In re the Bank of Ayden, 206 N.C. 821 (1934)

July 11, 1934 · Supreme Court of North Carolina

206 N.C. 821

In the Matter of the BANK OF AYDEN.

(Filed 11 July, 1934.)

Banlcs and Banking H li — Order that equal dividends on unproven and tardily proven claims be paid to clerk for distribution after hearings, entered to permit receiver to file final report, held without error.

An order of the Superior Court entered so that the Commissioner of Banks as statutory receiver for an insolvent bank might complete the liquidation of the bank and file his final account, all assets of the bank having been liquidated, which provides that the Commissioner of Banks should first pay all proper expenses of liquidation and then declare, out of the funds then remaining, a pro rata dividend among all depositors and creditors of the bank recognized by it at the time of its closing and that the dividends to creditors recognized by the bank but who had not filed claims, and dividends to creditors who had filed claims after expiration of the time be made to equal the dividends previously or subsequently declared on aptly proven claims, but that such dividends on unproven and tardily proven claims should be paid to the clerk of the Superior Court who should hold same for three months, after advertisement, for hearing and decision of conflicting contentions of creditors and depositors, and so that the University’s asserted right under chapter 546, Public Laws of 1933, to unclaimed dividends then remaining might be heard, is field without error.

Appeal by Gurney P. Hood, Commissioner of Banks, from Daniels, J., at February Term, 1934, of Pitt.

Affirmed.

Tbe above entitled cause, now pending in tbe Superior Court of Pitt County, was beard on tbe petition of Gurney P. Hood, Commissioner of Banks, for an order advising and instructing bim with respect to tbe payment of dividends out of tbe assets of tbe'Bank of Ay den, an insolvent banking corporation, now in bis bands for liquidation, to tbe creditors and depositors of said bank.

Tbe University of North Carolina was permitted to intervene in tbe cause, and to file a petition, setting out its contentions witb respect to unclaimed dividends, if there shall be any, under tbe provisions of chapter 546, Public Laws of North Carolina, 1933.

Tbe Bank of Ayden closed its doors and ceased to do business on 30 November, 1927, because of its insolvency. All of tbe assets of said bank came into tbe possession of tbe Corporation Commission of North Carolina, and subsequently into tbe possession of tbe petitioner, Gurney P. Hood, Commissioner of Banks, as tbe statutory successor of said Corporation Commission, for liquidation as provided by statute. Tbe said assets bave been fully liquidated, and after tbe payment of tbe costs and expenses incurred in tbe liquidation, and of dividends to creditors and depositors of tbe bank, there is now in tbe bands of tbe petitioner, tbe sum of $4,129.58, for distribution to creditors and depositors of said bank, according to tbeir respective rights.

Notice was given as provided by statute to all creditors and depositors of tbe Bank of Ayden that each of them was required to prove and file bis claim against said bank, within ninety days after 2 January, 1928. Pursuant to this notice, claims aggregating tbe sum of $165,057.26 were proven and filed before tbe expiration of said ninety days. A dividend of 10 per cent was declared and paid out of tbe assets of said bank, on these claims. Thereafter, unsecured claims aggregating tbe sum of $1,438.79, and secured claims aggregating tbe sum of $16,700.26, were proven and filed. A second dividend of 10 per cent was then declared and paid out of tbe assets of said bank on all claims against said bank, both those proven and filed before, and those proven and filed after tbe expiration of said ninety days. This dividend, together with tbe sums realized from tbe sale of tbe securities, was sufficient to pay and did pay in full tbe secured claims against said bank. Thus, creditors and depositors who proved and filed tbeir claims before tbe expiration of tbe ninety days bave been paid out of tbe assets of said bank, 20 per cent of tbeir claims, while creditors and depositors who proved and filed tbeir claims, after tbe expiration of said ninety days, bave been paid out of said assets only TO per cent of tbeir claims.

Tbe total indebtedness of tbe Bank of Ayden to creditors and depositors, who bave neither proved, nor filed tbeir claims against said bank, amounts to $5,365.35. This indebtedness was recognized by said bank at tbe time it closed its doors and ceased to do business. No dividend has been declared or paid on tbe amount of this indebtedness.

