O.C.G.A. § 18-2-21 (2019)

Annotations

JUDICIAL DECISIONS ANALYSIS GENERAL CONSIDERATION JUDGMENTS ACTIONS General Consideration Insolvent’s acquisition of property in name of third party. - If insolvent debtor, for purpose of hindering, delaying, and defrauding creditors, uses the debtor’s assets in the purchase of property, taking title in the name of a third person who has full knowledge of the purpose of the transaction, such transaction is fraudulent as to existing creditors. Harper v. Atlanta Milling Co., 203 Ga. 608, 48 S.E.2d 89, 1948 Ga. LEXIS 391 (1948). One to whom alimony is due is creditor. - Willful failure to provide for the maintenance and support of spouse and children creates a lawful demand which, when legally enforced, is called alimony, and is debtor/creditor relationship. Thus, wife was creditor at time of conveyances which are alleged to have been made to defeat her claim for alimony, although no alimony judgment had been rendered at time of conveyances, and it would be inequitable and unjust not to allow her to maintain an action for judgment in rem against the husband’s property when she was unable to obtain per-

sonal service due to his willful avoidance of service. Carter v. Bush, 216 Ga. 429, 116 S.E.2d 568, 1960 Ga. LEXIS 494 (1960). Statutory provisions for spouse’s one year support (see now O.C.G.A. § 53-5-2) may not be used to defraud judgment creditors of widow’s debtor son by attempting to assign as year’s support the son’s share of the estate, when this amount was far above widow’s legitimate needs for one year. Dukes v. Cairo Banking Co., 220 Ga. 507, 140 S.E.2d 182, 1965 Ga. LEXIS 549 (1965). Reaching distributive share of estate to which insolvent debtor is entitled. - Court of equity will aid judgment creditor who has pursued the creditor’s legal remedies to every available extent, to reach distributive share of estate to which insolvent debtor is entitled in the debtor’s own right, in hands of the administrator held in trust for such judgment debtor. Dukes v. Cairo Banking Co., 220 Ga. 507, 140 S.E.2d 182, 1965 Ga. LEXIS 549 (1965). Damages available. - Georgia law allowing the recovery of general and pu-

nitive damages for fraudulent conveyances survived the enactment of Georgia’s Uniform Fraudulent Transfers Act, O.C.G.A. § 18-2-70 et seq. Interfinancial Midtown, Inc. v. Choate Constr. Co., 343 Ga. App. 793, 806 S.E.2d 255, 2017 Ga. App. LEXIS 479 (2017).

attack by another creditor, in proceeding in nature of a money rule. Burkhalter v. Virginia-Carolina Chem. Co., 42 Ga. App. 312, 156 S.E. 272, 1930 Ga. App. LEXIS 380 (1930).

Judgments

Single suit seeking both judgment on debt and setting aside fraudulent conveyance. - Since Uniform Procedure Act of 1887, Ga. L. 1887, p. 64, a creditor may in one suit proceed for judgment on the debt and to set aside fraudulent conveyance made by a debtor. Harper v. Atlanta Milling Co., 203 Ga. 608, 48 S.E.2d 89, 1948 Ga. LEXIS 391 (1948). Creditor may in one action in superior court proceed against a debtor for judgment on creditor’s demand and to set aside fraudulent conveyance joining debtor and grantee. Hyde v. Atlanta Woolen Mills Corp., 204 Ga. 450, 50 S.E.2d 52, 1948 Ga. LEXIS 456 (1948). Third party to fraudulent transaction is necessary party. - Defrauded creditor may, in court of equity, have fraudulent transaction set aside; and, for this purpose, third party to transaction would be proper and necessary party. Harper v. Atlanta Milling Co., 203 Ga. 608, 48 S.E.2d 89, 1948 Ga. LEXIS 391 (1948). Actions at law. - O.C.G.A. § 18-2-21 provided a viable cause of action at law for fraudulent conveyance because, when the legislature repealed O.C.G.A. § 18-2-22, the common law reemerged as an appropriate remedy for fraudulent conveyance. O.C.G.A. § 18-2-21 referred plaintiffs to the Uniform Fraudulent Transfers Act (UFTA) (now Uniform Voidable Transactions Act), O.C.G.A. § 18-2-70 et seq., or, in the case of those claims that could not be brought under UFTA, to the common law cause of action. Wessinger v. Spivey (In re Galbreath), 475 B.R. 749, 2003 Bankr. LEXIS 2437 (Bankr. S.D. Ga. 2003). Judgment creditor did not have an equitable right to have a testamentary trust declared null and void when the creditor had failed to make a claim against the trust during the time between the trust’s establishment and the enactment of the Georgia Trust Act,

