64 Colo. 378 | Colo. | 1918
Defendants in error, Olmsted and Kingsbury, commenced this suit November 15,1913, as a'direct attack upon a confessed judgment for $7,809.15, entered against one Fawcett July 22, 1913, in favor of Coryell, plaintiff in error. The purpose of the action was to secure the cancellation of the judgment, enjoin and restrain the sheriff of Garfield County from selling the property of Fawcett on execution, and to procure the appointment of a receiver to take charge of the property.
The Pleadings.
The complaint alleges that June 24, 1913, Kingsbury recovered judgment against Fawcett for $170.40, on which"
The Evidence.
The uncontradicted evidence shows that Fawcett rented from Coryell what is known as the Red Soil Ranch for the years 1912 and 19Í3, at the agreed price of $600.00 a year; that March 21, 1913, Fawcett owed Coryell $600.00 for the rent of 1912, $49.25 for hay, and $100.00 for a gasoline engine, a total of $749.25} that Coryell received from Fawcett, to be credited on this account, $225.00, leaving a balance due on settlement, of $524.25, for which she gave Coryell a promissory note dated March 21, 1913, payable in thirty days, with interest at 10 per cent, no part of which was paid, and which entered into the confession of judgment; that March 31, 1913, Fawcett gave Coryell another note for $600.00, the consideration being the rent for the ranch for 1913, with interest at 10 per cent, no part of which was paid, and which also entered into the confession of judgment; that January, 1911, negotiations were commenced by Fawcett which resulted in the purchase, or agreement to purchase from Coryell, what is
Garrigues, J., after stating the case as above:
1. The only point in the case relates to the finding of the court that Fawcett confessed judgment for the purpose of hindering and delaying creditors. There is not a particle of evidence upon which to base such a finding or conclusion. The court seems to have proceeded upon the theory that plaintiffs and Fawcett were the only interested parties in this suit. Not so. Coryell was vitally interested. The pleadings were not evidence against Coryell, and constituted no basis for setting aside the judgment. It was the evidence given in court by Fawcett, and not her answer, that constituted her evidence against Coryell. There is no evidence to warrant an inference that the judgment was confessed wantonly, covinly, or maliciously, for the purpose of hindering or delaying creditors. Fawcett testified she purchased the Pierce tract for $6,000.00: that she considered it worth that sum; that she gave her note for the purchase price, expecting and intending to pay it, and that she-owned the land, and owed the note. She says Coryell represented that the confession of judgment would save costs, and promised in the event she would agree to the entry of judgment, that it should draw only 6 per cent interest, instead of the legal rate, and that she would hold off execution, and assist her in securing a loan on the land by which she could pay all her creditors. If true, this was only a matter between Coryell and Fawcett, was of no concern of plaintiff’s, and tended in no way to establish that Fawcett confessed judgment for the purpose of hindering or delaying creditors.
It is evident that no judgment could be confessed, except by agreement, which must necessarily precede the judgment. The judgment being based upon valid obligations, the agreement in advance to confess it in no way affects its validity.
Confession of judgment is not a badge of fraud. Preferring creditors, when one is insolvent, is not iniquitous,
In Sweet v. D. & R. G. Co., supra, it is said:
“We have yet to learn that there is any iniquity in consenting to a judgment upon just and valid obligations.”
In Walton v. First National Bank, supra, it is said, at page 276:
“It is not to be understood from this opinion that, in the absence of statutory restriction, a debtor may not, under ordinary circumstances, lawfully give preference to one creditor over others; nor that it is a badge of fraud for a creditor to secure such preference.”
In Sutton v. Dana, supra, it is said:
An insolvent “may lawfully prefer some of his creditors to others, and pay some of them in full, leaving others partially or wholly unpaid so far as he should be without means of payment. * * * The law permits an insolvent debtor to make choice of the creditors he will pay, and the mode or means by which he will make such payment, and that something beyond such preference or payment must appear before the transaction is to be considered fraudulent. The preference of creditors by a failing debtor is not necessarily fraudulent.”
This rule applies equally well to a confession of judgment. There is not the slightest evidence that the confession of judgment in this case was covinly, or maliciously, or. wantonly made by Fawcett with intent to hinder and delay creditors, or that she derived any unlawful, invalid or improper advantage, or any favor or benefit of any kind over her creditors by her action in that regard.
The court found that the $6,000.00 note was not due when judgment was confessed, and for that reason held it was not a valid claim against the estate of Fawcett. This was error. A judgment by confession is a judgment by agreement or consent. It is an admission that the demand is just and valid, and is a waiver of all technical defenses. Fawcett’s own evidence shows that she could not have prevented a judgment on the $6,000.00 note, although she might have delayed it until the notice was given, or caused two suits to be instituted. Instead of doing this, she consented to the judgment by which the provision regarding the thirty days’ notice was waived. No doubt she could waive the notice if she wished, and the confession of judgment certainly waived it.
Reversed and remanded with directions.
Chief Justice Hill and Mr. Justice Scott concur.