Miller v. Lange

• Decision Date: 12 May 1940
• Citation: 290 N.W. 618,234 Wis. 460
• Parties: MILLER v. LANGE et al., and two other cases.
• Court: Wisconsin Supreme Court

234 Wis. 460

290 N.W. 618

MILLER

v.LANGE et al., and two other cases.

Supreme Court of Wisconsin.

March 12, 1940.

Rehearing Denied May 12, 1940.

Appeal from a judgment of the Circuit Court for Milwaukee County; Gustav G. Gehrz, Judge.

Action by Edward J. Miller, receiver, against Walter W. Lange and others to set aside alleged fraudulent conveyances of certain shares of stock. From a judgment for the plaintiff, defendants Walter W. Lange, Lillian Lange and the Crucible Steel Casting Company separately appeal.-[By Editorial Staff.]

Reversed and remanded, with directions.

Action begun by plaintiff, receiver, September 29, 1938, to set aside alleged fraudulent conveyances made by defendant Walter W. Lange to his wife and co-defendant, Lillian Lange, of 898 shares of stock of South Side Malleable Casting Co. and 287 shares of stock of Crucible Steel Casting Co. made on March 16, 1927, and 499 shares of stock of Gulf Securities Holding Corp. made on or about January 1, 1930 (alleged to have been made on December 1, 1930 and found by the court to have been made on November 7, 1932). It is alleged that Walter W. Lange made said conveyances with actual intent to hinder, delay and defraud his creditors. Case was tried to the court.

The court found that said conveyances were made by Walter W. Lange to his wife without any consideration therefor as part of a plan and scheme, for and with the purpose and actual intent of hindering, delaying and defrauding his creditors, said purpose and actual intent having been known and participated in by defendant Lillian Lange. The court further found that by making said conveyances, Walter W. Lange rendered the fair saleable value of his assets to be less than the amount required to pay his probable liability on his existing debts as they became absolute and matured. Judgment was entered declaring the transfers of the stock in question fraudulent and void, that said transfers were made with an actual intent to hinder, delay and defraud the creditors of Walter W. Lange, and that said actual intentions were participated in and known by defendant Lillian Lange. It was further adjudged that each of said conveyances were made without any consideration and rendered the defendant Walter W. Lange insolvent. Defendants Langes and Crucible Steel Casting Co. appeal. The material facts will be stated in the opinion.

Corrigan & Backus and Wood, Warner & Tyrrell, all of Milwaukee, for appellants.

Gold & McCann and Lloyd S. Jacobson, all of Milwaukee (Chester W. Wilson, of Milwaukee, of counsel), for respondent.

MARTIN, Justice.

There is no finding by the trial court as to the value of the assets or the amount of liabilities of the defendant Walter W. Lange as of the dates on which the alleged fraudulent conveyances were made. The evidence as to Mr. Lange's assets and as to the value of same as of the dates in question is not as clear and definite as we would like to have it. However, allowance must be made in view of the fact that this case was commenced more than 11 years after the first transaction occurred and more than 8 years after the last. In the meantime we experienced a most serious world-wide economic depression.

The complaint in this action is grounded upon actual intent on the part of Walter W. Lange to hinder, delay and defraud his creditors by making the transfers of stock referred to in the foregoing statement. The trial court so found. Is this finding against the great weight and clear preponderance of the evidence? Actual intent to hinder, delay or defraud creditors is deemed fraudulent and will invalidate a conveyance regardless of insolvency. Sec. 242.07, Stats., provides: “Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay or defraud either present or future creditors, is fraudulent as to both present and future creditors.”

[1]We have carefully examined the evidence to find support or lack of support for the finding of actual intent on the part of Walter W. Lange to hinder, delay or defraud his creditors. Upon this issue plaintiff had the burden of proof to establish the alleged fraud by clear, satisfactory, and convincing evidence. Massey v. Richmond, 208 Wis. 239, at page 246, 242 N.W. 507.

[2]Because of the lapse of time between the two transactions, (March 16, 1927 and January 1, 1930), we have carefully examined the evidence as to Mr. Lange's financial condition on the respective dates, and also to ascertain if the evidence disclosed any motive on his part to hinder, delay or defraud his creditors by transferring the stock in question to his wife. The evidence is without dispute that at the time of the first transaction, Mr. Lange was a man of substantial wealth with a large income. In 1927 he had an income of $26,208.14; in 1928, $35,198.28; in 1929, $62,663.95; and in 1930, $28.861.77. His income in prior years was much larger. His income for the year 1926 amounted to $93,670 from all sources. On March 16, 1927, and after transferring the South Side Malleable Casting Co. stock and the Crucible Steel Casting Co. stock to his wife, Mr. Lange still had a net worth well in excess of $100,000. As the depression continued and the value of stocks and securities became less, Mr. Lange requested his wife to return both the South Side Malleable Casting Co. and the Crucible Steel Casting Co. stock so that he might use same to further collateralize his loans. Mrs. Lange returned said stocks, which her husband immediately...