Lumpkin v. American Surety Company

7 S.E.2d 687 | Ga. Ct. App. | 1940

Where a surety company contracts to indemnify a bank against loss occasioned by the defalcation of any employee thereof, and on an alleged defalcation by an employee pays the loss on presentation by the bank of a claim in accordance with the terms of the contract, the bank may properly transfer to the company its right of action against the employee to recover the amount of its loss, and the company may then maintain an action in its own name against the employee to recover the amount paid by it to the bank.

DECIDED FEBRUARY 29, 1940. American Surety Company brought suit against Hiram Lumpkin and alleged that the defendant was indebted to the plaintiff in the sum of $14,154.92; that the defendant was employed by the National City Bank of Rome, Georgia; that, on or about February 1, 1939, it was discovered that he had dishonestly, fraudulently, and criminally stolen, deducted, and appropriated or removed $14,254.92 which belonged to the bank, and had concealed such thefts and removals by making various false entries on the bank's books; that the bank made claim on the plaintiff for the amount of its loss, which, with a credit of $100 repaid to the bank, left a balance due of $14,154.92; that the plaintiff was surety for the defendant with the bank, the bond providing that the plaintiff was obligated to pay "any loss through any dishonest, fraudulent, or criminal act of any of the employees, including loss of property through any such act of any of the employees, wherever any such act may be committed and whether committed directly or in collusion with others;" that the plaintiff had accepted liability under this bond and on claim made by the bank and on or about February 25, 1938, had paid the bank $14,154.92, being the amount of the loss sustained by the bank on account of the acts of the defendant; that by reason thereof the plaintiff succeeded and became subrogated to all the rights and actions which the bank has, had, or might have had against the defendant by reason of this transaction, and that the same have been specifically assigned to the plaintiff by the bank, the assignment appearing on the itemized claim made by the bank, on the plaintiff, to wit: "That the insured does hereby assign and subrogate to the American Surety Company of New York any and all rights in and to each and every item of loss for which the said American Surety Company of New York shall pay, and it is understood that the said American Surety Company of New York, at its sole discretion and at its own cost and expense, may enforce all rights, claims, and demands by suit, if necessary, in the name of the insured or in its own name." Copies of the itemized claim of the bank, the assignment of the bank to the plaintiff thereon, and the contract of the plaintiff with the bank, were attached to the petition as amended as exhibits. The contract provided that in consideration of an annual premium the plaintiff company "undertakes and agrees to indemnify . . insured . . to an amount not exceeding . . $25,000 . . from and against any losses sustained by the insured. . . The losses covered by this bond [include] any loss through any dishonest, fraudulent, or criminal act of any of the employees."

The defendant demurred to the petition as amended on the ground that no cause of action was stated, there being no contractual relation shown between the plaintiff and the defendant whereby the defendant might be liable to the plaintiff for any sums paid on his account. The defendant demurred on various special grounds. The trial judge overruled the demurrer and the defendant excepted. It is insisted by the defendant that the judge erred in overruling the general demurrer because it appeared from the petition that there was no contractual relation whatever between the parties to the suit, but that the plaintiff had issued to the bank an instrument which, as the defendant contends, was a policy of insurance and not a bond; that the defendant had nothing to do therewith; that the defendant made no bond to the bank, and that the plaintiff was not a surety, and any right it might have was because of a purported assignment to the plaintiff of the bank's claim against the defendant. The contract referred to specifically provided that the plaintiff agreed to indemnify the bank against any losses sustained by it covered by "the bond," which coverage included "any loss through any dishonest, fraudulent, or criminal act" of any employee of the bank. The alleged shortages of the defendant resulting from the alleged dishonest, fraudulent, and criminal acts in stealing, deducting, and appropriating or removing the sum stated in the amended petition, which sum belonged to the bank and which it alleged the defendant concealed by making various false entries in its books, were covered by this contract or "bond." By reason of these alleged shortages of the defendant the bank suffered the loss of its money in the sum stated in the amended petition, and this loss was paid by the plaintiff on presentation by the bank of a claim therefor in accordance with the provisions of the contract. The claim thus paid by the plaintiff to the bank, being the amount of the alleged shortage of the defendant, was assigned in writing by the bank to the plaintiff, and suit thereon was brought against the defendant in the name of the plaintiff, as provided in the assignment. By this assignment the plaintiff succeeded to the right of the bank to recover from its employee the amount of money alleged to have been taken by him, on payment of this loss by the plaintiff to the bank. The bank had a right of action against the defendant for the monetary loss sustained by it by reason of the alleged dishonest and fraudulent acts of the defendant. In consideration of the payment to it by the plaintiff of the loss sustained by it as a result of the alleged dishonest and fraudulent acts of the defendant the bank could properly transfer and assign to the plaintiff its right of action against the defendant, and it could do this even had there been no agreement by the plaintiff to indemnify it against such a loss.

Under the Code, §§ 85-1803, 85-1805, a right of action for damage to property, or a right of action or chose in action arising from tort which involves, directly or indirectly, a right of property, is assignable. See Sullivan v. Curling,149 Ga. 96 (99 S.E. 533, 5 A.L.R. 124); Benjamin-Ozburn Co. v.Morrow Transfer c. Co., 13 Ga. App. 636 (79 S.E. 753);Hartford Fire Ins. Co. v. Davis, 29 Ga. App. 797 (116 S.E. 647); Information Buying Co. v. Morgan, 39 Ga. App. 292 (147 S.E. 128); Virginia-Carolina Chemical Co. v. Rachels,41 Ga. App. 221 (152 S.E. 308). The right of the bank to recover of the employee, on account of his alleged wrongful acts in taking the money of the bank is a right to recover for injury involving the bank's property right in the money.

The form of an assignment of a chose in action is immaterial. It is sufficient if it is in writing and manifests the intention of the owner to transfer to the assignee his title to the chose in action. Southern Mutual Life Ins. Co. v. Durden, 132 Ga. 495 (64 S.E. 264, 131 Am. St. Rep. 210). The assignment by the bank of its claim against the defendant contained a description of the various alleged thefts and dishonest acts of the employee. The assignment operated to pass to the plaintiff the title to the right of action of the bank against the employee.

The petition stated a cause of action and none of the grounds of special demurrer were meritorious. The trial court properly overruled the demurrer on all the grounds.

Judgment affirmed. Sutton and Felton, JJ., concur.