Carpenter v. Osborn — 2 N.Y. St. Rep. 520

Majority

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Sophronia Carpenter, Resp’t, v. Miranda A. Osborn, impleaded, etc., App’lt.

(Court of Appeals,

Filed June 15, 1886.)

Headnote

1. Husband and toe—Debt by husband to wife—Res ad judicata.

Plaintiff recovered judgment on five separate actions against her husband, for installments of interest due upon a mortgage given by him in consideration of her executing a contract of separation, in which she agreed to support herself and release her dower right, and refrain from incurring debts for which he should be liable. Upon the trial of the several actions the validity of the agreement and her status as a creditor of her husband was litigated and in each case determined in her favor: Held, that the judgments' in each of these cases were, in the absence of proof of fraud in their procurement, conclusive evidence, not only as against her husband, but also as to all other persons, of the questions of fact and law material to the issues tried which were there determined.

3. Same—Cbeditobs’ action by wife against husband—Evidence necessary TO SUSTAIN.

This action was brought for the purpose of setting aside certain transfers of real property made by her husband, as fraudulent as against his creditors. Plaintiff introduced in evidence the judgment rolls, and the executions issued thereon returned unsatisfied; also the agreement of separation, and gave evidence tending to show that the conveyances assailed were involuntarily made by her husband, with intent to defraud his creditors, to grantees, having knowledge of such intent: Held, that the evidence sustained the judgment rendered for plaintiff.

3. Same—Effect of a subsequent divobce.

In December, 1881, plaintiff procured a judgment for absolute divorce from her husband: Held, that as the prior contract in question looked toward a separation, and not to a union of the parties, a lawful separation, if produced without the misconduct of the wife, could not affect the pecuniary claims if secured by legal obligations.

4. Same—Wife not estopped by having joined in deeds.

As the conveyane s were executed by her husband and received by the

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grantees for the purpose of defrauding her, and without her knowledge of the fraud, plaintiff is not estopped from questioning the validity of such conveyance by the fact that she joined with him in their execution.

Appeal from judgment general term, supreme court, third department, affirming judgment of Cortland special term.

J. McGuire, for app’lt; Frederick Hatch, for resp’t.

The plaintiff recovered five successive judgments in justice’s court against the defendant John Carpenter, for about thirty dollars each, on October 14, 1819, January 9,1880, May 1,1880, July 14,1880, and November 13, 1880, respectively. The judgments of January 9th and May 1th were both appealed from, to the county court, and on April 26, 1881, were, after a retrial of the actions, affirmed by that court, and judgments of affirmance were regularly entered. Each of these actions was brought to recover an installment of interest alleged to be due to the plaintiff from John Carpenter upon a written instrument dated January 11, 1813, and executed under the hands and seals of the plaintiff and John Carpenter. It recited that theretofore the said John Carpenter had executed a mortgage for $1,100 to M. J. Robinson, to be applied to the support of Sophronia Carpenter, his wife, and in consideration thereof and of $300 in cash then paid to said Robinson, she had agreed to support herself and five separate and apart from her husband during her natural life, and receive said sum in full discharge of all claims upon John Carpenter or upon his property, either real or personal, and would execute releases of her dower right in his real estate, and would refrain from incurring debts, for which said John should be liable; and that as the said Sophronia preferred that said mortgage should be discharged and said John’s obligation in writing be substituted therefor, it was agreed that the same be done, and “ in consideration of the premises said John Carpenter hereby agrees to and with said Sophronia Carpenter that he will pay to her $26.25, January 1, 1813, and $26.11, April 1, 1813, and $21.11, July 1, 1813, and $21.63 October 1, 1813, and like sums on each and every first day of January, April, July and October for and during the term of her natural fife,” and pay the said principal sum to her heirs upon her decease. The said Sophronia also renewed the several covenants and agreements, herein-before recited, and agreed that in case she should refuse for ten days after request therefor, to execute releases of her flower right, in said Carpenter’s real estate that all her rights to the payment of interest as provided for, shall be forfeited. Upon the trial of the several actions referred to

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the validity of this agreement and the status of Sophronia Carpenter as a creditor of John Carpenter, was litigated between the parties thereto, and was in each of said actions determined in her favor.

The judgments rendered in these actions were, in absence of proof of fraud in their procurement, conclusive evidence not only as against John Carpenter, but also as to all others of the several questions of fact and law material to the issues tried which were thereby determined. Candee v. Lord, 2 N. Y., 269 , 274; Hall v. Stryker, 27 id., 596, 603; Burgess v. Simonson, 45 id., 225, 227.

