Andrews v. . Hood, Comr. of Banks

CoNNOR, J. Tbe sum of $500.00 was not deposited by Colonel Andrews or accepted by tbe Ealeigh Savings Bank and Trust Company as a savings deposit, subject to tbe control of Colonel Andrews as a depositor. Tbe receipt signed by an official of tbe company and delivered to Colonel Andrews, for the plaintiff, although written in a pass book, shows tbat it was tbe intention of both Colonel Andrews and tbe company tbat said sum should be held by tbe company as a trust fund, and, with interest, should be paid to tbe plaintiff upon bis arrival at tbe age of twenty-one years, or if tbe plaintiff, who was at tbe date of.tbe deposit an infant, should die before arriving at tbe age of twenty-one years, should be paid to bis mother, Mrs. Mabel Y. Andrews. Tbe said sum of $500.00 remained with tbe Ealeigh Savings Bank & Trust Company as a trust fund until 1929, when tbe said Savings Bank and Trust Company was merged with tbe North Carolina Bank and Trust Company. At tbe date of said merger tbe said sum, with interest, which bad been credited on said sum from time to time, was delivered to tbe North Carolina Bank and Trust Company, which thereafter held said sum as a trust fund for tbe plaintiff. For this reason tbe plaintiff’s claim is entitled to preferential payment out of tbe assets of tbe North Carolina Bank and Trust Company, which are now in tbe bands of tbe defendant Gurney P. Hood, Commissioner of Banks, for liquidation, because of tbe insolvency of tbe North Carolina Bank and Trust Company. In Flack v. Hood, Comr., 204 N. C., 337, 168 S. E., 520, it is said: “In tbe liquidation of insolvent banks, tbe general depositors are entitled to no preference, and must share pro rata with tbe general creditors. Corp. Com. v. Trust Co., 194 N. C., 125, 138 S. E., 530. But when tbe deposits are made with tbe distinct understanding tbat they are. to be held by tbe bank for the purpose of furthering a transaction between tbe depositor and a third person, or where they are made under such circumstances as give rise to a necessary implication tbat they are made for such a purpose, tbe deposits become impressed with a trust which entitled tbe depositor to a preference over tbe general creditors of tbe *502 bank in case tke bank becomes insolvent while bolding the deposits. Corp. Com. v. Trust Co., supra." This principle is applicable to the admitted facts' with respect to the plaintiff’s claim in the instant case. There is error in the judgment denying the plaintiff the right to preferential payment of his claim against the North Carolina Bank and Trust Company. The principle on which the judgment in Underwood v. Hood, 205 N. C., 399, 171 S. E., 364, was reversed is not applicable in the instant case. In that case the Bank of Clinton had deposited with itself funds which it held as a fiduciary. It held these funds as a general deposit, and not as trust funds. For that reason it was held that the beneficiaries of said funds were not entitled to preferential payment. As said in the opinion, that case was governed by Bank v. Corp. Com., 201 N. C., 381, 160 S. E., 360, and In re Garner Banking and Trust Company, 204 N. C., 791, 168 S. E., 813. The judgment in the instant case is Reversed.