Kendall v. Hodgins

The statement on which the judgment was entered is insufficient. (Chappel v. Chappel, 2 Kern. 215.)

H. F. Pohlmann, who moved to vacate it, is a bond fide purchaser of the premises on which it is an apparent lien, and which the plaintiff had caused to be advertised to be sold under an execution issued on such judgment.

The effect of an insufficient statement, or who may move to vacate a judgment entered on a statement which does not authorize such entry, the Code has not declared. (Code, §§ 382,383, 384.)

In Dunham v. Waterman, 17 N. Y. R. 14, Selden, J., in speaking of the section of the Code, which prescribes the particulars essential to a sufficient statement, and of its design and meaning, employs this language:—

“ The provision does not relate to a mere matter of form, or the manner of conducting a judicial proceeding, but is one which affects substantial rights. It virtually constitutes a condition precedent to the right of the party to confess the judgment at all. Although the Code does not, in terms, enact, as was done by the act of 1818, that a judgment confessed, without a compliance with its provisions, shall ‘be decreed and adjudged fraudulent ’ in respect to ‘ other bond fide judgment creditorsyet, considering the object in view, it must be plain that such must be its meaning.”

Section. 6 of the Act of 1818, declares that if a judgment be confessed without complying with the provisions of that act, “such judgment shall be taken, decreed, and adjudged fraudulent, as respects any other bond fide judgment creditors, and every bond fide purchaser for valuable consideration of any lands bound or affected by such judgment."—Sess. Laws of 1818, chap. 259.

If the object and meaning of the two statutes are the same, then it follows that the judgment in question is as absolutely fraudulent, as against a subsequent bond fide purchaser, as against

It is settled that a'judgment creditor may obtain relief against such a judgment by motion: Chappel v. Chappel, and Dunham v. Waterman, supra. Relief was granted on motion, because that is held to be an appropriate proceeding to obtain such relief, and because a judgment creditor is a person whom the statute was passed to protect.

But when it is once conceded, or is established, that a bond fide purchaser is protected by it equally with a judgment creditor, no good reason can be assigned why the former should not be relieved by the' same kind- of proceeding, in which relief will be granted to the latter.

The general rule is, that no one except a judgment creditor can come into Court to obtain relief against a transfer made, or judgment confessed by his debtor, as being a fraud upon creditors. The general rule is not that a creditor at large cannot obtain relief by motion which he might) in such a case, obtain by action, but that he cannot be heard at all. But a party, who, by statute, is entitled to particular relief, can obtain it by motion, when that is a proceeding in which it is proper for the Court to examine the matters to be considered, and to grant the desired relief.

If a bond fide purchaser for a valuable consideration cannot obtain relief by motion, it is not apparent that he can obtain any by action. The objection that he is not a judgment creditor, if of any force, is as fatal to his right to maintain a suit, as to make a motion. If held a fatal objection to his right to maintain an action, it must be on the ground that the statute was not designed for his protection.

The Act of 1818, in terms, protected him as fully and absolutely, as it did a judgment creditor. In that respect it created an exception to the general rule that no person, except a judgment creditor, can institute a suit to set aside a transfer or charge made or created by a debtor, in fraud of his creditors.

But if the óbject and meaning of the provisions of the Code, now under consideration, are the same as that of the Act of 1818, the purchaser should be permitted to resort to the same remedies as the judgment creditor. A proceeding, by motion,

If the judgment could be treated as absolutely void for defects appearing on its face, so that a purchaser, at a sale under an execution issued on such a judgment, could not acquire any title, it might not be necessary for the protection of a bond fide purchaser that it should be vacated. But that view would apply with equal force to a judgment creditor, and if entitled to consideration, would tend to the conclusion that the interposition of the Court was not required for the protection of either.

But the Courts have not acted on that view of the matter, when a subsequent judgment creditor has moved to vacate such a judgment. We think the true view is, that a subsequent bond fide purchaser for a valuable consideration, is entitled to the same relief, and may obtain it, by the same mode of procedure as a subsequent judgment creditor. And that as Pohlmann’s character, as such a purchaser, is not questiohed, it was proper to , grant to him, upon motion, the relief to which he is entitled. (Martin v. Martin, 3 Barn. & Ad. 934; Reed v. Bainbridge, 1 Southard, 351; Bonnell v. Henry, 13 How. Pr. R. 142; Barrow v. Bispham, 6 Halsted, 110; Howland v. Ralph, 3 J. R. 19; Seaving v. Brinkerhoof, 5 J. Ch. R. 329.)

