13 Pa. Super. 506 | Pa. Super. Ct. | 1900
Lead Opinion
Opinion by
Referring to the consideration for the note given by Dailey to his wife, the auditor finds: “ That Jonathan Dailey received all or a greater part of this money from his wife is undoubtedly true, but the validity and bona fides of the lien procured therefor is questioned.” Again he finds : “ The auditor is forced to the conclusion that Jonathan Dailey received this money from his wife, but that he was to repay it with interest is not so well established.” Again: “ It is evident from these facts that Mr. Dailey was not acting in good faith-with his creditors. Was his wife, A. C. Dailey, cognizant of the facts and the acts of her
In a subsequent part of the report the auditor says: “ Mrs. Dailey has established her claim against her husband’s estate to take effect and position or priority after the claims or liens of Mary High, Rachel Curts and William Bear, as the auditor has hereinbefore found, as there is no evidence of a fraud having been perpetrated against the claims of the subsequent liens to those named.” From the findings quoted and from the discussion in the report, it is clear that the debt as between husband and wife was honestly due. There is no finding which stamps the giving of the note by the husband to the wife with fraudulent intent as to the creditors generally. No one doubts that a husband can confess a judgment to his wife for money borrowed from her, and by this means make her a preferred creditor, or add to the security of her claim, even though the claim be held long enough to be barred by the statute of limitations: Wingerd v. Fallon, 95 Pa. 184; Lahr’s Appeal, 90 Pa. 507; Benson v. Maxwell, 105 Pa. 274; or include interest on the loan when there was, in fact, no agreement that the sum loaned should bear interest: Meckley’s Appeal, 102 Pa. 586; Hawley v. Griffith, 187 Pa. 306. The auditor does not seem to hold anywhere in his report that the giving of the note was
We thus have a confessed judgment by the husband to the-wife for money borrowed from her long anterior to the confession: for an amount honestly due; entered of record nearly a. year previous to any assignment for creditors; and given at a. time when the husband was possessed of property and was then completing negotiations for the purchase of more real estate. The auditor does not put his conclusion upon any finding of' fact that the wife had actual knowledge of or participation in an intended or accomplished fraud. He holds, however, that-the act of the husband in entering up the judgment note was-the act of the wife, and that his acts and knowledge in connection therewith became hers.
There are three creditors of Jonathan Dailey as to whom the-auditor finds that the judgment in favor of Agnes C. Dailey is fraudulent. The first is Mary High, to whom Dailey took a-judgment note and agreed to enter it up the same day. He postponed entering it of record until after the entry of the note in favor of his wife. He admits that he was the agent of Mary High for the purpose of entering the judgment. He was thus entrusted with the entry upon the record of the notes held by both his wife and Mary High. He admits that he agreed to enter up the High judgment note on the same day that he gave it, but does not say, nor is it elsewhere proven, that it was to-precede the lien of the judgment in favor of his wife, or take
The auditor also postpones the judgment of Mrs. Dailey to the judgment of Rachel Curts, on the ground of fraud. It appears from the testimony that the judgment note was given to Miss Curts about July 2 and dated July 25. Dailey says that he so dated it in order that this and certain other notes might not “ all appear so close together.” Apparently, it was a gratuitous act on the part of Dailey to convert his existing indebtedness to Miss Curts into a judgment on July 25. Miss Curts was called as a witness in her own behalf. She does not allege that Dailey represented that the Curts judgment should precede that of his wife. The substance of her testimony is that Dailey did not tell her anything about a judgment to his wife. How can this be regarded as proof of fraud and prejudicial to the right of Mrs. Dailey to priority in her judgment? Miss Curts, who was receiving the judgment note, was not injured by the concealment of the fact of the wife’s judgment. Miss Curts obtained a document by which she was enabled to -obtain a judgment summarily and within a time presumably less than she could otherwise have obtained it. Futhermore, it would be carrying the doctrine of agency beyond any application yet exhibited by the books to hold that in giving the judgment note to Miss Curts the husband was acting as the agent of Ms wife, or that any omission to gratuitously call attention to the wife’s judgment would estop his wife from asserting its priority.
The judgment of William M. Bear (also given priority) stands in a different position from the other two. About a month before he took the judgment note from Dailey he made an examination of the record to see what incumbrances there
Conceding, as the auditor does, that the judgment held by the wife was for an amount due, the silence or even false statement of the husband in his transaction with Bear does not estop the wife from prosecuting her lien in the absence of any evidence showing knowledge on her part that any misrepresentation, by silence or by false statement, was made by her husband and of any intent on her part to deceive.
