Court Opinion

ID: 8192501
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:36.673274+00
Date Added: 2024-06-11T16:40:39.313639
License: Public Domain

*425The following opinion was filed January 22, 1918:
WiNsnow, O. J.
(concurring in the result'). With considerable doubt I have concurred in the conclusion that the complaint states a good cause of action, but I wish to make it plain that my concurrence goes no further than the facts of the present case require, and I also wish to briefly state why this is so.
The present case, as set forth in the complaint, is a case where a husband (now deceased) entered into a conspiracy with his children and heirs at law to prevent the payment to his divorced wife of the sum secured to be paid to her after his death by antenuptial contract with her; and carried out the conspiracy by transferring to them before his death all of his property, amounting to $10,000, leaving no estate out of which the money agreed to be paid by the antenuptial contract (viz. the sum of $500) could be collected.
■ The antenuptial contract contained a number of other provisions with regard to the residence of the parties upon the wife’s farm, the disposal of the income of the farm, the duties of each in case of sickness of the other, the duty of the husband as to repairs, insurance, and payment of taxes on the farm, etc., which will be found more fully stated in tho statement of facts in the divorce action (Schwenn v. Schwenn, 143 Wis. 399, 127 N. W. 948).
Here wras, not a mere money obligation, but a contract providing for the doing of numerous things by each party, all arising out of, or closely connected with, the marital relation. The existence and validity of this contract had been admitted and practically adjudicated in a previous action between the parties (Schwenn v. Schwenn, supra). The defendants are alleged to have successfully conspired with the divorced husband to put all of his property out of his hands so that there was no estate at his death, for the very purpose of defeating the fundamental agreement on the part of the husband on which the whole fabric of the antenuptial agree*426ment rested, namely, the agreement that the wife should be paid a definite sum from the husband’s estate in case she survived him.
The cases in this court upon which the argument in support of the complaint really rests are the cases of Marlens v. Reilly, 109 Wis. 464, 84 N. W. 840; Randall v. Lonstorf, 126 Wis. 147, 105 N. W. 663; White v. White, 132 Wis. 121, 111 N. W. 1116; and McLennan v. Church, 163 Wis. 411, 158 N. W. 73.
There is no question but that this court distinctly held in the Martens Case that if two or more persons successfully conspire to produce the breaking of-a contract the injured party may recover his damages in an action at law against the conspirators. The contract breached in that case was a contract for the leasing of lands for a term of years, with a privilege of purchase and a number of other provisions as to the use of the premises, etc. In the Lonstorf Case the object of the conspiracy was “the breaching of the marriage contract and the desertion of the wife by the husband, leaving her in destitution.” In the White Case also it was a marriage contract which was breached as the result of a successful conspiracy, and in the McLennan Case it was a contract for the conveyance of land. The contract breached in the case of Angle v. C., St. P., M. & O. R. Co. 151 U. S. 1, 14 Supt. Ct. 240, where a similar ruling was made, was a contract for the construction of sixty-five miles of railroad which had been partially performed. So it appears that all of the cases Avhich seem to be relied upon to sustain the reasoning of the court in the present case were cases where the contracts breached were contracts of a continuing nature, or contracts only partially carried out, covering numerous transactions, with duties and obligations on both sides.
On the ground that the contract in the present case was of this nature and not a mere debt, I have, with some doubt, concurred in the result. I go no further, however. When *427the abstract question is squarely presented whether a transfer of a debtor’s property to third persons with intent to simply avoid payment of one debt or a number of debts (the transferees participating in the intent) is an actionable conspiracy within the rule of the Martens Case, I shall feel entitled to examine it unembarrassed by anything decided in the present case, In my judgment that question is not here presented.
There are, as it seems to me, a number of important considerations which will then demand careful attention which have not been presented or even suggested in the present case. I desire to mention briefly and without argument some of the considerations which I have in mind.
In the first place a transfer of property by a debtor does not necessarily cause a breach of the debtor’s contract with a creditor. It may or it may not. The debtor may acquire other property, in fact frequently does, and be entirely able to pay his debt within a short time, and-hence it could never be certainly established that damage had resulted from the conspiracy until the statute of limitations had run or until the debtor had been discharged from the debt by death or the bankrupt court. But there is another consideration which seems of greater weight. Such a transfer is absolutely void so far as the creditor is concerned. As to him the property remains the property of his debtor. If it be in existence and be leviable, it may be levied on by attachment or execution, or if nonleviable it may be reached by garnishment and subjected to the creditor’s claim.
