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JACKSON et al. v. FAVER.
SELMAN et al. v. FAVER.
FAVER v. SELMAN et al.
18285.
18286.
18287.
Equitable petition. Before Judge Wood. Fulton Superior Court. May 7, 1953.
HAWKINS, Justice.
1."A suit for a money judgment does not constitute a lis pendens, affecting the title to property conveyed by the defendant pending the action." Wells v. Blitch, 184 Ga. 616 (192 S. E. 209); Tanner v. Wilson, 184 Ga. 628, 632 (192 S. E. 425).
2.Under the provisions of Code 39-701 as amended by Ga. L. 1929, p. 165, it is provided that, as against the interest of third parties acting in good faith and without notice, who may have acquired a transfer or lien binding the defendant's property, a money judgment is sued in Fulton County, Georgia, shall have a lien upon the property of the defendant only from the date of the entry of the execution issuing thereon upon the general execution docket, which that statute requires the clerk of the superior court to keep. (For the rule as to when the lien of such judgment rendered in counties other than those falling within the classification specified by the act of 1929, supra, shall attach, see Code 39-701, supra.)
3. Where one obtains a money judgment in a tort action in the superior court and fails to have an execution issued and recorded on the general execution docket in accordance with the requirements of the Code, 39-701, as amended, relating to the keeping of the general execution docket and the entry of executions thereon, the lien of the judgment is lost as against property conveyed by the defendant in judgment to a purchaser in good faith and without notice during the pendency of the suit in which the judgment was rendered, and subsequently to the rendition of the judgment, but before the issuance and entry of an execution on the general execution docket as required by the statute. State Bank of Rome v. Moore, 148 Ga. 198 (1) (96 S. E. 225).
4. Keeping in mind the distinction between knowledge and notice, as pointed out in Clarke v. Ingram, 107 Ga. 565 (33 S. E. 802), and the provisions of Code 37-116 that: "Notice sufficient to excite attention and put a party on inquiry shall be notice of everything to which it is afterwards found such inquiry might have led. Ignorance of a fact, due to negligence, shall be equivalent to knowledge, in fixing the rights of parties," and the rulings to the same effect made in Jordan v. Pollock, 14 Ga. 145 (4); Urquhart v. Leverett, 69 Ga. 92; Greene v. Matthews, 31 Ga. App. 265 (120 S. E. 434), and also being mindful of the rule that knowledge acquired by an attorney in the course of his employment, and pertinent and relevant to the subject matter of his employment, is imputable to his client ( Fowler v. Jackson, 86 Ga. 337, 12 S. E. 811; Deveney, Hood & Co. v. Burton, 110 Ga. 56, 35 S. E. 268; Citizens Bank of Vidalia v. Citizens & Southern Bank, 160 Ga. 109, 127 S. E. 219; Bean v. Barron, 176 Ga. 285, 168 S. E. 259)--the fact that the attorneys for the purchaser, and therefore the purchaser, had actual knowledge of the pendency of a suit for a money judgment in a tort action would not charge them with notice of the rendition of a judgment in that case, where no execution had been issued and recorded as provided by the statute, and they would not be chargeable with negligence, and therefore with notice, because they did not examine the papers in the suit, examine the bar docket, examine the minutes of the court, or make inquiry of plaintiff's counsel in that case, for: "What the law requires . . . to put innocent third parties upon notice of the existence of a judgment lien is an entry of the execution upon a certain record [the general execution docket] in the office of the clerk of the superior court. Where there is a failure to make such record, third parties are not charged with any duty to make an investigation or inquiry in relation to the existence of such a lien against their vendor. " (Emphasis supplied.) Harvey & Brown v. Sanders, 107 Ga. 740, 743 (33 S. E. 713). In Moody v. Millen, 103 Ga. 452, 457 (30 S. E. 258), it is said: "It seems unquestionable that to require the purchaser to look to any other source of information than that which the statute has provided for him, would be contrary to the spirit and policy and letter of the statute." See also Bailey v. Bailey, 93 Ga. 768 (21 S. E. 77); Eason v. Vandiver, 108 Ga. 109 (33 S. E. 873); Swift & Co. v. Dowling, 151 Ga. 449 (107 S. E. 49).
