85 N.J. Eq. 308 | New York Court of Chancery | 1915
Complainant has caused a writ of attachment to be issued in his behalf against the property of defendant Charles E. Gondolf, as a non-resident debtor, and the writ has been levied on certain real estate in Atlantic City, the legal title to which now stands in the name of Maud Gondolf. Maud Gondolf is the name by which the wife of the attachment debtor is commonly known; her real name is Mary E. Gondolf.
The bill in this suit is in aid of the attachment levy, and seeks a decree declaring the conveyance to the wife of the attachment debtor fraudulent and void as against the lien of complainant’s writ.
The conveyance to the wife of the attachment debtor was made April 18th, 1911. The debt for which the attachment was issued was contracted in January, 1912. Complainant’s right to relief against the conveyance is accordingly based upon the claim that, the conveyance was made to defraud future creditors.
The writ of‘attachment was issued and levied December 9th, 1912. The bill in this suit was filed December 16th, 1912. Pending this suit, and before final hearing, judgment was entered in plaintiff’s favor on the report of the auditor in the at- - tachment proceedings; that judgment has been offered and received in evidence in this suit.
The primary question for consideration herein is whether the conveyance to the wife of the attachment debtor was made with intent to defraud his future creditors.
It is urged in behalf of Mrs. Gondolf that the conveyance to her by her husband was not wholly voluntary. The evidence discloses that prior to the date of the conveyance to Mrs. Gondolf the attachment debtor had conveyed the premises in ques1 tion to one Dora Collins; the conveyance to Mrs. Gondolf was from Mrs. Collins. Mrs. Gondolf has testified that the conveyance from her husband to Mrs. Collins was to secure a loan of $1,000 made by Mrs. Collins to her husband, and that her husband agreed with her that if she- would pay off that loan she could have the property, and that she subsequently discharged the Collins loan with her own money, and Mrs. Collins then conveyed the property to her at the request of her husband. I am unable to regard as false this testimony, corroborated as it is in material particulars.
The property conveyed was worth about $14,000. As to the excess over $1,000 the conveyance was admittedly voluntary. Nor am I able to treat as false the claim of Mrs. Gondolf that she was not aware of the nature of her husband’s pursuits, and had no reason to believe that the conveyance to her was intended by her husband to defraud creditors. Any decree in behalf of complainant must accordingly recognize a lien in behalf of Mrs. Gondolf to the amount of $1,000.
After the bill in this suit was filed, and before final hearing, a judgment in the attachment proceedings was entered for the amount claimed pursuant to the report of the auditor. It is now urged in behalf of complainant that that judgment is conclusive as to the debt due from the attachment debtor to complainant herein, and is operative to relieve the complainant herein from the necessity of establishing in this suit the nature and amount of his claim, and is also operative to deny to Mrs. Gondolf the right to contest the existence of a debt from her grantor to complainant for which an attachment could be sustained. I am unable to adopt that view. As the attachment judgment had not been entered at the time the bill was filed, the
The conclusive force to be given to a judgment which is made the basis of a suit of this nature is considered in McCanless v. Smith, 51 N. J. Eq. 505, and again in Minzesheimer v. Doolittle, 56 N. J. Eq. 206. But in these two cited cases the judgments were in personam. In the present case, the judgment is in rem and is purely statutory, and while it may be regarded as conclusive for certain purposes, it is not conclusive of the debt. By the terms 'of our statute the defendant in attachment is given one year after distribution of the proceeds of sale under the attachment judgment to sue the attachment creditor for money received by him which was not due and owing. This provision of our statute is pointed out in Miller v. Dungan, 36 N. J. Law 21, as wholly inconsistent with the idea of conclusiveness of the attachment judgment as to the debt, and in Schenck v. Griffin, 38 N. J. Law 462, our court of errors and appeals adopts the same view.
At final hearing herein complainant was required to establish the debt for which his attachment was issued. The evidence disclosed that the attachment was issued for money which complainant had lost through swindling operations of the defendant in attachment and his associates. The circumstances disclosed were briefly as follows: Complainant, while in New York City, was approached by a man who said his name was Hall and that he had met complainant before; in that manner he gained complainant’s confidence. Hall subsequently introduced to oomplainant the defendant in attachment under the name of McDonald. Hall and McDonald then induced complainant to believe that McDonald, by breach of trust with the Western Union Telegraph Company, with which company they falsely represented that McDonald was connected, could procure advance in
It thus appears that the contract between complainant and defendant in attachment, through which complainant lost the money for which the writ of attachment was issued, was a contract whereby the defendant in attachment was to supply to complainant information to be procured through a breach of trust to his employer, which information so supplied was to be used by complainant to swindle what complainant believed to be a pool room; the proceeds of the proposed swindle wore to be shared by the three participants in the unlawful undertaking. There was in fact no real pool room and no breach of trust by a trusted employe; complainant in consequence failed to accomplish his unlawful purpose. But complainant’s moral turpitude in the transaction was in no way lessened by the miscarriage of his plans; the moral turpitude of one who attempts the assassination of another is in no way involved in the circumstance that his intended victim escapes through his inaccurate aim. It follows that this court is now called upon to award a purely equitable remedjr to one who has been guilty of unconscionable conduct clearly involving his moral turpitude in the very transaction which forms the basis of his claim.
