184 Ga. 147 | Ga. | 1937
This is a claim case, involving the title to- land. The property consists of a lot in the City of G-lennville, Tattnall County, on which is located a building known as the Peoples Bank Building-. Under recitals in the entry of levy the claimant had the burden of proof. At the close of the evidence the court directed a verdict in favor of the claimant. The plaintiffs in ñ. fa. moved for a new trial, assigning error specially on this ground. The motion was overruled, and they excepted. The following facts appeared, without dispute, from the pleadings and the evidence: On March 28, 1931, P. L. Burkhalter and ten-others filed a suit against the Peoples Bank to recover a sum of money alleged to have.been embezzled by its cashier while acting in that capacity and also as the administrator of an estate in which the plaintiffs were interested. Burkhalter v. Peoples Bank, 175 Ga. 744 (165 5. E. 749). The petition alleged that the cashier carried an individual deposit account with the bank, and also kept his administrator’s account in the same bank; that his individual account became heavily overdrawn; that he <cstole from his administrator’s account, and placed the sum stolen to his individual account;” that tire bank officials knew of such misappropriations by him as administrator; and that .the bank received the benefit thereof. The petition alleged in effect that the funds so abstracted were trust funds, and that the plaintiffs were entitled to trace the same and recover the amount thereof from the defendant bank. The suit did not describe the real estate now in question, and did not otherwise refer to any specific property. The case was referred to an auditor, and resulted finally in a decree rendered on February 6, 1.934, in favor of the plaintiffs for $2248.43 as principal, $400 as attorney’s feos allowed to the plaintiffs because of bad
The claimant is the Glennville Bank, a banking corporation situated in the same city as the Peoples Bank, the defendant in ft. fa. The claim was predicated upon the following facts: On December 23, 1931, the Peoples Bank, finding itself unable to meet its obligations in ordinary course, sought and obtained from the Glennville Bank a loan of $95,482.04, for which it gave its promissory note, payable on demand, "for the purpose of raising a sufficient amount to pay [its] bills payable and depositors,” the note being indorsed by the eight individuals who composed its board of directors. This note was executed in pursuance of a written contract wherein the borrower pledged to the lender all oE its property and assets of every kind, including the real estate now in controversy. The contract contained the following among other stipulations: "The above-described promissory note represents the total amount due by the Peoples Bank to its depositors and the holders of its bills payable, certified checks, and cashier’s checks, as shown by its books; and the Glennville Bank shall immediately enter as a credit on said note all cash received by it from the Peoples Bank, and shall thereafter enter as credits thereon the net proceeds derived by it from the collection and/or sale of the pledged assets, when and as such proceeds accumulated in its hands total not less than one hundred ($100) dollars; provided, however, it shall have the right first to reimburse itself, out of any such proceeds in its hands, for any advances which it may have previously made for the purpose of paying obligations of the Peoples Bank other than those above mentioned, together with interest on such advances at the rate of 8% per annum. The Glennville Bank, as the agent of the Peoples Bank, shall retain and use the proceeds of the loan made by it to the Peoples Bank, as evidenced by the above-mentioned promissory note, for the purpose of paying off the depositors, bills payable, certified checks, and cashier’s checks of said Peoples Bank. The Glennville Bank shall pay depositors upon demand and in the order of demands made, and shall pay the bills payable either before or at maturity, but shall not be obligated to pay out more than the proceeds of said loan, unless at its option it elects to make future advances.
