text:
    15359.
    HALL v. VANN, receiver.
    1. “The pawnee may sell the property received in pledge after the debt becomes due and remains unpaid; but he must always give notice for thirty days to the pawner of his intention to sell, and the sale must be in public, fairly conducted, and to the highest bidder, unless otherwise provided by contract.” Civil Code (1910), § 3530. Where one signs a form note containing the clause: “I . . hereby pledge the following collateral and property which I affirm to be unincumbered,” followed by a space for the description of collateral, but which space is left in blank, and containing a power of private sale without notice, only “of said collaterals” (italics ours), the note does not upon its face confer authority upon the pledgee to dispose of collateral pledged at the time, by a private sale without notice. The facts in this case conclusively showed a conversion of the property pledged.
    2. The evidence in this trover action by the pledgor against the pledgee, for'a conversion of the pledge by an unauthorized sale, demanded a finding against the plaintiff upon the theory of ratification, and the court did not err in directing a verdict for the defendant, notwithstanding the erroneous ruling in reference to the measure of damage, which the plaintiff otherwise would have been entitled to recover.
    Decided April 25, 1924.
    Complaint; from city court of Miller county — Judge Geer. January 14, 1924.

      P. D. Rich, for plaintiff.
    . N. L. Stapleton, T. S. Hawes, for defendant.
   Bell, J.

M. M. Hall filed a trover suit against the First National Bank of Colquitt for the conversion of twenty bales of cotton which he deposited with the bank as security for a loan. Before the trial the bank went into the hands of a receiver, and J. B. Yann, the receiver, was made a party defendant in its stead. The case was submitted to the court and jury on an agreed statement of facts, upon which the court directed a verdict in favor of the defendant. The plaintiff has excepted to the overruling of his motion for a new trial.

The agreed statement was as follows: “On October 16, 1920, Hall gave the bank a note for $1,326.26, due January 4, 1921, and deposited with the bank 20 bales of cotton, weighing 10,261 pounds, as collateral security. The cotton was sold by the bank on January 13, 1921; the bank sold the cotton without the knowledge or consent of M. M. Hall, and Hall did not find out that the cotton was sold until April or May, 1921. The bank credited the note for $1,326.26 [with] the sum of $1,097.06 from the sale of the collateral cotton, which amount was arrived at as follows: selling price $1,230.32; expenses including ginning, bagging, ties, and warehouse charges, $133.26, leaving a balance of $1,097.06. This sum deducted from the principal of the note left a balance due the bank, $229.20. In addition to the cotton collateral note, Hall owed the bank one note for $346.88, one for $25, and one for $50. On June 6th, 1921, Hall gave to the bank a note for $698.48, which included the $229.20 balance on the cotton note, the $346.88, the $25 and the $50 notes and interest on each to that date, and to maturity of the $698.48 note. On September 17, 1921, Hall paid the note for $698.48 by check for $695, and was rebated $3.48 interest. The bank never made any other accounting or settlement of any kind with Hall touching the cotton. The highest proven market value of the collateral cotton from the date of the conversion or sale thereof to the date of the trial was 33% cents per pound. At the time the cotton was sold by the bank it sold for its then fair market value. The bank did not demand any additional collateral or security at any time, nor make any demand for the payment of the note, after the note fell due, and during January, 1921, M. M. Hall went to the bank and told its proper officers that he did not want his cotton sold, and asked them if they wanted any additional collateral or security, and they said they did not want any. additional collateral or security, and would let him know if they desired any additional collateral. A copy of the form of the note given by Hall to the bank is attached hereto. M. M. Hall swears that he did not know on June 6, 1921, when he gave the note for $698.48, that said note included the balance on the note for $1,326.26, but thought said note simply included some small notes which Hall owed the bank. Hall demanded an accounting of the bank for his collateral cotton in May, 1923, and had made no previous demand, and swears that he thought all the time he owed a balance of $1,025.00 on the cotton note, which S. M. Watson told him after Watson went out of the bank, but the bank holds no such item. If plaintiff is entitled to recover the highest proven value, the amount of his verdict after deducting expenses of handling cotton and the amount he has been credited with will be $2,232.77.”

The copy of the note referred to in the statement contained the following: “And to secure the prompt payment of this note, or any other indebtedness due or to become-due, the First National Bank, of Colquitt, Ga., or the holder of this note, I being possessed of the legal right and title to make said deposit, hereby pledges the following collateral and property which I affirm to be unincumbered: I hereby agree to pay 10 per cent, attorney’s fees if this note is given for collection, and it is agreed that other collateral of equal value may be substituted for the above with the consent of said First National Bank of Colquitt, Ga., or the holder of this note, which collateral when substituted shall be subject to this pledge. And I hereby constitute the president or cashier of the First National Bank, of Colquitt, Ga., or the holder of this note, jointly and severally my attorney or attorneys, to collect, sell, or otherwise dispose of the whole, or any portion of said ■collaterals, either at public or private sale and without notice to me of any intention to sell, either for the purpose of paying said note when due, or in ease margins shall not be furnished it when required. And I authorize the said First National Bank, of Colquitt, Ga., or the holder of this note to become the purchaser on its own account, at such sale, and for that purpose in my name to sign and execute any transfer, conveyance, or instrument in writing, whether under seal or otherwise, which may be necessary and lawful in the premises.”

As shown in the stipulation, “the bank sold the cotton without-the knowledge or consent” of the plaintiff. The defendant in error insists, however, that the bank was authorized to sell the cotton under the clause in the note set out above. No cotton or other collateral was described therein, and the note was in blank in so far as it related to collateral. Whether by parol the blank might have been supplied or the intention of the parties shown to include the property sued for is not now for decision. This was not done, and no power was given to the bank by the note upon its face to sell the cotton without a compliance with the Civil Code, § 3530, which provides: “The pawnee may sell the property received in pledge after the debt becomes due and remains unpaid; but he must always give notice for thirty days to the pawner of his intention to sell, and the sale must be in public, fairly conducted, and to the highest bidder, unless otherwise provided by contract.” Thus, the agreed statement demands the conclusion that the cotton was converted by the pledgee.

This court held in Kennedy v. Dexter Banking Co., 29 Ga. App. 95 (113 S. E. 819), that “Where property has been pledged to secure a debt and is wrongfully sold by the pledgee, who nevertheless applies a part of the proceeds to the payment of the debt and tenders the balance to the pledgor as a settlement of their respective rights in the property, an acceptance by the pledgor of the sum tendered, with full knowledge at the time of all the facts, will be held a ratification of the sale, although such acceptance was under protest; the pledgee not having at the time agreed that such acceptance might be made without prejudice.” See to the same effect McElmurray v. Heard, 30 Ga. App. 677 (1) (119 S. E. 220). In Reynolds Banking Co. v. Neisler, 130 Ga. 789 (61 S. E. 828), the bank wrongfully converted the collateral which it held as security for certain notes of Neisler, and the proceeds thereof, which were credited, satisfied all the notes except one, upon which a balance remained due of $2.80. The bank immediately sent Neisler a full report of the sales and the application of the proceeds, returning all notes to him duly cancelled except the one left unsatisfied. About two weeks afterwards, when demand was made upon him for payment of the remaining $2.80, he complained for the first time that the cotton had been sold without his authority, but paid this small balance, and the note was surrendered to him. There was no effort then or afterwards to return the cancelled notes, but, after full notice of the sale and of the fact that the proceeds thereof had been applied to their satisfaction, he continued to hold them and instituted a suit in trover for the cotton. The Supreme Court held that under these facts a verdict for the plaintiff was unauthorized.

The case before us, however, is different from any of those cited. The plaintiff “swears that he did not know on June 6, 1921, when he gave the note for -$698.40, that said note included the balance” of $229.20 due on the note for $1,326.26, which the cotton had been pledged to secure and upon which the proceeds of the cotton had been credited, “but thought that said note [that is, the new note executed on June 6th] simply included some small notes which he owed the bank.” He further swears “that he thought all the time he owed a balance of $1,025 on the cotton note [that is, the note which the cotton was pledged to secure], which S. M. Watson told him after Watson went out of the bank” (italics ours). It is true that elsewhere in the agreed statement it is stipulated in effect that the plaintiff learned of the wrongful- sale of his cotton ■in April ór May, 1921, but it is nowhere shown therein that he ever did anything to ratify it, unless he did so in giving the note of June 6, or in later paying it on September 17. It 'is shown “that the bank did not demand any additional collateral or security at any time, nor make any demand for the payment of the •note after the note fell due,” — referring to the note for $1,326.26. If Hall, when he gave or paid the note of June 6, knew that it included a balance upon the large note which remained after crediting the proceeds of the sale, this would amount to a ratification ; and while there certainly were circumstances from which the inference of such knowledge would be authorized, it was not demanded. The defendant in error asserts that the large note, after being in part paid by the proceeds of the. cotton and in part renewed by the note of June 6, was surrendered to the plaintiff. Whatever may have been the actual occurrence, such surrender of the note is not shown in the agreed statement. What would be the effect of this fact alone is not now for decision.

The conclusion is not demanded that the plaintiff ratified the sale because the note executed by him on June 6 included a balance of the larger note, which remained after the proceeds of the sale were credited, it appearing that the plaintiff may not have known of such fact. But the plaintiff admits that ho knew of the unauthorized sale of his cotton for two years before he brought the action for its recovery. What of his silence, or of his silence intermingled with‘his conduct and subsequent dealings with the bank, even though in reference as he thought, to a different matter ¶ Where property is pledged to secure a debt, and the debt is not paid at maturity, the pledgee becomes the agent of the pledgor in the sale of the property, and if he makes an authorized sale of it, it is the duty of the pledgor, as principal, to repudiate-the transaction in a reasonable time, as in other cases of principal and agent, or he will be held to a ratification by silence. Brooke v. Cunningham, 19 Ga. App. 21 (5) (90 S. E. 1037). “To bind the principal, there is no necessity for a positive or direct confirmation on his part, of the act of the agent, but it may arise by implication, from the acts or proceedings of the principal in pais. . . And for this purpose the acts and conduct of the principal are construed liberally in favor of the agent. Slight circumstances and small matters will sometimes suffice to raise the presumption of ratification.” Byrne v. Doughty, 13 Ga. 46 (3) (4), 52; Strong v. West, 110 Ga. 382 (1), 387 (35 S. E. 693). “If the agent, without authority, should do any act, and the principal, after knowledge of the fact, should make no objection, but acquiesce for a length of time — especially where such acquiescence cannot be explained or otherwise accounted for; and which has a tendency to mislead the agent; in all such cases, and many others, which might be supposed, the law would construe such silence as contrary to the duty of the principal, and he would be held bound by it.” Owsley v. Woolhopter, 14 Ga. 124 (6), 128; Mapp v. Phillips, 32 Ga. 72 (4), 81.

