Citizens' Bank of Valdosta v. Valdosta Mill & Elevator Co.
| Decision Date | 21 December 1925 |
| Docket Number | 16341. |
| Citation | 131 S.E. 126,34 Ga.App. 713 |
| Parties | CITIZENS' BANK OF VALDOSTA v. VALDOSTA MILL & ELEVATOR CO. |
| Court | Georgia Court of Appeals |
Syllabus by Editorial Staff.
Officers of corporation are not authorized to divert its property or pledge its credit for payment or security of individual debts, and, except where rights of innocent third persons are involved, such misapplication will be annulled or avoided.
A bank with knowledge that corporate officer is using corporate funds on deposit to discharge his individual debt to bank, is liable in suit in indebitatus assumpsit to recover amount so misapplied.
Where bank had knowledge that officer of corporation used its funds on deposit to discharge individual debt, in absence of ratification or laches on part of stockholders of corporation, fact that one of its directors subsequently acquired knowledge of such illegal procedure did not estop it from asserting its right to reimbursement.
Plaintiff must recover on the cause of action as laid in his petition and verdict in his favor is illegal, when evidence fails to supply the cause declared on, even though different cause of action may appear from testimony admitted without objection.
Although plaintiff must recover on cause of action pleaded, evidence admitted without objection, which supports what is in fact the same cause of action, although it might have been excluded on objection, may be sufficient to authorize recovery, if under facts petition could by amendment have been so conformed to proof as to render testimony relevant.
Verdict held not illegal for variance, because petition charged that bank knowingly accepted payment of personal note of one of plaintiff's officers, by check drawn by him on corporate deposit, while evidence showed that note in question was made by officer to company, and indorsed by company through that officer to bank; it appearing that such note was renewal or substitution of his prior individual obligation.
Where petition alleged that bank knowingly accepted payment of personal note made to it by one of plaintiff's officers by check drawn by him on funds on deposit to credit of plaintiff, there was no error in permitting plaintiff to introduce portion of its books of account to corroborate its testimony on question whether note indorsed by officer was a substitution or renewal of a direct personal obligation of such officer.
Error from Superior Court, Lowndes County; W. E. Thomas, Judge.
Action by the Valdosta Mill & Elevator Company against the Citizens' Bank of Valdosta. Judgment for plaintiff, and defendant brings error. Affirmed.
Franklin Langdale, of Valdosta, for plaintiff in error.
Whitaker & Dukes, of Valdosta, for defendant in error.
Syllabus OPINION.
1. No officer, or set of officers, of a corporation are authorized to divert its property or pledge its credit for the payment...
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