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McGovern v. Milwaukee Motor Co. 141 Wis. 309.

fraudulently transferred to him, which proceeds were received by him on a sale by him of such property. In Avery v. Johann, 27 Wis. 246, there was a full consideration paid for the land, but the transfer was made in fraud of creditors and the grantees participated in that fraud. Part of the consideration was the sum of $3,025 due from the grantor to the grantees, and the judgment reserved no right as against the creditors' bill to retain this amount as a lien on the land. In Mason v. Pierron, 69 Wis. 585, 34 N. W. 921, both parties to the transfer participated in the fraud. After the conveyance to him the fraudulent grantee mortgaged the premises to a bona fide mortgagee for $2,500, and the circuit court rendered a personal judgment against the grantee for the amount of such mortgage, principal and interest. Judgment was affirmed by this court. In Bank of Commerce v. Fowler, 93 Wis. 241, 67 N. W. 423, it is ruled that the grantee of nonexempt property colluding with the grantor thereof to hinder and delay creditors of the latter cannot as against such creditors be protected even for the amount actually paid on the purchase. In First Nat. Bank v. Bertschy, 52 Wis. 438, 9 N. W. 534, where no actual intent to defraud was shown and the fraud was merely constructive as against creditors, the conveyance was allowed to stand as a security for the sums due from the grantor to the grantee. See, also, Morley Bros. v. Stringer, 133 Mich. 690, 95 N. W. 978.

There can be no sound distinction in this respect made between moneys paid by the fraudulent grantee to his grantor and moneys paid by such grantee at the request of the grantor to other creditors of the grantor as the consideration of the fraudulent transfer. The scheme is equally effective in either case to hinder and delay the creditor to defeat whose demand the transfer is made. His right to collect his claim is impaired by the transfer. He must either assume the verity and honesty of all the claims thus discharged or assume the burden of proving their respective amounts or invalidity. He is de

Baumgarten v. Cohn, 141 Wis. 315.

prived of his opportunity to bid at a sale of the assets, and, in short, he is hindered and delayed by such transfer, and when the parties to such transfer are both engaged in the scheme to defraud him the fraudulent grantee can have no credit for the purchase money thus paid out in discharge of other alleged liabilities of the grantor. There is no certain or satisfactory way of measuring the damages to the creditor in such case by the percentage upon his demand which the whole property of the fraudulent grantor, if ratably distributed among all his creditors, would amount to. To limit recovery to such percentage would encourage and facilitate frauds upon small creditors and give the fraudulent transaction the legal force and effect of an assignment for the benefit of creditors or a bankruptcy proceeding. Fraud has not yet become so respectable. We find no reversible error in the judgment.

By the Court.-Judgment affirmed.

BAUMGARTEN and others, Appellants, vs. COHN, Respondent..

December 10, 1909-January 11, 1910.

Statute of frauds: Oral lease for one year to take effect in future: Validity: Statutes construed.

1. An oral lease of land for one year, to take effect in the future, is valid.

2. Such a lease is not within the terms of sec. 2304, Stats. (1898), which declares void every oral contract for the leasing of lands. for a longer period than one year; nor is it governed by sec. 2307, which declares void every oral agreement that by its terms is not to be performed within one year from the making thereof,the latter section being a part of ch. 105, entitled "Of fraudulent conveyances and contracts relating to personalty."

3. Even though a lease of land for one year be a chattel real and do not convey any interest in real property, it is nevertheless a contract "relating to real estate," within the meaning of the title to ch. 104, Stats. (1898), which includes said sec. 2304.

Baumgarten v. Cohn, 141 Wis. 315.

APPEAL from a judgment of the circuit court for Milwaukee county: LAWRENCE W. HALSEY, Circuit Judge. Reversed.

C. A. Koeffler, Jr., for the appellants.

For the respondent there was a brief by Quarles, Spence & Quarles, attorneys, and J. V. Quarles, Jr., of counsel, and oral argument by J. V. Quarles, Jr.

BARNES, J. This case involves the question whether a parol lease of a building for a period of one year, to take effect in the future, is valid.

Sec. 2304, Stats. (1898), makes void every parol contract for the leasing of lands for a longer period than one year. This section does not prevent leases being made for a period of one year when the term is to commence at some future date.

Subd. 1, sec. 2307, Stats. (1898), makes every agreement void that by its terms is not to be performed within one year from the making thereof, unless embodied in some written note or memorandum, which must express the consideration. and be subscribed by the party charged. If this provision is applicable to a parol lease, then the lease involved in this action is void. Chase v. Hinkley, 126 Wis. 75, 105 N. W. 230; Draheim v. Evison, 112 Wis. 27, 87 N. W. 795; Conway v. Mitchell, 97 Wis. 290, 298, 72 N. W. 752, and cases cited.