Notice will be taken that cotton is a commodity of constantly fluctuating value. If the plaintiff had repudiated the transaction promptly upon its discovery, the defendant might have been able to protect itself. The pledgor knew that his note was past due and heard nothing from the bank about it, although it called upon him on June 6, 1921, to give renewals for other indebtedness. He had known then since April or May that the cotton had been sold. Did he not under these circumstances suppose that the bank’s failure to mention the larger note was because it was relying upon his approval of the sale of the cotton? He had a further transaction with the bank on September 17, 1921, when he paid the note of June 6, still without a reference to the cotton. The cotton was sold in January, 1921, for approximately 13 cents per pound. Never a complaint did he make until some two years thereafter when the price of cotton had advanced to 33-3/4 cents per pound, although in the meantime he had dealings with the bank, which would naturally have suggested some mention between them of the subject-matter of this suit, unless all was satisfactory on both sides.

While it is true that “whether or not . . ratification has resulted is usually a question of fact, to be determined by the jury” (Coursey v. Consolidated Naval Stores Co., 22 Ga. App. 538 (3), 96 S. E. 397), we think that the only inference that can be reasonably drawn from the entire facts of this case is one of ratification. Such inference being demanded as a matter of law, the trial judge did not err in directing a verdict in favor of the defendant. See Thompson v. Neely, 32 Ga. App. 131 (123 S. E. 171); Pilcher v. Smith, 31 Ga. App. 606 (121 S. E. 701).

The trial court ruled that the measure of the plaintiff’s damage should be the actual value of the property at the time of the sale. This was error. This action was in trover. In such a case the plaintiff pledgor, if he is not otherwise concluded, may, as in other trover cases, elect to recover the highest value of the property proved between the date of the conversion and the trial, subject to the condition that if at the time of the verdict he owed the defendant anything upon the debt which the cotton had been pledged to secure, this should be deducted. Van Arsdale v. Joiner, 44 Ga. 173 (4).

The court’s ruling as to the measure of damages would have been sound if the bank had sued the defendant upon the debt and he had sought to recoup for the conversion without alleging a special contract fixing the terms of the pledge. Waring v. Gaskill, 95 Ga. 731 (2) (22 S. E. 659); Harrell v. Citizens Banking Co., 111 Ga. 846 (1) (2) (36 S. E. 460); Campbell v. Redwine, 22 Ga. App. 455 (3) (96 S. E. 347); Kennedy v. Buckeye Cotton Oil Co., 29 Ga. App. 167, 172 (114 S. E. 79). But where the debtor takes the initiative and brings an action in trover, he is entitled to all the benefits of that character of action. Again, where the debtor is sued and sets up a conversion of collaterals by his creditor, by way of recoupment, and shows a special contract fixing the terms of the pledge, the measure of the damages which he may recoup will depend upon the nature of the agreement. These questions are more fully discussed in the case of Bennett v. Tucker, 32 Ga. App. 288 (123 S. E. 165), and in our decision in that case-will be found a statement of what we conceive to be the reasons for the propositions here stated upon the subject of damage. But the verdict directed for the defendant being demanded upon the theory of ratification, the error in the ruling on the measure of damages was harmless.

Judgment affirmed.

Jenkins, P. J., and Stephens, J., concur.


source: Caselaw Access Project

author: Bell, J.

license: Public Domain

text:
    15235.
    BENNETT, superintendent, for use, etc., v. TUCKER & PENNINGTON.
    Where in a suit upon a note the defendant recoups for the conversion of property pledged to secure the debt, the measure of his damages for the conversion, in the absence of a special contract, is the actual value of the property at the time of the conversion, which the jury, or the judge sitting as sole trior, may, in their or his discretion, augment by the addition of legal interest thereto from the date of the conversion. The defendant pledgor, in such a ease,' is not entitled to recover the highest proved value between the date of the conversion and the trial, as in trover, and the court in this case erred in allowing that measure of damages.
    Decided April 25, 1924.
    Complaint; from Putnam superior court — Judge Park. November 9, 1923.

      Callaway & DeJarnette, for plaintiff.

      Stubbs & Dulce, for defendants.
   Bell, J.

The amended action in this case was a suit upon a note by “T. R. Bennett, superintendent of banks, for the use of the Bank of Eatonton, for the use of the Farmers Bank of Palmetto,” against Tucker and Pennington. The defendants pleaded a conversion by the Bank of Eatonton of certain cotton which they had pledged with it as security for the debt, and prayed to recoup for its highest proved value between the date of the conversion and the trial. The case was submitted to the judge for determination without a jury, upon an agreed statement of facts. It is undisputed that the cotton was sold by the bank without a compliance with section 3530 "of the Civil Code, providing that “The pawnee may sell the property received in pledge after the debt becomes due and remains unpaid; but he must always give notice for thirty days to the pawner of his intention to sell, and the sale must be in public, fairly conducted, and to the highest bidder, unless otherwise provided by contract.” It does not appear that there was any special contract between the defendants and the bank.

The sole question between the parties in the court below was whether the measure of the defendants’ recoupment was the actual value of the property at the time of the conversion, or the highest proved value between the date of the conversion and the trial. The judge decided this question in favor of the defendants, and, after allowing a credit for the highest value shown in the agreed statement of facts, rendered judgment against Tucker for the balance due. Pennington pending the cause had been discharged in bankruptcy. The plaintiff, contending that the credit should have been allowed only for the actual value of the property at the time of the conversion, excepted to the judgment and brought the case here for review.

Inasmuch as it has been insisted by some of the counsel in this case and in two other cases before us at the same time, wherein the briefs discussed the same question, that there is confusion, if not conflict, in the decisions relating thereto, we have given more than ordinary' thought and study to its solution. See Hall v. Vann, 32 Ga. App. 281 (123 S. E. 172), and Vann v. Kimbrel, 32 Ga. App. 275 (123 S. E. 168).

The measure of damages for the conversion of property will vary according to the remedy which the injured party adopts. Milltown Lumber Co. v. Carter, 5 Ga. App. 344 (2) (63 S. E. 270). In each of those cases in which the aggrieved party has been allowed to recover the highest proved value between the date of the conversion and the trial the action was either in tort (trover being an action ex delicto, — Southern Railway Co. v. Born Steel Range Co., 122 Ga. 658 (2) 50 S. E. 488), or the claim, if ex contractu, was based upon the breach of a special contract. In the latter case he may recover such damages as he may have sustained, even up to the highest proved value between the conversion’ and the trial, depending upon the particular nature of the agreement. Bedell v. Bass, 42 Ga. 271 (3); Wood v. Jones, 10 Ga. App. 735 (1) (73 S. E. 1099); Park v. Swann, 20 Ga. App. 39 (3) (92 S. E. 398); Campbell v. Redwine, 22 Ga. App. 455 (1) (96 S. E. 347); Roberts v. Bank of LaGrange, 25 Ga. App. 343 (2) (103 S. E. 176); Planters Warehouse Co. v. Hardin, 30 Ga. App. 459 (3) (118 S. E. 441). If there is a special contract, “then of course the parties would be bound by-its terms.” Whigham v. Fountain, 132 Ga. 277 (1), 279; Pilcher v. Smith, 31 Ga. App. 606 (121 S. E. 701).

Where one who is sued upon a debt which is secured by a pledge pleads a conversion of the security, the cross-action which he makes, unless in equity and based upon special grounds, must of necessity be ex contractu. “Tort cannot be set off against contract.” McKleroy v. Sewell, 73 Ga. 657 (1); McLendon v. Finch, 2 Ga. App. 421 (2 b) (58 S. E. 690). In such a ease, unless he pleads some special contract entitling him to a higher measure of damages, he cannot recoup by that exceptional measure which would be allowable if he were suing in trover. Waring v. Gaskill, 95 Ga. 731 (2) (22 S. E. 659); Harrell v. Citizens Banking Co., 111 Ga. 846 (1) (2); Turner v. Commercial Savings Bank, 17 Ga. App. 631 (1) (87 S. E. 918); Campbell v. Redwine, 22 Ga. App. 455 (3) (96 S. E. 347); Kennedy v. Buckeye Cotton Oil Co., 29 Ga. App. 167 (2) (114 S. E. 79); Whigham v. Fountain, supra. “Ordinarily the measure of damages where property has been converted is its market value at the time of the conversion.” Park v. Swann, supra. Meeting the plaintiff’s action ex contractu by a cross-action necessarily of the same kind, he must thus be content to accept a measure of damages applicable in an action ex contractu. The recoupment proceeds upon the theory of a breach of the obligations of the pledgee implied by the law in the pledge contract (Civil Code of 1910, §§ 3531, 3532, 3535, 3536; Turner v. Commercial Savings Bank, supra; Glidden v. Mechanics’ National Bank, 53 Ohio St. 588, 42 N. E. 995, 43 L. R. A. 737, 749), considering that and the loan contract as one (see, on recoupment, Civil Code of 1910, §§ 4350, 4353); and damages recoverable for a breach of contract are only “such as arise naturally and according to the usual course of things from such breach, and such as the parties contemplated, when the contract was made, as the probable result of its breach.” Civil Code (1910), §-4395. “Exemplary damages can never be allowed in cases arising on contracts.” Civil Code (1910), § 4393.

It cannot be said that the parties in making the contract contemplated that either would, instead of complying therewith, take advantage of it to commit a tort, as to which the measure of damages might be higher. “A very definite difference is generally recognized between consequential damages which may be recovered for the breach of a contract and similar damages recoverable for a tort.” Southwestern R. Co. v. Vellines, 14 Ga. App. 674 (2), 683 (82 S. E. 166); City & Suburban Railway v. Brauss, 70 Ga. 368 (1) (2); State Mutual Annuity & Life Asso. v. Baldwin, 116 Ga. 855 (2) (3) (43 S. E. 262); Carr v. Southern Railway Co., 12 Ga. App. 830 (1) (79 S. E. 41); Civil Code (1910), §§ 5929, 5930.

