Burkhalter v. People's Bank

• Decision Date: 26 September 1932
• Docket Number: 8700.
• Citation: 165 S.E. 749,175 Ga. 744
• Parties: BURKHALTER et al. v. PEOPLE'S BANK.
• Court: Georgia Supreme Court

165 S.E. 749

175 Ga. 744

BURKHALTER et al. v. PEOPLE'S BANK.

No. 8700.

Supreme Court of Georgia

September 26, 1932

Syllabus by Editorial Staff.

Generally bank may assume that trustee will properly apply money deposited by him, and is not accountable for misappropriation of trust funds in which it does not participate.

Bank knowingly appropriating to satisfaction of debt trust funds deposited with it by debtor after creation of debt, is liable to beneficiary.

Where administrator has misappropriated funds of estate, heirs at law may sue in their own names to trace and recover funds from persons allegedly receiving them from administrator (Civ. Code 1910, § 3784).

General demurrer does not reach defect in petition resulting from nonjoinder of proper parties.

That only some of heirs at law joined as plaintiffs in suit to recover misappropriated funds of estate held not ground for general demurrer.

Where order sustaining demurrer was limited to general grounds reviewing court will not consider special grounds.

Error from Superior Court, Tattnall County; J. H. Thomas, Judge.

Suit by P. L. Burkhalter and others against the People's Bank of Glennville. To review the judgment, plaintiffs bring error.

Reversed.

Where administrator has misappropriated funds of estate, heirs at law may sue in their own names to trace and recover funds from persons allegedly receiving them from administrator (Civ.Code 1910, § 3784).

P. L Burkhalter and others, as heirs at law of Mrs. J. B. Waters, brought suit against the People's Bank of Glennville, Ga., a banking corporation doing business in Tattnall county. The petition alleged that the plaintiffs were heirs at law of Mrs. J. B. Waters, deceased; that R. D. Easterling, while serving as cashier of the defendant bank, was appointed and served as administrator of the estate of Mrs. Waters; that Easterling carried an individual deposit account with the defendant 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"; and that the bank officials knew of such misappropriations and abstractions by the administrator and received the benefit thereof. The petition alleged, in effect, that the funds as thus misappropriated by the administrator were trust funds, and were received by the bank without any consideration whatever, and that the plaintiffs were entitled to trace the same and to recover the amount thereof from the defendant bank. The petition also prayed for an accounting, for a full disclosure of all charges made against the defendant, and for general relief.

The petition showed on its face that the plaintiffs had previously brought suit against R. D. Easterling as administrator of the estate of Mrs. Waters, and the sureties upon his bond, for an accounting and for judgment in a stated sum, and that the plaintiffs obtained a recovery in that case, the same being an action upon the bond of the administrator. The petition further disclosed that, while the suit was pending, the plaintiffs sought by amendment to make the present defendant, People's Bank of Glennville, a party defendant in that action, but that the trial judge "refused the amendment, and the plaintiffs carried the ruling of the court by a writ of error to the Supreme Court, which court sustained the order of the judge, but allowed their bill of exceptions to be filed as exceptions pendente lite in the clerk's office of said county." The reference here is to the decision in Burkhalter v. People's Bank, 169 Ga. 645, 151 S.

E. 389.

The defendant bank filed a demurrer on the grounds: (1) That no cause of action is set out in the petition; (2) that there is no equity in the petition, and no facts are alleged which would give a court of equity jurisdiction; and, if plaintiffs have any right in the premises, they have a complete remedy at law; and (3) that no legal right to bring this action is shown, it appearing from the petition that petitioners are some of the heirs of an estate now being administered. This demurrer also contained a number of special grounds.

Thereafter the plaintiffs amended their petition by alleging the following facts with respect to their right to bring the action: "Your petitioners show that they were the nearest relatives to Mrs. J. B. Waters, deceased, at the time of her death, and as such relatives they were entitled to her whole estate, because by blood they severally were her nearest blood relatives, each of your said petitioners being brothers and sisters except Miss Mary McManus, who is an adult now and was at the time this action was brought, and who is the daughter of Mrs. Jennie McManus, deceased, a sister to the other plaintiffs except Mrs. R. L. Holly and her children. And the said Miss Mary McManus is the sole surviving heir at law of her deceased mother. Petitioners show that R. L. Holly was the husband of Mrs. Maggie Holly deceased, who died without owing any debt, and who bore...