Court Opinion

ID: 5623109
Source: CourtListenerOpinion
Date Created: 2022-01-11 04:43:26.97552+00
Date Added: 2024-06-11T08:37:30.133735
License: Public Domain

Guerry, J.,
dissenting. M. L. Paulk, on December 11, 1930, deposited with the Union Banking Company of Douglas a draft for $1010, drawn on the Mountain City Mills, of Chattanooga, Tenn., Avith an “order-notify” bill of lading attached, for a carload of corn. It was admitted that this draft was so deposited Avith the Union Banking Company for collection, and that the relation of principal and agent Avas thereby created betAveen Paulk and the bank. It also appears that Paulk had at the time a checking account in said bank and that he subsequently thereto made other deposits on such checking account. The draft for $1010 was not credited to his checking account, and there Avas no relation of debtor and creditor established between Paulk and the Union Banking Company as to the draft. The Union Banking Company in due course forAvarded this draft, *819together with other items, to the Fulton National Bank of Atlanta. This bank credited the Union Banking Company with all the cash items, including the draft for $1010, and undertook to collect the same by sending it to the Hamilton National Bank, in Chattanooga, Tenn. The Fulton National Bank received notice on December 19 from the Hamilton National Bank that the draft had been paid and then charged the item to the Hamilton National Bank. It was further shown that the transaction did not become a finally adjusted and final credit as between the Union Banking Company of Douglas, the Fulton National Bank of Atlanta, and the Hamilton National Bank of Chattanooga until such notice was received. It appears further that on December 19 the Union Banking Company of Douglas gave to Paulk credit for this item. It does not appear at what time the credit was given or how any notice was received from the Fulton National Bank of Atlanta that such items had been paid. It appears that Douglas is 230 miles from Atlanta. The Union Banking Company closed on December 19 and did not open after that time. When a deposit is made in a bank the relation of debtor and creditor is established as between the bank and the depositor. Under the decision in the case of Macon Grocery Co. v. Citizens Bank of Fort Valley, 42 Ga. App. 74 (supra), when a depositor deposits checks upon other banks in his own bank, nothing else appearing, the title to the checks passes to the bank in which they are deposited and the relation of debtor and creditor arises between the bank and the depositor. If the checks are accepted by the bank for the purpose of collection and deposit afterwards to the depositor’s credit in the bank, the relation of principal and agent-exists until such bank has actually made such collection; and until such collection has been made by the bank and the proceeds therefrom deposited to the credit of the principal, the relation of principal and agent continues to exist. After the collection is made and the amount so collected is deposited, the relation of debtor and creditor exists. In the instant case the relation of principal and agent established December 11 between Paulk and the Union Banking Company continued until the Union Banking Company received notice that such collection had been made. This relationship, once established, may not be changed without the notice and consent of both parties, unless collection has been made and the bank has been notified thereof. The evidence in this case shows that Paulk was *820given credit on tire books of the bank, in Douglas, on December 19. The evidence shows also that the Fulton National Bank in Atlanta did not receive notice of the collection of this claim, and it did not become finally adjusted, in so far as they were concerned, until December 19. There is no evidence as to how any notice was communicated by the Fulton National Bank to the Union Banking Company of Douglas, nor whether any such notice was ever actually given. The Union Banking Company of Douglas, without such notice and without the knowledge and consent of Paulk, would have no right to change the relationship of principal and agent to that of debtor and creditor. The evidence in this case and the circumstances thereby shown were insufficient to warrant the direction of a verdict by the trial judge. Such issue should have been submitted to the jury.
I think therefore the judgment should be reversed.