It is a maxim of equity that he who comes into a c'ourt of equity must come with clean hands, and in the ordinary application of that maxim a court of equity denies its remedies to a complainant who has been guilty of bad faith, fraud or unconscionable acts in the transaction which forms the basis of his suit. The inquiry, therefore, arises whether in the circumstances of
In the law courts a similar principle is recognized, but in its application cases are to be found in which the courts incline to measure tire comparative guilt of the respective parties and extend relief to one who is comparatively innocent; that situation usually has been presented in cases in which the wrongful conduct of the party seeking relief has arisen through undue influence arising from a trust relationship of the parties, through mental weakness, threats, fea.r or oppression and like circumstances which have been regarded as sufficient to measurably excuse the wrongful conduct involved. And even when the parties have been found to be in pari delicto, relief has at times been awarded on the ground tha*t in the particular case public policy has been found to be best conserved by that course. Cases are also to be found in which courts of equity have adopted similar views. Brit I am unable to find any justification for a court of equity to extend equitable relief to a suitor who has been guilty of conduct involving the degree of moral turpitude of that which is involved in the conduct of complainant herein in the very transaction which forms the basis of the relief sought when that conduct and the turpitude involved in it have been impelled by the deliberate and intelligent purpose of the rational and normal intellect of a free agent. While complainant herein was the victim of his associates, and while his conduct was measurably influenced by them, yet his determination to enter with them into what he clearly understood to be swindling operations was wholly voluntary on his part; there was presented to him what appeared to him to be an opportunity of pecuniary profit by engaging in wrong-doing and he deliberately accepted the opportunity; the influence which impelled him was his cupidity and not the influence of his associates; his moral turpitude included not only the purpose to swindle others, but also a purpose to accept the benefits of a breach of trust of his associates as a part of the proposed plan of operations. Any attempt to measure the degrees of moral turpitude involved in the conduct of the respective parties is futile; complainant’s associates sought to swindle complainant, complainant sought to swindle
As already suggested, cases are to be found, in which it has been thought that, public policy is best conserved by awarding relief in cases somewhat of this nature; but I am convinced that the decisions of the courts of this state, and the decided weight of authority elsewhere, is to the contrary. In Cutler v. Tuttle, 19 N. J. Eq. 549, it was held by our court of errors and appeals that where one supplied money for the purchase of a property and caused the title to be taken in the name of another to defraud creditors of the purchaser, a court of equity would not decree a resulting trust in behalf of the person who supplied the money. In Johns v. Norris, 22 N. J. Eq. 102, it was held by this court that a widow who had procured a person to purchase at foreclosure sale the real estate of her late husband at prices below its real value by a contrivance agreed upon to deter bidder’s by giving out that the purchase was for the benefit of the widow and her family, was a party to a fraud against tire heir and creditors, and that in consequence she could not come into equity for relief against her confederate because of her unclean hands. In Watson v. Murray, 23 N. J. Eq. 257, a bill was filed by a member of a partnership against the other partners for discovery and an accounting of the profits and assets of the firm, which firm was engaged in a lottery business. A demurrer to the bill was sustained by this court. The ground of the decision is disclosed in a single quotation from the opinion: “It (the business) is eminently one to which the maxim applies, ex turpi causa non oritur actio. 'The objection,’ says Lord Mansfield, 'that a contract is immoral or illegal, as between plaintiff and défendant,
I also think it immaterial in this case whether the maxim, “In pari delicto potior est conditio defendentis ” is to be understood as but a corollary to the general rule “Ex dolo malo non oritur actio ” or as a limitation of the latter maxim, for parties are necessarily to be regarded as in pari delicto when the executed transaction which is made the basis of equitable relief is one in which each party of his own free and intelligent will entered with a deliberate and defined purpose to swindle others. “In the Boatright Cases," reported in 195 Mo. 693; 130 Fed. Rep. 905, and 117 Fed. Rep. 325, there is found an element of coercion which finds no parallel in the present case.
It is contended in behalf of complainant that the transaction which is made the basis of this suit was a gaming transaction falling within the provisions of a New York statute which gives a right of civil action for money lost, and that the laws of that state permit the action to be brought within the period within which the attachment was issued. In behalf of defendant it is contended that the statute of this state limits the period within which such actions can be brought to six calendar months. 2 Comp. Stat. p. 2624 § 5. The attachment here in question was not issued within that period.
A court of equity will ordinarily refuse relief under a gaming contract which has been executed by the payment of money, but where a statute authorizes affirmative relief in a gaming, usurious or other kindred transaction, this court necessarily extends its remedies in furtherance of such relief. I think it unnecessary, however, to consider here either the provisions of the New York statute or the effect of our statute limiting the period within which such actions shall be brought in this state. The transaction here involved was not a gaming transaction. The place where the money was lost was not in fact a pool room and no real bets were made. The pretended wagers were mere form and wholly without substance. They were not in fact wagers. Complainant did not undertake to make a wager; believing that he knew the result of the race it was his purpose and aim to rob the supposed pool room by means of a pretended wager ; there was
I will advise a decree dismissing the bill.