McGregor v. Witham

Fish, C. J. (After stating the facts.) 1. A motion was made in this court,'by the plaintiff in the main bill of exceptions, to dismiss the cross-bill of exceptions, upon the ground that the original plaintiffs in the court below had not been served with the cross-bill, nor had service been acknowledged by or for them. We will dispose of this motion before passing upon the questions presented by the main bill, as we are of opinion that this motion must be sustained, and the dismissal of the cross-bill will, to some extent, simplify the discussion of the questions arising under the main bill, as to whether the petition as amended set forth a cause of action. For with the dismissal of the cross-bill the petition will stand here, as it finally did in the court below, as one brought originally by the receiver in behalf of the bank, so that when we come to pass upon the ground of demurrer alleging no cause of action, we will only have to determine whether the amended petition showed that the receiver had a cause of action against the defendants, and need not consider whether the original plaintiffs had any cause of action against them. The cross-bill of exceptions does not appear to have been formally served upon any one, but upon it there is the following acknowledgment of service: “I acknowledge due and legal service- of the foregoing cross-bill of exceptions, waive copy, and further service. This Feb. 5, 1906. L. D McGregor & S. Ii. Sibley, Atty. for Plaintiff.” It appears from [707] the record that in the court below these attorneys represented, in this litigation, all of the original plaintiffs, as well as McGregor, the receiver. The cross-bill assigns error upon the allowance of the amendment to the allegations of the original petition, and also upon the order of- the court striking the original plaintiffs from the petition and substituting for them the receiver as sole plaintiff. It appears from the cross-bill that each of these rulings was made upon the motion of the original plaintiffs; but who such plaintiffs were, other than J. A. Anderson, does not appear in the cross-bill. It has been many times held that it should, unequivocally appear in a bill of exceptions who are the parties thereto, and that an acknowledgment of service thereof does not relate to or bind any person not actually named or sufficiently designated therein as a defendant in error, when the acknowledgment is entered. Greene v. Barron, 119 Ga. 901, and cit. In addition to this, it will be observed, that the attorneys whose names are signed to the acknowledgment of service acknowledge service as “Atty. for Plaintiff;” and that at the time they made this acknowledgment the receiver was the only plaintiff, the original plaintiffs having been stricken from the case, and he having been substituted in their stead. There was'also only this one plaintiff in the main bill of exceptions. So that aside from the rule that an acknowledgment •of service of a bill of exceptions relates only to the parties named or sufficiently designated in such bill, it can not be said that the acknowledgment itself shows an intention, on the part of’the attorneys making it, to acknowledge service for all of the original plaintiffs, as well as the receiver. A doubtful or uncertain acknowledgment of service is no substitute for the service which the law requires. In order for an acknowledgment of service to take the place of the service required by law, it must affirmatively show that service was acknowledged by the party himself, or by his attorney for him. For these reasons the motion to dismiss the cross-bill is sustained. 2. The main trouble which we have encountered in this case has been to correctly construe the imperfectly drawn and somewhat confused pleadings of the plaintiff. The difficulty in construction arose from the fact that while the effect of the original petition was to charge the defendants with the embezzlement of $11,400 of the funds of the bank, the amendment thereto'described the trans [708] action by which Allen obtained this amount of the bank’s money, to use for the benefit of himself and Witham, as a “loan,” made “on no other security than the hypothecation of [the] stock” which he had purchased from Witham, and referred to “the uncollectible paper of said Allen” as having been left “in lieu” of the money of the bank which he obtained and used; and charged that “the loan to said Allen of an amount exceeding half the capital stock of said bank,” on such security, was contrary to law. So the question of construction has been, whether the amendment adhered to the cause of action originally set forth, or sought to hold the defendants liable, as officers 'and directors of the bank, for a loss sustained by the bank by reason of a loan recklessly and improvidently made, or made in violation of statutory law regulating loans made by banks. While the original petition was unskillfully drawn, it evidently set forth a cause of action in favor of the bank, or of one authorized to institute suit in its behalf. Whether the original petition showed a right of action in the plaintiffs who-brought the suit, or in any of them, is another question, with which we are not now concerned. The question with which we are dealing is, did the amended petition set forth a cause of action in the receiver of the bank, who was the sole plaintiff when the demurrer was passed upon? It is perfectly clear that if, as alleged in the original petition, the defendants fraudulently appropriated to their own use the funds of the bank and it thereby sustained a loss, they would be liable to the bank for the amount of the loss sustained. This is too clear for discussion. Did the amendment change the cause of action set forth in the original petition? We think not. The amendment and the original petition are to be construed together, and so construing them, we think that the purport of the petition as amended is, that the defendants, for the purpose of defrauding the bank, entered into the scheme described in the original petition, and, in pursuance of this scheme, misappropriated the funds of the bank under the guise of a loan by the bank to Allen. In other words, we construe the language of the amendment descriptive of the manner in which Allen procured the money of the bank, for the use of himself and Witham, as intended to merely describe the method which the defendants adopted as a cover for the alleged misappropriation of the bank’s funds; that is, that Allen, either as cashier or as president of the bank, went through [709] "the form of lending the money for the bank to himself, or that "Witham and Allen undertook, as officers of the bank, to lend its funds to Allen. We do not think that the amendment, when considered in connection with the original petition, can be construed to mean that a loan was regularly, though unlawfully, made to Allen by the bank, acting through its board of directors. In our •opinion it is to be taken as merely alleging and describing a subterfuge to which the defendants resorted for the purpose of carrying •out their alleged scheme to misappropriate the money of the bank. It is not clear from the amended petition whether Allen was president, or cashier, of the bank at the time he is alleged to have used its money for the benefit of himself and Witham. It matters not, "however, whether he had then succeeded Witham as president or was still cashier. The cashier, whatever may have been his general .authority as to making loans, could not bind the bank by lending its money to himself. He could not represent his principal in lending the latter’s money to himself. 1 Morse, Banks and Banking, §169, p. 386; Savannah Bank v. Hartridge, 73 Ga. 223; Merchants National Bank v. Demere, 92 Ga. 735. Nor could the president of the bank, even if clothed with general authority to "lend its money, bind it by lending its funds to himself, or by lending them to the cashier, when the latter knew that the loan was made for the president’s own benefit. And certainly if, as appears from the petition as amended, the “loan” was made in pursuance, •and as the culmination, of a scheme between the president and the ■cashier to unlawfully appropriate the money of the bank for. their mutual benefit, the transaction would not bind the bank, and they would both be liable for any loss which it thereby sustained. It ■follows that the amended petition was sufficient to withstand the .ground of the demurrer which alleged that it set forth no cause ■of action. 3. It did not appear from the petition as amended that the ■cause of action was barred by the statute of limitations when the :suit was brought. While it was alleged in the original petition that the fraudulent scheme between the president and cashier to misappropriate the funds of the bank was concocted in June, 1898, from the amendment to the petition it appears that the funds of the bank were not, in pursuance of this scheme, actually misap-propriated by the defendants until June, 1899. The original pe [710] tition was filed on March 13, 1903, which was less than four years from the time when the misappropriation of the funds of the bank is alleged to have occurred. So the statutory bar applicable to actions of this kind had not attached when the suit was brought. Besides, so far as the defendant Witham is concerned, the amendment, in effect, alleged that the directors and stockholders of the bank did not know and could not, in the exercise of ordinary diligence, have known, that its assets “had been indirectly abstracted” for his benefit by Allen, in accordance with the alleged scheme between them, until after the failure of the bank, which is alleged to have occurred in February, ,1902. Judgment, on main till of exceptions, reversed; cross-Mil dismissed. All the Justices concur.