Strickland v. Davis

190 S.E. 586, 184 Ga. 76, 1937 Ga. LEXIS 465
CourtSupreme Court of Georgia
DecidedMarch 12, 1937
DocketNo. 11519
StatusPublished
Cited by15 cases

This text of 190 S.E. 586 (Strickland v. Davis) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Strickland v. Davis, 190 S.E. 586, 184 Ga. 76, 1937 Ga. LEXIS 465 (Ga. 1937).

Opinion

Bell, Justice.

On October 28, 1929, J. B. Davis, as surety for another person, executed a note to A. J. Strickland for $258.52. This note was reduced to judgment in August, 1932. 'In the meantime, on December 12, 1930, Davis executed to his wife a deed reciting a consideration of $1000, and conveying a tract of land containing about eighty acres. In July, 1935, Strickland filed the present suit against Davis and his wife, to cancel the deed, alleging that it was a voluntary conveyance which rendered Davis insolvent, and that it was made with intent to hinder, de-' lay, and defraud the plaintiff as a creditor, such intention being known to Mrs. Davis, the grantee. The defendants filed an answer denying the material allegations of the petition, and specifically alleging that the deed was made to satisfy an indebtedness which Davis owed to his wife, consisting of $206.64 which she loaned to him in 1920, and $450 loaned in 1927. The answer alleged that these two items with lawful interest amounted to more than $1000 at the time the deed was executed, and that this sum constituted a good and valuable consideration for the deed. On the trial the jury found a verdict in favor of the defendants. A motion for new trial was overruled, and the plaintiff exeepted. The evidence tended to show that Davis executed a note to his wife for the first of these items. There was no written evidence of the second item. Mrs. Davis testified that she did not know of her husband’s indebtedness to Strickland at the time the deed to her was made, and there was other evidence tending to support the answer of the defendants. It appeared that the conveyance of the real estate and the delivery of some personal property in connection therewith rendered the husband insolvent, and that he owed some other debts besides the debt to Strickland. Several witnesses testified regarding the value of the property in question. [78]*78The estimates ranged from about $1000 to upwards of $3500. It appeared, without dispute, that no money or present consideration passed at the time the deed was executed, and that the only consideration, if any, was the indebtedness of Davis to his wife. The special grounds of the motion for a new trial assigned error on several excerpts from the charge of the court and on refusal of requests to charge. These assignments will be stated and considered in the opinion which follows.

The court charged the jury as follows: “Mere inadequacy of consideration in a deed from husband to his wife, even if he is insolvent at the time of its execution, if there was no intention to delay or defraud his creditors, or if the intention was unknown to his wife, or she did not have reasonable ground for suspicion, would not void the contract. But inadequacy of consideration, if gross, would be a badge of fraud, and might, with other circumstances, amount to actual fraud.” This charge was assigned as error on the following among' other grounds: “It was the contention of movant upon the trial of the instant case that the conveyance sought to be canceled would have rendered the husband insolvent, and that the consideration of this conveyance was grossly inadequate, and there was evidence upon the trial to support these contentions; and therefore it was error for the court to charge the jury as stated, because, if the jury believed that the conveyance in question would have rendered the husband insolvent and that the consideration was grossly inadequate, it would have been their duty to find in favor of the plaintiff even though the wife did not have knowledge or reasonable ground to suspect that it was the intention of the husband to delay or defraud his creditors.” Also, “The instruction given conflicts with the rule of law as laid down in other portions of the charge with regard to fraud in transactions between husband and wife, wherein the jury were instructed that if the consideration in a conveyance by an insolvent husband to a wife in settlement of a debt due by the husband to the wife was grossly in excess of the amount of the debt, it'-would be considered as made with intent to delay or defraud his creditors, though both 'the husband and the wife claimed to have acted in good faith, and was therefore calculated to confuse and mislead the jury.” Under the facts of the ease, these exceptions were well taken. The excerpt complained of appears to have been based [79]*79upon the second paragraph of the syllabus in Hawkinsville Bank & Trust Co. v. Walker, 99 Ga. 242 (25 S. E. 205). While that case was decided by only two Justices, so that the ruling made is not necessarily binding, we need not question its soundness in the consideration of the case at bar. Under one phase of the evidence in that case, the jury would have been authorized to find that the deed to the wife was made for a present consideration in money, and in such case it may be that mere inadequacy, that is, an inequality not gross, would be insufficient to avoid the deed at the instance of creditors, and that even gross inadequacy would be only a badge of fraud, as distinguished from fraud per se. In Ernest v. Merritt, 107 Ga. 61 (3) (32 S. E. 898), it was held: “One who takes, a deed based on a valuable consideration, not so grossly inadequate as to suggest fraud, is not affected by an intention to defraud in the mind of the grantor but unknown to the grantee.” In Scott v. Winship, 20 Ga. 429 (2), it was said that “where property is fairly purchased from a debtor in failing circumstances, and the money paid, the creditors must refund the price paid before they can resell on account of the inadequacy of the price, unless it be so grossly inadequate as to amount to a fraud per se.” See also Shirk v. Loftis, 148 Ga. 500 (2) (97 S. E. 66); 27 C. J. 516, 544, §§ 188, 241.

