267 F. 897 | S.D. Ga. | 1920
The plaintiff, as a corporation of Maryland brings this bill against Laurens county, Ga., setting- up that on January 10, 1918, the commissioners of roads and "revenues of Laurens county passed a resolution authorizing a loan of $75,000 to supply a casual deficiency in revenue, but at the time no such deficiency really existed and the real purpose was to pay current expenses of the county, in anticipation of the taxes to be collected the current year; that an arrangement was made with Frank Scarboro Company, as a broker, to sell the notes to be given, and, knowing that the notes were really not binding on the county, the commissioners arranged with Scarboro Company and the Commercial Bank of Dublin that the latter should act as a special depository for the proceeds of the notes, and should use them only in the payment of county warrants representing valid claims against the county, which were to be held by the bank uncanceled as security for the notes until the latter should be paid and satisfied. The bank executed, under its corporate seal, a paper as follows:
“The county of Laurens, Georgia, having duly executed its notes aggregating in the sum of seventy-five thousand dollars, under and by virtue of a resolution adopted by the board of commissioners of roads and revenues of said county at regular meeting on January 10, 1918, said notes being executed by the treasurer and commissioners of Laurens county, Georgia, and bearing date of January 10, 1918, and payable to the order of Frank Scarboro Company on December 31, 1918, we hereby agree to honor and charge only warrants of the county of Laurens, Georgia, as drawn by the proper officer of said county, against the proceeds of these notes, and hold all of said warrants, uncanceled, subject to the order, of Frank Scarboro Company, or the holder or holders of said notes, until the notes as above mentioned and referred to are fully paid and satisfied, after which, on presentation to us of the notes bearing evidence of due an,d proper cancellation, we will then cancel and turn over to the proper officer all of said warrants.
“This 10th day of January, 1918.”
The plaintiff purchased of Scarboro.Company $30,000 of the notes, which were accompanied with copies of the above agreement, relying upon the faith thereof. The proceeds of the notes were deposited in the bank and were used as agreed in taking up warrants of the county. On August 14, 1918, said bank was consolidated with the Southern Exchange Bank, which took over the assets and assumed the liabilities of the Commercial Bank, receiving the warrants and .the balance of the deposits. On December 30, 1918, the Exchange Bank delivered the uncanceled warrants to the county commissioners, and on December 31st plaintiff’s notes were dishonored. The county officers are in possession of the warrants, and refuse to permit plaintiff to examine them, or to give a list of them. The prayers are for discovery with reference to the warrants, and for subrogation to the rights of the