The pledgor in such a case is not obliged to await the action of the pledgee and then adopt the remedy of recoupment. He may take the initiative, pay the debt, and sue the pledgee in trover. This he may do without paying or tendering the debt, if the pledgee by an unauthorized sale has put it out of his power to return the property upon such payment or tender. Whigham v. Fountain, supra; Halliday v. Bank of Stewart County, 112 Ga. 461 (37 S. E. 721). It was said by the Supreme Court in Van Arsdale v. Joiner, 44 Ga. 173 (4), that under the latter circumstances the measure of the pledgor’s damage would be the value of the property less the amount of the debt; but whether the court by “value” in that case meant the highest proved value (at the plaintiff’s election) between the conversion and the trial, it did not say. The question does not appear to have been involved, and although that case was cited as authority for the ruling in Waring v. Gaskill, supra, it would seem that the true reason for the measure of damages applied in the last-mentioned ease was not that the property had been pledged, but that the claim for the conversion was made ex contractu. The question was expressly left open in the Halliday case. It is not really involved in the present case except in so far as its consideration may be pertinent to an analysis of the decisions upon the point presented for decision and kindred subjects. The decisions in other jurisdictions are not altogether harmonious on the question. See 21 R. e. L. 676, 678, §§ 38, 40; 43 L. R. A. 768, note.

We see no reason, however, why if the pledgor does so take the initiative and bring a trover action, he might not as in other cases of trover recover the highest proved value between the conversion and the trial, less any amount of his debt remaining unpaid. If he is entitled to bring trover, we think he is entitled also to all the benefits of that character of action. Civil Code (1910), §§ 4514, 5929, 5930. This was practically held by this court in Bank of LaGrange v. Guinn, 26 Ga. App. 411 (1) (106 S. E. 308). See also Tuller v. Carter, 59 Ga. 395 (1) (2); O’Neill Mfg. Co. v. Woodley, 118 Ga. 114 (1) (44 S. E. 980); Bank of Blakely v. Cobb, 5 Ga. App. 289 (63 S. E. 24); Smith v. Duke, 6 Ga. App. 75 (2) (64 S. E. 292); Dunn v. Young, 22 Ga. App. 17 (95 S. E. 374).

Whether, if the pledgor takes no action until after he is sued by the pledgee, it will then be too late for him to file an independent suit in trover for the conversion, clearly is not now a question for decision, but the writer takes occasion to say that in his opinion it would not be. If he should accept the conversion as a breach of the obligation implied in the pledge, viewing the pledge contract as part and parcel with the loan contract, the pledgor would be bound by the rule that all the rights oí the parties to a litigation which accrued under the same contract must be litigated in one action. Evans v. Collier, 79 Ga. 319 (2) (4 S. E. 266); Jones v. Schacter, 29 Ga. App. 132 (1) (114 S. E. 59). But it is my individual opinion that the pledgor, even when he is sued upon the debt, is not compelled to treat the conversion merely as a breach of a contract, but'he may still classify it as a tort and bring his independent action therefor at any time within the statute of limitations, subject to the conditions expressed above, including estoppel by ratification, whether before or after a suit against him upon the debt. The Civil Code, § 3530, denounces any disposition of a pledge other than as prescribed therein,-as a conversion when there is no contract providing otherwise, and I think that upon the conversion the pledgor might treat the pledge contract as rescinded and that he might, if he chose to do so, even after being sued upon the debt, act independently of such contract, regarding the pledgee as an original wrongdoer. If he would protect his right of action in trover, he would probably be obliged to prevent judgment against him upon the debt where the proceeds of the unauthorized sale had been credited, no matter when suit thereon was begun. Otherwise, it would seem that the sale might possibly be adjudicated lawful and thus be a ground of bar to his action in trover. Miller v. Parker, 133 Ga. 187 (1) (65 S. E. 410). Perhaps he could only do this by pleading rescission on account of the conversion and tendering the amount of the debt independently of credits from the sale. It will be understood, however, that the court does not enter • into any decision upon the right of the pledgor to bring trover after he is sued upon the contract, nor as to what would be the rights of the parties in case of conflicting suits, regardless of which was brought first. See Johnson v. Reeves, 112 Ga. 690 (37 S. E. 980); Ray v. Fleetwood, 106 Ga. 253 (32 S. E. 156); Newsome v. Smith, 25 Ga. App. 148 (2) (102 S. E. 841).

Returning to the subject of the measure of damage which the pledgor may recoup, if he adopts that remedy, we may note by analogy, that even where property is converted independently of a pledge, and is sold, and the owner seeks redress in an action in form ex contractu, he can only recover of the wrongdoer its value at the time of the conversion, as upon an implied contract, or the proceeds of the sale, as for money had and received. Civil Code (1910), §§ 4407, 5513; Merchants Bank v. Rawls, 7 Ga. 191 (2) (50 Ann. Dec. 394); Blalock v. Phillips, 38 Ga. 216 (3); James v. Smith, 63 Ga. 345 (3); Buchanan v. McClain, 110 Ga. 477 (3) (35 S. E. 665); Cragg v. Arendale, 113 Ga. 181 (3) (38 S. E. 399); Rhodes v. Freeman, 3 Ga. App. 473 (1) (58 S. E. 696). The same is also true in case of a converted pledge, even though the pledgor takes the initiative, if he only does so by an ex contractu form of action. In the recent case of Blalock v. Adams, 31 Ga. App. 68 (119 S. E. 465), the action was for the proceeds of the unauthorized sale of a pledge as for money had and received.

It would seem that in a case like the present, where the defendants’ damage is from the breach of an implied contract, the jury might augment the ascertained damages by the addition of legal interest from the breach till the recovery. “In all cases where an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time till the recovery.” Civil Code (1910), § 4396. “In an action upon breach of contract, where the damages are not liquidated, interest is not recoverable as such; but the jury in their discretion may increase the immediate amount of damages found, by an allowance of interest.” Tifton &c. Ry. Co. v. Butler, 4 Ga. App. 191 (1) (60 S. E. 1087). See also Chatham Ice Cream Co. v. Sakakeeny, 29 Ga. App. 768 (3) (116 S. E. 558); Central R. Co. v. Atlantic & Gulf R. Co., 50 Ga. 444 (3).

The learned counsel for the defendant in error have contended earnestly that the decisions' of the Supreme Court in Waring v. Gaskill, 95 Ga. 731 (2) (22 S. E. 659), and Harrell v. Citizens Banking Co., 111 Ga. 846 (1) (2) (36 S. E. 460), do not correctly state the measure of damages that may be recouped in a case of this sort, and request in substance that, unless these cases are found to be distinguishable from the one at bar, a question be certified to the Supreme Court in order that they'may be reviewed. After a most thorough examination of many cases bearing upon the question we do not doubt the soundness of these decisions, and deemed it proper to decline the suggestion to certify. For the reasons we have given, we are content with the rule which they state.

The able judge who tried the case below rendered an opinion in connection with his judgment. In each of the eases upon which he relied the action was either in tort or the recoupment was based upon a special contract whereby the aggrieved party was entitled to a different measure of damage from that which ordinarily obtains where the claim is ex contractu. The judge was right, viewing the case from the premises which he took. But he apparently overlooked the fact that the defendants’ claim, in the very nature of the case, was one ex contractu, and that without a special contract entitling them to the measure of damages allowed.

We do not think there is anything said in Holmes v. Langston, 110 Ga. 861 (2) (36 S. E. 251), contrary to the views herein expressed.

Judgment reversed..

Stephens, J., concurs. Jenlcins, P. J., disqualified.


text:
    15349.
    LANIER v. BUGG, receiver.
    1. One who is transported over the line of a railroad company by virtue of a gratuitous pass, providing by its terms that “the person accepting and using it thereby assumes all risk of accident to person or property,” is not entitled as of legal right to any degree of diligence at the hands of the company or its servants, and the company is not liable for an injury to him because of mere negligence, though gross, the parties having, as they were free to do, provided otherwise by their contract. The company cannot be held liable in such ease unless the injury was inflicted wilfully and wantonly. Solly v. Southern Ry. Co., 119 Ga. 767 (47 S. E. 188); Wright v. Central of Ga. Ry. Co., 18 Ga. App. 290 (1) (89 S. E. 457) ; Seam v. Central of Ga. Ry. Co., 22 Ga. App. 1 (95 S. E. 368); Charleston cG Western Carolina Ry. Co. v. Thompson, 13 Ga. App. 528 (80 S'. E. 1097) ; Chai'leston & Westeim Carolina Ry. v. Thompson, 234 U. S. 576, 578 (34 Sup. Ct. 964, 58 L. ed. 1476).

      (a) This rule will apply to an employee who is riding upon such a pass, where his travel is in no way connected with his employment. - Charleston cG Western Carolina Ry. Co. v. Thompson, supra; New York Central R. Co. v. Moliney, 234 U. S. 576 (40 Sup. a. 287, 9 A. L. R. 496, 64 L. ed. 502); Tharp v. Central of Georgia Ry. Co., 31 Ga. App. 598 (2) (121 S. E. 592).
    2. “Negligence relatively to the safety of any particular person is the breach of some diligence due to that person. Where no duty of diligence appears relatively to the person injured, there can be no presixmption of its breach.” Holland v. Sparks, 92 Ga. 753 (1) (18 S. E. 990). In an action against a railroad company for the homicide, by the l’unning of its cars, of one riding upon the train by virtue of a free pass containing the stipulation set out in the first headnote, the burden is on tlie plaintiff to prove that the acts or omissions of the eoxnpany causing the death were wilful or wanton. No presumption of wilfulness or wantonness can arise against the company under the Civil Code, § 2780. Southern Ry. Co. v. Davis, 132 Ga. 812 (3), 818 (65 S. E. 131); Tiee v. Central of Ga. Ry. Co., 25 Ga. App. 346 (1 6) (103 S. E. 262).
    3. Evidence that the train was running at a speed of forty to forty-five miles per hour when the wooden coach in which the decedent was riding was derailed, that one of the wheels of this coach had a “crack,” an “old break,” in it “about four inches long,” causing it to crush when it struck the ties, that many of the ties were badly decayed, so that the spikes in them were insecure, and consequently the rails unsteady, and that the conductor, when the car left the track, did not instantly give to the engineer a stop signal, and that the train thereafter continued to run with unslackened speed for one hundred and fifty to two hundred yards, until the coach was wrecked and the decedent, with several others, killed, did not, without more, show that the decedent’s death was the result of wilful or wanton misconduct on the part of the railroad company or its servants in the acts and omissions thus indicated, from which the catastrophe resulted. It follows that the court did not err in awarding a nonsuit.
    Decided April 25, 1924.
    Action for damages; from city court of Atlanta — Judge Reid. October 25, 1923.

