Seagraves v. Couch & Jackson

• Decision Date: 13 February 1929
• Docket Number: 6484.
• Citation: 147 S.E. 61,168 Ga. 38
• Parties: SEAGRAVES v. COUCH & JACKSON.
• Court: Georgia Supreme Court

147 S.E. 61

168 Ga. 38

SEAGRAVES v. COUCH & JACKSON.

No. 6484.

Supreme Court of Georgia

February 13, 1929

Syllabus by Editorial Staff.

Voluntary bankrupt has assignable interest in property claimed as exempt under Constitution and homestead laws of state, and such interest can be transferred in good faith to creditors either to extinguish or to secure pre-existing debt before property is set aside by trustee in bankruptcy and before same is confirmed by bankruptcy court.

Voluntary bankrupt, having assignable interest in property claimed in petition as exempt, can prefer one creditor to another and in good faith transfer such property to one creditor in extinguishment of pre-existing debt in preference to other creditors, but he cannot make transfer of such interest that will be valid as against creditors where his intention in doing so is to delay or defraud his creditors and party receiving transfer knows of such intention or has ground for reasonable suspicion thereof, under Civ. Code 1910, § 3224 subd. 2.

Transfer by voluntary bankrupt of property claimed in petition as exempt, to be defeated by bankrupt's fraudulent intent as against other creditors, it must be shown that fraudulent intent existed and that transferee was connected with fraud either by participating in intent or having notice or reasonable grounds for suspicion.

Acts or declarations of bankrupt indicative of intent to defraud creditors in transfer of property claimed as exempt are competent evidence, without reference to whether they were known by transferee to show fraudulent intent by bankrupt existed, but are not competent to show notice or reasonable ground of suspicion to transferee if such acts are not in presence of transferee.

In suit by creditor against transferee of property of voluntary bankrupt claimed to be exempt to set aside transfer of exemption on ground of bankrupt's intent to defraud creditors, burden is on creditor, under Civ. Code 1910, § 5746, to show by direct or circumstantial evidence both fraudulent intent of bankrupt and notice to transferee of such intent or reasonable grounds to suspect it.

In suit by creditor to set aside transfer by bankrupt of property claimed as exempt if evidence introduced by creditor fails to make out prima facie case against transferee of exemption circumstance that transferee is in court and is not introduced as witness in own behalf will not supply deficiency in plaintiff's proof, regardless of Civ. Code 1910, § 5749, raising presumption against party failing to produce proof within his reach.

Where transfer by bankrupt of property claimed to be exempt was not shown to have been between husband and wife or persons of same family, and transfer was authorized by law, and evidence was not sufficient to support charge of fraudulent intent by bankrupt or at least insufficient to show transferee's notice or reasonable ground for suspecting bankrupt's fraudulent intent, judgment against transferee was error under Civ. Code 1910, § 4626.

Error from Superior Court, Richmond County; A. L. Franklin, Judge.

Suit by Couch & Jackson against S.E. Seagraves and others. Judgment for plaintiffs against defendant named, such defendant's motion for new trial was overruled, and he brings error. Reversed.

Johnny J. Jones, of Augusta, for plaintiff in error.

Wright & Jackson and Freeman C. McClure, all of Augusta, for defendant in error.

Syllabus OPINION.

ATKINSON J.

1. A voluntary bankrupt has an assignable interest in the property claimed by him in his petition as exempt under the Constitution and homestead laws of this state; and he can transfer this interest in good faith to his creditors, either to extinguish or to secure a pre-existing debt, before the property is set aside by the trustee in...