The authorities, cited in the opinion of Judge Hoffinan, in connection with those to which we have referred, seem to us to sustain the practice pursued in this case. The order, therefore, will be so modified, as to set aside the said “execution,” and all proceedings had under it, “ so far as they relate to, or affect the said real estate,” and in all other respects will be affirmed, with $10 costs.

The principal question is, can a purchaser,

for a valuable consideration from a judgment-debtor, without actual notice of the existence of a judgment by confession, but misled, after due diligence, into a belief that it did not exist, obtain relief, upon motion, against such a judgment, on the ground of its being fraudulent and void?

The judgment in the present case is undoubtedly void as to every person entitled to question it. The statement is insuffi.

The 3d chapter of Title 12 of the Code, under the head of “confession of judgment without action,” prescribes in what cases the confession may be made (§ 382); the essential particulars of such statement, and that it shall be verified and may be filed (§§ 383, 384). . It is silent as to the parties who may take advantage of any omission or violation of the requisites of the statement, or other directions.

The statutory provisions of 1813 and of 1830, regulated the course upon confessions to a certain extent, but are equally silent as to the parties entitled to interfere, or as to whom the defective statement shall be void. (1 R. L. 416, § 3; Ibid, p. 501, § 5; 2 R. S. 1830, 360, § 10.)

In 1818 it was enacted, that if the plaintiff, in any judgment "by confession on warrant, omitted to file the specification or statement therein prescribed, “such judgment should be deemed and adjudged to be fraudulent as respects any other bond fide judgment-creditors, and every bond fide purchaser for valuable consideration.” (Laws, 1818, ch. 259, § 8.)

I have found the following cases, expounding or depending upon this act: Lawless v. Hackett, 16 John. Rep. 149 ; White v. Williams, 1 Paige Rep. 502 ; Brinkerhoff v. Marvin, 5 John. Ch. Rep. 320; Seaving v. Brinkerhoff, Ibid, 329; and James v. Morey, 2 Cowen, 246.

A purchaser under a junior judgment was held within the act (1 Paige, 506). And a voluntary assignee for the benefit of creditors generally, was held not within it. He was not a purchaser for a valuable consideration, in the sense of the act. The term purchaser was used in its common and popular sense. (5 John. Ch. Rep. 329.)

In James v. Morey, Justice Woodworth considered that a mortgagee was a purchaser under the act, and Chief-Justice Savage held otherwise. The former was of opinion that notice of the judgment was of no importance. The party had a right

It has escaped attention (as far as I am aware) in all the cases, that this statute was repealed in 1821 (Sess. Laws, 9 Eeb. 1821, ch. 38). It was also repealed in the general repealing act of 1828 (3 R. S. 130, § 265). And Ch. J. Savage remarks, “that when the Courts carried it so far as to require every item of the plaintiff’s demand to be stated in the specifications, the Legislature seem to have considered the remedy worse than the disease, and repealed the act” (2 Cowen, 314).

Yet we find it to be settled law, by the cases in the Court of Appeals referred to, that the object of the Code, and of the Statute of 1818, was the same; that the particularity exacted by the latter, is requisite under the former; and that a judgment confessed without a compliance with the provisions, is as void and fraudulent under the Code, as it was under the Statute. As to whom it is so void, is left an open question, except as to judgment-creditors.

Whatever may have been the motives for repealing the Act of 1818, the question remains: Did the statute give originally to bond fide purchasers a right which they never possessed before, or, upon general principles, would not possess, to interfere with and procure the cancelment of a judgment fraudulently confessed? or, was the statute only an enumeration of those who, being entitled before, upon general principles, should be entitled under the act, when its requirements were neglected or violated ?

In my judgment, the latter is the true conclusion, and is warranted by settled principles and authorities of the common law.

The writ of audita querela was anciently the mode of obtaining relief against judgments, either by a party to the record, upon matter which he could not have pleaded, or by strangers (5 Taunton, 558; 2 Bingham, 41; 2 John. Cas. 258; Ibid, 227). So late as 1824, it was said by Best, J., that it was neither an obsolete nor difficult proceeding. (2 Bingham, 41.)

But it has been superseded to a very great extent, if not entirely, in our State, by a motion to vacate the judgment; upon, which, whenever the question offered is not clear, an issue may be directed. In Wardell v. Eden (2 John. Ca. 258), however, the Supreme Court left the party to his writ of audita

Now it was settled at the common law, that if one man acknowledge a statute merchant or statute staple to another, who afterwards releases it; and the conuzor aliens his land to a stranger, the stranger may have audita querela against the conuzee after execution sued out, though not before. (17 Ed. 3. 27 b. cited 3 Viner Ab. 321, with other cases from the year books.) • These authorities are recognized in Waddington v. Vredenbergh, (2 John Ca. 229.)

