Baxter v. Gormley

• Decision Date: 25 November 1936
• Docket Number: No. 11391.,11391.
• Citation: 183 Ga. 509,189 S.E. 1
• Parties: BAXTER. v. GORMLEY et al.
• Court: Georgia Supreme Court

183 Ga. 509

189 S.E. 1

BAXTER.

v.GORMLEY et al.

No. 11391.

Supreme Court of Georgia.

Nov. 25, 1936.

Judgment Adhered to On Rehearing Dec. 16, 1936.

Syllabus by Editorial Staff.

RUSSELL, C. J., dissenting.

Error from Superior Court, Coweta County; L. B. Wyatt, Judge.

Suit by V. A. Baxter against R. E. Gormley, superintendent of banks, etc., and others. To review a judgment dismissing the action, the plaintiff brings error.

Affirmed.

Atkinson & Allen, of Greenville, for plaintiff in error.

Ellis G. Arnall, Stonewall Dyer, and A. H. Freeman, all of Newnan, for defendants in error.

Syllabus Opinion by the Court.

BELL, Justice.

A married woman executed to a bank a note for a debt of her husband, pledging as security corporate stock, her individual property. The stock was later sold, and the proceeds applied as a partial payment. In a suit against her by the bank to recover the alleged balance, she pleaded as a defense the assumption of her husband's debt, and by cross-action sought a common-law judgment for the amount of the partial paymept. See Baxter v. Bank of Grantville, 48 Ga. App. 458, 172 S.E. 810. Pending this action, the bank failed and went into the hands of the superintendent of banks as an insolvent institution. Thereafter a judgment was rendered in favor of the wife against the bank, as prayed in the cross-action. Subsequently she filed with the superintendent a claim for recognition as a preferred creditor, upon the ground that the assets of the bank should be impressed with a trust in her favor to the extent of the partial payment as liquidated by the judgment. This claim being refused by the superintendent, she instituted the present suit in equity to enforce the alleged trust The court sustained a general demurrer, dismissed the action, and the plaintiff excepted. Held:

1. Whether or not the wife might have asserted a trust originally (O'Callaghan v. Bank of Eastmen, 180 Ga. 812 (2), 180 S.E. 847), the prosecution of her cross-action at law to a judgment against the bank for the amount of the payment constituted an election to treat the bank as an ordinary debtor, and will bar her from claiming an equitable interest in the assets, upon the theory of a trust (Board of Education v. Day, 128 Ga. 156, 57 S.E. 359; McGarity v. Simpson, 148 Ga. 146 (2), 95 S.E. 968; Frederickson v. Nye, 110 Ohio St. 459, 144 N.E. 299, 35 A.L.R. 1163; 20 C.J. 41; 65 C. J. 979).

2. While the wife could not legalize the assumption of her husband's debt by ratification (...