5. Where a vendee of land enters into actual possession and pays the entire purchase price, he thereby acquires a perfect equity which is the equivalent of legal title, and upon the strength thereof can successfully defend in ejectment against the vendor, or any one claiming under him, and may assert title under a claim to property attempted to be sold under judicial process, although no formal deed conveying the legal title was ever executed. Grace v. Means, 129 Ga. 638, 641 (59 S. E. 811). See also Sikes v. Seckinger, 164 Ga. 96, 102 (137 S. E. 833); Strickland v. Jenkins, 198 Ga. 15 (31 S. E. 2d 18); Long v. Godfrey, 198 Ga. 652 (32 S. E. 2d 306); Toms v. Knighton, 199 Ga. 858, 862 (36 S. E. 2d 315).
6. It appears in this case that J. D. Selman was the owner of a large tract of land known as Joylan Park at the time a suit for a money judgment in a tort action was filed against him and another by Mrs. Lydia B. Faver on November 1, 1949. In January, 1950, W. B. Jackson entered into a contract with Selman for the purchase of all of his lots in Joylan Park, and on January 23, 1950, Selman conveyed all of the lots covered by the contract with the exception of lots Nos. 116, 118, 119, 128, and 178. On April 10, 1950, judgment was entered against Selman in the suit brought against him by Mrs. Faver, but no execution was issued on the judgment and recorded on the general execution docket until three months later, on July 13, 1950. On April 17, 1950, after the rendition of the judgment, but prior to the date of the issuance of the execution and entry thereof on the general execution docket Jackson's attorneys paid to Selman the purchase price of lots Nos. 116, 118, and 119, Jackson went into immediate actual possession thereof, and these three lots were conveyed by Selman to Jackson by deed dated May 2, 1950. On June 3, 1950, after rendition of the judgment, but prior to the issuance and entry of the execution on the general execution docket, Jackson himself paid to Selman the full purchase price of the two remaining lots, Nos. 128 and 178, and entered into actual possession thereof approximately one week later, but no deed was executed to him by Selman until some time in August, 1950, the exact date not being shown. Held:
(a) In his eighth finding of fact, the auditor found that Jackson paid Selman $18,000 for the Joylan Park property, and there is no contention that this was not its fair market value. In Pound v. Faulkner, 193 Ga. 413, 418 (18 S. E. 2d 749), it is held that "Proof of payment of the purchase money alone raises a presumption of good faith, and carries the burden of claimant."
(b) The auditor having found that neither Jackson nor his attorneys had any actual knowledge of the existence of the judgment rendered against Selman at the time he acquired title to lots Nos. 116, 118, 119, 128, and 178, under the above rulings the auditor's conclusions of law that Jackson was charged with actual notice of the existence of the judgment against Selman, and was not, as to these lots, a bona fide purchaser without notice, were erroneous, and the trial judge erred in overruling the exceptions thereto, and in entering judgment against Jackson, as complained of by Jackson in case No. 18285.
(c) The ruling here made being controlling, it is unnecessary to pass on other assignments of error in Jackson's bill of exceptions.
