Burkhalter v. Bank, 11594.

Citation184 Ga. 147,190 S.E. 644
Decision Date11 February 1937
Docket NumberNo. 11594.,11594.
PartiesBURKHALTER et al. v. GLENNVILLE BANK.
CourtSupreme Court of Georgia
184 Ga. 147

190 S.E. 644

BURKHALTER et al.
v.
GLENNVILLE BANK.

No. 11594.

Supreme Court of Georgia.

Feb. 11, 1937


.

Rehearing Denied March 22, 1937.

[190 S.E. 645]
Syllabus by the Court.

1. One of the essentials of a valid and effective lis pendens is that the litigation must concern specific property so definitely described as to show what is involved. In the instant case, the plaintiffs in execution were not entitled to prevail on the theory that the suit which resulted in the money judgment and execution in their favor constituted a lis pendens affecting the property acquired by the claimant from the defendant in pursuance of a contract which they made with each other after the suit was filed but before the judgment was rendered.

2. The evidence did not show that the conveyance upon which the claimant relied was made with an intention to delay or defraud creditors, with such intention known to the claimant, contrary to the statute in regard to conveyances in fraud of creditors, but demanded a finding that the transaction was based on a present valuable consideration, and that so far as the claimant was concerned, it was bona fide and without notice or reasonable ground for suspicion, such conveyance being a security deed executed by one bank to another to secure a loan of money for the purpose of paying designated creditors other than the plaintiffs, the circumstances of which, if amounting to badges of fraud, were conclusively explained and rebutted by the inherent nature of the transaction, and by the other evidence.

3. The transfer in question did not amount to an assignment for the benefit of creditors, nor did it violate the statute law of this state regarding transfers and other transactions by banking institutions after or in contemplation of insolvency.

4. The evidence demanded the directed verdict for the claimant.

Error from Superior Court, Tattnall County; Gordon Knox, Judge.

Proceedings on an execution in favor of P. L. Burkhalter and others, in which Glennville Bank made claim to property levied on. Judgment for the claimant, and plaintiffs in execution bring error.

Affirmed.

W. T. Burkhalter, of Reidsville, for plaintiffs in error.

C. L. Cowart, of Glennville, for defendant in error.

BELL, Justice.

This is a claim case, involving the title to land. The property consists of a lot in the city of Glennville, Tattnall county, on which is located a building known as the Peoples Bank building. Under recitals in the entry df levy, the claimant had the burden of proof. At the close of the evidence the court directed a verdict in favor of the claimant. The plaintiffs in fi. fa. moved for a new trial, assigning error especially on this ground. The motion was overruled, and they excepted. The following facts appeared, without dispute, from the pleadings and the evidence: On March 28, 1931, P. L. Burkhalter and ten others filed a suit against the Peoples Bank to recover a sum of money alleged to have been embezzled by its cashier while acting in that capacity and also as the administrator of an estate in which the plaintiffs were interested. Burkhalter v. People's Bank, 175 Ga. 744, 165 S.E. 749. The petition alleged that the cashier carried an individual deposit account with the bank, and also kept his administrator's account in the same bank; that his individual account became heavily overdrawn; that he "stole from his administrator's account, and placed the sum stolen to his individual account"; that the bank officials knew of such misappropriations by him as administrator; and that the bank received the benefit thereof. The petition alleged in effect that the funds so abstracted were trust funds, and that the plaintiffs were entitled to trace the same

[190 S.E. 646]

and recover the amount thereof from the defendant bank. The suit did not describe the real estate now in question, and did not otherwise refer to any specific property. The case was referred to an auditor, and resulted finally in a decree rendered on February 6, 1934, in favor of the plaintiffs for $2,248.43 as principal, $400 as attorney's fees allowed to the plaintiffs because of bad faith on the part of the defendant, and other sums as interest and costs, the total being about $4,500. Execution was issued December 28, 1934, and the levy was made January 9, 1935.

The claimant is the Glennville Bank, a banking corporation situated in the same city as the Peoples Bank, the defendant in fi. fa. The claim was predicated upon the following facts: On December 23, 1931, the Peoples Bank, finding itself unable to meet its obligations in ordinary course, sought and obtained from the Glennville Bank a loan of $95,482.04, for which it gave its promissory note, payable on demand, "for the purpose of raising a sufficient amount to pay [its] bills payable and depositors, " the note being indorsed by the eight individuals who composed its board of directors. This note was executed in pursuance of a written contract wherein the borrower pledged to the lender all of its property and assets of every kind, including the real estate now in controversy. The contract contained the following among other stipulations: "The above-described promissory note represents the total amount due by the Peoples Bank to its depositors and the holders of its bills payable, certified checks, and cashier's checks, as shown by its books; and the Glennville Bank shall immediately enter as a credit on said note all cash received by it from the Peoples Bank, and shall thereafter enter as credits thereon the net proceeds derived by it from the collection and/or sale of the pledged assets, when and as such proceeds accumulated in its hands total not less than one hundred ($100.00) dollars; provided, however, it shall have the right first to reimburse itself, out of any such proceeds in its hands, for any advances which it may have previously made for the purpose of paying obligations of the Peoples Bank other than those above mentioned, together with interest on such advances at the rate of 8% per annum. The Glennville Bank, as the agent of the Peoples Bank, shall retain and use the proceeds, of the loan made by it to the Peoples Bank, as evidenced by the above mentioned promissory note, for the purpose of paying off the depositors, bills payable, certified checks, and cashier's checks of said Peoples Bank. The Glennville Bank shall pay depositors upon demand and in the order of demands made, and shall pay the bills payable either before or at maturity, but shall not be obligated to pay out more than the proceeds of said loan, unless at its option it elects to make future advances. The assumption of a deposit by the Glennville Bank as its own obligation shall be deemed payment within the meaning of this agreement. The Glennville Bank may accept as correct and rely upon the books of the Peoples Bank at the close of business on December 24, 1931, in determining the amount due to depositors and holders of bills payable, certified checks, and cashier's checks. The Glennville Bank is hereby authorized and empowered to extend, renew, and/or compound and compromise by accepting less than the full amount due, and to sue upon, foreclose, exercise powers of sale contained in any instruments securing, in the name of the Peoples Bank, any of the promissory notes or other obligations assigned, conveyed, and pledged by the Peoples Bank to secure the note above mentioned, and future advances...

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