Liver v. Thielke

Baedeeit, J. If it be conceded that Mrs. Frey had legal authority to execute a mortgage to her father to secure his claim against her husband, still, if such mortgage was not given to secure a bona fide indebtedness, it was fraudulent as 392 to creditors and should he set aside. At the time this mortgage was given John Frey was utterly insolvent, and this fact was known to the mortgagee. He was present when the frandnlent deed from John Frey to his wife was given. He knew Frey was deeply in debt. He knew the deed was without consideration. While these facts alone perhaps would not have prevented his taking security, they imposed upon him the duty of acting in good faith. The items claimed to have been secured by this mortgage are set out in the statement. One item was for money loaned in 1889. No note or other writing was taken. No proof was given that Frey had ever recognized this indebtedness in any way. Another item was for milk delivered in 1887. It stood a matter of open account. It does not appear that any claim had ever previously been made against Frey on account of either of these matters. Both claims had been outlawed many years before the mortgage was given. It is the settled law of this state that the effect of the statute of limitations is to completely extinguish the right upon which it has operated. Eingartner v. Illinois Steel Co. 103 Wis. 373, 79 N. W. 433. Mrs. Frey had no power to resuscitate or to give these extinguished claims any legal validity. Another item was for interesfrto the insurance company, amounting to $100. This was due on a mortgage on lands owned by the wife, for which Thiellce was in no way responsible. It was paid by him without any authority from Frey, and evidently for the protection of his daughter’s property. It constituted no debt against Frey. In this connection we may consider another item of $175, for interest on two mortgages upon the land in suit. Thiellce had never paid the amount, and was under no legal obligation to do so. Under the agreement between Frey and wife when the deed was given, the latter was to assume and pay these mortgages. In no> sense was it a debt due from Frey to Thiellce. The items of store account, board and clothing to Frey’s wife and children, were not proven as legal debts 393 against Erey. Thielke testifies to no fact from which any legal inference arises that Erey was honnd to pay him therefor. Mrs. Erey left her husband and went to live with her father some time in the year 1901. The husband was not responsible for debts indiscriminately contracted by her. The proof does not show that Thielke furnished goods to the wife by Erey’s request, or that they were necessaries, or were furnished under such circumstances as would make the husband' liable therefor. At the time the mortgage was given, Thielke was security for Erey on the Metzger note 'of $500 and the Morton note of $300. Mo part of either note had been paid by him at that date. Erom this review of the Thielke account, it appears that the only actual existing indebtedness of Frey to Thielke at the time tlie mortgage was given was for the horse and cattle, amounting to $185. These items were tacitly denied by Erey when he detailed the items of his indebtedness, which did not include Thielke''s said claim, and said these were all of his debts. We do not say that Thielke might not, under proper circumstances, have taken security for his contingent liability on the notes mentioned, but, inasmuch as the mortgage largely exceeds any real or contingent claim he had against Erey, it became presumptively fraudulent. Thielke knew that Erey was under no obligation to him for any such amount as the mortgage secured. He knew Frey was deeply in debt, and had but little property. In speaking of the situation, Mr. Thielke said: “I made a good many payments, and had a gcod many expenses, so I thought to secure myself. I took a mortgage of $1,500, and took it very easy. I might have taken one for $2,500.” In his answer he set up that the consideration for said mortgage was moneys advanced as purchase price of the land covered by the mortgage, and for care of Erey’s wife and children. He utterly failed in his proof as to moneys put into the land. His entire attitude is inconsistent with good faith. It cannot be easily reconciled on any 394 other theory than that he was .assisting Mrs. Frey in placing the land beyond the reach of creditors. The mortgage, being so largely in excess of any possible legal claim, and being valid on its face;, had a tendency to deceive creditors and delay them in the collection of their claims. The inference of fraud properly arising in the case was in no way repelled or overthrown by the testimony, or by the circumstances attending the transaction. Butts v. Peacock, 23 Wis. 359; Bradley Co. v. Paul, 94 Wis. 488, 69 N. W. 168; Kellogg v. Clyne, 4 C. C. A. 554, 54 Fed. 696. Under the circumstances we think it very clear that Thielhe was not acting in good faith; that his mortgage was not taken to secure an actual existing indebtedness, as found by the court; and being so much in excess of any possible claim held by him, its tendency was to mislead and deceive Frey’s creditors and prevent them collecting their claims against him. The court should have made findings as requested by plaintiff. The judgment must, therefore, be reversed, and a judgment for plaintiff entered, declar- • ing said mortgage void as to creditors. In taxing costs the clerk will disallow the expense of printing fifteen pages of appellant’s brief. A reprint of the complaint, answers, and findings was wholly unnecessary. By the Court. — The judgment is reversed, and the cause remanded with directions tó enter judgment as indicated in the opinion.