*1 fоr the persons together of such to act part be may an accomplishment purpose of unlawful mere "The judge jury: sufficient.” The also instructed the scene of the presence of the defendant on or about that mere case, if crime, that should be a factor alone presence such perpetration the time crime would not be to convict the alone sufficient defendant crime.” (Emphasis suрplied.) in a between "Conspiracy corrupt agreement consists act, persons or more to do an unlawful the existence two proof, be direct agreement may which established conduct, inference, as a deduction acts and which from part together discloses a common on their to act design the accomplishment of the purpose.” (Emphasis unlawful State, supplied.) Chappell 209 Ga. SE2d 417). We find thаt the court’s instructions to the jury were proper. The did not charge jury allow the to find a conspiracy based on presence, companionship Rather, conduct alone. jury instructed these were circumstances be considered determining existence of a conspiracy.
9. The remaining enumerations of error are without merit. Judgment JJ., McMurray, Marshall and affirmed.
concur. July Submitted June Decided Rehearing July 22, denied Hоrn, Al for appellants. Slaton,
Lewis R. Drolet, District Attorney, Joseph J. Stein, Donald J. Assistant District Attorneys, for appellee. 52066. PEOPLES BANK OF LaGRANGE v. NORTH
CAROLINA NATIONAL BANK.
Webb, Judge. In this action by North Carolina National Bank against Peoples Bank of LaGrange, Carolina seeks interest plus recovery fraudu- false and allegedly because had lost Carolina pith by Peoples. to it made representations lent to de- by Peoples induced it was claim Carolina’s L. C. signed fоr a note credit the latter’s posit Robinson, *2 G. E. endorsed Sons, Inc. and to deposit Three after days Peoples. of customers both its ac- this amount account, withdrew Peoples count. of allegations all of the substantially
Peoples denied Carolina. against claim and filed a cross complaint, claim was the cross motion to strike The latter’s motion to Peoples’ sustained, appeal. and there was no defendant the Robinson parties Carolina to as require join sustained and E. Robinson was corporation and Gerson This order joined parties ordered as defendant. they were appeal.1 was reversed on B. D.
Robinson’s note was transmitted
letter from
Roddey
Richards
as vice
Bray
president
Peoples
as
to
28,1970,
president
of Carolina. Written on
"I am
a
part:
enclosing
date of the
the letter read in
I
with a
days
note that
handle for
you
wish
if necessary
maturity.
of 30
days
renewal
additional
our
particular
This time of the
customer borrows
year
limit
additional funds
try
from us and we have to
to secure
his work is
year
time of
when
him
is the
since this
October, November
September,
His volume
the best.
$100,000 per
approximately
be
and December
should
Georgia
hauling
month. He does Interstate
both
time about
South
take their
Carolina and both states
is bonded
All
the work
paying
prime contractor.
this loan to
to recommend
therefore we do not hesitate
on
money
to leave the
it,
If
can handle
we intend
you.
you
possibly
paid
bank until the loan is
deposit
your
with
market.
will
even
on the
longer depending
financial
statement
a resolution and
you
forward to
is out
the files and our’s
soon
a
one. checked
get
as we
new
have
on all
work
Incidentally,
assignments
date.
we
LaGrange,
1 N. C.
Peoples
Nat. Bank
(197
SE2d
571);
At the E. request deposition Carolina the of G. taken on February 17, Robinson was 1972. Inter- Peoples to on rogatories February were answered 1972, and interrogatories answerеd on Carolina were March 1972.
