Citizens Bank v. Mobley

144 S.E. 119, 166 Ga. 543, 58 A.L.R. 1383, 1928 Ga. LEXIS 354

• Court: Supreme Court of Georgia
• Decided: July 10, 1928
• Docket: No. 6185
• Status: Published

Opinion

Gilbert, J.

The, sole question in this case is whether the Citizens Bank of Waynesboro, by reason of the facts set out in the above statement, was a “depositor” with Plains Bank, within the meaning of the act of the General Assembly dealing with assessments upon shareholders to pay “depositors,” or whether the transaction created the relation of borrower and lender in the ordinary sense. After providing for liability of shareholders to “creditors” for all debts of the bank, the banking law provides: “and said stockholders shall be further and additionally individually liable, equally and ratably (and not one for another) to depositors of such bank for all moneys deposited therein, in an amount equal to the face value of their respective shares of stock; it being the true intent and purpose of this section, that as to depositors for all moneys deposited with said bank, there shall be an individual liability upon each stockholder of such bank, over and beyond the par value of his or her original shares of stock equal in amount to the face value of said shares of stock.” Ga. Laws 1919, p. 189, Park’s Code, § 3279(a), Michie’s Code, § 3366(139). The word “depositor” is defined in the Georgia banking law as follows: “The term depositor,’ as used in this article, means any person who shall deposit money or commercial paper in any bank, either on open account, subject to check, or to be withdrawn otherwise than by check, tvhether interest is allowed thereon or not, and shall include holders of demand and time certificates of deposit lawfully issued.” Ga. Laws 1919, p. 135, Park’s Code, § 3362(b); Bennett v. American Bank &c. Co., 162 Ga. 718 (5), 728 (134 S. E. 781); and see 1 Words & Phrases, 1301; 1 Bouvier L. D. 847. A “loan of money” is defined in 38 C. J. 136, as “A contract by which one delivers a sum of money to another and the latter agrees to return at a future time a sum equivalent to that which he borrows; the delivery by one party and the receipt by the other party of a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with or without interest. If, such is the intent of the parties, the transaction will be considered a loan without regard to its form.” See also 7 C. J. 712, § 445. It is useless to endeavor to frame a rule by which a “deposit” may be differentiated in every ease from a mere “loan” as applied to banking transactions, and it is wholly unnecessary in deciding the present case. All deposits are loans. “It is unquestionably true that under the authorities a deposit of money on general deposit in a bank is a loan.to the bank by the depositor, and is not distinguishable by any clear mark from an ordinary loan of money by one man to another, payable on demand.” Spain v. Beach, 52 Ga. 494, 498. In Ricks v. Broyles, 78 Ga. 610 (3 S. E. 772, 6 Am. St. R. 280), this court said: “The moment the deposit was made, the credit of the banker was substituted for the money. Though in loose speech it would be said that this was done for safekeeping, in literal truth it was done, not to keep the money at all, but to part with it on the banker’s credit — to make it cease to be the money of the receiver [court receiver making the deposit], and become the money of the banker, with the expectation of drawing from him [the banker] on demand at a future time other money to take its place in the coffers of the court. It was a loan by the receiver to the banker, made under the name and with all the incidents of a general deposit. The fund was transformed into a chose in action.”

In Davis v. Elmira Savings Bank, 161 U. S. 275, 288 (16 Sup. Ct. 502, 40 L. ed. 700), it was said: “The deposit of money by a customer with his banker is one of loan, with a superadded obligation that the money is to be paid when demanded by a check.” See also 3 R. C. L. 518, 521, n. 9. In Iowa the contrary was held. Elliott v. Capital &c. Bank, 128 Iowa, 275 (103 N W. 777, 1 L. R. A. (N. S.) 1130, 111 Am. St. R. 198). Nor is it necessary to elaborate upon the different kinds of deposits. There are general deposits, special deposits, time deposits, savings deposits, etc.

Transactions between a customer and a bank, like all other contracts, must be determined according to the intention of the parties. Civil Code (1910), §§ 4223, 4266; 3 R. C. L. 517. And where the contract is ambiguous, evidence is of course admissible to determine what was the true intention of the parties; and where there is a conflict, the issue becomes one for a jury. In determining such questions, the general course of dealing becomes material. In transactions between banks and individuals or other banks, the word “deposit” must be restricted in its meaning to the sense in which it is ordinarily used in such business. In the course of the ordinary banking business, a “deposit” means placing of money, checks, and the like with a bank. When that is done the bank receiving such funds is a depository'and the fund is a deposit. A “deposit” is or is not, according to agreement, subject to check on the bank with which it was actually placed, and may or may not bear interest, and may be or may not be payable on demand. The issuance of a passbook is not conclusive evidence, but is material on the question whether the transaction is simply that of borrower and lender in the ordinary sense or that of a deposit. The relation between debtor and creditor is created in either case, whether the transaction is a deposit or a loan. Lamar v. Taylor, 141 Ga. 227 (6), 238 (80 S. E. 1085).

In the present case the money was “on call” or was described as “call money.” The Plains Bank showed the transaction on its books as a “deposit . . on call.” There is no legal difference between the phrase “on call” and the phrase “on demand.” Meador V. Dollar Savings Bank, 56 Ga. 605 (3), 608; Bowman v. McChesney, 22 Grat. (Va.) 609; 6 Words & Phrases (1st ed.), 4970. Therefore the money placed “on call” was payable merely “on demand.” In this the transaction does not differ from that of a general deposit. It is true that general deposits are usually paid on demand by checks; but while this is the usual course, there is no reason, as was said above, why it could not be done otherwise if the parties to the contract so agreed. In this case it does not appear from the record how the money placed to the credit of Plains Bank was to be paid, whether on check or in response to some other means of demanding or calling for the money.