      Hewlett & Dennis, for plaintiff.

      Colquitt & Conyers, for defendant.
   Bell, J.

Mrs. M. F. Lanier brought her action for damages against B. L. Bugg, as receiver of the Atlanta, Birmingham & Atlantic Railroad Company, for the value of the life of her son, upon whom she was dependent- and who was killed while traveling upon the defendant’s train by virtue of a gratuitous pass containing the provision set out in the first headnote. The trial resulted in a nonsuit, and she brings the case here upon exceptions to that judgment.

The plaintiff’s son was an employee of the railroad company, but was traveling at the time upon a mission wholly disconnected from his employment. It was averred that his death was the result of wilful and wanton misconduct upon the part of the railroad company in certain respects specified in the petition, proof of which the plaintiff attempted by the evidence hereinafter referred to.

Only the third headnote seems to require elaboration. We do not understand that the plaintiff in error takes issue with the propositions announced in the first and second headnotes. It is contended, however, that the evidence was such as to make a case of wilful and wanton misconduct, either by omission or commission, or both, from which the decedent lost his life.

With respect to the condition of the track one of the witnesses, W. P. West, testified: “We looked at the wreck and saw that the train had jumped the track. . . The track was spread, . . and where it was spread the wheels went around on the cross-ties and cut the cross-ties. .' . Where the car first made an imprint on the track the cross-ties were rotten. When this car-wheel hit them they just spread out like a box that they had run over. Just made a bunch of rotten splinters; just crushed all to pieces. The rail had slipped, I judge, two or three inches, may be, where the seat was on the track. . . I made an examination of the spikes up and down the track. There were some that were missing and some that had not been driven up, had been driven down, and the rotten ties would not hold some of them. I kicked one out with the toe of my shoe. In the thin part of the wheel, after it left what you might call the tire part, there was a crack about four inches;. that was an old break. The other was fresh.” ’ The testimony of the witness West is representative of that of several other witnesses relating to the same points. It appears that the cracked wheel was in some way disconnected from the car and was found to have about one third of it broken off, presumably because of the crack or old break described by Mr. West. The evidence shows that the train was running at a speed of 40 to 45 miles per hour at the time of the derailment. The coach derailed was a wooden coach. One or more of the witnesses testified that when it was first noticed that something was wrong the conductor was in the coach subsequently derailed, and that he got up and went forward into another ear. He did not give a stop signal in the ear which he left. It does not appear that he did not do so later. The evidence tends to show that the speed of the train was not perceptibly checked until if had run something like 150 yards after the derailment. The coach so derailed was then wrecked when it reached a trestle, falling over an embankment with the result that it was completely demolished and several persons killed.

“Gross neglect is the want of that care which every man of common sense, how inattentive soever he may be, takes of his own property.” Civil Code (1910), § 3473. Though the evidence may show that the railroad company was guilty of gross negligence as defined above, the term as thus employed should not be confused with “wilful and wanton misconduct,” as is sometimes done by jurists and law-writers. In the latter sense the evidence did not show gross negligence. In a case of this sort a recovery could not be had unless the death was the result of wilfulness or wantonness on the part of the railroad company or its servants. The defendant would -not be liable unless its conduct “was such as to evidence a wilful intention to inflict the injury, or else was so reckless or so charged with indifference to the consequences . . as to justify the jury in finding a wantonness equivalent in spirit to actual intent.” Central of Georgia Ry. Co. v. Moore, 5 Ga. App. 561 (1), 565 (63 S. E. 642); Harris v. Reid, 30 Ga. App. 187 (117 S. E. 256). We do not think that the evidence was sufficient to establish the quality of wilfulness or wantonness in the acts or omissions from which the catastrophe resulted. See Ocilla So. Ry. Co. v. Faircloth, 27 Ga. App. 728 (3) (110 S. E. 46); Dowman-Dozier Mfg. Co. v. Central of Ga. Ry. Co., 29 Ga. App. 187 (1) (114 S. E. 815); Southern Ry. Co. v. Davis, 132 Ga. 812 (3) (65 S. E. 131); Jackson v. Western & Atlantic R. Co., 146 Ga. 151, 154 (90 S. E. 963); Chattanooga &c. R. Co. v. Liddell, 85 Ga. 482 (5), 495 (11 S. E. 853, 21 Am. St. Rep. 169); Charleston &c. R. Co. v. McElmurray, 16 Ga. App. 504 (3) (85 S. E. 804), and cases therein cited. In the Liddell case, supra, the petition alleged that “the injury was sustained on account of the gross carelessness and negligence of the defendants in operating the railroad, and by the defective, improper and worn out rails, machine^, tracks and coaches which were being used.” The evidence adduced at the trial showed (p. 485) : “The cross-ties were of the length used in the narrow gauge track, and the track had but recently been changed from a narrow to a broad gauge. The spikes which held the iron rails to the cross-ties were driven in near -the ends of the ties, some of them so close as to be forced through the ends of the ties, as was discovered after the accident. On one side of track the ties appeared as if no spikes had been driven into them. The track was somewhat curved on approaching the trestle, and on examination it was found that the outside of the curve was not as much higher than the inside as is usual on a railroad track. The train was not running rapidly but only about twelve miles an hour, and the coach left the track thirty or forty feet before reaching the trestle, which was twenty-four feet high, and on which it rolled for some distance before falling off. It was a narrow gauge coach, placed upon broad gauge freight trucks, which had no spring bolsters as ordinary passenger-coach trucks have. Generally, what are called safety-chains, extending from the corner of the coach to the trucks to keep the truck from slewing in case it goes off the track, are used on passenger coaches, but there were none on this coach; and there was testimony that the attention of some of the company’s servants was called to this when the coach was put in use, four or five days before the accident, and that the car-inspector said he could not put on safety-chains unless he had them — that it was the best he could do, and it was safe; and after the accident he said it was as safe as he could make it with the material that had been furnished him to build the car with. The bolt used to fasten the car to the trucks was a narrow gauge bolt.” The Supreme Court held that this evidence was not enough to authorize the court to charge the jury upon the subject of punitive damages. The principle'involved in the instant case is very similar, if not the same.

The fact that the conductor did not instantly give a stop signal to the engineer upon notice that something was wrong in the movement of the coach did not show wantonness. It .could hardly be assumed that he was governed by a conscious or reckless indifference to the safety of others when he himself was in the same peril. It does not clearly appear that he appreciated the danger as did the witnesses who testified, nor that he failed immediately to give the signal in the car next ahead, into which he went.

In the case of New York Central R. Co. v. Mohney, 252 U. S. 152 (supra), relied upon by the plaintiff in error, it appears that the engineer ignored and ran past two block signals. These signals distinctly indicated that there was danger ahead. They gave to the engineer actual notice of that fact. In Alabama Great Southern Ry. Co. v. Hill, 90 Ala. 71 (8 So. 90, 9 L. R. A. 442, 24 Am. St. Rep. 764), the railroad company actually put down “old” rails, and must have known of their insufficiency. In the case at bar there was nothing to show that the railroad company had consciously or abandonedly neglected the safety of its tracks and appliances. For all that appears, they may have been once in good order, and the company negligently assumed such condition to have continued. Whether the ruling in the cited Alabama case would be followed in this State upon similar facts, we think it is distinguishable from the case now before us. Indeed, the facts in that case bore a complexion much like those in the Liddell case, from which we have quoted above, and in which our own Supreme Court reached an entirely different conclusion. The evidence fails to show that the defendant was guilty of that entire absence of care which would raise the presumption of conscious indifference, or that, with reckless indifference, it acted “with actual or imputed knowledge that the inevitable or probable consequence of [its] conduct would be to inflict injury.” See Harris v. Reid, supra.

The court did not err in granting the judgment of nonsuit.

Judgment affirmed.

Stephens, J., concurs. Jenhins, P. J., disqualified.


text:
    14893.
    Hudson v. Cohen.
    Decided April 26, 1924.
    Petition for certiorari; from Fulton superior court — Judge Humphries. June 20, 1923.

      S. C. Grane, for plaintiff in error. O. B. Copeland, contra.
   Bell, J.

Where a defendant against whom judgment has been rendered in the municipal court of Atlanta presents a petition for certiorari to the superior court to review the judgment, in which petition it is alleged that the judgment is erroneous solely upon the ground that the defendant had previously filed in the office of the clerk of the municipal court a demand for a bill of particulars, to which no response had been made, but in which petition it is not alleged either that the defendant complied in full with, the rules of that court in reference to such proceeding or that any judgment of the court was ever invoked thereon, the petition failed to show error, and the judge of the superior court did not err in refusing to sanction the same. Americus Grocery Co. v. Brackett, 119 Ga. 489 (7) (46 S. E. 657); Chambers v. State, 22 Ga. App. 748, 753 (97 S. E. 256); Rea v. McGahee, 12 Ga. App. 326 (77 S. E. 204).

Judgment affirmed.

Jenkins, P. J., amd Stephens, J., concur.


text:
    15206.
    Board of Drainage Commissioners of Henry County Drainage District No. 1, for use, etc., v. Morris Construction Company.
    Decided April 26, 1924.
    Complaint) from Cobb superior court — Judge Blair. November 9, 1923.

      Reagan & Reagan, C. M. Bolls, for plaintiff.

      Morris, Hawkins & Wallace, for defendant.
   Bell, J.

1. The general rule is that an action on a contract must be brought in the name of the party in whom the legal interest in the contract is vested. Civil Code (1910), § 5516. In this action by the Board of Drainage Commissioners of Henry County Drainage District No. 1, for the use of Bank of Stockbridge, upon a written contract, it being alleged that the plaintiff transferred - and assigned its interest in the contract to the Bank of Stockbridge before the action was brought, the general demurrer interposed to the petition was properly sustained. Ross v. Clover-Ball Co., 156 Ga. 109 (1) (118 S. E. 691).

2. The foregoing ruling makes it unnecessary for this court to decide, and it does not decide, whether the petition was subject to general demurrer upon additional grounds, including the plaintiff’s failure to allege that it had complied with its own obligations under the contract.

