Citizens & Southern Nat. Bank v. Kontz
| Decision Date | 04 December 1937 |
| Docket Number | 11948. |
| Citation | 194 S.E. 536,185 Ga. 131 |
| Parties | CITIZENS & SOUTHERN NAT. BANK v. KONTZ et al. |
| Court | Georgia Supreme Court |
Error from Superior Court, Rabun County; B. P. Gaillard, Jr. Judge.
Execution proceeding by the Citizens & Southern National Bank, as trustee, against Ernest C. Kontz, wherein Mrs. Mary Elizabeth Kontz filed a claim to the property levied on. Judgment for claimant, plaintiff in execution's motion for a new trial was overruled, and plaintiff in execution brings error.
Reversed.
Syllabus by the Court.
1. Where a deed is attacked under the Code, § 28-201, par. 2, as fraudulent, it is error to charge the jury that, if it was not the intention to delay and defraud the creditor, and the deed was for a valuable consideration, the transaction would be valid. To charge delay and defraud in the conjunctive and not in the disjunctive is incorrect; but this may or may not be ground for new trial, according to the circumstances of the case.
2. An erroneous and injurious instruction is not cured by a correct statement of the law in another part of the charge to the jury, wherein the incorrect charge is not expressly withdrawn from their consideration and their attention directed thereto.
3. When the plaintiff is attacking as fraudulent the deed from the husband to the wife, under which she claims, the onus is on the husband and wife to show that the transaction was fair. Hence in such case it is erroneous to charge the jury that the burden is on the party alleging fraud to show its existence.
4. A charge as follows: 'In considering transactions between husband and wife, slight circumstances under certain conditions may be sufficient to satisfy the jury of the existence of fraud,' without naming the certain conditions the court has in mind, is misleading and confusing to the jury.
5. A voluntary conveyance made with intent to delay or defraud a creditor is invalid as to an existing creditor. Hence a charge which makes it essential to void such deed that the donee should know of such intent is erroneous.
6. An instruction unauthorized by the evidence is improper, and, if it is not apparent that the jury could not have been misled thereby, is cause for new trial.
7. On the trial of a case where the wife claims under a voluntary conveyance from the husband, testimony on her part to the effect that she had let her husband have money for which he was indebted to her at the time of making the conveyance is relevant to show the bona fides of the transaction.
8. A charge without qualification, which requires a jury to determine an issue in the cause that might not be necessary for the jury to decide, is misleading.
9. A voluntary deed from the husband to the wife, made with intent to delay or defraud an existing creditor, is void as to the creditor.
10. A sale by a wife of her land to her husband for a valuable consideration is void unless approved by the superior court of her domicile. A wife cannot bind her property as surety for or convey same for the payment of a debt of her husband. She may give her land to her husband for the purpose and so that it may be subject to his debt. When a wife conveys her land by deed of gift to her husband for such purpose, and the conveyance is not a scheme or colorable transaction between her and the creditor of the husband to bind her property as surety otherwise for the payment of the debt of her husband, such conveyance is binding on her.
11. A new trial will be granted on proper motion, where the verdict is unauthorized by the evidence.
Statement of facts by Graham, Judge:
The Citizens & Southern National Bank, as trustee, caused to be levied a fi. fa. in its favor against Ernest C. Kontz on property in Rabun county, Ga. Mrs. Mary Elizabeth Kontz filed a claim to that property, and the jury found in favor of the claimant. The bank made a motion for new trial, which was overruled, and this writ of error is from that order. Among other evidence introduced was a deed dated August 11, 1930 from Ernest C. Kontz to Mrs. Mary Elizabeth Kontz, which recited that the consideration was 'the love and affection which he has and bears his wife, said Mary Elizabeth Kontz,' conveying the Rabun county property. This deed was filed for record on December 20, 1930. The plaintiff in fi. fa. asserted that this deed had been executed by Ernest C. Kontz with intent to defraud plaintiff in fi. fa.; that it was a voluntary conveyance made at a time when Ernest C. Kontz was insolvent.
