Court Opinion

ID: 6575060
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:29.108346+00
Date Added: 2024-06-11T15:57:03.757418
License: Public Domain

The opinion of the court was delivered by
Isham, J.
The plaintiff has brought this action on a note executed by the defendant Harding, upon which property was attached, and other defendants summoned as trustees. To this suit, the defendant, Harding, has made no appearance or defence.
A defence, however, is interposed by John A. Child, who subsequently commenced a suit against the defendant, and attached the same property, and summoned the same trustees; so that if he can be permitted to make this defence, and the same should be considered sufficient, the property attached will be held solely for the payment and satisfaction of his claim. The trustees, in their disclosure, acknowledge their indebtedness to the defendant, Harding.
On the trial of the case, the subsequent attaching creditor offered evidence, to prove that the note was collusively executed and fraudulent, and made with the mutual intent to hold the funds in the hands of the trustees, and to prevent the property attached from being reached by the defendant’s creditors. On the contrary, the plaintiff gave evidence, tending to prove that the note was given for a sufficient consideration, and for money loaned, and debts assumed. The court charged the jury, that if the note was wholly without consideration, or if there was a partial consideration for the note, but not to the full amount, and if the same was made larger for the purpose of attaching and holding the property and funds from the creditors of the defendant, then the note would be void as against creditors. The jury having returned a verdict for the defendant, we are to assume, as a fact in the case, that the note was executed without consideration, or at least, was given for more *490than was due, and for the fraudulent purpose of keeping the property attached, from the reach of the defendant’s creditors. Upon this fact, two questions have been presented in the case. It is insisted, that if the note was given in part for a good consideration, the plaintiff is entitled to a judgment thereon to that extent, and that the property attached can he held for the payment of that amount. And, in the second place, it is insisted, that a subsequent attaching creditor is not authorized under the statute, to appear and defend, where the property is attached under the trustee process; and that if he is so permitted, it is not competent for him to set up a defence, that the defendant himself could not make.
In relation to the objection, that the defence does not go to the whole note, when part of the consideration was good and lawful, and that to that extent the plaintiff is entitled to a judgment, it is to be observed, that the rule in many cases will follow as contended for, where part of the consideration is merely insufficient, without being illegal. But where part of the consideration is illegal, the entire contract fails, whether its illegality is rendered so by statute or common law. The rule is thus given in Chitty on Cont. 61, and note 3 ; and also on page 693, and note 2, and is fully sustained by the case of Fairfield v. Baldwin, 12 Pick. 388. In that case, it was held, “that if property is attached on two demands, one of them honest and the other fraudulent, the attachment is wholly void as against a subsequent attaching creditor.” Upon these authorities the charge of the court was evidently correctly given; as the jury have found that a part, at least, of the consideration of this note was fraudulent, and made so by the defendant, to defraud his creditors, the whole note is void, and the note, as well as the attachment, is inoperative as against such creditors, or at least would be so, in suits brought by the creditors themselves, contesting the validity of the note and judgment.
The testimony is equally proper in this case, when offered by the subsequent attaching creditor. It is true, the testimony could not have been received, if offered by the defendant himself, who thus fraudulently executed the note. If the note was fraudulently given, it would be good, as against him ; he could not avoid it by showing his own fraudulent act, neither would a court of law or of equity grant him relief therefrom, and the plaintiff would be entitled to recover the whole note as against him; still, the evi*491dence is manifestly proper, when offered by a subsequent attaching creditor; for as to him, the note and attachment is absolutely void.
The Comp. Stat. 223 § 34, authorizes the court, before whom the suit is pending, to permit a subsequent attaching creditor, of real or personal property, to enter an appearance and contest the validity of the debt or claim, on which a previous attachment is made. He is so far made a party to the suit, that he may on his own account prosecute the defence. The equity and spirit of this act extends to cases where debts and choses in action are attached, as well as other property; for the object of the act was to enable subsequent attaching creditors to protect for their benefit, any property which by law could be attached and held to respond the judgment that should be obtained by them, and in this manner to avoid subsequent litigation in relation to the property. And when such attaching creditor does thus appear, it is competent for him to introduce any evidence contesting the validity of the claim, and showing that it is illegal and void as against such creditors.
That the testimony offered has that effect, we have already considered.
The result is, that the judgment of the county court is affirmed.