Gilbert v. Stockman

• Decision Date: 22 March 1892
• Citation: 81 Wis. 602,51 N.W. 1076
• Parties: GILBERT v. STOCKMAN ET AL.
• Court: Wisconsin Supreme Court

81 Wis. 602

51 N.W. 1076

GILBERT

v.STOCKMAN ET AL.

Supreme Court of Wisconsin.

March 22, 1892.

Appeal from circuit court, St. Croix county; E. B. BUNDY, Judge.

Action by N. I. Gilbert against H. D. Stockman, May E. Stockman, his wife, Campbell Fletcher, and Nancy Fletcher, his wife. Judgment for defendants. Plaintiff appeals. Affirmed.

The other facts fully appear in the following statement by CASSODAY, J.:

This is a bill in equity to set aside a deed executed by the defendants H. D. Stockman and wife July 3, 1890, whereby they conveyed to the defendant Campbell Fletcher the 40 acres of land described, in St. Croix county, which deed recited a consideration of $500, and was recorded in the register's office of St. Croix county July 5, 1890, on the ground that said deed was given without consideration, and with the intent to hinder, delay, cheat, and defraud the creditors of the said H. D. Stockman, including the plaintiff. The complaint alleged the facts mentioned more in detail, and also that said Fletcher was the father-in-law of said Stockman, and never paid any consideration for said premises, and did not buy the same in good faith, and also alleged, in effect, that November 11, 1890, the plaintiff recovered a judgment against said Stockman for $105.19 in the circuit court for St. Croix county, and which was docketed therein on that day, and still remained unpaid and unsatisfied; that November 28, 1890, the plaintiff also caused to be docketed in the circuit court for St. Croix county another judgment, for $107.75, which had been previously recovered in this court; that the debts upon which said respective judgments were recovered accrued long prior to July 3, 1890,--and prayed that said deed be set aside, and declared null and void, and said judgments be declared superior liens upon said premises, and that the same be sold on execution to satisfy the same, and for general relief. To that complaint the defendants demurred on the ground that it did not state facts sufficient to constitute a cause of action. From the order sustaining that demurrer the plaintiff brings this appeal.Henry Anderson, Spooner & Taylor, and Richmond & Smith, for appellant.

R. D. Whitford, for respondents.

CASSODAY, J., ( after stating the facts.)

The deed from the judgment debtor to his father-in-law was executed and recorded more than four months prior to the time when either of the plaintiff's judgments was docketed in St. Croix county, in which the land in question is situated. There is no claim that any execution was ever levied upon the land, or even issued, upon either of those judgments. Equitable aid is invoked on the ground that the deed was given without consideration by an insolvent debtor, with the intent to hinder, delay, or defraud his creditors, including the plaintiff. The question is whether it can be granted upon such a showing. There is certainly a great diversity of opinion in the several states as to the question suggested, depending, it is believed, very much upon local statutes. It seems to be conceded, as a general rule, that whenever the nature of the property or thing in action is such, or the same is held in trust for the insolvent judgment debtor so, that it cannot be reached at law by levy and sale on execution, then the execution must be returned unsatisfied, in whole or in part, before a bill in equity, or what is usually known as a “creditor's bill.” can be maintained to reach the same. In such case the equitable lien is created, not by the judgment and execution, but by the filing of the bill and the service of process. Dunlevy v. Tallmadge, 32 N. Y. 437. This rule, requiring the return of an execution unsatisfied, is embodied in our statute. ¹ Section 3029, Rev. St. Formerly it was held in New York that where an insolvent debtor bought and paid for land with his own money, and took the title in the name of his wife or another with the intent to hinder, delay, or defraud his creditors, such land could nevertheless be reached and sold on execution against the debtor. Wait v. Day, 4 Denio, 439. But that case was expressly overruled in Garfield v. Hatmaker, 15 N. Y. 475, in an able opinion by COMSTOCK, J., on the ground that the then recently revised statutes of that state had abolished the uses and trusts in favor of the debtor so paying the consideration, which was implied at common law, and hence left in such debtor no legal or equitable estate to which such execution at law could attach. This ruling has become firmly established by repeated adjudications in New York. Wood v. Robinson, 22 N. Y. 564;McCartney v. Bostwick, 32 N. Y. 53;Bank v. Olcott, 46 N. Y. 17;Everett v. Everett, 48 N. Y. 223;Estes v. Wilcox, 67 N. Y. 264;Underwood v. Sutcliffe, 77 N. Y. 58. We have the same statutes in these respects, and have followed the same construction. Section 2077, Rev. St. Hyde v. Chapman, 33 Wis. 391;Kluender v. Fenske, 53 Wis. 122, 10 N. W. Rep. 370;Pavey v. Insurance Co., 56 Wis. 224, 13 N. W. Rep. 925;Week v. Bosworth, 61 Wis. 85, 20 N. W. Rep. 657;Cerney v. Pawlot, 66 Wis. 262, 28 N. W. Rep. 183;Skinner v. James, 69 Wis. 611, 35 N. W. Rep. 37;Campbell v. Campbell, 70 Wis. 311, 35 N. W. Rep. 743;Watters v. McGuigan, 72 Wis. 155, 39 N. W. Rep. 382;Gettelmann v. Gitz, 78 Wis. 439, 47 N. W. Rep. 660. To the same effect are Griffin v. Nitcher, 57 Me. 270; Hartshorn v. Eames, 31 Me. 93.

