Sutton v. Hasey , 58 Wis. 556 ( 1883 )

Taylor, J.

The learned counsel assigns as errors on this appeal that the circuit judge erroneously found the following as facts in the case: (1) That the value of the real estate conveyed by Chapman to Hasey was $6,630, and the personal property was of the value of $1,156.40; (2) that the total indebtedness and liability of Chapman to Hasey, including the $4,000 mortgage on the farm, was no more than $6,535.12, and that the value of the property, over and above such indebtedness, was the sum of $1,251.22; (3) that Chapman, on the day he made the deed and chattel mortgage, was otherwise largely indebted to other persons and threatened with suit, and that Hasey knew he was largely indebted and threatened with suits; (4) in finding that the three two-year-old steers were intended to be included in the mortgage, or were delivered to or disposed of by Hasey; (5) in -finding that the transfer’s were made with intent on the part of both Ilasey and Chapman to hinder, delay, and defraud Chapman’s creditors; (6) in finding that at the time plaintiff’s notes, upon which he obtained judgment1 against Chapman, were made, Chapman owned the personal prop? erty described in the chattel mortgage. lie also assigns as error that the judge found as a conclusion of law that the transfers were void as to the-plaintiff and his judgment.

After a careful reading of the evidence contained in the .record, we are unable to say. that these findings of fact are not fully sustained by the evidence. There is certainly no such preponderance o.f, the evidence against the findings as would justify the court in setting the same aside. As to the value of the real and' personal estate -conveyed by Chapman to Hasey, the preponderance of the .evidence would seem to be in favor of the finding rather than otherwise. If there is any mistake in the finding as to the amount of the total indebtedness, and liability of Chapman to Hasey at the time of the transfer, it is, according to Hasey's own showing, less than such actual indebtedness only by the sum of about $'45; and Such mistake, -if it be-one in the finding upon this point, could not prejudice the appellant in the case. The evidence shows very conclusively ■ that at the time of the transfer Chapman was largely indebted to other persons than Hasey, or those holding claim? against Chapman which he (Hasey) had agreed to pay, and.we think the evidence raises a fair presumption that Hasey was cognizant' of the fact and also that Chapman was threatened with suits by some of those creditors. The finding that, it was the intent of both Hasey and Chapman , that the three two-year-old steers' should be included in the chattel, mortgage, or at -all events be transferred,.is sustained by the testimony of. Chapman that such .was the intention, and by the other fact that they were afterwards sold and Hasey re-' •ceived tfye purchase money for them. This evidence is not -contradicted by Hasey himself, but is rather confirmed by ■his testimony.

The finding that the transfers were made with the intent on the part of both Hasey and Chapman to hinder, delay, •and defraud the creditors of Chapman, is certainly fully sustained by the testimony of the witnesses sworn on the part of the plaintiff, and we would not be justified in setting it aside, except upon the ground that such evidence was not worthy of credit. This we do not think we would be justified in doing. The -learned circuit judge who tried the case was certainly in a much better position to judge of the credibility of that testimony than we possibly can be, and his judgment upon that question ought to stand unless it is overborne by a very decided preponderance of the evidence on the other side. Lookingat the evidence of Chapman and Hasey, and their acts subsequent to the transfer, in regard to the property claimed to have been absolutely purchased by Hasey from Chapman on September 24,1879, and the version given to that transaction by the testimony of the plaintiff’s witnesses is rather confirmed than otherwise. The taking of the chattel mortgage by Hasey on the personal ■property, at the time he claims to have made an absolute purchase thereof, is inconsistent with such purchase; and his ■renewing the mortgage two years afterwards, and his then making affidavit that the whole sum mentioned in said, mortgage was still due to him, is certainly inconsistent with the claim now made, that the debts and claims of Hasey .against Chapman, described in said mortgage, were fully paid and discharged by the sale of the lands and the same personal property described in said mortgage by Chapman ■to Hasey two years previously. We think the explanation given to this transaction of the mortgage by Hasey and -Chapman is quite insufficient to nullify its effect as evidence against them. Hasey's subsequent conduct in buying up the outstanding notes of Chapman at a large discount, and without any apparent consideration for so doing except the transfer of the lands and chattel mortgage, is slight evidence, at least, tending to show that, as between the parties, Chapman and Hasey, there was a secret trust in favor of' Chapman inconsistent with the claim now made that the sale was absolute. Upon reading the whole evidence in the case the mind is impressed, as the mind of the circuit judge was, that the intention of the parties was to hinder, delay, and in law defraud the creditors of Chapman. .

