Williams v. . Maxwell , 123 N.C. 586 ( 1898 )

The "North Carolina Building and Loan Association" is a corporation and its place of business is Charlotte, N.C. The plaintiff, Richard Williams, became the owner of ten shares of capital stock in said association of the par value of $100 each, aggregating the sum of $1,000. This made him a stockholder in the association (Strauss v. B. L. Asso., 117 N.C. 314) and enabled him to borrow $1,000 from the association, which he did, and he and his wife executed one of the mortgages mentioned in the complaint as security therefor. The plaintiff having reduced the amount of this indebtedness to the association, was allowed to borrow $250 more, for which he and his wife executed a second mortgage on the same property. Plaintiff from time to time made payments to the association until this indebtedness was reduced to $676.70 on 27 March, 1897, if these amounts should all be applied to said indebtedness, calculating the indebtedness at six per cent interest and allowing plaintiff credit for all amounts paid by them, and interest thereon at the same rate of per cent, whether the same was called fines, assessments, or what not.

The defendant corporation became insolvent, suit was commenced in the Superior Court of Mecklenburg County to wind up the concern, and on 27 March, 1897, J. W. Keerans and E. T. Cansler were appointed receivers. The mortgages mentioned above were made to W. C. Maxwell with power to sell upon default. Maxwell was also a stockholder and member of said corporation, and a party to the action to wind up and settle the concern; and upon the plaintiff's failing to pay said indebtedness, the court made an order directing said Maxwell, trustee, to sell and to foreclose said mortgages.

(594) To prevent Maxwell's selling under said mortgages, the plaintiff on 17 February, 1898, commenced this action in the Superior Court of Burke County, and obtained a temporary restraining order against said sale. The plaintiff's motion for injunction was afterwards heard, when the following facts were found and agreed to by the parties:

The plaintiff on 26 March, 1890, borrowed $1,000, and on 2 October, 1894, borrowed $250; that after allowing plaintiff credit for every dollar paid the defendant association, whether by way of fines or otherwise, and interest thereon at the rate of six per cent (the same rate defendant had charged plaintiff), the balance remaining due from plaintiff, if the whole amount of these payments should be credited on the indebtedness, left a balance of $676.70. But the court allowed the receivers to apply $12.50 per share of stock to the loss account, amounting to $125, and if this be deducted from the amount paid into the concern, the amount still due will be $801.70. The injunction being refused, plaintiff appealed.

These are the facts found by the court and not disputed on the argument here.

Upon this state of facts there is nothing but questions of law presented, and they have been so frequently and so recently decided by this Court that we do not feel disposed to discuss them in this opinion.

It was decided in Strauss' case, supra, 117 N.C. 314 and 118 N.C. 556, that each holder of stock on 27 March, 1897, the day the receivers were appointed, is an incorporator, and liable for his pro rata part of the defalcation and expenses of closing out the concern.

It is held in Meares v. Davis, 121 N.C. 192, that a corporator (595) is not entitled to have the excess paid to him until his part of the deficiency is ascertained and accounted for.

And it is held in Meares v. Duncan, and in Meares v. Butler, at this term, that as incorporators are bound for the defalcation and expenses of winding up the concern, the amounts paid into the association cannot be allowed as a discharge of their indebtedness until this deficiency is paid. This is held in these cases to be so, even where the rights of married women are involved.

It is held in Strauss' case, supra, that the incorporators were liable for their pro rata part of this deficiency, according to their pro rata percent upon the amount of capital they had in the association on the day it went into the hands of the receiver. And the capital of the borrowing members was the amount they owed the association at that time.

In this case it seems that the shares held by each incorporator were assessed $12.50. We do not think this was a compliance with the rule inStrauss' case, and may make some difference in the amount due by the plaintiff. But this is a matter that may be corrected by a mathematical calculation, by taking what the assessments amount to, at $12.50 a share, and get the per cent this would make upon the whole collectible assets of the concern, and apply this per cent to the plaintiff's indebtedness.

We are of the opinion that the remaining amount of plaintiff's indebtedness is the amount he borrowed, with six per cent interest, the whole amount the plaintiff has paid the association, after first deducting the proper per cent therefrom for defalcations and expenses of closing out the concern.

In the consideration of this case, in order to put it upon its (596) merits, we have left out of consideration the question of venue.

We see no good reason why an injunction should issue, and therefore affirm the judgment of the court below.

Affirmed.