So a purchaser could have this writ to compel a judgment or statute creditor to comprise in his extent, every parcel of land bound by the judgment or statute, although in the hands of various feoffees or tenants. He was to make the debt out of the rents and profits, and the various holders under the conuzor or judgment debtor, were thus by the common law made to contribute proportionately to the payment (Brookes Ab. Tit. Audita Querela. Coke’s Reports, 3, 14 b. Viner’s Ab. vol. 3, p. 339, fol. 9. Ibid. 343, fol. 5, Ibid. 349 M. Pl. 1.)

The statute 16 and 17 Oar. 2d. cap. 5, made perpetual by 22 and 23 Oar. 2, cap. 2¡ recited this to be the rule of the law; and provided, that where a judgment, statute, or recognizance had been extended, it should not be avoided or delayed, because part of the lands extendible were omitted out of the extent; saving, however, to the party whose lands were extended, the right of contribution from those whose lands were omitted.

In Prynne v. Houghton, (2 Ventris 104) it was held, that the statute only applied, when the extent had been executed, and the tenant brought audita querela. But it did not apply before execution; and hence upon a scire facias to revive a judgment, one tenant could plead that others were not warned.

So in one of the cases cited in the abridgements before referred to, it was held that this writ did lie on behalf of an alienee of a conuzor in a statute staple, to compel the conuzee to extend lands still held by the conuzor, before his own could be resorted to. And this ancient authority is the foundation of the rule now settled, that a Court of Chancery will compel the sale of pre

Nothing can be more striking than these old authorities to show a preventive power in a court of law, through the medium of its own process, to avert the infliction of a wrong upon even third parties, by color of its own judgments, or execution under them, or under instruments, to enforce which process from the Court must be resorted to.

In Harrod v. Benton (8 Barn. Cres. 217) Lord Tenterden said, “ I think the Court has a jurisdiction over a warrant of attorney, ¿which it may exercise at the instance of any party who has an interest in supporting it, or setting it aside.” The applicant was, it is true, an execution creditor»

In Martin v. Martin, (3 Barn. & Adol. 934) a landlord was allowed to impeach a judgment confessed by a mother-in-law to her son-in-law. There was misrepresentation and deceit on the part of the debtor and creditor, which induced the delay of a distress. Taunton, J., said, “ I also doubted whether we could interfere at the instance of a third person, but I think in this case the Court may do so by virtue of its general jurisdiction over warrants of attorney, and because this is a fraudulent transaction. The landlord, by his lien, would have been quasi owner of the property, and in that respect he may be considered for the present purpose as representative of the debtor."

In Reed v. Bainbridge, (1 Southard’s Rep. 35) it was expressly decided that such an application may be made on behalf of a bond fide purchaser from the judgment debtor.

In South Carolina there is a statute that confessions may be taken before a clerk, in a manner prescribed, and judgment entered thereupon. It is then provided that every person aggrieved by such confession, may file a suggestion, and impeach the judgment. In Sutton v. Pettus, (4 Richardson’s Reports, 163) it was held, that a purchaser from the judgment debtor was within the act.

In both these cases, that of Howland v. Ralph, ( 3 John. Rep. 20 ) is referred to as an authority, that a purchaser could have this redress, McNee was, there, a purchaser from the defendant, the judgment debtor by deed in 1804. A judgment was dock

This was extended to the next term, “ so as to give McNee an opportunity to apply in the meantime to the Court of Chancery for relief, or to put the question of fraud and collusion in a train for trial at law, by an issue in fact.”

This case fully sustains the right of a purchaser to affirmative relief in some form, and indicates strongly that it can be had by an issue directed in the Court of Law.

Swan v. Saddlemire, (8 Wendell, 676,) determined that case will lie by a purchaser against the plaintiff and defendant in a judgment for fraudulently setting it up as unsatisfied, when it was paid, and causing an execution to be issued thereon against the land of the purchaser.

In Neusbaum v. Keim, (7 Abbott, 23 C. P. Gen. Term,) it was held that a judgment founded upon an insufficient statement, was void as to the debtor’s grantees, although it might be valid as to the debtor himself. The case arose upon an action by the judgment creditor, to set aside a conveyance of real estate as fraudulent, and the complaint was dismissed.

