Corporation Commission v. Farmers Bank & Trust Co., 183 N.C. 170 (1922)

March 15, 1922 · Supreme Court of North Carolina

183 N.C. 170

CORPORATION COMMISSION v. FARMERS BANK AND TRUST COMPANY.

(Filed 15 March, 1922.)

1. Appeal and Error — Judgments—Fragmentary Appeals — Dismissal— Banlcs and Banking — Corporations— Receivers — Collateral—Collection — Trusts.

A hank borrowed money from one of its correspondent foreign banks, and hypothecated certain local papers as security, which the correspondent bank sent back to the borrowing bank in trust to collect and apply the proceeds to the indebtedness. The borrowing bank became insolvent and a receiver was appointed for it, who, after notice, and claims of creditors filed, refused the stated claim as a preference, and the court, passing upon the matter, sustained the exception and reserved judgment as to the other claims. There was evidence that the insolvent bank had collected some of the collateral, and had hypothecated other of the-collateral to its note given to another bank for money borrowed: Held, the judgment rendered only as to this one claim was fragmentary, and' will be dismissed.

3. Same — Record—Suggestions—Parties—Receivers—Reports.

Upon this fragmentary and partially insufficient record, on appeal, and' the case as presented thereon, the Supreme Court suggests that the second bank receiving the collateral sent for collection by the claimant bank be. made a party to the suit; and that the report show the amount of indebtedness to the bank claiming the preference, together with the entire amount of the collateral held by it as security for its indebtedness, and its value to the extent practicable.

Appeal by receivers from Devin, Jat the November Term, 1921, of LENOIR.

Civil action, heard on certain exceptions to report of a receiver.

The record is so imperfect that it is difficult to make satisfactory disposition.of the cause, but it appears, we think, with sufficient certainty,, that an action was instituted under the provisions of the Consolidated Statutes, to wind up the affairs of an insolvent bank, the Farmers Bank & Trust Company of La Grange, N. C., and a receiver was appointed.. Notice was issued for all creditors to present tbeir claims in writing before said receiver at a specified time and place. Tbat said receiver appeared pursuant to said notice and considered and passed upon all claims tbat were filed. And thereupon said receiver made bis report. And tbe saíne is in part in tbe present record, beginning witb section 9. From wbicb it appears tbat tbe Hanover Bank of New York claims a preference in tbe assets by reason of certain collateral sent to insolvent bank for collection, before its doors were closed, under a trust agreement to collect and bold as security for an indebtedness to tbis bank. It further appears in tbis excerpt from receiver’s report tbat tbe insolvent bank, before it closed its doors, collected of tbis collateral tbe sum of $16,765, remitted to tbe Hanover Bank on account, $10,000, and retained tbe balance of $6,765, wbicb was commingled witb tbe assets of defendant bank. It further appears tbat of tbis collateral forwarded to tbe defendant there were renewals taken by tbe defendant to tbe amount of $9,100, wbicb were, not returned to tbe Hanover Bank, but hypothe-cated witb tbe Atlantic Bank & Trust Company at Greensboro, N. C., as collateral for money loaned to defendant. Tbe report of tbe receiver in effect ruled tbat there was no trust existent giving to tbe Hanover Bank a preferred claim on tbe assets, but said bank was only a general creditor to tbe amount of its debt and tbe assets so collected. On exception, tbis position was overruled by bis Honor, who entered judgment declaring tbat said Hanover Bank was a preferred creditor to tbe amount of tbe $6,765 balance of tbe amount collected from tbe collateral, and also to tbe extent of tbe $9,100 renewals, witb interest, etc. Tbe judgment making such disposition of tbe matter closing as follows:

“The court reserves any ruling upon or consideration of tbe report of said receiver except such questions as are adjudicated herein, and continues without prejudice tbe motion of tbe receiver tbat its report be now further considered.”

From tbis judgment tbe receiver of tbe Farmers Bank & Trust Company appealed.

Dickinson & Freeman for Hanover National Bank.

Dawson, Manning & Wallace for J. G-. Dawson, receiver.

Hoke, J.

From a perusal of tbe present record, it is clear tbat tbe appeal has been prematurely taken, and under tbe decisions applicable tbe same must be dismissed without prejudice to tbe rights of tbe parties in tbe premises. Cement Co. v. Phillips, 182 N. C., 437; Beck v. Bank, 157 N. C., 105; Pritchard v. Spring Co., 151 N. C., 249.

In Cement Co. v. Phillips, supra, tbe position is strongly stated, and supported by numerous authorities, and in Pritchard’s case, supra, an action to wind up tbe affairs of an insolvent corporation, judgment -bad been entered disposing of exceptions to report, and making distribution of part of assets, but sucb judgment not making final disposition of tbe matter, tbe appeal was dismissed. Speaking to tbe question in tbat case, tbe Court said:

“In tbis condition of tbe record, and on tbe facts indicated, tbe Court is of opinion tbat tbe appeal bas been prematurely taken, and tbat tbe same must be dismissed without prejudice. It bas been tbe uniform ruling of tbis Court tbat wben a reference bas been entered uj)on, it must proceed to its proper conclusion, and tbat an appeal will only lie from a final judgment or one in its nature final. Brown v. Nimocks, 126 N. C., 808; Driller Co. v. Worth, 117 N. C., 515, and Haley v. Gray, 93 N. C., 195.

“If a departure from tbis procedure is allowed in one case, it could be insisted upon in another, and each claimant, conceiving himself aggrieved, could bring tbe cause here for consideration, and litigation of tbis character would be indefinitely prolonged, costs unduly enhanced, and tbe seemly and proper disposition of causes prevented.”

There being only an excerpt from tbe receiver’s report, with no evidence or facts except as relevant to tbe claim of tbe Hanover National Bank and no entries showing what claims were presented, we are not in a position to act definitely upon tbe question, but consider it not improper to intimate tbat as now advised, it would seem to be necessary to a proper disposition of tbe questions involved in tbis litigation tbat tbe Atlantic Bank & Trust Company of Greensboro be formally made party to tbe proceedings. And tbat tbe report should disclose tbe amount'of indebtedness of defendant to tbe Hanover National Bank, together with tbe entire amount, and as near as may be tbe value of all tbe collateral held by said Hanover Bank, as security for said indebtedness.

Appeal dismissed.