#### GURNEY P. HOOD, Commissioner of Banks, v. T. E. HOLDING and HARVEY HOLDING, Administrator, C. T. A.

(Filed 22 November, 1933.)

1. Insane Persons I d — Judgment against insane person obtained without service or appearance is void and subject to collateral attack.

A judgment against an insane person who has not been adjudged insane is voidable and not void, and cannot be collaterally attacked, and a judgment against an insane person upon a mere semblance of service may be vacated for irregularity, but a judgment against an insane person, obtained without service of process and without appearance in person or by attorney is void and may be attacked collaterally.

3. Insane Persons I a: Process B e — Method of service on persons adjudged insane.

Where a person has been judicially declared insane service of summons in an action against him may be made by delivering a copy of the summons to his committee or guardian and to him personally, or if no committee or guardian has been appointed, service may be made on him personally or returned without service with the statutory endorsement, but in no event can final judgment be rendered against him without adequate notice to his committee or guardian, or to his guardian ad litem duly appointed by the court. O. S., 451, 483(3).

*452S. Banks and Banking H a: Insane Persons I <3 — Statutory stock assessment against insane person is void in absence of service or appearance.

A statutory stock assessment levied against a stockholder in an insolvent bank who has been adjudicated a lunatic prior to the assessment, N. C. Code, 218(c) (13), sucb assessment having been made without service on his committee or guardian or upon a guardian ad litem appointed by the court, is void, and may be attacked upon his subsequent death, by his administrator by appeal to the Superior Court from such assessment.

Appeal by plaintiff from Harris, J., at September Term, 1933, of Waee.

This is a controversy without action upon the following agreed statement of facts:

. . . (3) The Bank of Wake, a banking corporation organized under the laws of the State of North Carolina, having its principal office in Wake County, became insolvent, and Gurney P. Hood, Commissioner of Banks, took possession thereof on or about 18 December, 1931, and filed in the office of the clerk of the court of Wake County, a notice that he had so taken possession thereof as required by Consolidated Statutes, section 218(c).

(4) T. E. Holding, since deceased, was the owner of twenty-one shares of the capital stock of the said bank of a par value of $100 per share, and was the owner thereof at the time the said Gurney P. Hood, Commissioner of Banks, took possession of the said bank.

(5) After the expiration of thirty days from the date he filed notice of his taking possession of the Bank of Wake, the said Gurney P. Hood, Commissioner of Banks, docketed in the office of the clerk of the Superior Court of Wake County, in Judgment Docket 37, at page 180, a stock assessment against T. E. Holding upon his said stock in the Bank of Wake in the sum of $2,100, together with interest and costs. The said stock assessment was docketed on 29 February, 1932, and is the judgment herein appealed from.

(6) On 28 August, 1928, T. E. Holding was duly adjudged a lunatic by the clerk of the Superior Court of Wake County. He was not insane when he purchased the said stock in the Bank of Wake, which purchase was made some years prior to adjudication.

(7) On 20 January,. 1933, Harvey Holding was duly appointed and qualified as administrator cum lesiamento annexo of the estate of T. E. Holding, and has served as such administrator from the said date to the present time.

(8) On 18 February, 1933, Gurney P. Hood, Commissioner of Banks, filed with the said Harvey Holding, administrator as aforesaid, his *453formal proof of claim against tbe estate of T. E. Holding for tbe payment of tbe said stock assessment.

(9) On 1 September, 1933, Harvey Holding, administrator of tbe estate of T. E. Holding, as aforesaid, gave notice of appeal to tbe Superior Court of Wake County from tbe aforesaid stock assessment, and brought tbis appeal, no other appeal having been taken from tbe said judgment prior thereto.

(10) At tbe time tbe said stock assessment was docketed as above set forth T. E. Holding bad been adjudged insane by tbe clerk of tbe Superior Court and was (without) general or testamentary guardian, and no guardian ad litem was then or has been since appointed for him in tbis matter.

Upon tbe foregoing facts tbe trial court held that tbe judgment docketed against T. E. Holding is void and ordered that it be canceled of record. Tbe plaintiff excepted and appealed.

Willis Smith, I Beverly Lake and John H. Anderson, Jr., for appellant.

John G. Mills, Jr., and J. G. Mills for appellee.

Adams, J.

While of sound mind T. E. Holding purchased twenty-one shares of stock in the Bank of Wake, each of tbe par value of one hundred dollars. Several years afterwards (on 28 August, 1928) be was duly adjudged a lunatic and was committed to a hospital for tbe treatment and protection of tbe insane. Tbe Bank of Wake closed its doors on 18 December, 1931, and on 29 February, 1932, tbe Commissioner of Banks, having taken charge of tbe assets, docketed in tbe office of tbe clerk of tbe Superior Court of Wake County a judgment in tbe sum of $2,100 as an assessment on tbe twenty-one shares of stock. T. E. Holding died 7 October, 1932, and on 20 January, 1933, Harvey Holding-qualified as administrator of bis estate with the will annexed. Proof of tbe claim was filed with tbe administrator on 18 February, 1933, and was disapproved. Tbe administrator’s right to contest tbe claim is not denied.

