Hyde v. Atlanta Woolen Mills Corporation et al.

Supreme Court of Georgia1948-10-13No. No. 16379

204 Ga. 450

Summary · law.co

Holding. The court affirmed the judgment, holding that the plaintiff's petition stated a valid cause of action against all defendants and that the trial court properly overruled the general demurrer, as the petition was not multifarious or subject to misjoinder of parties where all defendants had a common interest in the issue of whether the property conveyed to them was purchased with stolen funds without legal consideration.

A creditor may bring a single lawsuit in superior court seeking both a judgment against a debtor and the invalidation of fraudulent transfers, naming both the debtor and the recipients of the transferred property as defendants. A voluntary transfer of property is void against creditors if the transferor's purpose was to hinder, delay, or defraud creditors, regardless of whether the recipient knew of the fraudulent intent or whether the transferor was insolvent at the time of the transfer.

The plaintiff's petition alleged that a defendant employee had stolen funds from the plaintiff, used those funds to purchase real property, and then conveyed parcels of that property without consideration to various other defendants, along with automobiles and cash. The petition sought judgment against the primary defendant, subjection of the properties to that judgment, cancellation of the deeds, appointment of a receiver, and injunctive relief. These allegations stated a valid cause of action against all defendants.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a creditor may join a debtor and multiple grantees in a single action to recover on a claim and set aside fraudulent conveyances
Whether a voluntary conveyance is void as to creditors when the grantor's purpose is to hinder, delay, or defraud creditors
Whether a petition is multifarious or subject to misjoinder when all defendants have a common interest in the central issue

Procedural posture

The trial court overruled a general demurrer filed by one defendant to the plaintiff's equitable petition alleging fraudulent conveyances and seeking judgment and relief against multiple defendants.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Duckworth, Chief Justice.

1. A creditor may in one action in the superior court proceed against his debtor for judgment on his demand and to set aside a fraudulent conveyance, joining debtor and grantee. DeLacy v. Hurst, 83 Ga. 223 (4) (9 S. E. 1052); Vaughn v. Georgia Loan Co., 98 Ga. 288 (25 S. E. 441); Booth v. Mohr, 122 Ga. 333 (1) (50 S. E. 173); Fourth National Bank v. Mooty, 143 Ga. 137 (84 S. E. 546); May Realty Co. v. Forsdick, 180 Ga. 226, 229 (178 S. E. 660).

2. “A voluntary deed is void as to creditors, though the grantor be not insolvent at the time of making the deed, if his purpose in so doing is to hinder, delay, or defraud creditors; and this would be true whether the donee knew of the fraudulent intention or not.” May v. Leverett, 167 Ga. 205 (1) (144 S. E. 778). See also Citizens & Southern Nat. Bank v. Kontz, 185 Ga. 131 (5) (194 S. E. 536).

No. 16379.

October 13, 1948.

3. The allegations of the petition — to the effect that the named defendant, while in the employ of the petitioner, abstracted and stole from it funds, which he used in purchasing described realty and thereafter conveying, without any legal consideration therefor, various parcels to named defendants, also giving to one of the donees several automobiles, as well as $15,000 in cash, representing money stolen from the petitioner, the petition praying for judgment against the principal defendant for the amount due because of the alleged fraudulent and illegal acts, that the properties bought with the stolen funds be subjected to the judgment, and that the deeds to the various defendants be set aside, a receiver be appointed, and for injunction and other relief — stated a cause of action against all of the defendants, and the court did not err in overruling the general demurrer filed by one of them.

4. “An equitable petition is not multifarious because all of the defendants are “not interested in all of the matters contained in the suit. It is sufficient if each party has an interest in some matter in the suit which is common to all, and that they are connected with the others. All persons who are directly or consequentially interested in the event of the suit are properly made parties to a petition in equity, so as to prevent a multiplicity of suits by or against parties at once or successively affected by the original case.” Cowan v. Nicholson, 158 Ga. 425 (1) (123 S. E. 681). See also Code, § 37-1007; Knox v. Reese, 149 Ga. 379 (100 S. E. 371); First National Bank of Sparta v. Wiley, 150 Ga. 759 (2) (105 S. E. 308); Hines v. Wilson, 164 Ga. 888 (4) (139 S. E. 802).

5. Since the petition asserts as to all defendants that the property conveyed or given to them respectively was without any legal consideration and purchased with funds stolen by the defendant grantor from the petitioner, the issue as to that question is common to all of the defendants, and under the above stated authorities the petition is not subject to the grounds of special demurrer as to misjoinder of parties and causes of action and multifariousness.

Judgment affirmed.

All the Justices concur, except Bell, J., absent on account of illness.

Hams, Henson & Spence, for plaintiff in error.

George & John L. Westmoreland, James A. Branch, Allen E. Lockerman, Thomas B. Branch Jr., W. K. Meadow, and Spalding, Sibley, Troutman & Kelley, contra.