Summary
In McGahee v. McGahee, 204 Ga. 91, 97 (2) (48 S.E.2d 675) (1948), the Court held that the statutory provisions on fraudulent conveyances are broad enough to include every transaction by which creditors or others may be defrauded regardless of nature or form. Moreover, in OCGA § 18-2-20, the General Assembly has provided that "[t]he rights of creditors shall be favored by the courts; and every remedy and facility shall be afforded them to detect, defeat, and annul any effort to defraud them of their just rights."
Summary of this case from Gwinnett Property v. G+H Montage GmbHOpinion
16190.
JUNE 17, 1948. REHEARING DENIED JULY 16, 1948.
Divorce, etc. Before Judge Hendrix. Fulton Superior Court. January 14, 1948.
Calhoun Calhoun, for plaintiffs in error.
Houston White, contra.
1. The possession and control of property devised after the will is admitted to record and the representative qualifies is sufficient, nothing else appearing, to show assent by implication. Assent, either express or implied, converts the inchoate title of the legatee into legal title which may be the subject-matter of a fraudulent transfer.
2. A court of equity has jurisdiction to vacate a judgment obtained by fraud.
3. The allegations of the petition, as amended, can not reasonably be construed as an attack upon the judgment on the ground that the award was excessive. The plaintiff not being a person actually concerned in the legal administration of the assets of the estate of the deceased, such attack is not open to her. As shown by our statement of facts, the present attack upon the validity of the judgment is solely upon the ground of fraud.
No. 16190. JUNE 17, 1948. REHEARING DENIED JULY 16, 1948.
Mrs. Louise P. McGahee brought a suit, based upon the ground of cruel treatment, against Carl L. McGahee for divorce and also alimony for herself and their three minor children. In her petition it was alleged that the defendant owned two described parcels of valuable real estate in College Park, Georgia, from which he receives a monthly rental of not less than $225. In an amendment to the petition it was further alleged: The defendant was a son of Luther L. McGahee, who died testate on September 6, 1947, and his first wife, Mrs. Lucy Johnston McGahee, was the second wife of Luther L. McGahee, and Rebecca Grace McGahee was their minor daughter. Luther L. McGahee's will had been admitted to record in Fulton County, Georgia, and Mrs. Lucy Johnston McGahee was the executrix of his estate. The will devised to the defendant the two parcels of real estate described in her petition. They were valued at $15,000. The remainder of the testator's estate, valued at $85,000, was devised to Mrs. Lucy Johnston McGahee and her daughter, Rebecca Grace McGahee. It was further alleged in the amendment that Mrs. McGahee, for the benefit of herself and minor daughter, applied for a year's support out of the estate of the deceased on October 10, 1947, and that the appraisers set apart the entire estate to them. The return of the appraisers was made the judgment of the court of ordinary at the November term, 1947. The application for year's support was a plan and scheme between the defendant husband and Mrs. McGahee to place the defendant's property beyond the reach of the plaintiff's claim for alimony. The defendant consented and agreed to the application and the award made by the appraisers, co-operated in that proceeding by filing no objections to the return, and by so doing it was his intention and purpose to place his interest in the estate of his father beyond the reach of the plaintiff's and her children's claim for support and maintenance, and Mrs. McGahee, acting for herself and minor daughter, had reasonable ground to suspect that such was his intention and purpose. At the time the application for year's support was filed by Mrs. McGahee, the plaintiff and her husband were living separate and apart and he was wilfully failing to support his family. It was further alleged that, at the time the defendant received the real estate devised to him by his father's will, and at the time it was transferred to Mrs. McGahee and her minor daughter by the year's support proceeding, he owed debts in excess of $500, as well as the amount due the plaintiff and her children for support and maintenance. The year's support award divested him of all his property, except wearing apparel. The defendant since receiving said devise has not only failed to pay his debts, but has only partially supported the plaintiff and their children. Since the award of the real estate devised to the defendant was effectuated without consideration, and with the intent and for the purpose stated, the judgment of the court of ordinary, in so far as it affects this property, should be set aside. It was further alleged that the defendant and Mrs. McGahee acted in bad faith in causing the real estate devised to the defendant to be transferred by the year's support proceeding, and for that reason she is entitled to recover the expenses of litigation in having the award set aside.
