118 Ga. 381 | Ga. | 1903
This was a suit by a trustee in bankruptcy on a policy of fire-insurance which had been previously transferred by Screws, •the debtor, to Everett, Ridley, Ragan & Company, one of his creditors, and by them surrendered to the trustee, under the provisions of the bankrupt act, § 57 g, with a view of having their debt proved as an unsecured claim. The insurance company demurred on the ground that from the allegations it appeared that the legal title was in Everett, Ridley, Ragan & Company, and would there remain until it was reassigned in writing; that a physical surrender of a chose in action would not put title in the trustee so as to authorize a suit
The original petition, failing to allege that the policy had been reassigned in writing, did show that the trustee could not sue in his own name. The amended petition, however, does not sustain the proposition that Everett, Ridley, Ragan & Company were not holders of the legal title. The adjudication in bankruptcy was not binding on them. As a judgment in rem.it conclusively fixed the status of Screws as a bankrupt, but Everett, Ridley, Ragan & Company had still a right to be heard on the validity of the transfer. They might have been able to show that it was not made within four months before the filing of the petition in bankruptcy, or that they had acted in good faith, without notice of insolvency, and purchased the jpolicy for full value. Even if preferences are void under the bankrupt act, the trustee can not treat them as such for all purposes. He must first establish that fact in proceedings instituted to have them set aside. Neither was the fact that the holders abandoned and surrendered the policy an admission that the original assignment was void. It may have been perfectly valid, and yet the condition of the estate may have been such as to make it to their interest to prove their claim as an unsecured debt. To do that they were required to surrender whatever collateral they already held. Having abandoned the policy and proved
The company contends, however, that even if the trustee could have instituted a proceeding which could be amended into a perfect cause of action, this could only be true in a case where the beneficial owner was in a position lawfully to begin the action, but that the attempted suit here was utterly nugatory, since the trustee could only commence a suit by virtue of an order from the bankrupt court; that in this respect he stands on the same footing as a receiver, who is only authorized to sue when directed so to do by the chancellor administering the estate. There is a marked difference between the two. The powers of a receiver are not fixed by law, but by the order of appointment. His duties vary in each case. In some instances they are active; he must operate a railroad, sell a stock of goods, manage a farm, or collect rents. He is often a mere stakeholder to preserve the property until final decree; he has no fixed duty or inherent power. Unless authorized so to do, he has no right to bring suit. Civil Code, §§ 4900, 4906. But the duties of a trustee in bankruptcy are fixed by statute. “ They shall collect and reduce to money the property of estates for which they are trustees,” — words as fully warranting him to sue as an administrator with the same power and duty. The fact that this is to be “under the direction of the court” no more requires a preliminary order to sue than it would necessitate a special order to authorize him to go in person and present a note and demand payment. The money when collected after suit or without suit, and the use to be made thereof, was to be “ under the direction of the court.” But, being bound to collect, he was not obliged to secure a special order to bring a suit necessary to col
The plaintiff claimed attorney’s fees under the Civil Code, § 3796, setting out no particular facts entitling him thereto, further than that “the refusal to pay was in bad faith, and for the purpose of hindering, delaying, annoying, and damaging petitioner.” Attorney’s fees under this section of the code have usually been asked for by the plaintiff in actions ex delicto, as will appear from the following cases: For damages to person and property, Mayor of Savannah v. Waldner, 49 Ga. 316; damages to live stock, Selma R. Co. v. Fleming, 48 Ga. 514; for deceit, Smith v. Dudley, 69 Ga. 78; for wrongfully suing out bail-trover, Farrar v. Brackett, 86 Ga. 463, Wall v. Johnson, 88 Ga. 525; wrongful seizure of property, Juchter v. Boehm, 67 Ga. 535; loss of goods by carrier, R. & D. R. Co. v. Spencer, 86 Ga. 203; Johnson v. East Tenn. R. Co., 90 Ga. 812; capricious refusal by hotel keeper to deliver either check or baggage, Carhart v. Wainman, 114 Ga. 632; false imprisonment, Ocean S. Co. v. Williams, 69 Ga. 251; maliciously dispossessing a tenant, Slater v. Kimbrough, 91 Ga. 217 (2), 222 ; injuries received while crossing a toll-bridge, Tift v. Towns, 63 Ga. 237. In Selma R. Co. v. Fleming, 