Koch v. Peters

73 N.W. 25, 97 Wis. 492, 1897 Wisc. LEXIS 73

• Court: Wisconsin Supreme Court
• Decided: November 16, 1897
• Status: Published

Opinion

WxNslow, J.

This was one of-the contests which so often

arise between a chattel mortgagee of a stock of goods and attaching creditors of the mortgagor. The attaching creditors claimed that the mortgage was fraudulent as to creditors, and this was the main question litigated in the case. The fact was undisputed that the consideration for the execution of the mortgage was a pre-existing debt, and the jury found that this debt was a bona fide debt, and that, while the mortgagor intended to defraud his creditors in giving the mortgage, and the mortgagee knew such facts and circumstances as should have put him on inquiry, which would have led to his ascertaining the mortgagor’s purpose, still the mortgagee had no knowledge of the fraudulent intent of the mortgagor, and that there was no agreement or understanding that the mortgagor might apply the proceeds of sales of the mortgaged property to his own use.

Under the rule laid down in Bleiler v. Moore, 94 Wis. 385, these findings establish the validity of the mortgage. It was there held that, to render fraudulent such a transfer of property to pay a bona fide debt, the creditor must participate in the fraudulent purpose of his debtor. It is not sufficient that the creditor may know or believe that the debtor is intending to hinder, delay, or defraud other creditors if he does not participate in that intention. So the principal contention in this case is easily decided in the plaintiff’s favor, and does not require elaboration of argument, nor further citation of authorities.

There are, however, other questions in the case which require attention, and which have caused us no little trouble; not so much by reason of their inherent difficulty or intricacy, as on account of the slovenly and imperfect manner in which the bill of exceptions has been prepared. So great has been the difficulty encountered in ascertaining the facts upon some of the questions raised that it has almost seemed as if we would be justified in striking the bill bodily from the record’ and affirming the judgment upon the pleadings ■and verdict. The amount involved in the action, however, is so considerable that we have finally concluded to consider the questions as best we may upon the imperfect and fragmentary record before us.

In order that these questions may be properly understood, it becomes necessary to state some further facts which appear in the record. The stock of goods was first seized on the 26th day of November by the sheriff, Peters, upon a writ of attachment in favor of Bhaltman & Oo. Afterwards, upon the same day, the sheriff received three other writs of ■attachment in favor of the defendants Scheftels, Abeles, and Mahler, and the Pritzlaff Hardware Company, and levied them upon the same goods in the order of their receipt, and all subject to the Shakman attachment. The remaining attachments were levied subsequently, partly on the following ■day and partly on November 28th, 30th, and December 1st. The attaching creditors were represented by different attorneys, and we find no evidence showing concert of action, before the levying of the attachments, but it rather appears to be a case where creditors acted separately, and each strove to obtain as early a lien as he could after hearing of the first attachment. It appears that the sheriff began selling the goods at private sale on or about December 13th, and continued his sales, either at privale sale or at auction, until about the 16th day of January, 1895, when all the goods had been sold, and the aggregate amount received upon the sales was $S,203.30. It was charged in the complaint that the sheriff unlawfully sold the goods under the direction of the defendants, and under a “supposed written authority or permission ” procured from the circuit judge in Dodge county, at chambers, but which supposed order was not authorized by law; and that the sheriff omitted to comply even with the terms and conditions of said supposed authority in making said sale. The answers of the defendants admitted the sale of the goods, but alleged that the sheriff was duly authorized, by order of the circuit court for Dodge county, to sell the same, and complied in all respects with said order. Neither party put the alleged order in evidence, and, so far as the proof showed, the sheriff had no authority to sell the property as he did. The summons, complaint, undertaking, writ of attachment, and return in each of the attachment actions were put in evidence, but nothing more, and it does not appear that the attachment actions ever went to judgment, nor that the sheriff ever applied any of the money received by him to pay any of the attaching creditors’ claims. The sheriff testified that Messrs. Malone, Lawrence, and Doney, attorneys at law, partly directed him about the sale of the goods. These gentlemen represented all of the attaching creditors save three, who'were represented by Messrs. Colman & Sutherland, of Fond du Lac.

While the sale was progressing,'and in the latter part of December, the sheriff received seven bonds of indemnity, signed by certain of the defendants. These bonds are not preserved in the bill of exceptions, so far as we can find, but they were offered and received in evidence on the trial, and it is stated by the sheriff that they were “ bonds of indemnity given me in the execution of my several acts which I did at Knowles.” In the absence of all definite evidence as to the exact conditions of the indemnifying bonds, we are obliged to accept the statement of the sheriff as to their purport, namely, that they were given to indemnify him against the consequences of his acts at Knowles, which acts wTere the seizing and selling of the'stock of goods in question.

