2020 Georgia Code
Title 19 - Domestic Relations
Chapter 3 - Marriage Generally
Article 1 - General Provisions
§ 19-3-10. Right of Married Persons to Contract; Presumptions

A married person may make contracts with other persons; but, when a transaction between a husband and wife is attacked for fraud by the creditors of either, the onus shall be on the husband and wife to show that the transaction was fair. If a husband or a wife has a separate estate and purchases property from persons other than his or her spouse, the onus shall be upon a creditor levying on such property as the property of the other spouse to show fraud or to show that the husband or wife did not have the means with which to purchase the property.

(Civil Code 1895, § 2492; Civil Code 1910, § 3011; Code 1933, § 53-505; Ga. L. 1979, p. 466, § 35.)

- Acts void as against creditors, § 18-2-20 et seq.

- For article, "Preparing the Georgia Farmer (or Other Small Entrepreneur) for Bankruptcy," see 22 Ga. State Bar J. 186 (1986).

ANALYSIS

• General Consideration
• Transactions
• Fraud
• Evidence

Statute applied to transactions between husband and wife only, and does not extend to transactions between other near relatives. First Nat'l Bank v. Kelly, 190 Ga. 603, 10 S.E.2d 66 (1940).

Statute was rule of evidence, and does not dispense with necessary elements in setting aside conveyance based on a valuable consideration. Baker v. Goddard, 205 Ga. 477, 53 S.E.2d 754 (1949).

- Recognizing that in transactions between husband and wife fraud might be so completely concealed that creditors could not expose the fraud, and in order that the public might not suffer from such concealment, the law imposes upon the husband and wife the duty of affirmatively establishing their good faith when creditors attack such transactions for fraud. Arrington v. Awbrey, 190 Ga. 193, 8 S.E.2d 648 (1940); Powell v. Grimes, 223 Ga. 56, 153 S.E.2d 434 (1967).

Jury was properly instructed that a debtor and the debtor's spouse had the burden to show that an allegedly fraudulent transfer of the debtor's interest in the debtor's home to the spouse was fair and free from fraud since O.C.G.A. § 19-3-10, placing the burden in spousal transfers, was not impliedly repealed by enactment of the Uniform Fraudulent Transfer Act, O.C.G.A. § 18-2-70 et seq., which did not impose any burden of proof or conflict with any provision of the statute. Key Equip. Fin., Inc. v. Overend, 665 Fed. Appx. 801 (11th Cir. 2016)(Unpublished).

Cited in Strickland v. Jones, 131 Ga. 409, 62 S.E. 322 (1908); Brand v. Bagwell, 133 Ga. 750, 66 S.E. 935 (1910); Adams v. First Nat'l Bank, 147 Ga. 470, 94 S.E. 568 (1917); Mitchell v. Mixon, 148 Ga. 596, 97 S.E. 528 (1918); Gill v. Willingham, 156 Ga. 728, 120 S.E. 108 (1923); Pope v. Bennett, 157 Ga. 357, 121 S.E. 333 (1924); Jenkins v. Flournoy, 157 Ga. 618, 122 S.E. 309 (1924); Durden v. Royster Guano Co., 158 Ga. 234, 123 S.E. 603 (1924); Simmons v. Realty Inv. Co., 160 Ga. 99, 127 S.E. 279 (1925); Davis v. Barrett, 163 Ga. 666, 136 S.E. 904 (1927); James v. Hudson, 170 Ga. 321, 152 S.E. 829 (1930); Cotton States Fertilizer Co. v. Childs, 179 Ga. 23, 174 S.E. 708 (1934); Strobel v. Cormley, 50 Ga. App. 358, 178 S.E. 192 (1935); Strickland v. Davis, 184 Ga. 76, 190 S.E. 586 (1937); Tippins v. Lane, 184 Ga. 331, 191 S.E. 134 (1937); Armour Fertilizer Works v. Maxwell, 186 Ga. 801, 199 S.E. 120 (1938); Parker v. Harling, 189 Ga. 224, 5 S.E.2d 755 (1939); Dwight v. Acme Lumber & Supply Co., 189 Ga. 473, 6 S.E.2d 586 (1939); First Nat'l Bank v. Kelly, 190 Ga. 603, 10 S.E.2d 66 (1940); Mattox v. West, 194 Ga. 310, 21 S.E.2d 428 (1942); United States v. Phillips, 59 F. Supp. 1006 (S.D. Ga. 1945); Beazley v. Allen, 61 F. Supp. 929 (M.D. Ga. 1945); Lee v. Calhoun, 202 Ga. 297, 43 S.E.2d 156 (1947); Beebe v. Smith, 76 Ga. App. 391, 46 S.E.2d 212 (1948); Powers v. Powers, 213 Ga. 461, 99 S.E.2d 818 (1957); Clark v. Ryals Ins. Agency, 99 Ga. App. 689, 109 S.E.2d 643 (1959); Maloy v. Dixon, 127 Ga. App. 151, 193 S.E.2d 19 (1972); Citizens & S. Nat'l Bank v. Parker, 145 Ga. App. 802, 245 S.E.2d 48 (1978); Stokes v. McRae, 247 Ga. 658, 278 S.E.2d 393 (1981); Johnson v. Sheridan, 179 Ga. App. 331, 346 S.E.2d 109 (1986); Hadlock v. Anderson, 246 Ga. App. 291, 540 S.E.2d 282 (2000); Broadfoot v. Hunerwadel (In re Dulock), 282 Bankr. 54 (Bankr. N.D. Ga. 2002); Bloom v. Camp, 336 Ga. App. 891, 785 S.E.2d 573 (2016).

