1. The petition set out a cause of action for the conversion of the fund sued for.
2. The suit was not barred by the statute of limitations, and the defendant had not acquired title by prescription to the fund.
DECIDED DECEMBER 2, 1941. REHEARING DENIED DECEMBER 16, 1941. W. Leonard Merriman brought suit in the city court of Savannah on July 11, 1940, against American Surety Company. It was alleged that on April 30, 1935, American Surety Company served process of garnishment on Citizens Bank Trust Company based on a judgment previously obtained against the plaintiff calling on the bank, as garnishee, to answer what money, property, or effects belonging to the plaintiff it had in its possession; that on June 4, 1935, the bank filed its answer stating, among other things, as follows: "At the date of the service of said summons of garnishment upon it, it was not indebted to said defendant [Merriman] in any sum whatever; that since the service of said summons of garnishment on it, it has become indebted to said defendant in the sum of $433.86, by reason of the following facts: that is to say, said defendant was indebted to this garnishee and had given as security his interest in a note and mortgage, which was paid to this garnishee after the service of said summons, the amount so paid to this garnishee being $433.86 more than the debt of said Merriman to it, and this garnishee holds said sum of $433.86 subject to the judgment of this honorable court;" that on June 23, 1936, the plaintiff filed with the ordinary of Chatham County his application for a homestead and exemption, and among other personal property, set out in his schedule the following: "That certain amount of money in cash now in the possession of the Citizens *Page 409 Bank Trust Company amounting to $433.86, together with interest thereon at seven per cent. per annum from April 30, 1935, which sum of money is held by the said Citizens Bank Trust Company, under process of garnishment served upon it on April 30, 1935, upon judgment obtained in the superior court of Chatham County, Georgia, January 10, 1935, in the case of Dorothy S. Cotton as administratrix, as plaintiff, and the American Surety Company and W. Leonard Merriman as defendants, and the Citizens Bank Trust Company and National Finance Corporation as garnishees, upon which execution was issued April 30, 1935, and transferred by the plaintiff to the American Surety Company;" that notice of the filing of this application for a homestead and exemption and the date for the hearing thereof was given to the defendant according to law; that on June 23, 1936, after having notice of the filing and pendency of this application for a homestead, American Surety Company, through its attorney Thomas F. Walsh, demanded and received of Citizens Bank Trust Company the sum of $433.86, knowing that this sum was set out in the schedule of personal property contained in the application for the homestead and exemption which was then pending; that on July 29, 1936, this attorney transmitted the sum thus received from the bank twelve days after the court of ordinary had set apart this sum to the plaintiff as a homestead exemption; that on July 17, 1936, the day set by the court of ordinary for a hearing on the application for homestead and exemption and the day stated in the notice which was sent to all parties at interest, including American Surety Company, the ordinary approved the plaintiff's schedule of real and personal property including the $433.86 mentioned above and in addition, on July 18, 1936, passed the following order: "This matter coming on to be heard, after regular assignment and written notice to all parties interested therein, and no objections having been filed or presented by parties interested, it is hereby ordered that the schedule of realty set forth in the second paragraph of the application and the schedule of personalty set forth in the third paragraph of the application, be and they are hereby `Approved, this the 17th day of July 1936.' And it is further ordered that that certain sum of money mentioned in the schedule contained in the third paragraph of the application be and it is hereby set apart to the applicant and exempted as personalty, *Page 410 and the Citizens Bank and Trust Company is hereby ordered to deliver the same to the applicant, for investment under direction of the court in such articles of personal property as the applicant may desire;" and that the plaintiff "has demanded payment of said sum but the American Surety Company, with full knowledge of the pendency of petitioner's application, and with full knowledge of the order of the court of ordinary directing the bank to pay the same to petitioner, fails and refuses to pay the same." The plaintiff prayed for judgment against American Surety Company with interest from July 18, 1936.
American Surety Company demurred to the petition on the ground that it appears therefrom that the alleged cause is barred by the statute of limitations for the reason that the sum sued for is alleged to have been paid to the defendant's attorney on June 23, 1936, more than four years before the filing of this suit on July 11, 1940; that it appears from the petition that the defendant has been in adverse possession of the property since June 23, 1936, more than four years before the filing of this suit on July 11, 1940, and that the petition sets forth no cause of action in favor of the plaintiff against the defendant. The surety company filed its answer, and in paragraphs 7 and 8 alleged that the cause of action was barred by the statute of limitations for the reason that such sum of money was received by it on June 23, 1936, and the suit was not filed until July 11, 1940, more than four years after its receipt of the money, and that it has been in adverse possession of this money for more than four years before the filing of the suit.
