Mayers v. Kaiser

PiNNEY, J. 1. The evidence shows that the judgments upon which the stock of Mayer Kaiser, the judgment debtor, was sold out in Chicago in October, 1883, were for honest debts which he theft owed; and there is nothing in the evidence, so far as we are able to see, to show that there was anything improper or unfair in the manner in — 392 — which the title to the stock purchased became vested in Mrs. Kaiser, Simon Wolf, and Altheimer, October 15, 1883, or in the agreement which they made for its management and sale by Wolf and Mrs. Kaiser for the benefit of the purchasers. The agreement of that date is a plain and reasonable business arrangement, and the facts which it recites are sustained by the evidence. There is nothing to show that the husband and judgment debtor had or used any funds or means of his own to enable his wife ultimately to become the sole owner of the business conducted at “ The Fair,” established in the first instance by Wolf and Mrs. Kaiser under said agreement. The note for $1,500, upon which the judgment against Kaiser in favor of his wife was rendered, was given for money which she testifies she loaned her husband, and the greater part of it but a short time before his failure; and his testimony tends to show that the money was loaned and was not a gift. There is no evidence to the contrary, and the finding of the circuit court that it was a loan is sustained, we think, by the evidence. If the money was a bona fide loan and not a gift there is no reason why the wife should not be protected in like manner as other creditors. She purchased Wolf’s interest, and made full payment therefor, December 29, 1884, and bought out and paid Altheimer for his interest. Mrs. Kaiser's husband, the judgment debtor, was employed in the mean time in the business, at $25 per week; and he managed the business, and rendered his personal services, which were thereafter continued at the rate of $5 per week. It seems clear that the title to the goods and business was, until the sale thereof, February 15, 1892, to her codef,end-ants, her sons and son-in-law, in Mrs. Kaiser, and there is no reason whatever for questioning its validity as to her ■husband’s creditors, unless the fact that he gave his personal time, attention, and services to the management and conduct of the business for about nine years is ground for — 393 — impeaching her title, as being for that reason fraudulent as! against his creditors, and who were such at the time of thel execution sales in October, 1883. It may be conceded that there are some statements in the testimony of the judgment debtor calculated to create suspicion, and particularly in respect to the extent of the business, amount of profits, and value of the stock; but these appear, upon the whole, to have been grossly exaggerated. The circuit court found that the sale of the stock, of February 15, 1892, was for its fair value, and the real estate, the home of the family, appears to be incumbered. While the court should carefully scrutinize all cases of alleged fraud against creditors, wherein members of the family of the debtor make claim to important or valuable interests as against creditors, yet judgment cannot go upon mere suspicion. Fraud cannot be presumed, and the burden of showing it is on him who alleges it. 2. As the business established at Madison in the Fair^ store was the business of Mrs. Kaiser, as against her husband’s creditors, she might lawfully employ her husband/ with or without hire, to manage it and assist her in carrying it on. The evidence does not sustain, we think, the charge that what he did in this respect was in pursuance of any plan or scheme to defraud his creditors. The business was not only her own, and transacted in all respects in her own name, but it does not appear that any claim was ever made to the contrary until this proceeding was instituted, nor that she ever made any concession, or her husband any claim, to the contrary, or that he has, during a period of eight or nine years, used any of the proceeds beyond his five dollars per week as his own, or claimed the right to do so. We are unable to say that his employment and management of the business was not in good faith, or that it shows that he was the real owner and the title of his wife was merely nominal or colorable. Mrs. Kaiser — 394 — had a right to deal with her separate property in all respects as a feme sole, and had a right to employ agents to assist her in managing her property and carrying on her business; and she had a right to employ or avail herself of the services of her husband without subjecting her separate estate to the claims of his creditors. “ With respect to her separate property the statute has placed her upon the same footing as to all the world, her husband included, as if she were, in.the words of the statute, ‘ a single female.’ ” Beard v. Dedolph, 29 Wis. 140. But she may not enter into partnership with him. Fuller & Fuller Co. v. McHenry, 83 Wis. 573. “As a negotiation or dealing, therefore, with respect to her separate estate, the transaction is to be looked upon as if the debtor was not her husband, but a 'stranger. The marriage relation is to be disregarded, except where the question of fraud arises; and there it will be considered, and the transaction more closely scrutinized, on account of the greater inducements offered and facilities afforded for the commission of fraud.” Beard v. Dedolph, 29 Wis. 140; Hoxie v. Price, 31 Wis. 82; Abbey v. Deyo, 44 N. Y. 348; Gage v. Dauchy, 34 N. Y. 297. 