Collateral attack. - Unreversed judgment of competent court cannot be collaterally attacked absent fraud or collusion. Smith v. Cuyler, 78 Ga. 654, 3 S.E. 406, 1887 Ga. LEXIS 46 (1887); William v. Lancaster, 113 Ga. 1020, 39 S.E. 471, 1901 Ga. LEXIS 462 (1901). Setting judgment aside by another creditor. - Judgment of foreclosure in favor of one creditor may not be set aside by another, except for fraud. Mahan v. Cavender, 77 Ga. 118, 1886 Ga. LEXIS 314 (1886). Setting aside judgment foreclosing liens. - When judgment foreclosing liens was on the judgment’s face valid and regular, the plaintiffs were not, so long as the judgment remained of force, entitled to an injunction for which the plaintiffs prayed. Dixon, Mitchell & Co. v. Baxter & Co., 106 Ga. 180, 32 S.E. 24, 1898 Ga. LEXIS 48 (1898); Suwannee Turpentine Co. v. Baxter, 109 Ga. 597, 35 S.E. 142, 1900 Ga. LEXIS 266 (1900). Judgment on petition consolidating four liens on separate parcels of land not void. - When in suit for foreclosure of four different liens for different amounts, each on land different and distinct from that affected by other liens, were consolidated in one petition and judgment prayed setting up and establishing liens for aggregate sum of all liens on all the land, and such judgment was rendered by the court, the judgment was irregular but not void. Suwannee Turpentine Co. v. Baxter, 109 Ga. 597, 35 S.E. 142, 1900 Ga. LEXIS 266 (1900). Collateral attack against default judgment against debtor known to be insane. - When attorney for plaintiffcreditor knew that the defendant had been judged insane at the time of obtaining a default judgment, this knowledge did not constitute such fraud or collusion as would open a judgment to collateral

Actions

Actions (Cont’d) O.C.G.A. § 53-12-1 et seq., the act applied to the trust and, since it gives a creditor having a tort judgment a statutory right

to proceed against distributions from the trust, the creditor was not entitled to equitable relief. Jordan v. Caswell, 264 Ga. 638, 450 S.E.2d 818, 1994 Ga. LEXIS 889 (1994).

RESEARCH REFERENCES Am. Jur. 2d. 21 Am. Jur. 2d, Creditor’s Bills, §§ 3, 4. 37 Am. Jur. 2d, Fraud and Deceit, § 497. C.J.S. 37 C.J.S., Fraudulent Conveyances, §§ 150 et seq. ALR. Creditor’s receipt of proceeds of conveyance or transfer by debtor as estopping him to claim that conveyance or transfer was fraudulent, 9 A.L.R. 358. Necessity of exhausting remedies against other judgment debtor before bringing suit to set aside conveyance as fraudulent, 22 A.L.R. 200. Right of creditor or one representing him to recover money paid or property transferred by debtor on illegal consideration, 34 A.L.R. 1297. Delivery of key as satisfying condition of immediate delivery and actual or continued change of possession to uphold sale of personal property against subsequent purchaser or third persons generally, 56 A.L.R. 518. Absolute conveyance or transfer with secret reservation as fraudulent per se as against creditors, 68 A.L.R. 306. Joinder of grantees or transferees in different conveyances or transfers in suit to avoid them as in fraud of creditors, 69 A.L.R. 229. When statute of limitations or laches commences to run against action to set aside conveyance or transfer in fraud of creditors, 76 A.L.R. 864; 100 A.L.R.2d 1094. Remedies of creditors of insolvent decedent’s estate where other creditors have received excessive payments, 77 A.L.R. 981. Validity as against creditors of conveyance in trust for settlor for life with remainder to his appointees, 93 A.L.R. 1211. Right of creditor of decedent, before perfecting his claim or after loss of re-