In Bonnell v. Henry, (13 Howard Pr. Rep. 142,) Mr. Justice Haréis states, that he does not understand the right to have an illegal judgment removed, to be confined to a judgment creditor. Of course he was not intimating that other creditors possessed it.

It is true, that the same careful Judge held in Beekman v. Kirk, ( 15 Howard, 230 ,) that a voluntary assignee for creditors at large could not resort to such a motion. But there appears to me to be a marked and important distinction between such an assignee, and a purchaser for valuable consideration; and that the learned Judge would be wholly free from inconsistency if he

It is urged that the grantee of a judgment debtor, can stand in no better position than his grantor; and hence, upon the concession that the debtor was bound by the judgment, the grantee cannot impeach it.

But in numerous instances a bond fide purchaser has a better standing, and is entitled to higher rights and immunities than his grantor, or volunteers under him possess.

Under the Statute of 27 Elizabeth, it is the English rule to this day, that a purchaser for valuable consideration, even with notice of a prior voluntary deed, acquires the better title, and can set it aside. (Cathcart v. Robinson, 5 Peters’ U. S. Rep. 264; Newman v. Rusham, 9 Eng. L. & Eq. Rep. 410.) The rule as laid down by the Supreme Court of the United States is, that the voluntary conveyance is merely presumptively fraudulent, as to a subsequent purchaser without notice. The presumption there was not repelled.

Now under either rule, the grantor himself could not set aside the conveyance; neither could his heir or devisee. (Jackson v. Garnsey, 16 John. 189 ; Anderson v. Roberts, 18 Ibid, 515.)

So a grantee in a subsequent voluntary deed cannot avoid a prior voluntary grant, (Roberts on Fraudulent Con. p. 646;) and it is held in the Queen’s Bench, that a purchaser from an heir or devisee of the grantor could not avoid the voluntary grant of the ancestor. (Newman v. Rusham, 17 Queen’s B. Rep. 723.) Yet it is clear that a purchaser for value from a voluntary grantee becomes vested with a better title than his grantor, and renders the voluntary deed, in effect, a purchase. (Ibid.)

It is justly observed by Judge Sutherland, that a voluntary conveyance is a deed without any valuable consideration; and the character of purchase or voluntary is determined by the fact whether anything valuable passed between the parties. (4 Wendell, 304.)

Again, a deed may be asserted as fraudulent in fact, by a bond fide purchaser, while it remains valid as to the grantor and bis heirs, (Wadsworth v. Havens, 3 Wendell, 411.)

These examples show how extensively the law protects and aids a bond fide purchaser, when his grantor would be left without redress.

It is true that in the vast majority of cases, such applications are made on behalf of judgment creditors. But many circumstances will account for the infrequency of a motion by a purchaser. He usually is apprised by his searches, of judgments and procures their removal, or regulates his purchase money accordingly, or if in possession, is content to wait and resist any action on the part of the judgment creditor,

It is an argument of no little weight against this application, that the invalidity of the judgment appears upon its. face, and that the power of a Court of Equity cannot be invoked to remove or cancel an instrument so void, upon the ground of its being a cloud upon the title. (Craft v. Merrill, 14 N. Y. Rep. 456 ; Heywood v. The City of Buffalo, ibid, 542; Ward v. Dewey, 16 ibid, 520; Scott v. Onderdonk, 14 N. Y. Rep. 9 .)

But, if this doctrine is applicable to motions to set aside judgments, under the common law power of a Court over its records, it would be in general as applicable when a prior judgment creditor moves, as in other cases. Particularly would it be so, when a purchaser, under a prior judgment, applies, who it has been held may do so. ( 1 Paige 506 , before cited.)

I apprehend that an exception to this rule exists in the case of judgments, and upon the principle, that a Court possesses power and control over its own records, so that it may always remove and cancel them, when they are fraudulently obtained or supported, and when innocent parties are aggrieved by them, who have not become expressly, or by clear legal implication, bound by them. (20 John’s Rep. 296; 2 John. Ch. Rep. 144; 12 Wendell, 222; 5 John. Ch. Rep. 324 ; 9 John. Rep. 80 ; 6 Halstead’s Rep. 110; Reading v. Reading, 4 Zabriskie’s Rep. 361.) When the facts are plainly made out, the Court decides at once;’ when they are doubtful and contested, an issue is directed. The 72d section of the Code, abolishing feigned issues, sanctions such course in the form there prescribed.