On the 31st day of December, 1894, an action in equity was commenced in the circuit court for Dodge county by all the attachment creditors jointly against William F. Koch, George Koch, and Amelia, his wife, Edward Schwartz, and John Hoffman, in which it was sought to set aside as fraudulent and void the chattel mortgage in question; also a certain transfer by G. G. Koch of a creamery business and property to Schwartz & Hoffman. The relief demanded in. this action, among other things, was that William F. Koch be enjoined from foreclosing his said chattel mortgage, or seizing the goods, or commencing any action to recover their value, and a preliminary injunctional order was issued on the same day restraining William F. Koch from either of said acts during the pendency of the action. Answers were served by the defendants in this action denying fraud, but containing no counterclaim, and upon the 6th of June, 1895, prior to the commencement of the present action, the temporary injunction was, upon motion, dissolved so far as it affected Willimn F. Koch. In this action in equity, the various attaching creditors were respectively represented by the same attorneys who represented them in the attachment actions, and who now represent' them in this action. This brings us naturally to the consideration of one of the grounds of error urged by the defendants.

The pendency of this so-called action in equity was alleged in the answer, and it was claimed that it was a good plea of another action pending between the same parties for the same purpose. The issue was tried by the court, and overruled, and it seems very plain that the ruling was right. The equity action was not an action between the same parties. It was not for the same purpose, nor could the same relief be obtained in it by Koah if successful. Wood v. lalte, 13 Wis. 81-92. It involved one question which was involved in the present action, namely, the question of fraud in the execution of the mortgage, but it did not involve nor could any judgment which might be rendered in it grant Koch any of the relief to which he would be entitled in the present action in case he recovered judgment. If Koch won the equity action, he would have to sue over again at law to obtain his damages for the conversion of the stock of goods. Again, the sheriff was not a party to the action in equity, and Koch was certainly entitled to his action at law against the sheriff to compel him to pay for the property converted; nor could he be deprived of his common-law remedy in that behalf by the commencement by other persons of a supposed action in equity. The proposition seems so self-evident that authorities are scarcely necessary.

At the close of the plaintiff’s case, Mr. Sutherland, who represented three of the attachment creditors whose attachments were levied after some seven or eight prior writs had been levied, moved for a nonsuit as to his clients, and at the close of the evidence he moved the court to direct a verdict for his clients on the ground that the goods had been previously seized by the sheriff under the earlier writs. Mr. Malone also moved at the close of the case to dismiss the action as to all the defendants whom he represented except the defendants 8hakman <& Go., on the ground that there was no evidence to sustain á verdict against any of the other defendants. All these motions were overruled, and error is alleged upon the rulings. In support of the motions it is claimed that the goods were converted by the sheriff once for all when he seized them on the ShaJcman-writ, and that, consequently, when the sheriff received the subsequent writs he did not convert the property by simply indorsing upon the writs a return of a levy subject to the previous levies. There is very respectable authority to the effect that, if the taking upon the first writ was wrongful, then the plaintiff was still, in contemplation of law, the possessor of the goods, and could maintain an action against a subsequent attaching creditor and the sheriff. Cox v. Hall, 18 Vt. 191. It is unnecessary, however, in this case, to decide'that question, because it appears that all the attaching creditors and their, indemnitors became jointly liable with the sheriff for the conversion of plaintiff’s goods. Had the creditors who attached after Shakmcm & Go’s writ was levied done nothing more than place their writs in the hands of th.e sheriff, and direct him to levy upon the goods, it seems probable that they would not have been jointly liable with Shalcman' <& Go., in the absence of some proof showing concert of action. Sparkman v. Swift, 81 Ala. 231; Lee v. Maxwell, 98 Mich. 496.

In this case, however, it appears that there was concert of action on the part of all the creditors after the seizure by the sheriff, and this fact appears by such evidence as to be conclusive. In the first place, it is shown that three of the attorneys for the attaching creditors (who had no interest in the matter except as representing their clients) were present at the sales, and directed the sheriff in making them.' These attorneys represented all of the creditors save three firms who are represented by Mr. Sutherland. Before the sheriff’s sales were finished, however, another step was taken by the attaching creditors, including Mr. Sutherland’s clients, which certainly establishes beyond dispute joint action and liability upon the part of all of them, and that step was the commencement of the so-called action in equity. By this act they obtained an injunction preventing the plaintiff from claiming his property, or even commencing an action to recover it, while a large part of it was still in the hands of the sheriff, and he was every day disposing of a portion of it. It is much as if they had all joined in holding the owner of personal property -while another person was making off with it. There is no escape from the conclusion that by this joint act of active participation in and protection of the sheriff’s illegal conversion the attaching creditors and their indem-nitors (who evidently indemnified the sheriff against the consequences of his proceedings) all became jointly liable with the sheriff. While they may not have been jointly liable in the beginning, they chose to band together and assist the sheriff in his subsequent sale of the property, and thus became joint tort-feasors. Lovejoy v. Murray, 3 Wall. 1. The motion to dismiss the action as to all except the sheriff and the first attachment creditor was therefore properly denied.

