La Crosse National Bank v. Wilson

Cassoday, J.

It appears from the undisputed evidence in this case that in -June, 1882, the defendant, Weston, received a deed of conveyance of the 1,400 acres of land in Clark county in question, and other real estate, from one Schofield and wife, reciting a consideration of $25,000; that the same was then recorded; that in the spring of 1884 said Weston was doing business in La Crosse, and was in- *396 debtecl to the plaintiff in this action, and owned the 1,400 acres of land in Clarke county mentioned; that at that time he was interested in a lumber company at Fort Madison, in the state of Iowa, which had in its employ the said B. M. Wilson, then a young lady between nineteen and twenty years of age, known by the name of Birdie M. Wilson; that May 8, 1884, said Weston and w7ife drew a deed of conveyance of the 1,400 acres of land mentioned, to said B. If. Wilson, reciting a consideration of $15,000; that said deed was executed and acknowledged by said Weston and ■wife June 19, 1884, and thereupon placed in the Traders’ Bank in Chicago, and held by that bank for about two weeks in escrow; that August 23, 1884, said Wilson sent the deed to the register to be held pending negotiations for a mortgage, and only to be recorded upon notice given; that September 15,1884, she wrote to the register to record the deed; that the same was recorded September 11, 1884; that September 10, 1884, said B. If. Wilson executed a mortgage to Abner Coburn on said 1,400 acres of land, conditioned for the payment of $10,000, and the same was recorded September 21,1884; that September 10,1884, said B. If. Wilson executed another mortgage on said 1,400 acres of land to said Weston for $8,000, and the same was recorded September 23, 1884; that the deed from B. If. Wilson to McDonald Bros, was executed December 21, 1885, and recorded January 14, 1886, and conveyed the 1,400 acres of land in question, and recited a consideration of $36,000; that January 8,1886, McDonald Bros, executed and delivered to said B. M. Wilson a mortgage on the 1,400 acres of land in question, conditioned for the payment of $15,000, and the same was recorded January 21,1886; that January 8,1886, McDonald Bros, executed another mortgage to B. M. Wilson on said 1,400 acres of land, conditioned for the payment of $8,000, and recorded February 12,1886, and that that mortgage was assigned by B. If. Wilson to A. *397 Ilealy & Sons February 8,1886, and the assignment thereof recorded Febuary 12, 1886; that in. the matter of all of said several negotiations, conveyances, and Mortgages, the said John H. Weston acted as and for the said B. 11. Wilson. These facts with the evidence in the record are sufficient to justify the findings of the court to the effect that the conveyance of the 1,400 acres of land to Wilson by Weston was without any consideration, and fraudulent and'void as to the creditors of the latter,— including the plaintiff,— and hence- that the alleged title of Wilson to the draft, notes, and mortgage in the hands of the garnishees was void as to Weston’s creditors, including the plaintiff.

The contention that the draft, notes, etc., could not be reached by garnishment by reason of their character as such is certainly untenable. Storm v. Cotzhausen, 38 Wis. 139 . In that case a draft payable to the order of the judgment debtor and in the hands of the garnishee was reached on garnishment. A creditor is expressly authorized to proceed by garnishment against any person having “ any property whatever, real or personal, in his possession or under his control, belonging to such creditor’s debtor.” Sec. 2752, R. S. “ The words ‘ personal property ’ include money, goods, chattels, things in action, and evidences of debt.” Subd. 3, sec. 4972, E. S. This language is broad enough to include the draft and notes in question. Storm v. Cotzhausen, 38 Wis. 144 ; State v. Coyle, 41 Wis. 270 ; Wayland University v. Boorman, 56 Wis. 660 . Garnishment is based upon the theory that the property of the debtor in the possession or under the control of the garnishee is not in such a condition as to be seized on execution. Sec. 2753, E. S. In fact, the affidavit for garnishment must state that such debtor “ has not property liable to execution sufficient to satisfy the plaintiff’s demand.” Ibid. That section, as amended, extends to “ any cause of action mentioned in sec. 2731.” Laws of 1885, ch. 286. This last section pre *398 scribes what an affidavit for an attachment must contain. But the statute is still more specific on the point in controversy. It provides that “ from the time of the service of the summons upon the garnishee he shall stand liable to the plaintiff to the amount of the property, moneys, credits, and effects in his possession or under his control, belonging to the defendant, or in which he shall be interested, to the extent Of his right or interest therein, and of all debts due, or to become due, to the defendant, except such as may be by law exempt from execution. Any property, moneys, credits, and effects held by a conveyance or title void as to creditors of the defendant, shall be embraced in such liabil-ityP Sec. 2768, R. S. The addition to that section by amendment was in furtherance of the same purpose. Sec. 2, ch. 86, Laws of 1881. The words in italics, in connection, with the other provisions of the statutes cited, clearly evince a purpose to make the remedy by garnishment as effectual in reaching non-leviable assets, things in action, evidences of debt, credits, and effects, and in fact any property held by anj7 sort of conveyance or title void as to the creditors of the principal defendant, as the old creditors’ bill in chancery. Such is the logical result of previous decisions of this court. Mullen v. Reinig, 72 Wis. 391 ; First Nat. Bank v. Knowles, 67 Wis. 389 ; Sutton v. Hasey, 58 Wis. 556 . As indicated in one of these cases, the real issue for trial in this garnishee action, therefore, was whether the deed from Weston to Wilson wras fraudulent and void as to Weston’s creditors, including the plaintiff; that is to say, Was it made with the intent to hinder, delay, or defraud such creditors? The court found that it was. This being so, the draft and notes, as a part of the avails of the fraudulent transaction, were .liable in garnishment for the plaintiff’s debt. No question of any bóna fide holder for value is involved. The mere fact that such avails had passed from the immediate possession and control of the fraudulent *399 yenclee and bad come into the bands of tbe garnishees, who held the same for her, in no way militates against their being reached by garnishment; otherwise the effectiveness of the process would depend upon the ignorance or craftiness of the perpetrators of the fraud instead of the establishment of the fraud itself. In such cases regard must be had to the substance of the transaction, instead of the mere form of the device resorted to in order to conceal the intent. ¥e must hold that a sufficient amount of the draft, notes, and mortgage to satisfy the plaintiff’s claim was liable to garnishment.

It is claimed that such garnishment is exclusively a legal remedy, and hence that the constitution guarantied to Miss Wilson a jury trial as a matter of right, which the court refused to grant. Sec. 5, art. I, Const, of Wis. Of course the right of trial by jury remains inviolate as it existed before the adoption of the constitution, and extends to all cases at law. There may be cases of garnishment where such right exists, but, as already indicated, the garnishment in this case was to reach non-leviable assets, things in action, evidences of debt. We do not understand that in such cases a party was, prior to the constitution, entitled to a jury trial as a matter of right. On the contrary, the remedy in such cases at that time was by creditor’s bill or proceedings in the nature of a creditor’s bill, and essentially equitable. The mere fact that the same object is now secured by a more direct and simple proceeding given by statute, does not change the relation of the parties nor the essential nature of the remedy which formerly existed. Buford v. Holley, 28 Fed. Rep. 680; Shepard v. Eddy, 2 N. Y. Supp. 531 ; McElrath v. U. S. 102 U. S. 440 ; Barton v. Barbour, 104 U. S. 126 . This is not “an issue of fact in an action for the recovery of money only, or of specific real or personal property,” within the meaning of the statute. Sec. 2843, R. S. We find no statute requiring an *400 issue in garnishment like the one at bar to be tried by a jury. It follows that no error was committed in refusing a jury trial.

By the Court.— The judgment of the circuit court is affirmed.