State Housecraft, Inc. v. Jones

• Decision Date: 10 July 1957
• Docket Number: No. 36773,No. 2,36773,2
• Citation: 96 Ga.App. 182,99 S.E.2d 701
• Parties: STATE HOUSECRAFT, Inc. v. V. C. JONES
• Court: Georgia Court of Appeals

Page 701

99 S.E.2d 701

96 Ga.App. 182

STATE HOUSECRAFT, Inc. v. V. C. JONES.

No. 36773.

Court of Appeals of Georgia, Division No. 2.

July 10, 1957.

Syllabus by the Court

1. Where in a claim case arising out of the levy of a fi. fa. on certain personal property as the property of the defendant in execution, which property was shown to have been found at the time of levy at the home of the defendant in execution, this is sufficient to establish prima facie that the property is in the possession of the defendant. The defendant may explain such possession by showing that in fact his possession of the property at the time of levy is because the same was placed in his custody by his employer to be used for the latter's purposes. See Cornelia Bank v. Taylor, 37 Ga.App. 538, 140 S.E. 901. Where, however, the testimony on the subject is conflicting and the trior of fact is authorized to find from the evidence that the defendant in fi. fa. as a matter of fact retained the property for his own use, the burden remains upon the claimant to show that the alleged sale of the property by the defendant to itself was not in fraud of creditors, and that it did not have notice or grounds for reasonable suspicion of this fact. The evidence here authorized a verdict in favor of the plaintiff.

2. The right to a thorough and sifting cross examination should not be abridged. Accordingly, questions directed to the defendant in fi. fa. on cross examination concerning business difficulties shortly before the time of the alleged sale were properly allowed over objection as they related to a relevant and material issue in the case.

The plaintiff in error, State Housecraft, Inc., seeks reversal of a judgment of the Civil Court of Fulton County finding against its claim interposed to the levy of fi. fa. on a certain Buick automobile which it claims by reason of alleged bona fide purchase from M. M. Karr without notice of any facts which would render its title defective. Vivilore Jones, judgment creditor in an action against Karr and defendant in error here, claims that the sale of the Buick on March 9, 1954 to the plaintiff in error during the pendency of the Jones suit against him is void as in fraud of creditors.

On the trial of the action before the court without a jury it appeared that there were five or six pending suits or judgments against Karr at the time of the sale; that he admitted he was insolvent at that time, and remained insolvent from March until September, 1954, when he filed his voluntary petition in bankruptcy. The court entered judgment finding against the claimant. It then filed its motion for new trial on the general grounds which was later amended by the addition of one special ground, and the denial of this motion is assigned as error.

Harold Karp, Ferrin Mathews, Atlanta, for plaintiff in error.

Matthews & McClelland, J. Ralph McClelland, Atlanta, for defendant in error.

TOWNSEND, Judge.

1. Code, § 28-201 provides as follows:

'The following acts by debtors shall be fraudulent in law against creditors and others, and as to them null and void * * *. 2. 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.' An agreement between the vendor and purchaser that the property shall remain in the possession of the vendor, not satisfactorily explained, is a badge of fraud. Taliaferro v. Moffett, 54 Ga. 150. Where such continued possession in the vendor is shown, the burden of evidence shifts to the claimant. Greene v. Matthews, 31 Ga.App. 265(1), 120 S.E. 434. In determining the intent of the grantor, circumstantial evidence, either to raise or rebut an inference of fraud, is of the highest importance. 'The issue of bona fides is peculiarly a jury question; and while a juror may not be authorized to captiously disregard the testimony of a witness who is not impeached in any of the modes prescribed by law, still a juror is liberty, dependent upon the circumstances of the case, to disbelieve any testimony of any or all of the witnesses in a case.' Eberhardt v. Bennett, 163 Ga. 796(5), 137 S.E. 64. That the claimant has notice of the fraudulent intention of the grantor may also be shown by circumstantial evidence. Betton v. Avery, 183 Ga. 559(3), 188 S.E. 901.

With these rules of law in mind, we examine the evidence of the case, construing it, as we must, in favor of the judgment rendered. The Buick automobile in question had been the property of M. M. Karr, used by him personally and in connection with a business of which he was owner, Interstate Roofing and Siding Company. His home was in Atlanta and he operated that business largely outside the State. His son, A. M. Karr, worked for him, and, according to the son, had no share in the profits of that business, but M. M. Karr testified that his son did have an interest in profits. On March 9, 1954, on which date Karr admitted he was insolvent, and on which day the automobile was sold to State Housecraft, Inc., the Interstate Roofing business had been closed down for a couple of months...