Campbell v. Morgan County Bank

Luke, J. Where one deposited money in a bank upon an agreement between herself and the bank that the bank should from time to time, as opportunity was presented, lend for her such portion of the deposit as it might deem proper, to responsible persons, upon ample and solvent security, and collect the loans when due and deposit the proceeds in the bank to her credit, and safely keep the same until reloaned as before (the depositor all the while checking on the deposit when and as she chose), and where the bank’s cashier, who was checking out and lending the money as the bank’s representative for the depositor, loaned himself a large portion of the deposit upon inadequate security, and the money so loaned was not repaid, and could not be traced either into the funds of the bank, which had become insolvent, or into the hands of the superintendent of banks, who had taken over the affairs of the bank, held: 1. The bank was the agent of the depositor in lending, collecting, and redepositing the money loaned by it, and as such agent it was bound to exercise ordinary diligence. Morgan County Bank v. Poullain, 32 Ga. App. 10 (123 S. E. 29) ; 157 Ga. 423 (121 S. E. 813, 33 A. L. R. 592). 2. The money loaned to the cashier was not a debt entitled to priority under class 5 of section 19 of the banking act of 1919; as a debt due by the bank as trustee or other fiduciary, or as a claim of like character. In this connection see discussion of trusts in Ober & Sons Co. v. Cochran, 118 Ga. 396 (45 S. E. 382, 98 Am. St. Rep. 118) ; also Williams v. Bennett, 158 Ga. 488 (123 S. E. 683), the case relied upon by plaintiff in error, and note how widely that case differs from the one sub judice. Judgment affirmed. Broyles, C. J., concurs. Blood/worth, J., not participating, on account of illness. A. G. Foster, Jones, Park & Johnston, for plaintiff. F. U. George, F. R. Lambert, K. 8. Anderson, Anderson & Wood, Anderson, Rountree & Crenshaw, for defendants.