Branch v. Human, 20523

Citation109 S.E.2d 732,215 Ga. 209
Decision Date08 July 1959
Docket NumberNo. 20523,20523
PartiesClara H. BRANCH et al. v. Clyde HUMAN et al.
CourtSupreme Court of Georgia

Syllabus by the Court

Under the facts of the present case, it was error for the trial judge to sustain the plea of discharge in bankruptcy of one of the defendants, the grantor in a deed attacked by the petitioners as frauduient because made to hinder, delay, and defraud creditors, and to dismiss the action to set aside the deed.

Mrs. Clara H. Branch and R. E. Branch filed a petition against Clyde Human, Susan Irene Human, and Joe Harris Human. In so far as material here, it was alleged: The defendant Clyde Human is indebted to the petitioners upon a judgment rendered in Clarke Superior Court on March 26, 1958, in a stated sum. Execution was issued on the same date, and an entry of nulla bona was entered on March 27, 1958. On December 12, 1957, Clyde Human executed and delivered to the other defendants a deed conveying described property, subject to a security deed previously executed to Citizens & Southern National Bank. This was a voluntary deed made without a valuable consideration other than the promise of the grantees to assume and pay the indebtedness, and it is void against the petitioners as creditors of the grantor. The conveyance was made for the purpose of hindering, delaying, and defrauding the petitioners in the collection of their judgment. Clyde Human has no property other than that described on which the execution may be levied.

The prayers were that the deed described, from Clyde Human to the other defendants, be declared void and of no effect; that a receiver be appointed for the purpose of selling the property, subject to the claim or lien of Citizens & Southern National Bank; and for other relief.

The defendant Clyde Human filed a plea for stay on account of bankruptcy. It was alleged that, on April 12, 1958, he filed a voluntary petition in bankruptcy, and was duly adjudicated a bankrupt on April 14, 1958. The indebtedness was incurred prior to the filing of the petition. The demand of the petitioners was duly scheduled, and they were given notice. The adjudication and discharge, when granted, will release the defendant from all liability on the indebtedness.

On December 17, 1958, the petitioners filed an amendment to their petition, showing that the bankruptcy was closed, and that no trustee in bankruptcy was appointed.

On April 11, 1959, a plea of discharge in bankruptcy was sustained, and the case dismissed as to the defendant Clyde Human. On the same date a plea of nonjoinder of necessary parties defendant was sustained, and the case dismissed. The petitioners except to the orders sustaining the plea of discharge in bankruptcy, and sustaining the plea of nonjoinder and dismissing the action.

O. J. Tolnas, Athens, for plaintiffs in error.

Hawkins & Hawkins, Vane G. Hawkins, Jay D. Gardner, Athens, for defendants in error.

HEAD, Justice.

The controlling question in the present case is whether or not the defendant Clyde Human could plead his discharge in bankruptcy to avoid the lien of the judgment obtained against him within four months of his adjudication as a bankrupt, and to abate the pending action against him and the other defendants, wherein it was alleged that a transfer of property by the defendant Clyde Human was a voluntary conveyance, and made for the purpose of hindering, delaying, and defrauding creditors.

This question arises under the provisions of the National Bankruptcy Act as codified in 11 U.S.C.A. § 107. This section provides in part as follows: '(a)(1) Every lien against the property of a person obtained by attachment, judgment, levy, or other legal or equitable process or proceedings within four months before the filing of a petition initiating a proceeding under this title by or against such person shall be deemed null and void (a) if at the time when such lien was obtained such person was insolvent or (b) if such lien was sought and permitted in fraud of the provisions of this title: * * *'. This provision of § 107 was formerly a part of § 67(f) of the Bankruptcy Act of 1898.

This section also provides that transfers by a debtor within one year prior to the filing of a petition initiating bankruptcy proceedings are fraudulent as to creditors when made without a fair consideration, or when made to hinder, delay, or defraud either existing or future creditors. 11 U.S.C.A. § 107, sub. d(2). For the purpose of a recovery under the above provisions, it is provided that any State court which would have had jurisdiction, if bankruptcy had not intervened, and the court of bankruptcy shall have concurrent jurisdiction. 11 U.S.C.A. § 107, subs. d(7), e.

The issue in the present case is one that has been finally settled by this court in a full-bench decision. In Morris Plan Bank of Georgia v. Simmons, 201 Ga. 157-173, 39 S.E.2d 166, Mr. Chief Justice Bell, speaking for the court, cites decisions of this court and the Court of Appeals to the effect that the lien of a judgment less than four months old is void only as to the trustee in bankruptcy and those claiming under him. He also cites a number of decisions by this...

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3 cases
  • Geo. A. Clark & Son Inc. v. Nold, 10819
    • United States
    • Supreme Court of South Dakota
    • 13 Abril 1971
    ...v. Pauline Oil & Gas Co., 309 U.S. 294, 60 S.Ct. 535, 84 L.Ed. 764; same case on remand, 191 Okl. 346, 130 P.2d 305; Branch v. Human, 215 Ga. 209, 109 S.E.2d 732; 8A C.J.S. Bankruptcy § 245(4)b. To hold otherwise in the circumstances of this case would be inequitable and in effect prefer th......
  • Federal Deposit Ins. Corp. v. Davis, 83-1295
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • 3 Mayo 1984
    ...on fraudulently conveyed property can pursue their state law remedies independently of the trustee in bankruptcy. See Branch v. Human, 215 Ga. 209, 109 S.E.2d 732 (1959) (a judgment lien is enforceable against property which the bankrupt debtor has fraudulently conveyed, even where the lien......
  • Moseley v. Fargason, 20521
    • United States
    • Supreme Court of Georgia
    • 8 Julio 1959

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