Tbe proceeds of tbe liquidation of tbe assets of tbe Bank of Ayden are not and will not be sufficient to pay in full tbe claims of its creditors and depositors.

On these facts alleged in tbe petition of Gurney P. Hood, Commissioner of Banks, and admitted in tbe petition of tbe University of North Carolina, it was ordered by tbe court:

“1. That Gurney P. Hood, Commissioner of Banks and statutory receiver of tbe Bank of Ayden, be and be is hereby authorized and directed

(a) To file in tbe office of tbe clerk of tbe Superior Court of Pitt County at Greenville a list showing all liabilities of tbe Bank of Ay den admitted as sucb before tbe bank closed but for wbicb no claimant bas filed claim;

(b) To pay any expense of liquidation heretofore approved by tbe court as sucb, and to present a statement of any other expense for approval, and to pay tbe same when and if approved; to prepare and file bis final account showing- tbe balance available for distribution to creditors, sucb distribution to be made in accordance with tbe instructions-of tbe court in tbe following- paragraphs;

(e) To pay to tbe clerk of tbe Superior Court of Pitt County tbe first dividend of 10 per cent wbicb bas not yet been paid to tbe creditors listed in Exhibit ‘A/ attached to tbe petition of Gurney P. Hood, Commissioner of Banks (these are tbe creditors who proved and filed their claims after tbe expiration of ninety days from 2 January, 1928), and a 20 per cent dividend on tbe bank’s liability to those depositors and other creditors who have not filed their claims, but liability for wbicb was recognized by tbe bank before it closed.

(d) To distribute any balance then remaining- pro rata to all tbe creditors of tbe bank not yet satisfied whether sucb creditors have filed claim or not, but where any sucb creditors have not filed their claim tbe pro rata payments are not to be made to them but to tbe clerk of tbe Superior Court of Pitt County.

(e) To cause to be published once each week for four weeks in a newspaper published in Pitt County, a notice to creditors owning-balances in said Bank of Ayden wbicb were recognized as a valid liability by sucb bank before it closed, but for wbicb no claim bas been filed, that a list of sucb creditors is filed in tbe office of tbe clerk of the Superior Court of Pitt County at Greenville, that a fund is being-paid to tbe clerk of tbe Superior Court of Pitt County representing tbe pro rata dividends of sucb claims, that the clerk of tbe Superior Court will bold this fund for a period of three months from tbe time of tbe filing of tbe final report in this matter, and calling upon sucb creditors to take sucb action in tbe premises as they may be advised.

(f) Then to proceed to file tbe final report to tbe court provided in subsection 18, section 218(c), of Consolidated Statutes as amended.”

Tbe petitioner, Gurney P. Hood, Commissioner of Banks, excepted to tbe foregoing order, and appealed therefrom to tbe Supreme Court.

C. I. Taylor and Blount & James for Gurney P. Hood, Commissioner of Banks.

Attorney-General Brummitt and Assistant Attorney-General Seawell and M. 8. Breckenridge for University of North Carolina.

Coknor, J.

"We find no error in the order of Judge Daniels, in this canse.

The effect of the order is to authorize and direct the Commissioner of Banks, in order that he may complete the liquidation of the Bank of Ayden, and file his final account as its statutory receiver, and thereby be discharged of all liability as such receiver, after paying all the costs and expenses of the liquidation, to declare a dividend out of the assets then remaining in his hands, ’ on the claims of all the creditors and depositors of said bank, without regard to the fact that some of said claims have not been proven and filed, and without regard to the further fact that some of said claims were proven and filed prior to, and others subsequent to the expiration of the time fixed by the notice for the presentation of claims. It is ordered, however, that these dividends shall not be paid to such creditors and depositors, but to the clerk of the Superior Court of Pitt County, who is directed to hold said dividends for a period of three months. During this period conflicting contentions of creditors and depositors may be heard and decided. At the expiration of the period of three months, if there shall be in the office of the clerk of the Superior Court any unclaimed dividends, the contention of the University of North Carolina, with respect to its rights to such dividends, under chapter 546, Public Laws, 1933, may be heard and decided. The order is

Affirmed.