Ernest C. Kontz was indebted to the First National Bank of Atlanta and the Citizens & Southern National Bank, and in January 1930, he executed a security deed dated December 31, 1929, conveying to the Citizens & Southern National Bank, as trustee, certain property in Fulton county, to secure notes in the principal sum of $53,540. This deed, after negotiations between Ernest C. Kontz and the two banks, was executed to secure debts that had theretofore been unsecured. Mrs. Mary Elizabeth Kontz knew of the existence of the indebtedness to the banks, and that the banks were pressing Ernest C. Kontz for payment. On August 1, 1930, notice was given by the Citizens & Southern National Bank, as trustee, to Ernest C. Kontz, that suit would be filed on said notes, returnable to the September term, 1930, of the superior court of Fulton county, to foreclose the deed dated December 31, 1930. On August 11, 1930, the Citizens & Southern National Bank, as trustee, demanded of Ernest C. Kontz that he pay to it as trustee under the deed the total indebtedness thereby secured. Ernest C. Kontz acknowledged that he had received these notices.
On August 12, 1930, the Citizens & Southern National Bank, as trustee, filed its suit in Fulton superior court, alleging that Ernest C. Kontz had executed to it a deed to secure debt dated December 31, 1929; and Ernest C. Kontz answered that suit. On December 18, 1930, there was a hearing on the demurrer of the bank to the answer of Ernest C. Kontz. He was present at the hearing, and his counsel asked for 20 days within which to amend the answer, but no amendment was ever filed. On January 9, 1931, a verdict was rendered in favor of the Citizens & Southern National Bank, as trustee, against Ernest C. Kontz, in the principal sum of $53,540, together with interest, attorneys' fees, and trustee's fees, and judgment was rendered on that verdict.
The Citizens & Southern National Bank found that Ernest C. Kontz had made the deed of August 11, 1930, to his wife, Mrs. Mary Elizabeth Kontz, conveying the property in Rabun county, Ga.; and on February 5, 1931, suit was filed in Fulton superior court by the Citizens & Southern National Bank against Ernest C. Kontz and Mrs. Mary Elizabeth Kontz, to set aside that deed. In paragraphs 7 and 8, of the petition it was alleged that the deed of August 11, 1930, was executed without any valuable consideration whatsoever, and was a voluntary deed for love and affection only. Ernest C. Kontz filed a verified answer to the petition on March 27, 1931, admitting the truth of these two paragraphs. Mrs. Mary Elizabeth Kontz filed a verified answer to the suit on March 25, 1931, admitting the truth of these paragraphs 7 and 8.
There were then negotiations between counsel of record for Ernest C. Kontz and Mrs. Mary Elizabeth Kontz and counsel for the bank, looking to an adjustment of the matter. Ernest C. Kontz was contemplating an appeal of the case in which the judgment had been rendered against him. A proposition was made that this appeal would be dropped; that Mrs. Mary Elizabeth Kontz reconvey the Rabun county property to Ernest C. Kontz so that it would be subject to the lien of the execution in favor of the bank, and that additional time would be given to September 1, 1932, for Ernest C. Kontz to pay his debt. An agreement was drawn to cover this settlement with Mrs. Mary Elizabeth Kontz, Ernest C. Kontz and the bank as parties thereto, but this agreement was never signed; and at the request of counsel of record for Mrs. Mary Elizabeth Kontz and Ernest C. Kontz a new agreement was drawn leaving out Mrs. Mary Elizabeth Kontz as a party, it being stated that the agreement of Mrs. Mary Elizabeth Kontz would be evidenced by her execution of a deed reconveying the Rabun county property to Ernest C. Kontz. This agreement was dated April 11, 1931. It recited the obtaining of the judgment by the bank against Ernest C. Kontz; that Ernest C. Kontz had conveyed the Lakemont, Rabun county, property to Mrs. Mary Elizabeth Kontz on August 11, 1930, for love and affection that the bank had filed its suit to set aside this deed and subject the property to the lien of the execution; and that Ernest C. Kontz was contemplating an appeal from the judgment against him. The parties agreed that Ernest C. Kontz would not appeal from the judgment; that Mrs. Mary Elizabeth Kontz would reconvey to Ernest C. Kontz the Lakemont property in Rabun county which he had conveyed to her by deed dated August 11, 1930, and filed for record December 20, 1930, so that that land would become subject to the execution in favor of the bank; that the bank would take no steps to levy its execution before September 1, 1932; that the bank would protect the Lakemont, Rabun county, property against any tax sale before September 1, 1932, taking a transfer of any tax fi. fa.; that Ernest C. Kontz could sell and obtain release from the deed to secure debt of the property in Fulton county, Ga., by paying to the bank certain named sums for the various parcels of land and of the Rabun county property at a named price; and the bank agreed to release certain property on Forrest avenue from the lien of its execution, and to pay taxes, and life insurance premiums on policies which Ernest C. Kontz had...
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