Opinion
32877.
DECIDED FEBRUARY 9, 1950.
Complaint; from Macon Municipal Court — Judge Feagin. November 2, 1949.
S.W. Hatcher, for plaintiff.
Hemingway Hemingway, Frank G. Wilson, for defendants.
Since money to which the debtor has only the right of possession rather than the actual possession is a chose in action, and since a judgment creates no lien on a chose in action, but attaches by the service of a summons of garnishment based thereon, and where, as here, such summons of garnishment is levied upon salary of the bankrupt in the hands of his employer within a period of 4 months prior to the filing of the petition in bankruptcy, the lien on the fund, which had subsequently been properly turned over to the trustee in bankruptcy, was rendered void by the provisions of the Bankruptcy Act.
DECIDED FEBRUARY 9, 1950.
This case appears before us on the exception of the plaintiff, Mrs. A. I. McWilliams, to the judgment of Hon. R. Douglas Feagin, Judge of the Municipal Court of the City of Macon, which judgment sustained a special plea filed in said proceedings by W. W. Hemingway, trustee in bankruptcy for the defendant, James Hicks. The ruling of the trial court comprehensively states the issues involved and is quoted in full:
"Statement of facts: The plaintiff sued the defendant in a bail trover action for $269.53 on June 4, 1949, alleging that the defendant was in possession of a certain automobile covered by a retention title note from the defendant to the plaintiff and that the defendant refused to deliver the property to the plaintiff and that the property is of the value of $285.00. The case was in default and the plaintiff on June 24, 1949, took a judgment by default for $269.53 principal with a provision in the judgment that there was to be a special lien on the automobile involved and that said property be levied on and sold and the proceeds of the sale applied to the payment of cost and the balance applied on the execution to be issued on this judgment. This was done and subsequently on the 27th day of July, 1949, the plaintiff sued out garnishment proceedings for $256.44 in the Municipal Court which was served upon the Central of Georgia Railway Co. The garnishee answered on August 19, 1949, an indebtedness of $333.03, $135.26 of which was earned from July 16, 1949 to July 27, 1949, and $197.77 for sixteen days earned between the date of the service of the garnishment and the date of the answer. The bankrupt was adjudicated a bankrupt on the 18th day of August, 1949, so that both the judgment of the plaintiff and the filing of the garnishment were within four months of the defendant's adjudication in bankruptcy. The trustee proved on the hearing of the case that the defendant was insolvent at the time he was adjudicated a bankrupt and on the date of the filing of the garnishment. The trustee has filed a dissolution bond in the Municipal Court and has received from the Clerk the money paid into the court by the garnishee. The trustee asks that the garnishment and the inchoate lien created thereby be declared null and void.
"Opinion. It is clear that under Section 67 (F) of the National Bankruptcy Act as amended in 1938 that the lien created by the garnishment proceedings must be declared null and void when attacked by the trustee. The effect of this is that the plaintiff can take nothing under the garnishment.
"It is further apparent from the nature of the proceedings that the debt upon which the plaintiff's judgment was rendered was founded upon a contract and is, therefore, provable in bankruptcy and the bankrupt's discharge when obtained and when pleaded is a good defense against the judgment and against any action thereon. This clearly appears from the ruling of the Supreme Court of the United States in Crawford v. Burke, 195 U.S. 176 ( 25 Sup. Ct. 9, 49 L. ed. 147), and in the Hunt case from Illinois, 292 U.S. 234, ( 54 Sup. Ct. 695, 78 L. ed. 1230, 93 A.L.R. 195). I am clear that the only judgment on a tort suit which is not dischargeable in bankruptcy is one where a wilful and malicious injury to person or property has been committed and that a mere technical violation as in this case with no wilful and malicious injury was not intended to be exempted or excepted from a discharge provided by the bankruptcy act. Any apparent ruling of the Supreme Court of Georgia and the Court of Appeals of Georgia in conflict with the ruling in the Crawford case must yield to the clear and definite opinion of the Supreme Court of the United States, which is the supreme arbiter and interpreter of an act of Congress. I, therefore, sustain the special plea of the trustee in bankruptcy and hold that the lien of the garnishment is null and void and that the trustee in bankruptcy is entitled to the fund in court answered due by the garnishee. This 2nd day of November, 1949."