Peoples’ answers to Carolina’s interrogatories were Sheffield, made by Thomas as Peoples’ successor president. Sheffield said that Bray’s employment terminated 1970; November Robinson first became Peoples 28,1968; indebted to on February Robinson’s debt Peoples $142,331.46, increased a high including $74,750.04, overdrafts 1, 1970; his bank’s legal $135,000 secured; debt limit to Robinson was in April of became aware that the line of сredit extended to Robinson was excessive and instructed *3 its officers not to any lend to more Robinson collateral; without proper Robinson’s account was credited loan proceeds with of 1970 on the assumption that Bank Fulton National loan, take that but it loan”; Fulton refused "to make was until 28 that the transaction with place; Carolina 15,1970 took "at the September meeting of the Executive Directors, Committee of the Board of to loan L. C. Sons, Robinson & Peoples Inc. made by Bank was read out and the committee refused approve to said loan. At said meeting a motion passed B. D. directing Bray not to any Sons, make more L. loans to C. Robinson & Inc. to Gerson E. Robinson. Neither the Executive Committee nor Board knew anything any about loan by made other L. Sons, banks to C. Robinson & Inc. until Banking about October 1970 when the State Department reрorted auditors made by some loans other banks Sons, to L. C. Robinson & Inc. We were also advised that Fulton Bank National had refused a loan C. to L. Sons, Inc”; Robinson & and as president Peoples had, prior September 28,1970, made a loan to which had not approved been Executive by the Committee. request Carolina’s in answer
Significantly, number of "name, telephone address for the Peoples knowledge of circumstances has who every person $50,000 from the note” for the execution of surrounding Carolina, and "who has sent to Peoples Robinson which con- or other transactions dealings, knowledge Sons, Inc., Bray, B. D. L. C. Robinson nections between National North Carolina LaGrange Bank Peoples Na- and First Company and Trust Georgia three individ- Newnan,” named Sheffield tional Bank E. Robinson. and G. uals, Roddey B. D. Richards Bray, Interrogatories propounded by Peoples to Carolina B. by Roddey Kemp. were answered and Francis These categorically two asserted some or more times that Robinson’s note for purchased by Carolina from Peoples; by credit information was given Peoples through president, Bray; Peoples made the check; loan the credit initially assignment represented contract for the note was rights security purchase be at the time of the of the note existing Carolina; it had such Peoples "represented assignment held for” Carolina by Peoples; which was Carolina made no loan to Robinson but a note purchased note; the note treated as a secured Peoples; secured; note it is "the prepared by Peoples indicates president of a bank is a reliable correspondent generally source of credit information as to customers of especially the bank supplying information”; credit the loan was made by Peoples purchased Carolina from who it "represented had such information as is necessary believed purchase”; recommend this they good banking both and Carolina "consider it to be practice to as the basis of the of a accept, credit information supplied president of a *4 correspondent bank. This is especially true where the borrower or maker of a note is a regular customer of the correspondent bank, in for such cases the correspondent bank would be the most reliable source of credit information.”
Robinson testified his deposition Bray prepared the notes to be "a signed, lot of times I’d and go by sign a and then money deposited right note the was into — — — account, just the but then don’t what know how I’d had tо operate, get how but a note and he things sign approval, either had another bank to it go get or he do, handled, he and was or whatever it, had to whoever not money deposited. may may the was or handling done”; have been around when it sometimes was note; him would call to come and a when he sign executed the note it payable on was Peoples, had payee not been "X’ed” out with the inserted; Bank” nаme "North he had Carolina National never heard of North until Carolina National Bank he note; received due on from the nobody a notice Carolina Bank note present was at the time the was executed; he $50,000 did not receive a for at the check note, cash, time he he did signed not receive he has not deposited $50,000 Peoples this into his account at does not know what to the he had happеned money; examined his deposit slips at and did find not Peoples. was at deposited his account of 1970 further testified that owed, "probab- he didn’t know much company how his ly $300,000”; two or all of property its and his mortgaged; his had company overdue notes bills which it could not he pay; personal endorser on notes to Peoples $58,000 $64,000 1,1970; or totaling on October he then $40,000 endorser at note First Bank Newnan; National he Georgia had a note at & Trust in Macon Company for around $40,000; he Bank $20,000; owed he was Fulton National endorser aon note at Central Company Bank and Trust $45,900; Birmingham notes, Macon except these Sons, Inc.; were L. C. corporation Robinson and was not able to pay notes, off these he was able to pay them off personally; the time of deposition his (February 1972), his company had no property other than five trucks worth approximately $3,000 each, and the company owes as $100,000; much as Peoples had foreclosed bought his property; when all was sold and the proceeds applied to obligations, his all were not paid full; off in he still owes a large amount of money; he wouldn’t think he was worth at the time Bray *5 Carolina; with Southeastern rights all contract wrote Carolina; Peoples, none assigned were Highway more than he owed pаy; than he can money he more owed for; it a short period sell he owned would property the pay, couldn’t 28, 1970 "that we September of time after on to off, pay, were called we pay that we couldn’t it on that we were not can base only thing that’s the that much.” worth by the exhibits identified
From the bank statement of the deposition, attached to his period for the account of L. C. Robinson Sons checking ending Septеmber beginning September the first fourteen continuously during shows overdrafts $8,886.73 $18,748.35. days ranging of the month entered for deposits were September apparently On $50,000, $50,000 and After $18,833.62, $30,000, $20. $13,997.68 five entries the balance was company’s those but the the account reflected an overdraft of day next $15,875.82. $50,000 indicated deposits One of the $50,000 on Fulton National. The source the other $18,833.62 deposit is not identified. Southeastern; deposit check from the marked 14th there GB&T on the certificate. On the were $46,686.25 account of for "Loan charges against $40,300 Bk. & Trust Co.” and participation Ga. There was not on participation "Loan Fulton.” bank entry deposit an of a statement —, entry appear such any on or about the 28th nor does the October bank statement. the three two of
Roddey and Robinson were knowledge by Peoples having individuals named other con- transactions, or circumstances dealings, is no There nections relative to the note involved. individual, testimony by Bray. the third In November and December of 1973 both parties filed motions for summary judgment. years Two later Carolina’s motion for summary judgment was granted and it is from this judgment Peoples appeals.
