Luthersville Banking Co. v. Hopkins

• Decision Date: 18 March 1913
• Docket Number: 4,550.
• Citation: 77 S.E. 589,12 Ga.App. 488
• Parties: LUTHERSVILLE BANKING CO. v. HOPKINS.
• Court: Georgia Court of Appeals

77 S.E. 589

12 Ga.App. 488

LUTHERSVILLE BANKING CO. v. HOPKINS.

No. 4,550.

Court of Appeals of Georgia

March 18, 1913

Syllabus by the Court.

While a bank has the right to set off a matured debt due to it by a depositor against the amount due by the bank to the depositor on a general deposit account, the exercise of this right is optional. If the depositor dies, and appraisers appointed to set apart a year's support to his widow make a return setting apart the amount due by the bank to the decedent, it is too late for the bank to exercise its right of set-off even though the return has not been filed in and made the judgment of the court of ordinary.

Error from City Court of Greenville; H. H. Revill, Judge.

Action by N.E. Hopkins, for use, etc., against the Luthersville Banking Company. Judgment for plaintiff, and defendant brings error. Affirmed.

N. F Culpepper, of Greenville, for plaintiff in error.

J. E Justiss, of Luthersville, and A. H. Freeman, of Newnan, for defendant in error.

POTTLE J.

This was an action by a widow, for the use of herself and her minor child, against a bank to recover a sum of money which the deceased husband and father had deposited with the bank. The defendant pleaded that the decedent was, at the date of his death, indebted to it on a promissory note in a sum greater than the amount of the deposit, and that the bank had applied the amount of the account as a credit on the note. The case was decided upon an agreed statement of facts, from which the following appeared: The husband died intestate on November 11, 1910. The widow, for herself and the minor child, made application for a year's support, and appraisers were duly appointed. These appraisers made a return to the ordinary, which included in the property set apart as a year's support the amount of a general deposit account of the decedent in the defendant bank, amounting to $80.88. The return of the appraisers was signed by them on December 9, 1910. On December 10, 1910, prior to the filing of the return in the office of the ordinary, the bank applied the account of $80.88 as a credit upon a note of the decedent to the bank for the principal sum of $175.75, which matured November 1, 1910. The decedent was insolvent at the date of his death, and did not leave an estate of sufficient amount to pay his debts. The return of the appraisers was subsequently made the judgment of the court of ordinary. Upon this agreed statement of facts the trial judge entered judgment in favor of the plaintiff, and the defendant excepted.

The deposit being general, title to the money passed to the bank and the relation of debtor and creditor arose between the depositor and the bank; the credit of the bank being substituted for the money. In the business world the expression is used that one has so much money on deposit in a bank, but in strict law a general depositor has no money in the bank; the bank simply owes to him on open account the amount which he has placed with the bank. The transaction is in the nature of a loan to the bank, subject to be repaid on demand of the lender. McGregor v. Battle, 128 Ga. 577, 580, 58 S.E. 28, 13 L.R.A. (N. S.) 185. Without reference to the right of the bank to retain the money of an insolvent depositor which has been deposited with it, and to apply it to a debt due by him to the bank when the same shall mature (see Bolles on Banking [2d Ed.] p. 740 et seq.; Magee on Banks, p. 526), the rule is well settled that a bank may apply the amount of the account of one of its depositors to a matured debt due by him to the bank, without reference to the insolvency of the depositor. Bank of Lawrenceville v. Rockmore, 129 Ga. 582, 59 S.E. 291. This right of set-off may be exercised by the bank at any time after the maturity of the debt, unless in the meantime some claim against the account has arisen which is superior to the bank's right to set-off. Some of the authorities hold that the bank has a lien upon the deposit for the amount of any indebtedness due it. But liens are statutory, and in this state the bank has no lien; and its right to retain the amount of the depositor's account depends upon the right of set-off. There is eminent authority for ...