Hazelhurst v. Adams

• Decision Date: 31 January 1871
• Citation: 42 Ga. 124
• Parties: CUBBEDGE & HAZELHURST, plaintiffs in error. v. O. F. ADAMS, defendant in error.
• Court: Georgia Supreme Court

42 Ga. 124

CUBBEDGE & HAZELHURST, plaintiffs in error. v. O. F. ADAMS, defendant in error.

Supreme Court of the State of Georgia

(Atlanta, January Term, 1871.)

[COPYRIGHT MATERIAL OMITTED.]

Equity Practice. Injunction. Before Judge Cole. Bibb County. Chambers. December, 1870.

On the 29th of November, 1869, Cubbedge & Hazelhurst filed a bill against Adams, making this case. They are bankers and brokers, and Adams is a cotton buyer; all live in Macon, Georgia. Adams has been one of their customers, for several years; has procured large advances of cash from them; has occasionally been largely in their debt, and, on such occasions, secured them against loss, as far as he could. Up to the close of their business relations, he always asserted his readiness, and ability to protect them against loss, for advances. From the foregoing facts, they placed implicit confidence in Adams' said assurances. Besides, Adams frequently exhibited to them his monetary status, to induce them to continue such advances, and to satisfy them of the safety in so doing. Up to the closing of their account, they believed that all Adams' property was pledged, as a security, for such advances. At the close of the cotton season of 1869-70, Adams owed them $9,308 97, and they paid a small amount for him since. Calling upon him for a settlement, they were astonished to find that he could not settle, and, upon inquiry, learned that Adams has conveyed all his property, with unimportant exceptions, to one Flanders, of Macon, his brother-in-law, in trust, for the wife and children of Adams, as appeared by a copy of the deed exhibited. The deed was made on the 22d of September, 1869; its consideration was "love and affection, " and it conveyed to Flanders, in trust, for Mrs. Adams and her children, by Adams, in esse, or to be in esse, free from the disposition and contracts of Adams, with power in her to change the trustee, and with power in him to sell, with her written consent, without applying to any Court. It conveyed Adams' residence, and all his *household and kitchen furniture, part of lot number six, south half of number one, square number fifty-eight, numbers sixteen and seven-teen, all in Macon, and twelve hundred and eighty acres of land in Missouri. This deed was recorded in Bibb county, on the 8th of March, 1870. This deed was made to defraud them, and other creditors, and it was withheld from record, that Adams might continue to get credit upon faith of his owning said property, and that, too, when, as they believe, he was insolvent. At the date of said deed, Adams owed them $7,900 00, and, without giving them any notice of his deed, he continued business with them without means to secure or pay them. Further, Flanders has been discharged, and Adams has been substituted as trustee. Under said deed, he has sold two pieces of property covered by said deed, and has advertised other portions of it for sale. Adams admits that he used the proceeds of said sale as if the money belonged to him absolutely. His family have enjoyed the money advanced by them to him, and said property conveyed is subject to the payment of their demand, whether this deed be annulled or not. They have reason to believe, and do believe, that Adams will sell all of said property, and convert its proceeds to his own use, unless he be enjoined. They prayed for an answer to said allegations, that said deed be declared void as to them, and that Adams be made to pay them said account. The Chancellor granted a temporary injunction, and ordered Adams to show cause why it should not be continued.

He made the following answer, in response to said order: He admitted that he was in their debt, on the 22d of September, 1869, and said that indebtedness was in this way: They held his note for $4,02500, made on the 3d of September, 1869, secured by a deposit of one hundred and seventy-nine shares of stock, in the Macon and Brunswick Railroad Company. Soon after, but perhaps after the 22d of September, 1869, they sold one hundred of said shares for $3,300 00, and applied that to the part payment of said note, and they *hold the other shares yet. Besides this, as appears by his bank book, he owed them on the 22d of September, 1869, $7,930 20. On the 23d of September, 1869, he deposited with them $7,197 55, and on that day issued checks amounting to only $107 17; was that, exclusive of said note, and leaving out any reckoning of usury, he owed them when the deed was made $839 82. Said deposit so proceeds of cotton owned and held by him, on the 22d of September, 1870. Estimating said stock at $30 00 per share, said shares would overpay said note by $1,341 00, which added to said deposit would overpay all of said indebtedness.

When said deed was made, he kept out realty and railroad stock in Georgia worth, as he believes, $6,400 00, besides an interest in two lots, supposed to contain copper, for which he would take $5,000 00; it was worth but little if it has no copper. Since making said deed he has sold considerable of the realty, not covered by the deed, and this he was compelled to do, to prevent possible loss on cotton bought since the deed was made. This deed was not made to defraud any creditor; loss was not then anticipated and his property outside of said deed, was on the 22d of September, 1867, sufficient to pay all his debts, except some advances which had been made by his father-in-law, which he regarded when they were made, as debts which, would never harrass or oppress him, and so he has been assured by his father-in-law; the larger part of these were used in paying for said residence, and he regarded it as a gift to his wife, rather than a debt against him. He made the deed simply to protect his family against possible losses by him in business. Before he did it, he was advised by Hazelhurst to...