88 Wis. 41 | Wis. | 1894
1. The issues raised by the special answer and affidavit for the writ of attachment are: (1) Whether, at the time it was issued, the defendants had in fact assigned, conveyed, and disposed of, or were about to assign, convey, dispose of, or conceal their property, with intent to defraud their creditors; (2) whether the defendants fraudulently contracted the debt respecting which the action was brought.
Proof of good reason on the part of the creditor to believe the truth of the charge is not sufficient to sustain the. attachment, but the substantive charge itself must be proved. Davidson v. Hackett, 49 Wis. 186. And the affirmative of the issues is on the plaintiff. R. S. sec. 2745. An order discharging the attachment will not be reversed
The evidence is very voluminous, extending over 500 printed pages, and the trial in the circuit court appears to have been a very lengthy and laborious one. The difficulty of arriving at a correct conclusion upon questions of fact by an appellate court, which, in the nature of- the case, cannot have the time and obvious advantages possessed by the court below in arriving at a result, has been frequently pointed out, and fully justifies the rule stated in Lord v. Devendorf, supra, and in many other cases, repeatedly applied to the review óf mere questions of fact by an appellate court. Mellor, one of the defendants, although examined under sec. 4096, R. S., before trial as an adverse party, died before the trial, and the fraudulent acts charged as foundation to warrant the attachment are claimed to have been done or committed by him only, while Hoxie, the surviving partner, .is in no way inculpated, except constructively by reason of his copartnership relation with Mellor. An elaborate statement of the evidence and of our reasons for the conclusions at which we have arrived would serve no useful purpose, and we shall content ourselves with a somewhat general statement of our views. "We are clearly of the opinion that, considering all the evidence, no cause for .the attachment was satisfactorily shown under the first charge, in the affidavit, namely, that the defendants had assigned, conveyed, and disposed of their property, or were about to do so, or conceal the same, with intent to defraud their creditors. The transactions relied on in support of this charge were not necessarily or legally fraudulent, and the evidence, we think, wholly fails to show that they were entered into with the fraudulent intent upon the part of the defendants, or either of them, charged in the affidavit. The evi-
2. The more difficult question is whether it appears from a clear preponderance of proof that the defendants fraudulently contracted the debt respecting which the action is brought. It appeared, in substance, that the defendants had been carrying on a very extensive business in logging, lumbering,' and merchandise in northern Wisconsin and Michigan, at An.tigo, Bessemer, Marinesco, Bryant, and Ironwood, from 1885 down to the time they assigned (September 6, 1890), and that the plaintiff, an Iowa corporation, having an office at Wausau, Wis.. had numerous and frequent business transactions with them down to the latter date, which had been conducted on its part by O. S. Ourtis, its general manager. Plaintiff was a manufacturer and dealer at Wausau in sash, doors, blinds, and lumber, and sold the defendants during the year 1890, from April 2d to September 1st, lumber and merchandise to the amount of $30,032.52, of which $21,000 was for a lot of lumber at Marinesco, sold June 13, 1890. Ourtis, the plaintiff’s general manager, testified that he extended credit and times of payment on the other bills, and relied in so doing on the statements made by defendants to the commercial agency, one of which, signed “ Hoxie & Mellor,” to R. G. Hun & Co., and dated “ November 26,1889,” was put in evidence, and was upon a printed form for answers to various interrogatories, many of which were not answered. It contained various items of assets and liabilities, showing total liabilities of $250,000, amount of assets over liabilities $254,000, and it stated at the foot: “The above is a true and accurate statement of our assets and liabilities, and is presented as a basis of credit through the reports of the mercantile agency,”— and was signed in the name of the firm by the
The witness Curtis testified that he first saw the statement put in evidence at the First National Bank of Wau-sau, about January 1, 1890; that he was a member of the discount committee, and this was when engaged in passing on Hoxie & Mellor’s paper; that he remembered the net balance of assets stated on it to be $254,000, but he had been unable to find the paper; that he was the credit man of the plaintiff at Wausau, and relied in extending the
After the assignment, a statement of the affairs of the defendants was made by one Bartz, as an expert accountant, who had until then been head man in the plaintiff’s office, when he went into the employ of Bardeen as as-signee. It appeared that Mellor issued commercial paper of the firm in large sums to be sold by J. H. Weed. The latter had $80,000 or $90,000 or more, for which the defendants claimed he had not accounted, and owed them that sum, and the defendants had also become accommodátion indorsers of A. Weed & Co. for about $80,000. It appears that these transactions were not all, or only in a small part, entered on the books of Hoxie & Mellor, but Mellor kept an account of them in a small book he carried in his pocket. The amount of liabilities was swelled beyond the state,ment in evidence, mainly by these and similar items of paper issued to be sold for the defendants, and for which they claimed they had not received consideration, and by contingent liabilities and accommodation paper. Hoxie let Mellor run the business, and never paid any attention
