Trust Co. v. . Hood, Comr. , 204 N.C. 778 ( 1933 )

Civil action to establish preference, or priority of plaintiff's claim against funds in hands of liquidating agent of insolvent bank.

The case was heard by the court without the intervention of a jury, upon facts agreed or found without objection:

The Continental Mortgage Company issued certain bonds with interest coupons attached. These bonds and coupons were payable at the Central Bank and Trust Company, named as trustee for such purpose. To meet the interest represented by maturing coupons, the Continental Mortgage Company deposited with the Central Bank and Trust Company $2,001.25, and this amount was entered upon the books of the trust department as having been received for the purpose of paying said interest coupons.

When the Central Bank and Trust Company failed, 19 November, 1930, the above amount had not been applied to the payment of interest coupons, and according to the records of the trust department of the bank, the amount was still being held for said purpose.

Plaintiff sues as substituted trustee.

The court found that the amount so deposited with the Central Bank and Trust Company by the Continental Mortgage Company constituted a special deposit for a specific purpose and adjudged plaintiff entitled to a preference against the assets in the hands of the liquidating agent.

Defendant appeals, assigning error. Affirmed on authority of Flack v. Hood, Comr., ante, 337. Plaintiff is entitled to a preference, and to share pro rata with other preferred creditors in the distribution of the funds in the hands of the liquidating agent of the Central Bank and Trust Company.

Affirmed.