The question: Has the plaintiff, as assignee of Durham County, a secured depositor creditor of the Merchants -Bank of Durham, North Carolina, the right to receive dividends on $43,950.48, the total amount of its claim as it stood, at the time the bank was closed because of insolvency? We think not, under the facts and circumstances of this case.
N. C. Code, 1931 (Michie), sec. 1334(70), in part, is as follows: “The board of commissioners is hereby authorized and empowered to select and designate annually, by recorded resolution, some bank or banks or trust company in this State as an official depository of the funds of the county, and the county commissioners shall require of such depository North Carolina State Bonds and/or United States Government Bonds or a bond in some surety company authorized to do business in North Carolina in an amount sufficient to protect such deposits, but in no event not less than the average daily bank balance of the county for the preceding year; but the board may at any time require an additional bond in its discretion. Provided, that a bank giving North Carolina State Bonds and/or United States Government Bonds as security for county funds may deposit said bonds with another bank which has been approved by the Corporation Commission as a depository bank, said bonds to be held for the benefit of the county and subject to the order of the board of county commissioners of said county.”
In accordance with the above statute, the Merchants Bank of Durham, N. C., had deposited with another bank, North Carolina State bonds in the sum of $29,000 and further to protect said deposit, secured two indemnity bonds in plaintiffs’ company, totaling $27,500. The plaintiff insisted that these bonds be sold by the county of Durham to ascertain what was due on the indemnity bonds given by plaintiff. The bonds were sold for $26,353.57 and the proceeds credited on the deposit of $43,950.48, leaving a balance of $17,596.91, which plaintiff paid to Durham County.
The plaintiff contends that it was entitled from the insolvent bank, the prorata on $43,950.48, irrespective of the amount realized from the sale of the State bonds. To sustain its contention it cites Winston v. Biggs, 117 N. C., 206; Bank v. Flippen, 158 N. C., 334; Milling Co. v. Stevenson, 161 N. C., 510; Bank v. Jarrett, 195 N. C., 798. We do not think the construction plaintiff puts on these cases are applicable to the facts on this record.
We find that it is said in Bank v. Flippen, supra, pp. 335-6: “When such dividends, added to any sums collected by the creditor from collateral, shall have paid the debt in full, then dividends of course must cease, and the uncollected collateral delivered to the receiver. . . . *643In Merrill v. Bank, 173 U. S., 131, tbe Supreme Court of the United States holds that ‘A secured creditor of an insolvent bank may prove and receive dividends upon the face of his claim as it stood at the time of the declaration of insolvency, without crediting either his col-laterals or collections made therefrom, after such declaration, subject always to the proviso that dividends must cease when, from them and from collaterals realized, the claim has been paid in full.’ ”
In Milling Co. v. Stevenson, supra, p. 513: “The receiver is not entitled to any securities in the hands of the appellant, the Home Savings Bank, until the bank has received full payment of its claims for $1,750 filed with the receiver. The bank is entitled to prorate with other creditors on the basis of $1,750, and then apply the proceeds of all collaterals in its hands to payment of the balance of its claim, unless the collaterals shall amount to more than the balance due. Bank v. Flippen, 158 N. C., 334, and cases cited.” We think the facts in this ease come more within the principle.
In Bank v. Alexander, 85 N. C., 352 (353) : “On 30 November, 187?, the principal debtors made an assignment for the benefit of their creditors, from the proceeds of which the plaintiff has received and applied to the notes a payment of 66 per cent of the amount due. The plaintiff now proposes to prove against the testator’s estate, the full amount of the notes without deduction of the sum paid, and claims to share upon the basis of an unreduced debt in the prorata distribution of the fund in the hands of the executor.” Held that the payment extinguished the debt pro{ tanto.
In Chemical Co., v. Edwards, 136 N. C., 73: “Insolvency — "Where a debtor holds certain notes as the property of the creditor, to be applied on his debt when collected, any amount collected on the notes is part payment of the debt and the debtor shares in the funds belonging to the administrator only in proportion to the balance of the debt due.”
In the present action, the agreed statement of facts, number three supra, shows that these North Carolina State bonds were sold at the request of plaintiff and credited on the $43,950.48 deposit, so that plaintiff could ascertain the balance due on the indemnity bonds. This balance $17,596.91 was paid by plaintiff and for this amount, it can file its claim. "When plaintiff took the assignment on 12 May, 1932, there was due only $17,596.91. Under the facts and circumstances of this case, it cannot prove for $43,950.48 although the claim for that amount was assigned to it. The bonds were sold and the credit made at plaintiff’s solicitation. The plaintiff is subrogated to the amount it voluntarily paid out after it had the bonds sold and credited on the deposit. The bonds were sold and brought less than par, they were sold at plaintiff’s insistence and it cannot now contend that it is subrogated to the full *644amount of tbe deposit in tbe insolvent bank. After plaintiff’s conduct in baving tbe bonds sold and credited on tbe county of Durham deposit, it is too late now to contend that it is subrogated to tbe original deposit of tbe county of Durham in tbe insolvent bank.
It will be noted that in tbe cases cited by plaintiff, tbe creditor held tbe collateral and in ease of insolvency bad tbe right to' prove for tbe full amount of tbe debt before exhausting other collateral held. This is not tbe factual situation in tbe present case. Durham County held as collateral or security for tbe deposit (1) $29,000 N. C. State bonds, (2) $27,500 indemnity bonds of plaintiff. This is tbe distinguishing feature between tbe cases cited by plaintiff and tbe present case. For tbe reasons given, tbe judgment of tbe court below is
Affirmed.
Stacy, C. J., took no part in tbe consideration or decision of this case.