FIRST NATIONAL BANK v. CARMICHAEL

First National Bank of Birmingham as trustee, a judgment creditor of Daniel L. Carmichael Sr., brought a bill in equity against Carmichael and his wife, and other nominal parties, to cancel two deeds to realty, executed by Carmichael to Sarah Smith, who later became his wife, as having been made fraudulently and being void as against the plaintiff. Each deed recited a consideration of "ten dollars and other valuable consideration." The first recited that the conveyance was subject to a $3500 loan, and the second, that the conveyance was subject to a $6824 loan. The petition alleged that at the time of said conveyances, Carmichael was indebted to said bank as trustee on a note which, after the record of said conveyances, was sued on and reduced to judgment. The petition averred that about three months before said conveyances, the plaintiff wrote Carmichael that, unless the note was paid, suit would be filed thereon; and averred that said conveyances, with others simultaneously made, were voluntary and left him totally insolvent; that, at the time of the acceptance of said conveyances by Sarah Smith, she knew that Carmichael was indebted to the plaintiff, knew that he had been notified of the plaintiff's intention to file suit thereon and that he had no defense thereto, and further knew that said deeds conveyed all the property owned by him, and that they were taken with full knowledge that they were fraudulent; and further averred that she conspired in such fraudulent acts. Mrs. D. L. Carmichael, formerly Sarah Smith, testified by depositions taken in behalf of the plaintiff, that she not only had paid the recited consideration of ten dollars, but that she also had invested $1000 in the property at the time of the purchase, represented by previous loans to Carmichael. She testified that the words "other consideration" represented the money which he had previously obtained from her; that she thought each of the properties was worth more than she advanced on such property, which advancements were made in the heart of the depression; that she did not know he was then insolvent, although she did know he was in bad financial condition, and she knew nothing about the plaintiff's claim until it was tried. Two officers of the plaintiff, George K. Kinman and Charles F. Zukoski Jr., testified as to the writing of a letter by the plaintiff to D. L. Carmichael, dated May 14, 1938, and a similar letter, dated August 2, 1938, advising him of a deficiency claim which the plaintiff held against him, resulting from the foreclosure of property in Birmingham, and that, unless it was paid, suit would be filed. They testified as to the plaintiff's custom of mailing letters, but there was no testimony that these letters were addressed, stamped, and mailed to D. L. Carmichael. D. L. Carmichael testified that in 1933 he executed the note on which the plaintiff's deficiency judgment was based; that on October 12, 1938, the equitable title to the two city lots was conveyed to Sarah Smith; that in 1936 he had acquired one of these lots from a mortgage company at the agreed purchase-price of $3500, an all-credit transaction without any cash payment; that under the terms of the contract of sale the purchase-price was to be paid in ten annual installments of $200, when the remainder of $1500 was to become due. He testified that, at the date of the alleged fraudulent conveyances, $400 had been paid on the purchase-price, and that the value was not substantially changed except that he had added a bathroom, and that its value with such improvement was not over $4000. As to the second lot in question, he testified that in 1921 he had built the house thereon; that in 1934 he had refinanced this second lot with the Home Owners Loan Corporation, its loan being for $6824.01, which represented the full value or more; and that the property would not have brought that amount "by a considerable difference;" that, at the date of the alleged fraudulent conveyances in 1938, that loan had been reduced only about $80, and had been in a state of continuous delinquency; that in the summer of 1938, he ran into reverses, which threw him $200 to $300 farther behind; that at the date of his conveyances in 1938 to Sarah Smith, the value of his equities in the two lots was less than his indebtedness to her, which was over $1500; that in August and September, 1938, the Home Owners Loan Corporation threatened foreclosure, and he was unable to raise the amount for which they made immediate demand, and seeing that he was about to lose the property, and Sarah Smith having loaned him $1500 or more from time to time since 1933 (which he sought to substantiate by documentary evidence), he sold his equities in said properties to her in consideration of that indebtedness. He testified that at the time of the conveyances, he did not know that the plaintiff was going to file suit against him; that it had not sued him over a period of five years, after it had his obligation; and that he had an understanding with the plaintiff that it would foreclose the Birmingham property and buy it in, and there would be no deficiency claim against him; that he did not convey said properties for the purpose of hindering, delaying, or defrauding the plaintiff, but made the conveyance at that time on account of the threatened foreclosure by the Home Owners Loan Corporation; that it was part of the agreement of sale of the properties that he would live in the basement of one of them, and would collect the rents and manage them, and try to work them out for the purchaser; that he had never received the letters written by the plaintiff on July 14 and August 2, 1938. Charles M. Paschal testified for the defendant that for about ten years he was sales manager of a realty company, and lived within a block of the properties in question; that in 1938 the smaller property would not have brought on the market $3500, and the larger property would have brought approximately $7000; that their combined values would have been $10,000 to $10,500, and if there was $9800 against them, there was not much equity in the properties. Mrs. D. L. Carmichael testified as to loans which she had made to Carmichael, beginning in 1932, evidenced by notes and checks, and introduced withdrawal slips, the proceeds of which she testified she had paid to him. Tax returns were introduced, showing returns of these properties by D. L. Carmichael in the name of Sarah M. Smith, after his marriage to her. Other evidence whose admission was objected to will be sufficiently referred to in the opinion. The jury found for the defendants, and the plaintiff filed a motion for a new trial. Exception is taken to the order overruling such motion.