See, in this connection, Golucke v. Lowndes County, 123 Ga. 412 (2) (51 S. E. 406); Bennett v. Burkhalter, 123 Ga. 154 (2) (57 S. E. 231); Schmidt v. Mitchell, 117 Ga. 6 (4) (43 S. E. 371); Barrow v. Pennington, 17 Ga. App. 481 (1) (87 S. E. 719); Life Insurance Co. of Va. v. Proctor, 18 Ga. App. 517 (1) (89 S. E. 1088); Dolan v. Lifsey, 19 Ga. App. 518 (5) (91 S. E. 913); Ford v. Lawson, 133 Ga. 237 (5) (65 S. E. 444); Hines v. Cureton-Cole Co., 9 Ga. App. 778 (72 S. E. 191); Jones v. Schacter, 29 Ga. App. 132 (1) (114 S. E. 59).

Judgment affirmed.

Jenkins, P. J., and Stephens, J., concur.


text:
    15212.
    GEORGIA STATE BANK v. HARDEN.
    1. Where special or amended grounds of a motion for new trial are set out in a bill of exceptions complaining of the overruling of the motion, and where the judge unqualifiedly certifies the bill as true, this is a sufficient approval and verification of such grounds of the motion, even though they may not have been previously approved or verified. Furthermore, since the passage of the “practice act” of 1911 (Ga. L. 1911, p. 149, sec. 3), the fact that there was not at any time any formal approval of the grounds will not prevent their consideration by this court, unless the point was first raised and insisted upon before the trial judge.
    2. There were facts and circumstances in evidence and before the jury sufficient to authorize the inference that the plaintiff bank was not entitled as a matter of law to an application in its favor of the rule that one holding a negotiable note by indorsement is presumed to be a holder bona fide, for value and without notice.
    3. The mortgage note involved in this case was a -negotiable instrument. Notwithstanding the ruling in the second lieadnote to the effect that under the facts and circumstances of the case the conclusion was not demanded that the bank under which the plaintiff held acquired the note before maturity, it indisputably appears that the payee sold, indorsed, and delivered the note to the first bank not later than March 31, 1920, which retained it until selling it to the plaintiff bank in 1922, and therefore that the defendant was not entitled, as against the plaintiff, to credits for payments which he made to the payee after March 31, 1920, the payee not having produced the note at the time, and there being no other evidence of the payee’s right to make the collections, and the money so paid having never reached the plaintiff. This is true whether the payee indorsed and delivered the note before or after its maturity.

      (a) If the holder of a negotiable instrument receives it after it is due, its non-payment at maturity is notice to him of dishonor, and he takes it subject to all the equities existing between the original parties thereto, arising out of and connected with the original contract; but the fact that a note is overdue does not destroy its character of negotiability, and equities between the maker and the payee, originating after a transfer to a third person, will not affect the rights of the holder, though the transfer be made after the note becomes due.
    4. The court did not err in excluding from the evidence what the plaintiff offered as a page from a ledger-book of the payee, which the plaintiff insisted bore entries tending to show that the bank under which the plaintiff bank claimed acquired the note before maturity, there being no evidence whatever identifying the document as being in fact a sheet from the ledger.
    5. A new trial being ordered for other reasons, it is unnecessary to pass upon the ground based upon alleged newly discovered evidence.
    Decided April 26, 1924.
    Rehearing denied July 14, 1924.
    Mortgage foreclosure; from city court of Oglethorpe — Judge Greer. November 22, 1922.

      Robinson & Ford, for plaintiff.

      Jule W. Felton,-for defendant.
   Bell, J.

On January 3, 1920, JI. A. Harden executed a promissory note to L. A. Crawford & Son, or order, for $300, which was secured by a mortgage on personalty. The note recited a maturity date of February 1, 1920, though it provided that it was to be paid in monthly payments of $50 per month. On December 26, 1922, Georgia State Bank, holding the note and mortgage as by a blank indorsement by the payees, L. A. Crawford & Son, foreclosed the mortgage, and Harden filed an affidavit of illegality, the third ground of which, being the only ground of the original affidavit which it is necessary to consider, was as follows: “that the Bank of Montezuma held this note as collateral security to secure indebtedness of L. A. Crawford & Son, and it authorized L. A. Crawford Jr. and A. 0. Williams to collect said note from affiant and credit him with the payment. Affiant paid same to L. A. Crawford & Son by two checks for $50 each and one draft for $200, which amounts covered the entire indebtedness at the time it was paid, the exact date of which affiant does not recollect.” At the trial the defendant offered an amendment, alleging that the note was paid by the defendant “in full to the owners of the same, L. A. Crawford & Son, before the same was assigned to the Bank of Montezuma,”— setting out the alleged dates, which were subsequent to its maturity. It may be stated here that it appeared upon the trial that some time in 1922 the Bank of Montezuma and the Georgia State Bank were merged, the latter acquiring all the assets of the former. The trial resulted in a verdict in favor of the defendant. The plaintiff bank filed a motion for a new trial, which was overruled, and it excepted.

Error is assigned in two grounds of the motion for a new trial upon the admission of evidence by the defendant Harden, to the effect that he had paid the note to Crawford & Son, $50 on March 8, $50 on April 10, and $200 on October 5, all in the year 1920,— upon the ground that the note had been transferred to a bona fide holder, the Bank of Montezuma, under which the plaintiff bank held, and that the defendant had no authority to pay the money to the payee. The defendant testified that the note was not exhibited to him by the payee at any payment; that the first two payments were made by mail, and that when he made the last payment the payee did not say anything about who had the note; except that he would mail it. With reference to this last payment the defendant further testified: “I know he [a member of the payee firm] didn’t have the note. He promised he would mail it to me. He didn’t say where the note was. . . I saw him afterwards. He looked for the note in his office. . . He said he couldn’t find it right then, but would get it and mail it to me. He didn’t tell me that the note was in the bank. When I paid the $200 I knew he didn’t have the note with him. I wasn’t in his office; I didn’t go there. The time when he looked for the note was some time in November or December, I think it was.” There was no evidence whatever that the payee was the agent of the bank to collect the note.

These grounds of the motion for a new trial must be considered in the light of certain evidence introduced by the plaintiff. At the outset of the trial the plaintiff’s attorney said: “We tender in evidence two notes, as follows: one dated March 31,1920, for $1,905.42, payable to Bank of Montezuma, signed by L. A. Crawford & Son, by L. A. Crawford Jr., setting forth that there are collateral notes, aggregating $3,446.25, attached; note for $300, payable to L. A. Crawford & Son, mortgage note, signed by H. A. Harden and indorsed by L. A. Crawford & Son, by L. A. Crawford Jr.” The notes were admitted in evidence. H. N. G-allaher, who had held office as president of the Bank of Montezuma, testified: “I would know whether or not notes placed with the Bank of Montezuma as collateral weré ever turned over to a person for collection. These principal notes of Crawford were — we tried collecting. Yes, sir, some of the Crawford notes that were placed with the Bank of Montezuma as collateral were turned over to A. O. Williams for collection. I cannot give you the time that was done. At that time the Crawfords were not in Montezuma, they had gone. We hadn’t placed these notes with either of the Crawfords for collection, they were in the bank all the time.” Two other special grounds of the motion for a new trial will be referred to in the opinion.

It is suggested by the defendant in error that the special grounds of the motion should not be considered, because they were not approved by the trial judge. Each of such grounds, however, was set out in the bill of exceptions, which the judge unqualifiedly certified as true. This was a sufficient approval and verification. Humphreys v. Smith, 128 Ga. 549 (1) (58 S. E. 26); Baldwin v. Daniel, 69 Ga. 782 (2). Furthermore, “under the 'practice act’ of 1911 (Acts 111, p. 149, sec. 3), the fact that there was no formal approval of the grounds of the amendment to the motion .for a new trial (the only entry thereon being 'allowed and ordered filed’) will not withdraw such an amendment from the consideration of the reviewing court, or prevent this court from determining the merits of the amendment, unless the point was first raised and insisted on before the trial judge. As it does not appear in this case that any question as to the approval of the grounds of the amendment to the motion was raised before the trial judge, the sufficiency of the judge’s approval cannot now be challenged.” Mason v. State, 18 Ga. App. 224 (1) (89 S. E. 185); Lott v. Banks, 21 Ga. App. 246 (1) (94 S. E. 322); Johnson v. Redwine, 21 Ga. App. 811 (1) (95 S. E. 315).

With reference to the general grounds, and also the special grounds assigning error upon the admission of the evidence of the payments, it is insisted by the defendant in error that the presumption that the bank of Montezuma acquired the note in question before maturity was rebutted to the extent that the question was one for the jury. It is noticed that the note directly in question, that is the small note, became due on February 1, 1920, and that the Larger note which was introduced in connection therewith was not executed until March 31, 1920. If the small note was included in the collateral notes which secured the larger one, the Bank of Montezuma tlierefore acquired it after maturity. We think that the fact that the two notes were introduced at one and the same time, the manner in which they were referred to by the counsel in introducing them, and the testimony of Mr. Gallaher with reference to certain collateral notes, were sufficient (being circumstances brought in by the plaintiff, evidently for no other purpose) to authorize tlie inference that the small note was among the collateral pledged to secure the larger note, and therefore that the Bank of Montezuma acquired it after maturity.

But the evidence nevertheless demanded a finding for the plaintiff for the amount of the note, less the first payment. The note involved in this case was a negotiable instrument. Civil Code (1910), §§ 4270, 4273; Reed v. Murphy, 1 Ga. 236 (1); Lynch v. Goldsmith, 64 Ga. 42 (1). If the note was sold and transferred to the Bank of Montezuma before the defendant made the payments to L. A. Crawford & Son, the payee, such payments would not be availing as a defense, in the absence of proof of the payee’s right to collect the note, or that the bank received the money, the note not having been produced by the payee at the time.

