Southern Educators Associates v. Silver

• Decision Date: 04 November 1981
• Docket Number: Nos. 37871,37872,s. 37871
• Citation: 284 S.E.2d 3,248 Ga. 520
• Parties: SOUTHERN EDUCATORS ASSOCIATES v. SILVER et al. SILVER et al. v. SOUTHERN EDUCATORS ASSOCIATES et al.
• Court: Georgia Supreme Court

Page 3

284 S.E.2d 3

248 Ga. 520

SOUTHERN EDUCATORS ASSOCIATES v. SILVER et al.

SILVER et al. v. SOUTHERN EDUCATORS ASSOCIATES et al.

Nos. 37871, 37872.

Supreme Court of Georgia.

Nov. 4, 1981.

Rehearing Denied Nov. 24, 1981.

Charles C. Pritchard, Abraham A. Sharony, Steven Schaikewitz, Macey & Zusmann, Atlanta, for Southern Educators Associates in 37871.

Jack Kleiner, Georgia Institute of Technology, E. Lee Redfern, Hurt, Richardson, Garner, Todd & Cadenhead, Atlanta, for Arthur Silver et al. in 37871.

E. Lee Redfern, Rex M. Lamb, III, Hurt, Richardson, Garner, Todd & Cadenhead, Atlanta, for Arthur Silver et al. in 37872.

Charles C. Pritchard, Macey & Zusmann, Jack Kleiner, Georgia Institute of Technology, Atlanta, for Southern Educators Associates et al. in 37872.

MARSHALL, Justice.

This case arises out of Kleiner v. Silver, 137 Ga.App. 560, 224 S.E.2d 508 (1976). In this suit, Arthur and William Silver have filed a two-count complaint against Southern Educators Associates (Southern) and Chicago Land Corporation (CLC), CLC having been a defendant in the prior suit.

In Count 1, the plaintiffs seek to set aside a warranty deed from CLC to Southern. This warranty deed was executed during the pendency of the prior appeal, and in this deed CLC conveyed to Southern its principal asset, a building located at 3098 Piedmont Road, N.E., Atlanta, Georgia. The plaintiffs' contention is that the conveyance is fraudulent in law against creditors under Code § 28-201(2), which renders null and void: "Every conveyance of real or personal estate, by writing or otherwise, and every bond, suit, judgment and execution, or contract of any description, had or made with intention to delay or defraud creditors, and such intention known to the party taking. A bona fide transaction on a valuable consideration, and without notice or ground for reasonable suspicion, shall be valid." In its pleadings and in testimony given in court, CLC admitted that it intended to hinder or delay the Silvers in collection of their judgment by making this conveyance to Southern.

In Count 2, the plaintiffs argue that Southern took the warranty deed subject to the lien of the plaintiffs' judgment against CLC, because Southern had actual knowledge of the existence of the judgment at the time of the conveyance. However, the plaintiffs' judgment against CLC was not recorded until after the conveyance. See Code Ann. § 110-515 (Ga.L.1958, p. 379; 1966, pp. 142, 143); Morris-Weathers Co. v. Decatur Federal Savings & Loan Assn., 158 Ga.App. 177, 279 S.E.2d 482 (1981); In the Matter of Tinsley, 421 F.Supp. 1007 (M.D.Ga.1976), affd. without opinion In the Matter of Tinsley, 554 F.2d 1064 (5th Cir. 1977). The trial court granted Southern's motion for directed verdict on Count 2 of the plaintiffs' complaint.

Count 1 was submitted to a jury in the form of a special verdict containing the following two interrogatories:

(1) "Under all the circumstances was Chicago Land Corporation's intention to hinder or delay its creditors by conveying the real estate known to Southern Educators Associates at the time of the conveyance? Yes ---- No ----." The jury was instructed that if the answer to this question was Yes, the form of their verdict would be, "We, the jury, find for the plaintiffs Arthur Silver and William E. Silver."

(2) "Under all the circumstances and notwithstanding Chicago Land Corporation's admission that it intended to hinder or delay its creditors by conveying the real estate, was the conveyance a bona fide transaction on a valuable consideration, and without notice or ground for reasonable suspicion of the Seller's intent and therefore valid? Yes ---- No ----." The jury was instructed that if the answer to this question was Yes, the form of their verdict would be, "We, the jury, find for the defendant, Southern Educators Associates."

The jury returned a verdict in favor of the plaintiffs on Count 1, and judgment was entered thereon.

In Case No. 37871, Southern appeals the entry of judgment in favor of the Silvers on Count 1. In Case No. 37872, the Silvers cross-appeal the direction of a verdict in favor...