Little v. . Steele

BaeNhill, J. The plaintiffs contend that the liability of stockholders for assessment in case of insolvency is a contingent asset and constitutes a trust fund for the benefit of depositors and creditors of the bank. They take the position that this liability is not an assignable asset of the bank, Hood, Commissioner, v. Realty, Inc., 211 N. C., 583; and that it constitutes a trust fund to be equitably distributed for the benefit of all creditors, Hood, Commissioner, v. Trust Co., 209 N. C., 367, 184 S. E., 51. It has been so held by this Court in the cases cited and relied on by plaintiffs and in many other decisions without exception. In each instance, however, the Court was discussing the double liability of stockholders prior to the rendition of judgment thereon. *346 The rights of a bank as a going concern and of the Commissioner of Banks as a statutory receiver in charge of an insolvent bank in process of liquidation in relation to this liability are distinctly different. A solvent bank has no property interest in the contingent fund thus provided for by statute. It exists solely for the protection of creditors of the bank. On the other hand, so soon as the Commissioner of Banks assumes control of an insolvent bank for the purpose of liquidation it becomes his duty to reduce the liability to judgment and thus make it a fixed and available asset to be applied to the payment of creditors. To the end that an expeditious and inexpensive method might be provided to enable the Commissioner of Banks to make this fund quickly available, C. S., 218 (c), was revised, amended and reenacted in 1927. Public Laws 1927, ch. 113; Michie’s Code of 1935, sec. 218 (c). After the expiration of thirty days from the date of the filing of the notice of the taking possession of a bank, in the office of the clerk of the Superior Court, the Commissioner of Banks may levy an assessment equal to the stock liability of each stockholder in the bank and shall file a copy of such levy in the office of the clerk of the Superior Court, which shall be recorded and indexed as judgments, and shall have the force and effect of a judgment of the Superior Courts of this State; and the same shall become due and payable immediately. And all sums collected under the levy shall become immediately available as general assets of the bank for distribution as other assets. Public Laws 1927, ch. 113, subsection 13. When judgment is so rendered it becomes a fixed liability of the stockholder and is a general assignable asset to be collected by the Commissioner of Banks in the manner which to him appears to be the most advantageous and beneficial to creditors. He has the authority, by and with the consent and approval of the Superior Court, to sell, compromise or compound any bad or doubtful debt or claim, and upon such approval may sell the real and personal property of such bank. Public Laws 1927, ch. 113, subsection 7. The judgment rendered against J. M. Little became and was a general asset of the bank. It was sold by the Commissioner of Banks under authority of the Superior Court. Upon the assignment thereof title thereto vested in the defendants and it continued in force as a lien upon the real estate of the judgment debtor. Neither the fact that the uncollected assets of the bank remaining after it had been substantially liquidated were sold in bulk, nor the fact that in said sale no particular valuation was placed upon the stock assessment judgment affects the regularity of said sale or the validity of the transfer of assets so sold. The Commissioner of Banks pursued a method of realizing upon this judgment which is specifically authorized by statute and, admittedly, *347 be received tbe consideration paid tberefor which, together with the other assets of the bank, was insufficient to pay creditors in full. In any event the judgment was regular upon its face and constituted an apparent lien upon the land plaintiffs desired to sell. The purchaser required the cancellation of the judgment before he would buy. Even if it be conceded that the judgment was invalid for the reasons alleged by plaintiff, it constituted a cloud on the title of the plaintiffs. Therefore, its cancellation was a sufficient consideration for the execution of the notes in controversy. We conclude that the notes executed by plaintiffs which they now seek to have surrendered and canceled are valid subsisting obligations based on a legal and valuable consideration. This conclusion is not in conflict with any former decision of this Court. The judgment below is Eeversed.