Opinion
34524.
DECIDED MAY 13, 1953. REHEARING DENIED MAY 27, 1953.
Action on bond. Before Judge Arnold. Fulton Civil Court. December 31, 1952.
Richard T. Nesbit, for plaintiffs in error.
Phillips, Johnson Williams, contra.
Where the obligor and the surety on a forthcoming bond sought to show that the breach of the bond sued upon was occasioned by a levy under an execution of a lien superior to the title of the plaintiff in the trover suit in which the forthcoming bond was made, but where it appeared by an entry of levy on the execution that other property had been previously levied upon, which was shown to have been worth more than the amount of the execution, and where the proceeds of this first levy were unaccounted for, the execution was shown prima facie to have been satisfied and hence invalid; and the court did not err in excluding from evidence the execution and second levy thereunder upon the property described in the forthcoming bond, and in rendering judgment for the plaintiff for the value of such property.
DECIDED MAY 13, 1953 — REHEARING DENIED MAY 27, 1953.
This was a suit upon a forthcoming bond given by V. M. C. Products, Inc., and H. C. McCullough for two electric motors, two arbors, a universal head, a slotting attachment with tools, a coolant system, a dividing head with gear-drive unit, and a swivel vise, all of which were accessory attachments for a milling machine. On October 11, 1948, the State Revenue Commissioner issued an execution against Henry Hutchinson, Inc., for $1,306.26 as unpaid unemployment insurance contributions. This execution was levied on September 30, 1949, upon a LeBlond lathe and a No. 12 Van Norman milling machine as the property of Henry Hutchinson, Inc., and these machines were sold at public outcry, but, being cumbersome, they were not brought before the courthouse door when sold. The milling machine was bought by V. M. C. Products, Inc., through its agent, who was a former employee of Henry Hutchinson, Inc., and when the milling machine was moved by the purchaser, the accessory attachments were taken with it.
On February 8, 1951, Henry Hutchinson, Inc., brought an action of trover against V. M. C. Products, Inc., for the milling machine and the accessories. V. M. C. Products, Inc., with H. C. McCullough as surety, made the forthcoming bond upon which the present suit was brought, and retained possession of the property. Henry Hutchinson, Inc., amended its trover suit during the trial so as to proceed for the use of Joel T. Henry, the plaintiff in the present suit, and obtained judgment for the accessories only, on March 29, 1951.
The foregoing facts were alleged by the plaintiff in his petition and were admitted by the defendants in their, answer. The plaintiff also alleged that Henry Hutchinson, Inc., had transferred its rights on the forthcoming bond to him, and that demand had been made for the property and refused.
The defendants admitted in their answer that a demand had been made on April 14, 1952, for the property recovered in the trover suit, but further alleged that, on April 3, 1951, the Sheriff of Fulton County had levied upon the property as that of Henry Hutchinson, Inc., and had placed the property in custodia legis. The execution under which this levy was made was attached to the answer as an exhibit, and was the same one under which the levy of September 30, 1949, had been made upon the lathe and the milling machine.
On the trial of the case, it was stipulated that the bill of sale executed by the sheriff for the milling machine did not include or describe the accessories for which judgment was recovered in the trover suit. The plaintiff introduced an assignment dated January 3, 1952, transferring the rights of Henry Hutchinson, Inc., as obligee on the forthcoming bond, to the plaintiff, Joel T. Henry.
The plaintiff testified: that he made a demand upon the defendants for the return of his accessories on April 14, 1952, but did not then get them; that the fair market value of the accessories on the date the bond was made was about $2,200; that he did not know that the accessories had been sold until after the sheriff's sale; that the value of the Van Norman milling machine was $3,000 and the fair market value of the LeBlond lathe was $6,000, on the date they were levied upon in September, 1949; that the unemployment-contributions execution in question had not been paid in full by him; that he did not know that it had been paid by anybody; and that he did not know what the property brought at the sale.
The defendant, H. C. McCullough, testified; that he was the president of V.M.C., Inc.; that, at the time the judgment was rendered for Henry in the trover case, he was ready to deliver the accessories in accordance with the court's order, but did not know where to make delivery to Henry; that he held the accessories until April 3, 1951, when the Sheriff of Fulton County levied upon them and hauled them away; that, when the Van Norman milling machine and the lathe were purchased by his agent, $465 was paid to the sheriff; but, on cross-examination, he testified that his corporation bought only the milling machine and not the lathe, which was sold under the same levy and at the same time: "We did not buy the LeBlond lathe. As far as I know, we didn't even bid on the LeBlond lathe"; and that the value of the accessories sued for was $200.
The case was heard by the Chief Judge of the Civil Court of Fulton County, who found in favor of the plaintiff. The defendants moved for a new trial and excepted to the denial of their motion.
