Ford for Use of Southern Stevedoring Co. v. Lone Star Cement Co.

• Decision Date: 10 April 1935
• Docket Number: 10411.
• Citation: 181 S.E. 773,181 Ga. 212
• Parties: FORD et al., for Use of SOUTHERN STEVEDORING CO., v. LONE STAR CEMENT CO. et al.
• Court: Georgia Supreme Court

181 S.E. 773

181 Ga. 212

FORD et al., for Use of SOUTHERN STEVEDORING CO., v. LONE STAR CEMENT CO. et al.

No. 10411.

Supreme Court of Georgia

April 10, 1935

Judgment Adhered to on Rehearing October 2, 1935.

Syllabus by the Court.

1. "The bonds on deposit with the State treasurer were choses in action to which no lien was perfected, and no lien attached in virtue of either of the several judgments; but in the equitable proceeding to marshal the assets of the company after its insolvency, the priorities of the several claims should be adjusted on general equitable principles." Eads v. Southern Surety Co., 178 Ga. 348 (3), 173 S.E. 163.

2. The award of compensation by the federal deputy commissioner after a hearing as prescribed in the statute, is a lien against the assets of insurance carriers who become sureties upon the bonds of the employer of the longshoremen. An award by such deputy commissioner, where no motion to modify or set it aside is made within thirty days, is expressly declared to be final. In a competition between such award and judgments of this state, the matter of priority is to be determined by the comparative dates, and the fund in controversy should be awarded to the oldest lien. The court erred in awarding priority to the defendants in error rather than to the plaintiffs in error.

Error from Superior Court, Fulton County; John D. Humphries, Judge.

Proceeding by the Lone Star Cement Company against the Independence Indemnity Company, wherein Adriana Ford and Clara Fields, for the use of the Southern Stevedoring Company, and others intervened. To review the judgment, named interveners bring error.

Reversed.

Connerat & Hunter, of Savannah, for plaintiffs in error.

D. F McClatchey, Jr., Harold Hirsch & Marion Smith, Alston Alston, Foster & Moise, Jas. L. Mayson, Courtland S. Winn Crenshaw & Hansell, Benton E. Gaines, Dorsey, Shelton & Pharr, Howell & Post, J. Richard Bowden, Warren Cox, and J. C. Savage, all of Atlanta, L. M. Wyatt, of La Grange, and Bradley, Baldwin, All & White, of Birmingham, Ala., for defendants in error.

RUSSELL Chief Justice.

Independence Indemnity Company, a nonresident corporation, as provided by statute (Laws 1912, p. 133, § 27), made a deposit of securities with the state treasurer of Georgia, and obtained a license to engage in the business of writing bonds in this state. Lone Star Cement Company, having obtained a judgment, on April 12, 1933, against the Indemnity Company, for $35,056.25 principal, besides interest, filed a petition for a receiver, and the court appointed a receiver. The company being found to be insolvent, the receiver, by authority of the court, obtained from the state treasurer the securities which had been placed on deposit, converted them into money, and held the fund subject to the order of the court. Other creditors of the Independence Indemnity Company intervened and set up their claims. The claim of the Industrial Realty Company was based on a judgment for $18,000 principal, besides interest, obtained on January 31, 1932. Both of these judgments were obtained against the indemnity company on bonds issued by it. Separate interventions were filed by Adriana Ford and by Clara Fields, for use of Southern Stevedoring Company, for the cash value of awards made by the federal deputy commissioner against Southern Stevedoring Company as employer and Independence Indemnity Company as insurance carrier, for injuries sustained by employees of the employer, under the provisions of the act of Congress known as the Longshoremen's and Harbor Workers' Compensation Act, 33 USCA § 901 et seq. The amounts of the two claims last named were $4,154.62 and $3,950.68, respectively. The award in favor of Adriana Ford was made on February 7, 1929, and that in favor of Clara Fields on November 14, 1930. The judge, passing on the priorities of the claimants to the fund in court, after ordering payment of the costs and expenses of the proceeding, decreed that the amount due on the judgment in favor of Industrial Realty Company be paid in full, and that the balance in the hands of the receiver be paid on the judgment in favor of Lone Star Cement Company; the amount due on these two judgments being more than the funds in the hands of the receiver. To this judgment Adriana Ford and Clara Fields, for the use of Southern Stevedoring Company, excepted and assigned error on the grounds: (1) Said judgment and decree is contrary to principles of equity and justice and is contrary to law. (2) The awards in favor of the plaintiffs in error, having been rendered prior to the date of the judgments of both the Industrial Realty Company and the Lone Star Cement Company, should have been awarded a priority, and the funds in the hands of the receiver should have been first awarded to the plaintiffs in error rather than to the two judgment creditors. Various other interveners filed claims to the fund in court, but only Adriana Ford and Clara Fields excepted to the court's distribution of the fund.

The Independence Indemnity Company was a nonresident corporation engaged in this state in the surety, insurance, and bonding business, and wrote bonds as surety for employers liable for compensable injuries to employees, as well as becoming surety on other bonds. In accordance with our insurance requirements, it had a deposit of bonds of the United States of the par value of $25,000. Upon a finding that the company was insolvent, the court appointed a receiver, who obtained the bonds from the state treasurer, and under order of court converted them into money and held the fund subject to the order of the court. The receiver was appointed on petition filed by Lone Star Cement Company, which had obtained a judgment against Independence Indemnity Company on April 12 1933. Interventions were filed by Industrial Realty Company, which secured a judgment against Independence Indemnity Company on January 21, 1932, and by Adriana Ford and Clara Fields, for the use of Southern Stevedoring Company, based on awards made by the federal deputy commissioner against the Southern Stevedoring Company as employer and the Independence Indemnity Company as insurance carriers. The award in favor of Adriana Ford was made on February 7, 1929, and that in favor of Clara Fields was made November 14, 1930. The judgment of which complaint is made declined to apply any portion of the fund in court to the awards in favor of Adriana Ford and Clara Fields, upon which, under the provisions of the Longshoremen's and Harbor Workers' Compensation Act (33 USCA § 901 et seq.), the Southern Stevedoring Company as principal was bound, and...