Bates-Farley Sav. Bank v. Dismukes

• Citation: 33 S.E. 175,107 Ga. 212
• Parties: BATES--FARLEY SAV. BANK v. DISMUKES.
• Decision Date: 20 April 1899
• Court: Georgia Supreme Court

33 S.E. 175

107 Ga. 212

BATES--FARLEY SAV. BANK v. DISMUKES.

Supreme Court of Georgia

April 20, 1899

Syllabus by the Court.

1. Where, by the terms of a contract between a building and loan association and its stockholders, a stockholders had the right, upon giving 60 days' notice, to withdraw his stock, and to thereupon receive from the association its withdrawal value, the rule for determining which was prescribed in the contract, printed upon each stock certificate, and a stockholder in the association transferred or indorsed his stock certificate to the association "For withdrawal," after which a banking company obtained from the association such certificate, and upon it collected from the association the withdrawal value of the stock which the certificate represented, the owner of the certificate had the right to recover from the banking company the amount so collected in an action for money had and received.

2. In such an action, it was not essential that any privity of contract between the plaintiff and the defendant should have been shown, if the plaintiff's right to the money received by the defendant was established, and the defendant was shown to have received it under such circumstances that it ought not to have retained it; the law implied a promise to pay it to the party who ought to have had it.

3. Although, under the circumstances stated in the first headnote, the payment by the building and loan association of the withdrawal value of the stock to the banking company would not relieve the association of its liability to the owner of the stock certificate, such owner was not confined to his remedy against the association. If he saw fit, he could ratify the unauthorized collection by the banking company, and the unauthorized payment by the association, and recover the amount of such payment from the banking company.

4. Except as against the claims of the corporation, a transfer of stock does not require a transfer on the books of the company.

Error from superior court, Fulton county; J. H. Lumpkin, Judge.

Action by G. W. Dismukes against the Bates-Farley Savings Bank. Judgment for plaintiff. Defendant brings error. Affirmed.

C. J Haden, L. A. Dean, and J. L. Travis, for plaintiff in error.

Hoke Smith and H. C. Peeples, for defendant in error.

FISH J.

1. According to the allegations of the petition, Dismukes and certain other persons named therein were the respective owners of certain certificates issued by the Southern Mutual Building & Loan Association, representing stock in this corporation. Upon each of these stock certificates there was printed the contract between the association and the stockholder. This contract contained the following stipulation or agreement: "At any time after one year and before two years, the certificate may be returned, and a member will be entitled to receive for each share the money paid into the loan fund. Any time after two years, and before maturity of stock, a member will be entitled to withdraw his stock, and receive the amount paid into the loan fund, and not less than six per cent. interest for the average time. A member desiring to withdraw his shares must give the association sixty days' notice of such withdrawal." Each of the stockholders in question, desiring to receive the withdrawal value of the stock, indorsed or transferred the certificate representing the stock to the building and loan association "For withdrawal." Subsequently, the Bates-Farley Banking Company obtained possession of these certificates from the building and loan association, some of them being transferred to the banking company in writing. Then, upon each of these certificates, the Bates-Farley Banking Company collected, from the building and loan association, the withdrawal value of the stock which the certificate represented, returning the certificate, with, in every instance save one, its own indorsement in blank thereon, to the association, which thereupon marked the certificate "Withdrawn." After this had occurred Dismukes became the owner, by written assignments, of the separate rights of the other stockholders under their respective certificates, and their respective rights against the banking company, and then brought this suit against the banking company for money had and received. The defendant demurred to his petition upon various grounds. The court overruled the demurrer, and the defendant excepted.

The demurrer not only expressly admits, but urges, as a reason for the alleged nonliability of the defendant to the plaintiff, that, the certificates "being indorsed to said association 'For withdrawal' only, there could be no transfer to the defendant thereof by said association." This is true. The indorsement or transfer to the association of each of these certificates was limited or qualified by the words "For withdrawal," which clearly showed the purpose for which the certificate was indorsed to the association; that purpose being not to convey title to the stock to the association, but to formally return or surrender the certificate to the association, in order that the owner of the stock might receive from the association its withdrawal value. The terms of the indorsement, taken in connection with the contract between the building and loan association, and the stockholders, which was printed on the certificate, were such as to put the banking company upon notice of the purpose for which the stockholder owning the certificate transferred it to the association which issued it. It being admitted that the building and loan association had no power to transfer these certificates to the banking company, then the right to the certificates, and whatever they represented, never passed to the banking company, and it collected the withdrawal value of the stock which the certificates represented without authority.

It is further urged in the demurrer, with reference to each of the certificates, that the owner thereof "having transferred said certificate and said shares 'For withdrawal' to said building and loan association, the same being the corporation issuing said shares, and being the association owing the withdrawal value thereof, said shares became extinct or permanently withdrawn, and the same could not be transferred to this defendant by said association, and this defendant cannot be made responsible to the plaintiff for any transaction with reference to said shares had between said association and this defendant." We do not think that the mere transfer of the certificate to the association "For withdrawal" extinguished the stock. The stock would nevertheless continue in existence until it was actually withdrawn. Until the expiration of 60 days from the notice of withdrawal, the owner of the stock, represented by the certificate which had been indorsed to the corporation "For withdrawal," would still be a stockholder in the corporation, and could, before the notice of withdrawal had matured, waive his right to withdraw, and resume all the rights and liabilities of a member of the association. Thomp. Bldg. Ass'ns, p. 278; Thornt. & Bl. Bldg. & Loan Ass'ns,§§ 316, 320. Whether, after the expiration of the 60 days, if he had not, in the meantime, canceled his notice of withdrawal, or waived his right to withdraw, he would, with reference to the other members, cease to be a member of the association, and become simply its creditor to the extent of the withdrawal value of his stock, as some authorities hold (Thomp. Bldg. Ass'ns,§ 146, pp. 281, 282; Thornt. & Bl. Bldg. & Loan Ass'ns, § 320), it is unnecessary to determine in this case; for, whatever his status, until he was paid the withdrawal value of his stock, the stock certificate, which contained the contract between himself and the association and defined his rights as against it, would still be...