The statutes of frauds in most, if not all, of the American states are based on Stat. 29 Car. II, which was entitled "An act for prevention of frauds and perjuries." By sec. 1 of that act it was provided that all leases not in writing should have the effect of leases at will only. Sec. 2 created an exception in favor of certain parol leases for a term not exceeding three years from the making thereof. Sec. 4 contained substantially the same provisions that are found in sec. 2307 of our statutes.

It is clear that, under the express terms of the statute referred to, a parol lease for a period of three years to take effect

Baumgarten v. Cohn, 141 Wis. 315.

in the future would be void. However, leases in parol for a term of three years from the date upon which they were made were held valid notwithstanding the subsequent provision in the statute declaring that no action should be brought on any parol agreement that was not to be performed within one year from the making thereof. It is evident, therefore, that the provision last referred to was not regarded as having any application to parol leases. Rawlins v. Turner, 1 Raym. 736; Ryley v. Hicks, 1 Strange, 651; Tress v. Savage, 4 E. & B. 36; Inman v. Stamp, 1 Starkie, 12. In the latter case it was held that part performance would take an invalid verbal lease out of the statute.

In

The decisions of the courts of this country are far from being harmonious on the subject. By many of the state statutes parol leases for a longer period than one year are declared void. In other respects the statutes are, for the purposes of this case, substantially similar to the English statute. In some of the states the two provisions referred to are found in a single section or chapter of the statutes. Such chapters are usually headed or entitled "Frauds and Perjuries," "Frauds," "Prevention of Frauds and Perjuries," or "Contracts." most of the states where the provisions are so found, it is held that a parol lease for a period of one year, to take effect in the future, is void; the courts taking the view that a lease, like any other contract, in order to be valid must be capable of performance within a period of one year from the time it is made. It is so held in Wolf v. Dozer, 22 Kan. 436; Johnson v. Albertson, 51 Minn. 333, 335, 53 N. W. 642; Roberts v. Tennell, 3 T. B. Mon. 247; Briar v. Robertson, 19 Mo. App. 66; Wheeler v. Frankenthal, 78 Ill. 124; Comstock v. Ward, 22 Ill. 248; White v. Holland, 17 Oreg. 3, 3 Pac. 573. Owing either to differences in statutes involved or in facts presented, the cases which respondent cites from Nebraska, Pennsylvania, Connecticut, and Washington have no bearing on the point before us for consideration. Some reliance is placed by

Baumgarten v. Cohn, 141 Wis. 315.

respondent on the case of Delano v. Montague, 4 Cush. 42. We are unable to find any statute of Massachusetts existing at the time this case was decided which at all corresponds with our sec. 2304 in so far as it deals with parol leases. was no exception in favor of such leases in the Massachusetts statute when Delano v. Montague was decided.

There

Ch. 7 of part II, R. S. 1829, of the state of New York (vol. 2), was entitled "Of fraudulent conveyances and contracts, relative to real and personal property." The matters covered by the chapter were placed under three distinct titles. Title I was headed "Of fraudulent conveyances and contracts, relative to lands." Its provisions are substantially the same as those found in ch. 104 of our statutes. Title II was headed "Of fraudulent conveyances and contracts, relative to goods, chattels, and things in action." Subd. 1 of sec. 2 under this title made every agreement void that by its terms was not to be performed within one year from the making thereof. Title III was headed "General provisions," and treated of contracts relating to both species of property.

The New York court of appeals has uniformly held that the provision of subd. 1, sec. 2, tit. II, ch. 7, part II (1st ed.) R. S. 1829, rendering parol contracts void which by their terms are not to be performed within one year, had no application to parol leases, and that a verbal lease for a period of one year, to take effect in the future, was valid on the ground that the statutory provision did not apply or extend to contracts pertaining to real estate. Young v. Dake, 5 N. Y. 463; Trull v. Granger, 8 N. Y. 115; Becar v. Flues, 64 N. Y. 518; Ward v. Hasbrouck, 169 N. Y. 407, 419, 62 N. E. 434. Under a substantially like arrangement of similar statutory provisions, the states of Michigan and Indiana have followed the New York rule. Whiting v. Ohlert, 52 Mich. 462, 18 N. W. 219; Waldo v. Jacobs, 152 Mich. 425, 430, 431, 116 N. W. 371; Hand v. Osgood, 107 Mich. 55, 56, 64 N. W. 867; Huffman v. Starks, 31 Ind. 474. And in Iowa and Colorado, where the two statutory provisions are found under a common heading in a sin

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