Court Opinion

ID: 8184661
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:06:59.578313+00
Date Added: 2024-06-11T16:40:22.310768
License: Public Domain

PiNNev, J.
It appears that the assignor, Barth, in 1874,. was engaged with others in the wholesale liquor business,, and they failed. All the assignor’s property not exempt from, execution was taken on execution and sold. With his exemptions, amounting to $200, he started a saloon, and continued in that business until May, 1881, but without much success, for it is conceded that he was still insolvent and owned no property not exempt. He had a family of eight children, six of whom lived with him. His oldest son, Alois, was, and for some years had been, engaged in carrying on successfully the business of manufacturing and selling cigars upon premises adjoining the building in which the1 assignor, Barth, had his saloon. The appellants claimed that in May, 1881, the assignor, Barth, sold and transferred his saloon business and the exempt property he owned connected therewith to his son Alois, and that thereafter the business was carried on by and in the name of the son, by whom the license fees and special taxes on the business were paid; that the assignor, A. Joseph Barth, was employed as manager of the business, at a salary of $60 a month during the first two years, and thereafter of $70; two other sons were also employed upon various salaries in the said business; that, shortly after purchasing the saloon, Alois borrowed $400, and started in a small way a wholesale liquor business upon the same premises. It ap*557peared that the special taxes to the XJnited States for the liquor business had been charged to Alois, the son, each year from May 7, 1883, to July, 1892, and receipts given therefor were in his name, and that licenses were issued for the same business by the city of Green Bay to him from May, 1887, to May, 1892; that Alois Barth did not actively participate in the management of the saloon or the liquor business, but they were entirely conducted by his father. It seems to be a fair conclusion from the evidence that the proceeds of the cigar business were not used in any way for the saloon or liquor business, but that each business was managed and conducted entirely separate from the other; and the question presented aves whether the title and ownership of the son to the saloon and liquor business and its proceeds were real and tona fide, or whether they were merely simulated, and a sham and cover to protect and keep the property from his father’s creditors, and enable him to enjoy and dispose of it at his pleasure.
There was some evidence tending to show that on a few occasions the father had spoken and acted in reference to the business as his own, but it was all transacted in the name of the son. It was shown beyond dispute that the property in question was purchased and paid for, and some of it considerably improved, from the proceeds of the liquor business. The assignor, Barth, was during ail these years insolvent, and there was a judgment over him, upon which there was due over $10,000, besides interest; and this fact shows a strong motive why a man not more than fifty-four years old consented to become a subordinate and servant where he had hitherto been owner and master. After the lapse of a considerable number of years, he made the assignment, upon the basis of which he now seeks to obtain a discharge from his debts; and this is significant, and shows his anxiety to be again in a position to transact business in his own name; but, if the theory advanced by the *558appellants is true, he has no means whatever with which to engage in any business pursuit. A careful examination of the evidence shows, so far as we can discover, that all that Alois, the son, ever contributed to the business, was the mere use of his name; for it is doubtful if he ever paid his father anything for the exempt property, and the borrowed money raised to extend the business was, no doubt, paid out of' its profits. There is certainly no evidence that Alois paid anything out of the proceeds of his cigar business to or for the benefit of the saloon or liquor business, and there was no substantial or satisfactory change of possession at the time of the alleged transfer. The facts upon which the defendant Anna Barth, founds her title are certainly very equivocal, not to say suspicious. Besides, the relations existing between the parties are such that, while they are not per se a badge of fraud, yet they facilitate and render its perpetration comparatively easy, and are proper matter for consideration in connection with all the facts and circumstances. Hoxie v. Price, 31 Wis. 82, 86; Beard v. Dedolph, 29 Wis. 136. The assignor and his wife, as well as Alois, all testified that the business belonged to and was the business of the latter, and that his father had no interest in it: but their statements to this effect are, to a great extent, matter of opinion and conclusion, and, in view of the circumstances, are not very satisfactory evidence. Neither the books kept in the liquor store or cigar business, nor any documentary evidence whatever, beyond the deeds to the real estate and the licenses and tax receipts, were presented to sustain the title of the defendant Anna Barth as against the claim of her husband’s creditors and the circumstantial and cogent evidence of fraud thus presented.