The prayers of the amendment were: (1) that it be allowed; (2) that Mrs. McGahee and her daughter be made parties; (3) that the judgment of the court of ordinary, in so far as it affects the property devised the defendant, be set aside; (4) that she have a special lien on the defendant's property for the amount which may be awarded as alimony; (5) that Mrs. McGahee be enjoined from disposing of the property in dispute until a final determination of the issues in this case; (6) that she have judgment for the expenses of this litigation against the defendant and Mrs. McGahee; and (7) for general relief.
There was no demurrer to the original petition, but all three of the defendants demurred to the amendment upon several grounds. The court overruled all of the demurrers and the exception here is to that judgment.
(After stating the foregoing facts.) In the brief for the plaintiffs in error it is stated that the writ of error presents for decision these issues:
"First: Where there is no allegation of assent by an executor to a devise and no allegations of dominion or control of property devised, is the title of the devisee ever perfected to the extent that the property may be `transferred'?
"Second: May the judgment of the court of ordinary on a subject exclusively within the jurisdiction of such court be set aside in an equitable action in the superior court where there is no attack on the jurisdiction of the court of ordinary or the regularity of its proceedings, and where there is no direct attack on the validity of the judgment rendered by the court of ordinary?
"Third: May the judgment of the court of ordinary in awarding a year's support to a widow be collaterally attacked in equity upon the ground of fraud?
"Fourth: May such judgment of the court of ordinary be set aside upon the allegation of fraud by one who failed to interpose a caveat or opposition to the award before the final judgment of the court of ordinary?
"Fifth: Where there is no allegation by one seeking to set aside the judgment of the court of ordinary awarding a year's support upon the grounds of fraud to the effect that the award was excessive, and where it does not appear that any objection has been made either in the court of ordinary or elsewhere that the said award was excessive, may the award be set aside in equity where on its face it appears that the court of ordinary has jurisdiction, and that the proceedings therein were regular and the citation was duly published?
"Sixth: Do the superior courts have the authority to determine the excessiveness or non-excessiveness of an award of year's support by the court of ordinary (a purely statutory proceeding), in the absence of any objection before the award and in the absence of any allegation of excessiveness in the action instituted in the superior court."
Since no other questions which may have been raised by the demurrers have been argued or insisted upon here, we will confine our consideration of the case to the issues stated above.
1. We deal first with the question of the defendant husband's interest in the land devised to him by his father's will. It is strongly urged that no interest in the real estate here involved, which could be the subject-matter of a fraudulent transfer, passed to the defendant legatee. To this we do not agree, as we think that the petition as amended sufficiently alleged, as against general demurrer, that the defendant's inchoate title had become legal title by assent. It has been frequently held by this court that assent to a legacy places title in the devisee and is generally irrevocable. Watkins v. Gilmore, 121 Ga. 488 ( 49 S.E. 598); Whatley v. Musselwhite, 189 Ga. 91 ( 5 S.E.2d 227); Cull v. Cull, 39 Ga. App. 164 ( 146 S.E. 559). Assent may be expressed or presumed from conduct. Code, § 113-802. We shall not repeat the allegations of the petition as amended, as they are fully set out in our statement of facts, but suffice it to say, they were sufficient to allege that the defendant husband received his legacy (the property in controversy); that he owned it, and was receiving a monthly rental from it. Such was a sufficient allegation that he was