125 N.Y. 256 | NY | 1891
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *258
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *259 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *261 Upon the facts it is very difficult to resist the conclusion that the mortgage to Mrs. Clay was a part of the scheme of fraud originated by Michael K. Wilson for the purpose of putting his property beyond the reach of his creditors. It has been adjudged that the conveyances from Michael to his brother, and from the latter to Eliza A. Wilson, the wife of Michael, were made to defraud the creditors of Michael. The suit of Haake was then pending, and in October, 1879, a few days before judgment was recovered therein, George, the fraudulent grantee of Michael, at the latter's request, executed a mortgage for $8,500 to a poor woman, who lived by her daily labor, in consideration, as is alleged, of a loan for that amount made by her to Michael K. Wilson.
But the question of law here is as to the effect of the foreclosure judgment as an adjudication in this action as against this plaintiff, of the bona fides of the mortgage. The general principle upon which the doctrine of res adjudicata is founded, does not seem to have any appropriate application to prevent the plaintiff from litigating the question of fraud in this action. The plaintiff was not a party to the foreclosure action. Hisstatus as creditor may in a loose sense be said to be under the judgment debtor. But in attaking a conveyance or mortgage made by his debtor in fraud of his rights as creditor, he claims not under, but in hostility to the debtor and his grantee or mortgagee. By the general rule a judgment binds parties and privies, but not strangers. The defendants rely upon a class of cases which hold that a judgment recovered for a debt, establishes not only the relation of debtor and creditor between the parties to the judgment, but also as to third persons, so as to preclude them, in the absence of fraud or collusion, from questioning the validity of the judgment or denying that the debt upon which it was rendered actually existed. The case of Candee
v. Lord (
The judgment should be reversed and a new trial granted with costs to abide the event.
All concur.
Judgment reversed.