48 Ga. 515, the first case construing this section, Judge McCay intimated that the right was limited to actions of tort, since he says that “damages for a tort may be increased by the expenses of litigation, if the defendant has shown himself stubbornly litigious.” And what was said in Mosely v. Sanders, 76 Ga. 293, is not an adjudication to the contrary, since the court did not have before it a case involving bad faith, but held that the sheriff was liable for expenses incurred as the result of his wrongful refusal to accept an affidavit of illegality, even though ,he acted in good faith. In Brunswick Co. v. Dart, 93 Ga. 747, it is intimated that the section allowing attorney’s fees was only applicable to suits for damages, since it was held
There are, however, a few Georgia cases ex contractu in which attorney’s fees were sued for, but this question was not made, the matter being disposed of on want of pleading or failure of evidence: Guernsey v. Shellman, 59 Ga. 797; Robinson v. Holst, 96 Ga. 19; Allen v. Harris, 113 Ga. 107. In Walden v. W. U. Tel. Co., 105 Ga. 275, the action was for damages, and the attorney’s fees were sued for not only on the ground that the defendant had acted in bad faith, but that it had also been stubbornly litigious; the court saying that the amendment was sufficiently broad to have authorized the proof necessary to establish a claim for damages of this character. The only instances in which such fees- have been sustained are Murphy v. Savannah, 73 Ga. 263, where there was no bad faith, but the city failed to fexcept; and Chambers v. Harper, 83 Ga. 382, where the court doubtingly allowed the verdict to stand, it appearing that the bad faith consisted in keeping both the horse and the money. If according to these rulings the right to recover expenses of litigation is not confined to actions sounding in tort, the same element'of bad faith must appear in order to warrant their recovery in actions ex contractu. In one class of cases the defendant must act in bad faith in attaching, levying, or seizing the property or imprisoning or detaining the person of the plaintiff. In the other it must be because of fraud, deceit, breach of trhst, wilful misappropriation of funds, or fraud in securing a contract, or property thereunder. Eor expenses of litigation are not allowed for bad faith in refusing to pay, but where he “ has acted in bad faith ” in the transaction ^nd dealings out of which the cause .of action arose. The language of section 3796 clearly points to bad faith prior to the institution of the action, rather than to the motive with which the particular suit is being defended — “ has acted in bad faith,” not “ is acting.” By § 2140, “ bad faith
The provisions of the Civil Code, § 5701, that “no person shall be deprived of the right to prosecute or defend his own cause in any of the courts of this State, in person, by attorney, or both,” is a privilege granted the defendant, as well as the plaintiff. And if the original contract was made in good faith, if there is an ordinary breach, if the cause of action itself is not colored or poisoned by bad faith on the part of the defendant, he will not be mulcted with additional damages because he refuses to pay. Some defendants fail to pay because they are not able, others because they are not willing, and many because they dispute the liability. The costs which are taxed against the losing party, and the interest allowed for the failure to pay promptly, are the only damages which the law imposes in such cases. There are some statutory damages imposed upon the defendant where his litigation is for delay only. See Civil Code, §§4623, 5594. But it has long been the policy of Georgia not to require the defendant to pay the expense of obtaining a judgment against himself. The “ docket fee ” given the attorney for the successful party by the old colonial act, and which is still allowed in many States, is no longer taxed as part of the costs. Even the contract provision in notes to pay attorney’s fees in case they are collected by suit has been restricted by statute. Civil Code, § 3667; Acts of 1890-91, p. 221. Section 3796 was not intended to announce new law, but was a codification of that previously existing. We are unable to find any case in which it has been held, in a suit on a note, bond, account, contract, or in
The expenses of the plaintiff in traveling to Macon to confer with counsel were voluntary, and, if recoverable under any possible circumstances, stand on the same footing as expenses of litigation hereinbefore dealt with. But as the record does not require a discussion of the meaning of the phrases, “ stubbornly litigious ” and “has caused the plaintiff unnecessary trouble and expense,” we confine our ruling to a discussion of the words, “ has acted in bad faith.” See, in this connection, Mosely v. Sanders, 76 Ga. 294 (3); Sav. R. Co. v. Pritchard, 77 Ga. 412 (2 a).
Judgment affirmed in part, and reversed in part.