Collins v. Corwith

• Decision Date: 15 December 1896
• Citation: 69 N.W. 349,94 Wis. 514
• Parties: COLLINS v. CORWITH ET AL.
• Court: Wisconsin Supreme Court

94 Wis. 514

69 N.W. 349

COLLINS

v.CORWITH ET AL.

Supreme Court of Wisconsin.

Dec. 15, 1896.

Appeal from circuit court, Marathon county; Charles V. Bardeen, Judge.

Creditors' bill by W. F. Collins against Charles R. Corwith and another, as executors, impleaded, etc. From a judgment for plaintiff, defendants appeal. Affirmed.

This is a creditors' bill to enforce collection of a judgment against J. E. Leahy upon the undivided one-half of a mill plant described, and to set aside a mortgage and a deed by him given thereon, the one dated January 21, 1886, and the other December 3, 1890. The issues being joined, and the trial had, the court found, in effect, the following facts: That from April 17, 1886, to December, 1890, the defendant Leahy was a logger and lumberman, doing a large business in logging and lumbering, with his headquarters and sawmill plant and equipment at Wausau. That one Beebe owned a one-half interest in the sawmill, and Leahy the other undivided half interest. That during the same time the plaintiff was a hardware merchant at Wausau, and from time to time until November, 1890, extended credit to Leahy in large amounts. That January 21, 1886, Leahy and wife executed and delivered to one Henry Corwith a mortgage of the undivided one-half interest in the mill property to secure the payment of $20,000, all payable before the end of that year, but which mortgage remained unrecorded for nearly five years. That Leahy was at that time quite heavily in debt, and owed Corwith a large sum of money, and that the money secured by such mortgage was needed by Leahy to carry on his business operations, and was advanced by Henry Corwith to him within a period of about six months after the date of the mortgage. That, at the time of giving the mortgage, Henry Corwith, Leahy, and Beebe entered into a contemporaneous written agreement, by the terms of which Henry Corwith was to have a lien upon certain logs and lumber then owned by Leahy and Beebe as security for the same indebtedness mentioned in the mortgage. That the purchase price of said logs and lumber was to be paid to Henry Corwith, and applied in satisfaction of the mortgage debt. That such security was ample and sufficient to pay the indebtedness mentioned in the mortgage. That a considerable amount was realized by Henry Corwith out of such logs and lumber so pledged to him, but the amount cannot be precisely determined from the evidence. That Henry Corwith died September 15, 1888, testate, leaving Charles R. Corwith his sole heir at law, and naming Charles R. and John Corwith as excutors in his will. That said mortgage was not recorded until November 20, 1890. That Leahy was, at that time, owing the plaintiff about $1,600 on account of sales of merchandise, and which sum was wholly unsecured. That the plaintiff thereafter took from Leahy a promissory note for the amount of such balance. That, during the time said mortgage was so withheld from record, the value of Leahy's interest in the mill plant was at least $15,000. That the plaintiff had no knowledge or notice of the existence of said mortgage until the same was so recorded. That the plaintiff extended credit to Leahy in the belief that the undivided one-half interest in the mill property owned by him was unincumbered; and that he would not have extended such credit had he known of the existence of that mortgage. That at the time the mortgage was so recorded, and before, Leahy was indebted to the estate of Henry Corwith for between $50,000 or $60,000. That Leahy was then being crowded and embarrassed by his creditors, and was then very much in need of funds, and was also then indebted to various parties, including the plaintiff and one James McCrossen, to whom he was owing a large amount of money, to secure which he had executed to McCrossen a mortgage or mortgages upon his timber lands and logging outfit. That, on the same day of recording said mortgage, Leahy and wife executed to Charles R. Corwith a second mortgage on the real estate covered by the McCrossen mortgage, which was recorded November 22, 1890. That December 2, 1890, an agreement in triplicate was entered into between Leahy, McCrossen, and Charles R. Corwith, which recites the indebtedness of Leahy to each; the giving of the mortgages on the timber land and personal property; the fact that all parties were agreed that it was advisable that the property should be so handled, and the operations so conducted, as not to sacrifice the same at forced sales; that Charles R. Corwith should take possession of all the property of Leahy, carry on logging operations, handle and sell the proceeds, paying out of said proceeds certain notes held by McCrossen amounting to $20,500, then to pay Corwith for all moneys advanced to carry on the business, then to pay the remainder of Leahy's indebtedness to McCrossen, and then to pay the remainder of Leahy's indebtedness to the Corwith estate, and, lastly, any surplus remaining should be paid to Leahy. That the wife of Leahy joined in that agreement, which contained a quitclaim deed of all their interest in real and personal property described in the several mortgages mentioned. That the property mortgaged and turned over to McCrossen and Corwith under that agreement covered all of Leahy's property except his homestead, his undivided one-half interest in the sawmill plant, and some boom stock worth about $10,000, which had previously been pledged to Henry Corwith as security. That the property covered by that agreement was thought to be enough to pay the claims of both McCrossen and Corwith, and leave a surplus. That that tripartite agreement was not recorded, and was not intended to be recorded, by the parties. That that tripartite contract of December 2, 1890, recites the agreement of January 21, 1886, between Corwith, Leahy, and Beebe, and admits payment thereon of $15,136.79. That it also recites certain securities held by Corwith for the payment of the indebtedness named, but negglectsto mention the mortgage of January 21, 1886. That it appears in proof that the defendants...