49 Wis. 101 | Wis. | 1880
Although the finding of the circuit court is general, sustaining the allegations of the complaint, and’there are no special findings of fact, the case'will be considered in this court upon appeal, so far as its merits are concerned, under the rule that this general finding will not be disturbed unless there is a clear preponderance of the evidence against it. This being a case in equity, after a very full trial, with all the evidence taken and in the record, without passing upon the various questions raised upon matters of practice, and upon the rulings of the circuit court in the admission or rejection of testimony, we think we ought to pass directly upon the merits of the action, under the above rule, as the view we are compelled to take of the evidence must put an end to the case.
In this view we have carefully noticed and considered all of the evidence relating to the main question, whether the sale of the property in controversy by Reid to Persons, on the 28th •day of August, 1874, was made with the intent to hinder, delay or defraud the creditors of Reid, and therefore void. On this question the inquiry must be limited to the intent of the parties at the time of- and-in the transaction of the conveyance, and it is quite immaterial what may have been the intention of either of the parties formed subsequently, and in their deal
The testimony relating to the value of the lots conveyed at the time is very conflicting, but we think it was conclusively shown, and by a clear preponderance of the evidence, that, as they were then situated, they were of very little value,, except for the purpose of being improved and used for mill and manufacturing purposes, and of much less value than the sum of $12,000, the consideration named in the deed. The mills thereon had been recently burned, and Reid was properly and naturally -very anxious to obtain pecuniary assistance from some source for the purpose of rebuilding and again setting in operation his manufacturing business on these lots, in order to make the property productive and useful. lie claimed to have other means at the time besides these lots, which he estimated at about' $20,000, but not available (except in a very small amount) for such purpose; and he was the owner of several other lots in the village of Depere, but they were of no great value, and he was evidently reputed at the time to he a man of wealth and good credit.
Tie owed one B. F. Smith at the time about $1,200, on one note of $500, which became due June 20, 1874, and one note of $434, due the last of May, 1874, and one note of $280, due in July, 1874, besides a part of a running account, commencing March 27,1874, and ending in May, 1875, finally amounting to $216. He, also, at the time, owed one N. C. Foster
The appellant Persons resided and was doing business at Broadhead, a long distance from Depere, and it does not appear that he had any experience in the manufacturing business, or in the building of mills, or in the use of machinery; but he was a man of money capital, and had been formerly engaged in the lumbering business at Depere, and knew something of the property in question. It does not appear that prior to this transaction there had been any intimacy, or special acquaintance, or peculiar friendship between Reid and Persons. Reid sought Persons, and made application to him, at Broadhead, for pecuniary assistance in rebuilding his mill, and stated to him the situation of the property, and the use he wished to make of the money. It appears from the testimony of Reid that a mortgage to secure the loan was spoken of instead of a deed, and that Persons refused to take a mortgage because the creditors of Reid might question it on the ground of fraud; but Persons denies that a mortgage was spoken of at all, and the reason given by Reid why Persons declined to take a mortgage was a very foolish one, if given, and very improbable.
The better reason than this, for taking a deed upon the conditions and arrangement- hereafter referred to, is claimed to have been given by Persons, and is made apparent by the nature of the transaction; which was, that' Persons might retain the control and "supervision of the use and investment of his moneys in the improvement of the property, which
These facts, together with the length of time which elapsed before their entering judgment against Reid, show that neither Smith nor Foster was disposed to press his claim against Reid, but, on the other hand, that they were disposed to treat him with indulgence, until such time as he could realize profits from his restored business by the use of the moneys of Persons; and show, also, that neither Smith nor Foster, until a long time after the sale, questioned its bonafides or validity.
After this brief statement of the situation of the parties and of the property, as it appears from the evidence, we come to consider the transaction itself; and, in addition to the deed, which was absolute on its face, it becomes necessary to consider the legal effect of the agreement of the parties,, and the terms and conditions upon which the money was advanced and the title conveyed.
