Jasper School Dist. v. Gormley

• Decision Date: 15 October 1937
• Docket Number: 11828,11829.
• Citation: 193 S.E. 248,184 Ga. 756
• Parties: JASPER SCHOOL DIST. v. GORMLEY, Superintendent of Banks. GORMLEY, Superintendent of Banks, v. JASPER SCHOOL DIST.
• Court: Georgia Supreme Court

193 S.E. 248

184 Ga. 756

JASPER SCHOOL DIST. v. GORMLEY, Superintendent of Banks.

GORMLEY, Superintendent of Banks, v. JASPER SCHOOL DIST.

Nos. 11828, 11829.

Supreme Court of Georgia

October 15, 1937

Error from Superior Court, Pickens County; J. H. Hawkins, Judge.

Suit by R. E. Gormely, Superintendent of Banks, against the Jasper School District. To review the judgment, both parties brought error to the Court of Appeals, and that court transferred the case to the Supreme Court (55 Ga.App. 391, 190 S.E. 366).

Case remanded to the Court of Appeals.

Syllabus by the Court.

Though a petition filed in the superior court may contain allegations authorizing the rendition of a money judgment against the defendant therein, as upon an action in equity upon the doctrine of subrogation, or as upon an action at law for money had and received, if the prayer of the petition seek the recovery of the money judgment as for money had and received, in the absence of any other prayer, the case presented is not an equity case within the meaning of the constitutional provision giving the Supreme Court exclusive jurisdiction of equity cases. The Court of Appeals has jurisdiction of a main bill and a cross-bill of exceptions in such case, assigning error, respectively, on the overruling and sustaining of demurrers to the petition.

Roscoe Pickett, of Jasper, and A. J. Henderson and Herman J. Spence both of Canton, for plaintiff in error.

E. M McCanless, of Canton, and Dave M. Parker, Asst. Atty. Gen for defendant in error.

HUTCHESON Justice.

Pickens County Bank, by and through R. E. Gormley, Superintendent of Banks, brought its petition in the superior court against Jasper School District, a local school district of said county. The petition was brought in two counts. The first count was on certain notes alleged to have been executed by the board of trustees of the school district for money loaned by the plaintiff. In the second count, the execution of the notes was again alleged, and the further allegation was made that the defendants had refused payment of the notes 'because of certain alleged technicalities in connection with the execution thereof,' and that if petitioner has no right to recover on the notes it is 'entitled to recover from the defendant the principal amounts as specified in said notes, for the reason * * * that the sums of money * * * described in said notes were * * * used by said defendant * * * in payment and discharge of liabilities legally incurred by the trustees in operating the schools of such district, and in defraying the lawful current expense of operating schools in such district'; that by reason of these facts the defendant has taken to its use money which in justice and fairness and in equity and good conscience belongs to plaintiff; that the plaintiff advanced said sums to the defendant 'in good faith and in the belief that the defendant had a legal right to borrow same and on the expectation that the same was to be repaid; and defendant having secured said sums of money on its promise to repay, and having used said sums of money in defraying its lawful expenses, it is in equity and good conscience bound to repay same to plaintiff, with lawful interest from the date of receipt of said several sums of money as shown by said notes, and plaintiff is entitled to be subrogated to all rights of the parties to whom said money was paid, and defendant is indebted to plaintiff in said sums of $8,092.' The prayers were for process, and, 'in the event that the court should find that said notes are not legal obligations of said defendant, then and in that event that it should have a judgment against the said defendant for the principal sum of $8,092 as for money had and received, said amounts being shown and designated as the amount specified in said notes above described, together with lawful interest thereon.' There was no prayer that the plaintiff be subrogated to the rights of the parties to whom the money was paid, nor was there a prayer for general relief. By amendment the plaintiff set out to whom and for what purpose the money loaned was paid by the defendant. Upon a hearing on demurrers to the petition, the court passed an order overruling certain of the demurrers and dustaining others. The defendant excepted to that portion of the order overruling demurrers; and the plaintiff filed a cross-bill of exceptions assigning error on that portion of the order sustaining demurrers. The case was transmitted to the Court of Appeals, and by that court transferred to this court on the ground that the Court of Appeals did not have jurisdiction 'to determine the purely equitable question as to whether the demurrer to the count setting up a claim based solely upon 'legal' subrogation was properly overruled.'

This court is of the opinion that the second count of the petition, properly construed in accordance with previous decisions of this court, is not one seeking to set up a claim 'based solely upon 'legal' subrogation,' but is one seeking a money judgment only in an action at law as for money had and received. An action for money had and received was, under the common law, one of the common counts of general assumpsit, and brother to the other money counts, money lent and money paid. 57 Am.Dec. 544, note. The action of general assumpsit is of an equitable character, and had its origin in a conception of a tort liability primarily based upon the element of deceit, by which one attempted to enrich himself at the expense of another from which ex debito justiae an implied promise was evolved. Whitcomb v. Brant, 90 N.J.L. 245, 100 A. 175, L.R.A.1917D, 609. It was soon transformed into an action of contract, becoming afterwards a remedy where there was neither tort nor contract. Philpott v. Superior Court, 1 Cal. (2d) 512, 36 P.2d 635, 95 A.L.R. 990. 'And it is now maintained in many cases which its principles do not comprehend, and where fictions and intendments are resorted to, to fit the actual cause of action to the theory of the remedy. It is thus sanctioned where there is no actual assumpsit, no real contract, but where some duty is deemed sufficient to justify the court in imputing a promise to perform it, and hence in bending the transaction to the form of action.' (Italics ours.) 4 Am.Jur. 495, and citations. The action of money had and received, as a form of assumpsit, was invented by the common-law judges to permit litigants to secure relief from the narrower restrictions of the common-law procedure which afforded no remedy in too many cases of merit. Heywood v. Northern Assurance Co., 133 Minn. 360, 158 N.W. 632, Ann.Cas.1918D, 241; Bosworth v. Wolfe, 146 Wash. 615, 264 P. 413, 56 A.L.R. 1117. An action for money had and received is founded upon the equitable principle that no one ought unjustly to enrich himself at the expense of another, and is maintainable in all cases where one had received money under such circumstances that in equity and good conscience he ought not to retain it, and ex aequo et bono it belongs to another. Merchants' Bank of Macon v. Rawls, 7 Ga. 191, 50 Am.Dec. 394; Alexander v. Coyne, 143 Ga. 696, 85 S.E. 831, L.R.A.1916D, 1039. Thus an action for money had and received is a substitute for a suit in equity (Culbreath v. Culbreath, 7 Ga. 64, 50 Am.Dec. 375), and, while founded on causes of action arising out of application of equitable principles, is an action at law by reason of its origin as a mode of action in the common-law courts. Culbreath v. Culbreath, supra.

Does the fact that the cause of action as set forth in an action for money had and received arises out of circumstances which give rise also to a right of subrogation make the action for money had and received one cognizable only in a court of equity? Subrogation is the substitution of another person in the place of the creditor whose obligation is paid, so that the person in whose favor it is exercised succeeds to all the rights of the creditor. It is of equitable origin, being founded upon the dictates of refined justice, and its basis is the doing of complete essential, and perfect justice between the parties, and its object is the prevention of injustice. Wilkins v. Gibson, 113 Ga. 31, 42, 38 S.E. 374, 84 Am.St.Rep. 204; Cornella Bank v. First National Bank of Quitman, 170 Ga. 747, 154...