In tbe absence of statute an insane person who is not subject to tbe protection of a general or testamentary guardian may sue and be sued, although it is generally required that in such event be be represented at tbe bearing by a next friend or a guardian. Smith v. Smith, 106 N. C., 498; Abbott v. Hancock, 123 N. C., 99. Indeed, our statute provides that if a defendant in an action or special proceeding is non compos mentis be must defend by bis general or testamentary guardian if be has one within tbe State, and if be has none, by a guardian ad litem to be appointed by tbe court. C. S., 451.

*454When tie stock assessment was docketed in tie Superior Court T. E. Holding was insane and was 'not represented by a guardian general or testamentary, or by one appointed lite pendente. In wlat respect and to wlat extent was le affected, if at all, by tie judgment ?

Tie banking law stipulates tliat at tie expiration of a specified period tie Commissioner of Banks may levy an assessment equal to tie stock liability of eacl stockholder in tie bank and shall file a copy of tie levy in tie office of tie clerk of tie Superior Court which, after being recorded and indexed, shall lave the force and effect of a judgment of tie Superior Court and shall be immediately due and payable. If tie judgment is not paid tie Commissioner of Banks may lave an execution issued against tie delinquent stockholder; but tie stockholder may appeal to tie Superior Court from tie levy of the assessment and may lave tic issue raised by tie appeal determined. Thereupon, tie trial judge may in his discretion grant relief upon such terms as he may fix. All sums collected under tie levy shall become available as general assets of tie bank, and tie amount remaining after liquidation shall be applied pro rata to tie amounts paid in by tie stockholders. Public Laws, 1921, clap. 113, sec. 1, 218(c) (13).

In Corporation Commission v. Murphey, 197 N. C., 42, tie Court construed this statute and declared it to be valid. Tie statute, it was said, does not contravene tie due process clause or indeed any other clause of tie Federal or of the State Constitution; tie stockholder is not denied tie right of a hearing for tie reason that before execution may be issued he may appeal from the assessment to tie Superior Court of tie county in which the liquidation is pending and there litigate all matters, whether of law or of fact, relating to his liability on the assessment. His appeal stays execution until final judgment is rendered. It was concluded that by this procedure the stockholder is given full opportunity to be heard before his property can be appropriated and that the assessment is not a judgment in the sense that it cannot be. attacked.

The opinion was written upon the assumption that stockholders are in the normal control of their faculties and not with reference to the contingency of “a human mind in ruins.” This becomes obvious by reference in the opinion to the stockholder’s right to petition the judge to relieve his property of the lien pending settlement of questions raised by the appeal and to the notice of liability with which the stockholder is affected by an adjudication that the bank has become insolvent and by the filing of a copy of the assessment in the office of the clerk. The present case does not rest on this assumption. T. E. Holding did not appeal from the assessment; when it was made he was without mental capacity; he was in a hospital for treatment; he had no guardian. '

*455Tbe rule is substantially uniform that a judgment against an insane person not previously declared insane is not void but voidable and that it will generally be sustained when collaterally attached. Odom v. Riddick, 104 N. C., 515; Craddock v. Brinkley, 177 N. C., 125; Bank v. Duke, 187 N. C., 386; Clark v. Homes, 189 N. C., 703; Wadford v. Gillette, 193 N. C., 413. But in such an instance relief may be administered when sought as between the parties by motion in the cause, or by an independent action. If there is a mere semblance of service upon a person of nonsane mind and a judgment is obtained against him “contrary to the course and practice of the court” it may be vacated on the ground of irregularity. But a judgment given without service of original or other timely process and without appearance in person or by attorney is void, and may be so regarded whenever and wherever offered. Duffer v. Brunson, 188 N. C., 789; Condry v. Cheshire, 88 N. C., 375.

In Corporation Commission v. Murphey, supra, it was held that an assessment cannot be made against a stockholder in an insolvent banking-corporation without notice to him or without an opportunity to be heard as to the validity of the assessment; and therein is pointed out the expediency of giving actual notice of a purpose to levy the assessments.

If these safeguards are required for the protection of persons of sound mind, a fortiori are they essential to the protection of those who by reason of disordered mental condition are unable to protect themselves. As to the mode of service analogy may be found in the statutory, method of serving a summons. If the action is against a person judicially declared to be of unsound mind or incapable of conducting his own affairs for whom a committee or guardian has been appointed a copy of the summons must be delivered to the committee or guardian and to the defendant personally. O. S., 483(3). If the declared incompetent has no committee or guardian service of notice may be made upon him personally or the notice may be returned without actual service with the endorsement required by the statute when service cannot be made without the danger of injury to him; but in no event should final judgment be rendered against him without adequate notice to his committee, or to his general or testamentary guardian, or to a guardian ad litem duly appointed by the court. In this case T. E. Holding was not affected by constructive notice and of actual or personal notice upon him or his representative there is neither semblance nor color. Judgment

Affirmed.