Bank Of Chatsworth v. Hagedorn Const. Co, (Nos. 5050, 5059.)

• Decision Date: 13 July 1926
• Docket Number: (Nos. 5050, 5059.)
• Citation: 162 Ga. 488,134 S.E. 310
• Parties: BANK OF CHATSWORTH. v. HAGEDORN CONST. CO. HAGEDORN CONST. CO. v. BANK OF CHATSWORTH.
• Court: Georgia Supreme Court

162 Ga. 488

134 S.E. 310

BANK OF CHATSWORTH.

v.HAGEDORN CONST. CO.

HAGEDORN CONST. CO.

v.BANK OF CHATSWORTH.

(Nos. 5050, 5059.)

Supreme Court of Georgia.

July 13, 1926.

(Syllabus by the Court.)

Atkinson and Gilbert, JJ., dissenting.

Error from Superior Court, Murray County; M. C. Tarver, Judge.

Mandamus by the Hagedorn Construction Company against the Bank of Chatsworth. Judgment for plaintiff, and defendant brings error, and plaintiff assigns cross-error. Affirmed. Cross-bill dismissed.

Hagedorn Construction Company, a corporation under the laws of the state of Alabama, filed its petition for mandamus on May 3, 1922, against the Bank of Chats-worth, and alleged in substance the following: Some time prior to December 3, 1919, Murray county issued and sold bonds aggregating $100,000, the proceeds of which were to be used for the purpose of building the public roads and bridges of the county. Upon the sale of the bonds the Bank of Chats-worth, having bid to become the county depository of said road bond fund, and the bid having been accepted and a bond tendered, received the money from Murray county. By the act of the bank and the officials of Murray county the bank became the duly constituted depository of said fund. The office of treasurer of Murray county had been abolished by legislative act, with power in the proper officers of the county to select a bank as depository to keep the accounts of the county, receive and pay out its moneys onproper vouchers, etc. On November 24, 1920, petitioner entered into a contract with Murray county for the construction and improvement of a highway known as project 178, on the basis of a contract price approximating $66,964.27, of which the Georgia state highway department contracted to secure 50 per cent. through federal aid. At the time of, or prior to entering into this contract, Murray county by resolution set apart a sufficient part of the road bond fund to pay the county's proportion of the work. Petitioner has fully performed its part of the contract, and the highway has been accepted by the state highway department. There is still due petitioner on the contract price approximately $23,000, all of which is unpaid. Murray county has given petitioner an order on the Georgia state highway department for approximately $5,000, and there is still due by Murray county to petitioner approximately $18,000. The board of commissioners of roads and revenues of Murray county passed a resolution authorizing the issuance of a warrant to petitioner for the sum of $17,725, and that the warrant be drawn on the road bond fund at the Bank of Chatsworth. In accordance with such resolution such warrant was drawn, and was presented to the bank for payment, which payment was refused on the alleged ground of insufficient funds. It is alleged that the bank received from Murray county sufficient funds that were appropriated for the payment of the county's proportion of the contract price of project 178 to have paid this warrant; that the amount of the warrant has not been paid out by the bank on this project; and that the bank should have had and in law is chargeable with having sufficient funds to pay the warrant. By amendment it is alleged that the bank came into possession of further funds belonging to the road funds, received from the highway department of the state, the sum of $29,000; that the bank knew and was chargeable with knowledge and notice that all of said funds were to be devoted to improving the roads and bridges of Murray county, and could not lawfully be used for any other purpose; that it was the duty of the bank to pay out the funds only for roads, bridges, and the repairing and improving thereof, and to pay no warrants that were not drawn for such purposes; that the bank was chargeable with knowledge and did know that Murray county had entered into a contract with the Hagedorn Construction Company to construct the highway known as project 178 for the approximate sum of $67,-000, of which one-half was to be paid by the federal government through the state highway department and one-half to be paid by Murray county out of its road money in the custody of the bank. To this petition as amended the defendant bank filed its demurrers, which were overruled, and the case was taken to the Supreme Court. This court held that the petition as amended set out a cause of action, and was not subject to the demurrers filed. Bank of Chatsworth v. Hagedorn Construction Co., 156 Ga. 348, 119 S. E. 28.