The substance of this agreement or arrangement is given by several witnesses, and may be best understood by copying the memorandum of it, made by Persons at the time of the sale: “A. Reid is to deed me the nine lots where his old
This memorandum, construed with the agreement as stated by Mr. Baker, who drew the deed, and as stated by Bowen when it was made in his presence at Broadhead, and with the proposition which Reid testifies he made at the time of the first -interview with Persons (which, in the language of Reid, was, “ My proposition to Persons was to have him furnish me means to complete the work and take an interest with me; I had the property, but no money; I wished him to furnish money, and he asked me how much the property was worth ”), is not difficult to understand. Its legal effect was to make Reid and Persons copartners in the property and business, with equal profits, on the condition that Reid should pay back to Persons one-half of his advancements and ten per cent: interest. In carrying out this arrangement, Reid had the entire supervision of building the mill and other constructions,, putting in the machinery, getting it into operation and stocking it; and Persons, without question, furnished the money for these purposes, with the exception of a small amount furnished by Reid out of his own means-; and when the mill was finally completed and in operation, Reid acted as the superin
In June of .1875, the creditor B. F. Smith attached the whole property upon his claims against Reid, on the ground of fraud in the conveyance to Persons, and Reid traversed the affidavit in attachment under his oath, denying the fraud. After this, nothing appears to have been done by either Smith or Foster to contest the validity of this transaction and enforce their claims against the property for over two years, and until July, 1877, when these supplementary proceedings were instituted. These creditors took no steps to enforce their claims against the property until long after the buildings were completed and the machinery in operation by the use of a very large amount of the moneys of Persons; and then took no further steps in that direction for over two years, when the mill was in operation, furnished and supplied by the same means. It looks very much as if these creditors lay by, watching the chances of this enterprise, to see if Reid could not obtain out of it in profits sufficient to pay their demands, and, when they found such a prospect dubious, sought to subordinate the whole property, made valuable by the advancements of Persons, to the payment of their claims, on the ground of fraud in the original conveyance.
It is in this condition of affairs, when Reid had abandoned his chances of re-investing himself with one-half of the property, and of obtaining one-half of the profits, and had become personally hostile to Persons, that these creditors commence 'proceedings to set aside this conveyance, and have availed themselves of the testimony of Reid to establish the fraud of the sale. If Reid’s evidence had not been rendered entirely worthless by his many contradictions of his own statements, and by now attempting to establish, by his evidence, a fraud, which he had before sworn did not exist, his present attitude of hostility towards Persons, and his mistaken interest in having the sale declared void, would, at least, make it very
.The next and only question -to be considered is, whether there is any reliable evidence in the case to show that Persons expressed an intent to defraud the creditors of Reid at the time of the transaction, or has since admitted or confessed that he had such an intent in taking the conveyance. We
This is conclusive of the question that when the contract was made there was no intent to defraud mentioned or considered. The only witnesses who. testify to any pretended admissions of Persons, subsequent to the execution of the deed, are these creditors, Smith and Foster; and they were made, according to their own testimony, about the time this litigation was threatened. They both agree that Persons told them all about the contract, and its terms and conditions, and the interest which Reid retained in the property and business, substantially as the facts were, as proved, and then admitted that he had consulted a lawyer before the conveyance was made, and that it was made secure and safe against the creditors of Reid. These statements, so far as they relate to the time before the conveyance, Persons utterly denies, and explains that he did say that he had consulted a lawyer in
But the story of these creditors is in itself incredible. It is not at all likely that Persons would confess and admit to these creditors, who were threatening him with this litigation, on the ground of the very fraud which they say he confessed, when no such intent, motive or purpose of the transaction was expressed by either party at the time it was consummated, that the conveyance was actually taken to defraud them, and thus put himself entirely within their power- and hazard the very large investment he had made in the property. And it is hot at all likely that Persons, in the same conversation in which he fully explained to them the terms of the contract, and the interest of Reid in the property and business, confessed to them that all the arrangements between the parties and the operation of the mill jointly and for their mutual profit and advantage, and the investment therein of so large an amount of money capital by Persons, and the execution and delivery of an absolute deed, were all but subterfuges only, to cover up the property from the reach of the creditors of Reid. Such a confession by Persons, to such persons, at such a time, and under such circumstances, is inconsistent with his mental sanity and common sense.
I have not sought to give the language of the witnesses, but only the substance and effect of their testimony, and'that correctly; and from a careful consideration of all the evidence, and of the facts and circumstances, and of the situation óf the parties and property at the time of the conveyance, the conclusion is irresistible, that it was made without any intent to
By the Court.— The judgment of the circuit court is reversed, with costs, and the cause remanded with directions to that court to dismiss the complaint.