Roberts v. Bank of LaGrange

Stephens, J, 1. Where a debtor deposits with a bank cotton receipts as collateral security for a loan, and the bank, after being authorized by the debtor to sell the cotton for a certain amount, sells it for a less amount before the maturity of the loan, and, instead of crediting the proceeds of the sale against the loan, credits the same against an unsecured overdraft of the debtor, and deposits the balance in the bank to the debtor’s credit; and where the debtor, upon a rendition to him by the bank of a statement of the transaction, protests against it, and leaves the balance thus deposited to his credit untouched, and never withdraws it or any part thereof, a renewal of the loan thereafter, without more, will not as a matter of law amount to a ratification of the sale of the cotton. The debtor’s claim for the value of the cotton not being a defense to the note, but being rather in the nature of a set-off or counterclaim, the ruling here made is distinguishable from the cases of American Car Co. v. Atlanta Street Ry. Co., 100 Ga. 254 (28 S. E. 40); Atlanta Consolidated Bottling Co. v. Hutchinson, 109 Ga. 550 (35 S. E. 124), and Hogan v. Brown, 112 Ga. 662 (37 S. E. 880), in which it zwas held that whore a debtor renews a note with knowledge of a defense thereto, he cannot plead such defense and defeat a recovery in a suit on a renewal note. [344] Decided May 12, 1920. Complaint; from city court of LaGrange-—B. J. Mayer, judge pro hac vice. September 8, 1919. A. H. Thompson, for plaintiff in error. Hatton Lovejoy, contra. 2. In a suit by the bank on the renewal note, where the defendant pleaded a set-off for the value of the cotton, upon it appearing from the evidence that the defendant did not authorize or ratify the sale of the cotton by the bank, he would be entitled to recover for the cotton at the value at which he authorized the bank to sell. It was therefore error to direct a verdict for the plaintiff for the amount of the note sued on. Judgment reversed. Jenkins, P. J., and Smith, J., concur.