Dalton v. Meister

239 N.W.2d 9, 71 Wis. 2d 504, 11 A.L.R. 4th 332, 1976 Wisc. LEXIS 1250
CourtWisconsin Supreme Court
DecidedMarch 2, 1976
Docket593 (1974)
StatusPublished
Cited by15 cases

This text of 239 N.W.2d 9 (Dalton v. Meister) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dalton v. Meister, 239 N.W.2d 9, 71 Wis. 2d 504, 11 A.L.R. 4th 332, 1976 Wisc. LEXIS 1250 (Wis. 1976).

Opinion

Wilkie, C. J.

On this appeal we are concerned only 1 with the demurrer of the defendant and sole appellant, the American City Bank & Trust Company, in an action commenced by LeRoy Dalton, the plaintiff-respondent, against Howard Meister, defendant, and a number of other named defendants, to wit: Gae Meister; Morris M. Meister, Executor of the Estate of Edith Meister; Ida Sack; Continental Bank & Trust Company; Biltmore Building, Inc.; Norman C. Skogstad; Marilyn Skogstad; *508 Seven-Up Milwaukee, Inc.; Universal Telephone, Inc.; and Brief, Inc.

As pertinent here the complaint alleges: On or about December 29, 1969, plaintiff Dalton secured a judgment in the amount of $151,749.98 against defendant Howard J. Meister as a result of a defamation suit in the circuit court for Milwaukee county. 2 Except for some $200, this judgment remains unpaid.

In anticipation of the trial, Meister had engaged in transactions with the defendants American City Bank and the Continental Bank (of which he was past president) such that he became indebted to American City Bank in the amount of about $2,500,000. The alleged purpose of these transactions, in which American and Continental allegedly conspired with Meister, was to “liquidate and secrete” from Dalton assets upon which Dalton could have realized subsequent to judgment.

At the same time, Meister, in conspiracy with a bank officer, fraudulently induced his seventy-nine-year-old mother, Edith Meister, who was unable to read English, to execute notes in the principal amount of $1,100,000 to American City Bank. This effectively rendered her estate insolvent, depriving Dalton of access to the one-third interest in Edith’s estate bequeathed to Howard Meister under the terms of his mother’s will. This transaction also allegedly permitted Howard Meister to partake of and dispose of Edith’s assets, and permitted American City Bank to “avoid compliance with the banking laws and regulations.” 3 All of the defendants allegedly conspired and participated in this arrangement.

*509 Also prior to the rendering of judgment against him, but in anticipation thereof, Howard Meister purchased real estate in Honolulu, placing the title in the names of Norman and Marilyn Skogstad (neither of whom allegedly furnished any consideration) for the purpose of defrauding Dalton.

In 1971, during the pendency of the appeal in this court, all of the named defendants and Edith Meister entered into an “agreement.” 4 This agreement operated to settle the indebtedness of Howard Meister to certain of the defendants, including American City Bank, and to transfer his entire estate and the Honolulu property, rendering him insolvent. This was done by the defendants without the knowledge of Dalton, for the purpose of hindering and defrauding him in the collection of his judgment. There were special relationships between the defendants, as of the time of the relevant transactions, as follows:

Howard J. Meister was past president of Continental Bank, secretary of Biltmore Building, Inc., an undenominated “officer” in Brief, Inc., and a one-third owner of Seven-Up Milwaukee, Inc. Gae Meister is his wife.

Morris M. Meister and Ida Sack are brother and sister of Howard Meister. Morris is president of Seven-Up Milwaukee, Inc., president and treasurer of Brief, Inc., treasurer of Biltmore Building, Inc., and is executor of the estate of Edith Meister. Ida Sack is vice-president of Biltmore Building and secretary of Brief, Inc. The capital stock of Brief, Inc., is equally divided among Howard and Morris Meister, and Ida Sack.

*510 Edith Meister was president of Biltmore Building, Inc.

Raymond Dittmore is president of both Continental Bank .and Universal Telephone, Inc. 5

Norman C. Skogstad (spouse of Marilyn Skogstad) was Howard Meister’s attorney during the trial leading to the judgment underlying this action.

The complaint is divided into three alternative causes of action: The first alleges fraud in the American City loan to Meister and the subsequent “agreement” disposing of Howard Meister’s estate, and demands that the “agreement” be set aside to the extent necessary to permit Dalton to collect his judgment, or that Dalton be permitted to execute against the property conveyed by the “agreement” or the proceeds thereof; the second alleges that the “agreement” operated as a voluntary assignment for the benefit of creditors such as is described in ch. 128, Stats., but that it failed to conform to the procedures required by ch. 128, creating a preference in favor of the parties to the “agreement,” and demands that the agreement be voided and Meister’s property distributed ratably to all of his creditors; the third alleges that a “resulting trust” was created in the Honolulu property in favor of Meister’s creditors, and that the “agreement” precluded Dalton, as a creditor, from obtaining his share of the trust proceeds, and demands that the “agreement” be voided and the trust proceeds distributed to all creditors.

The trial court overruled the defendant-appellant bank’s demurrer to plaintiff’s complaint.

Several issues are presented by this attack on the trial court’s order:

*511 1. Does a Wisconsin court have jurisdiction to recognize and enforce a “resulting trust” in land located in Hawaii?

2. If so, is such a proceeding properly joined to the main action for conspiracy to defraud?

3. Is the personal representative of Edith Meister, Morris Meister, a necessary party?

4. Is a proceeding under ch. 128, Stats., properly joined to the action for conspiracy to defraud?

5. Does the complaint state facts sufficient to constitute a cause of action for conspiracy to commit fraudulent conveyances in violation of ch. 242, Stats. ?

The answer to issues 1, 2, 4 and 5 is “Yes;” the answer to issue 3 is “No.” We therefore affirm.

Jurisdiction and Joinder of the Action Involving Land in Hawaii.

The American City Bank first argues that Wisconsin courts have “no jurisdiction to create a resulting trust in land in Hawaii,” since creation of such a trust is within the “sole and exclusive jurisdiction” of that state. While it is true that the law of the state of situs may be applicable to determine the existence of a fraudulent conveyance of or resulting trust in the land, 6 this does not *512 mean that courts of any other state are powerless to issue orders, arising from rights claimed in the proceeds of such land, to persons over whom in personam jurisdiction exists.

The Restatement provides:

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Bluebook (online)
239 N.W.2d 9, 71 Wis. 2d 504, 11 A.L.R. 4th 332, 1976 Wisc. LEXIS 1250, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dalton-v-meister-wis-1976.