In addition to the demurrers the defendant filed an answer admitting that it was conducting a banking business at Chatsworth; that bonds for road purposes were issued in the sum of $100,000; that it made a bid for the proceeds of the bonds and the bid was accepted and bond was given to Murray county as alleged. It denied that it was the county depository in connection with the fund, and chargeable with the duties of treasurer, and especially chargeable with the duty of safely keeping the road fund, as well as keeping the accounts of the county applying to the road funds, and of receiving and paying out moneys in connection with said fund on proper vouchers approved by the proper authorities of the county. It neither admitted nor denied the execution of the contract between plaintiff and Murray county, and that a sufficient part of the road fund had been set apart to pay for the county's part of the work, or that the work had been fully performed, or that there was still due plaintiff the amount alleged, or that a resolution had been passed by the county board authorizing the issuance of a warrant to pay the balance due plaintiff. The bank admitted that it refused payment of the warrant. It averred that it was not a county depository; that the money derived from the sale of the bonds was received unofficially, and as a bank deposit subject to check; that it has complied with its obligations in every respect; that it paid out the money upon checks as any other bank, furnished monthly statements, and that the last statement made by it showed that the road bond fund contained a balance of $S9.35. In connection with the answer the defendant attached a statement purporting to show the account between Murray county and the Bank of Chatsworth, showing a total of $136,000 deposited to the credit of the county, and that all of it was drawn out, except the sum of $S9.35. The plaintiff filed a motion to strike certain parts of the answer, which motion was partially sustained. The court struck all reference to the Cohutta Banking Company as county depository, and the averment that the Bank of Chatsworth was not chargeable as a county depository, and held that the statement of payments by the defendant was insufficient. The defendant filed an amendment to its answer, in which it set out money actually paid out by it on county warrants and the purposes for which the money was paid. It also set out the financial status of the bank on November 15, 1922, and certain negotiations and arrangements by which the assets were turned over to and its liabilities assumed by the Georgia State Bank, setting up that it had no funds to pay any judg-ment of the county if mandamus absolute should be granted against it. Plaintiff filed its motion to strike certain parts of this amendment, and certain of the objections were overruled and others sustained; the effect of the order being to strike from the answer the averments that related to defendant's financial condition, and what was done by it in connection with the Georgia State Bank in taking over its affairs, the averment with reference to its inability to have paid the warrant when presented, and that the Georgia State Bank could not be reached by mandamus. The defendant further amended its answer and set up that to require it to pay any sum in excess of $89.35 would be in violation of paragraph 1 of section 3 of article 1 of the Constitution of the state of Georgia which provides, "Private property shall not be taken, or damaged, for public purposes, without just and adequate compensation being first paid, " and in violation of the Fifth Amendment to the Constitution of the United States to the same effect, and further in violation of paragraph 21 of section 1 of article 1 of the Constitution of Georgia, which provided that "there shall be no imprisonment for debt." Plaintiff moved to strike said paragraph, which motion was sustained. The defendant filed exceptions pendente lite to each ruling of the court on the pleadings.

The case was then referred to G. E. Maddox, as auditor. The auditor filed his report giving his findings of law and of fact. Defendant and plaintiff each filed exceptions of fact and law to the report of the auditor, and the defendant filed objections to the plaintiff's original exceptions. These objections raised the question as to whether or not equity or common-law rules would apply in the form of the exceptions. These objections were overruled. The court sustained and overruled certain of the exceptions of law to the auditor's report filed by both parties, and, the case being submitted to, be decided without a jury, found for and against certain exceptions of fact of each of the parties, and held that the plaintiff was entitled to a mandamus absolute. The defendant excepted pendente lite to the rulings and judgment of the court, and also made a motion for new trial, which was overruled. The plaintiff also filed exceptions pendente lite to the findings of law and fact of the court, as set out in the cross-bill of exceptions.

Smith, Hammond & Smith, of Atlanta, W. C. Martin, of Dalton, and Jesse M. Sellers, of Chatsworth, for plaintiff in error.

Dorsey, Howell & Heyman and Mark Bolding, all of Atlanta, and C. N. King, of Chatsworth, for defendant in error.

HILL, J. (after stating the facts as above), [1] This case was here on a former oc casion. Bank of Chatsworth v. Hagedorn Construction Co., supra. It was here on petition and demurrer; and a majority...