4 Abb. Ct. App. 253 | NY | 1866
delivered the following opinion:
[After stating facts.] Upon this narrow question raised between the defendants, as to what part, or which interest in the mortgaged premises, that of the defendant Egbert Bement or that which his father as alleged fraudulently attempted to convey to him in October, 1854, should be first sold under the foreclosure judgment, the action has been pending for nearly six years. The question was one in which the plaintiff had no interest whatever; for the whole premises were subject to the
[The learned judge here recited the findings in the present action, the substance of which is fully stated above, and continued as follows:]
If there be any merit in the appeal of either of the parties, I have failed to discover it. The plaintiff has obtained, by the. judgment of the general term, what I think he was originally entitled to upon the pleadings. He was the assignee of a mortgage covering the whole premises; and no issue was anywhere raised by the pleadings that the amount claimed was not due, nor that the mortgage was not wholly valid in his hands. But if the view be incorrect, that he should have had the judgment appealed from on the pleadings, the case will be searched in vain for any evidence to impeach the validity of the mortgage in his hands, or to show that he was not entitled to enforce it against the entire premises. Clearly, the defendants, as against the plaintiff, have no ground for appeal.
The judgment should be affirmed.
delivered the following opinion :
The court below have wholly mistaken the effect of the fraudulent transaction of October, 1854, between the debtor tand his son. They were each equally culpable, and the law has no partiality for either of them.
The effect of this modification, and the further direction to divide the surplus money arising from the mortgage sale between Hyde and Everit and Egbert Bement, is to charge the share conveyed by the fraudulent deed with one-half of the mortgage debt, interest and cost. It gives to Egbert Bement a large portion of the benefit derived from his fraudulent transaction, and to that extent the creditors of William B. Bement are still hindered, delayed and defrauded. What is there in the facts which gives rise to this tenderness for Egbert Bement P The fact found by the judge, that he received no consideration for the mortgage, is wholly immaterial. The want of consideration, arising from the defeat of the fraudulent transaction, is a fact which Egbert is estopped by his mortgage from setting up, either as against his father or any other holder. Were the mortgage held by his father, neither would have any right's which would call for or permit a sale by foreclosure of that
Had Egbert paid the money for the conveyance of October 20, and had the transaction been committed to hinder, delay and defraud creditors, neither the payment of the money nor its subsequent honest application by the debtor to the payment of other debts would have saved the premises so conveyed from being subjected by a decree in equity to the executions of judgment creditors; and such would have been the result, without any regard to protecting Egbert, or making the money paid by him a prior equitable charge upon the land which he had sought fraudulently to acquire. It is his misfortune, as it was his fault, that this incumbrance was created, and not that of Hyde and Everit. Egbert Bement must bear the consequences resulting from the injuries inflicted upon his father’s creditors by the fraudulent act to which he was a voluntary party. A court of equity can extend no protection to Egbert Bement in; this transaction, without visiting upon the creditors some portion of the injury arising from the fraud, and, to that extent., making the fraud operative. The plaintiff has purchased a security, of no validity as a lien upon the land conveyed by the fraudulent deed, in the hands of the mortgagee, as against his creditors. It is the purchase by the plaintiff, in good faith and for value, that gives it any validity in his hands, as against the interest acquired by Hyde and Everit. The plaintiff became the owner before the creditors of William B. Bement had made any claim, or given any notice of their equitable rights, affecting a portion of the land covered by the mortgage.
The defendant Egbert Bement made the claim by his answer; and it is between him and Hyde and Everit that the litigation has been conducted. It was necessary for Hyde and Everit to appear and defend, to protect their interest. They are entitled to costs of their whole defense' and of the appeals
The decree should be modified, by directing a sale of the interest of the defendant, Egbert Bement, in the first instance, and payment of the mortgage, with interest and costs. In case there is a surplus, it should be applied to the costs of Hyde and Everit, as far as necessary, and the surplus to be paid into court. Should the sale of the interest of Egbert fail to produce the sum reported due, with interest from October 27,1854, and the plaintiff’s costs, then the interest purchased by Hyde and Everit at the sheriff’s sale should be sold to raise the deficiency, and the surplus to be paid into court. Ho costs should be allowed as between the plaintiff and Hyde and Everit, nor as between the plaintiff and Egbert Bement, upon this appeal, nor of the appeals to the general term of the supreme court, as no judgment in favor of the plaintiff has at any time been correct. The defendants Hyde and Everit should recover the costs’ of their defense, and of the appeal to the general term and to this court against the defendant Egbert Bement.
on further consideration, were of, opinion that the provision of the judgment appealed from, which awarded half the surplus t.o Egbert Bement and the other half to Hyde and Everit, was erroneous, but that the judgment was in other respects correct. They accordingly affirmed the judgment, with costs to the plaintiff, with a modification striking out from the judgment the words “ that the surplus moneys, if any there be, arising from such sale, belongs one-half to Egbert Bement, and the other half to the said Hyde and Everit,” and inserted in lieu thereof, “ that said surplus moneys, if any there be, be brought into the supreme court to abide its furth'er order.” And that no costs on the appeal be allowed to either of the defendants as against the others.
In this conclusion all the judges were understood to concur, except Potter, J., not sitting.
Judgment modified accordingly.