95 Ga. App. 565 | Ga. Ct. App. | 1957
Counsel for the plaintiff call our attention to Code § 37-113 which states: “When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the' third person to inflict the injury shall bear the loss.” The defendant, under the contract with A. G. Penuel was holding approximately 10% of $116,000 to be paid to Penuel on January 1, 1954. The plaintiff loaned Penuel $8,000 on October 1, 1953, in reliance upon the written agreement hereinbefore set out, to make the 10% of $116,000 check payable to Penuel and the plaintiff jointly. From the record it appears that the obvious-purpose of this arrangement was to provide security for the payment of the loan to the plaintiff. The defendant, subsequent to the signing of the agreement and in violation of the agreement, according to our construction of the contract, paid the $116,000 to Penuel alone and not to Penuel and the plaintiff jointly. It is alleged in the petition that on June 14, 1956, Penuel was adjudicated a bankrupt, thus barring the plaintiff from recovering anything from him. It is our opinion, in view of the whole record, that the loss to the plaintiff was occasioned by the violation of the contract by the defendant. See Federal Land Bank of Columbia v. Blackshear Bank, 182 Ga. 657 (186 S. E. 724). Counsel for the defendant attacked the soundness of the Federal Land Bank case as being inapplicable here. While that case and the case at bar are not identical as to facts, it is our opinion that they are similar in principle. The petition in the instant case alleges conclusively that it was on the faith of Penuel se
“Central Electric Company
Electrical Contractors
211 West Hoover Avenue, Box 423
Killeen, Texas.
722 Eastern Avenue,
Dallas, Texas.
“Gentlemen:
“We wish to extend an assignment of all monies to Wherry Housing project, Mineral Wells, Texas, F.H.A. Project No. 113-80008-Air Force No. 7, to Merchants & Planters National Bank, Sherman, Texas.
“All checks for gross amount of contract $60,500.00, shall be made payable jointly to the Merchants & Planters National Bank and Central Electric Company.
“Yours very truly,
Central Electric Company
By Alvin H. Falck /s/
“Accepted by:
Central Electric Company, Killeen, Texas.
Alvin H. Falck /s/: Partner
Hal A. Moody /s/: Partner
“Accepted by:
Wolters Village Management Company
B. P. Dunlap /s/: Vice Pres.”
In that case the following facts appear: “On August 10, 1953, upon presentation of this letter and the $60,500 subcontract between Central and Wolters, the bank made a loan to Central in the amount of $20,500, taking as further security therefor a demand note, a chattel mortgage on motor vehicles (estimated to be worth $2,500) and a preexisting assignment of Moody’s life insurance policy, of a value of $1,500 to $1,700. The bank did not notify Wolters of this.
“As the work proceeded and Central submitted estimates, Wolters made six progress payments to Central by checks, all of which were made out not jointly, as provided in the letter, . . . The bank did not inform Wolters that the checks were not made out in accordance with the letter. It proceeded to make further advances of credit to Central.” The court held: “The primary question is the effect of the letter agreement. The complaint referred to this as an assignment. The trial court said in its oral opinion: T find as facts, gentlemen, that the bank was dealt with
“Consequently, the assignment was not made by means of this letter, but was completed later, in the transaction between Central and the bank. If the bank’s rights depended solely on the subsequently completed assignment, it would have no right against Wolters here, because a debtor is entitled to credits for payments made before notice of the assignment, 5 Tex. Jur. 40-42; Restatement, Contracts § 167 (1), and according to one Texas case, also for payments made after notice of the assignment if they reasonably appear necessary to enable the assignor to perform his duties under a building contract upon the performance of which his right to payment is dependent. Peden Iron & Steel Co. v. McKnight, 60 Tex. Civ. App. 45, 128 S. W. 156. But the bank’s rights do not rest solely upon the assignment. We cannot agree
The principles of law involved and decided there are exactly as we encounter in the case at bar. We note that that case was reversed, but that was done because the wrong measure of damages was applied and not because of the principles of law involved.
We are convinced that under the record in the instant case the court erred in sustaining the demurrers and dismissing the petition.
Judgment reversed.