Court Opinion

ID: 3622907
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:04:17.461655+00
Date Added: 2024-06-11T09:35:45.849844
License: Public Domain

All the judges, so far as appears, who have expressed opinions in this matter, concur that the statement on which the judgment was confessed was sufficient.
The judgment as between Colmey  McEntee was, I think, valid and good, with a full knowledge of the adverse claims of his son and Colmey. But as far as this fraud is concerned, it seems to me there cannot be doubt. The judgment stood as a lien on the premises sold, and if there had been no transfer, Colmey would clearly, as judgment creditor, have been entitled to collect and receive to his own use the surplus money, at all events as against McEntee, the judgment debtor. The money would have fallen necessarily into Colmey's hands on the mere proof of the existence of his judgment, unless McEntee could have successfully assailed it. This McEntee could not have done for his own benefit, if he had confessed the judgment for the purpose of defrauding his creditors. The law would have left him where he had placed himself by his own fraudulent act. The canal company, holding as assignees of Colmey, and certainly, I think, for a good consideration, having extended the payment of the notes made by Colmey and indorsed by McEntee, acquired all Colmey's rights. The company took the assignment, as the referee has found, in good faith and without notice of any intent on the part of McEntee to hinder, delay or defraud his creditors. Besides, McEntee was a party to the arrangement by which the judgment was confessed and assigned over to the company, and he would be barred from setting up any equities as against the company if he had any as against Colmey. As was said by Chief Justice DENIO, inBush v. Lathrop (22 N.Y., 548), "one proposing to purchase the security can easily ascertain whether the person who gave it pretends to any defense. If he disclaims having any, and a purchase is made on the faith of such disclaimer, the assignees will be entirely safe against any which shall be afterwards asserted." The arrangement between the parties was a virtual disclaimer by McEntee as to any defense to the judgment in the hands of the company. As against McEntee the rights of the company were perfect. The rule that a *Page 426 
party taking an assignment, transfer or conveyance of a chose in action, not negotiable, is subject to all the equities between the original parties, has no application or force in this case.
When can the creditors of McEntee successfully attack the judgment in the hands of the company? The language of the statute is, among other things (3 R.S., p. 224, § 1, 5th ed.), that every "decree or judgment suffered," with intent to hinder, delay and defraud creditors, shall be void as against the persons thus hindered, delayed or defrauded. But the ensuing section (§ 355) declares that the provisions of the chapter "shall not beconstrued in any manner to affect or impair the title of a purchaser for a valuable consideration, unless it appears that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor." Now, the referee has found that the company had no notice of any fraudulent intent, and I suppose we are to take that finding as entirely conclusive in this case. If there was a valuable consideration on the part of the company, then we are forbidden to construe any of the previous sections, in anymanner, to affect or impair its title to the judgment.
I have already remarked that the extension of the time of payment of the notes on which both Colmey and McEntee were liable, was a valuable consideration. When the transfer is made to a creditor "there is no doubt (says Mr. Justice SELDEN inSeymour v. Wilson, 19 N.Y., 421) that the debt paid orsecured by the transfer must in such a case be regarded as avaluable consideration within the section, which shows the rights of bona fide purchasers."
The referee decided correctly; and the order of the Supreme Court should be reversed, and the report of the referee confirmed.
Judgment affirming the order of the Supreme Court. *Page 427