1. Peoples contends that the court erroneously ruled that there was a Quite sale of the note. obviously Peoples refers to the first conсlusion of law the trial court wherein it adjudged transaction to be a sale within the provisions § of the Securities Act of 1933. 15 USCA 77a.
The Securities Act of 1933 makes it any "unlawful for person the offer or sale of securities the use of any means or transportation instruments or com- munication interstate commerce or the use of (2) mails, directly ... to obtain or indirectly property by means untrue statement of a material fact or any omission to state a material fact necessary made, order to make light the statements *6 made, circumstances they under which were (3) transaction, or misleading, engage practice, or course of business which or operates operate fraud § or deceit upon purchaser.” 15 USCA Such 77q. offeror shall be liable to the sue purchaser, may who either at law or court equity competent jurisdiction, to recover the consideration paid with Ibid, § interest thereon. 77 1.
This Act by its definitions
"note” as the
designates
77b(1).2
very
Ibid, §
first security.
terms of
ordinary
"any note” or "evidence of indebtedness” are self-defining
no
require
further
definition. Farrell
v. United
States,
(9th
321 F2d 409,
1963),
417
denied,
Cir.
cert.
375
(84
478).
U. S. 992
631,
SC
11 LE2d
And "any note,
regardless
nature,
its
conditions,
terms or
is fully
subject to whatever antifraud provisions are included” in
the Act. Sanders v.
Co.,
John Nuveen
1075,
463 F2d
(7th
(93
1078
1972),
Cir.
denied,
cert.
Did Peoples "sell” the note within the meaning Securities Act?
Definition Number 3 of
provides
the Act
in part: "The
term 'sale’ or 'sell’ shall include every contract of sale disposition of a security or interest
value
in a security,
77b(3)
...” Ibid,§
(Emphasis supplied.) These terms "sale”
and "security”
are to be given a liberal construction.
United
(D.C.
States v. Monjar,
421,
47 FSupp.
426
Del.
1942),
(65
affd. 147 F2d 916, cert. den.
2 Also defined as such in Georgia Securities Act of
(Ga.
1957
l(i))
L. 1957, pp. 134, 136, §
and Georgia
(Ga.
Securities Act of
1202,
§
L.
pp.
(16)).
(16),
is a
§
Code Ann.
What
97-102
Sobieski,
See
LE
The term "sale” or "sell” is not limited to technical
sales,
common-law
or transactions ordinarily governed by
the commercial
Q.
Inns,
law of sales.
v. L. Motor
Spector
(CA 5th, 1975),
286;
F2d 278,
Dasho v. Susquehanna
(7th
Cir.),
380 F2d 262
Corp.,
cert. den.
Lehigh Valley Trust Co. v. Central Nat. (C.A. F2d 989 1969), 5th is quite similar to this A case. *7 development corporation attempted negotiate a loan of $325,000 from Central and Central being able to only agreed help by selling participation lend interests. Trust, Central Bank informed Lehigh among other that things, a guarantor "good was customer of bank, our had been for a timе and ... all long was right,” but failed to report some adverse information. The court held the participation agreement between the two banks to be within the security category, misleading information was "in dispensed connection with the purchase or sale” of the loan participation interstate commerce, and Lehigh Trust having been damaged Security, 25 Mercer L. (1974); Rev. 381 Lipton Katz, & - (Are Not?) "Notes” Are Review, Always Seсurities A Bus. Law. 861 (1974), (1975). 30 Bus. Law. 763 For tabulations of cases holding "notes” "securities,” to be "notes” not to be "securities” see 30 Bus. Law. 771. thereby had a cause of action Central Bank. In the against case before us there no a sale loan, participation a but rather the entire note or security was sold and bought.
The trial court correctly the transaction to adjudged be a sale within the terms of the Act.
