Andrews & Co. v. Kaufmans
Andrews & Co. v. Kaufmans
Opinion of the Court
This case came before the court below on a rule against the sheriff to distribute money in his hands, there being conflicting claims to it, whereupon an issue was made up and tried, when the jury, under the charge of the court, found the issue in favor of J. & J. Kaufman. The case is brought here on a bill of exceptions to the charge of the court and refusal to charge as requested. It appears from the evidence in the record, that J. & J. Kaufman sued out an
The counsel for Andrews & Co., requested the court to charge the jury, that “ if they believed from the evidence that J. & J. Kaufman sued out an attachment against Wesley and served the same by garnishment on Murdock, and after this, Wesley being indebted to J. O. Andrews & Co. in the sum of nine hundred dollars, gave his nine notes for $100.00 each, and Andrews & Co. obtained judgments at common law on said notes before the attachment judgment in favor of the Kaufmans, then the judgments in favor of Andrews & Co.constitute a prior lien against the fund in the sheriff’s hands, if the transaction between Andrews & Co and Wesley was bona fide and he owed them the money.” This request the court gave, with the addition of the following words, “ and not made collusively to give Andrews & Co. a preference over the Kaufmans,” and refused to give the request in charge without adding the additional words
In this state a debtor may prefer one creditor to another, and to that end he may Iona fide give a lien by mortgage or other legal means. Code, §1943. Debts in the aggregate which amount to more than justice court jurisdiction, may be divided into liquidated demands so as to bring them within such jurisdiction. Code, §447. As between attaching creditors only, does the first attachment levied create a prior lien (Code, §3330), but in a contest between attachments and ordinary judgments on suits, it is the judgment, and not the levy, which fixes the lien. Code, §3331. All monej'raised by process of garnishment shall be paid over to the creditors of the defendant according to the priorities now established by law. Code, §3545.
Should the court have given the charge as requested, without the additional words, “ and not made collusively, to give Andrews & Co. a preference over the Kaufmans,” in view of the evidence in the record and the law applicable thereto ? The charge of the court assumes that the preferring of Andrews & Co. by Wesley, the debtor, by giving to them the $100.00 notes so as to enable them to obtain judg rnents thereon in due course of law, and thus acquire a prior lien on the money in the garnishee’s hands over the Kaufmans’ attachment, was in law a collusive fraud, and would defeat the lien of Andrews & Co.’s older judgments upon the money in the hands of the garnishee. This is not an open question in this court. See Lavender vs. Thomas, 18 Ga., 668 ; Bank of Savannah vs. The Planters’ Bank et al. 22 Ga., 466 ; Alexander et al. vs. Young, 23 Ga., 616. If the debt due by Wesley to Andrews & Co. had not been a bona fide debt for which the small notes were given, but merely an assumed indebtedness, as was the case in Raefle vs. Moore, 58 Ga., 94, it would have presented an entirely different question, but when a man does nothing more than the law allowTs him to do, it is difficult to perceive how it can be said with legal propriety, that he has been guilty of a collusive fraud.
In view of the previous rulings of this court in the cases cited, we think the court erred in adding the words to the request to charge, “ and not made collusively to give Andrews & Oo. a preference over the Kaufmans,” as set forth in the record.
Let the judgment of the court below be reversed.
Dissenting Opinion
dissenting.
The law is undoubtedly that a debtor may ordinarily give a preference to one creditor over .other creditors when he is in failing circumstances, provided he honestly owes such creditor. This he may do by sale, by mortgage, or by cutting up a large note into small ones, so that the preferred creditor may get the first judgment by suing in a court which can render judgment in a shorter time. 18 Ga., 666-22 Ib., 466; 23 Ib., 616 ; Code, §§447, 1953.
By examining these cases, it will be seen, however, that in none of them had the property of the debtor been attached and a lien created. In the contest between the banks in Savannah,in the casein 22d Ga., 466, garnishments were sued out at common law, which did not give any lien to the credit- or ; but no attachment pendente Ute or otherwise was sued out, so as to fix the lien of the creditor upon the property attached by serving the garnishment. But in attachment cases, the attachment is levied by serving the summons of garnishment just as effectually as by seizing property in the hands of the debtor, Code, §3288; and of course the lien upon the property, debts, or effects in the hands of the garnishee is as effectual and valid as if in the debtor’s own hands.
The Code, §1952, declares as null and void, and fraudulent in law against creditors, “ every conveyance of real or personal estate, by writing or otherwise, and every bond, suit, judgment and execution, or contract of a/ivy description, had or made with intention to delay or defraud creditors, and such intention known to the party taking; a bona fide transaction on a valuable consideration, and without notice or grounds for reasonable suspicion, shall be valid.” It will be seen that a judgment is put upon the same footing as a conveyance, and whatever would set aside a conveyance would set aside a judgment; and the language is still stronger, it is any “ contract, of any description, had or made with intention to delay or defraud creditors, and such intention known to the party taking.” Here is a contract of a certain description made to cut up a large debt into
"What sort of a transaction would stand to give the preference ? “A bona fide transaction on a valuable consideration,” without more ? No. The law says (Code, §1952) “ a bona fide transaction on a valuable consideration, and without notice or grounds for reasonable suspicion,” shall be valid. Notice of what ? Why, of the lien, of course, and the intention to defeat it. Grounds for reasonable suspicion of what ? Of the intention of the debtor to defeat this lien, of course.
So section 1953, in stating how a debtor may prefer a creditor, declares that “to that end he may bona fide give a lien by mortgage or other legal means,” showing that to mortgage is a legal means, just as legal as to carve the large debt into small notes; but whoever dreamed that the debtor, by thus giving a lien, however legal the means, could divest a prior lien ?
Rut it is argued that the attachment lien is not good as against a judgment had before the judgment in the attachment case, because, under the Code, section 3331, it is declared that “ between attachments and ordinary judgments or suits, it is the judgment, and not the levy, which fixes the lien.” Tes, between ordinary suits and judgments, obtained regularly and without collusion, and attachments such is the rule ; but not, I apprehend, between judgments col-, lusively obtained ahead of the attachment judgment by a contrivance, fixed up after the attachment, by the debtor and creditor, on purpose to defeat the lien which was fairly obtained.
The lien of this attachment was good over this large debt,
Suppose this had been an attachment for purchase money aiid levied on the property purchased, could the lien be defeated by this contrivance ? I think not. If not, can it be defeated in this sort of attachment, where the lien is just as valid as in the case of purchase money?
Again, I understand that the facts in this record make the case of two attaching creditors, the hindmost of whom got ahead of his more active contestant by this contrivance, and defeated his prior lien. If so, of course the transaction is void and fraudulent as to the first attaching creditor, so far as it seeks to divest his lien.
Again, the principle ruled in 58 Ga., 94, is that this sort of thing cannot stand if done collusively, and such was the charge of the court in this case. And the facts, I think, show that it was so done.
This court has never decided that a lien could be divested by this sort of trick — this underhand, indirect endeavor to do what cannot be done directly; and the cases in the 18th, 22d and 23d Ga., can all stand consistently with the view here presented; but if they could not, I should hold that section 1952 of our Code was not before the court when those cases were decided, and that the Code had changed the law as then held. I see no trouble, however, in letting those cases stand and affirming this judgment.
My mind revolts at extending the principle ruled in 22 Ga., 466, one inch beyond what it squarely covers. I agree with Judge Stephens, in Lively vs. Harwell, 29 Ga., 515, where he says: “ But if the principle be unsound, analogy
So I dissent from the judgment of reversal.
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