Cotton States Fertilizer Co. v. Childs

• Decision Date: 24 May 1934
• Docket Number: 9856.
• Citation: 174 S.E. 708,179 Ga. 23
• Parties: COTTON STATES FERTILIZER CO. v. CHILDS et al.
• Court: Georgia Supreme Court

174 S.E. 708

179 Ga. 23

COTTON STATES FERTILIZER CO. v. CHILDS et al.

No. 9856.

Supreme Court of Georgia

May 24, 1934

Rehearing Denied June 16, 1934.

Syllabus by the Court.

This being a suit to recover a judgment on a note against a husband and to cancel a deed from the husband to the wife as having been made to defraud the plaintiff and other creditors, where the defendants relied solely upon the testimony of the husband, and the jury could have found that the failure of the wife to testify was not sufficiently explained, the trial judge erred, in view of these and other circumstances shown by the record, in refusing a timely written request presented by the plaintiff to instruct the jury in the language of the Civil Code of 1910, § 5749, that "where a party has evidence in his power and within his reach by which he may repel a claim or charge against him and omits to produce it, or, having more certain and satisfactory evidence in his power, relies on that which is of a weaker and inferior nature, a presumption arises that the charge or claim is well founded; but this presumption may be rebutted."

Error from Superior Court, Macon County; W. M. Harper, Judge.

Suit by the Cotton States Fertilizer Company against M. H. Childs and wife. Judgment for defendants, and plaintiff brings error.

Reversed.

Gilbert C. Robinson, of Montezuma, and J. S. Averill, Jr., of Columbia, S. C., for plaintiff in error.

Felton & Felton and Jule W. Felton, all of Montezuma, for defendants in error.

BELL Justice.

Cotton States Fertilizer Company brought a suit against M. H. Childs and Mrs. Childs, husband and wife, to recover a judgment against the husband on a note and to cancel a deed from the husband to the wife as being a mere voluntary conveyance which rendered the husband insolvent, or, if based upon a valuable consideration, as having been made with intent to hinder, delay, or defraud the plaintiff and other creditors the wife being aware of such intention or having reasonable ground to suspect the same. The defendants in their answer admitted that the husband was liable on the note, and that the deed had been executed as alleged, but denied the other allegations. They contended upon the trial that the deed was executed in payment of a debt due by the husband to the wife and that, although the husband was thereby rendered insolvent, the transaction was attended with the utmost good faith, and was lawful under the rule that a debtor may prefer one creditor over another. The jury found for the defendants and the plaintiff excepted to the overruling of its motion for a new trial. The motion was based on the general grounds and on several special grounds, in one of which error was assigned upon the refusal of a timely written request by the plaintiff to instruct the jury in the language of the Civil Code of 1910, § 5749, that "where a party has evidence in his power and within his reach, by which he may repel a claim or charge against him, and omits to produce it, or, having more certain and satisfactory evidence in his power, relies on that which is of a weaker and inferior nature, a presumption arises that the charge or claim is well founded; but this presumption may be rebutted." It is our opinion that the court erred in refusing to instruct the jury as requested; and in the view which we take of the case it is unnecessary to pass upon other questions raised. Before discussing the law relating to the question to be decided, some additional facts should be stated.

