52 Wis. 438 | Wis. | 1881
Upon the findings of fact, to which the respondent took no exceptions, we think it must be held that the court based its judgment against the appellants solely upon the ground that both the mortgage and conveyance from Leona/rd to John Bertsehy were without consideration, and for that reason fraudulent and void as to the creditors of the said Leona/rd.
It is said by the learned counsel for the appellants, that the deed was not without consideration, because the property conveyed was subject to a mortgage of $5,000, which John, Bertschy assumed to pay. We do not think such assumption alone could sustain the deed. It is conceded on the part of the appellants, that the property conveyed is of far more value than the mortgage which John Bertschy assumed to pay. The assumption of the mortgage, which is a charge upon the estate, and which the estate is amply sufficient to pay, cannot, as to creditors of the grantor, be deemed a sufficient consideration to sustain the conveyance. Such a transaction is nothing more nor less than a conveyance of the interest of the mortgagor in the estate mortgaged, without any consideration therefor. The creditors of the mortgagor have the right to his interest in the mortgaged estate, and he has no more power to give that interest away to their prejudice than he has to give away a part of his estate not mortgaged.
We must, therefore, look into the evidence to determine whether there was any other consideration for the mortgage and deed. The only other consideration for them grows out of the following state of facts: John Bertschy had loaned to Leonard, Bertschy, March 19, 1874, $3,000, upon which he was to receive interest at ten per cent; in September, 1871, he loaned to Oily Hammond, a son-in-law of Leonard, Bertschy, $1,000; to George Bertschy, in September, 1874, $500, and a few months after $400; and to Perry H. Bertschy, June 10, 1874, $2,000, and September 1, 1874, $1,000. George and Perry H. were sons of Leonard Bertschy. It is claimed by the learned counsel for the appellant, that all these loans were made by the said John, Bertschy with the understanding that Leonard Bertschy was to be ultimately liable for their repayment to him in case the sons and son-in-law failed to make payment, and that the mortgage in the first instance, and the
As to the loan of $3,000 to Leoncord Bertschy, there is no dispute as to its being a tonco fide loan, for the repayment of which said Leonard was both legally and equitably bound. The evidence shows that, previous to the giving of the mortgage and deed in question, Leonard had paid upon that loan the following sums: April 10, 1875, $300; May 16, 1876, $200; February, 1878, $3,000 ($1,000 in cash, and $2,000 in note and mortgage of Jacob Bertschy). The amount of this loan, with interest from the date at ten per cent, to the time when the last payment was made, February 1, 1878, would be $4,158, very nearly; deducting the amounts paid, $3,500, there would remain unpaid on this loan the sum of $658. As to this item there does not seem to be any reasonable doubt. The fact that it does not appear that there was any written agreement as to the amount of interest, cannot alter the case. It appears that the first year’s interest was paid at the rate of ten per cent.; and if that was the verbal understanding between the parties, it would be no fraud upon the other creditors if it was finally paid at that rate by the borrower, Leonard Bertschy. After applying these payments there would still be due upon this loan, when the deed was given, the sum of $658, which formed part of the consideration for the mortgage and deed.
The claim made by the appellant John Bertschy that Leonh-ard Bertschy was under obligation to pay the loans made by him to the son-in-law and sons of Leonard, and that the mortgage and deed were given to secure or pay such sums, rests upon the following evidence: John Bertschy testifies “that twenty-five years ago Leonard Bertschy was living at Woodstock, Illinois, and was worth about $65,000 or $75,000; that about twenty-two years ago he loaned Leonard Bertschy, Jr., a son of Leonard, who was then keeping a store, the sum of $3,000; that when Leonard Bertschy saw him, just after he
John Bertschy testified further that Leonard Bertsehy said nothing personally to him before the money was advanced to Perry, or any of the other boys, upon the subject of making the loans. He says: “I helped them along as a relative, and the whole family looked to me as having cash, and I helped in case of necessity. On this basis I made all these advances. Leonard Bertsehy had nothing to do with them at the time they were made.” John Bertsehy was a son-in-law and nephew of Leonard Bertsehy. The evidence showing the reason for giving the mortgage and deed is stated by John Bertsehy as follows: “I had seen the old gentleman a short time before the mortgage for $6,000 was given. I went to Appleton to see him.' I was hard up, and told him things had reversed, and told him I felt kind of blue; told him my whole circumstances; and, after I got home, he sent me the mortgage and notes, and I put them in my safe and was thinking what I should do with it, because I should not use it against the old man under any circumstances. About the ninth of September he deeded the property to me. He said, John, I am getting old and may die any day, and should like to see you paid. I
Leonard Bertsohy testified on this subject as follows: “I went to John four or five times, and stayed with him about a month. John had lost about $30,000 by his brother. I said, ‘John, you shan’t lose a cent by my folks. I’ll try that you get your pay for it.’ I told "him, ‘You must not be scared; I’ll pay every cent that my folks owe you.’ I talked to him about the loan to George. I told him, ‘Now I will make that thing good; you know I will pay it.’ He said, ‘You do as you please.’ I said, ‘No; I don’t do as I please; I pay every cent that my boys got from you; what my family got from you.’ ”
It will be seen from the evidence that the loans to Hammond and George Bertschy were made by John Bertsohy without any knowledge on the part of Leonard Bertsohy, at the time the loans were made, that they had been applied for, or that John intended to make the loans; and if John had any reason to expect that Leonard would repay them if the boys to whom the loans were made failed to do so, such expectation must have been based upon the general statements made by Leonard, that he should not lose anything by what he let the boys have, and from the fact that eighteen or twenty years before he had in fact repaid a loan of $3,000, which John had loaned to his son Leonard, Jr.- We are all of the opinion that if these loans were made without any expectation on the part of John Bert-
