Opinion
43698.
SUBMITTED JUNE 4, 1968.
DECIDED JUNE 18, 1968. REHEARING DENIED JULY 9, 1968.
Action on note. Augusta Municipal Court. Before Judge Mixon.
Fulcher, Fulcher, Hagler, Harper Reed, E. D. Fulcher, for appellant.
McGahee Plunkett, Jack E. McGahee, for appellee.
Evidence that the defendant, a member of a credit union, established an account in the name of his minor son and in this account deposited money earned by himself, retained exclusive control and right to make withdrawals from the account, and was paid dividends on the deposits, authorized a finding that the account was the property of the defendant.
SUBMITTED JUNE 4, 1968 — DECIDED JUNE 18, 1968 — REHEARING DENIED JULY 9, 1968.
The plaintiff credit union, by and through the Georgia Superintendent of Banks in charge of its liquidation, sued the defendant for the unpaid balance on a note. The defendant answered that he was not indebted and pleaded as a set off that he had on deposit in an account with the credit union a sum in excess of the balance of the note, the account being shown in the name of the defendant's son.
The trial court directed a verdict for the credit union, and the defendant appeals from this ruling and from the denial of its motion for judgment notwithstanding the verdict.
The evidence showed that the defendant had established membership accounts in the credit union in his own name and the names of his wife and all of his children, by purchasing a $5 share for each of them, and had deposited money that he earned from working; that he had made deposits in his own account and later transferred the sum to his wife's account, and when the deposits in his wife's account reached a sum over $5,000 he transferred the sum to the account of his son, then about 4 months old; and that dividends on the deposits were paid to the defendant. These transactions were known to the secretary-treasurer of the credit union and/or suggested by him for the purpose of avoiding income tax liability to the defendant on the interest on the deposits, and the secretary-treasurer recognized the defendant as having exclusive control and right to make withdrawals from the accounts.
The trial judge in directing a verdict for the plaintiff followed Smith v. Gormley, 47 Ga. App. 823, 825 ( 171 S.E. 735), because he considered it a binding precedent, though he questioned the fairness of its application in this case. Smith v. Gormley, supra, is a two judge decision which is not binding upon this court. Furthermore, it involved strict construction of pleadings to show facts that are not all the same as the evidence in the present case. Even if we consider the money to be a joint deposit of the defendant and his son, to follow the Smith case in holding this created a partnership would be obvious error; on the contrary, it created the relationship of joint tenants as to the deposit. Sams v. McDonald, 117 Ga. App. 336 ( 160 S.E.2d 594); Sams v. McDonald, 223 Ga. 53 ( 153 S.E.2d 538).
"A credit union is not an ordinary private corporation for profit, but is organized under special statutory provisions to promote thrift among, and provide credit for, its members." 13 AmJur2d 146-147, § 4. Depositors in credit unions and building and loan associations are generally held to be creditors and thereby have a preference over the stockholders in cases of insolvency. 13 AmJur2d 248, § 112; 98 ALR 132.
"Ordinarily, where a deposit is made by one person in the name of another, the rights with respect to such deposit belong to the person in whose name the deposit is made, even though the latter is unaware of the deposit, and the bank may not dispute his title or rights. However, the credit given on the bank's books is only prima facie evidence of the rights of the person to whom the deposit was credited; and, generally speaking, money deposited to the credit of one person may be shown by the circumstances to belong to another. Persons having title to funds are not divested thereof by another's deposit of the money in a bank having notice of the true ownership of the funds, and it has been held that a deposit may be made in the name of a person other than the depositor and yet remain the property of the depositor, so that the bank is justified in recognizing his ownership, where the circumstances are such that the deposit has not been put beyond his control." 9 CJS 597-598, § 287. See also Bank of Oglethorpe v. Brooks, 33 Ga. App. 84 ( 125 S.E. 600).
The evidence was sufficient to support, but did not demand, a finding that the deposit in the name of the defendant's son was the property of the defendant.
The trial court erred in directing a verdict for the plaintiff but did not err in denying the defendant's motion for judgment not-withstanding the verdict.
Judgment reversed. Bell, P. J., and Quillian, J., concur.