Court Opinion

ID: 8188937
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:11:48.764318+00
Date Added: 2024-06-11T16:40:31.991267
License: Public Domain

KeewiN, J.
Tbe main contentions of appellant are (1) that tbe case at bar is not ruled, bj Ecklor v. Wolcott, 115 Wis. 19, 90 N. W. 1081; and (2) that tbe findings and evidence warrant judgment for plaintiff.
1. As we have seen, tbe co-urt below dismissed tbe action and gave judgment for defendant on tbe strength of Ecklor v. Wolcott, 115 Wis. 19, 90 N. W. 1081, because of certain language used to tbe effect that under sec. 3832, Stats. (1898), it must appear, in order to entitle tbe administrator to maintain tbe action, tbat there will be a deficiency of assets to pay creditors existing at tbe time of tbe transfer. This language was obviously inadvertently used by tbe court and was not necessary to the decision of tbe case, since tbe ease turned upon tbe want of any evidence showing “tbat there was or would be any deficiency of assets in the estate to meet all proper claims against it of any nature.” The language in the opinion in the Echlor Gase, to the effect that it must appear tbat tbe suit under this statute can be maintained by tbe administrator only on account of creditors existing at tbe time of tbe transfer, is not a correct statement of tbe law, and, so far as out of harmony with tbe doctrine laid down here, must be regarded as overruled. Borcheri v. Borchert, 132 Wis. 593, 113 N. W. 35. It is established in the case before us that there are claims allowed against the estate of John P. Metters, deceased, which there are no assets to pay, although these claims did not exist at the time of the transfer in question. The vital question, therefore, under this head is whether an action under, this statute by an administrator can be maintained for the purpose of satisfying claims allowed against the estate not in existence at the time the conveyance sought to be set aside was made, but which were in contemplation. There can be no doubt under tbe authorities tbat an action can be maintained by an administrator under sec. 3832, Stats. (1898), to set aside a conveyance fraudulent as to future creditors whose claims *356arose after the conveyance and who were in the contemplation of the grantor at the time of the conveyance and who were intended by the grantor to be defrauded by such conveyance. So we think it clear that an administrator may attack his decedent’s transfer in fraud of a future creditor whose claim has been allowed where there is a deficiency of assets. The statute (sec. 3832) seems clearly to warrant this construction and cover a fraudulent transfer during the lifetime of deceased affecting future creditors as well as creditors existing at the time of the transfer. It provides:
• “When there shall be a deficiency of assets in the hands of an executor or administrator and when the deceased shall in his lifetime have conveyed any real estate or any right or interest therein, with intent to defraud his creditors or to avoid any right, debt or duty, or shall have so conveyed such estate that by law the deeds or conveyances are void as against creditors, the executor or administrator may and it shall be his duty to commence and prosecute to final judgment ajiy proper action for the recovery of the same, and may recover for the benefit of the creditors all such real estate so fraudulently conveyed,” etc.
This language is broad and was manifestly intended by the legislature to cover all conveyances made by decedent in his lifetime and which “by law are void as against creditors.” Now there can be no doubt that a conveyance under some circumstances may be void as to future creditors whose claims were not in existence at the time of such conveyance, and therefore may be set aside by the administrator in suit under sec. 3832, Stats. (1898). Sommermeyer v. Schwartz, 89 Wis. 66, 61 N. W. 311; Zimmerman v. Bannon, 101 Wis. 407, 77 N. W. 735; Hoffman v. Junk, 51 Wis. 613, 8 N. W. 493; Case v. Phelps, 39 N. Y. 164; Smith v. Podges, 92 U. S. 183 ; Fisher v. Lewis, 69 Mo. 629; Black v. Hease, 37 Pa. St. 433.
2. The next and important question presented is whether the deed from John P. Metters to his wife, the defendant, *357made on the 28th day of February, 1903, should be set aside because void as to creditors. It is established by the findings and evidence without substantial dispute that the deed in question was recorded March 2, 1903; that John P. Metters owed nothing at that time, and had other property aside from the real estate conveyed to defendant aggregating in value $1,900; that none of the existing creditors had any claim against Metters for sixteen months after the execution of the deed to defendant; that the conveyance was made to defendant in payment of money advanced to Metters by defendant and which was considered a loan to him; that the consideration named in the deed was about the amount advanced by defendant and which Metters considered due her when he made the conveyance; and that he considered his interest in the land conveyed worth about the amount named in the deed. It also appears that on March 4, 1903, Metters bought a bill of goods amounting to $656.59 for the contemplated business at Bigelow and paid thereon $156.59, and the defendant joined in a note and mortgaged her interest in the land in question to secure the balance due on this bill, namely, $500, and that she afterwards paid this mortgage with $300 thereafter received from her mother’s estate and $200, the proceeds of a note received for money earned by her during her marriage. So it appears from the evidence that the conveyance of the land in question was for a good and substantial consideration and that Metters retained, or intended to retain, no interest in the property conveyed to defendant. We find no evidence in the record tending to ' show any intent on the part of defendant or John P. Metters to defraud creditors. On the contrary, all the evidence seems to show that no such intention existed. True, the court below found that there was no consideration paid by defendant at the time of the execution of the deed, but it also found that it was understood between defendant and her husband, John P. Metters, that the money to* be received from the sale *358of the homestead, amounting to $775, should be taken by Metters to help him start in business at Bigelow, and the proof establishes that the advances heretofore referred to were made by defendant to her husband, and that the conveyance was made in payment of all money received by Met-ters from defendant, amounting in the aggregate, including the proceeds of the homestead and the $500 note and mortgage, to upwards of $2,200. Point is made'by appellant that John P. Metters represented and held out to creditors, fot the purpose of obtaining credit, that he owned the land in question, and so represented to Millard when he entered into partnership with him. There is no evidence that defendant knew of such representations, except the evidence of Millard to the effect that Metters stated in her presence that he owned land in Wisconsin. This statement is denied by defendant and her evidence is corroborated. Millard is not a creditor, and there is no evidence that defendant knew that any representation was ever made by John P. Metters to any creditor that he owned the land after it was conveyed to defendant. The court below found that it was not established that defendant was present at any of' the statements or sanctioned them, except the one in the presence of Millard above referred to. The appellant therefore failed to prove an estoppel against defendant. The burden of proof upon this point was upon the appellant. Wheeler & W. Mfg. Co. v. Monahan, 63 Wis. 198, 23 N. W. 127. We think it clear, also, that the burden was upon the appellant to show that the deed to defendant was fraudulent. The deceased had no debts at the time the deed was executed except the debt to his wife, and the deed was based upon a valuable consideration moving from defendant. Under such circumstances the burden was upon the appellant. Matthai, I. & Co. v. Heather, 57 Md. 483; Stoutz v. Huger, 107 Ala. 248, 18 South. 126; Wynne, L. & Co. v. Mason, 72 Miss. 424, 18 South. 422; Hagerman v. Buchanan, 46 N. J. Eq. *359292, 17 Atl. 946; Greer v. O’Brien, 36 W. Va. 277, 15 S. E. 74; Dygert v. Remershnider, 32 N. Y. 629, 649; W. Crane & Sons v. Barkdoll, 59 Md. 534; Rudershausen v. Atwood, 19 Ill. App. 58; Semmens v. Walters, 55 Wis. 675, 13 N. W. 889.
This court Ras Reid tRat a RusRand may make a valid gift to Ris wife at a time wRen Re is not indekted, wken the transaction is in good faith, and in a: contest with subsequent creditors the wife is not Round to show that ske paid a valuable consideration. Wheeler & W. Mfg. Co. v. Monahan, supra. How muck stronger in favor of the conveyance is the instant case, where the husband was not only free from debt, except to Ris wife, at the time the conveyance was made, but it was made in payment of a bona fide debt due from Rim to her in a sum, substantially at least, equal to the value of the property conveyed. Eeither the evidence nor the finding to the effect that the object of the parties in deeding the land was to prevent it from being subject to the debts of Metters, if the Bigelow business should be a failure, shows any fraudulent purpose. At most, all this can be said to mean is that it was intended to pay the defendant’s debt, though such payment might result in preferring it to subsequent debts contracted by Metters. This was what the parties to the deed Rad a lawful right to do, and there is nothing in the evidence or findings tending to show any other intention. Under such circumstances the deed to defendant cannot be questioned in this action. Second Nat. Bank v. Merrill, 81 Wis. 142, 50 N. W. 503; Whiting v. Hoglund, 127 Wis. 135, 106 N. W. 391; Wheeler & W. Mfg. Co. v. Monahan, 63 Wis. 198, 23 N. W. 109; W. Crane & Sons v. Barkdoll, 59 Md. 534; Kane v. Desmond, 63 Cal. 464; Tootle, H. & Co. v. Goldwell, 30 Kan. 125, 1 Pac. 329.
We have carefully examined the brief of counsel for appellant, but shall not attempt to review the cases cited. One of the strongest cases cited in favor of appellant’s main con*360tention is Sommermeyer v. Schwartz, 89 Wis. 66, 61 N. W. 311. But it will be seen that in this case the property conveyed to the wife was largely in excess of the indebtedness to her. As said by the court, the conveyance was intended to be “in large part a settlement upon the wife.” Besides, there are features of the case strongly tending to show that the transaction was fraudulent. But even in this case the court recognizes the right of the husband to make a voluntary settlement upon his wife not unreasonable in amount, where there is no fraudulent intent, which cannot be impeached by subsequent creditors. In the case before us the conveyance was in payment of a bona fide debt, meritorious in character, and quite adequate to the value of the property conveyed in payment of it. Moreover, the evidence shows that the business at Bigelow was carried on in good faith and with intent to pay all creditors. None of Metiera’ present creditors had any claim against him for about sixteen months after the conveyance. The $656.59 purchase made at about the time of the conveyance, and for which defendant mortgaged the real estate in question to secure the unpaid portion of the bill, went into the Bigelow business, together with $775, proceeds of the homestead, and all the facts and circumstances surrounding the transaction not only show that the deed to defendant was upon a good consideration, but that there was no intention in the execution of it to defraud future creditors. It is urged by counsel for appellant that $200 of the $500 paid by defendant on the mortgage belonged to her husband. But the evidence does not support this' contention. True, it appears she earned this money during marriage, and long before the conveyance loaned it and took notes in her own name, which notes were afterwards paid and the proceeds thereof applied on the $500 mortgage. Now, even if this $200 earned by defendant in law belonged to Metters, he had a right, when free from debt, to give it to defendant, and it then became her money to all intents and purposes. So, *361when she paid it on tbo1 $500 mortgage it was her money and not ber husband’s.
We are convinced that upon the findings and the established facts the conveyance in question was not -fraudulent, and therefore the judgment below is right and should be affirmed.
By the Court. — The judgment of the court below is affirmed.