The large note had no relevancy wliatsoever in this case unless it was established by that and the other evidence (and circumstances) referred to in the second division, that the small note was included in the collateral recited in its face, and thus that the small note was acquired by the Bank of Montezuma after its maturity on February 1, 1920. So then the bank could not have obtained the small note later than the date of the larger note, to wit, March 31, 1920. This indisputably appears. One of the $50 payments and the $200 payment were both made after that date. It not being shown that the payee had the right to collect the note, or owned it, or had possession of it at the time the maker claimed to have made these payments, such payments constituted no defense to the note. Bank of Cumming v. Bruce, 22 Ga. App. 237, 239 (95 S. E. 718), and cases cited. Where the maker made payments upon a negotiable note to-one not in possession.of it, who showed no arithority to receive such payment, and it did not appear that such payment had reached the real owner, the payment was not binding upon the owner. American Agricultural Chemical Co. v. Graham, 9 Ga. App. 479 (2) (71 S. E. 761). This rule is applicable whether the note had matured or not at the time the bank acquired it. “One who pays a negotiable promissory note, executed by himself, to any person other than the holder, without taking up the instrument, ought to see to it that the person receiving payment has a right to make the collection. By making the note negotiable, the maker expressly contracts to pay the same to any person who may lawfully acquire title to it in due course of trade. lie therefore cannot rest upon the assumption that payment to the original payee will necessarily discharge him. Of course, as against one who takes a -promissory note after its maturity, the maker may set up the defense that he had already paid it to the original payee before its assignment by the latter (italics ours); but where one takes such a note before its maturity, such plea of payment will not, in every instance, be available. The rule as settled by the authorities seems to be, that in such a case the holder, notwithstanding the previous payment of the note by the maker to the original payee, may collect it again, unless one of three things appears: first, that the payee was the holder’s general agent for the collection of such papers; or, second, had special authority to collect in the particular instance, or, third, that the money collected by the payee in fact reached the holder’s hands. It will be obvious, without further elaboration, that if the payee collected for the holder under his authority, either general or special, or if the holder actually received the money collected by the payee upon the note, this should be an end to the matter. Otherwise, the law renders the careless maker liable to pay a second time.” Bank of the University v. Tuck, 96 Ga. 456 (1), 465 (23 S. E. 467). See also French v. Campbell, 25 Ga. 600; Bank of the University v. Tuck, 101 Ga. 104 (1) (28 S. E. 168); Butler v. Barnes, 8 Ga. 513 (1); Edwards v. Savannah Trust Co., 13 Ga. App. 234 (1) (79 S. E. 35).

Whether the bank acquired the note before its maturity or not, it being conclusively shown that it was sold and indorsed to the bank not later than March 31, 1920, payments thereafter to the original payee were in no sense payments upon the note, which remained at that time in ihe hands of the Bank of Montezuma. The rights of this bank were later assigned to the plaintiff bank.

“If the holder [of a negotiable instrument] receives it after it is due, its non-payment at maturity is notice to him of dishonor, and he takes it subject to all the equities existing between the original parties thereto” (Civil Code of 1910, § 4287), arising out of and connected with the original contract (Civil Code of 1910, § 4344); but the fact that a note is overdue does not destroy its character of negotiability (see authorities cited in 46 L. R. A. 753, in note 1 to case of Young Men’s Christian Association Gymnasium v. Rockford National Bank (179 Ill. 599, 54 N. E. 297, 70 Am. St. R. 135); and equities between the maker and the payee, originating after a transfer to a third person, will not affect the rights of the holder, though the transfer be made after the note becomes due. Whittaker v. Kuhn, 52 Iowa 315 (3 N. W. 127); 7 Cyc. 820 (3); 8 C. J. 389, § 576; Civil Code (1910), 3653; Guerry v. Perryman, 6 Ga. 119; Central Trust Co. v. Fargason, 21 Ga. App. 696; Tinsley v. Beall, 2 Ga. 134 (1), 135; Ward v. Winn, 42 Ga. 323; Nix v. Ellis, 118 Ga. 345, 346 (45 S. E. 404, 98 Am. St. Rep. 111); 2 Daniel on Negotiable Instruments (6th ed.), p. 1393, § 1233 a; 8 C. J. 479, § 697; 4 Am. & Eng. Ency. Law 246 (2), 317; Joyce on Defenses to Commercial Paper, p. 851, 853; Ogden on Negotiable Instruments, p. 169, § 182; First National Bank v. Texas, 20 Wall. (U. S.) 79 (1) (22 L. ed. 295). See also the discussion in 31 Harvard Law Review, p. 1104.

The rule is otherwise as to a chose in action not negotiable, the assignee of which “takes it subject to all the equities which existed between the assignor and the maker thereof at the time of the assignment ; and all such equities as may attach in favor of the maker before notice of such assignment by the assignee to the maker.” Guerry v. Perryman, 6 Ga. 119; Jack v. Davis, 29 Ga. 219 (1); Cohen v. Prater, 56 Ga. 204; Ward v. Winn, 42 Ga. 323; Clay v. Banks, 71 Ga. 363 (1); Metropolitan Life Ins. Co. v. Morrow, 10 Ga. App. 433 (2) (73 S. E. 607). Civil Code (1910), § 3653.

It follows from wbat we have said above that the general verdict found for the defendant was unauthorized, regardless of whether the court" erred in admitting the defendant’s testimony as to the payments. The evidence as to the first payment, which appeared to have been made before March 31, 1920, and therefore possibly before the bank acquired the note, was admissible; but not so as to evidence of the other two payments, made after that date, the proof showing conclusively that the bank had acquired the note not later than that date. The rule is here applicable, however, that where evidence is objected to in mass, the overruling of the objection is not cause for a reversal, if any of the evidence is admissible. Knight v. State, 143 Ga. 678 (6) (85 S. E. 915).

Error is also assigned upon the rejection from evidence of what the plaintiff offered as a page from the ledger of L. A. Crawford & Son, bearing entries which purport to show that the Bank of Montezuma procured the-note before maturity. Irrespective of whether this document might otherwise have been admissible, an examination of the brief of evidence shows that there was no evidence identifying it as being what it purported to be. The court did not err in excluding it.

A further ground of the motion for a new trial is based upon alleged newly discovered evidence, but, inasmuch as a new' trial is ordered upon other grounds, it is wholly useless to pass upon this ground.

Judgment reversed.

Jenkins, P. J., and Stephens, J., concur.


text:
    15247.
    Blackwell v. Dannenberg Company.
   Bell, J.

1. Where an action is brought to enforce payment of a debt for which promissory notes have been pledged as collateral security, it is incumbent upon the plaintiff “ either to produce and restore the collateral . . or to satisfactorily account for its nonproduction.” Where to a suit upon a note the defendant pleads that other notes were pledged as collateral security to the one sued on, and that the plaintiff has converted the collateral, the value of which the defendant prays to recoup, and where in support of this plea the defendant testifies to the pledge, and that before suit he offered to pay the debt upon return of the collateral, and that the plaintiff replied that it did not have the collateral, and where it is not produced at the trial, the inference of a conversion as alleged is authorized. Turner v. Commercial Savings Bank, 17 Ga. App. 631 (1) (87 S. E. 918). Such inference is not conclusively rebutted by the testimony of the plaintiff’s agent with whom all of the transactions with the defendant were had, to the effect that if the plaintiff ever received such collateral — this fact not being directly disputed — it has been lost or misplaced and has never been sold, transferred, or hypothecated, the agent being the plaintiff’s secretary, the custodian of its papers, and the only person authorized to dispose of the same, where there was a conflict between the testimony of the agent and that of the defendant as to certain matters material and relevant to the case, and the testimony of the agent was in some material respects inconsistent.

Decided April 26, 1924.

Complaint; from Jasper superior court — Judge Park. November 3, 1923.

A. S. Thurman, for plaintiff in error.

Jones, Park & Johnston, contra.

2. There being material conflicts between the testimony of the two witnesses mentioned in the preceding paragraph, and the agent of the plaintiff having testified inconsistently, first that the plaintiff was unwilling to extend the original credit to the defendant with certain land as sole security, and secondly that the land “was really the security that he called for” (this fact apparently being offered as inferential proof that the notes were never pledged), it was error to direct a verdict in favor of the plaintiff for the amount of the note in suit, the value of the collateral appearing, and there being no other evidence which could ás a matter of law resolve the issue in favor of the plaintiff.

3. The jury were not bound under the circumstances to accept the testimony of the plaintiff’s agent to the effect that if the notes were pledged as the defendant alleged, they were not converted, but lost. Whiddon v. Hall, 155 Ga. 570 (6), 578 (118 S. E. 347); Redd v. Lathem, 32 Ga. App. 214 (123 S. E. 175).

Judgment reversed.

Jenkins, F. J., and, Stephens, J., concur.


text:
    15324.
    Western & Atlantic Railroad Co. v. Mathis.
   Bell, J.

1. In the trial of this action against a railway company for injuries done by its locomotive and ears to the plaintiff and his vehicle at a public crossing in a city, the trial judge, after instructing the jury that the portion of section 2 of the act of August 19, 1918 (Ga. L. 1918, p. 212), which refers to the erection of blow-posts and blowing the whistle was inapplicable to the case on trial, expressly told them that the remainder of the act which he would then give them in charge was applicable. He then read, as a part of his charge, section 4, which contained certain provisions inapplicable within the corporate limits of cities, towns, and villages, one of which was that the failure of the engineer to blow the whistle as prescribed in the act would constitute a misdemeanor. In the motion of the defendant for a new trial error is assigned upon this charge, upon the ground that it tended to confuse the jury and improperly instructed them that it was an engineer’s duty to blow his whistle under the circumstances of this ease. Held: While the charge was in a measure contradictory, and was to that extent erroneous, the error w'as not so serious, under the circumstances, as to require a new trial under the rule (Morris v. Warlick, 118 Ga. 421 (2), 45 S. E. 407; Pelham Mfg. Co. v. Powell, 6 Ga. App. 308 (4), 64 S. E. 1116) that a charge containing two distinct propositions directly conflicting, the one with the other, will amount to prejudicial error and work a new trial, since section 4 itself contains a clear and express declaration that the engineer is not required to blow the whistle within the corporate limits of a city, town, or village, because of which the jury were not probably misled. While there is a slight difference, there is no substantial difference, upon the point in question, between this case and Georgia R. Co. v. Wallis, 29 Ga. App. 706 (5) (116 S. E. 883), wherein it was held: “It cannot be reasonably presumed'that intelligent ánd upright jurors could have been misled or should ‘have misapplied the latter express declaration of the statute as precluding irf this case any rightful application by them of the provisions of the act relating to blow-posts and the blowing of the whistle.” See also Eagle & Phenix Mills v. Herron, 119 Ga. 389 (3) (46 S. E. 405); Martin v. Hale, 136 Ga. 228 (2) (71 S. E. 133); Dixie Mfg. Co. v. Ricks, 30 Ga. App. 433 (5) (118 S. E. 452). (Bell, J., dissents from the ruling in this paragraph.)

