Cohen v. Parish

• Decision Date: 27 July 1898
• Citation: 31 S.E. 205,105 Ga. 339
• Parties: COHEN et al. v. PARISH.
• Court: Georgia Supreme Court

31 S.E. 205

105 Ga. 339

COHEN et al. v. PARISH.

Supreme Court of Georgia

July 27, 1898

Syllabus by the Court.

1. When the controlling question in a case is one of fact, and the jury, having been properly charged, determine that question and there is evidence in the record which supports their finding, the verdict, when complained of as being contrary to law and to the evidence, will not be set aside after its approval by the trial judge.

2. When a father purchases land with his own funds, and causes the title to be made by the vendor to himself as trustee for a minor daughter, this, in the absence of any valuable consideration as between these two, is equivalent to a gift of the land by the father to the daughter; and the fact that he may have supposed the daughter had a valid, legal claim against him, and may have intended to thus settle it, when in fact there was no such claim, does not invalidate the trust deed. Its validity, when attacked by his creditors, depends upon his solvency at the time of the conveyance, and the absence of any intention on his part to hinder, delay, or defraud his creditors; and although the conveyance gives to the trustee a general power of sale, without order of court such power does not carry with it the right to sell and convey the property in consideration of the payment of an individual debt of the trustee.

3. In the trial of a case involving the validity of such a deed where it is alleged that at the time of the gift the father was insolvent, and his object in causing such conveyance to be made was to hinder, delay, or defraud his creditors, the issues to be determined are those of solvency and of good faith; and declarations on the part of the father, made at the time of the conveyance, as to his reasons for having the conveyance so made, may be submitted to the jury for their consideration on the question of intention, and so may any documentary evidence tending to show the good or bad faith of the transaction, though such declarations or such documents may not be evidence of the truth of the matters recited or contained therein.

Error from superior court, Fulton county; J. H. Lumpkin, Judge.

Action by Minnie L. Parish, by her next friend, against L. Cohen & Co. Judgment for plaintiff. Defendants bring error. Affirmed.

Although a conveyance of trust property to a trustee gives the trustee a general power of sale without order of court, such power does not carry with it a right to sell and convey the property in consideration of the payment of the trustee's individual debt.

The following is the official report:

On February 12, 1895, Minnie Laura Parish, a minor, brought suit by her next friend against L. Cohen & Co., a firm composed of L. Cohen, E. Steinheimer, and Jacob Menko, and against L Cohen individually and John T. Parish, alleging in brief: In April, 1886, Samuel T. Bryan, by a deed recorded May 7, 1886, conveyed to the plaintiff, through her father, John T. Parish, as trustee for her, a certain lot of land in the city of Atlanta. The deed contained a clause as follows: "This conveyance made with power to said John T. Parish, trustee as aforesaid, to sell and convey said property at public or private sale, without any order of court for that purpose." On September 13th of the same year the sheriff, under a fi. fa. in favor of L. Cohen & Co. against John T. Parish, assumed or pretended to sell the property, and L. Cohen bid it in; the alleged consideration being $100. The sheriff's deed to him is void, because John T. Parish had no leviable interest in the property; the property belonging exclusively to the present plaintiff.

On August 21st of that year, John T. Parish, having become indebted to L. Cohen & Co. and L. Cohen for whisky, agreed to execute, as trustee, a deed conveying said realty to L. Cohen in payment of the whisky account, and for similar goods to be thereafter supplied. This indebtedness was exclusively that of the plaintiff's father, and she had no interest in it, and the deed is void. The alleged consideration, $500, is less than half the value of the property. The trustee had no power to execute such a deed, and the grantee knew this, and knew that the plaintiff had no interest in, and derived no benefit from, the transaction, and wrongfully and fraudulently induced Parish to execute the deed. Cohen took possession of the property on or about the date of the deed, and continued wrongfully in possession until March, 1893, when he sold to one Spier. (Originally the plaintiff's petition attacked the title of Spier, but it is now conceded that Spier was an innocent purchaser, and obtained a good title.) The plaintiff prayed for a judgment against L. Cohen & Co., and against L. Cohen individually, for $1,250, which she alleged was the value of the property on August 21, 1896, together with interest, and for general relief. L. Cohen & Co. and L. Cohen, in their answer, denied the allegations as to fraud, and alleged that they bought the property from Parish in good faith, believing it was subject to their debt. They contended that the sale by the sheriff was valid, and the sheriff's deed conveyed a good title; that the deed to John T. Parish, purporting to create a trust for the benefit of the plaintiff, was void as against his creditors, because the consideration of the deed was a lot belonging to Parish, which Bryan received from him in exchange for the one conveyed, and the conveyance was therefore in the nature of a gift to the plaintiff from Parish, who was then insolvent, and because it was made for the purpose of hindering, delaying, and defrauding his creditors. Further, the deed executed to Cohen by Parish was made in consideration of $500, and created a good title.

