Court Opinion

ID: 3631275
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:10:44.415506+00
Date Added: 2024-06-11T13:45:07.260378
License: Public Domain

The character and effect of sections 382 and 383 of the Code, relative to judgments by confession have been too well settled by the authority of the Supreme Court and of this court to be any longer open to question. The requisitions of the Code in regard to the confession of judgments, are not precisely conditions precedent, which must be complied with, or there is no judgment. A judgment by confession, which does not conform to what the Code prescribes, in respect to the particularity of the statement of the debt, or satisfy its requirements in any and every respect, is not utterly void as to all parties and for all purposes. It is nevertheless good as between the parties, and it cannot be avoided collaterally by third persons, but must be directly impeached and set aside. (Sheldon v. Stryker, 34 Barb., 116;Miller v. Earle, 24 N.Y., 110; Neusbaum v. Keim, id., 325. Such a judgment may be amended, but with what effect and how far to the prejudice of other creditors *Page 304 
is the question here. On the other hand, a failure to comply with the requirements of the statute in respect to the contents of a statement upon which a judgment is to be entered is not a mere irregularity. The right to move to set it aside is not restricted by the statute limitation of a year, which applies to all irregularities. What is more decisive is that such a defect in a judgment is proper ground for an action, and for the exercise of the equitable power of this court to set it aside. (Dunham v.Waterman, 17 N.Y., 9.) The effect of the Code is, as was stated in that case, that a judgment confessed without compliance with its provisions is to be deemed and held to be fraudulent and void as to other bona fide judgment creditors. The same view has been expressed and adhered to in the most recent cases. (24 N.Y., 110, 325, cited above.) The power to set aside such judgments upon motion is an equitable power, and the original and ordinary jurisdicdiction to proceed against them is in equity. The Code was intended not only to regulate and simplify the manner of confessing judgments, but to provide that they should exhibit the truth, and the whole of it, in regard to their consideration; or if they did not they should be held fraudulent as to other judgment creditors. Its provisions have been held to restore, in this respect, the effect of the statute of 1818 (Laws of 1818, chap. 259, sec. 8), which were applied in the case of Lowber v.Hackett (10 Johns., 149). The 8th section of that act, after requiring that at the time of filing every record of judgment by confession, the party making the same should file therewith a statement and specification of the nature and consideration of the debt or demand on which such judgment is confessed, enacted that in default of a compliance with this requirement, such judgment should be decreed and adjudged fraudulent as regards any other bona fide creditors, and every bona fide purchaser, for valuable consideration, of any lands bound or affected by such judgment. The construction put by the courts upon the sections of the Code to which I have referred, is that they must be read as if they contained a similar *Page 305 
clause, and similar consequences must follow from the failure to comply with them.
It is to be observed, then, that in every case in which a judgment is confessed without complying with the requisites of the law, this is not to be evidence of fraud or of a design to defraud, nor merely to create a presumption of fraud, but it renders the judgment fraudulent and, therefore, void as to other judgment creditors. The defect is not supplied by proof of good faith or a sufficient consideration, nor can the presumption be overcome by such evidence. A subsequent judgment creditor may attack such a judgment by motion or by action, and when he has instituted a proceeding in either form, he has commenced the assertion of a right which cannot be defeated by a subsequent amendment. It would hardly be maintained that in an action to set aside such a judgment a court would have a right to dismiss the plaintiff with a decree amending the confession, curing the defect and removing what the statute makes a fraud, upon any terms or for any reasons excusing the failure to comply with the law. If the decision which was rendered on this motion had been given in an action brought for a similar purpose, I suppose that it could not stand for a moment But the rights of the parties and the scope of the proceeding is the same, whether the relief is sought by motion or by action. The power to set aside judgments upon motion for such a cause, is an equitable power, and is asserted and exercised in analogy to proceedings by suit in a strictly equitable forum. The permission of an amendment to relieve the party from the consequences of a failure to observe the provisions of the law in those cases, is not a matter of discretion with the court, or if it can be considered to rest in such a discretion, it is a discretion governed by legal rules, and whose exercise can be corrected by an appellate tribunal when those rules are transgressed. The statute, as the court have construed it, makes an untrue or an insufficient statement upon a confession of judgment a fraud upon other creditors, and they have consequently a legal right to avoid it. The Supreme Court, in making the order from which this *Page 306 
appeal was taken, in effect denied this right, on account of the ignorance and honest intentions of the plaintiff in the judgment, and the justice of his debt. But the judgments confessed to the Olmsteds and Hanford were fraudulent and void as to Mitchel, not because they were not in fact for honest debts, but because they were not accompanied by such a statement of the consideration and particulars of the debts, as the law requires. The proof given by the counter affidavits could not cure this difficulty, and the Supreme Court erred in amending the judgments and preserving their lien. Their order should be reversed with costs and an order entered vacating these judgments absolutely.
DAVIES, J., concurred in this opinion.
Order affirmed.