There were some exceptions to rulings upon evidence, but they are not of sufficient importance to require discussion. There was no ruling which could affect the questions upon which the case was decided, and hence there was no prejudice even if there was technical error.

We have now discussed all the assignments of error which go to the merits and which seem to require discussion, and have found no prejudicial error as to all of the defendants who were attaching creditors, or who signed bonds of indemnity to the sheriff. There are four defendants, however, who appear simply to have signed undertakings upon attachment, and who do not appear to have signed any indemnity bonds, nor participated in any way in the acts of the sheriff; and we do not see how they can be held liable in this action. Their undertaking simply was an agreement that they would pay the defendant in attachment, George G. Koch, all damages and costs which he might sustain, not exceeding $250, in case he recovered judgment. They gave no undertaking requiring them to respond to the plaintiff here, nor any third person, and, in the absence of proof showing any act on their part either directing the sheriff to levy on the plaintiff’s property' or participating in the levy after it was made, we see no ground to hold them liable. These defendants are J. B. Perry, E. A. Gary, John Hughes, and J. A. Merryman, and as to them the judgment must be reversed m toto.

Some questions arise upon the taxation of costs which require consideration. The summons contained three folios and the complaint 179 folios, of which 160 folios consisted of an itemized schedule of the stock of goods in question. Costs were taxed for these papers' as follows:

Draft summons, 3 fols., 25c."..§ 75

1 copy eng. 1 copy keep. 33 serve. 105 fols., 12c. 12 00

Draft complaint, 179 fols., 25c. 44 75

1 copy eng. 1 copy keep. 33 serve. 6,265 fols., 12c. 75180

This taxation of costs was certainly an abuse. The plaintiff was entitled to tax for draft of each paper and for three copies, viz. one engrossed copy, one to keep, and one to serve. Dunkan v. Erickson, 82 Wis. 128. He was not entitled to make and charge for thirty-three copies to serve simply because there were thirty-three defendants. It is the sheriff’s duty to make copies of the summons and complaint to serve upon the varions defendants. E. S. sec. 731, subd. 4. There is; however, another manifest abuse here, which is of greater importance, which is so glaring that the court will correct it' upon taxation of costs, and that is the charge for copies of 160 folios of complaint which consisted simply of an itemized inventory of the entire stock of goods. It was not necessary to attach such a list to the complaint. The goods should have been described in general terms, and a list could have been demanded and furnished afterwards, if necessary.

The taxation of the items above named should have been as follows:

Draft summons, 3 fols., 25c.'.. § 75

3 copies, engrossing, keep, and serve, 9 fols., 12c. 1 08

Draft complaint, 19 fols., 25c. 4 75'

3 copies, engrossing, keep, and serve, 57 fols., 12c. 6 84

There was also taxed $9.10 for drawing affidavits and resisting a motion to change venue. As the plaintiff was successful in this motion, and recovered $10 motion costs, he cannot tax these items in the bill of costs. The costs allowed on the motion are intended to cover these very things. Costs were allowed for two copies of the judgment, one an engrossed copy and one to keep. This, we think, was correct.

Objection is made to the taxation of double fees for travel of witnesses. It appears that the case was set for trial for a day certain, and that the plaintiff with his witnesses attended on that day, and that the court was then engaged in other business and could not take up the cause, and it was set for another day, and the witnesses went home, and returned on the adjourned day. Under these circumstances we think the charge was correct.

The reduction in the cost bill as indicated above amounts to $805.58. As to this amount the judgment must be reversed.

By the Court. — Upon the appeal of the defendants Perry, Cary, Hughes, and Merryman the judgment is reversed, with costs, and as to them the action is remanded for a new trials upon the appeal of the remaining defendants so much of the judgment as adjudges the recovery of more than $361.46 costs is reversed, and the remainder of the judgment is affirmed, with costs.. No costs are awarded to the last-named appellants, because, upon the merits of the case, the respondent has been wholly successful.