93 N.J. Eq. 67 | New York Court of Chancery | 1921
The bill in this case was filed by-judgment creditors of the defendant Melnyk to set aside a conveyance of land made by him to the defendant Novak, alleging that it was made to cheat and defraud them. Novak answered denying fraud, setting up that the deed was in the nature of a mortgage and cross-billed, praying that it be declared a mortgage. On the hearing it was held that the deed was given as security, and valid as a mortgage, but void as to the complainants’ judgments. A decree was accordingly entered upholding the deed to the extent of Novak’s advances, but, subject to his lien, iti was set aside as against the complainants’ judgments, and the property was ordered to- be sold to satisfy Novak’s lien, and the complainants’ judgments and a ft. fa. is now in the hands of the sheriff. Novak has petitioned the court to determine who- will be entitled to the possible surplus. He wants to know how to- bid. I do> not pause to consider whether he is entitled to the court’s judgment m limine under the act of 1915 (P. L. 184 ¶ 7), or upon the authority of Point Breeze Ferry Co. v. Bragaw, 47 N. J. Eq. 298, or State Mutual Building and Loan Association v. O’Callahan, 65 N. J. Eq. 738, cited by him. I think he is not, but, as the matter is pressing and no objection is raised, I will pass upon the question.
Novak claims to be entitled to the surplus, and he rests his claim on the ground that the deed to him was executed by Melnyk with intent to cheat and defraud creditors; that, although voidable as to creditors, it was good inter pandes, and that equity will not aid the wrong-doer. Geroso v. DeMaio, 75 N. J. Eq. 410. The claim is based- upon the recitals in. the final decree, rather than upon tire facts disclosed at the hearing which led to that instrument. The decree does recite that “the deed of said Myak Melnyk and Olena Melnyk, his. wife-, to said Michael Novak was made, and executed by them with intent to cheat and defraud-the complainants, but was taken by the defendant Michael Novak to secure to him the sum of $3,400 then advanced by him.” This is an inadvertence. Actual intent to cheat and defraud was not shown at the trial, as I recall the testimony, and, surely, the cause was not presented nor decided upon that theory. At the
If Novak still relies upon the recital in the final decree as res adjudicada, the recital will be corrected on application.