7. After levy of Mrs. Faver's execution on a portion of the property above referred to, and the filing of a claim thereto by Jackson, which was later withdrawn by him as to some of the lots which are not here involved Mrs. Faver filed her equitable petition in aid of her levy against Jackson, Selman, and Mrs. Selman (and others who need not be named here, since there is no question for decision as to the others), in which petition she sought to subject to her execution all of the Joylan Park property herein referred to, and attacked all of the conveyances thereof by Selman to Jackson, upon the ground that they were made by Selman with the intent and purpose to hinder, delay, and defraud her as a creditor, and that Jackson knew and had reasonable ground to suspect this intention on the part of Selman at the time he took such conveyances. Upon the trial of the consolidated claim and equitable proceedings, the auditor found that, at the time of the making of these conveyances by Selman, it was Selman's intention to hinder, delay, and defraud his creditors, but that Jackson did not know of or make reasonable grounds to suspect this intention on the part of Selman at the time he, Jackson, took the conveyances, and that the Joylan Park property, except that part to which the claim had been withdrawn, was not subject to the levy under this theory. To this latter finding of fact and conclusion of law by the auditor Mrs. Faver excepted in case No. 18287, and also excepted therein to the overruling of her motion for judgment on the auditors report that the lien of her judgment with respect to all of the lots conveyed by Selman to Jackson was superior to the claim of Jackson, it being insisted by Mrs. Faver that actual knowledge on the part of Jackson of the pendency of her suit at the time of the conveyances charges Jackson with notice of or reasonable grounds to suspect Selman's fraudulent intention. Held:
(a) While a deed made with intention to hinder, delay, or defraud a creditor of the grantor is void as to the grantee if the grantee has notice of such intention or has reasonable ground to suspect the same, even though it be based upon a valuable consideration (Dickson v. Citizens Bank & Trust Co., 184 Ga. 398, 191 S. E. 379; Smith v. Wellborn, 75 Ga. 799 (8); Dwight v. Acme Lumber &c. Co., 189 Ga. 473, 6 S. E. 2d 586; Cunningham v. Avakian, 192 Ga. 391, 15 S. E. 2d 493), and while the fact that a suit is pending against a creditor at the time a deed is executed is a circumstance which the trior of issues of fact is at liberty to consider in determining whether the grantee takes with or without notice of such intent, or reasonable ground to suspect the same ( Peck v. Land, 2 Ga. 1; Godfrey v. City of Cochran, 208 Ga. 149, 65 S. E. 2d 605)--the pendency of a suit is only a circumstance, and actual knowledge of the pendency of a suit by the grantee is not in and of itself conclusive in law or in fact upon the grantee as to notice or reasonable ground to suspect the fraudulent intent of the grantor. Colquitt v. Thomas, 8 Ga. 258. See also Burkhalter v. Glennville Bank, 184 Ga. 147 (190 S. E. 644); Hardin v. Reynolds, 189 Ga. 589 (6 S. E. 2d 913).
(b) It being conceded by counsel for Mrs. Faver that disputed issues with respect to this matter have been resolved against her, except the undisputed fact of actual knowledge on the part of Jackson of the pendency of the suit against Selman at the time of the conveyance by him, under the ruling above made the trial judge did not err in overruling this exception by Mrs. Faver to the auditor's report and in declining to enter judgment for Mrs. Faver on her motion therefor. Regal Textile Co. v. Feil, 189 Ga. 581 (4) (6 S. E. 2d 908).
(c) Counsel for Mrs. Faver, plaintiff in error in case No. 18287, concedes that there was evidence to support the findings of the auditor with respect to what is referred to in the record as the Hill Street property, and that the judgment of the trial court overruling the exception thereto is not subject to reversal.
8. The trial judge erred, for the reasons pointed out in the opinion, in overruling the exceptions of J. D. Selman and Mrs. Nina Selman to the auditor's findings of facts Nos. 29 through 33, and to the auditor's conclusion of law No. 15.
On November 1, 1949, Mrs. Lydia B. Faver filed suit against J. D. Selman and S. L. Nix, in which she sought damages on account of the death of her son as a result of the negligence of the defendants. On April 10, 1950, verdict and judgment were rendered for Mrs. Faver in the amount of $25,000 against both Selman and Nix. On August 17, 1951, an execution, issued and recorded July 13, 1950, pursuant to said judgment, was levied on certain lots in a subdivision known as Joylan Park as the property of J. D. Selman. On September 25, 1951, W. B. Jackson filed a claim to said Joylan Park lots. On June 30, 1952, at the hearing before the auditor theretofore appointed, Jackson by amendment to his claim withdrew same as to lots 82, 83, 114, 115, and 139. No issue as to these withdrawn lots is before this court. On October 1, 1951, Mrs. Faver filed an equitable petition against Selman, Nix, Jackson, Mrs. Nina C. Selman (wife of Selman), and others (who need not be named, since there are no issues to be decided by this court as to them).
