Reid v. McRae

• Decision Date: 23 May 1940
• Docket Number: 13128.
• Citation: 9 S.E.2d 176,190 Ga. 323
• Parties: REID v. McRAE.
• Court: Georgia Supreme Court

9 S.E.2d 176

190 Ga. 323

REID v. McRAE.

No. 13128.

Supreme Court of Georgia

May 23, 1940

Syllabus by the Court.

1. Where in a settlement between a landlord and a tenant the landlord credited the tenant with a sum for which the tenant agreed that 'as soon as the same arrived and was ready for delivery' he would 'turn over' to the landlord a check for 'parity on cotton' which he was to receive from the Federal Government, and where on receipt of the check he failed and refused to indorse and deliver it to the landlord, the tenant being insolvent, the landlord could maintain an action for specific performance to require the tenant to indorse and deliver the check in accordance with the agreement. The petition stated a cause of action for specific performance, injunction, and receivership.

2. It appearing on interlocutory hearing that the defendant had indorsed and cashed the check and had also disposed of the proceeds before the hearing, it was error to grant an injunction to restrain the defendant from indorsing the check or from disposing of the proceeds, these acts having been completed; and this is true notwithstanding the defendant in the performance of one or more of such acts may have violated a previous restraining order.

3. An order restraining the defendant from indorsing and cashing a check fairly comprehended disposition of the proceeds in the event of its collection by the defendant; and it appearing from the evidence that the defendant did dispose of such proceeds after knowledge of the restraining order, the court did not err in adjudging him in contempt for so doing.

On July 13, 1939, Mrs. Max L. McRae, doing business as Cedar Park Farm, filed against Jeff Reid an equitable petition in which she made the following allegations:

'2. That your petitioner, through the manager of said farm, Max L. McRae, rented to the defendant a farm to be cultivated by him on the lands of petitioner for the year 1938 at and for a rental of $150.

'3. In addition to furnishing said defendant with said land petitioner supplied said defendant with fertilizer cottonseed, corn, hay, and oats, and cash for hiring labor and for paying the cost of gathering and harvesting said crop, including said rent, to the amount of $399.94.

'4. That in the settlement for said supplies and the rent due by the defendant to petitioner the defendant desired that petitioner should pay to him the parity paid by the United States government on the cotton grown on said premises in and during said year, and proposed to petitioner through the manager of said farm aforesaid that the parity price of said cotton be paid to him, the defendant, and that petitioner take and receive and that defendant would turn over to petitioner the government check for said parity on said cotton when the same arrived and was ready for delivery.

'5. In pursuance of said proposal of defendant petitioner paid to defendant two and four-tenths cents per pound on the total cotton grown and harvested by said defendant, amounting to 3,114 pounds, or an aggregate of $74.73.

'6. That said government parity check has now arrived and is in the hands of the county demonstration agent, ready for delivery, but that the defendant fails and refuses to indorse said check or to turn the same over to petitioner, and fails and refuses to account to petitioner for said sum of $74.73 so paid to the defendant by petitioner under the agreement aforesaid.

'7. That in making said settlement and paying to the defendant said parity allowance made by the government, petitioner did so on the agreement and understanding that said defendant, on the arrival of said check, would indorse the same and cause the county agent to deliver said check to petitioner in order that petitioner might secure reimbursement for the purchase of said parity check as aforesaid.

'8. That petitioner and the defendant in calculating said parity payment did so on the basis of the cotton produced by said defendant. Petitioner is informed and believes that said parity check now in the hands of the county agent as aforesaid is for a sum slightly in excess of said amount of $74.73 so paid by petitioner to defendant, on account of the fact that the same was calculated and the amount thereof arrived at on a slightly different basis. That your petitioner is willing and has offered to pay the defendant the difference between the amount heretofore paid to defendant by petitioner on said parity payment or check, but that said defendant declines and refuses to consent to the delivery of said check to petitioner or that petitioner have any part thereof.

