Halliday v. Bank of Stewart County

• Decision Date: 20 December 1900
• Citation: 37 S.E. 721,112 Ga. 461
• Parties: HALLIDAY v. BANK OF STEWART COUNTY.
• Court: Georgia Supreme Court

37 S.E. 721

112 Ga. 461

HALLIDAY v. BANK OF STEWART COUNTY.

Supreme Court of Georgia

December 20, 1900

Syllabus by the Court.

Where one deposits property with another as security for the payment of a debt, such property is thereafter held in pledge, but the effect of the transaction is not to devest the title of the pledgor. It only invests the pledgee with a qualified interest in such property for the purpose of the pledge. After the maturity of the debt secured by pledge, the pledgee may sell the property and devest the title of the pledgor therein, provided he gives 30 days' notice of his intention to sell, and the sale is made in public, fairly conducted, and to the highest bidder; or he may sell as stipulated in the contract of bailment, if it provides for a sale otherwise than under the statute. If, however, the sale be under the statute, its terms must be complied with, or the sale will amount to a conversion, giving the pledgor a right of action in trover.

Error from superior court, Stewart county; Z. A. Littlejohn, Judge.

Action by N.W. Halliday against the Bank of Stewart County. Judgment for defendant. Plaintiff brings error. Reversed.

Clarke & Harrison, S. T. Pinkston, and J. H. Worrill, for plaintiff in error.

Allen Fort and Hickey & Fort, for defendant in error.

LITTLE J.

Halliday instituted an action of trover against the Bank of Stewart County to recover possession of 233 bales of cotton. On the trial of the case, plaintiff introduced evidence which tended to show the following facts: Halliday was a cotton buyer, and arranged with the bank to pay for such cotton as he might purchase, and warehouse receipts for the cotton were deposited with the bank as the cotton was paid for. Under this arrangement the bank had paid about $5,500 or $5,600 for the cotton in question, holding the receipts in pledge. The contract further stipulated that Halliday was to keep the bank protected by a deposit to cover a depreciation in the value of the cotton. The bank desired to collect the amount due by Halliday, and the latter drew a draft on Blanchard Humber & Co., cotton merchants in the city of Columbus payable to the bank, for the amount of the indebtedness, and attached a bill of lading,--it being drawn to Halliday's order, notify Blanchard, Humber & Co.; and the cotton was duly shipped to Columbus under said bill of lading. This draft was not paid, and, the cotton being in Columbus, it was agreed between the parties that W. C. Bradley, another cotton merchant in the city of Columbus, should handle the cotton and sell the same, and pay out of the proceeds the amount due the bank, turning over the balance to Halliday. This agreement was not executed, but the bank, without any authority, through one of its officers, sold the cotton to other parties for a price below its value. It was contended that such sale by the bank was a conversion of the cotton to its own use, and entitled the plaintiff to recover in trover. The price of the cotton was proven in connection with the above, and this constituted the evidence submitted by the plaintiff in relation to the title. The plaintiff having closed, the defendant moved for a nonsuit on the ground that the plaintiff had failed to show title to the property. The motion was granted, and the plaintiff excepted.

The question which arises under the evidence is whether or not the title of the cotton was in plaintiff at the time of the institution of the suit. Fairly construed, it...