We are not forgetful of all that this court and the Supreme Court have said in regard to the effect to be given to the findings of an auditor, nor of the fact that a collusive judgment may be attacked before and its character determined by him in the absence of a proper application for an issue: Meckley’s Appeal, 102 Pa. 536. We cannot better conclude than by quoting a paragraph from Mr. Justice Mitchell’s opinion in Werner v. Zierfuss, 162 Pa. 360. “The forms and devices of fraud are legion, and it would be vain to attempt to enumerate or define them, but it may be said as a general rule, that to impeach the payment or security of an actual debt there should be evidence tending to show either, first, some other advantage or benefit to the debtor beyond the discharge of his obligation; or, secondly, some other benefit to the creditor beyond mere payment of his debt; or, lastly, some injury to the other credi
The decree is reversed, and the record remitted to the end that distribution may be made in accordance with the views-herein above expressed.
Dissenting Opinion
dissenting:
That a mere confession of judgment to a bona fide creditor, by a debtor, for the purpose of giving such creditor a preference, is not invalid as an act done to hinder and delay creditors, is well settled. The auditor has found as a fact that the judgment of Agnes C. Dailey against her husband was given for an honest debt, and that finding eliminates from our inquiry any question as to the consideration given for the original judgment note. It only remains to be considered whether the-judgment upon this note was collusively entered by the parties thereto for the purpose of hindering, delaying and defrauding-the creditors of the defendant. The mere giving of the judgment for the purpose of preferring the creditor is not sufficient to sustain a finding of fraud or collusion in the transaction: Banking Company v. Fuller, 110 Pa. 156. There must be-additional evidence of something which may be considered, either in itself or in its connection with the circumstances, a-badge of fraud; and what evidence would be sufficient for that purpose must, in each case, be dependent upon the peculiar-circumstances: Bunn v. Ahl, 29 Pa. 387; Werner v. Zierfuss, 162 Pa. 360. There must be something which is a step in the: process of carrying the fraudulent intention into effect. The-auditor has found that “the confession of the judgment by-Jonathan Dailey to his wife was made in 1896, at or near the-time the note was entered of record; that the same was fraudulent and collusive between Jonathan Dailey and A. C. Dailey, the claimant, and was made and entered in fraud of the creditors of Jonathan Dailey.” And again: “Third. That from the statements made by the debtor, Jonathan Dailey, both before and after he entered the judgment in favor of his wife, the judgment was fraudulently confessed and given to hinder, delay and defraud his creditors.” We have here specific findings by the auditor that the entry of the judgment was fraudulent and collusive between Jonathan Dallej^ and the appellant,
Was there sufficient evidence to sustain these findings of fact? The appellant testified that she never had the note upon which this judgment was entered in her possession, or knew of its existence until after the judgment had been confessed upon it, and she fixes the date when judgment was entered upon it as in 1892; her husband testifies that he never delivered this note to his wife, and at first said that he wrote the note in 1892 but subsequently admitted that he might have written it in 1896, at the time he entered judgment upon it. Whether he wrote the note in 1892, and kept it in his possession, without his wife’s knowledge, or wrote it in Williamsport at the time he confessed judgment on it, he was at the time he entered that judgment acting as the agent of his wife, his knowledge was her knowledge and his ac.t was her act. When .the appellant asserts her rights under this judgment, she must accept the judgment bound by the acts of her agent in the matter. She cannot claim the fruits of his fraud and escape the consequences of the fraudulent act: Werner v. Zierfuss, supra; Hughes v. The Bank, 110 Pa. 428. On July 2, 1896, Jonathan Dailey received from Mary High a judgment, note in her favor, made by said Jonathan Dailey, and at that time agreed and undertook to file said note and have judgment entered against himself at the office of the protbonotary in Williams-port on July 3, 1896, and on the day last named he took said note to the office of the prothonotary and instead of entering the High note, as he had agreed, he entered the judgment in favor of his wife, which is now the subject of controversy, and, in violation of his agreement, held the High note until July 6, when he entered judgment upon it. This was an actual fraud upon Mary High, one of his creditors, and the fraud of an agent, in a civil point of view, is the fraud of the principal, so far as to prevent the principal from deriving any benefit from