JENKINS, Presiding Justice.

1. The Code, § 28-201 (2), Provides: "The following acts by debtors shall be fraudulent in law against creditors and others, and as to them null and void, viz: . . Every conveyance of real or personal estate, by writing or otherwise, and every bond, suit, judgment and execution, or contract of any description, had or made with the 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 ground for reasonable suspicion, shall be valid." The trial judge having given the above Code section in charge to the jury, it was not error, especially in the absence of a request, to fail to charge the following language: "In this case, gentlemen, if you believe that the defendant Carmichael executed the deeds in question, to wit: the Barnett Street property or properties, with the intention to hinder, delay, or defraud the plaintiff; and if you believe that such intention was known to the defendant, Miss Smith, now Mrs. Carmichael, or that she had reasonable ground to suspect the same, then and in that event, on that issue, you would find for the plaintiff, and your finding, if it should be for the plaintiff on that issue, would result in a cancellation of those deeds. If you believe that the defendant Carmichael executed the deeds in question with intention to hinder, delay, or defraud the plaintiff, but find that such intention was not actually known to Miss Smith, now Mrs. Carmichael, but that she had reasonable ground to suspect the same or ground for reasonable suspicion, then in that event on that issue you would find for the plaintiff."

(a) The assignment of error is, not that the court failed to given in charge the principle of law involved in the language stated, but that he failed to charge the specific language set forth in the exception. The exception fails to state that any sort of request so to do was made, but, even had this been done, a request to charge must be in writing; and in this case, just as in Wells v. Blitch, 184 Ga. 616 (8) ( 192 S.E. 209), "The ground of the motion for a new trial complaining of the court's refusal to give a requested charge does not state that the request was in writing, and thus presents no question of error for determination by this court."

(b) It is true that, after giving in charge the provision of the Code, § 28-201 (2), that "a bona fide transaction on a valuable consideration and without notice or ground for reasonable suspicion shall be valid," the court told the jury in another portion of the charge that: "If you believe that the Barnett Street property deeds were not voluntary but were for a valuable consideration; that there was no intent by the defendant Carmichael to defraud, or that, if there was such intent, that the same was unknown to Miss Smith, now Mrs. Carmichael; then and in that event, you would find that issue for the defendants." However, no exception is taken to the correctness of this latter instruction, and the exception now being dealt with on the failure to charge does not couple such failure with the giving of the excerpt just quoted. But even had the excerpt last quoted been attacked, it has been held ( Benton v. Benton, 164 Ga. 541 (4), 546, 139 S.E. 68) that the error therein contained was rendered harmless and was sufficiently corrected by giving in charge the correct rule embodied in the Code section just quoted.

2. On cross-examination, the defendant, over objection, developed the fact that the plaintiff did in the Birmingham property at the foreclosure sale, the amount paid at such sale, its value at the time of such sale, and its present value, and the fact that the plaintiff still owns it; and by his own testimony, over objection, the defendant swore that, "In 1933, I had the word of Mr. Zukoski, vice-president of the First National Bank of Birmingham, that there would be no deficiency claim against me." The grounds of objection to this evidence were: (a) that it was irrelevant to the issues; (b) that it was not restricted to evidence given on direct examination; and (c) that it was upon matter res adjudicata, as determined by the deficiency-judgment suit. The exceptions to its admission showed that such testimony was not admitted generally, and not on any question as to whether Carmichael was originally indebted to the plaintiff, which question the court stated was not in issue, but was admitted solely to illustrate the one issue submitted in the charge of the court, to wit, whether the transfer was made with fraudulent intent. After such announcement by the court, no further objection was made by the plaintiff to this testimony.

