36 N.J. Eq. 384 | New York Court of Chancery | 1883
The complainants are Albert D. Traphagen and the Orange National Bank, judgment creditors of Israel D. Condit and Israel D. Condit, Jr., under judgments recovered by them respectively in the supreme court of this state against the Condits. Mr. Traphagen’s judgment is for $4,141.75, damages and costs, and was recovered November 19th, 1874, and the bank’s judgment was recovered July 27th, 1874, and is for $3,828.88, damages and costs. The object of the suit is to compel the cancellation of two judgments, one recovered against Israel D. Condit and others, May 4th, 1874, by William McDonald for $2,596.65, damages and costs, and assigned to Thomas B. Peddie, and the other recovered by Samuel W. Torrey, May 6th, 1874, against Israel D. Condit and Israel D. Condit, Jr., for $7,074.41, damages and costs, and a mortgage for $3,000, given by Israel D. Condit and wife J une 17th, 1874, to Andrew J. Wood, all which judgments and mort
The facts appear to be that on the last-mentioned day, May 13th, 1875, Torrey did accept the mortgages in full satisfaction of his demands against Israel D. Condit, including those on which the judgment was founded, although a final settlement was not made between them until October 6th, 1876. The judgment was never canceled of record. Shortly before the assignment, Israel D. Condit, who owed Lyons’s firm (said by the bill to have consisted of Lyons and McCabe) over $2,000, told Lyons that he could control the judgment and make it the first encumbrance on part of the property on which it was a lien, and proposed to Lyons that the latter should take an assignment of it, to which Lyons agreed. It was agreed between them that the consideration of the assignment should be the amount of the judgment, and out of the consideration Lyons was to deduct the amount of the indebtedness of Condit to his firm, and pay the balance in money; $1,000 of that balance were to go to Peddie as consideration of a release for the benefit of the Torrey judgment of part of the property on which Peddie’s judgment was a lien. That judgment was, as before stated, prior to the Torrey judgment. Lyons took the assignment and paid the money ac
The consideration expressed in the deed of assignment was only $1, but Torrey, by the assignment, not only sold and assigned the judgment to. Lyons, but covenanted with him that there was due on it the sum of $7,031.13 damages, and $43.38 costs of suit, and that he would not collect or receive that money or any part thereof, nor release or discharge the judgment, but would own and allow all lawful proceedings thereon, Lyons saving him harmless from any costs in the premises. Lyons appears not to have known or suspected (and the same is true of McCabe also) that the judgment had in fact been paid, or that it was not a valid and subsisting security for its full amount. He employed an attorney to attend to the assignment, and placed the money he was to'pay in the attorney’s hands, in order that he might pay it over for him when he should be satisfied that it might safely be done. The attorney appears to have taken pains
The rule is elsewhere thus expressed: “ A purchaser bona fide- and for a valuable consideration, without notice of any defect in-his title at the time he made his purchase, may buy or get in any encumbrance (although it is satisfied); and if he can defend himself at law by it, his adversary shall never be aided in e.quity for setting it aside, for equity will not disarm a purchaser but assist him; and precedents of this nature are very ancient and numerous, viz., where the court hath refused to give any assistance against a purchaser, either to an heir, or to a vendor, or to the fatherless, or to creditors, or even to one purchaser against another.” 2 Sugd. on Vend. 738. Said Lord Loughborough, in Jerrard v. Saunders, 2 Ves. Jr. 454, “Against such a purchaser this court will not take the least step imaginable.” “ A purchaser without notice for a valuable consideration,” said Lord Northington in Stanhope v. Earl Verney, 2 Eden 81, “ is a bar to the jurisdiction of this court, and it is of no consequence when the legal advantage was acquired, if the purchase was made and the money paid without notice.” In Wallwyn v. Lee, 9 Ves. 24, which was a suit by a tenant in tail in possession under a marriage settlement for discovery and delivery of title deeds, Lord Eldon allowed a plea of mortgage by the tenant for life, alleging himself to be seized in fee and in possession of the premises and deeds as apparent owner, on the rule that equity gives no assistance against a purchaser for valuable consideration without notice. In Joyce v. De Moleyns, 2 J. & L. 374, the rule was-
But, further, the equity of the complainants to have the Torrey judgment canceled was, when Lyons took his assignment, and also when McCabe took his, a latent one, and while the assigneeof a chose in action takes it subject to the equities existing between the parties to it, he is not bound by latent equities in favor of third parties, of which he had no notice when he took his-assignment. Reilly v. Mayer, 1 Beas. 55; Lavalette v. Thompson, 2 Beas. 274; Murray v. Lylburn, 2 Johns. Ch. 441; Freeman on Judg. § 428; Story on Bills § 220; Starr v. Haskins, 11 C. E. Gr. 414. Here, the judgment debtor and judgment creditor together conspired to sell the judgment to Lyons. They concealed from him the fact that it had been paid. Both represented to him that it was a valid security of which no part had been paid. This, Condit did by words and Torrey by his conduct as well as by his assignment, and his solemn covenant therein with Lyons that the whole amount was due. What diligence can protect a purchaser against such a combination T What greater diligence could be required or could be exercised than that which Lyons exercised in this case ? There was noth