In this equitable petition, which was filed in aid of the levy above referred to, Mrs. Faver sought to subject certain properties to the lien of her judgment. The properties as to which there are issues before the court are lots in Joylan Park Subdivision and Spring Lake Inn property. The equitable petition drew in question the validity and priority of deeds from Selman to Jackson conveying Joylan Park lots. These deeds are dated January 23, 1950, May 2, 1950, and August --, 1950. The petition also sought a personal judgment against Jackson for sums realized by him from the sale of Joylan Park lots conveyed to him by Selman, and subsequently sold by Jackson to innocent purchasers. The deed relating to this issue is the deed dated May 2, 1950.
All the defendants were served except Brady Harper, and all defendants who were served answered the petition.
The cases were referred to Hon. Edward S. White, as auditor, and the auditor subsequently filed his report accompanied by the evidence adduced before him.
W. B. Jackson filed exceptions of law and fact. J. D. Selman, Mrs. Nina C. Selman and S. L. Nix filed joint exceptions of law and fact.
The trial judge overruled all exceptions, overruled said motion of Mrs. Faver, and entered a final decree in the case in conformity to the findings of the auditor.
Case No. 18285 assigns error upon the overruling of Jackson's exceptions and upon those portions of the decree adverse to him.
Case No. 18286 assigns error upon the overruling of the joint exceptions of Selman, Mrs. Selman, and Nix, and upon those portions of the decree adverse to them.
Case No. 18287 assigns error upon the overruling of Mrs. Faver's motion for judgment on the auditor's report above referred to, upon the overruling of her exception of law and exceptions of fact, and upon certain portions of the final decree adverse to her contentions.
The various Joylan Park lots were conveyed by Selman to Jackson under deeds of January 23, May 2, and August, 1950. These deeds covered all the lots levied on and other lots not levied on, with the single exception of lot 177, which was levied on. Upon the hearing before the auditor, it developed that Jackson had title to lot 177 through a source independent of Selman, and the auditor's finding in favor of Jackson as to lot 177 is not excepted to.
The greater number of the lots in controversy were conveyed by Selman to Jackson by the deed of January 23, 1950, which conveyed certain lots in the subdivision and a strip of land. Mrs. Faver contended that this deed was void because made by Selman to hinder and delay her in the collection of the judgment to be rendered in her then pending suit, she contending that Jackson had reasonable ground to suspect Selman's intention.
Lots 116, 118, and 119 were conveyed by Selman to Jackson under the deed of May 2, 1950. These lots had been sold by Jackson to innocent purchasers, and they were not levied on, but a personal judgment was sought against Jackson for the proceeds of these lots and improvements, not only upon the ground that the sale of these lots was void as a fraudulent conveyance, but also upon the ground that these lots, which were conveyed after judgment, were subject to the lien of the judgment and that Jackson, having subsequently conveyed them to innocent purchasers, was liable for the proceeds.
These lots were levied upon, and Mrs. Faver contended that they and the improvements thereon, were subject to her judgment, not only upon the ground of fraudulent conveyance, but also because, when these lots were conveyed, Jackson took the conveyance with both actual and constructive notice of her judgment.
Jackson denied all the foregoing contentions of Mrs. Faver, and in addition, relatively to lots 116, 118, 119, 128, and 178, contended that he was a bona fide purchaser without notice of the judgment, and also contended that he had made a parol purchase of these five lots antedating the conveyances of May 2, and August, 1950, and also antedating the April 10 judgment.
The auditor's findings of fact in respect to the Joylan Park lots are set forth in findings of fact numbers 4 through 18.
The pertinent parts of the auditor's findings as to the Joylan lots are in brief:
(4) When Mrs. Faver filed her suit and until January 23, 1950, Selman owned certain real estate (which is shown to include all the Joylan Park lots in controversy except lot 177).
