The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1898-04-15

- Decided Th1 the Assets OF the
Parent Bank ut Wilmington and the
Branch Bank t wadesboro are Divisabie
Among All Creditors Alike-This Will
Give the Wilmington Creditors $4,000
More Than Otherwise
Below Will be found the decision of the
supreme court OF North Carolina. by
winch the findings OF referee Ham e.
Jones and the decision OF Judge McIver.
OF the superior court. are reversed.
Inns acton came up on q petition OF
smith e. al, creditors OF the Bank OF
we" hanover at Wadesboro, filed IN the
cause OF W. II. Worth, state treasurer OF
Noi'h carolina, ct al. VS.. the Bank of
we" f1dhoEer. The petition was referred
10 and heard by Colonel II. c. Jones =,
charlotte The controversy in brief was
whether the assets OF the branch h,u-
Vi "adesboro are separate from the as
sets OF thu parent bank at yyilni,-.o,
ana should be devoted TO the paynen, NJ
the creditors 2f the branch bank, or are
a part OF me assets OF the parent hark
ana suoJect alike to the Claims OF all the
creators The case was argued by
Messrs. George Rountree and Eugene s
martin, ESqrs., of Wilmington. for Junius
DdrLo, ESQ, receiver OF the Bank of New
"HOst contention WaA that the
assets OF Inc parent bank and the branch
oank Were inseparable. Hon. Jas A Lock
mart and the Hon. r. T. Bennett of
NaoesooFo. represented James A. Leak.
receiver OF the branch bank of Wadas.
poro, whose contention was that the as
sets OF the branch bank should be SET
apart alone for the creditors of the
Dranch 6ank and only such surplus as
remained thereafter should go into the
assets OF the parent bank. Colonel Jones
Iouno IN accordance with the contention
Oh hecel|er Leak. and Messrs. Rountree
ana martin excepted to his report. The
case came up before Judge McIver AT
the last May term of the superior court
OF New Hanover county, and was ably
ana IuIly argued by the counsel on both
sides. Judge McIver confirmed the re-
port OF Colonel Jones and overruled the
exceptions of Messrs. Rountree and Mar
TN. Iney took an appeal 10 the supreme
court. The opinion of that tribunal was
handed down by Justice Walter Clark,
and was as follows:
THE DECISION.
North CAROLINA Supreme Court, Febru-
airy term, 1898. No. 219, New Hanover
County. w. H. Worth STATE Treas
urer. ct al, VS.. Bank of New Hanover
ct al.
Appeal by the plaintiffs and Junius Da-
Wis, receiver of defunct bank.
George Rountree and E. S. Martin. for
appellant: Jas. A Lockhart and r. T.
Bennett for Leak and others.
Clark, j. This cause has been argued
very ably and deliberately and with great
weight of citation. In Difference to coun-
sci, time has been taken to consider the
and the opinions cited to sus-
tain them. But in the view we take of
the case, the decision of the controversy
oependS upon a very few simple propo-
SitiOnS.
: The Bank of New Hanover was char
tered by an act of the general assembly
ratified January II, 1872, with the usual
powers of a banking corporation, and es-
fahIiSha6 + rinoin v1nnA @f ,,-:-~-
at Wilmington. Section 9 of said act
provided: Agencies of the bank may be
established at such times and places as
the president and directors NAV desig-
nate. and such agencies may be removed
at any time and shall be subject to such
rules and regulations as may be prescrib-
ed by the president and directors of the
bank Agencies under this authority
were established at Goldsporo. Wades-
boro and Tarboro, N. c., and Marion, S.
C, styled in their reports respectively,
'"The Bank of New Hanover, at Colds
boro,' and The Bank of New Hanover,
at Wadesboro,' etc. Some time since
the agencies at Goldsboro, Tarboro and
Marion were discontinued and removed
as authorized by said section 9. On June
10, 1898, the Bank of New Hanover made
an assignment of all it's property "of ev-
ever situated, including all that belongs
or may belong to its agency or branch
bank at Wadesboro." On the same day
the agency, or branch bank at Wades-
7 Il u1dUt d SEPARATE dSSISIII1eII, DuI
without any authority from the bank at
Wilmington. The property and deposits
at Wadesboro, if appropriated solely to
the depositors at that point and other
creditors dealing directly with the agen-
cy. would be sufficient to satisfy them in
full, but if this property is placed with
the other assets of the Bank of New
Hanover and the depositors and credi-
tors dealing directly with the agency
at Wadesboro are to share generally with
all the creditors of the Bank Of New
Hanover; the pro rata dividend Will be
small. Hence the effort of the Wades-
bOrO depositors and creditors to have the
assets at that point declared a trust
fund for their benefit, the surplus alone,
if any, to go into the assets of the Bank
Of New Hanover. Blu ii is found as a
fact by the referee that there was no
stock issued by the branch bank Cas il
is called for convenience and there was
no charter therefor distinct from the
Bank of New Hanover: that the branch
bank derived its authority solely from the
provisions of the act chartering the Bank
of New Hanover, and the action Of the
directors Of the bank, establishing the
branch bank, was in pursuance of the
, powers given by its charter" 1t neces-
sarily followed that the relation existing
between the Bank of New Hanover and
the agency at Wadesboro was that OF
, principal and agent, and all the assets
of the agency belonged to the princi.
pal. and all the debts of the agency were
: debts of the Bank of ..ew Hanover
Prince VS.. Bang, Eng. L. r. 3. app. case:
| 325; Garnett vs.. McKewan, l.. r: s Elk
? 10; Irwin VS.. Bank. 3S N. c., 2 B. 3T5
= Webb VS.. Bank. so y c, 2SS.
This being so. the rule Of distribution
upon the insolvency Of a corporation
l both under the general law and section
go of Tn Code. is that all creditors shall
= share equally and ratably. No corpora
;, ton can create a subordinate corpora
= ton without express legislative warrant
r This is not only an uncontrovertlol'
= proposition of law. but the evidence j:
conclusive that in point of fact the banl
= did not attempt to create a subordinate
= corporation at Wadesboro. The bank a
Wilmington sent 80 200 TO Wadesboro u
= start the branch bank in business. am
q by resolution established a local board
of three directors to manage ii. and thes
: direc-OrS together with all the otner Of
y ficers. were from time TO time elected b.
= the parent bank in Wilmington. TO whicl
e the oficers and directors in immediate
r charge of the branch at Wadesbor'
a transmitted their reports twice ever.
year. In the published reports of tn
Bank Of New Hanover in Wilmington
the items of capital and surplus fund
always included the capital and surpiu