Mason v. Pierron

Lyon, J.

The various errors assigned as grounds for the reversal of the judgment herein will be considered in their order.

*590 1. On the trial of the action, the appellant claimed the right to a jury trial of the issues made by the pleadings, but the point was not pressed in the argument of the cause in this court, although it is discussed in the brief of counsel for the appellant. Counsel abandoned this alleged error advisedly, for it was decided upon the former appeal herein that the action is an equitable one. 63 Wis. 239 . Hence, although the court might, in its discretion, have awarded a jury trial of an}r or all the issues, yet its refusal to do so is not error.

2. It is maintained by counsel for the appellant that the payment of the judgment against the sureties of the appellant by the plaintiffs, and those whom they represent, was a voluntary payment, and hence that they are not in a position to enforce contribution against the defendant Lal-lier, their co-surety. Several adjudications by different courts are cited in support of this proposition. None of these are in point. They are all actions to recover money paid for alleged illegal license fees or taxes, and in which, or at least some 'of them, it was held that if the money sought to be recovered was paid with full knowledge of the facts, but under a mutual mistake of law as to the liability of the payors, the payments were voluntary, and could not be recovered. The cases in this court of Van Buren v. Downing, 41 Wis. 122 ; Powell v. Sup'rs St. Croix Co. 46 Wis. 210 ; and Kollock v. Parcher, 52 Wis. 393 ,— belong to the same class. The rule of law applicable to this case is that a surety may, without compulsion, pay the debt when due, and immediately sue his co-surety for contribution without demand or notice. Brandt on Suretyship, § 257, and cases there cited. Indeed, the rule is elementary.

3. The next error assigned is the failure of the plaintiff Mason to file the affidavit specified in R. Si sec. 3024, which is required in order to preserve the lien of the original judgment upon the lands affected by this action. It is true that Mason filed no such affidavit; but the sureties Gfaynor, Bart *591 lett, and Moore, who paid the whole judgment in the first instance, each filed his affidavit in strict compliance with the terms of the above section. This is sufficient. These affidavits covered the whole judgment, and inured to the benefit of Mason, who mad-/ contribution to the above-named sureties, and rendered it unnecessary that any further affidavit should be filed.

4. On the former appeal it was held essential to the validity of the complaint that the insolvency of the defendant Lallier should be averred. Of course, it is equally essential that it should be proved on the trial. There was much, testimony given on this subject. The circuit court found that at the date of execution by him of the conveyance to the appellant, Lallier was insolvent; that all his property above exemptions, in whatever form, did not equal his then indebtedness by at least $5,000. It is claimed that this finding is unsupported by the testimony.

The court found that at the time last aforesaid the only property subject to éxecution which Lallier had was a certificate of deposit in a bank therein named for $1,800; an interest in a grocery store worth, above exemptions, not to exceed $1,500; other personal property worth, above exemptions, about $300; and real estate, liable to execution (excluding certain parcels mortgaged for more than they were worth), of the value of $2,000,— making in all $5,600. The court also correctly found that the share of the original judgment which, in justice and equity, Lallier ought to pay the plaintiffs, amounted to $9,096.28. ¥e think the testimony fully sustains the above findings, and hence that Lallier was badly insolvent, unless, as counsel for the appellant claims, he should be credited with the sum of $4,700, which the appellant testifies he paid him for the lands, in controversy. But allowing him this amount would scarcely restore his solvency, for it would only leave the meager sum of about $200 in his favor, excluding interest and costs. *592 Besides this, Lallier declared to his co-sureties his inability to pay more than $2,500 or $3,000 on such original judgment against them; This statement is probably a truthful one, and is a frank admission of his insolvency.

It is manifest, however, that the learned circuit judge did not believe that the appellant paid him $4,100 for the lands conveyed to him by Lallier in 1882, as the appellant claims to have done. It is worthy of notice, in this connection, that the appellant did not call Lallier as a witness on the trial, or obtain his deposition, as he might have done, to prove the amount so paid, or to prove Lallier’s solvency; also, that it does not appear what Lallier did with the money if he received it. He remained at Eond du Lac several months after it is alleged he received the money; yet there is no evidence that he deposited it, or made any use of it, or even had it in his possession. There is also some significance in the fact that whatever property Lallier had, except the real estate valued at $2,000 as aforesaid, he after-wards removed from the state, and thus placed it beyond the reach of an execution.

