Where the circumstances of a transfer of property by a debtor are suspicious, the failure of the parties to testify or to produce available explanation or rebutting evidence is a badge of fraud. Union Bank v. Chaffin, 24 Tenn.App. 528, 147 S.W.2d 414 (1940). Macon Bank & Tr. Co. v. Holland, 715 S.W.2d 347, 349 (Tenn. Ct. App. 1986).
These are circumstances so suspicious as to cast doubt on the transaction and require an explanation from the defendant. E.g. Macon Bank Trust Co. v. Holland, 715 S.W.2d 347, 349 (Tenn.Ct.App. 1986); Union Bank v. Chaffin, 147 S.W.2d 414, 418 (Tenn.Ct.App. 1940); Bank of Blount County v. Dunn, 10 Tenn. App. 95, 107 (1929). Plaintiffs often must prove fraud through the use of circumstantial rather than direct evidence.
Fraud may not be inferred solely on the basis of the relationship of husband and wife although their transactions are carefully scrutinized when attacked for fraud. Union Bank v. Chaffin, 24 Tenn. App. 528, 534, 147 S.W.2d 414; Detrio v. Boylan, 190 F.2d 40, 42-43 (C.A. 5); Sieb's Hatcheries, Inc. v. Lindley, D.C., 111 F. Supp. 705. Relationship of the parties is not a badge of fraud.
9. Lack of innocent purpose or use for the transfer.See Weaver v. Nelms, 750 S.W.2d 158 (Tenn.Ct.App. 1987); Macon Bank and Trust Co. v. Holland, 715 S.W.2d 347 (Tenn.Ct.App. 1986); Gurlich's, Inc. v. Myrick, 54 Tenn.App. 97, 388 S.W.2d 353 (1964); Union Bank v.Chaffin, 24 Tenn.App. 528, 147 S.W.2d 414 (1940); Bankof Blount County v. Dunn, 10 Tenn.App. 95 (1929); Grannis, White Co. v. Smith, 22 Tenn. (3 Hum.) 179 (1842); Floyd v. Goodwin, 16 Tenn. (2 Yer.) 484 (1835).
9. There is a lack of innocent purpose or use for the transfer.See Weaver v. Nelms, 750 S.W.2d 158 (Tenn.Ct.App. 1987); Macon Bank and Trust Co. v. Holland, 715 S.W.2d 347 (Tenn.Ct.App. 1986); Gurlich's, Inc. v. Myrick, 54 Tenn. App. 97, 388 S.W.2d 353 (1964); and Union Bank v. Chaffin, 24 Tenn. App. 528, 147 S.W.2d 414 (1940). The transfers of the $56,420.
See Weaver v. Nelms, 750 S.W.2d 158 (Tenn. Ct.App. 1987); Macon Bank and Trust Co. v. Holland, 715 S.W.2d 347 (Tenn.Ct.App. 1986); Gurlich's, Inc. v. Myrick, 54 Tenn.App. 97, 388 S.W.2d 353 (1964); Union Bank v. Chaffin, 24 Tenn.App. 528, 147 S.W.2d 414 (1940); Bank of Blount County v. Dunn, 10 Tenn. App. 95 (1929); Grannis, White Co. v. Smith, 22 Tenn. (3 Hum.) 179 (1842); Floyd v. Goodwin, 16 Tenn. (2 Yer.) 484 (1835).
"Where the circumstances of a transfer of property by a debtor are suspicious, the failure of the parties to testify or to produce available explanation or rebutting evidence is a badge of fraud." Macon Bank & Trust Co., 715 S.W.2d at 349 (citing Union Bank v. Chaffin, 147 S.W.2d 414 (Tenn. Ct. App. 1940)). Here, Appellants do not dispute that Ms. Kidd consolidated her CD with her husband, an "insider."
Again, "[w]here the circumstances of a transfer of property by a debtor are suspicious, the failure of the parties to testify or to produce available explanation or rebutting evidence is a badge of fraud." Union Bank v. Chaffin, 24 Tenn. App. 528, 147 S.W.2d 414 (1940). In the instant case, proof of the existence of every applicable statutory factor and numerous badges of fraud surround the transfer of the Daybreak Way property.
Where the circumstances of a transfer of property by a debtor are suspicious, the failure of the parties to testify or to produce available explanation or rebutting evidence is a badge of fraud. Union Bank v. Chaffin, 24 Tenn App. 528, 147 S.W.2d 414 (1940).Macon Bank and Trust Co. v. Holland, 715 S.W.2d 347, 349 (Tenn. Ct. App. 1986).
The presence of one or more of the badges of fraud gives rise to a presumption of fraud and consequently shifts the burden of disproving fraud to the defendant. Macon Bank, 715 S.W.2d at 349; Union Bank v. Chaffin, 24 Tenn. App. 528, 147 S.W.2d 414 (1940); Nichols v. Hite, C.A. No. 125 (Tenn.Ct.App., filed January 20, 1989). When reviewing the trial court's handling of "badges of fraud" under the circumstances of this case, it is important to recognize that they are to be considered from Mr. Smith's viewpoint. As previously stated, whatever the intent of Fields, if Smith entered into the transaction in good faith, gave adequate or fair consideration and had no knowledge or notice of the grantor's fraudulent intent, then the conveyance cannot be attacked by creditors.