Case Name: BOARD OF EDUCATION OF BUNCOMBE COUNTY, and T. H. REEVES, Treasurer of BUNCOMBE COUNTY, v. GURNEY P. HOOD, Commissioner of Banks, and G. N. HENSON, Liquidating Agent of CENTRAL BANK AND TRUST COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1933-03-15
Citations: 204 N.C. 353
Docket Number: 
Parties: BOARD OF EDUCATION OF BUNCOMBE COUNTY, and T. H. REEVES, Treasurer of BUNCOMBE COUNTY, v. GURNEY P. HOOD, Commissioner of Banks, and G. N. HENSON, Liquidating Agent of CENTRAL BANK AND TRUST COMPANY.
Judges: 
Reporter: North Carolina Reports
Volume: 204
Pages: 353–354

Head Matter:
BOARD OF EDUCATION OF BUNCOMBE COUNTY, and T. H. REEVES, Treasurer of BUNCOMBE COUNTY, v. GURNEY P. HOOD, Commissioner of Banks, and G. N. HENSON, Liquidating Agent of CENTRAL BANK AND TRUST COMPANY.
(Filed 15 March, 1933.)
Banlcs and Banking H d — Cashier's check does not constitute statutory or equitable preference against assets of insolvent bank.
Where a bank debits a depositor’s account with the amount of a check drawn by the depositor and issues its cashier’s check for the amount, but is placed in a receiver’s hands before remitting the proceeds to a third person as instructed to do by the depositor: Selct, the cashier’s check does not constitute a preference either as defined by C. S., 218(c) or under the trust fund theory.
Civil actioN, before Clement, J., at October Term, 1932, of Buk-COMBE.
It was agreed that the trial judge should find the facts and enter judgment thereon. Such of these facts as are pertinent to the point of law involved are as follows:
On 7 November, 1930, the board of education drew a draft, “payable to the Central Bank and Trust Company of Asheville,” and drawn upon the treasurer of Buncombe County, in the sum of $204,333.33, with attached memorandum reading as follows: “Notes due Central Hanover Bank and Trust Company, $200,000; interest on same from 12 June, 1930, at 5%, $4,333.33; total $204,333.33.” Between the dates of 7 November and 15 November, the secretary of the board of education presented tbe draft to tbe Central Bank and Trust Company “with instructions that said bank collect tbe proceeds of said warrant or draft from tbe treasurer of Buncombe County and transmit tbe same to Central Hanover Bank and Trust Company for tbe express and sole purpose of paying off and discharging tbe aforesaid $200,000 of notes with accrued interest. On 15 November, 1930, L. L. Jenkins, treasurer of tbe public school fund of Buncombe County, executed and delivered to tbe Central Bank and Trust Company a check “on tbe Buncombe County school fund in tbe sum of tbe aforesaid warrant or draft, and tbe same is stamped paid by tbe bank on 14 November, 1930. On 14 November, 1930, tbe ledger sheet of Buncombe County school fund was debited with tbe aforesaid check, reducing tbe balance of tbe public school fund from $376,313.49 to $171,980.16. On tbe same day tbe Central Bank and Trust Company issued its cashier’s check, payable to 'ourselves’ in tbe sum of $204,333.33.” This cashier’s check was marked paid 19 November, 1930, and said sum was credited to tbe Buncombe County school fund, increasing tbe balance in said fund to $390,373.39. Tbe Central Bank and Trust Company failed to transmit or cause to be transmitted to tbe Central Hanover Bank and Trust Company of New York City tbe proceeds of said check and closed its doors on 20 November, 1930. On tbe day it closed tbe bank bad these items and due from other banks tbe sum of $144,474.85. Of this sum only $65)493.13 in cash actually came into tbe bands of tbe receiver. Tbe bank bad other unencumbered and unpledged assets of tbe face value of approximately $4,600,000.
Upon tbe foregoing findings of fact tbe trial judge was of tbe opinion that tbe claim of plaintiff constituted a preference and ordered that plaintiff’s claim be paid out of tbe amount of cash actually on band at tbe time of tbe failure, to wit, tbe sum of $65,493.13, and that such claim did not constitute a preference to be paid out of tbe other general assets of tbe bank.
From such judgment both parties appealed.
O. N. Malone and J ones & Ward for plaintiff.
Jolmson, Smothers & Rollins for defendants.

Opinion:
Brogden, J.
Tbe cashier's check described in tbe evidence did not constitute a statutory preference as defined by C. S., 218(c). In re Bank, ante, 143. See, also, Morecock v. Hood, Comr., 202 N. C., 321, 162 S. E., 730. Nor do tbe facts constitute a preference upon tbe trust fund theory as interpreted in Parker v. Trust Co., 202 N. C., 230, 162 S. E., 564; Williams v. Hood, Comr., ante, 140. See, also, Flack v. Hood, Comr., ante, 337.
Reversed.