Rosenstein v. Mechanics & Farmers Bank

Justice MEYER

concurring in result.

I concur in the result reached by the majority but for reasons different than those expressed by the majority. G.S. § 53-66 provides as follows:

Any bank conducting a savings department may receive deposits on such terms as are authorized by its board of directors and agreed to by its depositors. The board of direc*546tors shall prescribe the terms upon which such deposits shall be received and paid out, and a passbook or other evidence of deposit shall be issued to each depositor containing the rules and regulations adopted by the board of directors governing such deposits. By accepting such book or such other evidence of deposit the depositor assents and agrees to the rules and regulations therein contained. (Emphasis' added.)

It is clear beyond question that the terms governing deposits, in order to be valid, must be “authorized,” “prescribed,” and “adopted” by the board of directors. There is not a scintilla of evidence in the record before us that the rules contained in the passbook in question were ever authorized, prescribed or adopted by the board of directors. Two officers or employees of the bank testified that the rules had been in effect for years —one testifying that they had been in existence since 1948 or 1949. Such evidence in my view is evidence of the long-standing use of such rules and constitutes no showing whatever that the rules were authorized, prescribed or adopted by the board of directors. The Rosensteins demanded that the original books of the board of directors in which the rules and regulations were adopted be produced. They were not offered into evidence and there is no explanation in the record of why the bank could not have produced them, if they in fact existed. Contrary to the opinion of the Court of Appeals, I do not believe that failure to prove the vital fact of the authorization or adoption of the passbook rules by the board of directors was harmless.

Unless the passbook provisions prohibiting the transfer of the accounts without the bank’s consent were valid, the transfer of those accounts by the Roberts to the Rosensteins was valid and enforceable against the bank. The bank received notice of the assignment and could have, at that time, taken appropriate action to freeze the accounts until the validity of the disputed assignments was determined. Although the bank notified the Roberts’ attorney of its refusal to accept the assignments, it continued to make disbursements from the account to third parties. I believe that the bank acted at its peril in so doing, except for amounts deducted by the bank for collateral on foreclosures that produced deficiences.

The provisions of G.S. § 53-66 specify in part that by acceptance of the passbook the depositor assents and agrees to the *547rules and regulations contained therein. I would prefer not to forecast in this opinion that the bank “need only to have included a rule making assignment of accounts contingent upon the bank’s consent.” The question of the validity of such a provision, properly authorized by the board of directors and properly receipted for by the depositor, when it is but one of many small-print items in a passbook and is not discussed with or brought to the attention of the depositor and not within the contemplation of the parties, should await another day when it is before this Court on fully developed facts and briefed by the parties.

I agree with Judge Hedrick of the Court of Appeals that the evidence supports the critical findings and conclusions made by the trial judge and that his judgment should be affirmed.