Treseder v. Burgor

• Decision Date: 04 December 1906
• Parties: TRESEDER v. BURGOR ET AL.
• Court: Wisconsin Supreme Court

130 Wis. 201

109 N.W. 957

TRESEDER

v.BURGOR ET AL.

Supreme Court of Wisconsin.

Dec. 4, 1906.

Appeal from Circuit Court, Richland County; Geo. Clementson, Judge.

Action by James Treseder, as trustee of the estate of N. H. Burgor, bankrupt, against Mattie Burgor and another. From a judgment for plaintiff, defendants appeal. Affirmed.

This action is in the nature of a creditor's bill, brought by a trustee in bankruptcy to set aside, on the ground that the same was fraudulent as to creditors, a certain deed made by defendant N. H. Burgor to his wife, and codefendant, Mattie Burgor, of a piece of real estate situated in the village of Viola upon which is located two business buildings, one used as a drug store, and the other as a bank building. The deed was made October 26, 1903, and recorded within a day or so thereafter. November 6, 1905, defendant N. H. Burgor, who for many years had been doing business as a merchant and private banker at Viola, filed a petition in voluntary bankruptcy and was, on November 20, 1905, duly adjudicated a bankrupt. His liabilities as scheduled were upwards of $20,000, and his assets as appraised were about $7,500. The complaint alleges that he was insolvent on the date of the deed. Separate answers were made by defendants; Mattie Burgor denying all the allegations of fraud and fraudulent knowledge upon her part at the time of taking the deed, and alleging that the deed was, in fact, executed to secure her for the payment of various sums of money which she had furnished and loaned her husband from her separate estate in former years, and which, on the date of deed, amounted, including accumulated interest, to $2,221.66, said answer asking that the deed be decreed to be an equitable mortgage for the amount found due her, and such amount made a lien upon the premises prior to any lien decreed in plaintiff's favor representing the creditors of her husband. The answer of defendant N. H. Burgor is substantially the same, alleging the receipt of money at various times from his wife, which had never been repaid, and that the deed of October 26, 1903, was intended to secure her for said loans. The case was tried by the court and the court found that the defendant N. H. Burgor was indebted to his wife on the date of the deed in the sum of $380 only, and that the conveyance was void as to creditors, except as to defendant Mattie Burgor's lien thereon for said sum, and that as to said sum the deed is an equitable mortgage. Judgment was entered on the findings of the court awarding plaintiff costs and the amount of the costs as taxed was ordered to be deducted from the said $380, leaving $311.33 and interest to be paid to defendant Mattie Burgor by plaintiff before taking possession of said premises, from which judgment this appeal was taken.C. W. Graves, L. H. Bancroft, and F. W. Burnham, for appellants.

George W. Bunge, for respondent.

KERWIN, J. (after stating the facts).

The errors assigned may be considered under two heads: (1) That the court erred in overruling the defendants' objection to the admission of any testimony under the complaint. (2) That the findings are not supported by the evidence.

1. It is contended by counsel for appellants that plaintiff in his representative capacity as trustee in bankruptcy of the estate of defendant N. H. Burgor represented two classes of creditors, (a) a class entitled to set aside the deed as fraudulent upon sufficient testimony, because they were creditors at the time of the execution of the deed; and (b) a class not entitled to set the deed aside, because they had become creditors after the alleged fraudulent transfer. And it is argued that the plaintiff representing creditors can only have relief for the first class, and the trial court could not undertake to determine that some could participate in the fruits of the litigation and others not. We are unable to agree with counsel for appellants in this contention. It is sufficient to authorize the trustee to maintain the action that the transfer was fraudulent as against creditors existing at the time it was made, and whether or not subsequent creditors can participate in the assets recovered by the trustee is entirely immaterial so far as the trustee's right to maintain the action is concerned. Valley L. Co. v. Hogan, 85 Wis. 366, 55 N. W. 415;Jackman v. Eau Claire N. Bank, 125 Wis. 465, 104 N. W. 98. The judgment in this case does not determine or adjudicate how the fruits of the litigation shall be distributed among creditors. That is a question for the federal court in which the bankruptcy proceedings are pending. In re Cannon (D. C.) 121 Fed. 582. The complaint in this case clearly shows a cause of action to set aside the deed in question upon the ground that the conveyance was, at least, fraudulent as to some creditors, and that is sufficient to constitute a good complaint by the trustee in bankruptcy to set aside a conveyance fraudulent as to creditors.

2. The court found, in effect, that the amount due defendant Mattie Burgor at the time of the conveyance was $380; that claims filed and allowed against the estate of defendant N. H. Burgor in the United States district court before the commencement of this action exceeded the sum of $20,000; that the assets in the hands of the trustee will be insufficient to pay the debts of the said bankrupt by more than $12,000; that the only consideration for the transfer to defendant Mattie Burgor was an indebtedness of $400 deposited with said defendant N. H. Burgor in August, 1903; and that prior to the time defendant N. H. Burgor was adjudged a bankrupt he paid defendant Mattie Burgor on said indebtness all except $380. The court made several other findings to the effect that the defendant N. H. Burgor prior to the time he was adjudged a bankrupt was doing a...