In re Garner

• Decision Date: 29 June 1901
• Docket Number: 90.
• Citation: 110 F. 123
• Parties: In re GARNER. v. FINDLEY. GARNER
• Court: U.S. District Court — Northern District of Georgia

110 F. 123

In re GARNER.

GARNER v. FINDLEY.

No. 90.

United States District Court, N.D. Georgia.

June 29, 1901

H. H Perry, for complainant.

Dean &amp Hobbs, for trustee.

Howard Thompson, for bankrupt.

NEWMAN District Judge.

On the 12th day of January, 1899, John D. Garner was adjudged a bankrupt. On October 3, 1899, Mrs. Millie Garner, wife of the bankrupt, filed her petition on the equity side of the district court against the trustee, asking that she be decreed to have an undivided one-half interest in the equity in a certain tract of land in Hall county, Ga. The petition was referred to the referee to take the evidence, and the facts, as gathered from the pleadings and the testimony so taken, are as follows: That Mrs. Millie Garner was married to John D. Garner on December 18, 1889, at which time she owned a farm in Hall county, and had in money $426; that she agreed with her husband to sell her farm and purchase jointly with him the land now in controversy, each paying one-half of the purchase money, and said purchase was made from H. T. Martin for $4,250, subject to a debt of $2,500 due to one Stanley who held the legal title to the land, Martin having a bond for title thereto; that Mrs. Garner sold her own farm for the sum of $1,670; that she turned over to her husband the sum of $2,000, to be paid upon the land they bought, and that her husband contributed $2,000, which left a balance due to Martin of $250, which was afterwards paid off from the proceeds of the farm; that the debt due Stanley of $2,500 was afterwards transferred by him, together with the legal title to Miss Cora Wood, and $500 has been paid upon the principal of this debt from the proceeds of the farm; that said Martin, without the knowledge of Mrs. Garner, transferred the bond for title held by him to John D. Garner, and when Mrs. Garner discovered this she objected, but her husband assured her that the deed when made should be to them jointly; that the bankrupt afterwards, without the knowledge of Mrs. Garner, executed to the State Banking Company of Gainesville, Ga., a mortgage upon said land to secure a loan made by him from the banking company; that he did not advise the officers of said banking company that his wife owned a half interest in said land, nor did he advise other parties from whom he borrowed various sums of money, but claimed that it was his property alone. The bankrupt has a number of general creditors. It is shown that the bankrupt made a statement to a mercantile agency, which was such that the land must have been embraced in the real estate he claimed to own. One, at least, of these general creditors had a copy of this mercantile agency statement, and probably acted on it in giving the bankrupt credit.

The record shows no act whatever on the part of Mrs. Garner to induce persons to give credit to her husband as the sole owner of this land. If she is estopped at all from setting up her claim now to an undivided half interest, it must be because of her allowing the title to remain in her husband, thereby enabling him to hold it out to the world as his own. Is this sufficient? In Bell v. Stewart, 98 Ga. 669, 27 S.E. 153, the supreme court of the state, referring to several former cases on the subject, determined the question at issue here in a way favorable to the contention of Mrs. Garner. An extract from the opinion by Chief Justice Simmons will show what was determined:

'Undoubtedly the wife was the owner of an equitable undivided interest in the land, and it was proper and lawful for the husband to convey to her a portion of the land, now greater in value than the amount of her money that went into the purchase. Brooks v. Fowler, 82 Ga. 329, 9 S.E. 1089; Dodd v. Bond, 88 Ga. 355, 14 S.E. 581. The judgment against the husband not having been obtained until after the land had been conveyed to her, her title, if the conveyance was made in good faith, was superior to the judgment, unless there was conduct on her part amounting to an estoppel; that is to say, unless her conduct had been such as to mislead the creditor, and cause him to extend the credit to the husband upon the faith of the latter's apparent ownership of the property. In no way could an extension of credit upon the faith of property which did not in fact belong to the debtor give the creditor any right to subject it, as against the real owner, to the payment of the debt. In the cases relied on by counsel for the defendant in error, and in all others in which this court has held that a creditor could subject to a general judgment against the debtor, as against the claim of an equitable owner, property which at the time the credit was extended was apparently the property of the debtor, the creditor had obtained his judgment while the legal title was still in the debtor, or there was conduct on the part of the equitable owner which operated as an estoppel. See Zimmer v. Dansby, 56 Ga. 79; Sumner v. Bryan, 54 Ga. 614; Kennedy v. Lee

...