Decided April 26, 1924.

2. The act of the General Assembly referred to above requires that the engineer shall keep a constant and vigilant lookout for a distance of at least 400 yards before reaching any public crossing located in a city, town or village. Queere: Does not the act require a railway company to maintain “a constant and vigilant lookout along the track ahead of its engine while moving within the [entire] corporate limits of said city, town, or village,” regardless of the distance from the crossing? See section 4.

3. Where certain averments of negligence contained in the petition were stricken on demurrer, and others were unsupported • by proof, and the jury were so informed by the judge’s charge, a subsequent instruction, that upon proof that the plaintiff was injured by the running of the defendant’s locomotive and cars, the presumption would arise that the defendant was negligent in each of the particulars specified in the petition, was not cause for a new trial upon the ground that it authorized a finding .for the plaintiff upon the allegations of negligence which had been eliminated. This is true notwithstanding the judge, in withdrawing such averments from the jury’s consideration, may have referred to them only by the numbers of the paragraphs of the petition in which they were contained. The jury were not probably misled or confused by these instructions. Barbour v. State, 8 Ga. App. 27, 28 (68 S. E. 458).

Judgment affirmed.

Jenkins, P. J., and Stephens, J., concur. Bell, J., dissents from the ruling in pa/ragraph 1.

Action for damages; from Whitfield superior court — Judge Tarver. December 14, 1923.

Tye, Peeples & Tye, Maddox, McCamy & McFarland, for plaintiff in error..

W. G. Marlin, Harwell, Fairman & Barrett, contra.


author: Bloodworth, J.

text:
    14780.
    WILSON v. QUICK-TIRE SERVICE.
    1. If a servant employed in a garage, while not engaged in the prosecution of his master’s business and without the knowledge or consent of the master and against his instructions, takes an automobile of the master for the purpose of going to his own breakfast, and while so using it negligently injures a person in the street, the master will not be liable.
    2. The judge did not err in any of his rulings rejecting evidence, of which complaint is made in the motion for a new trial.
    Decided May 13, 1924.
    Rehearing denied June, 10, 1924.
    Action for damages; from Eulton superior court — Judge Ellis. June 4, 1923.
    Spencer Wilson, by her father as next friend, sued the Quick-Tire Service, a corporation, for damages for personal injuries received by her when struck by an automobile of the defendant. The evidence for the plaintiff showed the manner and extent of her injuries, and she endeavored to show that at the time of her injury the driver of the automobile was using it for the business of the defendant. The evidence for the defendant showed that Jackson, the driver of the automobile, was in the employ of the defendant, but at the time of the injury was not using it on business for the defendant, but was using it to go to his own breakfast; that he had no authority to use the car for this purpose, but was so using it without the knowledge or consent of the defendant and against the defendant’s express orders. When the evidence was closed the judge directed a verdict for the defendant. A motion for a new trial was overruled, and the plaintiff excepted.

      Bchrimper & Baumsiarh, G. Don Miller, for plaintiff.

      Underwood, Pomeroy & Haas, for defendant.
   Bloodworth, J.

(After stating the foregoing facts.)

It is necessary only to discuss the ruling stated in the second headnote. This ease in its facts is somewhat similar to that of Gillespie v. Mullally, 30 Ga. App. 118 (117 S. E. 98). The first headnote in that case is as follows: “The evidence being positive and uncontradicted that when the defendant’s automobile struck and injured the plaintiff it was being operated without the knowledge or consent of the defendant or of the proprietor of the garage in which the defendant had stored it, and that the person driving it was without authority, express or implied, to do so, the court did not err in directing a verdict for the defendant.” The same principle is announced in Lewis v. Amorous, 3 Ga. App. 50 (59 S. E. 338); Garner v. Souders, 20 Ga. App. 242 (92 S. E. 965); Dougherty v. Woodward, 21 Ga. App. 427 (94 S. E. 636). In the case of Hartnett v. Gryzmish, 218 Mass. 258, the chauffeur was returning from his home, where he had gone in the car of his employer for a noon meal. The chauffeur testified that .he had been told not to use the automobile for the purpose of going to his noon meals. The Supreme Court of Massachusetts held that the facts did not warrant “a finding that at the time of the accident the chauffeur was acting within the scope of his employment by the defendant.” In the case of Steffen v. McNaughton, 142 Wis. 49, a chauffeur used the automobile of his master to go to his midday meal, and struck and killed a woman, and the Supreme Court of Wisconsin held: “The owner of an automobile is not liable for injuries caused by his chauffeur’s negligent operation of the machine at a time when the chauffeur was using it for his own personal use and private purpose, not within the scope of his employment, and without authority or consent, express or implied, of the owner.” The court in Miller v. National Automobile Sales Co., 117 Ill. App. 367, in holding that the Automobile Sales Company could not be held liable for an injury, inflicted by its car while the car was being used by its manager, who had taken the car at the close of business hours for the purpose of taking himself and his children home and for a drive, said: “To hold a master liable for a tort committed by his servant, it must appear that at the time of the injury the servant was engaged in the master’s business and not upon some private and personal matter of his own; that is, the injury must have been inflicted in the course of the servant’s employment.” See also Danforth v. Fisher, 75 N. H. 111; Reilly v. Connadle, 214 N. Y. 586; Bursch v. Greenough Bros. Co., 79 Wash. 109; Glassman v. Harry, 182 Mo. App. 304 (1). The foregoing cases (and many others could be cited) clearly establish the principle that the owner of an automobile cannot be held liable for an injury occurring while the car is being used by a servant for his own purpose, and that in order to fix liability on the owner of the car the person seeking to recover must establish the fact that at the time of the injury the servant was acting within the scope of his employment. In the case sub judice the evidence establishes the fact that at the time of the injury the driver of the automobile was not using the car on business for the defendant, but was using it to go to his breakfast; and that he had no authority to use it for this purpose, but was so using it without the knowledge or.consent of the defendant and against defendant’s express orders.

The verdict for the defendant was properly directed.

<Judgment affirmed.

Broyles, G. J., and Lulce, J., concur.


text:
    14791.
    FRYER et al. v. MORRISON.
    This being a suit for malicious use of legal process, the petition is fatally defective for want of an' averment that the suit upon which it was founded had terminated in favor of the defendant in the former suit (the plaintiff in this one) before the present action was filed; and the petition should have been -dismissed on general demurrer.
    Decided May 13, 1924.
    Action for damages; from city court of Albany — Judge Clayton Jones. May 24, 1923.

      J. T. Mann, B. S. Boddenbery Jr., for plaintiffs in error.

      Milner & Farlcas, contra.
   Bloodworth, J.

Morrison brought suit for damages against the defendants in this case, who, with others, were plaintiffs in a previous proceeding in which it was sought to enjoin him from establishing and maintaining an undertaking establishment near their homes. The petition in this case, properly construed, is a suit for the malicious use of legal process. McElreath v. Gross, 23 Ga. App. 287 (1) (98 S. E. 190). In Marshall v. Armour Fertilizer Works, 24 Ga. App. 403 (100 S. E. 766), this court said: “There are three essential elements which must appear before one can recover for malicious use of legal process: (1) malice; (2) want of probable cause; and (3) that the proceeding complained of had terminated in favor of the defendant therein before suit for damages based upon it was brought.” That each' of the three elements mentioned in the foregoing quotation are essential in suits of this character, see also Fender v. Ramsey, 131 Ga. 440, 443 (62 S. E. 527); Clement v. Orr, 4 Ga. App. 118 (60 S. E. 1017). Granting that in the case we are now considering the petition can be construed as showing that the injunction suit against Morrison was malicious and was without probable cause, it is fatally defective for want of an averment that the suit upon which it was founded had terminated in his favor. The court therefore erred in not sustaining the general demurrer to the petition. Fulton Grocery Co. v. Maddox, 111 Ga. 260, 264 (36 S. E. 647); Brantley v. Rhodes-Haverty Furniture Co., 131 Ga. 276 (1) (62 S. E. 222); Waters v. Winn, 142 Ga. 138, 139 (82 S. E. 537, L. R. A. 1915A, 601, Ann. Cas. 1915D, 1248), and cases cited; Stoufer v. Missenheimer, 29 Ga. App. 191 (2) (114 S. E. 587); Gibbs v. Bank of Tifton, 21 Ga. App. 653 (3) (94 S. E. 827), and citations; Clement v. Orr, 4 Ga. App. 117, 120 (60 S. E. 1017), and cases cited. It is true that in this case there is an allegation in the petition that when the injunction case against Morrison was called for trial the plaintiffs therein “voluntarily requested the judge to pass an order dismissing the suit.” However, the record shows the following order: “Upon the call of the above-stated case, it being made to appear to the court by competent evidence that the defendant W. E. Morrison has sold and conveyed all of his right, title, and interest in and to the premises upon which it is alleged in said petition that said Morrison was conducting an undertaking parlor or establishment, and that the said W. E. Morrison is no longer engaged in the undertaking business directly or indirectly at said premises, nor attempting to do so, and that therefore there is nothing to enjoin in said case, and injunction being the only remedy sought in said case by the plaintiffs, it is now ordered, that said case be and the same is hereby dismissed, with costs against plaintiffs.” In the light of the statements in this order this court cannot hold that there was such a legal termination of the suit against Morrison as would enable him to maintain a suit for the malicious use of legal process. Both the superior and the' Supreme Court had decided against him, and after this he voluntarily sold the property where the undertaking establishment was to be located. The suit against him had accomplished the purpose for which it was instituted, and, as was said in the order dismissing the case, “there is nothing to enjoin.” See, in this connection, Waters v. Winn, supra.

Judgment reversed.

