Opinion
44665.
ARGUED SEPTEMBER 2, 1969.
DECIDED SEPTEMBER 19, 1969.
Garnishment. Grady Superior Court. Before Judge Culpepper.
Sutton, Kelley Pittman, Thomas H. Pittman, Frank Sutton, for appellant.
Bell Baker, Conger Conger, J. Willis Conger, for appellee.
Where a defendant in a pending suit had a contract with an owner of property under which it was entitled to periodic instalment payments, and assigned such contract to the garnishee bank on no consideration other than under an oral agreement the assignment would secure any loan that might subsequently be made by the bank to the defendant, such assignment being agreed to by the owner on the stipulation that it would remain effective until canceled by the bank, and where thereafter and before any loan was in fact sought or procured the defendant and the bank agreed that no loan would be needed and the assignment would be immediately canceled, the fact that the owner was not notified of the rescission until two days after a summons of garnishment was served on the bank by the plaintiff in the main case, no money having come into the garnishee's possession after service of the summons, would not of itself place any liability on the garnishee to answer for funds thereafter paid by the owner to the defendant.
ARGUED SEPTEMBER 2, 1969 — DECIDED SEPTEMBER 19, 1969.
Long Mfg. Co. filed a summons of garnishment against the Citizens Bank based on its pending suit against Clyde Taylor Co., against which latter it later obtained a judgment. It appears from the stipulation of facts that the defendant had a checking account in the garnishee bank in which there was a balance of $12.10 at the time of service of the garnishment, which was on the morning of October 28, 1968. It further appears that the defendant Clyde Taylor, Inc., had a contract with Powerhouse, dated June 10, 1968, to perform a construction contract on which it would receive periodic payments. During the course of construction the defendant and garnishee bank discussed the likelihood of the defendant needing a construction loan which could be secured by the contract payments, and pursuant to an oral agreement to have funds available if needed, the defendant on August 7, 1968, assigned all of its rights, title and interest in the contract, including the instalment payments to it, to the bank, and authorized all subsequent payments to be made to the bank. Powerhouse, Inc., agreed to the assignment in the following language: "We hereby accept the above and foregoing assignment and agree that until notice in writing by the assignee, Citizens Bank of Cairo, Georgia, we will make all payments due or payable under said contract directly to and in the name of said Citizens Bank when work is completed to our satisfaction and agree that this acceptance and acknowledgment shall be irrevocable and binding on the undersigned company until notice in writing by said bank that said assignment is no longer of any force and effect."
Pursuant to this commitment, Powerhouse, Inc., mailed a payment check on September 16 and another on October 24 to the bank, payable to the bank and the defendant jointly, and both these checks were immediately turned over to the defendant by the bank. By the middle of October it appeared that no bank loan would be needed, and the president of the defendant company informed the president of the garnishee of this fact, whereupon it was agreed "to promptly return said assignment to said Powerhouse, Inc., and to thus terminate any rights and obligations as between the defendant and the garnishee bank, but through negligence on the part of the president of the bank the assignment had not been returned to said Powerhouse, Inc., by October 28, 1968." It was in fact returned on October 30 and accepted by Powerhouse, who thereafter made checks payable directly to the defendant. No funds came into the possession of the garnishee under this contract subsequent to the service of the garnishment.
Upon the trial a verdict was directed in favor of the plaintiff in garnishment for $12.10, and plaintiff appeals.
The direction of the verdict in favor of the garnishee is shown by the order of the trial court to have been based on the statement that "there was no consideration for the making of such assignment" of the contract by the defendant to the bank which appears in the stipulation of facts and which is binding on the parties, and also the stipulation that "at no time did garnishee claim any proprietary interest in such assignment and the contract therein referred to and at no time was such assignment utilized by garnishee for the purpose of securing any indebtedness or other obligation owed by defendant to garnishee." An assignment to be valid must either be a gift or be for consideration. The holding in Brown Guano Co. v. Bridges, 34 Ga. App. 652 (3) ( 130 S.E. 695) was to the effect that there is no presumption of consideration for an equitable assignment. The assignment here recites that it is for value received, and the appellant contends that even though the stipulation is to the effect that there was no consideration, it is elsewhere stipulated that "the purpose of such assignment was to secure such loan if such loan was subsequently made by garnishee to the defendant," and that this, being an agreement to extend credit, was in itself sufficient consideration. "The consideration for a contract may consist in a promise that an agreed beneficial thing shall afterwards be done for the maker." Bing v. Bank of Kingston, 5 Ga. App. 578 (2) ( 63 S.E. 652). However, assuming that had the bank in fact made a loan, and kept the funds sent in under the contract with Powerhouse, Inc., as collateral lateral security, there would have been a valid and enforceable contract and even assuming that under the oral and unplaced agreement between the defendant and the bank by virtue of which the assignment was made the bank might have obligated itself to furnish the defendant with funds if the defendant had requested them, it is beyond dispute that the contract to lend money to the defendant was completely executory and further that the commitment of Powerhouse, Inc., was only to protect the bank in the payments of funds belonging to the defendant until notified by the bank to cease doing so. From these documents in connection with the stipulation it is clear that the bank had no interest in the defendant's contract unless and until it needed it for collateral security on a loan, that it did have a bare legal title, and that it had an option to divest itself of this by notification to Powerhouse, Inc. One method of terminating all rights under an executory contract whether in writing or not, is by mutual agreement. Tucker v. Baker, 88 Ga. App. 580 (1) ( 77 S.E.2d 92). Some ten days prior to the service of the summons of garnishment the parties did in fact mutually agree that the loan would not be made. The legal effect of such an agreement was an effective rescission of the contract, and the bank thereafter had no right in it or any funds available under it. The fact that the garnishee did not inform Powerhouse, Inc., of the rescission until two days after service of the summons is immaterial, since no funds were received in the meantime, and since any right which it may have had in the contract prior to the mutual rescission no longer existed. The appellant's contention that the contract as a mere piece of paper had some value, and that therefore the garnishee's answer of "not indebted" was inaccurate is irrelevant since the contract as a piece of paper was of no value to the plaintiff. De minimis non curat lex.
The trial court did not err in directing a verdict in favor of the garnishee.
Judgment affirmed. Bell, C. J., and Eberhardt, J., concur.