Gatewood v. Furlow , 19 Ga. App. 74 ( 1916 )

Broyles, J.

E. D. Gatewood and others brought suit against T. M. Eurlow as administrator on the estate of Mrs. Julia Gate-wood, deceased, and the surety of his bond as such administrator, alleging that Eurlow and the surety Avere liable to them, as heirs at law of Mrs. Julia Gatewood, in the sum of $1,400, by reason of the fact that Eurlow, as such administrator, deposited the funds of the estate, Avhich came into his hands, in the Americus National Bank; that subsequently the bank failed, and that at the time of the failure there was deposited in the bank $1,400 belonging to the estate, in the name of “T. M. Furlow, adm’r,” without indicating that this fund belonged to the estate of Mrs. Julia Gate-wood. The defendant demurred to the petition, upon the ground that it did not set forth a cause of action. The court sustained the demurrer, and the plaintiffs excepted. The plaintiff in error contends that the deposit of the funds of the estate in the bank in the name of “T. M. Eurlow, adm’r,” was in law nothing more than a deposit in the name of Eurlow individually; that the letters “adm’r,” added to the name of Eurlow, were merely descriptio personce, and did not indicate that the funds so deposited in the bank were the funds of the particular estate of Mrs. Gatewood, and that on account of such deposit arid the loss' of the same, occasioned by the failure of the bank, the administrator and the surety on his bond were liable to the heirs at law of Mrs. Gatewood for, that amount.

Section 3570 of the Civil Code is as follows: “An instrument signed by one as agent, trustee, administrator, executor, or the like, without more, is the individual undertaking of the maker, such Avords being generally words of description.” This section of the code, however, deals with the relation of principal and agent, and the liability of a person who executes an instrument and adds to his name the word “agent,” “trustee,” “administrator,” etc. In our opinion this section of the code is not applicable to the question presented in the instant ease; for here there was no instrument executed by Eurlow. It is upon the theory of conversion that an administrator is held liable for depositing funds of the estate in his individual name (Summers v. Reynolds, 95 N. C. 404); and in Munnerlyn v. Augusta Bank, 88 Ga. 333 (14 S. E. 554, 30 Am. St. R. 159), it was held that a deposit in a bank by a trustee of trust funds in his own name, as agent, was not a conversion. A distinction should be drawn as to the rule where an instrument is signed-by one as “agent,” “administrator,” or the like, and where the same words are used to indicate the nature of a bank deposit.It is clear that under section 3570, supra, if Eurlow had signed an instrument as “T. M. Furlow, adm’r,” it would have been his individual undertaking. In Dozier v. McWhorter, 117 Ga. 786 (45 S. E. 61), it was held, that “Prima facie a judgment in favor of E. J. D., executor of M. G., is his individual property, but this presumption may be removed by.slight evidence tending to show that he holds the same in trust for the estate;” and “evidence that the note on which the judgment issued was the property of the estate shifts the burden; and unless the same is met by a counter-showing, the jury may find that the beneficial ownership of the fi. fa. issued on such judgment is in the estate.” In the same case Mr. Justice Lamar further said: -“Where the maker of a note signs his name ‘executor,’ ‘administrator,’ or ‘trustee,’ he can not relieve himself of his individual liability and impose .the debt on the estate. The converse is only literally true, and the courts will readily lay hold of any fact to show that a paper payable to ‘A; executor, administrator, or trustee,’ is not his individual property. Prima facie it is; but where third persons attempt to trace funds, or to show that the holder of a paper thus payable had notice of its trust character, these words, instead of being ignored and treated as mere surplusage of descriptive merely of the person, are given full force and effect as imparting notice. And so, too, when the beneficiaries proceed against the payee so described) in an equitable proceeding like this, where the proceeds as well as the fi. fa. itself are involved (Saffold v. Banks, 69 Ga. 294; Fla. C. R. Co. v. Usina, 111 Ga. 698, 699 [36 S. E. 928]), these words go far to establish the fact that the- paper is held in his representative capacity.” It is the duty of a trustee or administrator to deposit money belonging to an estate in the name of that particular estate, or by so distinguishing it on the books of the bank as to indicate in some way that it is the money of that identical cestui que trust or estate. Chancellor v. Chancellor, 177 Ala. 44 (58 So. 423); Williams v. Williams, 55 Wis. 300 (12 N. W. 465, 42 Am. Rep. 708). When'the trustee or administrator fails to do this, the legal effect of such a deposit is to vest the title thereof in the bank and to establish the relationship of debtor and creditor between the bank and the administrator, prima facie, in his individual capacity. 2 Machie on Banks and Banking, 887, § 119 (2 b) et seq. As was said by Justice Cassoday of the Supreme Court of Wisconsin, in the much quoted case of Williams v. Williams, supra: “The test is not so much the keeping of a separate account at the bank as it is the parting with, and hence the losing of the identity of, the trust fund, and having in lieu thereof no obligation, contract, or account upon which is impressed the equitable ownership of the trust. Had this administrator retained these moneys in his own possession, and mingled them with his own funds so as to lose their identity, and the whole had been lost without his fault, yet we apprehend he would have been liable (Shoemaker v. Hinze, 53 Wis. 116 [10 N. W. 86]. . . To hold the administrator liable in this ease is undoubtedly a great hardship; but to exonerate him from liability is to encourage the mismanagement of trust funds and to open the door to frauds innumerable against those whose age and weakness entitle them to the most rigid protection of the law.” From what has been said it follows that the court erred in sustaining the general demurrer to the petition and in dismissing the petition. The question as to whether the administrator would have a good defense to this suit if he could show upon the trial of the case that at the time he deposited the estate’s fund in the bank, and up to the date of the bank’s failure, he had no other deposit in that bank, or if lie could otherwise clearly establish that the funds therein deposited were in fact and in truth the funds of the particular estate in question, is not in this case, and therefore is not passed upon. Judgment reversed.

Hodges, J., absent.