Opinion
36629.
DECIDED APRIL 2, 1957.
Garnishment. Before Judge Hicks. Floyd Superior Court. December 17, 1956.
Covington Kilpatrick, for plaintiff in error.
Wright, Rogers, Magruder Hoyt, Fullbright Duffey, contra.
In the present case, where the garnishee did not hold any funds that the defendant could recover in an action against him, the judgment of the trial court finding for the garnishee's answer and against the plaintiff's traverse to such answer was supported by the evidence.
DECIDED APRIL 2, 1957.
Smith Evans Lumber Company brought an action against J. H. Kell et al. seeking a judgment on an open account against Kell, and a lien on the property of the other defendants. The other defendants were stricken on demurrer and a judgment was rendered against Kell on July 31, 1956. While this action was pending the plaintiff garnisheed the Citizens Federal Savings Loan Association. Kell filed dissolution bond to such garnishment. On February 21, 1956, Citizens Federal Savings Loan Association filed its answer to the garnishment proceedings in which it denied that it was indebted to Kell and denied that it had any property belonging to him. The plaintiff traversed the garnishee's answer, and issue was thus made. The trial court, hearing the case without the intervention of a jury, found for the garnishee's answer, and the plaintiff filed its motion for new trial on the usual general grounds. Exception is to the denial of this motion.
It appears from the evidence that the garnishee had made certain loans to the owners of real property for the express purpose of making improvements on such real property, that the proceeds of such loans were not delivered to the borrowers but were held by the garnishee to be paid to the contractor (the defendant), or his materialmen or laborers for work and material furnished in connection with the improvements being made, that no funds were disbursed for this purpose, nor could any funds have been disbursed for this purpose, except upon the orders of the borrowers, and that the contractor (the defendant) could not have collected any of such funds from the garnishee except upon the order of the borrowers.
It is well settled that funds in the hands of a third party can not be reached by garnishment where the defendant, in an action against the garnishee, could not recover such funds. See Foster v. Southern Bell Tel. Tel. Co., 85 Ga. App. 504 ( 69 S.E.2d 644) and citations. In the present case the funds in the hands of the garnishee, which the plaintiff contends were subject to garnishment, could not have been recovered by the defendant Kell in an action against the garnishee unless the borrowers of this money had given their consent to the defendant having such funds, inasmuch as the garnishee was merely an agent of the borrowers insofar as the handling of these funds was concerned. In Holmes v. Pope Fleming, 1 Ga. App. 338 (3) ( 58 S.E. 281), Judge Russell, speaking for the court, said, "As to a fund in the hands of a garnishee to be advanced under a contract and in pursuance thereof and held for one special purpose only: as the debtor can not compel its payment to other purposes foreign to the contract, neither can the garnishing creditor extend his rights beyond those of the defendant."
Accordingly, in the present case where the funds in the hands of the garnishee were there for one particular purpose, to wit, to pay for labor and material furnished under the contracts between the borrowers and the defendant for the improvement of the borrowers' real property, which contracts were made prior to the institution of the main action against the defendant and for no other purpose, the trial court properly found for the garnishee's answer and did not err thereafter in denying the plaintiff's motion for new trial based on the usual general grounds.
Judgment affirmed. Felton, C. J., and Quillian, J., concur.