McGovern v. Kraus

• Decision Date: 05 April 1927
• Citation: 192 Wis. 558,213 N.W. 332
• Parties: MCGOVERN v. KRAUS ET AL.
• Court: Wisconsin Supreme Court

192 Wis. 558

213 N.W. 332

MCGOVERN

v.KRAUS ET AL.

Supreme Court of Wisconsin.

April 5, 1927.

Appeal from Circuit Court, Vernon County; R. S. Cowie, Judge.

Action by Edward McGovern as trustee of the estate of Fred Kraus, bankrupt, against Fred Kraus and others.From order overruling his general demurrer to the complaint, defendantLevi Eckhart appeals.Order reversed and cause remanded, with directions to sustain demurrer, and for further proceedings.--[[[By Editorial Staff.]

See, also, 213 N. W. 334.C. J. Smith, of Viroqua (J. Henry Bennett, of Viroqua, of counsel), for appellant.

Grady, Farnsworth & Walker, of Portage, for respondent.

DOERFLER, J.

The complaint contains three alleged causes of action, in each of which separate and distinct relief is prayed for.To the third cause of action the defendant Eckhart interposed a general demurrer, which was overruled by the court, and from such order such defendant has appealed.

In the third cause of action the plaintiff realleges and reincorporates therein all of the allegations contained in paragraphs 1 to 3, inclusive, of the first cause of action.In the first paragraph of the first cause of action it is alleged that the defendant Kraus filed a petition in bankruptcy in the United States District Court for the Western District of Wisconsin, and that he was duly adjudged a bankrupt.In the second paragraph of the first cause of action he alleges, in substance, that the plaintiff was duly elected and appointed as trustee in bankruptcy; that he duly qualified as such; and that he is now such duly qualified and acting trustee.In the third paragraph of such first cause of action he alleges that the defendantFred Kraus was indebted to divers persons, firms, and corporations, in large sums, which indebtedness continued and existed at the time of the bankruptcy.

In the third cause of action it is further alleged as follows:

“(1) On or about November 19, 1924, defendant Eckhardt took and obtained from defendant Kraus a promissory note executed by the latter for the sum of $6,000, being the same note as is referred to in paragraph No. 8 of the foregoing first cause of action and paragraph No. 6 of the foregoing second cause of action.

(2) That, as plaintiff is informed and believes, defendant Eckhardt gives out and claims that the consideration for said note was two stallions and two mares sold by him to defendant Kraus; that, if any consideration whatsoever existed therefor, it was such sale of said stallions and mares.

(3) That said note did not have written or printed thereon in red ink, or otherwise, ‘The consideration for this note is the sale of a lightning rod, stallion, boar or brood sow, or interest therein, as the case may be,’ or any words of like or similar import, nor did it contain any recital whatsoever as to the nature of said consideration, as required by section 116.03 of the Wisconsin Statutes.

(4) That, if there was an actual sale of said stallions by defendant Eckhardt to defendant Kraus, the consideration therefor is evidenced by said note, and said note was so taken and obtained in violation of law; that by reason thereof, as plaintiff is informed and believes, defendant Eckhardt became and is liable to a penalty, equal to the face of said note, as provided in and by section 116.04 of the Wisconsin Statutes, and a cause of action for the recovery thereof existed in favor of defendant Kraus at the time he was adjudicated as bankrupt as hereinbefore alleged.

(5) That, if said note was sold or transferred to defendant Glick, plaintiff verily believes he had knowledge of the fact that, it any consideration existed therefor, it consisted of the sale of said stallions and mares.

Wherefore, in the event of the denial of the relief sought in and by the foregoing first cause of action, plaintiff demands judgment upon his third cause of action herein, declaring said $6,000 note null and void, and for the recovery of and from defendant Eckhardt, of the sum of $6,000 as damages.”

Section 116.03 of the Statutes provides as follows:

“ Words to be Printed on Face of Note.All promissory notes and other evidences of indebtedness, taken or given, for any lightning rod, stallion, boar or brood sow, or interest therein as the case may be, shall have written or printed thereon in red ink the words: ‘The consideration for this note is the sale of a lightning rod, stallion, boar or brood sow, or interest therein, as the case may be.’ ”

Section 116.04 of the Statutes provides as follows:

“Penalty for taking note without statement required.Any person who shall sell a lightning rod, stallion, boar or brood sow, or any interest in a lightning rod, stallion, boar or brood sow, who shall take a promissory note or other evidence of indebtedness for the whole or any part of the consideration thereof, and who shall fail to state the consideration for said note as provided by section 116.03, or in words of similar import, shall be liable to a penalty equal to the face of the note so taken.”

[1]The plaintiff, as trustee in bankruptcy, succeeded to all the rights of the defendant Kraus.It is argued by plaintiff's counsel that, inasmuch as the words required by section 116.03 of the Statutes were not written or printed upon the note in question, that therefore, under the provisions of section 116.04, Kraus, prior to the bankruptcy, could have maintained a cause of action to recover the penalty provided for in such section, and that the plaintiff succeeded to such rights.

Whatever our individual view may be as to the effect of the omission to write or print the words required by statute in red ink upon the note, it was definitely decided by this court in the case of Quiggle v. Herman, 131 Wis. 379, 111 N. W. 479, that the giving or...