Case Name: Paul M. Berger et al., Resp'ts, v. George E. Varrelmann, Impl'd, App'lt
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-12-29
Citations: 34 N.Y. St. Rep. 911
Docket Number: 
Parties: Paul M. Berger et al., Resp’ts, v. George E. Varrelmann, Impl’d, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 34
Pages: 911–913

Head Matter:
Paul M. Berger et al., Resp’ts, v. George E. Varrelmann, Impl’d, App’lt.
(Supreme Court, General Term, First Department,
Filed December 29, 1890.)
Assignment for creditors—Preferences—Confession of judgment.
Immediately prior to the execution of a general assignment for creditors the firm confessed judgment to the father of one of the partners for more than one-third the entire value of the assets, which fact was known to the creditor. Held, that the confession of judgment was made in contemplation of the assignment, and a part thereof, and was in violation of the statute against preferences. .
Appeal from judgment of the special term, setting aside a confession of judgment obtained by George E. Yarrelmann against Henry Erdtmanu and Gustave Yarrelmann.
Rudolf Dulon, for app’lt; Frederick W. Hinrichs, for resp’ts.

Opinion:
Brady, J.
This appeal rests upon the findings alone, no requests to find having been submitted.
The action was brought by the plaintiffs as judgment and simple creditors of the firm of W. & H. Erdtmánn, consisting of Henry Erdtniann and Gustave Yarrelmann, in aid of the general assignment of that firm, to set aside as in fraud of such assignment a confessed judgment of the firm to the defendant Georgb EL Ycrrelmann, the father of Gustave, dated April 29, 1889. '
It appears that on the afternoon of April 29, 1889,'the firm oí Erdtmann &Yarrelmann made a general assignment to the defend» ant Kracht with preferences, which was recorded on the 2d of May, 1889. On the afternoon of the same day, and immediately prior to the execution and delivery of the general assignment,, and while the firm was absolutely insolvent, they confessed a jiidg»' ment to George E. Yarrelmann, the father, as suggested, of one 0$ the members of the firm. It is found, and not questioned, that ai> the time of the confession of the judgment and the making'of the assignment, the firm and their creditor to whom the judgment'was; given were all well aware that a sale under an execution would; absorb much more than one-third of the assets of the firm, the: entire value of which was not three times the amount thereof, but,, on the contrary, payment of said judgment at the time would have, absorbed much more than one-third of such property.
The learned presiding justice, before whom the 'case was tried in the court below, found that the judgment mentioned, execution and levy were made in contemplation of the assignment, and as part thereof, for the purpose of duly preferring the judgment creditor, and to prevent the assets of the firm from going into the hands of their assignee to be distributed according to the terms of the assignment; that the judgment, execution and levy were in fraud of the assignment .and void, and that the assets levied upon or their proceeds should be paid over to the assignee Kracht.
The judgment of the learned presiding justice rests upon the established legal proposition that confessions of judgments made with intent to avoid the statute as to preferences in assignments are void.
There is nothing presented upon this appeal to limit in any manner the rule laid' down or to relieve the- appellant from its. force and destructiveness.
It is suggested, it is true, that it is not found as a fact that when the firm confessed the judgment they contemplated making the assignment, which is sufficiently answered by referring to the fact, that both acts of confession and assignment were perpetrated on the same day, the judgment having been confessed immediately prior to the execution and delivery of the assignment. The fact-therefore springs out of the circumstances attending the two performances, and is so plainly written upon the transaction that he who runs may read.
The confession was in violation of the statute against preferences. Laws 1887, chap. 503, § 30; Spelman v. Freedman, 54 Hun, 409 ; 27 N. Y. State Rep., 392 ; Wilcox v. Payne, 8 N. Y. Supp., 407 ; 28 N. Y. State Rep., 712 ; see also Manning v. Beck, 7 N. Y. Supp., 215 ; 26 N. Y. State Rep., 483; also Kessell v. Drucker, 6 N. Y. Supp., 945; Turnbull v. Cohen, N. Y. D. Reg., June 16, 1889 ; Abegg v. Schwab, 7 N. Y. Supp., 46 ; 24 N. Y. State Rep., 986; affirmed 9 N. Y. Supp., 681; 31 N. Y. State Rep., 139.
The appellant can derive no advantage whatever from the ad judication of Trier v. Herman, 115 N. Y., 163; 24 N. Y. State Rep., 552. That case relates to the right of a creditor to obtain a judgment against his debtor in any one of three modes. But although it seems to be favorable to him, it is burdened with the observation that "if his practice is regular and his claim and proceedings are honest and bona fide, no court will deprive him of the advantage his judgment will give him."
The judgment creditor's practice in this case was not regular. It was not bona fide, because it is expressly found that he knew when he obtained his judgment that he would secure an undue advantage which is an unlawful advantage under the statute, and thus violate the statute to which reference has been made.
For these reasons the judgment appealed from must be affirmed, with costs.
. Daniels, J., concurs.