Bealle v. The Southern Bank Of Ga.

• Decision Date: 31 July 1876
• Citation: 57 Ga. 274
• Parties: Thomas F. Bealle, plaintiff in error. v. The Southern Bank of Georgia, defendant in error. Thomas F. Bealle, plaintiff in error. v. The Citizens' Mutual Loan Company, defendants in error
• Court: Georgia Supreme Court

57 Ga. 274

Thomas F. Bealle, plaintiff in error. v. The Southern Bank of Georgia, defendant in error. Thomas F. Bealle, plaintiff in error. v. The Citizens' Mutual Loan Company, defendants in error

Supreme Court of the State of Georgia

(Atlanta, July Term, 1876.)

.

Negotiable instruments. Title. Notice. Before Judge Tompkins. Chatham Superior Court. January Term, 1876.

Reported in the opinion.

Jackson, Lawton & Basinger, for plaintiff in error.

S. Yates Levy; George A. Mercer, for defendants.

JACKSON, Judge.

This was an action of trover brought for the recovery of certain bonds of the Savannah and Albany Railroad Company, payable to bearer, and not yet due, with coupons attached. The bonds were deposited with one Bruen by the plaintiff, for safe keeping, with directions to collect the coupons, but without authority to dispose of the bonds or otherwise use them. Bruen borrowed $1,500 00 from defendant and deposited these bonds as collateral security, representing that he had full right and authority to control them, and concealing Bealle's title. The bank made the loan on the security of the bonds in entire good faith and total ignorance of plaintiff's title. The bonds were nominally $500 00 each—in the aggregate $2,500 00, worth eighty cents on the dollar, or $2,000 00. The plaintiff demanded the bonds, defendant refused to deliver them up, the court charged to the effect that the title *was in the bank, and the jury found for defendant; the charge was excepted to, and the question is, was the title in the bank, or in the plaintiff. The Code declares that the purchaser, bona fide, of a negotiable paper not dishonored, will be protected in his title, though the seller had none: Code, section 2639. It also declares that the bona fide holder for value, of any negotiable instrument, who receives it before due, and without notice of defect or defense, shall be protected from any defenses except non est factum, gambling or immoral or illegal consideration, or fraud in its procurement. In 37 Georgia Reports, 66, fraud in the procurement of the note is held to mean fraud in the holder, and this was affirmed in 48 Georgia Reports, 162.

So that this is no longer an open question in this court. It seems, then, clear that the defendant, by section 2633 of our Code, would have been protected, though Bruen had no title, if it had purchased these bonds, and protected in its title to these bonds, for they were not due, and were negotiable by being made payable to bearer. It seems clear, too, that the maker of them could not have defeated their collection by the bank, the defendant, unless it, the bank, had procured its title by fraud in itself, for there is no pretence of illegal or immoral consideration, or of non est factum; indeed, no contest between the makers and the bank at all. If the bank had purchased the bonds for value, bona fide, it would have been protected in its title by section 2639, though Bruen had none, and could have collected the money, when due, from the makers, unless it had procured the bonds fraudulently. But the bank did not buy the bonds. It took them only as collateral security, or on pledge, which, perhaps, are equivalent terms. What sort of title did it thus acquire? The Code again informs us that the holder of a note, as...