Collins v. Corwith , 94 Wis. 514 ( 1896 )

Cassoday, C. J.

The case turns wholly upon the evidence and well-established principles of law. Both parties claim under J. E. Leahy. It is true, as contended by the appellants’ counsel, that the testimony of Leahy was incompetent “in respect to any transaction or communication by him personally with ” Henry Corwith, deceased. Sec. 4069, S. & B. Ann. Stats., and cases cited in the notes. The trial court, however, in this equity case, very properly received such testimony under objection, as it was necessarily more or less mixed up with competent evidence. But when the court decided the case, he said in his written opinion that “ Even if we exclude from our consideration the testimony of Leahy as to the agreement not to record, and admit that neither of the parties had any actual intention to defraud when the mortgage was given, yet I think, under all the circumstances in proof, the mortgage became and is fraudulent and void as to the plaintiff. We have, then, this state of facts: An agreement by Corwith, deceased, to advance money to Leahy and Beebe; the taking of personal security for the advances to be made, on its face ample and sufficient to pay the debt; the taking of a mortgage from one of the parties as additional security; the concealment from record of this mortgage for four years and ten months; Leahy continuing business and trading as though his property was dear; the record of the mortgage after Leahy became involved ; no explanation of the failure to record the mortgage ; the transfer of the mortgaged property by deed after Leahy became insolvent; the mortgaging and transfer of all of Leahy’s property not subject to exemption, with other •circumstances mentioned in the proof. What conclusion must every reasonable person arrive at after considering these facts? Simply that the mortgage was not recorded because it was believed that to do so would injure Leahy’s business, and that it was so withheld pursuant to some agreement of the parties. Looking at the business conducted by Leahy, and Corwith’s knowledge of it, the necessary and in•evitable result of withholding this mortgage from record was to give Leahy a false financial standing, and to deceive people trading with him. In law, Corwith must have intended that result, even though actuated by-no evil or fraudulent motive. And Charles B. Corwith cannot relieve himself from the same imputation, because he held the mortgage ■over two years as executor and only recorded it when Leahy became insolvent.”

A careful examination of the record convinces us that .such conclusions of the trial court are amply supported by the evidence, without giving any weight to such incompetent testimony. The trial court was further of the opinion, in effect, that the several instruments and transactions which were made and took place between November 20,1890, and December 3, 1890, inclusive, as mentioned in the foregoing statement, should be regarded “as parts of one continuous transaction; ” that, taking all those transactions together —■ the gathering up of all of Leahy’s property by McCrossen -and Corwith to pay themselves, with a reversion to Leahy if any property was left, they came very near the border line of the law, if not over it,” of making a voluntary assignment for the benefit of preferred creditors, within the repeated rulings of this court. Winner v. Hoyt, 66 Wis. 227; Maxwell v. Simonton, 81 Wis. 635; Fuller & Fuller Co. v. McHenry, 83 Wis. 573; Northern Nat. Bank v. Weed, 86 Wis. 212; Strong v. Kalk, 91 Wis. 29; Jameson v. Maxcy, 91 Wis. 563. Such, opinion of the trial court is fully justified by the nature of the instruments and transactions and the •evidence. Manifestly, the case comes within the condemnation of these decisions.

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