Kesler v. Veal

356 S.E.2d 254, 182 Ga. App. 444, 1987 Ga. App. LEXIS 1710
CourtCourt of Appeals of Georgia
DecidedMarch 20, 1987
Docket73452
StatusPublished
Cited by14 cases

This text of 356 S.E.2d 254 (Kesler v. Veal) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kesler v. Veal, 356 S.E.2d 254, 182 Ga. App. 444, 1987 Ga. App. LEXIS 1710 (Ga. Ct. App. 1987).

Opinions

Birdsong, Chief Judge.

The appellants here are brothers, Jimmy and H. V. Kesler, against whom a jury verdict was rendered for the setting aside of a deed, $5,000 actual damages against both and $65,000 against each in punitive damages, all for fraudulent conveyance of property under OCGA § 18-2-22. Four days after Jimmy Kesler was convicted of the murder of Jan Veal Evans, he conveyed certain real property to his brother H. V. Kesler. Mrs. Evans’ minor children subsequently filed a wrongful death action against Jimmy Kesler and, before this case was tried, received a verdict of $550,000 in that lawsuit.

On appeal, appellants do not complain of the verdict setting aside the deed, but contend the law does not allow money damages in such an action. Held:

1. Appellants contend that evidence that H. V. had advanced $40,000 to Jimmy for attorney fees in his murder trial proved a “valuable consideration” under Brown v. C & S Bank, 253 Ga. 119 (317 SE2d 180), and therefore the conveyance could not be found fraudu[445]*445lent. However, what Brown said was that the defraudee, C & S Bank, was not entitled under § 18-2-22 (3) to a directed verdict on liability because a jury could find Mr. Brown’s conveyance to his wife was based on valuable consideration. The verdict in this case is sustained under § 18-2-22 (2), which makes a bona fide transaction on a valuable consideration valid, if “the taking party is without notice or ground for reasonable suspicion of said intent of the debtor [to delay or defraud creditors].” Manifestly, notwithstanding evidence of valuable consideration, if the jury finds that the debtor made the conveyance with the intention to delay and defraud creditors, and the taking party has notice or even ground for reasonable suspicion of the debtor’s intent, the act is fraudulent in law.

The fraud proscribed in § 18-2-22 (2) is purely in the intention, which is a question of fact for the jury. The degree of legislative opprobrium expressed in this paragraph is clear recognition that a fraudulent conveyance is most easily accomplished when it appears to be otherwise, and that the statute means to reach the fraudulent intent regardless of appearances. It has long been the law that the presence of a bona fide consideration or indebtedness does not render the conveyance valid. Dixie Mfg. Co. v. Ricks, 153 Ga. 364 (5), 371-372 (112 SE 370). Evidently the jury concluded that not only did Jimmy Kesler transfer his property to H. V. “with intention to delay and defraud creditors,” but that “such intention [was] known to the taking party.” And the jury, being well and truly charged on the matter, evidently concluded that H. V. had notice of Jimmy’s fraudulent intent or ground to reasonably suspect it. We are not at liberty to disregard this finding of fact merely because there was the appearance of propriety, because this is the very thing the statute attempts to pierce in finding the intent.

2. Jimmy and H. V. Kesler contend, as they did below, that no authority exists allowing damages, much less punitive damages, for a conveyance with intent to avoid creditors under OCGA § 18-2-22. They advance Bacote v. Wyckoff, 251 Ga. 862 (310 SE2d 520) as meaning that there is no fraud and money damages cannot be collected in a suit to cancel a deed, unless there were actual fraudulent misrepresentations; and Brown v. C & S Bank, supra, as meaning damages are not recoverable in a wrongful conveyance case unless a “conspiracy” is involved.

Appellants’ reliance on these cases is misplaced. Bacote, supra, did not involve a conveyance to delay or defraud creditors and was not a suit on a fraudulent conveyance under OCGA § 18-2-22. The petition alleged a conspiracy to defraud between Bacote and the plaintiff’s former husband, who conveyed plaintiff’s property to Bacote. The Supreme Court upheld the voidance of the deed but reversed the award of money damages against Bacote, as there was no [446]*446evidence Bacote had committed fraud because he made no “representations” to the plaintiff and there was no “reliance.” Bacote involved actual fraud, and not being a § 18-2-22 fraudulent conveyance case, it does not stand to mean that actual representations by the transferee and reliance by the defrauded party are required in a suit under OCGA § 18-2-22. Appellants contend that Plough Broadcasting Co. v. Dobbs, 163 Ga. App. 264 (293 SE2d 526) required the trial court to give a jury charge on actual fraud, but that case had to do with actual fraud committed in a fish-catching contest and thus is inapposite to this case. The trial court would have erred if it had charged the jury in this case that actual “misrepresentation” must be proved in a fraudulent conveyance case, since OCGA § 18-2-22 does not require it, but rather makes the described acts fraudulent-in-law.

The fact that the plaintiffs in Brown v. C & S Nat. Bank, supra, alleged a conspiracy to accomplish a fraudulent conveyance patently does not mean damages can be recovered for fraudulent conveyance only where a jury finds a conspiracy. The acts described by OCGA § 18-2-22 (2) are the acts and intentions of both the grantor and grantee, a conspiracy of sorts in the inception. They constitute acts “fraudulent in law” and that is all that is required to render a conveyance fraudulent under the statute.

The dissent proffers that transferees cannot be liable in suit brought on fraudulent conveyances. OCGA § 18-2-22 (2) states that if the transferee takes the property on a bona fide transaction on a valuable consideration “without notice or ground for reasonable suspicion of said intent of the debtor [to delay or defraud creditors the deed] shall be valid.” There would not and could not be a cause of action against the transferee in such an instance; however, in the case sub judice the jury found fraud on the part of both the transferor and transferee and set aside the deed. Are we to conclude that when two parties act to perpetuate a fraud-in-law according to the terms of the statute, only one of the two parties can be sued for the fraud? We think not and hope not; and the statute does not say so nor does it imply that the fraudulent act of the transferee which renders the act of the debtor fraudulent in law is not actionable against the transferee. Logic forbids such a result, for if the act of the transferee in taking with knowledge of or ground for reasonable suspicion of debtor’s fraudulent intent is not fraudulent, then the conveyance is not fraudulent under the terms of the act itself, and the debtor is not liable either.

3. The contention is made generally that a fraudulent conveyance action under OCGA § 18-2-22

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356 S.E.2d 254, 182 Ga. App. 444, 1987 Ga. App. LEXIS 1710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kesler-v-veal-gactapp-1987.