Standard Dry-Wall Co., Inc., Et Al. v. Georgia Railroad Bank &Amp; Trust Co., 94 Ga. App. 357, 94 S.E.2d 511 (1956)
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John D. Capers, Henry P. Eve, Cumming, Nixon & Eve, contra.Counts & Collins, for plaintiff in error.
General and loose allegations of fraud in the procurement of a note do not constitute a defense thereto where no facts are alleged to show of which the alleged fraudulent acts and misrepresentations consisted. The present action being a suit on a note as to which two of the three makers named as defendants contended that the third signer of the note and the payee therein had wrongfully conspired to obtain their signatures thereto, but the answers failing to allege any facts sufficient to show such fraudulent conspiracy either to procure the signatures or to prevent the complaining defendants from receiving their share of the proceeds thereof, it was not error for the trial court to sustain a motion to strike the defendants' pleas and thereafter direct a verdict in favor of the plaintiff.
Georgia Railroad Bank & Trust Company filed a suit in the Superior Court of Richmond County against Standard Dry-Wall Co., Inc., as maker and R. L. Powell and William K. Ward as endorsers of a certain promissory note alleged to be due and unpaid. Ward, a nonresident, acknowledged service of the petition but otherwise made no appearance and filed no defense. Standard Dry-Wall Company and Powell filed identical pleadings which, after admitting the note and that it was unpaid, attempted to set up an affirmative defense herein set out as amended (the italicized portion being an amendment offered and rejected after the commencement of the trial):
"That it is not indebted to the plaintiff in any sum whatsoever since the note alleged and sued on was procured as the result of and in the prosecution of a fraudulent scheme entered into by and between the plaintiff bank, through its agent Felton Dunaway while acting within the scope of his authority as vice-president of said bank, and William K. Ward. Said fraudulent scheme amounted to a conspiracy and was instigated and carried out by the said Felton Dunaway and William K. Ward for the purpose of using this defendant and R. L. Powell as a conduit through which to channel money to the said William K. Ward or to his company, Ward Builders, Inc. It is not known to this defendant who initiated the said fraudulent conspiracy but it was initiated and the exact time and circumstances of its initiation are well known to the plaintiff bank and to William K. Ward. Said fraudulent conspiracy was knowingly participated in and carried out by the bank, through its agent Felton Dunaway, and the said William K. Ward. Said fraudulent conspiracy consisted of and is evidenced by a series of concerted and individual acts by the bank and William K. Ward, performed with a single intention, to get money through this defendant and R. L. Powell to William K. Ward or to his company, Ward Builders, Inc. As a result of this concerted action and common intent the note sued on was executed, and these facts are peculiarly within the knowledge of the plaintiff bank and the said William K. Ward. The said bank as payee of this note had full knowledge of the relationship of the parties and the circumstances under which the note was executed. Defendant Standard Dry-Wall did not receive any consideration for the note but rather the entire amount of consideration furnished by the bank was given by the bank in furtherance of the fraudulent conspiracy directly to the said William K. Ward or to his company Ward Builders, Inc. The said fraudulent persuasions and promises consisted of wilful misrepresentations of material facts, knowingly made for the purpose of deceiving the defendant R. L. Powell, that the defendant R. L. Powell relied upon these misrepresentations and signed the note sued on. As a result of the fraudulent conspiracy Standard Dry-Wall was led into a type of financing totally unfamiliar to it and as a result of the subtle practices and fraudulent representations of the said William K. Ward and the said Felton Dunaway as agent of the plaintiff bank, this defendant was caused to execute the note alleged and sued on, the consideration for which went, straight to the said William K. Ward or to his company Ward Builders, Inc. All of this was well known to the plaintiff bank and was nothing more than a continuation of the scheme by which additional moneys were advanced to the said William K. Ward and his company Ward Builders, Inc., after he had become heavily indebted to the plaintiff bank both in his individual capacity and through his company Ward Builders, Inc. The Georgia Railroad Bank & Trust Company has converted to its own use the security set forth on the face of the note now sued on. By reason of said conversion defendant Standard Dry-Wall Company, Inc. has been damaged in the sum of $23,000."
Insofar as the defendants Standard Dry-Wall Company and Powell seek by their pleadings to set up fraud in the procurement of the note on the theory that an officer of the plaintiff bank conspired with the other endorser of the note, Ward, to "channel money" to Ward's corporation, no issuable defense is set out since no facts are alleged on which to base this conclusion. "A plea alleging fraud, but not alleging specific acts constituting fraud, should be stricken on demurrer." Carroll v. Hutchinson,
The trial court did not err in striking the defensive pleas and thereafter directing a verdict in favor of the plaintiff.
Judgment affirmed. Gardner, P. J., and Carlisle, J., concur.
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