(5) On January 23, 1950, Selman conveyed the real estate described in finding 4 to Jackson, with the exception of lots 116, 118, 119, 128, and 178.
(6) At the time of the conveyance of said property to Jackson by Selman, Mrs. Faver's suit against Selman and Nix was pending in the Superior Court of Fulton County.
(7) Selman conveyed said property to Jackson with the intent and purpose to hinder and delay Mrs. Faver in the collection of damages for the homicide of her son; and Selman later, on May 2, 1950, conveyed lots 116, 118, and 119, and in August, 1950, conveyed lots 128 and 178 to Jackson with the same intent and purpose.
(8) The consideration paid by Jackson for the three conveyances was $18,000, which was approximately full value.
(10) In making such examination Mr. Huff obtained actual knowledge not later than January 18, 1950, that Mrs. Faver's suit against Selman and Nix for the homicide of her son was pending in the Superior Court of Fulton County, and that the plaintiff was represented in said suit by attorney Durwood T. Pye.
(11) Neither Jackson, Mr. Camp, nor Mr. Huff had actual knowledge or reasonable grounds to suspect that Selman at the time of said conveyance of January 23, 1950, to Jackson had any intent or purpose to hinder and delay Mrs. Faver in the collection of damages on account of the homicide.
(12) Jackson deposited with Mr. Camp on January 23, 1950, at the time of the conveyance of that date, $600, which represented the purchase price of lots 116, 118, 119, 128, and 178, to be paid over by him to Selman at the rate of $120 per lot as soon as the title to said lots had been cleared to the satisfaction of Mr. Camp and proper deeds had been executed by Selman and delivered to Mr. Camp. At the time of said transaction, on January 23, 1950, it was not expected or intended by the parties that title to any of said lots should pass to Jackson until said title had been cleared and a deed thereto delivered to Mr. Camp.
(13) On April 17, 1950, Mr. Camp, acting for Jackson, paid Selman the full purchase price of $360 for lots 116, 118, and 119, but the deed to said lots was not executed and delivered until May 2, 1950.
(14) Jackson went into possession of lots 116, 118, and 119 immediately after their purchase price was paid by Mr. Camp to Selman.
(15) On June 3, 1950, Jackson personally paid to Selman $240, which represented the full purchase price of lots 128 and 178, and Jackson went into possession of said lots approximately one week later; but no deed to said lots was executed and delivered to either Jackson or his attorney until some time during August, 1950.
(16) Notwithstanding the intention of the parties on January 23, 1950, that title should not pass to Jackson until said title had been cleared and a deed delivered to Mr. Camp, it was contemplated and intended by them on April 17, 1950, when the purchase price of lots 116, 118, and 119 was paid, that the title to said lots should immediately pass to Jackson; and it was contemplated on June 3, 1950, when the purchase price of lots 128 and 178 was paid, that the title to these lots should pass immediately to Jackson.
(17) Mr. Huff, who had actual knowledge of the pendency of the suit by Mrs. Faver against Selman and Nix not later than January 18, 1950, and Mr. Camp, who had actual knowledge thereof not later than January 23, 1950, were put on inquiry as to the existence of a judgment in favor of Mrs. Faver in said suit; and a reasonable investigation would have disclosed the existence of said judgment on the date of the payment of the purchase price of lots 116, 118, and 119, on April 17, 1950, at the time possession thereof was taken by Jackson immediately thereafter, and at the time of the delivery of the deed to said lots on May 2, 1950, and, as well, on the date of the payment of the purchase price of lots 128 and 178 on June 3, 1950, at the time possession thereof was taken by Jackson approximately one week later, and at the time of delivery of deed to said lots during the month of August, 1950.
(18) After receiving conveyances of lots 116, 118, 119, 128, and 178, Jackson built residences on and otherwise improved each lot. He later sold lots 116, 118, and 119 as improved to bona fide purchasers for $6,275 each, less a realtor's commission of $300 on each lot.