In the instant case, however, there was no evidence of a present consideration. On the contrary, it appeared without dispute that the only consideration, if anjq was a past indebtedness owed by the husband to the wife, and apparently the verdict turned upon the bona fides of the husbandV preference of his wife as a creditor. As to such an issue it has been held that “while the husband has the right to prefer his wife to other unsecured creditors and pay her as well with property as with money, provided the property conveyed to the wife in satisfaction of her debt is reasonably proportioned to the amount of the debt, the conveyance by him to her of property in a sum grossly in excess of the amount due her amounts to a conveyance made with intent to delay and defraud creditors, this being true notwithstanding both husband and wife claim to have acted in good faith in the transaction; and such conveyance will be set aside as a fraud upon other creditors of the husband.” Gill v. Willingham, 156 Ga. 728 (11), 732 (120 S. E. 108); Krueger v. MacDougald, 148 Ga. 429 (4) [80]*80(96 S. E. 867). It was further held in the Gill case, that, as applied to the right of a husband to prefer his wife as a creditor, the court erred in instructing the jury that gross inadequacy of consideration would be- a badge of fraud, since the law denounces such inadequacy as a fraud upon the husband’s creditors. In the present case there was no place for application of both the principle ruled in Hawkinsville Bank & Trust Co. v. Walker and that enunciated in Gill v. Willingham,

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

Related

Blankenship v. West Georgia Plumbing Supply, Inc.
444 S.E.2d 596 (Court of Appeals of Georgia, 1994)
Hunt v. Commissioner
1988 T.C. Memo. 360 (U.S. Tax Court, 1988)
Bowman v. McDonough Realty Co.
237 S.E.2d 647 (Court of Appeals of Georgia, 1977)
United States v. McMahan
392 F. Supp. 1159 (N.D. Georgia, 1975)
Smith v. Atlanta Transit System, Inc.
127 S.E.2d 857 (Court of Appeals of Georgia, 1962)
Hudson v. Cole
115 S.E.2d 825 (Court of Appeals of Georgia, 1960)
McCallum v. Bryan
100 S.E.2d 916 (Supreme Court of Georgia, 1957)
Mann v. Carter
97 S.E.2d 137 (Supreme Court of Georgia, 1957)
Atlantic Coast Line R. Co. v. Thomas
64 S.E.2d 301 (Court of Appeals of Georgia, 1951)
Trustees of Jesse Parker Williams Hospital v. Nisbet
14 S.E.2d 64 (Supreme Court of Georgia, 1941)
First National Bank of Cornelia v. Kelly
10 S.E.2d 66 (Supreme Court of Georgia, 1940)
Richter Bros. v. Atlantic Co.
200 S.E. 462 (Court of Appeals of Georgia, 1938)
New York Life Insurance v. Ittner
200 S.E. 522 (Court of Appeals of Georgia, 1938)
Johnson v. Sherrer
195 S.E. 149 (Supreme Court of Georgia, 1938)

Cite This Page — Counsel Stack

Bluebook (online)
190 S.E. 586, 184 Ga. 76, 1937 Ga. LEXIS 465, Counsel Stack Legal Research, https://law.counselstack.com/opinion/strickland-v-davis-ga-1937.