Worth v. Bank of New Hanover

Citations

• 29 S.E. 775
• 122 N.C. 397
• 1898 N.C. LEXIS 270

Syllabus

<p>Banks — Blanch Banks — Principal ancl Agent — Insolvency of Principal Bank- — Assets of Branch Banks■— Distribution of Assets.</p> <p>1. The Bank of N. Ii., under aprovisionof its charter authorizing it to establish agencies at such times and places and subject to such rules and regulations as the president and directors might designate and prescribe, established a branch at W. under the name of “The Bank of N. H. at W.”, the directors being elected and the capital supplied by the parent Bank. No capital stock was issued by the branch Bank, but it received deposits and dealt with the public as “The Bank of N. II. at W.”, making semi-annual statements to the parent Bank, which included in the statements of its own assets the capital and surplus of the branch Bank. Upon an assignment by the parent Bank of all its assets, including the assets of the branch bank, for the benefit of creditors, the branch Bank also made an assignment for the,purpose of protecting the depositors and others dealing directly with it. Held, that the relation between the parent bank and the branch was that of principal and agent, and all the assets and indebtedness of the agency were those of the principal and the depositors and creditors of both must share ratably.</p> <p>2. The establishment of a branch Bank by a Bank, having the authority under its charter to do so, is not an estoppel upon the latter so as' to require it to treat the former as an independent Bank, and if such estoppel could arise as between the two it would not affect the creditors of the principal bank, who are entitled to have its property of every description applied ratably to the payment of their claims.</p>