Court Opinion

ID: 9582966
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:33:18.334248+00
Date Added: 2024-06-11T13:35:39.558787
License: Public Domain

On Rehearing.
The plaintiff’s proof showed: that the defendant owed him a debt which had been reduced to judgment before the trial of the instant case in the trial court; that, pending the suit that resulted in the judgment, the defendant had actually sold farm equipment owned by him to one who was not a creditor. This created a presumption that the allegation of the petition that the defendant was selling his property to hinder, delay and fraudulently defeat the plaintiff in the collection of the debt sued upon, was true. The law is well settled that a conveyance to a person other than one of his creditors made pending a suit instituted by his creditor on a money demand is evidence that the conveyance is fraudulent and made to hinder the creditor in the collection of the demand sued upon. “On the trial of the issue whether a conveyance is fraudulent against creditors, it is competent for the plaintiff in fi. fa. to prove the pendency of suits against the debtor at the time of the execution of the deed.” Barber v. Ter*388rell, 54 Ga. 146 (5); Colquitt v. Thomas, 8 Ga. 258 (7); Bozikis v. Anestos, 33 Ga. App. 422 (1, 2) (126 S. E. 555). The defendant contended and the plaintiff’s proof showed that the defendant did not have a clear title to the equipment but that the Merchants & Farmers Bank held a bill of sale in which the equipment was conveyed for the purpose of securing a debt owed by the defendant to the bank. The defendant contended that he was selling the equipment not only for the purpose of paying the bank, but also to obtain money with which to discharge other liens against the equipment held by Mose Gordon Lumber Company and Westbrook Motor Company. On the trial the defendant testified that this was his intention. He introduced three notes in evidence; one for the principal sum of $633, executed on April 15, 1953, and made payable to Trussell Equipment Company. Entered on this note was a transfer to Mose Gordon Lumber Company from the Citizens & Southern Bank, dated January 14, 1954. The .transfer did not reveal the consideration for which the note was transferred, nor did the note show any credits. This note showed no credits and the transfer to Mose Gordon Lumber Company did not disclose its consideration. The first of these notes was in the form of a conditional-sale contract, the second was a bill of sale to secure a debt and contained a description of the property it conveyed as “B/S farm equipment.” No transfer of title to these instruments from the Trussell Company to the Citizens & Southern Bank appeared on the papers or from the record. The defendant introduced a conditional-sale contract for $1,440 dated April 23, 1949, payable to Westbrook Motor Company, Inc., and covering a part of the defendant’s farm equipment. This note showed no credit. The defendant testified that he telephoned Mose Gordon, and Gordon told him to sell the machinery and bring the money to him. His testimony included the statement “Yes, I owe all the note calls for to Mose Gordon now on this tractor.” He did not designate to which of the two notes held by Mose Gordon Lumber Company this reference was made. He made no statement as to what balance was due on his note to Westbrook Motor Company. The defendant further related that after the equipment was levied upon, and subsequent to having obtained its release from the *389levy of attachment by giving the replevy bond which appears in the record, he delivered the equipment to Mose Gordon Lumber Company and the Westbrook Motor Company, Inc. He did not state upon what terms or for what consideration this was done.
The plaintiff omitted by his own testimony to divulge material evidential facts essential to the determination of the issue of his good faith in the sale of his equipment, and that was the most important issue in the case. These facts were: 1. The price at which he sold the equipment to C. L. Gordon, the value of the equipment and the amount of the debts he owed to the Bank, Mose Gordon Lumber Company and Westbrook Motor Company, 2. The basis on which he turned the equipment over to Mose Gordon Lumber Company and Westbrook Motor Company after it was levied upon and possession of it obtained by giving the replevy bond. The defendant, though he could have established these facts by the books of the Mose Gordon Lumber Company, Westbrook Motor Company and the Merchants & Farmers Bank and the testimony of the employees of those concerns in charge of the books, that they actually were the notes in the form of retention-of-title contracts and bills of sales to secure debt, that he testified constituted liens on the equipment at the time it was sold by him to C. L. Gordon, and- just what balance, if any, was at the time of the sale to Gordon owing on the notes. He could have produced Mose Gordon and officers of the Westbrook Motor Company to corroborate his statements that he had, after the levy on the machinery was dissolved by him giving a replevy bond, actually returned the machinery to them.
The defendant did not by his own testimony, or by material evidence within his control, furnish to the jury data from which they could decide whether he acted in good faith when selling the machinery to C. ■ L. Gordon pending the plaintiff’s suit brought against him on a money demand.
In Hoffer v. Gladden, 75 Ga. 532 (5), it is held: “Failure to produce testimony is a badge of fraud, where the bona fides of the transaction is in issue, and witnesses who ought to be able to explain it are in reach.”
