Case ID: abb-pr_15/html/0082-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Ingraham, P. J. Leonard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

BENTLEY a. GOODWIN.
    
      Supreme Court, First District; General Term,
    
      Nov., 1862.
    Fraudulent Confession of Judgment.—Standing of Attaching Creditor.—Authority of a General-term Decision.
    An attaching creditor is not within the class of persons who can impeach the bonafides of a judgment confessed by a debtor to a third person before the attachment was levied.
    To enable a party to question, and put in controversy, the bam-fides of a judgment by confession, it must appear that he is a judgment-creditor of the party confessing the judgment.
    The decision of a general term should be followed by the general terms of other districts, unless apparently made through some mistake, or so clearly erroneous as to leave no hesitation concerning the error.
    Appeal from order denying motion to set aside a judgment by confession.
    This action was brought by Norman S. Bentley and Charles W. Burton against William Goodwin, to recover $732.02, for merchandise sold and delivered. The defendant had confessed a judgment in this court to John Bellamy for $2,000, which was docketed in the office of the clerk of the city and county of New York, on the 15th of September, 1862.
    Execution was issued on this judgment against the property of the judgment-debtor, and a levy made thereunder on a stock of goods contained in the store of the judgment-debtor, and the property advertised for sale. Before the day fixed for such sale, the plaintiffs Bentley & Burton, presented affidavits, in the present action, to one of the justices of this court. In these affidavits it was claimed that Goodwin was indebted to the said Bentley '& Burton, on contract, for goods sold and delivered, to the amount and value of $732.02; that the defendant had sold arid disposed of, at great sacrifice, considerable quantities of merchandise, from his store, with intent to defraud his creditors; and that he had, after secreting himself for a time, absconded and left this State, taking with him the proceeds of the merchandise last mentioned. Accompanying these affidavits was the usual security, by undertaking, and the justice to whom the application was made, issued an attachment against the property of Goodwin, which was placed in the hands of the sheriff on "the 17th of September, 1862, and the sheriff made a levy thereunder on the same property seized by him under the execution. above-mentioned.
    Bentley & Burton, thereupon presented further affidavits to one of the justices of this court, setting forth (among other things) the facts above stated; also various other facts.which were claimed to show that the said judgment was collusively and fraudulently given; that- Goodwin was not indebted to Bellamy; that the property seized by the sheriff under the said execution, was greatly insufficient to satisfy the said judgment; that Bellamy was insolvent; and that if the judgment and levy were permitted to stand, the debt of Bentley & Burton would be lost. On these papers the j ustice granted an order to show cause why the judgment and levy should not be set aside; and also directing the sheriff to stay proceedings on the levy, until further order.
    The motion was heard before Hr. Justice Peckham. It was opposed by Bellamy, whose counsel raised the preliminary question that the plaintiffs, as attaching creditors, had no standing in court, to attach or move against the said judgment and levy; whereupon “ it was considered by the court that the said preliminary question was well taken; and it was therefore ordered that the said motion be, and the same was thereby denied, with $10 costs; but that the stay of proceedings theretofore granted be continued, with the modification that the sale proceed, and the sheriff hold the proceeds until the hearing and decision of the general term on an appeal from this order.”
    There were no opposing affidavits read on the motion.
    Prom that portion of. the order which is above quoted, the plaintiffs appealed to the general term.
    
      John A. Bryan, for the appellant.
    I. On this appeal.it must be assumed that the judgment is fraudulent, and that all the facts stated in the moving papers are true.
    II. The court below erred in deciding that the plaintiffs, as attaching creditors of Goodwin, had no standing in court, to attack a levy under the judgment fraudulently confessed hy him. 1. The court below rested its decision on Hall a. Stryker (9 Abbotts’ Pr., 342; S. C., 29 Barb., 105). 2. The court was shown the subsequent case of Thayer a. Willett (9 Abbotts' Pr., 325; S. C., 5 Bosw., 344). But the court thought that a judge sitting at special term of this district was bound by the decision of the same court at general term (although of another judicial district), until such decision should be reversed by a general term of this district. 3. It was assumed by-the court below, and will be admitted here, that if an attaching creditor cannot attack a fraudulent sale of goods, he cannot impeach a fraudulent judgment. 4. The case of Hall a. Stryker was not considered with that care which was bestowed on Thayer a. Willett. In the latter, one of the justices puts a case as illustrating the manifest injustice which would result from denying to attaching creditors a standing in court to impeach the fraudulent acts of their debtors in respect to property seized by virtue of their attachments regularly issued as authorized by law. Qur case is quite as strong as that there put of the fraudulent sale hy father to son. We have a judgment collusively and fraudulently confessed, to an amount large enough to sweep all the property the absconding debtor leaves behind him; it is founded on no valid consideration whatever; and the “judgment-creditor” being insolvent, the attaching creditors will get nothing if they are compelled to wait till they recover judgment and issue execution. In the mean time the sheriff, if not stayed by some court of - competent jurisdiction, will have sold the property under the execution, and paid over the proceeds to an insolvent person.
    III. 1. Our remedy may be by motion; and this motion is regular. The sheriff could not be expected to treat the execution on the confession of judgment as a nullity. 2. Courts have control over their, own judgments, whether by confession or otherwise, and may set them aside either on a motion, or by action. (King a. Shaw, 3 Johns., 142; Everitt a. Knapp, 6 Ib., 331; Frasier a. Frasier, 9 Ib., 80 ; Lansing a. McKillup, 1 Cow., 35; Chappel a. Chappel, 12 N. Y, 215; Dunham a. Waterman, 17 Ib., 9.) 3. If by action, the only necessary par-, ties would be the attaching creditor, and the judgment-creditor; and if by motion, notice to the judgment-creditor would alone be necessary. 4. The proper title of the motion-papers would be in the action of the attaching creditors against Goodwin. There is no other action. The execution was on a “judgment by confession without action.” (Code, § 382.)
    
