Haring v. Hamilton

• Decision Date: 15 May 1900
• Citation: 82 N.W. 698,107 Wis. 112
• Parties: HARING v. HAMILTON ET AL.
• Court: Wisconsin Supreme Court

107 Wis. 112

82 N.W. 698

HARING

v.HAMILTON ET AL.

Supreme Court of Wisconsin.

May 15, 1900.

Appeal from superior court, Milwaukee county; J. C. Ludwig, Judge.

Action by Cornelius Haring, as receiver, against Charles H. Hamilton and others. Judgment for plaintiff. Defendants appeal. Reversed.C. H. Hamilton, for appellants.

Haring & Frost and John F. Burke, for respondent Edgewood Distilling Co.

CASSODAY, C. J.

It appears from the record that July 3, 1897, Waldheim & Wittenberg obtained a judgment against the defendant S. R. Miller for $203.61; that Miller appealed from that judgment to this court, and the same was affirmed October 22, 1897 (97 Wis. 300, 72 N. W. 869); that, after the remittitur had been filed in that case, execution was issued on that judgment November 29, 1897, and returned December 3, 1897, as wholly unsatisfied; that thereupon, and on or about December 16, 1897, proceedings supplementary to such execution were commenced, and resulted in the appointment of the plaintiff, Haring, as receiver therein, March 17, 1898; that pursuant to an order of the court made April 16, 1898, this action was commenced by the plaintiff as such receiver to reach and recover for the benefit of creditors 148 shares of stock, of the lawful value of $100 each, which had been issued by the Sam R. Miller Company to the defendant Samuel R. Miller, and by him transferred to the defendant Charles H. Hamilton as trustee or attorney for Katie B. Miller, wife of Samuel R. Miller, and to set aside such transfer as having been made with intent to defraud the creditors of Samuel R. Miller. The defendants Charles H. Hamilton, Samuel R. Miller, and Katie B. Miller severally and separately answered to the effect that such transfer of such stock was made to secure a bona fide indebtedness due from the defendant Samuel R. Miller to his wife, Katie B. Upon the trial of the issues thus formed there were found, in effect, the facts stated, and that September 4, 1897, the Sam R. Miller Company was incorporated and organized under the laws of this state, with a capital stock of $15,000, divided into 150 shares, of $100 each; that on that day Samuel R. Miller turned over and conveyed to that corporation all of his tangible property, consisting of stock in trade, store fixtures, book accounts, and assets, and received in exchange therefor the 150 shares of capital stock mentioned, of which 148 shares were issued directly to him, and 1 share to his brother John C. Miller, and the other share to one H. R. Johnson; that September 7, 1897, Samuel R. Miller, as the sole owner thereof, conveyed the 148 shares of such stock so held by him to the defendant Charles H. Hamilton, as the trustee for the defendant Katie B. Miller, with the understanding and agreement that, in case any surplus should remain in the hands of such trustee after paying her claims against Samuel R. Miller, such surplus should be immediately returned to Samuel R. Miller by such trustee; that such stock constituted all the property of any value then owned by Samuel R. Miller; that at the time of such transfer Samuel R. Miller was indebted to a number of other persons besides his wife, in large amounts of money, and was insolvent, and knew that he was insolvent, and such stock was received and accepted by Hamilton and Katie B. with knowledge of such insolvency, and such conveyance of stock was so made and accepted by the defendants for the purpose and with the intention of hindering, delaying, and defrauding his other creditors, including Waldheim & Wettenberg and the Edgewood Distilling Company, a corporation, which had duly intervened herein and had become a party to this action July 9, 1898, and held and owned a judgment duly recovered against Samuel R. Miller, March 8, 1898, for $443.72, and that such transfer was so made for the purpose of giving Katie B. Miller a preference over the other creditors of her husband; that at the time of such transfer Samuel R. Miller was indebted to his wife, Katie B., in the sum of upward of $7,734.93 and interest, evidenced by two certain promissory notes, one for $4,734.93, dated September 30, 1893, bearing 7 per cent. interest, and the other for $3,000 and interest; that from and after the time of such transfer, and ever since September 7, 1897, Samuel R. Miller has been exercising certain rights of ownership over the stock, with the knowledge and consent of Charles H. Hamilton and Katie B. Miller, and has continued to act as a stockholder and officer of the corporation; that Samuel R. Miller was duly enjoined from conveying and interfering in any way with such capital stock and any of his property at the time of the appointment of such receiver, and that subsequently Katie B. Miller and Hamilton were also enjoined and restrained from transferring such stock and the property represented thereby, and all property mentioned in the pleadings in this action, or in any way interfering with, disposing of, or conveying the same, or making any changes in the property, or the instruments or certificates representing the same, which injunctional order was still in effect; that August 5, 1898, while the Sam R. Miller Company was so enjoined, he, acting as president of the company, signed and executed what purported to be a chattel mortgage to secure the payment of $2,500 to Friedman, Keiler & Co., of Kentucky, on which $600 was subsequently paid; that since the commencement of this action the 148 shares of capital stock mentioned had largely depreciated in value, in at least the sum of $1,900, on account of such chattel mortgage incumbrance, which depreciation resulted from the acts and laches of the defendants; that immediately after the appointment of the plaintiff as receiver, and before the commencement of this action, to wit, March 21, 1898, the receiver duly demanded the return of such shares of stock, and gave due notice of his appointment as receiver, but the defendants refused to deliver such stock to the plaintiff as such receiver, and the defendant Hamilton has ever since held, and still continues to hold, such certificates of stock.

As conclusions of law, the court found, in effect, that such transfer of stock by Samuel R. Miller to the defendant Hamilton as trustee for Katie B. Miller was fraudulent, and amounted to a voluntary assignment with unlawful preferences, and that such assignment was void and contrary to the statute in such case made and provided; that the plaintiff, as receiver, was entitled to the relief prayed, and the return of the 148 shares of capital stock mentioned, for distribution under the order of the court; that Katie B. Miller was liable to the plaintiff, as such receiver, for the depreciation which had taken place in the value of such 148 shares of stock since March 21, 1898, which was thereby fixed at $1,900,--and ordered judgment to be entered in favor of the plaintiff, as receiver, against the defendants, for the immediate transfer and delivery of the 148 shares of stock by the defendants Hamilton and Katie B. Miller to the plaintiff, and, further, a judgment against Katie B. Miller for $1,900 damages for depreciation of stock, and for the costs and disbursements of this action. From the judgment entered upon such findings accordingly, the defendants bring this appeal.

It is practically undisputed that September 4, 1897, the defendant Samuel R. Miller was the owner of two saloons in Milwaukee; that the aggregate stock in trade, furniture, fixtures, book accounts, and assets of both establishments was of the nominal value of $21,000, and that the fair cash valuation of the same was about $15,000; that at that time the corporation known as the Sam R. Miller Company was incorporated and organized under the laws of this state; that the capital stock of such corporation was $15,000, divided into 150 shares, of $100 each; that thereupon Samuel R. Miller conveyed and transferred to such corporation all of such property of both of such saloons in consideration of 150 shares of such stock, of which 148 shares were duly issued to Samuel R. Miller, who was elected president thereof, 1 share thereof to his brother John C. Miller, who was elected secretary thereof, and the other share thereof to H. R. Johnson, who was elected vice president thereof; that the defendant Hamilton had been attorney for Samuel R. Miller, and drew the articles of incorporation of the...