Plaintiffs appeal as a matter of right under G.S. 7A-30(2) from a split decision of the North Carolina Court of Appeals,
Huskins, Justice. Justice Meyer concurring in the result. Justice Carlton dissenting. Justice Exum joins in the dissenting opinion.
The dispositive question posed by this appeal is whether the savings accounts were validly assigned to plaintiffs.
Bank deposits are assignable. Lipe v. Bank, 236 N.C. 328, 72 S.E.2d 759 (1952). When an individual deposits money in a bank account, a debtor-creditor relationship is established between the bank and the depositor. "The debt thus created is subject to the rule that ordinary business contracts for money due or to become due are assignable." Id. at 331, 72 S.E.2d at 761.
Defendant contends that this principle of assignability is subject to contrary agreement by the bank and the original depositor. The Court of Appeals agreed that a depositor cannot assign a bank account when his contract with the bank forbids transfer without the bank's consent. The court further held that
the contract between defendant bank and Mr. and Mrs. Roberts did in fact bar assignment without the bank's consent.
The contention that the accounts in this case were not assignable is based upon Rule 11 of defendant's passbook, which provides that: "No assignment or transfer of the Bank Book need be recognized by the Bank unless it consents thereto, and a memorandum thereof entered in said Book." The rule makes no mention of assignability of accounts. Rule 11 is listed in defendant's rules and regulations under the heading "Bankbooks." Defendant's rules and regulations have a separate category entitled "Deposits." None of the rules listed under "Deposits" restricts the assignability of deposits or accounts.
A straightforward reading of defendant's rules and regulations impels the conclusion that defendant has restricted the assignment of passbooks, but not accounts. Had defendant wished to restrict assignability of accounts, it could have done so in the same manner it reserved the right to refuse deposits. Rule 7 under "Deposits" states: "The Bank may refuse any deposits and require any depositor to withdraw the whole, or any part of the same, upon 30 days' written notice mailed to the depositor at his or their address as same appears on the signature card; interest to be allowed only to the time of the expiration of such notice." Defendant need only to have included a rule, properly adopted by the board of directors, making assignment of accounts contingent upon the bank's consent. Defendant failed to do so.
The rule restricting the assignment of passbooks does not restrict the assignment of the underlying accounts themselves. The Court of Appeals found the distinction between accounts and passbooks to be "illusory" on grounds that a passbook is worthless other than as a record of the contract between the bank and the depositor. Apparently, no one would want a passbook by itself.
Such reasoning mischaracterizes the transaction at hand. Instead of the assignment of a passbook without an account, this situation involves the assignment of an account without necessarily delivering a passbook. This latter form of transaction, perhaps unlike the former, is not meaningless. A deposit may be validly assigned without the delivery of a passbook. McCabe v. Union Dime Sav. Bank, 150 Misc. 157, 268 N.Y.S. 449 (1934). Mr.
and Mrs. Roberts validly assigned their accounts to plaintiffs. The rule restricting assignment of passbooks was immaterial.
The question why parties would agree to the assignment of a passbook without assigning the underlying account is not before this Court. Neither is the question why a bank would wish to prevent such a transfer. Defendant in this case restricted such apparently meaningless transactions. "When the language of a contract is clear and unambiguous, effect must be given to its terms, and the court, under the guise of construction, cannot reject what the parties inserted or insert what the parties elected to omit." Weyerhaeuser Co. v. Light Co., 257 N.C. 717, 719, 127 S.E.2d 539, 541 (1962). Defendant bank itself drafted this contract to become binding upon depositors without negotiation or bargaining on their part. The provisions of such a contract must be construed against the drawer. We will not interpret the purported restriction of assignment of passbooks to apply to assignment of accounts. "Courts do not make contracts. . . . [T]he law does not permit inquiry as to whether the contract was good or bad, whether it was wise or foolish." Knutton v. Cofield, 273 N.C. 355, 363, 160 S.E.2d 29, 36 (1968).
We hold, as did the trial court, that plaintiffs are entitled to the funds in the two savings accounts at the time of the assignment plus interest as specified in the judgment of the trial court, less the $10,700 offset to cover ...