Commerce Union Bank v. Pearson

234 S.W.2d 653, 34 Tenn. App. 121, 1950 Tenn. App. LEXIS 137
CourtCourt of Appeals of Tennessee
DecidedSeptember 1, 1950
StatusPublished
Cited by1 cases

This text of 234 S.W.2d 653 (Commerce Union Bank v. Pearson) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commerce Union Bank v. Pearson, 234 S.W.2d 653, 34 Tenn. App. 121, 1950 Tenn. App. LEXIS 137 (Tenn. Ct. App. 1950).

Opinion

HOWELL, J.

In these consolidated cases the complainants sued the defendants on some promissory notes held by them and executed by the defendant, S. M. Pearson. It is alleged in the hills that the defendant S. M. Pearson had made fraudulent conveyances to his wife of certain lands in Rutherford County for the purpose of hindering, delaying and defrauding the complainants of their just and lawful claims and the hills pray that the deeds to Mrs. Pearson be set aside and declared void as to them and that the property be subjected to the satisfaction of their claims. The defendants denied the material allegations of the hills.

The cases were consolidated and heard by the Chancellor and a jury and the issues submitted were decided in-favor of the complainants.

The defendants have appealed to this Court and have assigned numerous errors.

The defendant S. M. Pearson admitted owing the debts sued for.

The issues submitted to the jury by the Chancellor and the answers thereto are as follows:

“Issue No. 1 is as follows: Is the consideration of ‘love and affection’ recited in the deeds of S. M. Pearson to his, wife, Prances S. Pearson, of date January 12,1948, and April 17, 1948, respectively, the true consideration for the conveyance of the lands described in said respective deeds? Answer No
“Issue No. 2: Was the true consideration for the deeds aforesaid the sum of $12,000.00 claimed by the defendants Pearson and wife to have been owing to Mrs. Annie Sawyer, which indebtedness she cancelled against said Pearson upon his conveying said lands described in said deeds to his wife, Prances S. Pearson?- Answer No
[124]*124“Issue No. 3: Was the conveyance of the lands described in said respective deeds made by said Pearson to his said wife for the purpose and with the intention on the part of both said Pearson and Mrs. Pearson to hinder and delay the creditors of said Pearson in the collection of their just claims. Answer Yes. ’ ’

The following stipulation appears in the record: ‘ ‘ During the deliberations of the jury, the jury ashed the Court if Issue No. 3 could be answered ‘Yes’ as to one and ‘No’ as to the other. The Court instructed the jury that the Issue had to be answered ‘Yes’ or ‘No’. That unless both Mr. S. M. Pearson and Mrs. Frances S. Pearson were guilty of fraud, then the Issue No. 3 should be answered ‘No’. But that, if both were guilty of fraud, then the Issue No. 3 should be answered ‘Yes’.”

It is ably and earnestly insisted for the defendant Mrs. Frances S. Pearson that the Chancellor erred in not explaining to the jury the difference between actual fraud, and constructive fraud and in not charging the jury that if Mrs. Pearson did not know of the insolvency of her husband at the time the deed to her was registered and accepted this deed in good faith with no intention of defrauding the complainants she was guilty only of constructive fraud and should be allowed a credit for the actual amount of her own money that she had in good faith expended in permanent improvements upon the land involved.

The record does not disclose that any request for such a charge was made to the Chancellor. See Eve v. Union Central Life Ins. Co., 26 Tenn. App. 1, 167 S. W. (2d) 8; Shelby County v. Fisher, 137 Tenn. 507, 194 S>. W. 576 and other eases. Also since the Act of 1911, Sec. 10654 of the Code it must affirmatively appear that the error affected the result of the trial.

[125]*125In the charge the Chancellor in connection with the liability of Mrs. Pearson and Issne No. 3 said: ‘‘But even though Mr. Pearson intended by said conveyances to his wife to hinder and delay the complainants in the collection of their just claims and Mrs. Pearson had no knowledge of the intention and purpose of Mr. Pearson to delay said complainants and to hinder them in the collection of their just claims, then your answer to Issue No. 3 should he ‘No’ but if Mrs. Pearson knew of this intention to hinder and delay said creditors, and took said deeds to aid her husbarid in said purpose, then your answer to Issue No. 3 should he ‘Yes’.”

Again-the Chancellor in the charge said:

“I therefore charge you that if under the facts and circumstances of this case a suspicion of fraud, which is equivalent to a presumption of fraud, is raised in your minds, it then becomes incumbent upon Mrs. Pearson, who is claiming under said deeds, to remove such presumption from your minds, and to show the good faith and fairness of the transactions, and that the consideration was as insisted by her, and that the same was paid to Mrs. Sawyer or a debt of that amount held by her against Mr. Pearson cancelled.
“In other words the deeds on their face show that the only consideration for this conveyance was ‘love and affection.’ Now, inasmuch as Mrs. Pearson in her answer undertakes to show that there was other valuable consideration for said conveyance, to-wit: The cancellation of said $12,000.00 indebtedness due by Mr. Pearson to Mrs. Sawyer, the burden shifts to her to satisfactorily explain the matters set up in her answer and to prove to you by a preponderance of the evidence the truth of her insistence relative to the cancellation of said alleged indebtedness.
[126]*126■ “I further charge you that even though your answer to Issue No. 2 is ‘Yes’, you are to go further and find a true answer to Issue No. 3. That is, did Mrs. Pearson accept the conveyance of said'lands from her husband with the intention on her part to hinder and delay his creditors in the collection of. their just claims, and I further charge you that the burden of the proof is on Mrs. Pearson to show to your satisfaction by a preponderance of the evidence that it was her intention in accepting said deeds to hinder, delay or defraud the creditors of her husband, and her intention canno't be proven by her testimony alone but must be shown by other facts and circumstances.
“The intent to hinder, delay or defraud creditors is an act of the mind manifested by conduct of the party.
“Now, if you find in this record that her acts and conduct, as revealed by the facts and circumstances, manifested an intention on her part to hinder, delay or defraud the creditors of her husband by accepting said deeds, then your answer to Issue No. 3 should be £ Yes ’. ’ ’

It is true that there is a material difference between the effects of actual fraud and constructive fraud as is shown by Vol. 24 American Jurisprudence page 276, Par. 131, 37 Corpus Juris Secundum, Section 280, page 1122, the cases of Alley v. Counsel, 40 Tenn. 578; Bank of Blount County v. Dunn, 10 Tenn. App. 95; James v. Joseph, 156 Tenn. 417, 1 S. W. (2d) 1017 and other cases. We are of the opinion however that the charge of the Chancellor as quoted above fairly instructed the jury as to the rights of Mrs. Pearson if she was not guilty of actual fraud and that the fact that the Court did not more fully instruct the jury as to actual and constructive fraud did not affect the verdict.

The jury found that the conveyances to Mrs. Pearson were for the purpose and with the intention on the [127]*127part of both Pearson and Mrs. Pearson to hinder and delay the creditors of Pearson in the collection of their just claims.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Davidson v. Burger
259 S.W.2d 541 (Court of Appeals of Tennessee, 1952)

Cite This Page — Counsel Stack

Bluebook (online)
234 S.W.2d 653, 34 Tenn. App. 121, 1950 Tenn. App. LEXIS 137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commerce-union-bank-v-pearson-tennctapp-1950.