Graham v. Southern Ry. Co

• Decision Date: 15 October 1931
• Docket Number: No. 8325.,8325.
• Citation: 173 Ga. 573,161 S.E. 125
• Parties: GRAHAM . v. SOUTHERN RY. CO. et al.
• Court: Georgia Supreme Court

173 Ga. 573

161 S.E. 125

GRAHAM .

v.SOUTHERN RY. CO. et al.

No. 8325.

Supreme Court of Georgia.

Oct. 15, 1931.

Rehearing Denied Nov. 14, 1931.

Syllabus by the Court.

1. In this state a partial assignment of a debt due to the assignor will not vest in the assignee such title to the part of the debt assigned as can be enforced by the assignee by an action at law, without the assent of the debtor. The reason upon which this principle has been stated to rest is that the debtor has the right to stand upon the contract with his creditor as originally made.

2. It is equally as well settled in this state that a partial assignment is enforceable in equity, although the debtor may not assent, if all the parties at interest are before the court, so that the right of each in the fund may be determined in one suit and settled by one decree. The tendency of modern decisions is in the direction of more fully protecting the equitable rights of assignees of choses in action; and the objection that to allow an assignment of a part of the entire demand might subject the debtor to several actions to enforce a single obligation lias less force under a system which requires all parties at interest to be joined as parties to the action.

3. An equitable assignment of a part of a debt vests an equitable interest in the assignee to such part, and after notice to the debtor he is bound to apply the fund according to the terms of the assignment, regardless of the wishes of the debtor. A contrary doctrine is inconsistent with the equitable title of the partial assignee to the part of the debt assigned to him. The payment by the debtor to his creditor of the whole of his debt, after notice of the partial assignment, and in disregard of the assignment, renders him liable to the partial assignee in such assignment.

Error from Superior Court, Fulton County; Virlyn B. Moore, Judge.

Action by Joseph Graham against the Southern Railway Company and another. Judgment for defendants, and plaintiff brings error.

Reversed.

Hendrix & Buchanan, of Atlanta, for plaintiff in error.

McDaniel, Neely & Marshall and W. O. Wilson, all of Atlanta, for defendants in error.

HINES, J.

On November 1, 1931, White, by an instrument in writing, sold and assigned to Graham $25 of the amount of his salary which he had earned as an employee of the Southern Railway Company during the period beginning October 15, 1930, and ending October 31, 1930. The amount of salary due White by the railway company was larger than the amount assigned, and was due at the time of the assignment. On November 1, 1930, Graham gave notice in writing of this assignment, to the paymaster of the railway company at Washington, D. C, and to the agent of the company in Atlanta, Ga. These notices were received by the paymaster and the agent on November 3, 1930. On that day the railway company and its Atlanta agent acknowledged receipt of these notices, and in their acknowledgments notified Graham that his assignment was a partial assignment which did not vest legal title in him to any part of the salary earned by White during the above period, and that for this reason the company would disregard the assignment, and would pay to White his earnings for the period mentioned on his regular pay day on November 15, 1930. These notices of the refusal of the company to recognize this assignment were received by Graham on November 5, 1930. On November 15, 1930, the company paid to White the salary earned by him during the above period, amounting to $62.81. On December 12, 1930, Graham filed his petition against White and the Southern Railway Company, in which he set up the foregoing facts, and prayed for judgment against the company for the amount of said assignment and interest thereon from November 15, 1930. The Southern Railway Company demurred to the petition, upon the grounds that (a) it set forth no cause of action either legal or equitable; (b) the assignment on which petitioner is proceeding is a partial assignment of the wages earned by White during the period covered by the instrument, and said assignment, not having been accepted by this defendant, furnishes no basis, equitable or otherwise, for the relief sought; and (c) due and ample notice was given to the plaintiff of the fact that this defendant would not honor, accept, or recog-nize said assignment, and would pay the money covered thereby to White when the same became payable, and, this case not having been brought until this defendant had paid White his wages due him for the period covered by the assignment, the plaintiff cannot now maintain this equitable action against this defendant on account of said assignment. The judge sustained the demurrer, and the plaintiff excepted.