The judge rendered this order: "The above demurrers and plea of the statute of limitations is hereby overruled on each and every ground." To this judgment American Surety Company excepted "and says that the court erred in overruling each and every ground of said demurrer, and also erred in overruling that portion of defendant's answer contained in paragraph 7 and 8 thereof, in which the said defendant pleaded the statute of limitations." This is a suit by W. L. Merriman against American Surety Company *Page 411 to recover $433.86, alleged to be the property of the plaintiff, which the defendant had obtained from Citizens Bank Trust Company after a summons of garnishment had been issued and served on the bank in a garnishment proceeding instituted by American Surety Company based on a judgment in favor of American Surety Company against Merriman. The garnishee bank, according to its answer which was untraversed, was not indebted to Merriman, but had in its hands $433.86 belonging to Merriman. It does not appear from the petition that American Surety Company, the plaintiff in the garnishment proceeding, had obtained a judgment against the garnishee. The surety company had, on the fund of Merriman in the hands of the bank, no more than a lien. The creation of a lien does not effect the passage of title. The title to the fund which was in possession of the bank, the garnishee, and which the bank in its answer stated was the property of Merriman, was in Merriman, subject, however, to whatever lien the surety company may have had on the fund for the satisfaction of its judgment against Merriman. The surety company, in acquiring possession of this fund from the bank, did not do so by force or by some other tortious act. It acquired the fund by the bank's own voluntary act in relinquishing and transferring the fund to the surety company. The surety company did not acquire this fund from Merriman, but acquired if from the bank, and the mere acquisition of the fund by the bank's voluntary act did not in itself amount to a conversion of the fund by the surety company as against Merriman. The surety company, after having acquired the fund from the bank by its voluntary relinquishment, held mere possession of the fund with whatever lien it may have had on it as security for its judgment against Merriman. As to Merriman, the surety company stood in no better relationship as respected the fund than did the bank. Whether the surety company, after having acquired the fund, and having possession of it with only a lien thereon, had no right to the possession of the fund as against Merriman, it is not necessary to decide. I am of the opinion that, although the bank, while holding the fund, may have been entitled to its possession as against Merriman, the surety company after having acquired the fund had only a lien thereon, and had no right to its possession as against Merriman. I am of this opinion because the bank as garnishee had the right to hold *Page 412 possession of the fund as against Merriman, but the surety company, not being the garnishee, but a lien-holder only, and as a lien-holder being not entitled to possession of the fund without the consent of the lienor, was not entitled to the possession of the fund as against Merriman. Thus far the surety company had not converted the fund as against Merriman. If Merriman had any right at all to the fund at this time it was not by virtue of a right of action in trover for a conversion of the fund. It might, if Merriman was entitled to possession of the fund, notwithstanding the surety company's lien, have been one for money had and received.
Whether or not the surety company had the right to hold the possession of the fund as against Merriman, the holder of the legal title, the surety company certainly had no right, as an incident to any lien which it may have had on the fund, or for the enforcement of such lien, to convert the fund to its own use or to appropriate it to the satisfaction of its debt secured by the lien. If the act of the surety company, in merely acquiring the fund by virtue of the bank's voluntary relinquishment of it, did not in itself amount to a conversion of the fund as against Merriman, and it did not amount to a conversion, it must appear that the surety company afterwards, and by some act other than the mere acquisition of the fund, converted it to its own use, as by an application of it to the debt of Merriman evidenced by its judgment against Merriman. Since the surety company was a mere lien-holder of the fund after it had acquired it, and as such lien-holder had no right to appropriate the fund to its own use by an application of it to the payment of Merriman's debt to the surety company, it will not be presumed, in the absence of some fact showing a conversion by the surety company, that the surety company committed the illegal act of appropriating and applying the fund to the satisfaction of its debt which was secured by the lien.
Whatever right, if any, Merriman may have had to recover possession of the fund after the surety company had acquired it and had not converted it to its own use in satisfaction of its lien on the property as security for its debt against Merriman, there had, at that time, accrued no right of action in Merriman against the surety company for a conversion of the fund. No right of action for the conversion of the fund by the surety company accrued *Page 413 to Merriman until Merriman made a demand on the surety company for the fund and the surety company refused to surrender it. Whether Merriman, when he made demand on the surety company for the fund, as alleged in the petition, and the surety company refused to surrender it to him, could not recover the fund by reason of the existence of the surety company's lien thereon, there certainly accrued to Merriman a right of action against the surety company for the conversion of the fund on the surety company's refusal, after a proper demand made on it, to surrender the fund to him after the lien of the surety company on the fund had been extinguished by the setting aside to Merriman of the fund by the ordinary as a homestead, with the knowledge of the surety company, and which, under the homestead statute, exempted the fund from all liens.
The quoted allegation in the petition as to the demand made by Merriman, and the refusal by the surety company to surrender the fund, is an allegation that the surety company, with knowledge of the setting aside of the fund by the ordinary as a homestead, refused to comply with the plaintiff's demand on the defendant to pay this fund to the plaintiff. This is an allegation that there arose a conversion of the fund by the defendant after July 18, 1936, the date of the order setting aside the fund as a homestead. Therefore the plaintiff's cause of action, which is one for a conversion of the fund by the defendant, did not arise until after July 18, 1936, which was within four years of the filing of the present suit on July 11, 1940. The action, as it appears from the petition, is not barred by the statute of limitations which requires that such a suit must be brought within four years after the cause of action accrues. By the same reasoning it appears from the petition that the defendant did not, by adverse possession of the fund for four years, acquire title thereto by prescription.
The petition set out a cause of action which was not barred by the statute of limitations. The court did not err in overruling the general and special demurrers. The assignment of error on the judgment "overruling" the plea of the statute of limitations filed by the defendant is not presented for consideration.Atlantic Coast Line Railroad Co. v. Tifton Produce Co.,50 Ga. App. 614 (5) (179 S.E. 125). *Page 414 Judgment affirmed. Sutton and Felton, JJ., concur in thejudgment, but not in all that is said in the opinion.