The issue was a narrow one; namely, whether A. Joseph Barth was merely a bona fide employee, without interest or ownership, or not. There was no evidence to show that Alois ever actually received any of the proceeds of the sa*559loon or liquor business, or that there was ever any accounting between the father and. son, or any balance stated in relation to a business wholly managed by the former and entirely separate and distinct from the cigar business of the son; and, while the liquor business must have been quite a considerable one, the books kept in it were not produced, showing the amount of profits gained, or what disposition or use had been made of them, beyond the purchase of the property in question'. The testimony of Alois Barth in regard to the purchase of the real estate places whatever might otherwise be considered equivocal or ambiguous in a strong and clear light. He said his father managed the purchase of the real estate, and added: “ I could not tell you anything about that. It may íe so. I don’t know. I might have heard my father say something about it, but 1 never paid any attention to it. My mother might have spoken of it, but it has escaped my memory. I have enough to do to mind my own "business.” And yet he claims that he furnished the money to purchase the property, and that it was the proceeds of his liquor business; that he kept an account of the money in his mind, but in no other way. He says he was not present when the bargains were made for the property; that he did not attend to the buying of it, but his father might; that it might have been by some other person. “I don’t know- anything about it. Q. You didn’t have any interest in that ? A. No.” Although he subsequently said he had “ something to say about the payment, and the manner in which it was to be made,” but what he does not state, and that the deed was to be made in the name of his mother, but this may have been merely advisory.
The theory of the defense is that Alois gave his mother this money, part of the proceeds of the liquor business!, with which the property in question was purchased; and it is claimed that the assignor, the husband, as against his *560creditors, bad a right to give Alois his exempt property, and his time as well in managing the business. As matter of law, this is correct and must be conceded. Carhart v. Harshaw, 45 Wis. 340; Allen v. Perry, 56 Wis. 185; Dayton v. Walsh, 47 Wis. 113; Mayers v. Kaiser, 85 Wis. 382. Put an insolvent debtor cannot accumulate property under the cover of another’s name, acting ostensibly as the agent of such other, and hold it as against his creditors; and where such a claim is made, it is always a question of fact whether the business actually belongs to such other person, or to the ostensible agent and debtor, and whether the alleged agency was a mere scheme and device to conceal and keep the property used in or gained by it from his creditors. Feller v. Alden, 23 Wis. 301; Hoxie v. Price, 31 Wis. 82; Dayton v. Walsh, 47 Wis. 113; Mayers v. Kaiser, 85 Wis. 394; Knapp v. Smith, 27 N. Y. 280; Abbey v. Deyo, 44 N. Y. 347, 348.
Appellants’ counsel relied on the case of Mayers v. Kaiser, 85 Wis. 382, as controlling the present case, but that case is clearly distinguishable from this one. In that case it was clearly shown that the wife had a separate estate, in the use of which in business she acquired the means with which she purchased the real estate in dispute; and the fact that she employed her husband as her agent on a salary, though an inadequate one, or he even gave her his services in managing the business, it was held, would not render the property liable to the claims of his creditors. Here the wife had no separate estate, and paid nothing for the property. The money with which it was purchased was given to her by her son, it is said; but we think the evidence satisfactorily shows that the title of the son to the liquor business and the money realized in it was simulated, and was fraudulent as against her husband’s creditors, and that it was in fact her husband’s money. It will not be contended that an insolvent husband might give his *561wife money with which to buy property, and that she could hold it as against his creditors; and yet the present case is not materially different. The trial judge heard the evidence of the witnesses, and found the claim of title of the defendant Anna Barth to the property in question fraudulent as against her husband’s creditors, and that the money with which it was purchased was gained in a business conducted by him under the cover of the name of his son and in order to fraudulently conceal and keep the same and its profits from his creditors. We concur in this conclusion, and hold that the judgment of the circuit court is correct.
By the Court.— The judgment of the circuit court is affirmed.