Opinion ID: 1228498
Heading Depth: 1
Heading Rank: 2

Heading: Transfer of W. J. Markham Company as fraud.

Text: The trial court found that only one half of the W. J. Markham Company, or $6,216.44, was currently owned by respondent. Appellant contends that the respondent transferred a one-half interest in the company to Nordin  without consideration, or for an inadequate consideration, in contemplation of the divorce and inferentially with the intent to keep assets from the appellant. See, e.g., Waukesha County Dept. of Social Services v. Loper (1972), 53 Wis. 2d 713, 193 N. W. 2d 679. While appellant does not ask that the transaction be found void, she does ask that the full value of the company be listed as an asset and treated as fully distributed to the respondent. In Caldwell v. Caldwell (1958), 5 Wis. 2d 146, 92 N. W. 2d 356, this court determined that where a husband has made a gift or transfer, without consideration, of a substantial portion of his property to a third person in order to avoid payment of alimony or support money or to escape or minimize the division of property which might be ordered against him, that the court has the power to make the transferee a party to the divorce and cancel the transaction to the extent necessary to protect the rights of the wife and minor children. Caldwell v. Caldwell, supra, page 158. Thus this court held that a wife was a creditor within the protection of sec. 242.07, Stats., which provides: 242.07 Fraud in fact. Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay or defraud either present or future creditors, is fraudulent as to both present and future creditors. Appellant contends that the intent required under the statute can be inferred from the following facts: (1) In March, 1968, the parties permanently separated; (2) in December, 1969, the respondent decided to cut Nordin into the partnership on the basis that Nordin would work for two years without being able to draw any money, but that at the end of the two years Nordin would own half the business and have the right to half the profits from the beginning of the agreement; (3) there was no  written agreement evidencing this arrangement; (4) in October, 1970, appellant filed for a divorce which was dismissed early in 1971, for failure of appellant to sign a complaint; (5) that shortly thereafter, in April, 1971, the respondent filed this action for divorce; (6) that Nordin did the same or less work for the company than the respondent, but that Nordin received an equity interest for his efforts in addition to half of the profits while the respondent only received half of the profits; and (7) that Nordin would end up with half of a company worth $12,000 for two-year's labor at two to three hours per week. On the other hand, the following facts support a finding of the lack of any intent to defraud the wife: (1) Although there was no written agreement, Nordin's income tax returns for 1970 and 1971 and the partnership returns for the same period indicate that Nordin reported as income half the profits from the company plus a contribution of services in lieu of money to the equity of the partnership; (2) the value of the company at the time the agreement was reached, while not definitely established in the record, was less than $12,000, and the respondent's equity contribution to the business at the time of the agreement was only $2,169.91 and it was this figure that Nordin was to match by the work he was to perform over two years; (3) the idea of making Nordin a partner had been considered for three or four years prior to the agreement; (4) Nordin was made a partner because the respondent felt it was unfair for him to spend Carver time on the partnership when he should have been devoting as much time to running Carver as Nordin; and (5) the divorce filed by the appellant in October, 1970, post-dated the agreement and was the second divorce for which appellant had filed, both of which were dismissed or withdrawn. This court has held that services performed can serve as consideration for a transfer of property even though  the value of the services are slightly less than the value of the property transferred. Byrnes v. Clark (1883), 57 Wis. 13, 14 N. W. 815. (Services performed for father by son amounting to $1,000 is adequate consideration for the transfer of land worth $1,500 and intent otherwise not established, the transfer is not void as fraud on creditor.) Further, this court has held that the burden of establishing the fraudulent intent on the part of the transferor by clear, satisfactory and convincing evidence is on the creditor. Kerbet v. Behling (1953), 265 Wis. 288, 61 N. W. 2d 205; Zimdars v. Zimdars (1941), 236 Wis. 484, 295, N. W. 675. Unlike Caldwell v. Caldwell, supra , the present case does not involve a transfer for no consideration, nor does the transfer involve a substantial portion of the respondent's assets. Further, in this case there was a valid business purpose behind the transfer, and no actual intent to deprive the appellant of property has been shown. The finding of the trial court is not against the great weight and clear preponderance of the evidence.