Bank of Garfield v. Clark
| Decision Date | 17 October 1912 |
| Citation | 76 S.E. 95,138 Ga. 798 |
| Parties | BANK OF GARFIELD v. CLARK et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
Where on the back of a deed to a corporation, there was entered a transfer of such deed and the property described therein signed in the name of the company, its president, and its secretary, and treasurer, and after the name of each appeared "[L. S.]," but there was no reference in the body of the transfer to a seal, and this instrument was attested like a deed, and recorded, in a case where the authority of the officers to make such transfer was involved, it was not admissible as prima facie importing authority.
If officers of a corporation executed, even though without previous authority, a transfer of title to land belonging to it, and thereby procured a loan, which was subsequently renewed on the same security, the corporation could not retain the fruits of the transfer, and at the same time successfully defend against it as being unauthorized.
If subsequently to the making of such transfer and the obtaining of money by means thereof, a mortgage was made by the corporation to stockholders and directors thereof to secure them against loss by reason of having indorsed its paper they taking with notice of the facts, and with a recital in the mortgage that it was a second lien, they would be in no better position to contest the validity of the transfer than the corporation itself.
It was error to reject evidence tending to show that money was obtained for the corporation by means of the transfer, and was used for its benefit with the knowledge of the directors on the ground that such "transfer would not be valid unless it was executed by the authority of some by-law, or under the charter, directly or indirectly, or by some resolution duly passed."
In connection with the evidence touching the making of the transfer, the securing of money thereon, and its use for the benefit of the corporation, and the knowledge of the stockholders and directors and the recital in the mortgage taken by them, it was error to reject such transfer from evidence.
The assets of the corporation having been placed in the hands of a receiver, and, on his application and by agreement, an order having been passed for a sale of the real estate free from incumbrances, leaving questions of priority for subsequent determination, a statement, in the application of the receiver for leave to sell, and that the transferee held the title to the land as security, was not admissible to prove that fact as against stockholders and creditors contesting the validity of the transfer.
Ordinarily the minutes of a corporation show the formal actions of its directors and stockholders; and before parol evidence thereof can be introduced, they should be produced or accounted for. If such action was taken, but not entered on the minutes, this should be shown.
The evidence in support of the contention that the transfer of the corporate property to secure an indebtedness was infected with usury, and was therefore void, was not such as to authorize the direction of a verdict on that ground.
Error from Superior Court, Emanuel County; B. T. Rawlings, Judge.
Action by the Bank of Garfield against W. W. Clark and others. Judgment for defendants, and plaintiff brings error. Reversed.
Saffold & Larsen and F. H. Saffold, all of Swainsboro, for plaintiff in error.
Hill & Anderson and Dixon & Dixon, all of Millen, and Smith & Kirkland, Williams & Bradley, Lee Godfrey, and Saffold & Larsen, all of Swainsboro, for defendants in error.
LUMPKIN, J. (after stating the facts as above).
The whole case revolves about the question of the validity of the transfer of the deed made to secure the bank. It did not recite that it was a sealed instrument, nor was the corporate seal of the company attached to it. The name of the company was signed, followed by that of its president and its and secretary and treasurer. Presumably stood for general manager. Opposite each were the letters inclosed in brackets. This was not enough to make the instrument admissible as prima facie importing authority on the part of the...
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