1. It is well settled in this state that a partial assignment of a debt due to the assignor will not vest in the assignee such a title to the part of.the debt assigned as can be enforced by the assignee in a common-law action, without the assent of the debtor. The reason upon which this principle has been stated to rest is that a debtor has a right to stand upon the contract with his creditor as originally made, and to pay the debt as a whole. So at law the creditor cannot divide an obligation to pay him a stated sum of money into fragments, and assign them to a number of different persons, thereby subjecting the debtor to the annoyance of more than one claim being presented to him, growing out of the single contract, or putting him to the necessity of defending more than one suit for the same cause of action in case he has a defense to the contract as originally made. This principle, as now understood and enforced by the courts, seems to rest mainly upon this ground. Hence it is, that, in order to enforce such partial assignment of a single debt, acceptance by the debtor must be shown. Rivers v. A. & C. Wright & Co., 117 Ga. 81, 43 S. E. 499; Western & A. R. Co. v. Union Inv. Co., 128 Ga. 74, 57 S. E. 100; Brown v. Southern Ry. Co., 140 Ga. 539, 79 S. E. 152; West v. Brown, 165 Ga. 187(2), 140 S. E. 500; Central of Georgia Ry. Co. v. Dover, 1 Ga. App. 240, 57 S. E. 1002; Mandeville v. Welch, 5 Wheat. 277, 5 L. Ed. 87; Tierman v. Jackson, 5 Pet. 5S0, 8 L. Ed. 234; Gibson v. Cooke, 20 Pick. (Mass.) 15, 32 Am. Dec. 194; Robbins v. Bacon, 3 Me. (3 Greenl.) 346. In the present case the assignment is of a portion of wages earned by the employee during a specified period, to which the debtor expressly refused to assent; and the assignment comes within the rule just stated.

2. It is equally as well settled in this state that such an assignment is enforceable in equity, although the debtor may not assent, if all the parties at interest are before the court, so that the right of each in the fund may be determined in one suit and settled by one decree. While equity follows the law, it is said that the reason for not enforcing a partial assignment at law does not exist in equity, as all the parties at interest can be brought before the court, and their rights under the original contract and the assignments can be settled in one action and by one decree, and that, while a debtor would have a right to complain of being subjected to more than one suit, the fact that a resort to a different forum is rendered necessary by the assignments does not afford him any just cause of complaint. Rivers v. A. & C. Wright & Co., supra; King Bros. & Co. v. Central, of Ga. Ry. Co., 135 Ga. 225, 69 S. E. 113, Ann. Cas. 1912A, 672; 2 R. C. 619, § 27. In Rivers v. A. & C. Wright & Co., supra, it was stated that there were cases in which the common-law rule as to partial assignments of a debt was of force in suits in equity; but that the great weight of authority is against this view. This principle was recognized at an early date in the English chancery cases. Row v. Dawson, 1 Ves. Sr. 331; Yeates v. Groves, 1 Ves. Jr. 280; Ex parte South, '2 Swanst, 392; Fitzgerald v. Stewart, 2 Sim. 333; Lett v. Morris, 4 Sim. 607; Watson v. Duke of Wellington, 1 Russ. & Myl. 602. In Burn v. Carvalho, 4 Myl. & C. 690, Lord Cottenham made this statement of the principle: "In equity an order given by a debtor to his creditor, upon a third person having the funds of the debtor to pay the creditor out of such funds, is a binding equitable assignment of so much of the fund." In Row v. Dawson, supra, Lord Hardwicke said: "It is a credit on the fund, and must amount to an assignment of so much of the debt; and though the law does not admit an assignment of a chose in action, this court does, and any words will do, no particular words being necessary thereto." In Yeates v. Groves, supra, Lord Thurlow said: "This is nothing but a direction by a man to pay a part of his money to another for a valuable consideration. If he could transfer, he has done it; and it being his own money, ho could transfer." In Ex parte South, supra, Lord Eldon said: "It has been decided in bankruptcy that if a creditor gives an order on his debtor to pay a sum in discharge of his debt, and that order is shown to the debtor, it binds him. On the other hand, this doctrine has been brought in doubt by some decisions in the courts of law, which require that the party receiving the order should in some way enter into a contract. That has been the course of their decisions, but is certainly not the doctrine of this court." In Watson v. Duke of Wellington, supra, Sir J. Leach said: "In order to constitute an equitable assignment there must be an assignment to pay out of a particular fund." In Rodiek v. Gandel, 12 Beav. 325, Lord Truro reviewed the cases extensively, and expressed a similar view as to the principle to be deduced therefrom. The same rule has been repeatedly followed in the later English chancery decisions. In Addison v. Cox, L. R. A. Ch. 76, an officer assigned a part of a sum due to him from the sale of his commission, and the sale was held to be valid.

The principle announced in Rivers v. A. & C. Wright & Co., supra, that the great weight...