Ascribing a purpose on the part of the General Assembly; in providing that shareholders of banks may be assessed for the purpose of paying depositors and failing to provide for assessment other than for unpaid subscriptions for the purpose of paying other creditors of the bank, it must be assumed that the word “depositor” was used to distinguish that relationship from other kinds of loans, loans in the sense as used in the ordinary banking business. The section of the banking act dealing with such assessments also refers to “all other creditors,” and thus makes “depositors” a separate class of creditors. The Georgia banking act under which the parties in this case operated and to which they are subject enumerates designated powers delegated to banks, and also creates a State Banking Department presided over by the superintendent.of banks. Certain duties are required of the superintendent, such as examination of State banks and the securing of reports from them. The record shows that certain forms for the reports were used, and this court assumes that all of the banks operating under the act were familiar with and understood such terms. The record shows that the superintendent required reports to be made under specific headings, some of which are set out under Exhibit E. No. 6 refers to “call money due banks in this State,” and No. 7 to “call money due banks in other States.” Thus the State Banking Department appears to have recognized some distinction between “call money” and “deposits.” Several classes of “deposits” are designated under headings 8, 12, 13, 14, and 15.

Plains Bank entered the transaction on its books, according to Exhibit 0, as “Call Money, Citizens Bank of Waynesboro, $5000, . 7-16-27,” and the examiner’s report of Plains Bank of May 20, 1926, Exhibit D, among other items under the heading “Call Money Due,” contains the item, “Citizens Bank of Waynesboro, 6%, $5000.” The Bankers Trust Company of Atlanta, financial agent for both the Citizens Bank and Plains Bank, wrote Citizens Bank, as shown in Exhibit F, with reference to the transaction, a “Letter of Advice Covering Call Funds,” in which it was shown that Plains Bank had paid $500 of the amount advanced by Citizens Bank. Moreover, the record shows that the Bankers Trust Company, in a “Letter of Advice Covering Call Funds,” Exhibit B, wrote Plains Bank: “We deposit $5000 with Fulton Nat. Bank. From — Deposited $5000 by Citizens Bank, Waynesboro, Ga.” Thus it appears that the $5000 furnished by the Citizens Bank to the Bankers Trust Company to be placed on interest was actually deposited with Fulton National Bank and not with Plains Bank. When that was done the $5000 so deposited with Fulton National Bank in the usual course of business was held by Fulton National Bank as a deposit to the credit of and subject to the check of Plains Bank. It will be seen therefore that in this the transaction differs materially from the ordinary method of making a bank deposit. The usual method is for the depositor to place his funds in the bank with which he expects to maintain the relation of depositor and depository, and on which he expects to check, in case of a general deposit.

The precise question does not appear to have been decided in this State or elsewhere. Neither this court nor counsel in the case have been able to find a satisfactory definition of the phrase “call money.” No authorities on the question have been found, except, as said above, “on call” has been held to mean “on demand.” It is a matter of common information that “call money” and “call loans” are terms used in transactions between banks, especially in New York, Chicago, and other large cities, and brokers on the exchanges. These seem to be temporary loans for the purpose of handling transactions on the exchange. But such loans to brokers are distinct from the transaction in this case, in that brokers are not in the general business of receiving deposits as is the case with banks. Clearly a “call loan” or “call money” made to or placed with an individual would not, in the absence of a stipulation or contract between the parties, be construed as a deposit, while such moneys left with a banking institution, a large part of whose business is receiving deposits, might be intended as a deposit.

What was the understanding of the Georgia, Banking Department in receiving reports of bank examiners in which a distinction was drawn between “call money” and deposits ? We can not escape the conclusion that the Banking Department and all the banks operating under the banking act of 1919 and its amendments understood in their dealings that money placed “on call,” such as shown by the facts of this case, was not an ordinary deposit or a deposit falling within either of the classes named in such reports. We are also driven to the conclusion that the General Assembly, in providing for the assessment of shareholders to pay depositors, used the word “depositors” in a limited and restricted sense, and intended that such assessments should be used only for depositors in this sense. We also are of the opinion that when the Citizens Bank of Waynesboro sent its check for $5000 to its financial agent in Atlanta without specific instruction as to the particular bank in which the sum was to be placed, but merely transmitted it, leaving the agent free to place it when and where it would, and such agent did deposit the same in Fulton National Bank to the credit of Plains Bank, advising both Citizens Bank and Plains Bank of such act, the transaction was not one of “deposit” between Citizens Bank and Plains Bank, and did not fall within any one of the recognized classes of deposits known to the banking business. It certainly created, however, the relation of debtor and creditor. It was a mere loan. Just what is the exact character of such a loan it is unnecessary to decide in this case. It is necessary only to determine whether the transaction was a deposit. In this connection see State Savings Bank v. Foster, 118 Mich. 268 (76 N. W. 499, 42 L. R. A. 404); Wedemeyer v. Hindelang, 161 Mich. 600 (126 N. W. 708) ; Leaphart v. Commercial Bank, 45 S. C. 563 (23 S. E. 939, 55 Am. St. R. 800, 33 L. R. A. 700); In re Law’s Est., 144 Pa. St. 499 (22 Atl. 831, 14 L. R. A. 103).

The case was submitted to the court on an agreed statement of facts, and there appears no conflict. The decision of this court therefore can not be based upon a refusal to control a discretion or decision of the trial judge on disputed facts. The court did not err in holding that the transaction- was not a “deposit,” and in rendering a judgment for the defendant.

Judgment affirmed.

All the Justices concur.