Mrs. Childs, though a party defendant, did not attend the trial, and her depositions were not taken, the only evidence introduced by the defendants being the testimony of Mr. Childs, the husband. He testified that his wife was ""undergoing the change of life," and was of a "nervous disposition," and that although she was "up and about" he was "afraid to bring her to court." He further testified: The deed in question was made in payment of a loan in sum of $1,800 which he obtained from his wife in June, 1917. He did not give his wife any note or other obligation in writing, but promised to pay interest at the rate of 8 per cent. per annum. The deed was made "for a consideration of $3,500, which represents the principal of $1,800 and interest." He did not intend to hinder or delay his creditors, but merely wanted to pay his wife what he owed her. He has no written evidence showing the receipt and disbursement of the $1,800 loaned by his wife, except one check in the sum of $183.50, with which he paid for repairs upon his house. The money which he obtained from his wife was inherited by her from an aunt, and was received by her and delivered to the witness in currency. The witness purchased 500 acres of land in 1907, for which he paid $1,815, and purchased 67 1/2 acres in 1925, for which he paid $4,000. All of these lands were conveyed by the deed which is now in controversy. At the time of making this deed, in October, 1931, the witness owed the debt sued on in this case, and another debt which he mentioned as amounting originally to $1,000, but on which some thing had been paid. He did not "recall" other debts that he owed at that time, but stated that "he owed considerable money." The making of this deed and the transferring of certain personal property with it left him without owning any property of any kind whatsoever. All of the personalty on the farm, including certain cattle, he gave to his wife at the time he made the deed to her. He turned everything over to her in payment of what he owed her. He "never made a delivery of the lands or any part of the property" to his wife, but kept all of it and managed it for her. The tract of 67 1/2 acres was called the Oates place. Before purchasing this place for $4,000 in 1925, the witness did not offer to repay his wife what he owed her, and he did not suggest to her that the Oates place be put in her name at that time. Other testimony of this witness was as follows: "I have made considerable money during the years since I made this loan from my wife, and up to two or three years ago I could have paid back this loan several times; but I never at any time offered to repay the same, and my wife has never demanded that I pay her. She did not demand that I pay her at any time before I made her a deed, and did not ask me to make a deed to her conveying this property on October 9, 1931. I have given my wife money during all of the years since I made the loan, but I do not recall any single amount, nor could I estimate how much I have given her. Nothing was said about this money being applied on what I owed her. I have no written evidence of where this $1,800 my wife loaned me came from, and no written evidence of its disbursement except the check as previously testified. Out of all checks produced under your notice, I cannot tell whether paid out of this exact money. I did not give my wife a note or any other written evidence of the $1,800. The lands I conveyed to my wife on October 7, 1931, were free from any liens or encumbrances. The land and personalty I conveyed to my wife was worth much less than I owed her."

The plaintiff introduced evidence to the effect that on December 11, 1931, M. H. Childs obtained an extension of the obligation now sued on, and pledged as collateral a rent note from a tenant for the following year for a part of the lands which he had previously conveyed to his wife, which note was executed after such conveyance and was made payable to himself; and that he executed to the plaintiff, as further security, a mortgage on three cows which he had previously given to his wife, but which, together with the rent note, he warranted to be his own property, "free from all liens and encumbrances." It was also in evidence that M. H. Childs did not tell the plaintiff that he had conveyed all of his property to his wife, at the time of obtaining the extension agreement and of giving the additional security.

In the foregoing circumstances, it was error to refuse to charge the principle stated in the Civil Code of 1910, § 5749. It may be conceded that this principle cannot be safely given as a charge except in a very limited class of cases (Bank of Emanuel v. Smith, 32 Ga.App. 606, 124 S.E. 114 and cit.); but it cannot be said to be improper in all cases, and this is one of the cases in which it would have been appropriate. Such a charge has been affirmed in other cases as follows: Fountain v. Fuller E. Callaway Co., 144 Ga. 550 (2), 87 S.E. 651; Moye v. Reddick, 20 Ga.App. 649 (2), 93 S.E. 256; Blanchard v. Ogletree, 41 Ga.App. 4 (3), 152 S.E. 116.

It is true that "a debtor may prefer one creditor to another" (Civ. Code 1910,§ 3230), and that under this rule a husband who is indebted to his wife may convey property to her in preference to other creditors; but this rule is subject to the qualification that the conveyance must be made only for the purpose of paying or securing his wife as a creditor, and not be tainted with any intention to hinder, delay, or defraud others, such conveyance being judged by the intention with which it is made and accepted and not by its consideration or effect. Conley v. Buck, 100 Ga. 187 (2), 206, 28 S.E. 97; Monroe Mercantile Co. v. Arnold, 108 Ga. 449, 459, 34 S.E. 176; Bigby v. Warnock, 115 Ga. 385, 389, 41 S.E. 622, 57 L.R.A. 754; Cowan v. Bank of Rockdale, 159 Ga. 123 (4), 126, 125 S.E. 194. It is also the law that when a transaction between husband and wife is attacked for fraud by the creditors of either, the onus is on the husband and wife to show that the transaction was fair. Civ. Code 1910, § 3011. This is a burden which is placed on both the husband and the wife and does not rest upon the husband alone. While an absolute conveyance from a husband to a wife...