Bank of Dania v. Farmers' & Traders' Bank
| Decision Date | 11 February 1930 |
| Docket Number | 7020. |
| Citation | 151 S.E. 803,169 Ga. 846 |
| Parties | BANK OF DANIA v. FARMERS' & TRADERS' BANK et al. |
| Court | Georgia Supreme Court |
Rehearing Denied Feb. 22, 1930.
Syllabus by Editorial Staff.
Where corporation received funds from bank with direction to place them on call loan for bank and corporation undertook to place funds on call loan, fiduciary relation of principal and agent arose between parties.
Where officer of corporation receiving funds from bank to be placed on call loan, and having knowledge of source of fund purpose to which it was to be applied, and fiduciary relation between parties was also officer of borrowing bank, and actually handled transaction in which funds received to be placed on call loan were placed on call loan with borrowing bank officer's knowledge of source of fund and purpose and fiduciary relation between corporation and lending bank will be imputed to borrowing bank.
Where officer of corporation receiving funds from lending bank to be placed on call loan knew of fiduciary relation between lending bank and corporation and purpose of fund, and placed fund on deposit in correspondent bank to credit of bank borrowing fund from corporation, and borrowing bank drew out fund in regular course of business, fund did not become "deposit" in borrowing bank within meaning of Banking Act, Acts 1919, p. 209, art. 19, § 42, Park's Ann. Civ. Code Supp. 1922, § 2280 (pp), Michie's Code 1926, § 2366 (188), but gave rise to relation of debtor and creditor between borrowing bank and lending bank.
Where officer of corporation receiving fund from lending bank to be placed on call loan, and knowing of purpose of fund deposited fund to credit of borrowing bank, and issued written statement to borrowing bank reciting that it was debtor to lending bank as for call loan for amount of fund and issued similar statement to lending bank, and portions of principal and interest were paid and received by borrowing and lending banks on such statement, contractual relation of debtor and creditor arose between banks, though no formal written contract was entered into between them, and officer negotiating transfer of fund may make entryof deposit on books of borrowing bank for amount of loan to individual account of agent corporation.
Where lending bank places money with corporation on call loan, acceptance by lending bank from corporation of its time certificate for amount of debt of bank borrowing fund from corporation will not be novation or operate to discharge borrowing bank not party to certificate, especially where certificate was not paid and was produced in court for cancellation.
Where lending bank placed money with corporation on call, and corporation loaned money to borrowing bank under circumstances creating debtor-creditor relation between lending and borrowing banks, and borrowing bank was taken in possession by state superintendent of banks as insolvent institution, priority of lending bank will rank as contractual liability under Banking Act 1919, as amended by Laws 1925, p. 129, § 8, enacting new art. 7, § 19, subsec. 5 (Michie's Code 1926, § 2366(70).
Error from Superior Court, Fulton County; John D. Humphries, Judge.
Action by the Bank of Dania against the Farmers' & Traders' Bank and another. Judgment for defendants, and plaintiff brings error. Reversed.
Robert H. Jones, Jr., and Alfred C. Broom, both of Atlanta (Howell Heyman & Bolding and Herman Heyman, all of Atlanta representing parties at interest, not par...
To continue reading
Request your trial