The defendants acquired title to the real estate in question from John Carpenter, and necessarily took it at the risk of any incapacity in him to convey a good title, and so far as that was affected by the rights of existing creditors, his fraudulent grantees were equally bound by such legal adjudications, as might be made against him in respect thereto, as John Carpenter himself. Candee v. Lord, supra; Rogers v. Rogers, 3 Paige, 379; Shufelt v. Shufelt, 9 id., 137; French v. Shortwell, 6 Johns. Ch., 234 ; Raymond v. Richmond, 78 N. Y., 351 , 354; Bigelow on Estoppel, 102; Voorhees v Seymour, 26 Barb., 585 . It did not, therefore, he open to any of the defendants upon the trial of this action to contest the validity of such agreement, or the liability of John Carpenter as a judgment debtor thereon, or the legal competency of husband and wife to contract with each other, for those questions were res adjudicates and placed beyond the power of retrial.

This present action was founded upon the last four judgments described, and was brought for the purpose of setting aside certain transfers of real property made by the defendant, John Carpenter, to the other defendants, as being fraudulent and void, as against his creditors. To entitle the plaintiff to maintain such an action, it was essential that she should establish her character as a judgment creditor of the fraudulent grantor, and the fact that the conveyances challenged as fraudulent were so in fact, and stood in the way of the collection of her judgment. Adsit v. Butler, 87 N. Y., 585 ; § 1891, Code of Civ. .Pro. ; 2 R. S., § 175, pt. 2, chap. 1, tit. 2, § 38. The production and proof of a judgment in her favor,' for a sum of money against the debtor, rendered by a court of competent jmisdiction, was, if not impeached for fraud, conclusive evidence in such an action of her character as such creditor. To establish the issue on her part in this action, the plaintiff put in evidence the respective judgment-rolls in the several actions above referred to, and the several executions issued thereon, each of which were severally duly returned unsatisfied. She also proved the written agreement above re

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ferred to, and gave evidence tending to show that the several conveyances assailed were voluntarily made by her husband, with intent to defraud his creditors, and that the several grantees therein had knowledge of such intent and participated therein. The evidence, we think, sustained the conclusions of fact found by the trial court, which rendered judgment for the plaintiff, and it does not appear to us that any error of law was committed by that court which requires a reversal of such judgment.

The principal questions presented by the appellants’ counsel upon the argument before us, related to the invalidity of the separation agreement of January, 1873, and the incompetency of husband and wife to thus contract with each other. Since we have held that the defendants are precluded from raising those questions in this action, the further discussion of them would be unprofitable and unnecessary. It may, however, not be improper for us to say that we would be quite unwilling to yield our assent to the appellant’s contention in respect thereto, even if we considered ourselves at liberty to enter into the consideration of the question.

Some other questions, however, were raised in the case which will be briefly noticed.

The evidence showed that in December, 1881, the plaintiff procured a decree for an absolute divorce from her husband for adultery, and that the judgment in such action made no provision for her support from his property. It is claimed by the defendants that marriage was the gravamen of the separation agreement, and that its annulment by the decree, necessarily subverted and destroyed the obligations of the contract. It is quite obvious that this proposition, if generally correct, would not affect the validity of judgments, for lawful debts already obtained, and standing unpaid and unreversed, when such decree was obtained. But we are also of the opinion that there is nothing in the terms or character of the agreement referred to, which authorized John Carpenter to commit adultery, or to violate with impunity the obligations of his marriage contract, without incurring the penalty, which the law imposes upon an offending party, for such misconduct. There is no express or implied condition in the contract, that the plaintiff should continue to remain the wife of John Carpenter, but the obligation to pay interest was to continue unconditionally during her natural life. The contract looked toward a separation, and not to a union of the parties; and a lawful separation, if produced without the misconduct of the wife, could not affect her pecuniary claims, if secured by legal obligations. The right of the wife to dower in the lands of her husband, or to an allowance by way of alimony out of

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his estate, could not be impaired by a divorce, granted for his misconduct; and the existence of an agreement whereby her future support by him, was secured by a lawful obligation, would afford a good reason why, in equity, her claims upon his property should not be provided for in the decree in divorce. The absence of such a provision seems to confirm rather than destroy the provisions of the contract, and looks to its expected continuance as a just and proper provision for the wife. Blake v. Cooper, 7 Serg. & Rawle, 500 .