Even though the property be concealed or disposed of by transferees a court of equity will, after it appears that an execution will not bring the money, compel the application of the value or proceeds of the property to the payment of the debt by the use of those equitable remedies which are well understood and need not be enumerated here.
These considerations make it clear that, when the con*428spirators (i. e. the transferees) are known, the fact of the fraudulent transfer has not breached the contract or made a future breach certain in any legal sense. The debt may yet be satisfied out of the transferred property itself if to be found, and if not, by equitable remedy against the transferee personally. The result of the conspiracy is not to prevent the creditor from getting his money, but is simply to reduce somewhat his chance of so doing, and perhaps to make the process longer.
This reduction of the chances of ultimate recovery is manifestly too speculative a thing to be measured in damages, but there must be actual legal damage shown to support an action for conspiracy, hence the difficulty of supporting such an action founded simply on a fraudulent transfer of property to defeat creditors, before any attempt to collect the debt by pursuing the property itself has been made.
This is in accordance with the weight of authority everywhere except in the state of Pennsylvania. Field v. Siegel, 99 Wis. 605, 75 N. W. 397, 47 L. R. A. 433 and note; 12 Ruling Case Law, p. 645, § 152, and notes 11 and 14.
The court’s opinion draws a distinction between a conspiracy to defeat one specific contract or certain specific contracts and a conspiracy to defeat creditors generally, holding that in the first-named case the action for conspiracy may be maintained, but leaving the question open as to the last-named case.
There is, of course, no difference in the quality of the act whether the fraudulent transfer of property be made with intent to defeat one or ten or a hundred creditors. Nor is there any logical ground for holding that the one creditor has any special remedy which the ten or the hundred have not. If this were the law, then it would follow that in an action brought by one creditor claiming a conspiracy to defeat his claim alone, the conspirators could come in and prove that their intent was, not to defeat the plaintiff’s claim alone, but *429tbe claims of ninety-nine other honest men as well, and walk out of court with a clean bill of health. This would be absurd.
Now, if an action for damages for conspiracy lies whenever a transfer of this kind is made, it must lie in favor of each separate creditor, because each suffers a separate injury. Every such action is an action at law in which the defendants are entitled under the constitution to a jury trial. Const, art. I, sec. 5. Suppose there are fifty creditors with claims aggregating $25,000 and the property fraudulently conveyed aggregates $5,000. Of course the total damages recovered cannot exceed the value of the property transferred. If all the creditors commenced their actions at once and pressed them to trial and judgment so that the amount of debts became fixed and certain, a pro rata division might be made, perhaps, of the damages; but can any one acquainted with legal proceedings regard such a thing as possible or probable? A court of law has no machinery to handle such matters. This is not on account of any mere artificial rules of procedure or of the magical effect of the words Law or Equity, but on account of the practical impossibility of doing jury business as business without a jury can be done. As before said, each creditor will have his own separate cause of action; the alleged conspirators will be entitled to demand a jury trial in every such action; they will be entitled also to contest separately the validity of every claim; indeed they may be obliged to do so. Can any one imagine any more involved mass of litigation than such a situation would produce, and can any one imagine a satisfactory result coming therefrom? And how many years would it take to work out such result ? The situation would be practically impossible in every case where there are many creditors and a small amount of property transferred. These considerations, among others, doubtless induced the courts to hold with practical unanimity (as held by this court in *430the Field Case, supra) that a general creditor has no canse of action for conspiracy resulting from a fraudulent transfer of his debtor’s property, hut that his remedy is to reach after the property itself by attachment, garnishment, supplementary proceedings, or by appeal to equity after having exhausted his legal remedies against his debtor without success. To my mind this doctrine seems to he good law, good sense, and good administration, and when the question is necessary to be decided I shall want some better reasons for abandoning it than have been given in the present case.
Vinje, J. I concur in the foregoing opinion of Mr. Chief Justice Winslow.
Esci-iweilee, J. I also.