In view of all the foregoing considerations, we cannot say that the court erred in finding that Lallier was insolvent when he executed the conveyance in question to the appellant in 1882.

5. It is very earnestly argued by the learned counsel for the appellant that the findings that the conveyance of 1881 from the appellant to Lallier, and that of 1882 from the latter to the appellant, are fraudulent and void as against the plaintiffs,.are unsupported by the testimony. In considering this proposition, it must be remembered that the parties are intimately connected with each other,— Lallier having married the adopted daughter of the appellant; that the conveyance of 1881 was made after the appellant was in default to the city, and when he was about to proceed under the insolvent laws to obtain a discharge from his in *593 debtedness; and that the conveyance of 1882 was made after the city had obtained judgment against the appellant sureties, including Lallier, for nearly $40,000, and before such judgment had become a lien on the real estate of the judg: ment debtors in Eond du Lac county. Besides, the court found, upon sufficient testimony, the value of the land convoyed by the deed of 1882 to be $9,000, subject to a mortgage of $2,000, while the consideration alleged to have been paid therefor was only $4,700. These facts, and others hereinbefore mentioned bearing upon the question of fraud, undoubtedly had a controlling influence upon the mind of the circuit judge in determining that question. In view of those facts, and after a careful consideration of the whole testimony in the case, we are unable to say that the findings of the circuit court in this behalf are unsupported by the proofs. We have but little doubt that Lallier executed the conveyance of 1882 to the appellant for the purpose of preventing the original judgment from becoming a lien upon’ the lands conveyed thereby; thus placing those lands beyond' the reach of any execution which might thereafter be issued upon such judgment. Under all the circumstances of the case, it seems almost incredible that the appellant, when he accepted the conveyance, was ignorant of such fraudulent intent of Lallier.

6. It has already been stated that, after the conveyance to him of 1882, the appellant mortgaged the premises so conveyed to a bona fide mortgagee for the, sum of $2,500, and that such mortgage debt remains unsatisfied. The circuit court rendered a personal judgment against the appellant for the amount of such mortgage, principal and interest. It is claimed that the judgment in this respect is erroneous.

The principle upon which this judgment was rendered, received the sanction of this court in Ferguson v. Hillman, 55 Wis. 181 . In that case a personal judgment was upheld *594 against a fraudulent grantee, who had sold the property, for the amount received by him on such sale, which had not been applied in the payment of the grantor’s debts. The principle upon which that ease was decided, and which the circuit court applied to the present action, is eminently; equitable and just. The fraudulent grantee holds the property in trust for the creditors of the fraudulent grantor, and, like any other trustee, he must preserve it intact for such creditors. If he place it beyond their reach by a sale to a bona fide purchaser, or if lie lessens its value by giving a mortgage or other incumbrance upon it to a bona fide mortgagee or incumbrancer, he is guilty of a breach of duty for which he must answer to the creditors in damages. The measure of damages in the latter case is necessarily the amount of the incumbrance. It is quite immaterial that the mortgage so given by the appellant upon the property in controversy also covers his homestead; and it is also quite immaterial what use he made of the money raised'by the mortgage, so long as it did not go to the creditors entitled to a lien upon the lands so mortgaged.

The plaintiffs are entitled to a judgment lien upon all the interest in the lands in question which Lallier conveyed to the appellant; hence it is the duty of the appellant to remove the incumbrance he has placed upon such lands, and which impairs the security" of the plaintiffs to the amount thereof, or to pay that amount to the plaintiffs. We conclude, therefore!, that the circuit court did not err in rendering a personal judgment against the appellant for the amount of such mortgage. We are of the opinion, however, Ih'at if the appellant removes the mortgage from the premises by procuring a release thereof before the premises are sold upon execution in the original action, it will be proper for the circuit court, upon proof thereof, to direct that a satisfaction and discharge of the personal judgment be entered.

See note to this case in 34 N. W. Rep. 921 .— Rep.

Upon -the whole case, we find no sufficient ground for disturbing the judgment of the circuit court.

By the Court — Judgment affirmed.