course against decedent’s estate, to pursue remedy against property conveyed by the decedent in fraud of his creditors, 103 A.L.R. 555. Fraud of judgment debtor in concealing assets or misrepresenting his financial condition as affecting failure to issue execution or revive judgment within the statutory period or as ground of action for fraud and deceit causing loss of legal remedy on the judgment, 104 A.L.R. 214. Decree in suit by judgment creditor to set aside conveyance in fraud of creditors as bar to another suit for same purpose in respect of another conveyance, 108 A.L.R. 699. Succession, estate, or gift tax in respect of or as affected by conveyance or transfer restoring to original owner property transferred by him to defraud or delay creditors, 108 A.L.R. 1508. Criterion of jurisdictional amount in action in form of creditors’ bill or suit to avoid conveyance in fraud of creditors, 109 A.L.R. 1185. Conflict of laws as regards validity of fraudulent and preferential transfers and assignments, 111 A.L.R. 787. Rights as between creditors of fraudulent grantor, where one or more of them, in payment of or as security for his debt, receives deed or mortgage from fraudulent grantee, 114 A.L.R. 406. Right to attack and conditions of attack upon conveyance, mortgage, or transfer as fraudulent as against creditors as affected by mortgage or other security for indebtedness to attacking creditor, 116 A.L.R. 1048. Complainant’s purpose to defraud creditors as defense to suit to recover property paid for by him but conveyed to defendant, 117 A.L.R. 1464. Right of individual creditor or creditors of debtor in liquidation or receivership to maintain bill to set aside conveyances or transfers in fraud of creditors, 119 A.L.R. 1339.

Statute of limitation applicable to suit by creditor to set aside transfers of debtor’s property, 128 A.L.R. 1289. Right of grantee, or his privies, to maintain suit or proceeding for affirmative relief, where claim is made or anticipated that conveyance was made with intention on part of grantor, but without actual fraud by grantee, to defraud former’s creditors, 128 A.L.R. 1504. Conditions of creditor’s bill or suit to avoid conveyance as a fraud on creditors where creditor has recovered foreign judgment, 129 A.L.R. 506. Right to set aside, for benefit of heirs and distributees, a conveyance or transfer by decedent in fraud of his creditors, 148 A.L.R. 230. Rights as between creditors of grantor or transferrer and those of grantee or transferee in respect of property conveyed or transferred in fraud of creditors, 148 A.L.R. 520. Pleading and proof of exempt character of property in suit to set aside its convey-

ance as in fraud of creditors, 154 A.L.R. 913. Right of wife or child by virtue of right to support to maintain action to set aside conveyance by husband or parent as fraudulent, without reducing claim to judgment, 164 A.L.R. 524. Right of attachment or judgment creditor, or officer standing in his shoes, to attack older lien or security interest for usury, 70 A.L.R.2d 1409. Right of tort claimant, prior to judgment, to attack conveyance or transfer as fraudulent, 73 A.L.R.2d 749. Conveyance as fraudulent where made in contemplation of possible liability for future tort, 38 A.L.R.3d 597. Right of secured creditor to have set aside fraudulent transfer of other property by his debtor, 8 A.L.R.4th 1123. Right of creditor to recover damages for conspiracy to defraud him of claim, 11 A.L.R.4th 345. Purchase of annuity by debtor as fraud on creditors, 74 A.L.R.6th 549.