Sanford v. U.S. Fidelity & Guaranty Co.

Decision Date11 December 1902
Citation43 S.E. 61,116 Ga. 689
CourtGeorgia Supreme Court

Syllabus by the Court.

1. An equitable petition filed by the surety of a tax collector, in which it is alleged that the principal has committed a breach of his bond by a failure to pay over to the state and county large sums of money which he has collected, and that the principal is insolvent, and is disposing of his personal property so as to avoid the liens created by the statute thereon, and which prays for an injunction against the principal to prevent his disposing of his property, and for the appointment of a receiver to take charge thereof, sets up an equitable cause of action, and is sufficient to base on it an amendment in which it is alleged that the surety, since the filing of the original suit, has paid the amount of the default of the principal, and that execution has been issued against the principal and the surety.

2. The cases of Guilmartin v. Railroad Co., 29 S.E. 189 101 Ga. 565, and Tichenor v. Pavement Co., 42 S.E 505, 116 Ga. 303, distinguished.

Error from superior court, Floyd county; W. M. Henry, Judge.

Suit by the United States Fidelity & Guaranty Company against B. T Sanford. Judgment for plaintiff, and defendant brings error. Affirmed.

W. J. Neal, Fouché & Fouché, Seaborn & Barry, and Wright, Dean & Dean, for plaintiff in error.

Denny & Harris, for defendant in error.


On August 1, 1901, the United States Fidelity & Guaranty Company filed in the office of the clerk of the superior court of Floyd county a petition, the material portion of which was as follows: Petitioner, a Maryland corporation doing business in Georgia as surety on official and other bonds, executed on named dates certain bonds as surety for Sanford, who, in October, 1898, and again in October, 1900, had been elected tax collector of Floyd county; these bonds being conditioned upon the faithful discharge by Sanford of his duties as tax collector during the terms of office for which he was elected; two of the bonds being payable to the governor of Georgia and his successors in office, and two to the board of commissioners of roads and revenues of Floyd county and their successors in office. By the terms of these bonds petitioner was liable as surety for any shortage in Sanford's accounts in his collections of either state or county taxes. After the execution, delivery, approval, and acceptance of these bonds, Sanford defaulted in the payment of the sums due the state and county in certain large sums, for which sums petitioner was liable as surety, and petitioner was thereby a creditor of Sanford in said sums. Petitioner charged that Sanford has recently conveyed to one Camp, who had knowledge of Sanford's shortage, certain personal property, with intent to defraud and defeat the rights of the state of Georgia and the county of Floyd and of petitioner, and escape their lien upon the property described. Sanford is the owner of a large amount of real and personal property, which is subject to be suddenly converted into cash, so as to defeat the rights of petitioner. This real and personal property is to a considerable extent incumbered by mortgages, deeds of trust, bills of sale, and other liens, some of which are superior and some inferior to the rights of petitioner. Much of Sanford's property is subject to be suddenly removed and disposed of, to the injury of petitioner and the destruction of its rights as surety on Sanford's bonds. Sanford is causing his property to be removed beyond the limits of the state since the discovery of the shortage in his accounts, and a considerable amount of his personal property has been placed in the hands of Camp, who either now has the same in his possession or has sold it, and applied it to his own use. Under the bonds referred to, petitioner is subrogated to the rights of the state of Georgia and the county of Floyd. Waiving discovery, the petition prays: (1) That Sanford be enjoined from selling, incumbering, or disposing of any of his property, real or personal; (2) that Camp be enjoined from selling or disposing of any of the personal property received by him from Sanford; (3) that a receiver be appointed to take charge of all the property of Sanford, both real and personal, including the crops on the lands, "to reduce the same to cash, and that same may be applied to judgment in favor of petitioner against V. T. Sanford"; (4) for judgment against Sanford for the amount of its debt; (5) that the receiver take charge of and dispose of Sanford's property in the hands of Camp; or (6) if the same has been converted into money by Camp, or is not forthcoming upon the demand of the receiver, that petitioner have judgment against Camp for the value of the property; and (7) for process. On August 17, 1901, the judge of Floyd superior court granted a restraining order in accordance with the first two prayers of the petition; and called upon the defendant to show cause before him on September 2, 1901, why the prayers of the petition should not be granted. On August 29, 1901, the plaintiff presented to the judge an amendment to its petition, which set out that since the filing of the original petition the plaintiff had paid to the state of Georgia $16,000, and to the county of Floyd $18,000, on account of the bonds before mentioned, whereby Sanford had become indebted to it in the sum of $34,000; that these payments to the state and county were made on account, and by special request the comptroller general of the state of Georgia and the board of commissioners of roads and revenues of Floyd county had extended the time to the plaintiff for paying the balance of the shortage until it could have the books checked over, and the balance arrived at to their definite satisfaction. The plaintiff, by its amendment, acknowledged its liability for this balance, and promised to pay the amount thereof within a few days. The amendment also alleged that Sanford's indebtedness of $34,000, as therein set out, constituted the plaintiff his creditor in more than three-fourths of his entire indebtedness to anybody, and charged that Sanford was hopelessly insolvent. Further facts were set forth as to Sanford's property. The amendment prayed for the appointment of a receiver to take charge of the estate of Sanford, who should be empowered to collect all of its assets, and convert them into cash as speedily as practicable, accounting and reporting to the court; for an injunction against the sheriff of Floyd county and his deputies to restrain them from selling any of Sanford's property under legal process until the parties interested in or claiming such property should come into court by interpleader, and have their claims adjudicated; for an order requiring Sanford to turn over to the receiver all of his property, receipts, checks, vouchers, bank books, and account books, whether kept by him personally or as tax collector of Floyd county, which had not already been turned over to the proper authorities; for an order making Camp a party defendant; and for general relief. This amendment was allowed by the judge on August 29, 1901, and was filed in the office of the clerk of Floyd superior court on August 30th. It does not appear that any objection was ever made to the allowance of the amendment, or that a motion was made to strike it. On September 2, 1901, the hearing of the case was, by agreement, continued until September 16th, at which time the court passed an order substantially...

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