Evans v. Coleman , 101 Ga. 152 ( 1897 )

Simmons, C. J.

The official report states, in substance, the pleadings and the evidence. It will there be seen that Evans filed his equitable petition against Mrs. Courson, her husband John M. Courson, her father W. L. Coleman, and others mentioned therein, to set aside certain mortgages executed by Mrs. Courson to her father and to others, upon the ground that they were given for the purpose of delaying or defrauding her creditors. He also, in the same petition, claimed damages against Coleman and John M. Courson for recording the mortgages alleged to be fraudulent, and for giving notice thereof at a sale of the mortgaged property, held under an execution against Mrs. Courson in favor of Sibley, Nixon & Co., which notice prevented the property’s bringing its full value at the sale. Evans claimed in his petition that the mortgages being fraudulent and void, notice of them given at the sale prevented others from bidding and enabled Coleman, the holder of one of the mortgages, to buy the property for $200 when it was worth much more than that sum. The $200 was applied to some justice’s court fi. fas., and therefore Sibley, Nixon & Co., did not realize anything from the sale. Afterwards Evans obtained his judgment and had it levied upon other property of Mrs. Courson, but the proceeds of the sale had to be applied to the judgment of Sibley, Nixon & Co., which was older than his; whereas if the notice of the fraudulent mortgages had not been given, the judgment of Sibley, Nixon & Co. would have been satisfied out of the proceeds of the first sale and his (Evans’s) junior judgment would' have taken the proceeds of the last sale.

1. The trial judge, in instructing the jury as to what acts were sufficient to set aside and invalidate conveyances, charged as follows: “If you believe from the evidence that the making of the mortgage to Coleman by Mrs. Courson was intended to delay, hinder and defraud the creditors of Mrs. Courson, then you should find for the plaintiff.” The jury having returned a verdict against the plaintiff, the latter excepted to this charge and made it one of the grounds of his motion for a new trial. We think the exception is well taken. The second paragraph of section 2695 of the Civil Code declares in substance that every conveyance . . had or made with intention to delay or defraud creditors, and such intention known to the party taking, shall be void. Under this section a conveyance made by a debtor to another with the intention to delay his creditors is void; so if it be made with intention to defraud his creditors, it is void. If the plaintiff, who seeks to set aside a conveyance on this ground, proves that it was made either to delay or to defraud creditors, it is sufficient. The jury would be authorized to set aside the conveyance upon satisfactory proof of either. It is not necessary that the plaintiff prove intention both to delay and to defraud. The trial judge by his charge put upon the plaintiff a greater burden than is done by our statute. The jury might have believed from the evidence that the conveyance was made with intention to delay creditors, and yet, under the charge as given, could not find the conveyance fraudulent and void unless the evidence had authorized them to find that it was made with intention to both delay and defraud creditors. We think, therefore, that the court erred in the charge excepted to.

2. The evidence for the plaintiff shows that on the day Sibley, Nixon & Co. obtained their judgment against Mrs. Courson and after the judgment was rendered, their attorney visited the clerk’s office for the purpose of ascertaining whether there were prior liens against her. He found in the office a mortgage executed by Mrs. Courson to her father, Mr. Coleman, which had been recorded. The attorney saw Coleman the next day and inquired about the mortgage, and Coleman told him that he knew nothing of it. It appears further from the evidence, that the mortgage to Coleman had not been delivered to him by the mortgagor at that time, but had been sent through an agent of the mortgagor to the clerk for record. On this state of facts the plaintiff requested the court, in writing, in substance to charge that where a mortgage is executed by a debtor to a creditor and not delivered to him but sent by the mortgagor to the clerk for registration, and after it is recorded the creditor accepts it and thereby ratifies it, judgment liens obtained by other creditors after the delivery to the clerk but before ratification by the creditor take precedence of the mortgage. The court refused this request, and the plaintiff excepted to this refusal and assigns it as error.

Under the facts as disclosed by the record, the court should have charged the jury as requested. If the jury believed that Mrs. Courson executed this mortgage to her father, Mr. Coleman, and sent it to the clerk for registration, that it was recorded, and that Coleman knew nothing of the mortgage until after its record, then any judgment obtained against Mrs. Courson by another creditor after the record of the mortgage but before its acceptance by Coleman had a lien against her property prior to the lien of the mortgage. Ratification generally relates back to the act ratified. So if a bona fide mortgage is executed without the knowledge of the mortgagee who, however, subsequently ratifies it, this ratification generally relates back to the execution of the mortgage; but if, between the execution of the mortgage and the ratification thereof, other creditors obtain judgments against the mortgagor, the liens of these judgments will take precedence of the mortgage lien. To all conveyances relating to real property delivery and acceptance are necessary and essential. There can be no valid conveyance without delivery and acceptance. In discussing this subject, Mr. Justice Davis, in the case of Parmelee v. Simpson, 5 Wall. 81, says (p. 86): “But it is said that he could ratify the acts of Bovey and the register. This is true, but he did not do this until after the execution and registration of the mortgage; and this ratification can not relate back so as to cut out the mortgage. Simpson acquired no title until after the rights of the mortgagee had accrued, and he holds it encumbered with the lien of the mortgage.” Mr. Devlin in his work on Deeds, 1st vol.,§ 291, says: “Subsequent assent of the grantee does not operate by relation to pass the title as of the time of delivery against creditors of the-grantors, whose rights have attached prior to the time the grantee manifested his assent.” In the case of Hibberd v. Smith, 67 Cal. 547, s. c. 56 Am. R. 726, it was held: “Where a deed is delivered to a third person for the use of the grantee, but without his knowledge or assent, his subsequent assent will not defeat the lien of an intervening judgment against the grantor.” See also Clark v. National Bank, 66 Fed. Rep. 404-408. Judgment reversed.

All the Justices concurring.