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2018 Georgia Code 18-2-42 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 18-2-42 Case Law from Google Scholar Amendments to OCGA 18-2-42

TITLE 18 DEBTOR AND CREDITOR

Section 2. Debtor and Creditor Relations, 18-2-1 through 18-2-85.

ARTICLE 3 PREFERENCES AND ASSIGNMENTS FOR BENEFIT OF CREDITORS

18-2-42. Rights of persons and firms.

Persons and firms may make assignments and prefer creditors.

(Ga. L. 1894, p. 90, § 2; Civil Code 1895, § 2699; Civil Code 1910, § 3232; Code 1933, § 28-303.)

JUDICIAL DECISIONS

Even an insolvent debtor may prefer one creditor to another, and to this end the debtor may transfer choses in action as collateral security for preexisting debt, surplus in such case not being reserved for the debtor's own benefit. Suttles v. Vickery, 179 Ga. 751, 177 S.E. 714 (1934).

Mere pendency of suit against debtor does not extinguish the debtor's right to prefer one creditor over another, and in such case, controlling question is "existence or nonexistence of fraud in the transfer." Suttles v. Vickery, 179 Ga. 751, 177 S.E. 714 (1934).

Assignment to be made in good faith and not benefit debtor.

- Debtor is permitted to prefer one creditor over another and to make assignments to that end, so long as the transfer is made in good faith and does not benefit the debtor. Bank of Cave Spring v. Gold Kist, Inc., 173 Ga. App. 679, 327 S.E.2d 800 (1985).

Effect of assignment prior to service of summons of garnishment.

- If assignment is made before service of summons of garnishment upon drawee, garnishing creditor will be postponed to assignee, and this is so whether or not garnishee was notified of assignment. Suttles v. Vickery, 179 Ga. 751, 177 S.E. 714 (1934).

Sufficient consideration to support equitable and legal assignments to secure preexisting indebtedness.

- Suttles v. Vickery, 179 Ga. 751, 177 S.E. 714 (1934).

Cited in Anderson v. Chambers, 58 Ga. App. 844, 200 S.E. 478 (1938).

RESEARCH REFERENCES

Am. Jur. 2d.

- 21 Am. Jur. 2d, Creditor's Bills, §§ 35, 79.

C.J.S.

- 21 C.J.S., Creditor and Debtor, § 3 et seq.

ALR.

- Priority as between different assignees of same chose in action as affected by notice to debtor, 31 A.L.R. 876; 110 A.L.R. 774.

Preference in event of debtor's insolvency in respect of funds designated or set apart by him for payment of specified obligations, 32 A.L.R. 950.

Right of debtor who pays creditor to control application of payments made by latter to his creditor with proceeds of original payment, 41 A.L.R. 1297; 130 A.L.R. 198; 166 A.L.R. 641.

Debtor's return of merchandise to selling creditor for credit as preferential transfer voidable in bankruptcy proceedings, 62 A.L.R.2d 774.

Validity of provision in deed or transfer to assignee for benefit of creditors for payment of attorneys' fees, 79 A.L.R.2d 513.

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