The difference between an insolvent debtor thus purchasing land in the name of another with the intent to hinder, delay, or defraud his creditors, or the making of a conveyance from himself directly to such third person with the same intent, is, to say the most, very slight, since the purpose and effect in each case is substantially the same; and yet it is firmly established by the authorities cited that if such insolvent debtor purchases land in the name of another with the intent to hinder, delay, or defraud his creditors, such land cannot be reached by execution nor in equity until the execution has been issued, and returned unsatisfied in whole or in part. Such return can only be dispensed with where the judgment creditor has first obtained a valid lien at law upon the land. What are the essentials of such a lien? Originally, at common law, a judgment was not, strictly speaking, a lien upon real estate. Thus Lord Chancellor COTTENHAM said: “It is not correct to say that according to the usual acceptation of the term the creditor obtains a lien by virtue of his judgment. * * * What gives a judgment creditor a right against the estate is only the act of parliament; for, independently of that, he has none. The act of parliament gives him, if he pleases, an option by the writ of elegit,--the very name implying that it is an option,--which if he exercises, he is entitled to have a writ directed to the sheriff to put him in possession of a moiety of the lands. The effect of the proceeding under the writ is to give to the creditor a legal title, which, if no impediment prevent him, he may enforce at law by ejectment.” Then, after indicating that equity would aid in the removal of such impediment, he said: “Suppose he [the judgment creditor] never sues out the writ, and never, therefore, exercises his option. Is this court to give him the benefit of a lien to which he has never chosen to assert his right? The reasoning would seem very strong that as this court is lending its aid to the legal right the party must have previously armed himself with that which constitutes his legal right, and that which constitutes the legal right is the writ.” The act of parliament thus referred to was 13 Edw. I. c. 18, which declared, in effect, that, upon the recovery of a judgment, “it shall be from henceforth in the election of him that sueth for such debt or damages to have a writ of fieri facias unto the sheriff for to levy the debt on the lands and goods,” etc. At common law such writ was to be sued out within a year and a day after the judgment was entered, otherwise it would be deemed satisfied, unless revived. 3 Bl. Comm. 421. Such English rule became operative as a part of the common law of this country, except in so far as modified by local statutes. Burton v. Smith, 13 Pet. 479;Spaulding v. Railway Co., 30 Wis. 110. “It is not understood,” said Mr. Justice STORY, “that a general lien by judgment on land constitutes per se a property or right in land itself. It only confers a right to levy on the same to the exclusion of other adverse interests, subsequent to the judgment; and when the levy is actually made on the same the title of the creditor, for this purpose, relates back to the time of his judgment, so as to cut out intermediate incumbrances.” Conard v. Insurance Co., 1 Pet. 443. Our statute makes a judgment, when docketed as required, a lien for the period of 10 years on the real property not exempt, which the debtor “may have at the time of docketing thereof in the county in which such real estate is situated, or which he shall acquire at any time thereafter within said period of ten years.” Section 2902, Rev. St.

The contention is that every conveyance made with the intent to hinder, delay, or defraud creditors is made void, as against the person so hindered, delayed, or defrauded, by section 2320, Rev. St., and hence that the deed in question, although made and recorded long prior to the docketing of either of the plaintiff's judgments, was nevertheless utterly void and of no effect as against creditors, including the plaintiff. But such claim is obviously subject to several qualifications. No one would seriously contend, under the statutes of this state, that the validity of such deed could be questioned by a mere creditor at large, nor by a mere foreign judgment creditor, nor by a judgment creditor whose judgment is docketed merely in some other county than the one in which the land is situated, and upon which no execution has been issued, nor even a judgment recovered in the county where the land is...