'9. That said defendant is wholly insolvent; and should said defendant receive and cash said check he will refuse, as he has already announced his intention so to do to pay to petitioner any part of said sum of $74.73. That being insolvent and unable to respond to any judgment that may be rendered, that said loss and damage to petitioner will be irreparable unless restraining order and injunction issue and defendant be required to specifically perform his contract.

'10. That the process of garnishment or attachment does not lie in said case, because of the nature of said fund and the payment thereof.

'11. That said defendant should be restrained and enjoined from indorsing or cashing said check, and should be required to specifically perform his said contract and indorse said check and deliver the same to petitioner in order that petitioner may cash said check and take therefrom the amount so paid by petitioner to the defendant.

'12. That a receiver should be appointed to take possession of, hold, and preserve said check pending the trial of this case and the final direction and adjustment therein.'

The plaintiff prayed: '(a) That said defendant be restrained, and on the hearing hereof enjoined, from indorsing or cashing said check so held by [him] or that may have been delivered to him by the county agent of said County of Telfair, except to indorse the same and make delivery thereof to your petitioner. (b) That said defendant be required to specifically perform his said contract with your petitioner and endorse and deliver said check to your petitioner upon petitioner's paying to said defendant the difference between the amount of said check and the amount of $74.73 so paid by petitioner to said defendant for parity allowance by the United States government to said defendant. (c) That a receiver be appointed to take and hold said check pending the final judgment and decree of the court, and to dispose of the same and the proceeds thereof in accordance with the order and decree of the court. (d) That petitioner have judgment against said defendant for said sum, and a decree that the same be paid from the proceeds of said check. (e) That petitioner have such other and further relief as to the court may seem meet and proper and the exigencies of the case may require.'

The defendant demurred to paragraphs 11 and 12 of the petition and to prayers a, b, c, and e, upon the ground that there was no equity in them, in that the allegations did not show cause for injunction or appointment of a receiver. The defendant's answer admitted the making of the rental contract as alleged in paragraph 2, and the furnishing of supplies as alleged in paragraph 3, but not the amount of such supplies. His answer amounted to a denial of all other allegations. He further alleged that he had fully paid the plaintiff for all items furnished to him, and did not owe the plaintiff any sum whatever, and that in fact the plaintiff was indebted to him $75 'for the run of his field; that the plaintiff through her agents, servants, and employees refused to allow and permit this defendant to use the run of his fields; and that the reasonable value of the run of said fields were and is $75, for which amount he prays judgment.' With reference to the check in question, the defendant alleged 'that he has already received said check and spent the money thereon; said check having been received and cashed prior to the time the instant suit was served on him.'

On July 22, 1939, the plaintiff amended her petition by adding the following allegations and prayers: '1. On information and belief petitioner alleges that since the filing of the above-stated cause the defendant has received, indorsed, and cashed said government check, and that said defendant now has the proceeds of said check in his possession and custody. 2. That said defendant, unless enjoined from otherwise disposing of said money and from withholding the same from petitioner, that he will dispose of said funds, and the same will not be available to the direction of the court and to the payment of said debt or obligation when final judgment is entered thereon; and petitioner by reason thereof will suffer irreparable injury. 3. That the receiver applied for in said original petition and that may be appointed by the court should be authorized to take possession of said money, and the defendant restrained and enjoined from withholding the same from such receiver, that the receiver may hold and preserve said fund until the final judgment, order, decree, and direction of the court therein. Wherefore petitioner prays that this her amendment be allowed, and that said defendant be restrained and enjoined from disposing of said money and from withholding the same from your petitioner; that receiver be appointed by the court to take possession of and to hold said fund pending the further order of the court, and that said defendant be restrained and enjoined from withholding said fund or otherwise interfering with said receiver in taking possession thereof; and petitioner will ever pray.'

On interlocutory hearing Max L. McRae, for the plaintiff testified: 'At the...