2. There is no merit by Peoples contention president, Bray, had no bind the bank and authority to question province within the of a jury. Assuming arguendo that lacked proper specific authority bank, to bind the his acts were within his apparent authority president, as it is uncontradicted that the purchase of the note price paid by Carolina to account, a deposit latter’s and Peoples had the proceeds. benefit of the president offiсer,
"The of a bank is its chief executive and, in the absence of any showing contrary, will be presumed to be the agent charge of its affairs. In the absence of any evidence to the it contrary may very properly be^assumed aas matter of it duty law is the of the president of a chartered bank charge to take of and manage its business. He in legal its al contemplation (92 394); ter v. ego.” Park Cordray, App. Ga. SE Branan, Franklin v. Savings 363, 366 Loan 54 Ga. App. (188 67). SE
Where, here, Peoples has obtained the benefits of the transaction, $50,000 credited to its account by Car- olina, withdrawn Peoples and deposited to its account National, Fulton Carolina may maintain its action on the original transaction against Peoples. Rowland Canon, (182 Farmers Bank 52 Ga. App. 81); SE Bacon v. Co., Dannenberg Ga. App. 540 SE
3. Peoples further contends that Carolina "could have, by the exercise of ordinary care and usual banking practices, ascertained the financial condition of L. C. Sons, Robinson & Inc.”
The Securities Act was intended to relieve purchaser from the common-law obligation using reasonable "In prudence. response to a Presidential *8 message there urging be added to the ancient rule of caveat emptor the further doctrine of 'let the also seller bеware,’ Congress passed the Securities Act of 1933. issuers, Act investors, requires protect
Designed full and fair disclosure underwriters, to make and dealers in interstate character of securities sold sale. To and to fraud their foreign prevent commerce 12(2) [Ibid, § a special § effectuate created policy, 771] which differs right misrepresentation to recover for in that action from the common-law substantially lack of proving assume the burden seller is made to court is enforceable special right scienter. The Act’s — — federal or state of competent jurisdiction .” . . Wilko prohibited removal from a state court 168) (1953). 427, 182, 98 LE Swan, 346 U. S. SC knowledge it had lack of never contended condition. On the truth about Robinson’s financial its directors contrary, Peoples’ own evidence showed that it relied on president did know. Carolina showed prove and dоes not have to Peoples’ representations, it could falsity upon not have discovered the reasonable (C.A. Nixon, 348, investigation. Gilbert v. 429 F2d 10th, This enumeration of error is without merit. 4. All error either have other enumerations merit. already been covered or are without Deen, J., Clark, Bell, J.,C. P. Judgment affirmed. Stolz, JJ., Pannell, concur. P. McMurray, Marshall and J., J., Quillian, dissents. judgment only. concurs July April 1976 Decided Submitted July
Rehearing denied Jr., Birdsong, Richter & A. W\ Birdsong, appellant. Thomasson, Duncan,
Duncan & Thurman E. appellee. Judge, dissenting.
Quillian, The trial court and the majority opiniоn have ruled the transmittal of a note with a letter from the LaGrange to the North Carolina Bank was the sale of the note. There is evidence to sustain this proposition. However, are considering we this matter on motion for summary judgment.
The note is made out to the North Carolina Bank and L. C. signed by Sons, Inc., Robinson and Robinson, G. E. President. The note shows its face that it is a loan made by the North Carolina Bank L. C. Robinson and Sons. Hie majority oрinion construes the evidence to show it is a note made to the Bank and then sold LaGrange the North I Carolina Bank. cannot agree with this reasoning. letter addressed to the North Carolina Bank bears out the parties contemplated fact the that the North Carolina Bank money, would loan the the note from LaGrange Bank. It states: "This customer [has our limit I you borrowed] from us. wish handle” it for "we have to try secure additional funds fоr him...” "We... if recommend this loan to you... you can handle it...” Both the note and letter show an intent of the LaGrange Bank to secure a loan from the North Robinson, Carolina Bank to not a sale of a note from Robinson to the LaGrange discounted to the North Carolina Bank.
Further, it should be observed the North Carolina Bank wrote to the LaGrange as follows: "We are pleased also to handle a loan to L. C. Robinson Sons, Inc., endorsed by Mr. Robinson for thirty days with the understanding we will handle another thirty if day renewal necessary as an overline for your bank.” The most reasonable construction of this correspondence is that the North Carolina Bank was making a loan to the LaGrange Bank’s customer. The note itself contains no indorsement, assignment transfer from the If LaGrange Bank. we follow the majority reasoning, the sale was accomplished changing the name of the payee, most certainly not an acceptable business practice. §§ See UCC 8-307 and 8-308 (Ga.L. 1962, 156,367) pp. for the indorsement and transfer of investment securities. See and compare §§ UCC 3-201, (Ga. 248) 3-202 L. 1962, pp. 156, setting out the transfer and negotiation of instruments. negotiable
Construing proof offered the movant against in favor of the party opposing the motion for summary judgment, find that an issue of fact remains as to whether or not a sale place. took For reason respectfully dissent.