(18a) Levy was made on August 17, 1951.
Pertinent parts of the auditor's conclusions of law in respect of the Joylan Park lots are:
(1) The deed from Selman to Jackson dated January 23, 1950, was not void as to Mrs. Faver, and Jackson's claim to the lots conveyed by said deed is superior to the interest of all other parties.
(3) At the time Jackson acquired title to lots 116, 118, 119, 128, and 178, he was charged with actual notice of the existence of Mrs. Faver's judgment against Selman, and was not as to such lots a bona fide purchaser without notice. Actual notice includes such notice as one is presumed to have received personally because the evidence within his knowledge was sufficient to put him upon inquiry. By reason of the facts found in finding of fact No. 17, it appears as a matter of law that Jackson is presumed to have received personal notice of the existence of Mrs. Faver's judgment because the evidence within the knowledge of his attorneys was sufficient to put him and their upon inquiry.
(4) Mrs. Faver's judgment against Selman, as to lots 128 and 178, is superior to the claim of Jackson and the interests of all other parties.
(5) In his answer Jackson claimed the right to set off the value of improvements made by him on any lots that he bought from Selman subject to Mrs. Faver's claim against Selman, but, notwithstanding the issues made in such pleadings and the fact that the plaintiff's attorney sought to discover the cost of said improvements, Jackson objected to testifying on such issue and objected to producing his books and records that would show the cost of such improvements. Therefore, Jackson is not entitled to set off the value of any improvements placed by him on lots 116, 118, 119, 128, and 178.
(6) By conveying lots 116, 118, and 119 to bona fide purchasers, Jackson placed them beyond the power of the plaintiff to subject them to the satisfaction of her judgment, and Jackson is, therefore, personally liable to Mrs. Faver for the net sums received by him from the sale of said lots.
(7) Mrs. Faver is entitled to judgment against Jackson personally for $17,925 (which is the amount received by him from the sale of lots 116, 118, and 119, less the real estate commissions paid), but not to exceed the principal, interest, and cost due the plaintiff on her said judgment, less such sums as may be realized in this action and applied toward the satisfaction of her judgment.
(8) The execution levied on August 17, 1951, should proceed as to the lots as to which Jackson withdrew his claim, and as to lots 128 and 178.
Jackson excepted to the 17th finding of fact, and also excepted to the 3rd, 4th, 5th, 6th, 7th, and 8th conclusions of law.
Mrs. Faver excepted to finding of fact No. 11, making substantially the same contention. Mrs. Faver also excepted to findings of fact Nos. 8 and 16.
Mrs. Faver also excepted to conclusion of law No. 1, making substantially the same contention as that made in her motion for judgment on the face of the auditor's report and in her exception to finding of fact No. 11.
In the joint exceptions filed by J. D. Selman, Mrs. Nina Selman, and S. L. Nix, exception is taken to the 7th finding of fact, relative to the intention of Selman at the time he made the conveyances to Jackson.
The auditor's findings of fact in respect to Spring Lake Inn in brief are:
(28) The Spring Lake Inn property was conveyed in undivided interests to Basil H. Cochran and Mrs. Nina Cawthon Selman (wife of J. D. Selman) on March 1, 1946; and, subsequently, on April 26, 1946, Cochran conveyed his undivided interest in said property to Mrs. Selman.
(29) J. D. Selman furnished the money paid for the conveyances of Spring Lake Inn property to his wife, the defendant Mrs. Selman.
(30) J. D. Selman was in possession of Spring Lake Inn property from the time it was conveyed to his wife until the auditor's hearings in this action were held in May, 1952, and was, therefore, in possession of said property at the time judgment was rendered for Mrs. Faver against J. D. Selman and Nix on April 10, 1950, and at the time the equitable action was filed on October 1, 1951.
(31) The Spring Lake Inn property was bought by J. D. Selman, and title thereto was placed in the name of his wife for convenience. The beneficial interest in said property belongs to the defendant J. D. Selman.
(32) The conveyances of the Spring Lake Inn property to Mrs. Selman were voluntary as far as she was concerned.
