Bell Finance Co. v. Johnson

179 S.E. 703, 180 Ga. 567, 1935 Ga. LEXIS 483

• Court: Supreme Court of Georgia
• Decided: April 11, 1935
• Docket: Nos. 10608, 10737
• Status: Published

Opinion

Atkinson, Justice.

A partial assignment of an amount owed to the assignor, as distinguished from an assignment of the entire debt, vests in the assignee an equitable interest in the entire fund. Fidelity & Deposit Co. v. Exchange Bank, 100 Ga. 619 (28 S. E. 393); Western & Atlantic Railroad Co. v. Union Investment Co., 128 Ga. 74 (57 S. E. 100); King v. Central of Georgia Railway Co., 135 Ga. 225 (69 S. E. 113, Ann. Cas. 1912A, 672).

If after an employee executes a partial assignment of wages owed to him by his emploj^er, to which the employer has not assented, such assignor without consent of the assignee collects the amount so assigned and converts the same to his own use, he commits a wrongful conversion (Covington v. Rosenbusch, 148 Ga. 459, 97 S. E. 78), for which he may be sued at law by the assignee. Code of 1910, § 5406; Code of 1933, § 37-901. See Fidelity & Deposit Co. v. Exchange Bank, supra, holding that such partial assignment will support a statutory claim interposed to a garnishment proceeding in a court of law instituted after the assignment, seeking to subject the fund to a prior judgment obtained by a general creditor.

“Private duties may arise from statute or flow from relations created by contract, express or implied. The violation of any such specific duty, accompanied with damage, shall give a right of action.” Code of 1910, § 4406, Code of 1933, § 105-104. “When a transaction partakes of the nature both of a tort and a contract, the party complainant may waive the one and rely solely upon the other.” § 4407 (1933, § 105-105). The assignee under such circumstances has an option to sue-the assignor for money had and received (Bates-Farley Savings Bank v. Dismukes, 107 Ga. 212, 33 S. E. 175), or to sue him in tort for the conversion of the money assigned.

Where the assignor collects the money from his employer after his equitable assignment as indicated above, such collection will ipso facto make him a trustee of the entire interest in the amount assigned, for the benefit of the assignee.

In the event of bankruptcy of the assignor before he has accounted to the assignee for the money so collected, the claim of the assignee is such a fiduciary claim as will not be affected by the discharge in bankruptcy of the assignor. See Covington v. Rosenbusch, supra.

In Wilson v. Etheredge, 174 Ga. 386 (162 S. E. 707), two of the Justices dissenting, the majority failed to give effect to the distinction between a case instituted by the assignee directly against Ms assignor, involving only rights between those parties, and other cases where the rights of the creditor of the assignor and other assignees were involved, and erroneously held tha/fc the assignee could not sue the assignor at law for the conversion. The ruling there made was application of principles generally applied in the class oE cases last mentioned. Rivers v. Wright, 117 Ga. 81 (43 S. E. 499); Western & Atlantic Railroad Co. v. Union Investment Co., supra; King v. Central of Georgia Railway Co., supra; Lawson v. Lyon, 136 Ga. 214 (71 S. E. 149); Southern Printing Co. v. Potter, 136 Ga. 869 (72 S. E. 427); Shearer v. Shearer, 137 Ga. 51 (72 S. E. 428); Brown v. Southern Ry. Co., 140 Ga. 539 (79 S. E. 152); West v. Brown, 165 Ga. 187 (140 S. E. 500); Graham v. Southern Ry. Co., 173 Ga. 573 (161 S. E. 125, 80 A. L. R. 407, 414). The ruling will not be followed as a precedent to be applied to the facts of the instant case.

The foregoing answers the questions propounded.

All the Justices concur, except Russell, O. J., who dissents.