Court Opinion

ID: 3650856
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:05:34.565554+00
Date Added: 2024-06-11T14:08:13.768214
License: Public Domain

Action to recover an assessment on bank stock. The plaintiffs are receivers of the Planters Bank  Trust Company. In November, 1925, they reported to the Superior Court that in their opinion it would be necessary to assess the stockholders of the bank to the extent of their full liability on the stock. After due notice the judge of the Superior Court holding the courts of the Tenth Judicial District instructed the receivers on 18 December, 1925, to bring suit against all the stockholders, including the defendants. The suit was brought and the plaintiffs *Page 721 
alleged that they were entitled to recover of the defendant, Cozart, the sum of $1,500, and of the defendant, Umstead, the sum of $700.
In their answer the defendants alleged that they had been stockholders in the First National Bank of Creedmoor, which was put in course of liquidation on 8 January, 1923; that its officers and directors without authority had thereafter applied to the N.C. Corporation Commission for a charter to do a banking business under the name of the Planters Bank 
Trust Company; that at the organization of this bank less than a majority of the stock in the First National Bank of Creedmoor had been represented; that the Bank  Trust Company had not been legally organized, and that the defendants were not holders of any of its stock. The presiding judge instructed the jury to answer the first issue "Yes," and the second as to Cozart "$1,500," and as to Umstead "$700," if the jury should find the facts as testified to be true. Thereupon the following verdict was returned.
1. Were the defendants stockholders in the Planters Bank  Trust Company at the time of the appointment of the receivers thereof?
Answer: Yes.
2. Are the defendants indebted to the plaintiffs on account of assessments on said stock, and if so in what amount?
Answer as to C. H. Cozart, $1,500.
Answer as to W. L. Umstead, $700.
Judgment was rendered for the plaintiffs and the defendants appealed upon exceptions duly entered.
The controversy is reduced to two points raised by the exceptions: (1) whether at the close of the plaintiffs' evidence, the defendants having offered none, the action should have been dismissed as in case of nonsuit, and (2) whether there was error in the instructions given the jury, or in the refusal to give the instructions prayed.
In our opinion both points must be resolved against the defendants. They first take the position that the liquidation of the First National Bank of Creedmoor and the organization of the Planters Bank  Trust Company was without legal sanction and that they are not bound thereby, especially as to the latter — that the resolution purporting to authorize the surrender of the charter of the First National Bank and the incorporation of the Planters Bank  Trust Company was passed at a regular annual meeting of the stockholders held on 9 January, 1923, and that no notice was given them of the transaction of any unusual business. Thompson says that as a general proposition of law it is doubtless *Page 722 
true, subject to exceptions, that notice need not be given of special business to be transacted at the regular meetings of the stockholders. 1 Thompson on Corp. (2 ed.), sec. 821. There is evidence that in this meeting the defendants were represented by proxy. They contend, it is true, that in their written appointment no proxy was named; but each of these appointments was signed by the defendants, who, of course, had personal notice of the meeting, and their stock was voted. Even if the special business required a notice of its nature and scope, the minutes of the Planters Bank  Trust Company show that in a meeting held on 28 February, 1923, it was resolved that before the completion of the organization all the stockholders of the liquidating First National Bank of Creedmoor should be notified to attend an adjourned meeting of the incorporators or stockholders in order that a proper exchange of the stock could be effected. 3 C. S., 217(m). All the stockholders were notified and the adjourned meeting was held on 5 March, 1923. Certificates of stock were duly signed by the president and the cashier; they were left in the stock book and not delivered, but the issue of stock was at least impliedly authorized in the meeting of 9 January, 1923, by a vote of 427 in favor of and 73 against the surrender of the old charter and the incorporation of the new bank. During these transactions the defendants neither protested nor objected; and in any event they were entitled to all the privileges of stockholders. C. S., 1170. If the bank had been successful and dividends had been declared each of the defendants could have recovered of the bank his proportionate part of the income, and it would be inequitable to permit them, with undoubted knowledge of the facts, after the lapse of two years or more to deny that they were stockholders in the Planters Bank  Trust Company, which is now insolvent.
The defendants argue that the resolution appended to the articles of incorporation is invalid because one of the witnesses testified that he had not found any minutes of the meeting held on 9 January. We find no exception to the introduction of the resolution; but if an exception had been taken we do not perceive how it could avail the defendants in a collateral attack upon the organization of a bank which transacted a regular banking business de facto, if not de jure, for a period of two or three years to the knowledge of both defendants, one of whom at least was a depositor.
Whether the defendants ever made an actual exchange of their stock in the First National Bank for stock in the Planters Bank  Trust Company is not necessarily decisive of their liability; nor is the question whether they consented to the liquidation of the former bank and the organization of the latter. According to the record these matters were legally determined by the stockholders. *Page 723 
We think the learned judge before whom the case was tried was correct in denying the defendants' motion for nonsuit, in declining their prayers for instructions, and in giving the instructions pertinent to the issues submitted.
We find
No error.