Case ID: wis_91/html/0107-01.html
Source: Caselaw Access Project
Author: {"author": "Winslow, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sommers, Respondent, vs. Hamburger, Appellant.
    
      September 9
    
    
      October 22, 1895.
    
    
      Debtor and creditor: Joining claims in one note: Perjury: Fraud: Public policy.
    
    1. An affidavit by a creditor that the whole amount of a judgment note was due him was not perjury, although such note was given for the claims of himself and others, where the arrangement was that he should take and enforce it for the benefit of all.
    2. An arrangement by which the claims of several creditors are included in a single judgment note payable to one of them is not fraudulent or against public policy, at least as between the parties themselves.
    3. If an action to set aside a judgment entered on such note is settled by the payee in such way that he realizes a part only of the amount thereof, the other creditors whose claims were included in the note may recover from him at least their proportionate shares of the sum so realized.
    Appeal from a judgment of the circuit court for Waupaca couuty: Chas. M. Webb, Circuit Judge.
    
      Ajjb'med.
    
    Action, for money had and received. The facts are that ■one Wigderson, in June, 1892, was a merchant, in business at Waupaca, having a stock of goods worth at least $7,800, and ivas then insolvent, being indebted to an amount exceeding $13,000, among which debts was a debt to the appellant, Ha/mbwrg&r, of about $2,200, a debt to the plaintiff, Sommers, ■of $300, and a debt .to one Robinson of $250. On the 30th of June, 1892, Wigderson gave several judgment notes in favor of several of his creditors, upon which judgments were immediately entered in the following order of priority: Wau-paca .National Bank, $1,036.20; Landauer & Co., $1,196.16; Israel Hamburger, $2,711.11; L. Geisenfelt, $1,125.35; S. Fein, $590.09; and Mary Wigderson, $1,682. It will be se,en that the judgment note given to Hambm-ger was for more than $2,100, while Hamburger’s claim was for but $2,200. This arose in this way: When Wigderson was about to give Hamburger his note, Robinson was present, representing his own ‘claim and that of Sommers, and desired payment or security for both claims. It was suggested that all three claims be combined in one note, to be given to Hamburger, to save the expense of three judgments, and that when Hamburger collected his judgment he should pay Robinson and Sommers their claims. To this Wigderson and Hamburger agreed, and the note was given for the gross amount of all three claims, and put in judgment in the name of Hamburger alone.
    Executions were at once issued on the judgments, and the entire stock seized by the sheriff and advertised for sale. While the stock was in the hands of the sheriff under the executions,'actions were begun by several unsecured creditors of Wigderson, whose claims aggregated more than $4,000, and the stock of goods attached, and notice given to the sheriff that the attaching creditors claimed that said judgments were fraudulent and void, and that he would be required to pay the money realized from sale of the goods into court. The sheriff sold the goods for $7,800 to the appellant, Hamburger, and paid the money into court, and returned the executions with a statement of the facts. An action in equity was thereafter begun by the attaching creditors as soon as they had obtained judgment on their claims, for the purpose of setting aside the judgments on cognovit as fraudulent and void, and obtaining an order of the court for the payment of the money realized from the stock to them in- the order of their attachments. This action was never brought to trial. Ha/niburger bought up the claims of the attaching creditors at the rate of sixty cents on the dollar, as he testifies, and settled the action. Out of the $7,800 deposited in the hank, the claims of the Waupaca Bank and Landauer & Co. were at once paid in full, and the judgments discharged. Hcmriburger discharged his own judgment, and acknowledged payment of it in full upon the docket, as well as the judgments in favor of Geisenfelt, Eein and Mary Wig-derson, of which he had assignments; but he claims that the amounts actually paid out to these first judgment creditors, together with the amounts paid to the attaching creditors to settle the suit and the necessary expenses of the litigation, aggregate about $6,800, and that he has still $300 to pay to his attorneys, so that he has realized but $700 to apply on the Hamburger judgment, notwithstanding it appears on the record to have been paid in full.
    There was a sharp contest in the evidence as to whether Sommers or Eobinson knew about or authorized the settlement of the equitable action to set aside the judgments, Hamburger claiming that they authorized it, and they denying all knowledge of it.
    A motion to direct a verdict for the defendant was overruled, and exception taken; and the cause was submitted to the jury upon a charge to which there is no exception. A verdict for the plaintiff for the full amount of his claim, with interest, was rendered, and from judgment thereon the defendant appealed.
    
      John II. Brennan, for the appellant.
    
      Edwct/rd H. Browne, for the respondent.
   Winslow, J.

Two principal contentions are made by the defendant: Eirst, that the plaintiff cannot recover, because he must trace his right to a remedy through a contract void as against public policy; second, that Hamburger had a right to settle the entire claim in good faith, and to accept a smaller sum than the face of the claim, and that in the absence of malfeasance or neglect such, settlement would be binding on the plaintiff.

In support of the first contention it is said that the arrangement between "Wigderson, Hambwrger, and Robinson, by which the three claims were consolidated and put into one judgment note to Hamburger, contemplated both the commission of a crime and the perpetration of a fraud on Wigderson’s creditors. The crime referred to is the crime of perjury, in the making of a false affidavit by Hamburger to the effect that the whole amount of the note was due him before the rendition of judgment on the note. Is such an affidavit, under such circumstances, perjury? If not,, then the argument on this branch falls. We do not think it can be considered perjury. The arrangement between the debtor and his creditors, by which one creditor was to take and enforce a judgment note for the claims of both, involves nothing against good morals or good faith, at least so far as the parties themselves are concerned. It would seem to create a trust relation, making the holder of the note a trustee for his fellow creditor in that part of the securitj'' which was given for the benefit of the other, and not only a trustee to hold the note, but to enforce it. If such was the relation of the parties, and we think it was, then, clearly, it was not perjury for Hamburger to swear that the note was due to him, for a part was due to him personally and a part to him in his trust capacity. Whether this trust arrangement was one which bound the parties in its inception so that they could not rescind it, or whether it could have been disaffirmed by either party before it was acted upon, it is unnecessary to decide. It was not disaffirmed or rescinded, but carried out, and it involved no moral wrong in any view which we can take of'it. It is said, however, that it 'was a fraud upon creditors. This question is not really involved in the case. There are no creditors here to raise it. There are many transactions which will be held fraudulent at the suit of a creditor, hut which will he held good as between the parties. The debts for which the note was given all appear to be honest debts, and there was no-fraud or moral turpitude in joining three honest debts in one note, nor are there any considerations of public policy which forbid it, at least when the question arises between the parties themselves.

As to the second contention made by the defendant,, namely, that he had a right to settle up the litigation, and that in the absence of malfeasance his action is-binding on the plaintiff, it may for the purposes of this case be admitted. Conceding that such is the law, still it appears beyond dispute that Hamburger received and has $700 upon the $2,700 judgment. Certainly the plaintiff has a right, in any view, to recover his proportionate share of the $700. Therefore the motion to direct a verdict for the defendant was properly overruled. There are no exceptions to the charge. Therefore it must be taken to state the law correctly. It is-unnecessary to repeat it here. It is sufficient to say that, under the charge, there was sufficient evidence to justify the verdict rendered.

. There are no other questions in the case which we consider of sufficient importance to state.

By the Oourt.— Judgment affirmed.