The learned counsel further alleges as error that the court improperly admitted in evidence the declarations of Chapman, made after the execution of the deed and chattel mortgage, for the purpose of impeaching the good faith of the transaction. It may be that some of these declarations of Chapman were not proper evidence against Hasey, but as this case was tried by the court without a jury, the admission of such improper evidence should not work a reversal of the judgment when it appears that the evidence which is properly in the case is sufficient to sustain the findings of the court. See Cairns v. O' Bleness, 40 Wis., 469-477; Norris v. Persons, 49 Wis., 101-103. We are of the opinion that the evidence, without the declarations of Chapman which were objected to by the appellant, sustains the findings of the court. These admissions were undoubtedly admissible for the purpose of showing,the intent of Chapman in making the transfer, and if not admissible for the purpose of showing the intent of Hasey, we must presume that the learned circuit judge only considered them for the purpose of finding the intent of Chapman, and that he did not consider them in finding the intent of Hasey. The transaction with Polley, several months after the transfer to Hasey, was competent evidence tending to prove the purpose for which Hasey held the property of Chapman.

The learned counsel for the appellant claims that the plaintiff, Sutton, was a creditor of Chapman subsequent to the transfer of the land and personal property to Hasey, and that he is in no position to question the good faith, of that sale. There would be great force in this argument if it were a fact that Sutton was a subsequent creditor of Chapman within the meaning of the law. The fact is that the notes upon which Sutton obtained his judgment were given by Chapman before the pretended sale to Hasey. The only question in the case is whether Sutton, having purchased the notes after the sale to Hasey, must be treated as a subsequent creditor of Chapman, or whether he stands in the same relation to the transfer as the parties stood of whom he purchased the notes.

The statute, we think,'settles the question in favor of the proposition that Sutton, as purchaser of the claims against Chapman, has the same right to question the good faith of the sale to Hasey that the original creditors would have, had they brought the action, and that it is wholly immaterial that Sutton purchased after the sale to Hasey. Sec. 2322, R. S. lS'TS, provides “ that every conveyance, charge, instrument, or proceeding declared void by the provisions of this title as against creditors or purchasers, shall be equally void against the heirs, successors, personal representatives, or assignees of such creditors or purchasers.” The plaintiff in this action is clearly an assignee of the original creditors of Chapman, within the meaning of this section of the statute, and if the conveyance to Hasey was void as to such original creditors, it is equally void as to Sutton, their as-signee. The language of the statute is very general, and we cannot construe it to mean assignees holding the claim at the time the fraudulent conveyance is made. The construction we give to this section is fully supported by the following authorities: Warren v. Williams, 52 Me., 343-349; Bump on Fraud. Conv., 495, and cases there cited.

It was immaterial what Sutton paid for the claims. Chapman could not defend against the claim of Sutton by showing that he paid less than the face of the notes when he purchased them. lie, Chapman, owed the full amount of the notes to the assignors of Sutton, and Sutton, being the lawful owner and holder of the claims, was entitled to recover the amount due thereon, irrespective of their cost to bim. There was no error, therefore, in excluding evidence as to the consideration paid by Sutton for the claims upon which his judgment against Chapman was obtained.

It is objected that the plaintiff should not recover in this proceeding, because, after the same was properly commenced under the provisions of sec. 2753, R. S. 1878, a second execution was issued on the judgment against Chapman, and property levied upon sufficient to satisfy the execution. We do not think this objection is well taken. The judgment against Chapman had not been paid, and the property levied upon had been replevied by the appellant. It is true, appellant had given a bond to answer for the value of the property in case it should be determined that the sheriff was entitled to hold the property seized on his execution to satisfy Chapman’s debt. If, however, Hasey should be compelled to pay the amount of the Chapman judgment in this proceeding, and on the trial of the replevin action the sheriff should succeed, he could only recover damages against Hasey for the amount unpaid on the judgment, and if it were all paid, he would either be defeated in that action or recover only nominal' damages.

There does not seem to be any objection to the plaintiff’s pursuing both these remedies at the same time. If the proof showed a seizure of sufficient property upon the execution to satisfy the judgment against Chapman,— and there was no dispute as to the ownership of the property so seized, or its liability to be applied in payment of the judgment,— there would be reason for holding that no judgment should be rendered against the defendant in the garnishee proceedings until it was ascertained whether such levy would discharge the judgment. In such case the proper course would be to get a stay of proceedings in the garnishee action until the result of the proceedings upon the execution was ascertained.

The learned counsel for the appellant takes exceptions to a personal judgment against his client for the amount of the plaintiff’s claim, but in his brief he does not argue the point. The objection was, we think, sufficiently answered in the case of Ferguson v. Hillman, 55 Wis., 181.

By the Court.— The judgment of the circuit court is affirmed.