Feeney v. Decatur Developing Co.

• Decision Date: 18 August 1933
• Docket Number: 22809.
• Citation: 170 S.E. 518,47 Ga.App. 353
• Parties: FEENEY et al. v. DECATUR DEVELOPING CO.
• Court: Georgia Court of Appeals

170 S.E. 518

47 Ga.App. 353

FEENEY et al. v. DECATUR DEVELOPING CO.

No. 22809.

Court of Appeals of Georgia, Second Division

August 18, 1933

Syllabus by the Court.

Petition alleging consignor deposited drafts, agreeing to reimburse bank if consignees refused to honor drafts, and checked out amount of drafts, and that consignees refused to honor drafts, and that consignor fraudulently disposed of consignments and refused to reimburse bank, stated action for fraud not involving "right of property," which could not be maintained by transferee of bank's assets since not assignable (Civ. Code 1910, §§ 3655, 5517).

The plaintiff, as the assignee of the bank, had no right of action against the defendants for fraud alleged to have been perpetrated upon the bank. A right of action for injuries to the assignor arising from fraud cannot be assigned.

Error from City Court of Atlanta; Hugh M. Dorsey, Judge.

Suit by the Decatur Developing Company against J. W. Feeney and another, doing business as J. W. Feeney & Son. Demurrer to the petition was overruled, and defendants bring error.

Reversed.

STEPHENS J., dissenting.

Hendrix & Buchanan and Clifford Hendrix, all of Atlanta, for plaintiffs in error.

Weekes & Candler, of Decatur, for defendant in error.

SUTTON Judge.

The Decatur Developing Company brought a suit sounding in tort against J. W. and A. W. Feeney, doing business as J. W Feeney & Son, in which it made substantially this case: The defendants drew several drafts, payable to the Decatur Bank & Trust Company, on certain customers of theirs. At the special instance and request of the defendants the bank advanced and credited to their account with it the amounts of such drafts with the understanding with the defendants that the sums would be paid to the bank by the consignees of certain shipments of hay, on whom the drafts were drawn; and in each instance the defendants agreed to reimburse the bank in the event the consignees failed or refused to take up the drafts for full value when presented. The consignees refused to honor these drafts and they were returned to the bank unpaid. In the meantime the defendants had checked out from the bank the sums of such drafts. The defendants did willfully, fraudulently, and with tent to deceive, sell, bargain, or otherwise dispose of the shipments of hay to the various consignees or to other parties, without the consent of the bank, and did receive the sums therefor and did not reimburse the bank in any amount, despite the fact that payment thereof was demanded by the bank of the defendants. Thereafter the bank was taken over by the superintendent of banks, and the superintendent, by virtue of an order of the superior court of De Kalb county, transferred to the plaintiff for value all the assets of the bank, including the drafts so drawn by the defendants.

The defendants demurred to the petition as setting forth no cause of action against them, in that the bank could not transfer to the plaintiff a cause of action for fraud. The court overruled the demurrer, and the defendants excepted.

When the consignees of the hay refused to pay the drafts, the title to the hay did not pass to the bank, but remained in the defendants. When the defendants took this hay and disposed of it and pocketed the money received therefor refusing to pay the money over to the bank, in view of their distinct understanding with the hank that, if the consignees did not honor the drafts, they would pay the same, the defendants perpetrated a fraud on the bank. For them to dispose of this hay, with no intention of reimbursing the bank, which had advanced them the money thereon upon their representations that they would so reimburse it, was certainly unconscionable and bad faith. However, the plaintiff in this case acquired by a transfer all of the assets of the bank, upon whom this fraud was perpetrated, among which were the drafts in question. It claims that for this reason it is entitled to bring this action for fraud against the defendants. "An action for a tort must, in general, be brought in the name of the person whose legal right has been affected." Civil Code (1910),§ 5517. This section, which was codification of the common law, has been modified to some extent by section 3655, which allows certain torts to be assigned, and which is as follows: "A right of action is...