Broyles, G. J., and LuJce, J., concur.


author: Luke, J.

text:
    14793.
    HART v. DOSS RUBBER AND TUBE COMPANY.
    As to the contract of employment in question and the authority of the president of the defendant corporation the sufficiency of the evidence to support the plaintiff’s allegations was a question for the jury; and the court erred in granting a nonsuit.
    Decided May 13, 1924.
    Rehearing denied June 10, 1924.
    Action for breach of contract; from Eulton superior court — Judge E. D. Thomas. April 27, 1923.
    The plaintiff’s petition alleged that under a contract, the terms of which were set out, he was employed by the defendant corporation as its sales manager; that the defendant made the contract “through its duly authorized officer and agent, N. C. Doss, its president,” who was in charge of all its business and who represented it in this matter with full authority to act, but that when the plaintiff reported to the president and other officers at the defendant’s office at the time agreed upon to enter upon his duties under the contract, they stated to him that they had no contract with him, would recognize no contract with him, and had no place for him; and that by reason of the defendant’s repudiation and breach of the contract he was damaged in the sum sued for! The defendant in its answer denied the plaintiff’s allegations, and stated that “at one time it discussed with petitioner the making of a contract for a certain period, and corresponded with the plaintiff with reference to the details of said contract, but that the plaintiff and defendant never agreed upon and consummated any contract whatever.” The defendant pleaded also the statute of frauds.
    From the evidence it appears that the discussion and correspondence referred to were between the plaintiff and Dr. N. C. Doss, the president of the defendant company; and the plaintiff testified that at a meeting between them they reached an agreement upon the terms of the alleged contract of employment, and that the contract was drawn and was to be signed by them after the making of a copy, which Dr. Doss was to have made and sent to the plaintiff. A subsequent letter to the plaintiff from Dr. Doss as president was introduced, in which it was said: “The writer has been so very busy since your departure that I am not prepared to forward a completed draft of our contract. This will be done, however, at an early date, and since all the practical features of the contract have been agreed upon, there will, no doubt, be no differences along these lines between us.” This was not done, and finally Doss wrote to the plaintiff that he was about to leave for a vacation, that the directors had employed W. F. Smith as general manager for the company* that the writer had referred the matter of the “proposed contract” between the plaintiff and the company to Smith, and it would be necessary for the plaintiff to see Smith for the purpose of closing up the contract. The plaintiff testified that he went to Smith, and Smith said “he had no place for me,” that he (the plaintiff) insisted that Doss carry out the contract, and Doss replied that he could not do anything. It was also testified by the plaintiff that after the agreement had been reached between himself and Doss, but before it was drawn, Doss said he “would like to put the contract up to the finance committee,” Doss adding: “There are three of us, — Mr. Etheridge, president of the Atlanta Trust Company, is the chairman of the finance committee, and I would like to have his approval; the other man don’t count; he is out of town any way.” Continuing, the witness testified: “That was done. 1 went with Dr. Doss to Mr. Etheridge, . . and Dr. Doss explained to Mr. Etheridge under what conditions he had employed me, and . . Mr. Etheridge said he was mighty glad he had gotten me, and that he had been talking to the board about me, and he was satisfied I was the man he wanted, and asked me to come back here as early as possible. . . I don’t know whether we told Mr. Etheridge that the agreement was drawn or was verbal; I don’t remember that we said anything except that we had gotten together on this proposition; the contract had been made and I was to report as soon as possible, and I left. Dr. Doss was then to send me the signed contract embodying the agreement that we had made. We had already made a definite agreement, but it was agreed that a memorandum of it was to be put in writing afterwards. It had been typed, but had not been signed. . . Dr. Doss was to sign up a contract and send it over to me at Gadsden. I presume I was to sign one and send it back; that was my understanding.” It was testified that Dr. Doss was manager of the defendant company’s works at that time.
    Snowden McGaughey testified, that he was vice-president of the Atlanta Trust Company, and that Dr. Doss was the president of the defendant company and conducted the latter company’s business with “the bank,” and negotiated loans with the bank, but the witness was “not prepared to say what he did about the manufacturing part of the business;” he was “managing its financial affairs;” associated with him was Mr. Adair, secretary and treasurer, and Mr. Etheridge and two others were on the finance committee, and Mr. Etheridge was chairman of the finance committee; the committee, so far as the witness knew, was advisory. There was additional testimony for the plaintiff. The evidence was silent as to the defendant’s charter or by-laws.

      Bryan & Middlebroolcs, for plaintiff.

      Marie Bolding, Dorsey, Brewster, Hotvell & Heyman, for defendant.
   Luke, J.

This is a suit to recover damages for the breach of an alleged contract of employment. Upon the trial of the case, at the conclusion of the plaintiff’s evidence, the court, on motion of the defendant, granted a nonsuit, upon the following grounds: “(1) that the evidence in said ease failed to show that the alleged contract sued upon by plaintiff was made by any person authorized to act for and represent the defendant in the making of said alleged contract;” and “(2) that the evidence of plaintiff failed to show that the defendant had made a contract with him, as alleged by him.” To this judgment the plaintiff excepted.

1. “A president of a corporation, merely in virtue,of being such, has not power to bind the company by a contract. Brown v. Bass, 132 Ga. 41 (63 S. E. 788). But such authority may be conferred generally, or specially in the individual case. If the charter or bylaws confer on him general power to contract, a contract made within the scope of such power is binding on the corporation. Or, without this, power in the president to contract for a corporation may be inferred from a course of dealings, or it may ratify his acts. The management of the business of a corporation may be entrusted to its president by express resolution of the directors, or by their acquiescence in a long course of dealing. If he be permitted to carry on the business for a long time and to make contracts for the corporation, contracts made by him, incident to and forming part of the operation of the business, will be binding on it, whether or not expressly authorized by the by-laws or by formal action of the directors.” Potts-Thompson Liquor Co. v. Potts, 135 Ga. 460 (69 S. E. 734), and citations.

2. “An agreement to make and execute a certain written agreement,, the terms of which are mutually understood and agreed on, is in all respects as valid and obligatory as the written contract itself would be if executed. If therefore it.appears that the minds of the parties have met, that a proposition for a contract has been made by one party and accepted by the other, that the terms of this contract are in all respects definitely understood and agreed on, and that a part of the mutual understanding is that a written contract embodying these terms shall be drawn and executed by the respective parties, this is an obligatory agreement.” 13 C. J. 290, citing numerous eases, one of which is Campbell v. Mion, 6 Ga. App. 134, where it was held: “The agreement was complete, however, and the writing would have only been evidence. This would have been true even if the agreement had been within the statute of frauds.”

3. Applying these rulings to the facts of the instant case, the court erred in granting a nonsuit.

Judgment reversed.

Broyles, C. J., concurs. Bloodworth, J., disqualified.


text:
    14814.
    JOHNSON v. BANK OF TALLAPOOSA.
    1. As there is no assignment of error in the bill of exceptions either upon the exceptions pendente lite or upon the ruling therein excepted to, this court is not called upon to consider the question raised by the exceptions pendente lite, or the ruling of which complaint is made therein.
    2. 'the court erred in directing a verdict.
    Decided May 13, 1924.
    Complaint; from city court of Tifton — Judge Price. June 6, 1923. •
    In settlement of a note on which he was indebted to the Bank of Tallapoosa, E. E. Johnson traded to the bank a note, payable to. himself, signed by J. H. Brown and 0. II. Brown. At the time this note was discounted to the bank Johnson received not only his note, but some cash. On the trial of the ease, it was shown that in trading with the bank he dealt exclusively with J. E. Davis, the cashier, and that at the time the note signed by the Browns was delivered to the bank J ohnson did not indorse it. After the evidence was all in, the court directed a verdict for the plaintiff. The defendant excepted.

      John Henry Poole, for plaintiff in error.
    ■ J. S. Ridgdill, Ellis, Mitchell & Ellis, contra.
   Bloodworth, J.

(After stating the foregoing facts.)

Only the second headnote needs , to be enlarged upon. On the trial of the case the defendant swore in part as follows: “When the exchange was made of these two notes I did not indorse the note I am now sued on. Nothing was said about me indorsing it. Later on, Mr. Davis, as such cashier of the bank, asked me to indorse the note I had exchanged to the bank, he saying the bank could not enter suit against the Browns unless I did indorse the note, to make the title of the bank complete. I first refused to indorse it, but Mr. Davis, the cashier, told me that I would not be held liable on the note, but that my indorsement was solely for the purpose of giving the bank title and enabling it to collect from the Browns. I then stated to Mr. Davis I would indorse it with the understanding tlm I was not to be held liable on the note, but was indorsing it for the sole purpose of passing title. I then indorsed the note with that agreement and understanding.” Davis, the cashier, swore in part: “This note was made payable to B. E. Johnson, and by him in dorsed to the Bank of Tallapoosa. This note was discounted at the office of the Bank of Tallapoosa, Tallapoosa, Haralson county Georgia. At the time the note was discounted the indorsement bj B. E. J ohnson was overlooked. This was by mistake, and when we went to record the note on our books we discovered that Mr. Johnson had not indorsed the note, and when he called in at the bank soon after, I called his attention to the fact that he had failed to indorse the note, and he at that time indorsed it. We purchased this note in question before due and for a valuable consideration. We bought it in good faith, and it was a bona fide transaction, and we parted with our money to B. E. Johnson on the faith of his indorsement. . . There was no understanding at the time B. F. Johnson indorsed the note that he was doing so for the purpose of putting title to the note in the bank.”

In Cowart Co. v. Sheffield, 18 Ga. App. 512 (1) (89 S. E. 1101), this court, citing a number of decisions to support the proposition, held: “Blank indorsements of negotiable paper may always be explained between the parties themselves. Civil Code, § 5796. One who makes such an indorsement can show by parol testimony that it was made for the sole purpose of passing title to the paper so indorsed, and not to create any liability in the indorser.” See Proctor v. Royster Guano Co., 21 Ga. App. 617 (1), (2) (94 S. E. 801); Jossey v. Rushin, 109 Ga. 319 (34 S. E. 588, 77 Am. St. Rep. 377); Goette v. Sutton, 128 Ga. 180 (4) (57 S. E. 308); Sanders v. Ayers, 155 Ga. 630 (117 S. E. 651). The purpose of the indorsement of the note sued on in this case being a material issue on the trial, and the evidence on this point being in sharp conflict, the issue should have been submitted to a jury, and the court erred in directing a verdict. This ruling is not in conflict with what was decided in Swindell v. Bainbridge State Bank, 3 Ga. App. 364 (60 S. E. 13), nor what was decided in Haymans v. Bennett, 29 Ga. App. 265 (114 S. E. 923), cited and relied on by counsel for the defendant in error. The facts in each of those cases differentiate it from this ease.

Judgment reversed.

Broyles, O. J., and Lulce, J., concur.