity.
2. That the Citizens' Bank & Trust Company was a duly designated depository for state funds, and at the time of the closing of the Citizens' Bank & Trust Company in November, 1924 there was on deposit in the name of Benjamin R. Lacy treasurer of the state of North Carolina, $47,619.68; that the said sum of $47,619.68 was a general deposit and checking account of the treasurer of the state of North Carolina, but there was on hand at the closing of the said bank less than $1,000 in cash.
3. That the Citizens' Bank & Trust Company was required by the treasurer of the state of North Carolina to file an indemnity bond in the sum of $50,000 for the protection of the said treasurer because of said deposits, and that the said bond was furnished by the Citizens' Bank & Trust Company with the Fidelity & Deposit Company of Maryland as surety.
4. That the Citizens' Bank & Trust Company applied to the Fidelity & Deposit Company of Maryland for the indemnity bond required by the treasurer of the state of North Carolina, and before signing the said bond as surety, the Fidelity & Deposit Company of Maryland, by examination and otherwise satisfied itself of the financial responsibility of the Citizens' Bank & Trust Company, and thereupon executed the said indemnity bond conditioned as aforesaid for the protection of the treasurer of the state of North Carolina, the Fidelity & Deposit Company of Maryland charging for the execution of the said bond as surety the usual premium charged for indemnity bonds of like amount, and no allowance was made in the premium so charged, because the bond was executed by the Citizens' Bank & Trust Company for the indemnification of the treasurer of the state of North Carolina because of deposits in said bank.
5. That at the time of the closing of the bank in November, 1924, and at the date of the appointment of temporary receivers by an order of court thereafter, and the appointment of permanent receivers on December 18, 1924, there had been no claim made by the state of North Carolina for the repayment of its deposit, nor had any action been taken seeking to enforce priority rights in the payment thereof before the payments to other depositors and creditors of said bank, and the Fidelity & Deposit Company made no demand nor took any action seeking to enforce such priority before the filing of the petition herein on or about the _____ day of April, 1925.
6. That Benjamin R. Lacy, treasurer of the state of North Carolina, called upon the Fidelity & Deposit Company of Maryland to perform its obligations in accordance with the terms of the said bond, and that thereafter on or about the 20th of March, 1925, the Fidelity & Deposit Company of Maryland did pay to the said Benjamin R. Lacy, treasurer of the state of North Carolina, in performance of the terms of the said bond, the principal sum of $47,619.68, together with accrued interest of $708.47; and the said Benjamin R. Lacy, treasurer of the state of North Carolina, did on or about the said date assign the said deposits in the said bank, together with all rights, equities, and remedies growing out of the same, to the Fidelity & Deposit Company of Maryland.
The condition of the indemnity bond was as follows:
"Now, the condition of the above obligation is such that if the above bound the Citizens' Bank & Trust Company of Wilmington, North Carolina, shall well and faithfully pay over upon demand, all moneys belonging to said Benjamin R. Lacy, personally or as treasurer, or to those to whom he may, from time to time, personally or as treasurer, by check or draft or bill of exchange, direct payment to be made, all moneys which said Benjamin R. Lacy may, either personally, or as treasurer of the state of North Carolina, deposit with said the Citizens' Bank & Trust Company, of Wilmington, N. C., which may in any manner come into its custody or possession, while acting as said state depository, then this obligation to be void; otherwise to remain in full force and effect."
The treasurer's assignment to the petitioner was in these words:
"Now, therefore, for and in consideration of the premises, and in the further consideration of $48,328.15, paid to the party of the first part by the party of the second part, the receipt of which is hereby acknowledged, the said party of the first part has transferred, assigned, and set over, and by these presents does transfer, assign, and set over to the party of the second part, its successors and assigns, all of the said deposits hereinbefore referred to, together with all rights, equities, and remedies growing out of said deposits, by reason of the contractual relations between the party of the first part and the said Citizens' Bank & Trust Company, but without abridgment or limitation of any rights, equities, or remedies which the party of the second part may have independent of this agreement, and which it could have enforced by virtue of law if this agreement had not been made."
Judge Grady was of opinion that the petitioner was not entitled to have its claim filed with the receivers of the insolvent bank as a preference, the deposits being on open account, and that the state has no priority as an attribute of sovereignty in the collection of its debts; furthermore, that the receivers having been appointed and qualified before any claim was made or any proceeding was instituted took the assignment of the assets of the bank free from any lawful claim of priority. Thereupon it was adjudged that the petition be dismissed and that the receivers accept the petitioner's claim against the assets of the bank as one unsecured, to share pro rata with other general claims in the distribution of the bank's assets.
The intervening petitioner excepted and appealed.
Adoption of common law was left to states.
Rountree & Carr, of Wilmington, for appellant.
Ed S. Abell and Norman C. Shepard, both of Smithfield, for appellees.
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