Gormley v. Phinizy

Sutton, J.

The court sustained a general demurrer to the petition of E. E. Gormley, as superintendent of banks of this State, against the executrix of Billups Phinizy, who succeeded Jacob Phinizy as trustee of Marion Daniel Phinizy, a person of unsound mind. The superintendent of banks excepted to the judgment sustaining the demurrer, and brought the case to this court. The transactions out of which this case arose have been the subject-matter of other litigation. See Phinizy v. Mobley, 42 Ga. App. 33 (155 S. E. 73), and Mobley v. Phinizy, 172 Ga. 339 (157 S. E. 182).

Where on June 17, 1924, the assets of the estate of a person non compos mentis were turned over to one as trustee by the personal representatives of the deceased trustee of such non compos mentis person, said assets including certain stock in the Washington Exchange Bank, which was chartered under the act of 1888 (Ga. L. 1888, p. 73), and where the successor trustee executed to the personal representatives of his predecessor trustee a receipt in which he stated that he did not ratify any unauthorized investments made by such predecessor for the cestui que trust, and where on December 18, 1924, the successor trustee filed his petition in Clarke superior court, in which he set up that he had received from his predecessor such bank stock, and asked authority to sell it at private sale from *432time to time as would be to the best interest of the trust estate, service being made on the cestui que trust and a guardian ad litem duly appointed, and on December 33, 1934, the court passed an order authorizing such trustee to sell this bank stock at private sale as soon as “it could be disposed of without unduly sacrificing the same,” and where such trustee sold the stock on July 34, 1935, and the bank failed on October 7, 1935, the personal estate of such trustee is not liable to the superintendent of banks for an assessment on this bank stock purchased and acquired by his predecessor trustee, on the ground that he accepted the bank stock from his predecessor and retained it without authority for an unreasonable length of time. The liability of stockholders in the defunct Washington Exchange Bank is fixed by the charter of that bank, and not by the general banking laws of this State. Bennett v. Wilkes County, 164 Ga. 790 (139 S. E. 566). Under the general law, a trustee making an unauthorized purchase of bank stock with the funds of the trust estate becomes individually “liable as a stockholder.” Ga. L. 1919, p. 189; Michie’s Code (1936), § 3366 (140). No such provision appears in the charter of the Washington Exchange Bank.

The trustee of tlie person non compos mentis, who succeeded to the trust upon the death of Jacob Phinizy, was not personally liable for the stock assessment because the stock stood on the books of the bank in the name of “Billups Phinizy, Trustee Marion Daniel Phinizy,” he having had the stock transferred on the books of the bank in this manner upon his succession to the trust, in that the Avords “Trustee Marion Daniel Phinizy” were merely descriptio person®. Had the stock been transferred and entered on the books of the bank in the name of “Billups Phinizy, trustee,” with nothing more, the legal title to the stock would be prima facie at least in Billups Phinizy. Williams v. Farmers State Bank, 22 Ga. App. 656 (97 S. E. 249); Civil Code (1910), § 3570. The omission of the word “as” from the entry of this stock on the books of the bank is immaterial. See Harp v. First National Bank, 173 Ga. 768 (161 S. E. 355). Any one examining the books of the bank and seeing the entry of the stock in this manner Avould clearly understand that the stock was in the name of the trustee as trustee for the named cestui que trust, and this meets the intent and purpose of the requirement that where stock is transferred the entry thereof *433shall be made upon the books of the bank. Johnson v. Laflin, 103 U. S. 800 (26 L. ed. 532). The petition having failed to allege such facts as would render the trustee, Billups Phinizy, personally liable for the stock assessments against the bank stock of the estate of his cestui que trust, which was purchased and acquired by a predecessor trustee, the court properly sustained the general demurrer and dismissed the petition.

Judgment affirmed,

Jenkins, P. J., concurs. Stephens, J., disqualified.