9 N.W. 534 (Wis. 1881), First Nat. Bank of Appleton v. Bertschy

Citation:9 N.W. 534, 52 Wis. 438
Opinion Judge:DAVID TAYLOR, J.
Party Name:THE FIRST NATIONAL BANK OF APPLETON v. BERTSCHY and another, imp
Attorney:W. H. Seaman, for the appellants, H. W. Tenney, for the respondent,
Case Date:June 04, 1881
Court:Supreme Court of Wisconsin
 
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Page 534

9 N.W. 534 (Wis. 1881)

52 Wis. 438

THE FIRST NATIONAL BANK OF APPLETON

v.

BERTSCHY and another, imp

Supreme Court of Wisconsin

June 4, 1881

Argued May 10, 1881

APPEAL from the Circuit Court for Outagamie County.

From a judgment in accordance with these conclusions, Leonard and John Bertschy appealed.

Judgment reversed and cause remanded.

W. H. Seaman, for the appellants, to the point that Leonard Bertschy might waive the defense of the statute of frauds, and recognize, without evasion, his liability for the advances made to his sons, and that a transfer of property to satisfy such a claim cannot be impeached by creditors, cited Bump on Fraud. Con. (2d ed.), 220; Livermore v. Northrup, 44 N. Y., 107; Hyde v. Chapman, 33 Wis. 391; Sackett v. Spencer, 65 Pa. St., 89; 108 Mass., 47; 41 Ind., 456; 42 id, 153; 63 Me., 326; 42 Pa. St., 529; 5 Harr. (Del.), 206; Wilson v. Russell, 13 Md., 494; Trueman v. Fenton, Cowp., 544; Clark's Adm'r v. Rucker, 7 B. Mon., 583; Baldwin v. Ryan, 3 N. Y. Sup., 251; Gallman v. Perrie, 47 Miss., 131.

H. W. Tenney, for the respondent, argued, inter alia, that there was no consideration for the conveyances to John Bertschy. Leonard Bertschy never became liable to pay the debts of his sons, because he never in fact promised to pay them, because there was no consideration to uphold such a promise, and because the statute of frauds made it impossible to incur such liability without writing. Throop on Verbal Agreements, 79 et seq.; Lampleigh v. Braithwaite, 1 Smith's L. C., 222; Mills v. Wyman, 3 Pick., 207; Frey v. Fond du Lac, 24 Wis. 204; Kaye v. Crawford, 22 id., 320; 1 Parsons on Con., 469. There was not even a moral consideration, such as the law recognizes and gives effect to. A moral consideration is only recognized when it is founded on an anterior legal right which has become devoid of legal remedy. Here there was no antecedent legal liability to be revived. 1 Parsons on Con., 431 et seq.; Lampleigh v. Braithwaite, supra; Throop on Verbal Agreements, 490, 505; Kaehler v. Dibblee, 32 Wis. 19. A voluntary conveyance, that is, a conveyance without valuable consideration, is void as against creditors who are prejudiced thereby. May on Fraud. Con., 31-48; 1 Am. L. C., 35-43; Hamlin v. Wright, 26 Wis. 50; Pike v. Miles, 23 id., 164; Avery v. Johann, 27 id., 246; Kaehler v. Dibblee, 32 id., 19; Manseau v. Mueller, 45 id., 430; Carhart v. Harshaw, id., 340. And deeds founded on any moral, but not legal, consideration, are looked upon as merely voluntary. Even if, therefore, there had been a moral consideration in this case, it could not avail to defeat existing creditors. It takes money to defeat money. Twyne's Case, 3 Coke, 80; May on Fraud. Con., 49, 233, 235; 1 Parsons on Con., 431 et seq.

OPINION

DAVID TAYLOR, J.

[52 Wis. 442] The case is thus stated by Mr. Justice TAYLOR:

"This is an action in the nature of a creditor's bill, to set aside a conveyance from Leonard Bertschy to John Bertschy, of certain real estate formerly owned by said Leonard Bertschy, and to subject the property so conveyed to the payment of a judgment against him. The complaint alleges that the conveyance was without consideration, and made for the purpose of hindering, delaying and defrauding the creditors of Leonard Bertschy, and upon a secret trust known to John Bertschy.

"The answer of John Bertschy denies all intent to defraud on his part; denies that the conveyance to him was made without consideration; and alleges that the consideration paid by him therefor was $ 13,000, which was all the property was worth. Leonard Bertschy also answers, denying all intent to defraud his creditors by the conveyance of said property, and alleging that the conveyance was for a full consideration. The action was tried by the court; and, after hearing the evidence, the judge made and filed his findings of fact and conclusions of law.

"The first, second, third and fourth findings of fact relate to the judgment of the plaintiffs against the defendant Leonard Bertschy. The other findings of fact are as follows:

"'(5) When the

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indebtedness was contracted, the defendant Leonard Bertschy was the owner in fee of the premises described in the complaint, which were of considerably more than the value of $ 13,000, and he continued to own the same up to the 7th of September, 1878. (6) After contracting such debt, said Leonard Bertschy made the note to John Bertschy, and with his wife executed the mortgage for $ 6,000, dated May 16, 1878, recorded May 24, 1878, as in the complaint described. (7) On September 7, 1878, Leonard Bertschy and wife executed and delivered to John Bertschy a warranty deed of conveyance, conveying the real estate above described to John Bertschy for the pretended consideration therein expressed of $ 13,000, which deed was acknowledged and recorded, as alleged. The property thereby conveyed was all which Leonard Bertschy then owned, and he was then largely indebted to many persons. The mortgages and notes remain unassigned, and the land has not been since conveyed. (8) Said mortgage and notes and said deed to John Bertschy were without any valuable or other consideration, and with the intent on the part of Leonard Bertschy, and for the purpose, of hindering and delaying and defrauding his creditors of their lawful actions, debts and demands, and particularly this plaintiff, and upon a secret trust for his own benefit, all which facts above alleged John Bertschy well knew at the time he accepted said mortgage and conveyance respectively.'

"The conclusions of law were: '(1) That said mortgage and said conveyance so made to John Bertschy are each of them fraudulent and void, and of no effect as against the plaintiff herein. (2) That plaintiff's said judgment is and was a valid lien upon said real estate, as the property of Leonard Bertschy, to the same extent and with the same effect as if no conveyance of any interest therein had been made. (3) That plaintiff is entitled to judgment vacating and annulling said mortgage and deed of conveyance to John Bertschy, and authorizing the sale of said real estate upon execution upon the judgment above mentioned, free and clear of all right or claim on account of said mortgage and deed, and for the costs of this action against said defendants Leonard Bertschy and John Bertschy.'" Upon the findings of fact, to which the respondent took no exceptions, we think it must be held that the court based its judgment against the appellants solely upon the ground that both the mortgage and conveyance from Leonard to John Bertschy were without consideration, and for that reason fraudulent and void as to the creditors of the said Leonard.

[52 Wis. 443] There is certainly nothing in the findings of fact which charges John Bertschy with any intent to defraud the creditors of Leonard, except such intent as may be deduced as a conclusion of law from the fact that he took a conveyance of a valuable estate from Leonard without giving any consideration therefor, knowing that such estate was all the estate the said Leonard owned, and knowing that he was indebted to a considerable amount at the time the conveyance was made and accepted by him. We think it must be admitted that the evidence clearly establishes the following facts: That at the time Leonard Bertschy gave the mortgage for $ 6,000, and afterwards the deed, to John Bertschy, John knew that Leonard was indebted, or had contracted liabilities, for a considerable sum of money, which he might ultimately be compelled to pay; that the estate...

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