81 Wis. 142 | Wis. | 1892
The following opinion was filed November 17, 1891:
The respondent commenced an action against the Merrill & Houston Iron Works and S. T. Merrill and C. E. G-. Collins, on a note of $5,000 given by said Collins to Merrill & Houston Iron Works, and indorsed by the said company on July 13, Í883, and indorsed by S. T. Merrill on October 24, 1883. Pending such action, garnishee proceedings were instituted against the appellant, Louis B. Merrill, to answer as to his having or holding any property belonging to the defendant in the action, S. T. Merrill. On issue joined, the main question litigated was whether a conveyance by S. T. Merrill and wife to Louis B. Merrill, made July 7, 1883, of sixteen acres of land in the city of Beloit, was made with intent to hinder, delay, or defraud the creditors of said S. T. Merrill, and was therefore void. The undisputed facts appear to be as follows:
S. T. Merrill, on the 25th day of December, 1868, held four notes of Benjamin Eield and Israel Williams, dated August 15, 1868, each for $1,971.75, due in two, three, four, and five years, respectively, and each note, at that time, imported an indebtedness, principal and interest, of the sum of $2,028.75. On that day, as a Christmas gift to his children, he gave what he supposed was about $1,000 to each, as follows: He gave to Mary L. and George S. Merrill one of the notes; to Louis B. Merrill and Annette Merrill another; and to Ellen C. and Robert Merrill another of said notes. The other of said notes he passed over to his wife in payment of his indebtedness to her. He wrote the names of the children on their respective notes, and handed them to his wife and their mother, to keep for them until they should each become of age. They were placed in envelopes marked with the children’s names
In 1873, on the organization of the Merrill & Houston Iron Works, S. T. Merrill, having collected his share in the notes, procured the issuing of ten shares of stock in the new company to Louis B. Merrill, in commutation, exchange or payment of his $1,000 interest in one of said notes. The shares of said stock were for $100 each, and were then of the value of their face. This stock remained in the name of Louis B. Merrill on the books of the company until the assignment of the same to S. T. Merrill in 1883. At the time of this exchange S. T. Merrill appears to have owned properties and securities of the value of about $80,000 over and above his debts. He then considered his wealth sufficient for him and his wife to make the tour of Europe, and soon thereafter they went abroad.
In 1881, after Louis B. Merrill became of age, he worked in the shops of the Merrill & Houston IronWorks at $1.50 per day. He was dissatisfied with his condition and talked ■of leaving home to better it. His father, S. T. Merrill, to induce him to remain at home, promised him personally to make his compensation equal to that of his brother George, the company to pay him the $1.50 per day, and the father to pay the balance. S. T. Merrill had at that time a very large interest in the company. In this way S. T. Merrill became indebted to him from $300 to $500. About the 7th day of July, 1883, the stock of the company had become greatly lessened in value, and the father, S. T. Mer
S. T. Merrill testified that he never had any intention to hinder, delay, or defraud his creditors in any of these transactions with his son Louis B. Merrill. The circuit court found that this conveyance was made with such intent, and set it aside, and required Louis B. Merrill to surrender this land to the payment of the judgment in this action.
These facts are substantially sustained by the testimony and in accordance with the findings of the court.
The gift having been made by the parent to the child, it was irrevocable. Kellogg v. Adams, 51 Wis. 138. Such a gift is valid as against subsequent creditors of the donor, and as against existing creditors also, if made in consideration of natural love and affection and when the donor was free from embarrassment, and the gift was but a small part of his estate, and it being a reasonable provision for the child, and made without intent to defraud. Salmon v. Bennett, 1 Conn. 525; Carr v. Breese, 81 N. Y. 584; Wait, Fraud. Conv. § 102; Carpenter v. Roe, 10 N. Y. 227; Crawford v. Logan, 97 Ill. 397; Clark v. Killian, 103 U. S. 766; Wallace v. Penfield, 106 U. S. 260; and other cases cited in appellant’s brief.
2. There can be no fraud predicated on the future conduct of S. T. Merrill in respect to the gift after it was perfected by delivery. He obtained the possession of the note, and collected principal and interest, and then exchanged the product for ten shares of the Merrill & Houston Iron Works, worth $1,000. It was only $1,000 of the note that was given. The balance belonged to S. T. Merrill, and in place of that $1,000 he had this stock issued to the appel
4. Tbe delay in recording tbe deed until November is said to be a badge of fraud. Tbe rights of creditors do not depend upon registration or on failure to register a deed. Crawford v. Logan, 97 Ill. 396. Tbe appellant could have bis deed recorded at any time be pleases, tbe only risk being a subsequent conveyance recorded first. But it is said tbe failure to record tbe deed gave S. T. Merrill credit, and that tbe respondent bank took bis indorsement of tbe $5,000 when tbe land stood in bis name on record. This means that tbe bank trusted S. T. Merrill on tbe strength of bis ownership of tbe sixteen acres. There is no proof of this. That land would not have given S. T. Merrill that much credit, at tbe most. It is presumed that tbe appellant merely delayed having bis deed recorded. There is no proof that be knew of this claim against bis father, or any other claim, or that bis father was greatly in debt, embarrassed, or insolvent. There is no proof that Louis B. Merrill knew anything about bis father’s financial circumstances. They both testified that they had no intention to defraud tbe creditors of S. T. Merrill, or any one else, in tbe execution of tbe deed or in any other of tbe transactions. If there was any proof that S. T. Merrill had any such intention, there was not a particle of proof that Louis B. Mer
By the Court.— The judgment of the circuit court is reversed, and the cause remanded with direction to dismiss the proceedings of garnishment against Louis B. Merrill.
A motion for a rehearing was denied February 2, 1892.