The defendant had material evidence within his reach by *390which the essential facts omitted from his testimony could have been supplied, and his own testimony, so far as it went corroborated. This evidence was: 1. Books of the Mose Gordon Lumber Company, Westbrook Motor Company and the Merchants & Farmers Bank to show what balance, if any, he owed those concerns at the time he sold the equipment to C. L. Gordon. 2. The testimony of Mose Gordon that his company actually held the notes introduced in evidence and purportedly transferred to him at the time the sale was made by the defendant to C. L. Gordon. 3. The testimony by an officer or employee of the Westbrook Motor Company that it actually held the note introduced in evidence and which was originally made payable to it. 4. Testimony of Mose Gordon and that of an officer or employee of the Westbrook Motor Company, familiar with the facts, as to the terms under which the equipment in question was delivered to those concerns by the defendant. 5. Testimony of some witness as to the value of the equipment and the price at which it was sold by the defendant to C. L. Gordon.
Hayes v. Hill, 105 Ga. 299 (31 S. E. 166), Eberhardt v. Bennett, 163 Ga. 796, 802 (137 S. E. 64), and Lamkin v. Clary, 103 Ga. 631, 637 (30 S. E. 596), in similar but slightly differently worded pronouncements, held that circumstantial evidence is of great importance in showing the intent of a debtor to hinder, delay or defraud creditors.
“When a conveyance, a security deed, or a mortgage is attacked as having been made to hinder, delay, or defraud the creditors of the maker of such instrument, circumstantial evidence is of the highest importance in determining the good faith or bad faith—the real intent—of the grantor in the execution of the instrument. Direct testimony as to the real intent of the grantor and grantee whose motives are under attack can only be obtained from these interested persons, and consequently necessarily any circumstance that may throw light on their conduct and motive is admissible for the jury’s consideration. 'Fraud may not be presumed, but, being in itself subtle, slight circumstances may be sufficient to carry conviction of its existence.’ Civil Code, § 4626. In 27 C. J. 822, § 771, the rule of evidence is thus stated: 'Since proof of fraud is seldom if ever possible *391by direct evidence, recourse to circumstantial evidence is a necessity, and there is no kind of action wherein it can be held with greater reason that the fact in issue may be inferred from other facts proved than in cases of this character. Circumstances apparently trivial or almost inconclusive, if separately considered, may by their number and joint operation, especially when corroborated by moral coincidences, be sufficient to constitute conclusive proof.’ ” Eberhardt v. Bennett, 163 Ga. 796, 802, supra.
It may be observed that the fraudulent intent of a debtor to hinder, delay and defraud creditors can seldom be proved except by proof of the badges of fraud, the indicia of intent in the conduct of the debtor.
These badges of fraud appear in some instances from affirmative conduct of the debtor, such as the conveyance of his property pending a suit against him on a money demand to the payment of which his property might be applied, if not placed beyond the reach of a fieri facias issued upon a judgment obtained in the pending suit. The purpose to hinder, delay and defraud creditors may be inferred from what the debtor omits to do. Such an instance is found in the defendant’s failure to produce material evidence which tends to repel the charges of fraud made against him and to show his good faith in the transaction under investigation.
Another pronouncement helpful in deciding this case is found in Lamkin v. Clary, 103 Ga. 631, 637, supra: “Where a conveyance is attacked for fraud, any evidence tending to show fraud upon the part of the grantor is admissible, and we do not see why the contrary proposition is not true, i. e., that where the grantor and grantee claim that the transaction was bona fide and not made for the purpose of defrauding or delaying creditors, any evidence tending to show the bona fides of the transaction is likewise admissible. The force and effect of such evidence would be for the jury to determine.” Similar holdings are found in Lewis v. Lewis, 210 Ga. 330, 332 (80 S. E. 2d 312); Fields v. Marchman, 179 Ga. 613 (176 S. E. 636); Blevins v. Pittman, 189 Ga. 789 (6) (7 S. E. 2d 662).
While the plaintiff’s proof was largely circumstantial we think *392it was sufficient to prima facie prove the allegation of the petition, that the defendant was selling his personal property for the purpose of hindering, delaying and fraudulently preventing the plaintiff in the collection of the debt upon which suit had been previously filed.
We are of the opinion that the defendant’s evidence did not conclusively disprove that submitted by the plaintiff, and that the case was one for the jury.
Evidence of the defendant’s insolvency was not an element of proof necessary to prove the cause laid in the petition. Keeter v. Bank of Ellijay, 190 Ga. 525, 528 (9 S. E. 2d 761).