      Charles Cheney, for the respondent.
    I. The motion is made in this action to set aside a judgment in another action in favor of a person not a party to this action. The relief cannot be granted in this action. The motion should be entitled in the other action, or in both actions.
    II. The moving parties are not judgment-creditors of Goodwin, the judgment-debtor, in the judgment sought to be set aside. They claim to be only attaching-creditors. They have no standing in court to make this motion, or to question the judgment of Bellamy. 1. In all the reported cases where the court has interfered to set aside or postpone the lien, or effect of a judgment by confession, it appears by the case that the party applying for relief was a judgment-creditor. 2. In all these cases the courts in the opinions delivered have expressly declared, that it was only judgment-creditors who could appeal to the court for relief, and that creditors at large could not be heard. (Wintringham a. Wintringham, 20 Johns., 296 ; Beekman a. Kirk, 15 How. Pr., 228, 231; Schoolcraft a. Thompson, 9 Ib., 61; Winebrenner a. Edgerton, 8 Abbotts' Pr., 419; Chappel a. Chappel, 12 N. Y., 215; Dunham a. Waterman, 17 Ib., 9, 12-14 ; Wiggins a. Armstrong, 2 Johns. Ch., 144; Williams a. Brown, 4 Ib., 682; Hall a. Stryker, 9 Abbotts' Pr., 342; Schlussel a. Willett, 34 Barb., 615; see, also, 424; Willett a. Vandenburgh, Ib., 424.). 3. A j udgment upon an insufficient statement is good as between the parties, where the property of the defendant has been sold under an execution upon such a judgment, the purchaser’s title cannot be impeached by a creditor having no judgment or lien on the property at the time of the levy. (Miller a. Earl, Ct. of App., Oct., 1862; Neusbaum a. Keim, same court, same term.) 4. A judgment upon an insufficient statement is not void but voidable, and that only as to a subsequent valid judgment; and the only order to be made in such a case is to postpone it as a lien, or set it aside, as against the valid judgment in favor of the party applying for relief. If the moving party has no judgment, no such order can be made. (Chappel a. Chappel, 12 N. Y., 215; Hoppock a. Donaldson, 12 How. Pr., 141.) The decision in Thayer a. Willett is in conflict with Hall a. Stryker (29 Barb., 105). If the court should approve of the case of Thayer a. Willett, then it is submitted it is not an authority in point. In that case the court only hold that the sheriff may justify and defend this seizure of the property under his attachment in an action brought against him, acting merely on the defensive; but in this case the attaching creditor takes the offensive, is not content to defend himself when attacked, but becomes himself the assailant, and seeks, before obtaining a judgment himself, to set aside a judgment in favor of another party. He may never become a judgment-creditor.
    III. The Court of Appeals has held that the object of the provisions of the Code in respect to judgment by confession, was the same as that of section 6, of chapter 159, of the Laws of 1818; “that the object of both statutes were precisely the same;” that, although the Code does not in terms enact as was done by the act of 1818, that a judgment confessed without a compliance with its provisions shall be “ decreed and adjudged fraudulent” in respect to “ other bona-fide judgment-creditors,” yet, considering the object in view, it is plain that such must be its meaning. (Chappel a. Chappel, 12 N. Y., 215,222; Dunham a. Waterman, 17 Ib., 9, 12-14.) It would thus seem that the provisions of the Code respecting judgments confessed, are to be construed and enforced as if there were a provision that judgments confessed without a compliance with its provisions, shall be deemed fraudulent in respect to other bona-fide judgment-creditors. In other words, that such a provision in the Code is to be implied.
   By the Court.—Ingraham, P. J.

We see no reason for reversing the order appealed from. The case of Hall a. Stryker (9 Abbotts’ Pr., 342; S. C., 29 Barb., 105) was made by the general term of the second district; that case-holds that an attaching creditor is not within the class of persons who can impeach the bonafides of a judgment confessed by a debtor to a third person before the attachment was levied. This can only be by a judgment-creditor.

The attachment is no evidence of the plaintiff’s claim, or of his right to recover. In the case of a non-resident debtor it is nothing more than the means of commencing the action, and takes the place of the summons.

The fact that an attachment was issued on the affidavit of the plaintiff on an ex-parte application, furnishes no greater proof of his being a creditor than the complaint verified by him does. Both state a cause of action on his part, sworn to by him, and yet it is of constant occurrence that in both cases the plaintiff fails. We concur with the general term of the second district in the case referred to.

Even if we doubted on that point, we have often said that we considered that the decision of a general term of another district expressly in point, ought to be followed by us, unless we were of the opinion that it was made through some mistake, or was so clearly erroneous, that we should have no hesitation as to the error. Such is not the case here.

In addition to the reasons assigned therein, may be added the further ground, that there is uncertainty in all cases commenced by attachment, whether the plaintiff will ever recover a judgment. The uncertainty as to the plaintiff’s rights is of itself sufficient ground to deny such a motion. If granted, and the plaintiff should not recover judgment, injustice would be done to the party having the judgment, and entitled at any rate to the security of the judgment for his debt, as between him and his debtor, even if the statement on which the judgment was confessed, should be defective.

The order appealed from should be affirmed.

Peokham, J., concurred.

Leonard, J.

I concur in the result of this opinion, upon the ground only that the attaching creditor may not institute actions or proceedings to test the validity of the rights of other claimants, before judgment has been rendered in favor of the attaching creditor.

Order affirmed.