In their amended motion for a new trial, the defendants contend that the judgment was contrary to the law and evidence, in that: (1) the plaintiff testified that he knew about the sale of his accessories by the sheriff after the sale was held but before asking McCullough for the accessories; (2) the plaintiff's property in the defendants' possession was seized under a lien of superior dignity to the plaintiff's lien, and compliance with the forthcoming bond was thereby rendered impossible; (3) the court made the legality of the levy the issue in the case and placed the burden on the defendants to prove the legality of the levy and the amount realized from the sale; (4) the court failed to recognize that acts performed by public officers are presumptively valid; (5) the court refused to admit in evidence the execution and levy attached to the motion as an exhibit, under which the accessories belonging to the plaintiff were taken from the defendants' possession, over the objection that the original levy on September 30, 1949, upon the milling machine and lathe had not been accounted for, and that there was no evidence to show there was any balance due on the execution; (6) the plaintiff admitted that he was in Winder when he obtained judgment for the accessories and did not request the return of the accessories until more than a year later, after he had heard about the sale of the accessories, and that he had not paid the execution in full; (7) the court did not permit the defendants to introduce the execution and levy, which would tend to prove that the defendants were agents of the levying officer and so were not answerable to a suit in which their principal had not been made a party; and (8) the plaintiff was the transferee and alter ego of the corporation against which the execution was issued and levy made, and so was estopped from claiming a breach of the forthcoming bond.
The execution which the defendants sought to introduce in evidence was issued on October 11, 1948, by the Revenue Commissioner of Georgia, and was for $1,306.26 in unpaid contributions to the unemployment trust fund. It contained an entry of levy signed by W. G. Cagle, a Deputy Sheriff of DeKalb County, upon a No. 12 Van Norman milling machine and a LeBlond lathe, and was dated September 30, 1949. There were credits entered for payments made on December 1, 1948, January 3, 1949, and December 21, 1950, totaling $402.60, of which $293.91 had been credited upon the principal of the execution. These credits appeared over the signature of J. W. Warren. It was shown that the sheriff's sale at which this property was sold was advertised as to be held on the first Tuesday in November, 1949, but there was nothing on the execution to show what amount was raised by the sale of the lathe and the milling machine, or how the proceeds of the sale, if any, had been applied.
The question for determination is whether the court erred in excluding the execution and levy from evidence and in thereby depriving the defendants of their only defense to the suit on the forthcoming bond. If the property described in a forthcoming bond is taken from the obligor's possession under valid legal process superior to that under which the property was originally brought into the law's possession, this may be shown as a defense to an action on the forthcoming bond; but if the obligor surrenders the property under a process which is invalid or inferior to the lien or title upon which the first proceeding was based, this would be no defense. Carroll v. Richards, 50 Ga. App. 272, 275 (3) ( 178 S.E. 178); Kinney v. Avery, 14 Ga. App. 180 ( 80 S.E. 663); Allen v. Allen, 119 Ga. 278 ( 45 S.E. 959); Floyd v. Cook, 118 Ga. 526 ( 45 S.E. 441, 63 L.R.A. 450). The obligor and his surety have the burden of showing that the process by which the property was taken from the obligor's possession was legally adequate. Rockmore v. Garner, 9 Ga. App. 369 ( 71 S.E. 506).
"A levy upon personal property sufficient to pay the debt, unaccounted for, shall be prima facie evidence of satisfaction to the extent of the value of such property." Code § 39-601. The value of the property embraced in an unexplained levy is essential to determine whether a presumption of satisfaction is raised. American Harrow Co. v. Banks Bros., 127 Ga. 203 ( 56 S.E. 300). And no presumption of satisfaction arises where the property is sold for a sum insufficient to satisfy the execution. Jenkins v. Swicord, 25 Ga. App. 640 (1) ( 104 S.E. 18).
The plaintiff testified that the milling machine described in the levy of October 11, 1949, was worth $3,000, and that the lathe also described was then worth $6,000. The defendant, McCullough, testified that $465 was paid to the sheriff for the milling machine. The execution was thus shown to have been satisfied to the extent of $465 by the sale of the milling machine, and it was uncontroverted that the lathe also described in the levy was worth $6,000, more than enough to have satisfied the execution in full. The amount for which the lathe was sold was not shown.
While the lien of the unemployment-contributions execution was superior to the title of either Henry Hutchinson, Inc., or Joel T. Henry, who succeeded by assignment to the corporation's rights as the obligee of the forthcoming bond, nevertheless, the defendants failed to carry the burden of showing that the execution under which they had surrendered the property to the levying officer was valid at the time of the second levy; on the contrary, it was shown prima facie to have been satisfied by the first levy, of September 30, 1949.
Therefore, the court did not err in excluding the execution and the second levy thereunder from evidence, as complained of in ground 5 of the motion for a new trial. What we have stated disposes of the other grounds of the motion. The defendants, in their answer, confessed the plaintiff's action on the forthcoming bond and sought to avoid it by the defense of a levy made under process superior to the plaintiff's title, but they failed to sustain this defense by proof. The finding for the plaintiff was supported by the pleadings and the evidence, and the court did not err in denying the defendants' motion for a new trial.
Judgment affirmed. Felton and Worrill, JJ., concur.