In pursuance of this agreement the Peoples Bank, on December 31, 1931, executed and delivered to the Glennville Bank a security deed conveying the property in question, and other real estate. This deed was recorded on January 21, 1932. The Glenn-ville Bank complied with its obligations under the loan agreement, by paying the- entire amount of the loan to the depositors and other creditors of the Peoples Bank as designated in the contract. On
The evidence tended to show that 'the Glennville Bank claims that a balance of about $20,000 is still due on the loan made by it
As shown’ in the preceding statement, the plaintiffs in execution filed suit against the Peoples Bank on March 28, 1931. This suit resulted in a judgment for an aggregate sum of about $4500. In the meantime the Peoples Bank obtained from the Glennville Bank a loan in the amount of $95,482.04, and as security for such loan transferred or conveyed all of its property of every kind, including the lot on which its bank building was situated, which property it conveyed to the Glennville Bank by a security deed. The Glennville Bank later sold this property under a power of sale conferred upon it, and at such sale became the purchaser in accordance with the contract. This is a statement in part of the facts upon which the Glennville Bank bases its claim to the lot and bank building, which is the property in controversy. The facts touching the suit originally brought
“The following acts by debtors shall be fraudulent in law against creditors and others, and as to them null and void, viz.: . . Every conveyance of real or personal estate, by writing or otherwise, and every bond, suit, judgment and execution, or contract of any description, had or made with intention to delay or defraud creditors, and such intention known to the party taking. A bona fide transaction on a valuable consideration, and without notice or ground for reasonable suspicion, shall be valid.” Code, §'28-201(2). A conveyance of property for a present valuable
The grantor was insolvent at the time it obtained the loan and executed the security deed; and it could have been inferred from the evidence that the lender was aware of this fact. While insolvency of the grantor is a pertinent matter for consideration in determining whether a transfer or conveyance is fraudulent, it is only a circumstance, and is not conclusive. Tillman v. Fontaine, 98 Ga. 672 (5) (27 S. E. 149). “A bona fide sale of property, not made to hinder, delay, or defraud creditors, is not rendered
A further contention is that the transfer amounted to an assignment for the benefit of creditors, and was not made in conformity to the law. Code, §§ 28-305 to 28-318, inclusive. We can not agree to this contention. The Peoples Bank merely obtained a present loan of money from the Glennville Bank, and gave security therefor. This did not constitute an assignment for the benefit of creditors, within the meaning of the Code. But the plaintiffs rely further upon section 2360 of the Civil Code of 1910, as follows: “All conveyances, assignments, transfers of stocks, or other contracts made by a bank in contemplation of insolvency, or after insolvency, except for the benefit óf all creditors and stockholders, shall be fraudulent and void, unless made to an innocent purchaser for value without notice or knowledge of the condition of the bank; and the officers making or consenting to such conveyances or contracts shall be punished as provided in the Penal Code.” It is insisted by counsel for the plaintiffs that this section is still of force, and that in view of it the transaction in questions was fraudulent and void as a matter of law, without reference to any possible good faith on the part of the Glennville Bank. Counsel for the Glennville Bank insists that the section just quoted was impliedly repealed by a section of the banking act of 1919 (Ga. L. 1919, p. 210); Code of 1933, § 13-2046), as follows: “All transfers of notes, bonds, bills of exchange, or other evidences of debt owing to any bank, or deposits to its credit; all assignments, mortgag-es, conveyances or liens; all judgments or decrees suffered or permitted against it; all deposits of money, bills
In view of the underlying purposes of these laws, we do not deem it necessary to consider the question of repeal in this case. It has been ruled in effect by this court that the former statute was intended to prevent preferences among antecedent debts, and does not apply to a transfer taken in good faith as security for a debt simultaneously created. Booth v. Atlanta Clearing-House Association, 132 Ga. 100 (2) (63 S. E. 907). See also Toomey v. Citizens & Southern Bank, 19 Ga. App. 271 (91 S. E. 339); Morrison v. Citizens & Southern Bank, 19 Ga. App. 434 (3) (91 S. E. 509). Such also- is the proper construction of the later statute. It is much the same as the Federal statute relating to national banks (Rev. Stat. § 5242; 12 IJ. S. C. A. § 91), the purpose of which, according to the Federal courts is to prohibit preferences among unsecured creditors. In Armstrong v. Chemical National Bank, 6 L. R. A. 229 (41 Fed. 234), it was said: “The statute [§ 5242, supra] is directed to a preference, not to the giving of security when a debt is created; and if the transaction be free from fraud in fact, and is intended merely to adequately protect a loan made at the time, the creditor can retain the property transferred to secure such loan until the debt is paid, even “though the debtor is insolvent, and the creditor has reason at the time to believe that to be the fact. This has often been decided in the analogous cases arising under the bankrupt act.” This was quoted with approval in Booth v. Atlanta Clearing-House Association, supra. As tending to the same view, see Stapylton v. Stockton (1899), 91 Fed. 326 (33 C. C. A. (Fla.) 542); Richter v. Laredo National Bank (C. C. A.) (Tex. 1932), 62 Fed. (2d) 289; Earle v. Carson, 188 U. S. 42 (23 S. C. 254, 47 L. ed. 373); Mechanics Universal Joint Co. v. Culhane, 299 U. S. 51 (57 Sup. Ct. 81, 81 L. ed. 25), affirming 80 Fed. (2d) 147. Owing to the substantial similarity of the State law, the pertinent Federal decisions are to be given distinct consideration as per
The foregoing is a sufficient discussion of the contentions made by the plaintiffs. The court did not err in directing the verdict in favor of the claimant.
Judgment affirmed.