As to the loans made to Hammond and George Bertschy, we cannot find any sufficient evidence that they were made with any reasonable expectation that Leonard would pay the same if the borrowers failed. The only ground for any such expectation was the fact that a loan made under similar circumstances to another son eighteen years before had been paid by the father. This we deem too slight a circumstance on which to ground any conclusion that in making these loans any credit was given to the father, or that there was any thought at the time of holding the father responsible for the loans. Ve are, however, of the opinion that the loan made to Perry H. Bertschy was made under different circumstances, and under such previous assurances that John Bertsehy had the right to suppose the'father held himself responsible for the amount loaned, and would refund the same if loaned by him. The loans made to Hammond and George were made when they were living far away from the father, and under such circumstances that he would not be likely to- know anything of the loans being made, or of the fact that they had been applied for. The loan made to Perry H. Bertschy was made when he was residing in the same city with his father, and doing business there. It was in fact made by the direction of the father, and with the promise of the father, to his son at least, that he would
We do not think the evidence sufficient to sustain an action .at law to recover the amount loaned from Leotiard, for the reason that the promise was not in writing, and because it was a collateral promise to pay the debt of another. The promise was not to pay absolutely, but to pay in case the son failed to pay. In such case the debt is the debt of the son, and the father stands in the light of one who is surety for the payment and not a principal debtor. The contract is, therefore, void under the statute of frauds. It is urged by the learned counsel for the respondent, that, because the promise of the father was void under the statute, such void agreement does not furnish any sufficient consideration for the mortgage or for the deed as against the creditors of Leonard. This we think is an
This court, in Hyde v. Chapman, 33 Wis., 391, held that when a conveyance was made by a debtor, of real estate which he held in his own name, but the consideration for the purchase of which had been paid by another, and the deed taken in the name of the debtor, and for the use, benefit and accommodation of the person paying the consideration, such debtor had the right to consider the equitable claim of the person paying the purchase money, and that such conveyance of the estate to the person paying for the same was not voluntary or fraudulent as against the creditors of the person holding the title. Under the facts presented in that case, neither a court of law nor one of equity could have compelled the debtor to make the conveyance to the person paying the purchase money, the statute having declared that in all such cases no trust should result in ' favor of the person paying the purchase money, but that the absolute estate should vest in the person to whom the estate was conveyed. That case clearly holds that where a conveyance is made by a debtor, of property to which he has the legal title, but as to which another has an equitable claim, though such equity is not enforceable in any court, such debtor may recognize such equitable claim, and convey the estate to the claimant, without being guilty - of any fraud as against his other creditors. The present chief justice, who delivered the opinion in that case, says: “B. A. Chapman (the
It is also held that a mortgage or other security given by a debtor to secure the payment of a debt of a third person, when
The cases of Livermore v. Northrup, 44 N. Y., 107, and Keen v. Kleckner, 42 Pa. St., 529, cited by the learned counsel for the appellants, and especially the case of Livermore v. Northrup, seem to go much further than we are disposed to go in this case. In that case it would seem to have been held that a debtor might assume the payment of the debt of a third person without any proof of any previous promise to pay such debt, and without any request on the part of such third person, or the person to whom his debt was due, that he should secure the payment of the same. It is, perhaps, probable that the facts of that case showed that the assumption of the debt of such third person was at the request of the parties interested, and for the purpose of securing the same, and was within the principles of the case of Marden v. Babcock, 2 Met., 99, above cited. The case of Keen v. Kleckner, supra, decides simply the point involved in the case at bar, “ that the verbal assumption or agreement to pay an indebtedness, which under the statutes could not be enforced at law, is, nevertheless, a good consideration for the confession of a judgment for the amount of such indebtedness, and such judgment so confessed is not fraudulent and void as to the creditors of the person confessing the same.”
There being no actual intent to defraud the creditors of Leonard by the giving of the mortgage or deed, found by the
May on Fraudulent Conveyances, 235, says: “A deed of sale for an inadequate consideration may be set aside as far as it purports to be an absolute conveyance, and may stand as security only for the money actually advanced.” So in this case, although the deed was given as security or in payment of several claims, some of which it was the duty of Leonard to pay, and others he was under no obligation to pay, as to such as he was not obliged to pay the deed should be declared void, but as to those which he was obliged to pay it should stand as security for the payment thereof, and not as an absolute conveyance. The transaction having been made in good faith, and without any fraudulent intent, there is no reason for holding the whole transaction fraudulent and void in favor of the other creditors. Leonard having the right to prefer John Bertsohy over his other creditors, as to the debts he was under obligation to pay, such preference should be upheld by this court.
By the Court.- — The judgment of the circuit court is reversed, and the cause remanded with directions to the circuit court to enter judgment declaring that the deed to John Bert-sehy be held by him as a mortgage upon the real estate therein