Transactions

Husband not liable for rent if wife specifically contracts to pay.

- Husband is not liable for the rent simply because the rent constitutes a necessity of life for his family and because he is legally bound to support his family and provide them with the necessities of life if it appears under the allegations of the petition that the wife expressly contracted with the landlord to pay the rent for the dwelling abode of the family and that the wife entered into a written lease contract with the landlord to that effect. Butler v. Godley, 51 Ga. App. 784, 181 S.E. 494 (1935).

- When a married woman enters into an unambiguous written contract whereby she becomes the owner of personalty, and agrees to pay a stipulated price therefor, she is bound by her obligation as purchaser, if the seller committed no fraud upon her nor knew of any committed by the husband. Gibson v. GMAC, 46 Ga. App. 201, 167 S.E. 203 (1932).

When a married woman was sold an automobile under a written contract of purchase and sale, and there was no evidence whatever of any fraud practiced upon her by the vendor, and no evidence going to show that she was unable to read and comprehend the terms of the written agreement, and although the defendant may have purchased the automobile for the benefit of her husband, and may have immediately turned it over to him, she (the married woman) was bound by the unambiguous written contract, by which she became the purchaser of the property, and by which the consideration for the agreement on her part to pay the purchase price passed legally and morally to her. Gibson v. GMAC, 46 Ga. App. 201, 167 S.E. 203 (1932).

Transactions between husband and wife involving transfer of property are to be scanned closely. Futrelle v. Karsman, 41 Ga. App. 765, 154 S.E. 714 (1930).

Transactions between husband, wife, and near relatives, to the prejudice of creditors, are to be closely scanned and their bona fides clearly established. State Banking Co. v. Miller, 185 Ga. 653, 196 S.E. 47 (1938).

Conveyances may be fraudulent as to subsequent creditors, as well as existing creditors, if made with intent to defraud. Jones v. J.S.H. Co., 199 Ga. 755, 35 S.E.2d 288 (1945).

- When a transaction between husband and wife is attacked for fraud by the creditors of either, the onus is on the husband and wife to show that the transaction was fair. Cotton States Fertilizer Co. v. Childs, 179 Ga. 23, 174 S.E. 708 (1934); Edwards v. United Food Brokers, Inc., 195 Ga. 1, 22 S.E.2d 812 (1942).

In a claim case where the wife sets up title to the property levied upon under a deed from her husband, and his creditor attacks the deed upon the ground that it is a fraudulent conveyance, this puts the burden upon the husband and wife to show that the transaction as a whole is free from fraud. Cotton States Fertilizer Co. v. Childs, 179 Ga. 23, 174 S.E. 708 (1934); Merchants' & Citizens' Bank v. Clark, 180 Ga. 490, 179 S.E. 103 (1935); Hodges v. Tattnall Bank, 185 Ga. 657, 196 S.E. 421 (1938).

When the plaintiff was attacking a conveyance from the husband of claimant to her on the ground that it was voluntarily made to delay or defraud the creditor, since the transaction attacked was one between husband and wife, the onus was on them to show the transaction was fair. Citizens & S. Nat'l Bank v. Kontz, 185 Ga. 131, 194 S.E. 536 (1937).

