Pasquotank County v. Hood Ex Rel. Savings Bank & Trust Co.

Devin, J. It was admitted that the plaintiffs were entitled to the full amount claimed, together with interest thereon at 6 per cent, but defendant denied liability for any greater amount as damages under C. S., 357. It was urged in the oral argument and by brief that the pledge of the securities on 18 December, 1930, was not authorized by the board of directors of the bank, nor accepted by the board of county commissioners. However, it would seem that this action of the president and cashier of the bank was acquiesced in and acted upon by the Commissioner of Banks, who succeeded to the assets' and rights of the bank, that his dealings therewith were approved by orders of the court, that the county commissioners are asserting their rights under said pledge, and that the collections from these and other assets of the bank are sufficient to pay the claims of all creditors in full. Hence, it is no longer open to the defendants to question the validity of a pledge upon which both have so long acted. Therefore, the only question to be determined is whether the plaintiffs are entitled to recover damages at the rate of 12 per cent per annum upon deferred payments on their claims. This depends on whether the statute invoked by plaintiffs applies to the facts of this case. C. S., 357, must be considered in connection with the preceding section. C. S., 356, is as follows (omitting unnecessary words) : “When a sheriff, coroner, constable, clerk, county or town treasurer, or other officer, collects or receives any money by virtue or under color of his office, and on demand fails to pay the same to the person entitled to require the payment thereof, the person thereby aggrieved may recover judgment in the Superior Court, etc.” Sec. 357: “When money received as aforesaid is unlawfully detained by any of said officers, and the same is sued for in any mode whatever, the plaintiff is entitled to recover, besides the sum detained, damages at the rate of twelve per centum per annum from the time of detention until payment.” This statute, which is of ancient origin, prescribes a penalty in the form of damages at a fixed rate, upon defaulting public officers, or those public officers who unlawfully detain funds received by them by virtue of their office. While a bank, which has been appointed county financial agent under the statute, performs the duties usually appertaining to the office of *555 comity treasurer, there are material differences with respect to the manner in which public funds shall be held. It is provided in the statute that “such bank shall not charge nor receive any compensation for its services, other than such advantages and benefit as may accrue from the deposit of county funds in the regular course of banking.” O. S., 1389. Evidently sections 356 and 357 off the Consolidated Statutes are inapplicable to impose liability for damages in a case where the facts are as presented here. We are not dealing with a defaulting or delinquent public officer. Here the Commissioner of Banks, acting pursuant to the authority of the statutes enacted to expedite and safeguard, in the public interest, the liquidation of closed banks, took over the affairs of a bank which had been theretofore constituted the financial agent of the county and which had county funds on deposit and in its possession. The defendant’s relationship to the bank is that of statutory receiver. He took possession of the assets and funds of the bank for the purpose of collecting, preserving, and distributing the same for the benefit of all the creditors. His holding a portion of the fund, subject to- the orders of the court1 and for the purposes of liquidation, could not be said to constitute an “unlawful detention,” nor should he in his representative capacity be liable in damages as a penalty for so doing. The punishment would not fall upon a defaulting or delinquent public officer, as intended by the statute, but would penalize funds held in trust for all the creditors and stockholders whose stock assessments have-helped to contribute. All the decided cases that have been called to our attention, where the statute 357 has been applied, are concerned with defaulting public officers. Bond v. Cotton Mills, 166 N. C., 20; Hannah v. Hyatt, 170 N. C., 634; S. v. Martin, 188 N. C., 119; S. v. Gant, 201 N. C., 211. For these reasons the judgment below must be modified to allow the plaintiffs the full amount of their claim, with interest at the rate of six per cent per annum on deferred payments, calculated in the manner set out in the judgment, instead,of at the rate of 12 per cent; and thereafter the funds will be distributed in accordance with the statutes and this opinion. Hackney v. Hood, Comr., 203 N. C., 486. Modified and affirmed.