Henry B. Weed, plaintiff in error, vs. John A. Davis, defendant in error

Supreme Court of Georgia1858-06

25 Ga. 684

Summary · law.co

Holding. The trial court properly instructed the jury that a voluntary conveyance by a debtor is not void against creditors simply because the debtor was indebted at the time of transfer; rather, creditors must prove the debtor acted with intent to defraud them, which may be inferred from all circumstances but is not conclusively established by indebtedness alone. The judgment was affirmed.

A debtor conveyed land to his son-in-law as a gift while owing debts. The trial court instructed the jury that the gift would not be void against creditors merely because the debtor was indebted at the time of the transfer. Instead, the court told jurors to consider whether the value of the land given away was disproportionately large compared to the debtor's total property and the amount owed. The plaintiff challenged this instruction as incorrect.

The appellate court upheld the trial court's charge. The court interpreted the Statute of Elizabeth, which voids gifts made with intent to defraud creditors, as requiring proof of fraudulent intent rather than merely showing the debtor was indebted when making the gift. Being in debt at the time of a voluntary conveyance is not conclusive evidence of fraudulent intent. Instead, courts should consider all circumstances, including the debtor's overall financial condition, whether he remained able to pay his debts after the transfer, and whether the gift was reasonable given his station in life.

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

Key issues

Whether being indebted at the time of a voluntary gift constitutes conclusive evidence of fraudulent intent under the Statute of Elizabeth
What factors courts should consider when determining if a gift was made to defraud creditors
Whether the lack of valuable consideration in a gift is conclusive or merely presumptive evidence of fraud

Procedural posture

The plaintiff in error sought review of the trial court's jury charge regarding whether a voluntary conveyance by an indebted person was void as against creditors.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

By the Court.

Benning, J.

delivering the opinion.

Was the charge of the Court wrong?

The charge seems to amount to this; that although Hampton might have been in debt at the time when he made the voluntary conveyance to his son-in-law, Davis; yet the conveyance was not void as to the persons, to whom he was so in debt, unless the value of the land conveyed, was disproportionably great, as compared with the value of his whole property, and the amount for which he was so in debt.

If there is any law which this charge violates, it must be the 13 th of Elizabeth, “against fraudulent deeds, alienations, &c.”

That statute declares, “ that all and every feoffment, gift,” &c., “ made to, or for,” the “ intent to delay, hinder or defraud creditors and others, of their” — “debts,” “shall be deemed and taken, (only as against” such creditors, and others,) “to be clearly and utterly void.” — Schley’s Dig. 215.

A gift, then, to be void by this statute, must be “ made” with “ intent” to defraud creditors.

Now is a man’s being in a state of indebtedness, however slight, at the time when he makes a voluntary gift, however small as compared with his whole property, conclusive evidence, that he acts from an “intent” to defraud the creditors out of their debts. If it is, the charge was wrong, if it is not the charge was right.

It is certain, that the statute itself does not say, that this fact shall be conclusive evidence, or even any evidence, of such intent. The statute is simply silent, both as to the kind of facts which shall be admissible on the question of this Intent, and as to the degree of weight to which any facts that may be admissible on the question, shall be entitled.

And yet it is equally certain, that there have been dicta, and perhaps a few decisions, to the effect that this fact is conclusive evidence of this fraudulent intent. But what law they find to support themselves by, I cannot imagine. In Hindes, lessee, vs. Longworth, 11 Wheat. R. 190, the Court say: “ A deed from a parent to a child, for the consideration of love and affection, is not absolutely void as ■against creditors. It may be so under circumstances. But the mere fact of being indebted to a small amount would not make the deed fraudulent, if it could be shown, that the grantor was in prosperous circumstances, and unembarrassed, and that the gift to a child was a reasonable provision, according to his state and condition in life, and leaving enough for the payment of the debts of the grantor. The want of a valuable consideration may be a badge of fraud 5 but it is only presumptive, and not conclusive^evidence of it, and may be met and rebutted by evidence on the other side.” Story Eq. section 362. The weight of authority is, in our opinion, in favor of the view here expressed. See note 2, to the section referred to, and note 1, to the next section, and section 365.

We think, then, that the charge was not wrong.

And if the charge was not wrong, it is plain, that it could not have been wrong to refuse the request to charge, for that was in conflict with the charge.

Judgment affirmed.