In the 15th conclusion of law, the auditor concluded that the equitable title and interest in the Spring Lake Inn property, including the equipment, fixtures, and merchandise located therein are the property of the defendant J. D. Selman and subject to the lien of Mrs. Faver's judgment rendered April 10, 1950.
In the joint exceptions Of J. D. Selman, Mrs. Nina Selman, and S. L. Nix, exception is taken to all of the foregoing findings of fact respecting the Spring Lake Inn property, except finding No. 28. Exception is also taken by these parties to the aforesaid conclusion of law respecting this property.
(After stating the foregoing facts.) Only the 8th headnote requires elaboration. In her equitable petition filed in aid of the levy of her execution upon certain other property as that of the defendant J. D. Selman, Mrs. Faver alleged: that the restaurant and road house known as Spring Lake Inn and improvements thereon, located upon a described tract of land, worth approximately $25,000, was purchased by J. D. Selman, who paid for the same out of his own funds and caused legal title thereto to be placed in the name of his wife, Mrs. Nina Selman, for convenience--it being understood and agreed between Selman and his wife that she was to hold the legal title to said land and improvements as trustee for her husband, but that her husband was to be at all times the real and beneficial owner thereof; and that the purpose and convenience for which Selman caused legal title to said land and improvements to be placed in the name of his wife, which was known to her, was the purpose of hindering, delaying, and actually defrauding the then and subsequent creditors of J. D. Selman, and place the property beyond the reach of his then and subsequent creditors. And Mrs. Faver prayed that it be ascertained and decreed that the Spring Lake Inn property is the property of J. D. Selman, and subject to the lien of petitioner's judgment. All these allegations were denied by the defendants, Mr. and Mrs. Selman, who alleged that this property was purchased and paid for by Mrs. Selman, and belonged to her. By his findings of fact numbered 29 through 33, the auditor found: that Selman furnished the money paid for the conveyances of the Spring Lake Inn property to his wife; that Selman was in possession of the property from the time it was conveyed to his wife until the auditor's hearing held in May, 1952, at the time the judgment was rendered for Mrs. Faver against Selman and Nix on April 10, 1950, and at the time the equitable action was filed on October 1, 1951; that this property was bought by J. D. Selman and title thereto placed in the name of his wife for convenience, and the beneficial interest in said property belongs to the defendant Selman; that the conveyances of the property to Mrs. Selman were voluntary as far as she was concerned; and that she knew at the time the property was placed in her name for convenience, and it was agreed by Mr. and Mrs. Selman, that she would hold the beneficial interest to said property for her said husband. In the 15th conclusion of law, the auditor concluded that the equitable interest in the Spring Lake Inn property, including the equipment, fixtures, and merchandise located therein, is the property of the defendant J. D. Selman and subject to the lien of Mrs. Faver's judgment rendered April 10, 1950. To these findings of fact and to the conclusions of law Mr. and Mrs. Selman filed their exceptions, which were overruled by the trial judge, and to this judgment they except.
