Corporation Commission v. Stockholders of the Bank of Beulaville

CoNNon, J. The statute applicable to tbe Bank of Beulaville on 21 December, 1921, and to other banks doing business in this State at said date, with respect to a transfer of its assets and liabilities by one bank to another bank, is section 12 of chapter 4, Public Laws of North Carolina, 1921, now C. S., 217 (k). It is provided therein tbat “a bank may consolidate with or transfer its assets and liabilities to another bank.” It is further provided therein tbat “no such consolidation or transfer shall be made without tbe consent of tbe Corporation Commission.” There is no finding of fact in tbe instant case, tbat such consent was sought or obtained. It is, however, alleged by tbe stockholders of the Bank of Beulaville, and not denied by tbe Corporation Commission, tbat tbe transfer of its assets and liabilities by tbe Bank of Beulaville to tbe Earmers Bank and Trust Company, on 21 December, 1921, was made with tbe consent and approval of tbe Corporation Commission. Both tbe Bank of: Beulaville and tbe Earmers Bank and Trust Company, at tbe date of the' transfer, were under the supervision of tbe Corporation Commission. It must be presumed tbat in tbe performance of its duties as prescribed-by statute) tbe Corporation Commission bad knowledge of tbe transfer. It w-ill'not be presumed tbat a State agency, such as tbe Corporation Commission, with knowledge tbat tbe transfer bad *589 been made, and that the Bank of Beulaville had ceased to do business, permitted the transfer to become effective, without its approval. Bank v. Bank, 198 N. C., 477, 152 S. E., 403. Under the statute, the consent and approval of the Corporation Commission could be given only after an examination of both banks by the Corporation Commission had disclosed that the interests of depositors, creditors, and stockholders would be protected, and that the transfer was for legitimate purposes. It is finally provided by the statute that “in case of either transfer or consolidation the rights of creditors shall be preserved unimpaired, and the companies deemed to be in existence to preserve such rights for three years.” The implication is, that after the expiration of three years from the date of the transfer, the existence of the corporation making the transfer ceases, at least in so far as creditors are concerned. The creditors of a bank which has transferred its assets and liabilities to another bank, under the authority of the statute, and those claiming under them, are therefore barred from maintaining any action or proceeding against the bank or its stockholders after the expiration of three years from the date of the transfer. While probably not applicable to the instant case, because not enacted until after the transfer involved herein, see section 4, chapter 47, Public Laws 1927, as amended by chapter 73, Public Laws 1929, wherein it is provided that the purchasing bank may institute suit against the stockholders of the selling bank to recover amounts due on their statutory liability at any time within three years from the date of the sale and transfer. Prior to the enactment of chapter 113, Public Laws of North Carolina, 1927, now C. S., 218(c), subsection 13, the Corporation Commission had no power, by assessment, to enforce the statutory liability of stockholders of a banking corporation organized under the laws of this State. It had power only to take possession of such corporation, upon certain contingencies, and to apply to a court of competent jurisdiction for the appointment of a receiver of the corporation. The receiver appointed by the court, and subject to its jurisdiction, had power to enforce the statutory, liability of the stockholders by applying to the court to make assessments against them. Corp. Com. v. Murphey, 197 N. C., 42, 147 S. E., 667; Corp. Com. v. Bank, 193 N. C., 113, 136 S. E., 362; Corp. Com. v. Bank, 192 N. C., 366, 135 S. E., 48. After the assessments had been made by the court, an action by the receiver for judgment against the stockholders for the amounts due by them was not barred until the expiration of ten years from the date of the assessment. C. S., 240. See Litchfield v. Roper, 192 N. C., 202, 134 S. E., 651. In the instant ease no receiver has been appointed, and C. S., 240, is not applicable. It is applicable only to an action brought by the receiver of an insolvent *590 banking corporation to recover judgment for tbe amount due by a stockholder on an assessment made against him by a court, under the procedure which obtained in this State prior to the enactment of chapter 113, Public Laws 1927. Whether or not the Corporation Commission has the power, under C. S., 218(c) to take possession of a banking corporation organized under the laws of this State, which prior to the enactment of chapter 113, Public Laws of 1927, had with its consent and approval transferred all its assets and liabilities to another bank, and ceased to do business, as authorized by statute, and to proceed with the liquidation of such corporation, need not he decided in the instant case. In any event, this proceeding against the stockholders of the Bank of Beulaville cannot be maintained, for that the proceeding was not begun until more than three years had elapsed from the date of the transfer by the Bank of Beulaville to the Farmers Bank and Trust Company of all its assets and liabilities. There was no error in the judgment.