Evidence Avas offered and received tending to show that in the ordinary course of business, in making statements or reports to commercial agencies for concerns of the character and kind of Iioxie & Mellor, it was not customary to include in their liabilities accommodation paper, and also tending to shoAV that it was a method, quite common, of raising money by issuing notes to note brokers to sell. The evidence tended to show that Mellor really believed that his firm was solvent up to the time of the attachment on the Ironwood property, and, with temporary assistance, could get over its present difficulties and go on, and also tending to show that the statement made to R. G. Hun & Co. was made in good faith, though it appears to have been a very inaccurate or mistaken one, particularly in regard to their liabilities; and the evidence tended to show that Curtis, the general manager of the plaintiff, had, in a general way, knowledge of the kind and character of the business and general business operations of Hoxie & Mellor. Jt does not appear that at any time in the course of its business transactions with that firm he asked them for any
The statement made by the defendants to the R. G. Dun & Co. Agency was too remote from the transaction in question, in view of the knowledge the plaintiff had of the defendants’ business enterprises and methods, and of the business relations which had existed between the parties for over four years, to reasonably justify the plaintiff in absolutely relying on this representation of the defendants as a basis of credit for so large a sum, without any attempt to obtain from them or other sources further information on the subject. It was made November 26,1889, and Curtis saw it in January, 1890, and the main transactions between the parties were about seven months after its date. Upon its face it does not seem to have been intended as a basis for the action of the plaintiff or the banks named in it, for they were the parties the defendants named as references to whom the commercial and business public might refer to vouch for the reliability^ of the statement and for the standing and responsibility of the defendants. When Curtis saw this paper he must have observed its obvious import in this respect, and that the plaintiff was being held, out to the world as vouching for the statement in a manner that might be highly prejudicial to the interests of others. With knowledge of the character of the statement, investigation became a duty, both for the protection of the ■plaintiff if it expected to act on it as a basis of credit, and in fairness to protect others who might rely 'Oil it by reason of the reference to the plaintiff. It does not appear
It is material to note that it does not appear that mention was ever made of this statement by Curtis, the plaintiff’s general manager, to the defendants or to any one else until a few days before the attachment was made, notwithstanding so large a deal as that for the lumber at Marinesco for $21,000, and one probably out of the usual course of business, took place between them; a transaction, it appears, the plaintiff was quite anxious, and the defendants rather reluctant, to make,— so much so that they offered to give $75 to have the sale abandoned or declared off. This is certainly strong evidence to show the statement in question was not made with intent to defraud and deceive the plaintiff, or to secure or bring about a sale of the property to the defendants without an intention on their part to pay for it, or with intent to defraud the plaintiff. The statement does not appear to have been put forth as a device or means to influence any matter theii in hand between the parties, or to which it had any contemplated or near relation, and there seems to have been an absence of any intention on the part of the defendants to defraud or mislead.
Whether the plaintiff had a right to rely upon the representations contained in the statement is not a deduction to be made from its language alone, but from all the extrinsic facts and circumstances as well, as to whether it would be liable to influence the judgment and conduct of a prudent business man. Curtis testifies, it is true, that he extended credits to the defendants on account of the statement made by them to the commercial agency, and, on redirect examination, that he relied “upon the statement he saw at the bank, corroborated by the statement made to Yan Horn.” It is evident from the testimony of Yan Horn that Curtis was interested in seeking for information about the last of May, and a short time before the Marinesco sale, as to the responsibility of the defendants. He had three conversations on the subject with Yan Horn, and he learned the substance of the partial oral statement made to the latter, and that, on inquiry by him at two or three of the banks and of one Trever, he “found out that
The objection to the competency of'A. E. Hoxié as a witness to give evidence of conversations with Mellor, since deceased, is clearly not well taken. A. E. Hoxie was not a party to the suit or in interest in any way whatever. Neither party claimed or derived any interest or title under or through him. The statute in respect to the competency of witnesses was intended to extend and liberalize the rules of the common law, and not to restrict them. The rule has always been that, at common law, a witness circumstanced as the one in question was competent to testify to statements or declarations made by a party since deceased. And we see no objection to this witness being asked what he heard Curtis say as to his desire to sell the lumber at Marinesco in bulk or a portion of it. Other objections to testimony admitted present no point material to the decision, and do not require consideration.
It would seem from the testimony and findings that the court below must have arrived at the conclusion that the plaintiff, under the facts and circumstances shown, was not entitled to rely, and did not in fact rely, on the statement in question, and we do not find any clear or decided preponderance of proof against this view of the case or of the finding of the circuit court. We hold, therefore, that the order vacating the attachment is correct.
By the Court.— The order appealed from is affirmed.