It is further claimed that the plaintiff is estopped from questioning the validity of the several conveyances from John Carpenter to the other defendants, because she joined with him in their execution. It was found by the trial court that these conveyances were executed by John Carpenter, and received by the defendants for the purpose of defrauding the plaintiff, and without knowledge on her part of such fraudulent purpose. The claim made that Carpenter could, under his contract with his wife, require her to execute deeds releasing her dower in all his lands, under the penalty of' forfeiting all of her rights thereunder in case of refusal, and yet require her to execute such conveyances as should forever disable him from performing the obligations to her, which formed the only consideration for her agreement, is too absurd for serious consideration. The proposition is elementary that fraud vitiates all contracts, and a construction of an agreement which would hold an innocent party to his contract, and still authorize the other to defeat his obligation by his own fraud, is unsupported by any rule with which we are familiar. The only ground for such a claim would be that of estoppel, and that is untenable when all of the parties to the act except the plaintiff were cognizant of afi of the facts relating to the transaction, and were not deceived or misled by the plaintiff’s action. They were all active participants in the fraud practiced upon the plaintiff, and are not justified in asserting any rights secured thereunder as against the defrauded party.

In our view, the only serious question in the case relates to the additional relief granted by the court below, rendering judgment against Carpenter, in declaring a lien upon the land in question, for the several installments due, but not in the judgment when tho action was commenced. We are, however, of the opinion that the court, having acquired jurisdiction to decree such conveyances fraudulent and void, as to judgments previously recovered, was authorized to grant such further relief within the scope and meaning of the issues made, as the parties might be equitably entitled to, in connection with the transaction under investigation. No

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question was raised on the trial but that the proper parties were before the court, or that different causes of action were improperly united in the same complaint which required different modes of trial; but the sole question was whether the court had jurisdiction to render the judgment appealed from. The rule relating to the subject is comprehensively stated by the author of the most recent work on Equity Jurisprudence as follows: If “the controversy contains any equitable features, or requires any purely equitable relief which would belong to the exclusive jurisdiction, or involves any matter pertaining to the concurrent jurisdiction, by means of which a court of equity would acquire, as it were, a partial cognizance of it, the court may go on to a complete adjudication, and may thus establish purely legal rights and grant legal remedies which would otherwise be beyond the scope of its authority. Pomeroy’s Eq. Jur., § 181; Rathbone v. Warren, 10 Johns. 586 , 596; Hawley v. Cramer, 4 Cow., 717 ; Crane v. Bunnell, 10 Paige, 333; Bradley v. Bosley, 1 Barb. Ch., 152 . This principle has been applied in many cases in awarding judgment for pecuniary damages, even when the party had an adequate remedy at law, if the damages were connected with a transaction over which the courts had jurisdiction for any purpose, although for the purpose of collecting damages merely, they would not have had jurisdiction. Bradley v. Bosley, supra; Clark v. White, 12 Pet. 188 ; Franklin Ins. Co. v. McCrea, 4 Green [Iowa], 229; Brooks v. Stalley, 3 McLean, 523 . The court below had unquestionable jurisdiction to award relief against the conveyances hi question, as to judgments recovered, and although not entitled to award such relief as to claims not in judgment, it still had power to grant any other relief to which the party was legally entitled, although it might result in consequences similar to those afforded by a decree declaring a hen. The legal effect of the decree setting aside the conveyances, was to vacate and amiul the title conveyed by John Carpenter to the several grantees named in his deeds, so far as it stood in the way of the collection of the plaintiff’s judgment, and as against the parties to this action, of any other claim arising out of the same transaction, which should be thereafter lawfully put in judgment. The plaintiff’s complaint alleged that several installments, aside from those in judgment, were then due and unpaid upon the separation agreement, and asked that the same be declared a hen upon the said real estate, and that the property be sold, and such installments be paid from the proceeds of such sale. The fair import of this demand was to entitle the plaintiff to so much of the relief demanded as was within the power of the court to

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grant, and if the rendition of a money judgment, for such installments was necessary to confer the relief sought, the court had undoubted authority under the prayer for relief, to order such a judgment. The proof of the separation agreement, and the recovery of previous judgments thereon, constituted conclusive evidence of the rights of the plaintiff, .as a creditor of John Carpenter under such agreement, for the amount appearing to be due and unpaid thereon, and authorized the court to render judgment against John Carpenter, for such amounts as were not already in judgment. The rule which precludes a court of equity, from entertaining jurisdiction of an action, to set aside a fraudulent conveyance at the suit of a simple contract creditor would seem to render the judgment appealed from erroneous, so far as it declares such a debt a hen upon the property in question; yet the rendition of a pecuniary judgment therefor, in this action is authorized, and would seem so far as the parties to this action were concerned, to place the plaintiff in a position to enforce it hereafter against such real estate, by appropriate proceedings therefor. These views lead to a modification of the judgment by striking out so much thereof as declared it a hen upon the real estate for the installments not previously in judgment, and to an affirmance of its other provisions.

The judgment, therefore, should be modified in that respect, and as modified affirmed, with costs to the plaintiff.

Ah concur.