Mrs. Faver, the plaintiff, having made these allegations and sought relief based thereon, the burden was upon her to establish the facts alleged. Code 38-103; Taintor v. Rogers, 197 Ga. 872, 874 (3b) (30 S. E. 2d 892). While there are conflicts in the testimony of Mr. and Mrs. Selman as to the source from which she obtained the loan of a portion of the money with which to make the initial $8,000 payment on the purchase price, and while the auditor was authorized to find from the evidence that Selman had repaid $4,000 of the loan obtained, had negotiated a renewal of the balance of the purchase price due and an additional loan of $2,000 which he proposed to use for his own purpose, his wife executing the note and security deed therefor but which sum the evidence discloses was later used by the wife in the purchase of an automobile, and while Selman did execute an easement over the property to the Georgia Power Company, in which it was recited that he was the owner of the property, and while Mrs. Selman in her testimony did state that the first deed ever issued to "us" was in "my name," and that named persons were operating the property "when we bought it--when I bought it," and J. D. Selman, in answer to the question, "Mr. Selman, do you operate Spring Lake Inn?", answered "My wife and myself together, we own it"--the evidence further discloses that title to this property into Mrs. Selman did not come from her husband, but from third parties to her and one Cochran on March 1, 1946, and by deed from Cochran to her of an undivided one-half interest on April 26, 1946, long before the alleged tort which furnished the basis of the judgment now sought to be enforced against the property, the tort action against Selman and Nix not having been filed until November, 1949. Both Mr. and Mrs. Selman testified positively and unequivocally that she bought and paid for the property, and that it belonged to her; that she operated it for the first six months after it was purchased by her, after which time she rented it to her husband at a monthly rental of $200, which he has since paid regularly to her, and that she has since that time paid to a named bank the monthly instalments due on the balance of the purchase price from this monthly rental, paid the taxes thereon, returned it in her name for taxes, and there is no evidence whatever to support the findings of the auditor that at the time title was taken in her name, approximately four years prior to the rendition of the judgment now sought to be enforced against this property, there was any agreement or understanding between them that she was to hold the legal title for the convenience of her husband, and that he was to have the beneficial interest therein.
While it is true, as held in Keller v. Mayer, Straus & Baum, 55 Ga. 406 (4): "Husband and wife are not permitted by the law to cover with her name his business or property, in order to protect the same against his creditors. In a contest between the wife and the creditors, any fraud or false coloring which may have been practiced or attempted, may be inquired into, and if the husband be the real owner, the creditors will prevail"--it is also true, as pointed out in the 5th headnote of that case, "The husband may be his wife's agent or employee in the management of her separate estate." To the same effect, see Wells v. L. N. Smith & Co., 54 Ga. 262. The husband may likewise be the tenant of his wife as to her separate estate. May v. Leverette, 164 Ga. 552 (139 S. E. 31). The fact that some time after title to the property was placed in Mrs. Selman, her husband repaid the loan obtained by Mrs. Selman from her father with which to make a part of the down payment on the property, does not operate to make her the trustee of her husband, and vest in him the beneficial interest in the property. "A resulting trust which arises solely from the payment of the purchase price is not created, unless the purchase money is paid either before or at the time of the purchase." Hall v. Edwards, 140 Ga. 765 (3) (79 S. E. 852). See also Loggins v. Daves, 201 Ga. 628 (40 S. E. 2d 520); Williams v. Porter, 202 Ga. 113 (42 S. E. 2d 475); Price v. Price, 205 Ga. 623 (54 S. E. 2d 578).
While, as above stated, there was some conflict between the testimony of the husband and wife in the respects hereinbefore pointed out, the evidence failed to sustain the allegations of the plaintiff's petition, and was insufficient to authorize the findings of fact and conclusion of law here excepted to, and the trial judge erred in overruling the exceptions thereto.
The other exception filed by Selman, Mrs. Selman, and Nix is without merit.
Judgment reversed in case No. 18285; judgment reversed in case No. 18286; judgment affirmed in case No. 18287. All the Justices concur except Atkinson, P. J., not participating.
Ralph R. Quillian, Benjamin Camp, Camp & Camp, Grant, Wiggins, Grizzard & Smith, W. G. Grant, Francis C. Dwyer, Dennis F. Jones, Crenshaw, Hansell, Ware & Brandon, S. H. McCalla, contra.
Durwood T. Pye, for plaintiff in error (Case No. 18287).
Durwood T. Pye, contra.
Ralph R. Quillian, for plaintiffs in error (Case No. 18286).
Durwood T. Pye, contra.
Wm. G. Grant, Grant, Wiggins, Grizzard & Smith, Benj. J. Camp, Camp & Camp, N. E. Parker, Jr., for plaintiffs in error (Case No. 18285).
ARGUED JULY 14, 1953 -- DECIDED SEPTEMBER 15, 1953 -- REHEARING DENIED SEPTEMBER 28, 1953.
Saturday May 23 04:08 EDT


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