Whenever a transaction is between husband and wife, and the creditors of the husband attack the transaction for fraud, if the wife claims the property purchased or received from her husband, the onus is on her to make a fair showing about the whole transaction. State Banking Co. v. Miller, 185 Ga. 653, 196 S.E. 47 (1938); Jones v. J.S.H. Co., 199 Ga. 755, 35 S.E.2d 288 (1945).

Although the onus is on the husband and wife making the transaction to show that the transaction was fair, the plaintiff still retains the burden of putting forth evidence of the fraud. Bonner v. Smith, 247 Ga. App. 419, 543 S.E.2d 457 (2000).

Husband and wife must show that transaction as a whole is free from fraud, and the bona fides must be clearly established. Mattox v. West, 194 Ga. 310, 21 S.E.2d 428 (1942); Edwards v. United Food Brokers, Inc., 195 Ga. 1, 22 S.E.2d 812 (1942).

When there was no proof to show any transaction between spouses, onus was upon creditor to show fraud or collusion if any. Rainey v. Eatonton Coop. Creamery, 69 Ga. App. 547, 26 S.E.2d 297 (1943).

- When there exist conveyances in exchange for love and affection or nominal consideration, the law forms a presumption that such transfers between husband and wife were fraudulent as against their creditors, because the burden of proving that a legitimate sale occurred must be shouldered by the debtor and his/her spouse. Loeb v. Dante, 1 Bankr. 547 (Bankr. N.D. Ga. 1979).

Failure to produce testimony is badge of fraud, when the bona fides of the transaction are in issue, and witnesses who ought to be able to explain the transaction are in reach. Cotton States Fertilizer Co. v. Childs, 179 Ga. 23, 174 S.E. 708 (1934).

- Summary judgment was error when an issue of fact remained as to whether an unliquidated wrongful death claim at the time of a killer's property transfer without consideration to the killer's spouse rendered the killer insolvent and material issues remained as to fraud. Bryant v. Browning, 259 Ga. App. 467, 576 S.E.2d 925 (2003).

Mere introduction of conveyance from husband to wife would not shift burden from her to the creditor. State Banking Co. v. Miller, 185 Ga. 653, 196 S.E. 47 (1938); Jones v. J.S.H. Co., 199 Ga. 755, 35 S.E.2d 288 (1945).

Slight circumstances must be considered, and may be sufficient to establish existence of fraud. Arrington v. Awbrey, 190 Ga. 193, 8 S.E.2d 648 (1940).

- Onus being on the claimant wife to show the fairness of the transaction and deed under which she claimed, as the court correctly charged, and she having assumed this burden and accepted the right to open and conclude the argument, it was not error, in the absence of request, for the court to fail to charge the jury further as to such burden, or as to any shift in the burden of introducing evidence. Tucker v. Talmadge, 186 Ga. 798, 198 S.E. 726 (1938).

- It is for jury to say whether wife has made proof of good faith required of her by law by simply denying knowledge of such business affairs of her husband. Mercantile Nat'l Bank v. Aldridge, 233 Ga. 318, 210 S.E.2d 791 (1974).

RESEARCH REFERENCES

Am. Jur. 2d.

- 37 Am. Jur. 2d, Fraudulent Conveyances and Transfers, § 206. 41 Am. Jur. 2d, Husband and Wife, § 52 et seq.

- 37 C.J.S., Fraudulent Conveyances, § 121. 41 C.J.S., Husband and Wife, § 60 et seq.

- Conflict of laws as to capacity of married women to contract, 18 A.L.R. 1516; 71 A.L.R. 744.

Validity of partnership agreement between husband and wife, 20 A.L.R. 1304; 38 A.L.R. 1264; 157 A.L.R. 652.

Conveyance pursuant to antenuptial agreement as fraud on creditors, 41 A.L.R. 1163.

Liability of married woman for articles purchased by her for which husband is not liable, 114 A.L.R. 910.

Liability of married woman or her estate for fees of real estate broker, 117 A.L.R. 752.

Spouse's acceptance or retention of benefits of other spouse's fraudulent act as ratification of transaction, 82 A.L.R.3d 625.

Separation agreements: enforceability of provision affecting property rights upon death of one party prior to final judgment of divorce, 67 A.L.R.4th 237.