in possession and control of the property devised to him. In 1849 this court, in Jordan v. Thornton, 7 Ga. 517, 520, said: "Assent to a legacy is necessary to enable a legatee to sue at law for his legacy. It is not necessary to show an express assent; it may be implied from the facts and circumstances. The assent, it is true, must be clear and unambiguous. The possession of the property willed, does make out a clear case of assent, by implication." And in the rather recent case of Lewis v. Patterson, 191 Ga. 348, 353 ( 12 S.E.2d 593), it was held: "Since there is a presumption that executors will perform their duties and will thus take care of estates entrusted to them [ Wilson v. Aldenderfer, 183 Ga. 760, 189 S.E. 907], where nothing else appears, the assent of an executor to a legacy may be presumed or implied from possession of the property by the legatee." To the same effect see Parker v. Chambers, 24 Ga. 518 (6); Thaggard v. Crawford, 112 Ga. 326 ( 37 S.E. 367); Citizens Bank of Vidalia v. Citizens Southern Bank, 160 Ga. 109 ( 127 S.E. 219); Haas v. Godby, 33 Ga. App. 218 (3) ( 125 S.E. 897). Upon this issue the court did not err in overruling the demurrers. Moreover, if it could be said in the present case, as the plaintiffs in error contend, that the amended petition does not allege facts sufficient to show that the defendant husband's inchoate title to the realty devised to him had ripened into legal title through assent by the executrix, it would not follow that the court erred in overruling the demurrer, since the defendant's inchoate or equitable title is an interest which he may voluntarily convey. Pike v. Ashley, 179 Ga. 262 ( 175 S.E. 560); Sanders v. Hepp, 190 Ga. 18 ( 8 S.E.2d 87); Brown Guano Co. v. Bridges, 34 Ga. App. 652 ( 130 S.E. 695). This being true, it necessarily follows that it is an interest which may be the subject-matter of a fraudulent conveyance.
2. The second, third, and fourth questions present this proposition for decision: Has a court of equity jurisdiction to set aside a judgment in a year's support proceeding upon the ground of fraud, on the petition of a stranger to that proceeding who interposed no objection to the award prior to final judgment, there being no attack upon the jurisdiction of the court of ordinary or the regularity of its proceedings? We think that it has. The jurisdiction of courts of equity to vacate judgments obtained by fraud is well recognized. Code, § 110-710; Langston v. Roby, 68 Ga. 406; Williams v. Lancaster, 113 Ga. 1020 ( 39 S.E. 471); Ford v. Clark, 129 Ga. 292 ( 58 S.E. 818); Giles v. Cook, 146 Ga. 436 ( 91 S.E. 411); Branan v. Feldman, 158 Ga. 377 ( 123 S.E. 710); Owenby v. Stancil, 190 Ga. 50, 60 ( 8 S.E.2d 7). In Wade v. Watson, 133 Ga. 608 ( 66 S.E. 922), this court held that the superior court, in the exercise of its equity jurisdiction, upon appropriate pleadings, has power to set aside a judgment of the Supreme Court obtained by fraud. And in Lester v. Reynolds, 144 Ga. 143 ( 86 S.E. 321), it was held that the superior court in the exercise of its equitable jurisdiction may set aside a judgment of a court of ordinary procured by fraud, upon proper allegations and proof, and that the party seeking such relief is not compelled to move to set aside the judgment in the court of ordinary. That case was a proceeding to set aside a year's support judgment. In Smith v. Cuyler, 78 Ga. 654, 660 ( 3 S.E. 406), Chief Justice Bleckley, speaking for the court, said, "Fraud is not a thing that can stand even when robed in a judgment." A wife and her minor children when living separate and apart from her husband have a legal demand upon him for support and maintenance, which we call alimony. Code, § 30-201. And to enforce this legal demand she may bring suit and in the same proceeding move to set aside any fraudulent transfer of his property. Wood v. Wood, 166 Ga. 519 ( 143 S.E. 770); Blevins v. Pittman, 189 Ga. 789 ( 7 S.E.2d 662); McCallie v. McCallie, 192 Ga. 699 ( 16 S.E.2d 562); Peoples Loan Co. v. Allen, 199 Ga. 537 ( 34 S.E.2d 811). In the present case it is urged that the plaintiff has no right to attack the year's support judgment