On the first trial of the case there was a verdict in favor of the plaintiff, and the case was brought to this court, and a new trial granted. 100 Ga. 335, 28 S.E. 122. On the last trial (April 23, 1897) there was a verdict for the plaintiff for $700 principal and $519.94 interest. The defendants made a motion for a new trial, upon grounds hereafter stated, which the court overruled, provided the plaintiff would within a stated time write off from the verdict $204.40, with interest thereon at 7 per cent. from August 21, 1896; the court stating that the principal sum stated was the amount which counsel for the defendant claimed was paid on that date. The plaintiff wrote off this amount, with interest, as directed, and to the overruling of the motion Cohen & Co. excepted. The motion was upon the grounds that the verdict was contrary to law and the evidence, and excessive, and against all of the defendants jointly, although the proof showed that the deeds made by the sheriff and John T. Parish were to L. Cohen, and not to Steinheimer and Menko, and there was no evidence to sustain any verdict against Steinheimer and Menko. Also, that the court erred as follows:

(4) In admitting in evidence, over the objections of defendants L. Cohen & Co., "the homestead proceedings" (an application by Eva Parish and John T. Parish to the superior court to allow them to sell the lot described in the petition), and the proceedings and order of court, found in Book Q, pp. 45-48,--the petition to sell this homestead property; the appointment of a guardian ad litem for the two minor children of Eva and John T. Parish; his consent, as guardian, that it should be sold; and the order of the judge of the superior court authorizing its sale, and stating certain terms of the reinvestment of the fund arising from the sale. (It appeared from this evidence that on April 17, 1876, Eva Parish, wife of John T. Parish, and mother of the plaintiff, filed her claim of exemption under section 2040 of the Code of 1873, including in the schedule land subsequently exchanged by John T. Parish for the property conveyed to him by the trust deed in question, and that the exemption was allowed.) Defendants objected to the introduction of the evidence on the grounds: (a) There was no evidence that Eva and John T. Parish had any such property. (b) There was no evidence that they had a homestead on the property, except as stated in the petition, and the homestead would be the highest evidence of that fact. (c) It should first be shown that Cohen & Co. had no notice of this homestead fund. (d) It makes no difference whether Parish had any homestead funds or not, for, if he did have any, it did not create a debt from him to his daughter. She had no interest in the homestead estate, nor was she interested in the proceeds of it,--certainly not to the extent of justifying him in giving her his property. The court held that the evidence offered was not admissible to show the truth of the recitals in the petition, as against Cohen & Co., but that he would admit it as against Parish. The movants contend that it was not admissible even as against Parish, and its only effect would be to cloud and prejudice the minds of the jury, to the injury of defendants Cohen & Co., and that it was not admissible because of the objections stated at the time it was offered.

Note by the court: "On the trial it was contended on behalf of defendants that the trust deed was [void], among other reasons, on two grounds: (1) Because it was a deed without valuable consideration, made pending insolvency; and (2) because it was made for the purpose of hindering, delaying and defrauding creditors. The court admitted the evidence of the grant of a homestead or exemption, the proceeding to sell it, in which Parish participated, the receipt of money by him in connection with this exemption, and what he said in taking the trust deed (part of the res gestæ), solely as evidence of the circumstances surrounding him, and as bearing on the state of his mind and intention,...