183 Ga. 477 | Ga. | 1936
Lead Opinion
D. M. Cole, as trustee in bankruptcy of J. E. Eowe, instituted his equitable action against the bankrupt and his wife, seeking to have set aside and canceled a certain deed from the husband to the wife. He alleged that such deed was made to hinder, delay, and defraud the creditors of J. E. Eowe. By her answer the wife practically placed herself in the position
The evidence upon the trial now under review was substantially the same as that upon the former trial, and would have authorized a verdict for the defendants (plaintiffs in error). It does not appear that any of the creditors of the husband had reduced their
In this case the wife was not seeking to have the title to this property put in her name. She already had the legal title to it under the deed of her husband conveying it to her. The trustee of her bankrupt husband was seeking to have the deed from her husband to her canceled because it was made by her husband to delay, hinder, and defraud his creditors. Cole, the trustee and the plaintiff, was also the creditor of the husband. He contended that he did not have notice, when he purchased a promissory note of the husband from the payee, the Gwinnett Grocery Company, that the equitable title to the property in question was in the wife by reason of the payment by her of the purchase-money, and that when he purchased this note he had his attorney examine the records in the office of the clerk of the superior court, from which
It will be noted that under the pleadings and the evidence two separate defenses were presented, and, as stated by counsel for the defendants, “one of the defenses involves the principles of law relating to implied trusts when the title is taken in one person and the purchase-money is paid by another. The other arises under facts consistent with the provisions of section 3330 of the Code of 1910 [1933, § 38-301], where a husband owes a wife money and prefers her as a creditor by conveying to her property in payment of such debt.” The law relative to the first of these defenses was fixed and laid down in the former decisions of this court in this ease, cited above. “A debtor may prefer one creditor to another, and to that end he may bona fide give a lien by mortgage or other legal means, or he may sell in payment of the debt, or he may transfer choses in action as collateral security, the surplus in such cases not being reserved for his own benefit.” Code, § 38-301. There is no contention that the husband in this case owned or possessed any property save that conveyed to Ms wife.
The failure of the wife to make her claim known does not deprive her of her rights as a creditor, even as against one of the husband’s creditors who gave credit to him in ignorance of the wife’s claim, there being no inquiry made of her by such creditor. Robinson v. Stevens, 93 Ga. 535 (21 S. E. 96). So where the wife’s money is used with her consent to purchase a tract of land, the title to which was intended to be in her, but taken in the name of her husband, which the wife did not know at the time, the wife had the equitable title, and it was perfectly proper and lawful for the husband to convey such land to her. If this was done in good faith before a particular creditor of the husband obtained any judgment against him, the wife’s title was superior to the judgment subsequently obtained, although in the creation of the debt upon which this judgment was founded the creditor may have extended credit upon the belief that the land
Applying the foregoing principles to the second defense raised under the pleadings and evidence, the judge erred in charging the jury as complained of in the motion for a new trial, by qualifying the right of the wife to receive a deed to this property from her husband in. payment of a valid pre-existing debt with the statement that it must be made to appear that the wife “had not lost her rights by allowing title, as explained to you, to be put in her husband,” and failing to explain what he meant by such words. The plaintiff’s reply to the defendant’s claim that the property was purchased with her money was that the credit to the husband had been extended upon the faith of the legal title being in him, without knowledge of the equitable title of the wife. As a matter of fact it appears that credit was not extended to the husband upon the faith of the husband’s ownership. The charge complained of tended to confuse and mislead the jury, under the facts of this case. The defendants did not, as to the defense that the conveyance attacked was a bona fide preference by the husband of his wife, have to show that the creditor had not extended credit upon the faith of the legal title to the land being in the husband, or that the creditor had knowledge of the debt owing by the husband to the wife, at the time the plaintiff purchased the note. The evidence shows that no credit was extended to the husband by the original seller of his note on the faith of the husband’s ownership of such property. The only manner in which the wife could lose her rights, referred to by the trial judge as having been explained to the jury, had reference to his previous charge on the equitable title and implied trust defense of the defendants. The charge complained of tended to confuse the jury and to lead them to believe that if the creditor extended credit to the husband be
In view of these errors, the judge erred in overruling defendants’ motion for a new trial. As a new trial is granted, the question of the sufficiency of the evidence is not passed on by this court, save to hold that a verdict in favor of the plaintiff was not demanded thereunder.
Judgment reversed.
Concurrence Opinion
concurring specially. Under the pleadings and the evidence, as I construe it, the relation of debtor and creditor did not exist between the husband and wife. If the husband borrowed money to make the purchase, from, his wife, then no trust can be implied. Accordingly no instructions on that subject were applicable. The court did not err in not so instructing the jury, with or without request. The wife paid about one half of the purchase-money, and when the husband took the title in his name, a trust was impressed in favor of the wife to the extent of her payment of purchase-money. It appears also that the husband borrowed from a third person a portion of the purchase-money, and executed a security deed or mortgage to secure the loan. It