Miller v. New Amsterdam Casualty Co.

123 S.E.2d 717, 105 Ga. App. 174, 1961 Ga. App. LEXIS 587

• Court: Court of Appeals of Georgia
• Decided: December 5, 1961
• Docket: 39156
• Status: Published

Opinions

Hall, Judge.

The question presented is whether the payees’ indorsements of bank checks issued by a highway subcontractor to laborers, carry with them assignments by the laborers of their claims under the provisions of the contractor’s payment bond required by statute. Clearly the plaintiff was not among those for whom the express terms of the statute required protection. “. . . all subcontractors and all persons supplying labor, materials, machinery, and equipment in the prosecution of the work provided for in said contract.” Code Ann. § 23-1705 (2). Neither is plaintiff included as a beneficiary by the express terms of the bond, quoted supra.

Each of the laborers whose check plaintiff cashed had two distinct rights. One was his right to payment as payee of a negotiable instrument. The other was the right (chose in action) to recover under the payment bond in the event he was not otherwise paid for his work on the project covered by the contract. The former right may be transferred by an indorsement in blank. Code Ann. § 14-401. The latter right (chose in action) may be transferred by an assignment. Here the laborers transferred whatever rights they had in the checks by indorsing them in blank. However, the blank indorsements did not per se operate as assignments of the laborers’ separate and distinct rights (choses in action) to recover under the payment bond. In this State an assignment of a chose in action must be in writing; the meaning of a legal assignment is a transfer of title or interest by writing. Turk v. Cook, 63 Ga. 681.

The plaintiff contends and cites authority for the proposition that by virtue of his being an indorsee of the checks he became the assignee of valid equitable assignments of the rights of the payees under the bond. Finch v. Enke, 54 S.D. 164 (222 NW 657); Shoshoni Lumber Co. v. Fidelity & Deposit Co., 46 Wyo. 241 (24 P2d 690, 699). “An equitable assignment is such an assignment as gives the assignee a title which, though not cognizable at law, will be recognized and protected in equity.” Smith v. Folsom, 190 Ga. 460, 470 (9 SE2d 824).

However, the question whether or not this petition sets out a cause of action in equity was beyond the jurisdiction of the City Court of Albany. Constitution Art. VI, Sec. IV, Par. I (Code Ann. § 2-3901); Code Ann. § 37-101; Ga. L. 1897, p. 408. For this reason, and because, under the above cited authorities, the petition did not set out a cause of action at law, the trial court did not err in sustaining the general demurrer.

Plaintiff relies on Alley v. First Nat. Bank of Gainesville, 46 Ga. App. 527 (168 SE 317). There the court held that a court of law, without invoking equitable principles, could declare a judgment in favor of the transferee of the note to be a special lien on the property described in the security deed securing the note, even though the security deed had not been transferred. The court stated that “the law gives full, adequate, and complete relief,” under the statute, Code Ann. §§ 67-1706 and 67-1707, providing that transfers of certain evidences of indebtedness (including security deeds) shall carry with them to the transferee “the lien connected with the same without specifically transferring the lien.” A lien is a “claim or charge on property, either real or personal, as security for the payment of some debt or obligation. . .” 53 C.J.S. 826, § 1. The Alley case is not authority for granting the relief sought by the present plaintiff, because he does not sue on an evidence of indebtedness secured by a lien.

Judgment affirmed.

Felton, C. J., and Bell, J., concur.