Corporation Commission v. Bank of Jonesboro

AlleN, J. The former opinion in-this action was prepared for the Court by the writer of this opinion, and it is true, as alleged in the petition to rehear, that the point now presented as to the right of the trust company to retain the collaterals deposited with it was then made and dismissed, and was not considered by the Court. It appears, however, from the first brief filed that the ground then chiefly relied on by the appellant was that the deposit of the collaterals was in effect an assignment, and therefore void as a preference, and that this position is now practically abandoned, because it does not appear .that "the collaterals formed any considerable portion of the assets of the bank; and if a preference, it was made more than four months prior to the suspension of the bank. *207 Tbe appellant now urges that the deposit of the collateral was to secure a preexisting debt; that in this transaction Huntley was acting for the trust company, and not against it; that therefore his knowledge of the insolvency of the bank is to be imputed to the trust company; and that as he was the cashier and manager of the bank and president of the trust company, the deposit of the 1 collaterals is fraudulent as to the other creditors. There is much force in this contention, if-the premises are-admitted; but it rests upon the assumption that the collaterals were deposited to secure a preexisting debt, which does not appear to us to be true. ; " The agreement at the time of the deposit was that the collat-erals should not only be held to secure the amount then due, but any amount that might become due at any time, and it appears from the findings of fact that in addition to the balance of $5,000 due on the $7,000 note, the trust company has advanced since that time $11,581.50 on the faith of the col-laterals, which has been used in paying depositors of the Rank of Jonesboro, and in remittances for collections. If so, the debt of the trust company, for which the collaterals are held, is not preexisting. An agreement in reference to collaterals securing other indebtedness in all material respects like that before us was sustained in Norfleet v. Insurance Co., 160 N. C., 330, and a deposit of collaterals by an insolvent to secure a debt then created was upheld against creditors in Godwin v. Bank, 145 N. C., 325, under facts not more favorable to them than those in this case. The trust company has advanced, under any contention of the appellants under the facts found by the Court, more than $11,000 on the faith of the collaterals, which has been used in payment of depositors and other Iona -fide creditors, and it is no wrong or injustice, upon these facts, to permit it to retain its security according to the agreement of the parties. We are, therefore, of opinion that the judgment of the Supe-' rior Court should be affirmed and the petition dismissed. Petition dismissed.