1. Code § 107-106 states as follows: "An alternative verdict in an action of trover so far vests the title to the property sued for in the plaintiff, that, until the judgment is paid by the defendant, such judgment shall have the first lien on the property sued for, to the exclusion of all other claims whatsoever." It is apparent that a judgment in trover vests the title absolutely in the plaintiff, so far as the property itself is concerned, and that, where a money judgment is elected, this judgment would become a special lien upon the property sued for, and a general lien upon all other property of the defendant. Code § 110-507. As to the property of the defendant other than the personalty sued for, then, the judgment is controlled by the rules of law relating to judgments generally. Execution may issue under it and levy be made on all the defendant's property of which he is in possession. However, property or money to which the debtor has only the right of possession rather than the actual possession is a chose in action. Sterling v. Sims, 72 Ga. 51 (1). No lien is created upon a chose in action by a judgment. The plaintiff's lien arises rather by summons in garnishment, and when money due the defendant as salary is in the hands of the employer, the lien attaches from the date of the summons. When this date is within the four-month period prior to the filing of the petition for bankruptcy (under Sec. 67 of the Bankruptcy Act) the lien is thereby rendered void by the Federal statute. In Armour Packing Co. v. Wynn, 119 Ga. 683 ( 46 S.E. 865), the supreme court held that the garnishee, having notice of the adjudication in bankruptcy, not only had the right to set up his non-liability to the garnishing plaintiff, but if he had failed to make such defense and had subsequently been sued by the judgment debtor's trustee in bankruptcy, the judgment awarding the bankrupt's money in its hands to the judgment creditor would have been no defense to such an action. Here the plea is filed, not by the garnishee, but by the trustee in bankruptcy himself, and the effect thereof is the same.
It follows that it is not necessary for this court to decide whether a money judgment on a trover proceeding such as is here involved, where the petition fails to allege fraud, malice or wilful misconduct, is also dischargeable in bankruptcy when obtained within four months of the application therefor. Our Supreme Court and this court have, up to the present time, uniformly held that they are not. See Berry v. Jackson, 115 Ga. 196 ( 41 S.E. 698); Birmingham Fertilizer Co. v. Cox, 10 Ga. App. 699 ( 73 S.E. 1090); Covington v. Rosenbusch, 148 Ga. 459 ( 97 S.E. 78); Citizens Bank v. Mullis, 161 Ga. 371 ( 131 S.E. 44); Worsham v. Penn, 32 Ga. App. 189 ( 122 S.E. 817); Levy v. American Wholesale Corp., 32 Ga. App. 103 ( 122 S.E. 808). In Citizens Bank v. Mullis, supra, the court, in answer to a certified question of the Court of Appeals containing a statement of facts very similar to that here involved, held that the trover judgment was not dischargeable, one judge dissenting. This case was decided in 1925, and it appears that the Federal decisions on which the plaintiff in error here relies, which were handed down before that date, were considered by the court and found to be distinguishable. Since that date it was held in Davis v. Aetna Acceptance Co., 293 U.S. 328 ( 55 Sup. Ct. 151, 79 L. ed. 393), that a judgment in an Illinois trover action for a mortgaged automobile secured by a bill of sale absolute in form, a chattel mortgage, a trust receipt, and promissory notes was rendered void by the discharge in bankruptcy of the debtor who had properly listed the respondent in his schedule of creditors, the court holding that the transaction was a "technical conversion" and did not constitute an exception to Section 63 of the Bankruptcy Act, setting forth what debts may be proved and allowed in such proceedings. Since a determination of this point is not necessary to reach a decision in this case, the request of the defendant in error that the case be certified to the Supreme court to determine whether the decision there reached in Berry v. Jackson, supra, should be reversed, is hereby denied.
The trial court did not err in sustaining the special plea of the trustee in bankruptcy and in ordering that the funds raised by the garnishment proceedings be paid over to him.
Judgment affirmed. MacIntyre, P. J., and Gardner, J., concur.