(a) In dealing with objections to the evidence, marked "a" and "c" under exceptions taken in accordance therewith, the court agreed with the plaintiff that the validity of the defendant's indebtedness to it was not an issue in the case and was not to be attacked, nor was it in fact sought to be attacked. Therefore the question is whether such evidence relating to the foreclosure, the value of the Birmingham property bought in by the plaintiff, and the plaintiff's alleged statement that it did not intend to obtain a deficiency judgment, bore on the one vital question for which it was admitted, to wit, whether the conveyance by the defendant was fraudulent or made in good faith. It is the rule that, "Where in response to an objection of a general nature to evidence the court states that it is admitted for a limited purpose, and the objecting party makes no further objection thereto, no valid assignment of error can be based upon the court's act in admitting the evidence." Mickle v. Moore, 193 Ga. 150 ( 17 S.E.2d 728). Accordingly, there being no renewal of the objection to the admission of the testimony for the particular and limited purpose outlined by the court, the general exception on the grounds originally made in the court below does not raise any question as to its admissibility for the restricted purpose for which it was actually allowed.

(b) "The right of cross-examination, thorough and sifting, shall belong to every party as to the witnesses called against him." Code, § 38-1705. "Where a witness is voluntarily called by a party and examined, even though to a formal point only, the court cannot restrict the right of cross-examination of the witness to the formal point upon which the party has examined him, but the opposite party has the right to cross-examine the witness as to all points in the case." Cowart v. Strickland, 149 Ga. 397 (2) ( 100 S.E. 447, 7 A.L.R. 1110). Therefore, even had the question been properly presented, we find no error in the overruling of the objection that the cross-examination was not restricted to evidence given by the witness upon direct examination.

(c) Moreover, irrespective of the validity of any exceptions taken, the evidence elicited on cross-examination and the testimony of the defendant himself that, "In 1933, I had the word of Mr. Zukoski, vice-president of the First National Bank of Birmingham, that there would be no deficiency claim against me," had probative value, and therefore was in fact properly admitted for the one restricted purpose outlined by the court, to wit, as illustrating the presence or absence of a fraudulent intent and purpose on the part of the defendant in making the transfer of the property here involved. While it is true that the plaintiff introduced the testimony of two of its officials as to Carmichael's indebtedness to the plaintiff, who stated that, before the alleged fraudulent transfer of the properties, the plaintiff had written Carmichael concerning the deficiency claim which the plaintiff held against him, resulting from its foreclosure of a mortgage he had given the plaintiff on Birmingham property, in which letters it had threatened suit on such deficiency claim, which after the transfers had been made was in fact reduced to judgment, it is also true that the receipt of any such letters was denied by the defendant, and while one of the plaintiff's officials swore that such letters had been dictated by him there was no proof as to their having been addressed, stamped, or put in the mails so as to conform to the requirements for showing a presumptive receipt. See Rawleigh Medical Co. v. Burney, 25 Ga. App. 20 ( 102 S.E. 358).

3. The plaintiff excepted to the admission of the testimony of Mrs. D. L. Carmichael, the grantee in the deeds alleged to have been fraudulently made, that in 1939 (after such conveyances, but before her marriage to D. L. Carmichael) she borrowed $1063.58 from a bank, which was used to improve the basement in one of the houses conveyed, and which had been repaid; the objection being that this testimony was irrelevant because it referred to a transaction after the conveyances in question. The evidence showed that Carmichael lived in these basement quarters, collected rents, and otherwise handled matters relating to the properties, which the plaintiff contended evidenced a fraudulent conveyance. This evidence was, therefore, admissible to illustrate the defendant's contention that the transaction was bona fide, and that Carmichael's possession and management was on behalf of Sarah M. Smith, the grantee, who later became Mrs. Carmichael. The same ruling applies to similar objections made to the introduction of documentary evidence relating to the same loan, and to checks and withdrawal slips of Sarah Smith, the proceeds of which she testified she had turned over to Carmichael in cash up to the amount of $900, before the conveyances. A similar objection to the admission of a mortgage from Mrs. D. L. Carmichael to "Mr. Seckinger" cannot be considered, as neither the mortgage nor any brief thereof appears in the record.

4. "It is never error to refuse to direct a verdict." Western Atlantic Railroad v. Michael, 178 Ga. 1 (3) ( 172 S.E. 66); Harmon v. Gaddy, 193 Ga. 574 (3), 578 (9) ( 19 S.E.2d 302). See also cases cited in the annotations to Ga. Code Ann., § 110-104.

5. The evidence authorized the verdict, and having been approved by the trial judge, his judgment in overruling the motion for new trial must be

Affirmed. All the Justices concur.