3. The proposition most strongly pressed at the argu-I ment was that the creditors of Kaiser, the husband, were . entitled to receive payment of their claims out of the prop- * erty accumulated, beyond the present needs of his family, , by his skill, industry, and ability in managing and. conducting the business of “ The Fair ” as the agent of his wife; and the cases of Glidden v. Taylor, 16 Ohio St. 509, and Feller v. Alden, 23 Wis. 301, among others, were cited in support of the position. This contention is contrary to the case of Dayton v. Walsh, 47 Wis. 113; wherein it was held that where a married woman, having - at the time no - separate estate, purchased a farm of a stranger entirely upon credit, giving her notes for the price, secured by a mortgage on the property, and her husband lived with her on — 395 — the farm and controlled the farm labor, carrying on the business in her name and as her agent without any agreement as to his compensation for such services, the purchase by her having been made in good faith and not as a means of fraudulently placing the husband’s property beyond the reach of his creditors, the crops raised on the farm by their joint labor and management belonged to the wife, and that they were not subject to sale for the husband’s debts. This conclusion was considered to be in accordance with the case of Feller v. Alden, 23 Wis. 301, relied on by the appellant. In Feller v. Alden it was held that where the wife owned land as her separate estate she might cultivate it by means of the labor of her husband and their minor children, and that the legal title to the products and proceeds would be in her, so that they could not be levied upon under an execution against her husband; that the mere fact that the wife employed the husband’s services in cultivating her land was not proof of an attempt to defraud his creditors. It ivas questioned in that case, upon the authority of Glidden v. Taylor, 16 Ohio St. 509, whether a court of equity, upon a proper application of the husband’s creditors, would not make an apportionment of the products, as between the fair rent and use of the capital of the wife and the value of the personal services of the husband, so as to give the creditors the benefit of his industry, but the question was not decided. The case of Glidden v. Taylor, supra, is materially different from this case, in respect to the fact that in this the husband had a compensation for his services, and none of his property was used in the business, and none, of the profits applied to his use. Penn v. Whitehead, 17 Gratt. 503, seems to hold that in such a case as Olidden v. Taylor the wife would not be entitled to any share of the profits. It is stated in some of the text-books, and held by many well-considered cases, that the time, talents, and industry of a debtor are at his own disposal, and that his creditors — 396 — Rave no claim thereto; that he may bestow them gratuitously upon whom he will, and upon his wife as well as another, and that he cannot be compelled to labor for the benefit or advantage of his creditors; that while the law does.not require the wife to support the husband it does not prohibit her from using her own means for that purpose or for the support of his children. 2 Bish. Mar. Wom. § 453; Kelly, Cont. Mar. Wom. 149; Abbey v. Deyo, 44 N. Y. 344; Gage v. Dauchy, 34 N. Y. 293; Buckley v. Wells, 33 N. Y. 518; Foster v. Persch, 68 N. Y. 400; Third, Nat. Bank v. Guenther, 123 N. Y. 568. In Spering v. Laughlin, 113 Pa. St. 209, 213, it was held that, if a married woman’s separate right to property is found to exist, her husband may not only act as her agent, but he has the legal right to give his wife his labor and skill in conducting her business, and his creditors cannot sell her property, produced by his labor and skill with her original property. Baxter v. Maxwell, 115 Pa. St. 473. The entire question in all such cases vrould (seem to be whether the property and business in question is really that of the wife, or whether it is that of the husband and her claim to it a mere cover to protect it from his creditors. We are unable to understand how the husband’s creditors can be said to be defrauded, when they cannot compel him to labor for their benefit, if he voluntarily bestows on others, or on his wife, that which under the law they cannot reach for the satisfaction of their demands. The cases of Wortmam, v. Price, 47 Ill. 22, and Wilson v. Loomis, 55 Ill. 352, while differing in some respects from the present, are not in accord with our own cases or those cited above; and Hallowell v. Horter, 35 Pa. St. 375, was a case of confusion of. property, and the whole was held liable for the husband’s debts. The cases that hold or intimate an opinion that in a court of equity an apportionment of profits or division of property may be had at the suit of the husband’s creditors, will be found to rest — 397 — upon the ground of community or blending of the money or property of the husband, as well as his labor, with the property of the wife in some business venture or enterprise in which there is a common participation in or use of the profits; and we have met with no case in which the bare fact that the time, skill, and labor of the husband devoted to the business of the wife has been held to give rise to such an equity. It is difficult to see how such an equity could arise where the husband has already been paid for his services, as agreed, by the wife. ¥e think that the plaintiff’s contention in this respect cannot be sustained. "We think that the evidence sustains the findings of the circuit court, and it is therefore not necessary to consider the question whether the action was barred by the statute of limitations, or by laches on the part of the creditor instituting the action. We do not find any error in the record. By the Court.— The judgment of the circuit court is affirmed.