because she failed to file objections to the award in the year's support proceeding prior to final judgment. There is no merit in this contention. This court held in Jones v. Cooner, 137 Ga. 681 ( 74 S.E. 51), that "only heirs, their privies, and creditors, may contest with a widow and minor children their right to a year's support out of the estate of the deceased husband and father." Such person must be actually "concerned" in the legal administration of the assets of the estate. Mathews v. Rountree, 123 Ga. 327 ( 51 S.E. 423). While it is true that creditors of the estate are entitled to contest the return of the appraisers for a year's support ( Goss v. Greenaway, 70 Ga. 130; Mulherin v. Kennedy, 120 Ga. 1080, 48 S.E. 437; Aiken v. Davidson, 146 Ga. 252, 91 S.E. 34; Lee v. English, 107 Ga. 152, 33 S.E. 39), no such right exists in favor of a creditor of a legatee under a will. Such creditor is no more than a stranger and an interloper. Montgomery v. McCants, 49 Ga. App. 324 ( 175 S.E. 397).
We have held in the preceding division of this opinion that the allegations of the petition were sufficient to show that the defendant husband had such an interest in the property devised to him as to be the subject-matter of a fraudulent transfer, and as pointed out above equity has jurisdiction to set aside a judgment obtained by fraud. The allegations of the petition in the instant case, if true — and for purposes of the demurrer they are so admitted — are sufficient to show that the defendant husband's property was included in the return of the appraisers for the purpose of defeating the plaintiff's right to recover alimony. Such, of course, is a fraud. The Code, § 28-201, declares: "The following acts by debtors shall be fraudulent in law against creditors and others, and as to them null and void, viz: . . 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." The words, "and others," appearing in that section bring the plaintiff's claim for alimony within its provisions. McDowell v. McMurria, 107 Ga. 812 ( 33 S.E. 709, 73 Am. St. R. 155); McVeigh v. Harrison, 185 Ga. 121 ( 194 S.E. 208). "Fraud will authorize equity to annul conveyances, however solemnly executed, and to relieve against awards, judgments, and decrees obtained by imposition." Code, § 37-709. The taint of illegality is not removed from a fraudulent conveyance by employing a judgment of court instead of a voluntary transfer to effect the conveyance. First National Bank v. Flersheim, 290 U.S. 504, 54 Sup. Ct. 298, 78 L. ed. 465, 90 A.L.R. 391).
The terms of our statutes are broad enough to include every transaction by which creditors or others may be defrauded, and that is true whether a conveyance by a deed or a judgment be employed. "It is not the nature or form of the transaction, but the presence of the fraud, which brings the case within the prohibition of the statutes. . . Many devices and instruments have been resorted to for the purpose of covering up fraud; but whenever the law is invoked they are declared to be nullities; the law looks upon them as if they had never been executed. They can never be justified, or sanctioned by any new shape or cover, by forms or recitals, by covenants or sanctions which the ingenuity or skill or genius of the rogue may devise." 24 Am.Jur. 218, § 62. In the present case the allegations of the petition as amended were sufficient to allege that the year's support proceeding was brought as a part of a plan and scheme on the part of the defendant husband and Mrs. McGahee to place his property beyond the reach of any claim for support and maintenance that the plaintiff and her children might have. Such proceeding being in law a fraudulent act, equity will not permit the judgment to stand when properly attacked.
3. The ruling on questions five and six is made in the third headnote and does not require further elaboration.
It necessarily follows from what has been said in the above three divisions that the petition as amended stated a cause of action, and the court did not err in overruling the demurrers thereto.
Judgment affirmed. All the Justices concur, except Bell and Wyatt, JJ., absent on account of illness.