THOMAS ATKINSON AND FRANCIS ATKINSON v. PASCHAL ALLEN

SUPREME COURT OF VERMONT, 1839

12 Vt. 619

Ejectment, for the whole of the first division of the right of Charles Murray, in Charleston, being lot No. 5. Plea, not guilty, and trial by jury.3

Upon the trial in the county court, the plaintiffs introduced testimony tending to prove that, in 1806, one John Atkinson took possession of one hundred acres of the west part of said lot. The plaintiffs also read in evidence two deeds from John Atkinson to themselves, conveying the land in question, one dated in 1820, and the other in 1821; also, an act of the legislature, passed in 1819, authorizing the plaintiffs to hold lands in this state. The possession of John Atkinson was continued until the fall of 1810, and then vacated until 1818, when he again took possession, and he and the plaintiffs, from that time, continued in possession until 1829, when the plaintiffs were evicted by one Alpha Allyn, who continued in possession until July, 1833. The plaintiffs did not connect their claim of title with Murray, the original grantee. The defendant was in possession of the land previous to, and at the time of the commencement of this suit. Here the plaintiffs rested.

The defendant then read in evidence a judgment of the county court, rendered at the June term, 1833, in favor of Charles Murray, of the city of London, in England, against Alpha Allyn, showing a recovery of the seizin and possession of said land; also a writ of possession, issued on said judgment, and the return of the officer thereon, showing that the writ had been duly executed.

The plaintiffs then gave evidence tending to prove that the action of ejectment in favor of Murray against Alpha Allyn, was commenced without Murray's knowledge; that he never recognized it, and that the judgment recovered therein was collusive, colorable and fraudulent. To the admission of this evidence the defendant objected, but the court overruled the objection.

The jury returned a verdict for the plaintiffs to recover one hundred acres of the lot in question, and the defendant excepted to the decision and charge of the county court.

REDFIELD, J. The only remaining objection made to the proceedings in the court below is, that the plaintiffs were suffered to attack the judgment in favor of Charles Murray against Alpha Allyn collaterally, by showing that it was not bona fide, but colorable merely, got up by Allyn to shield himself and his tenant, the defendant-Murray having no knowledge of the proceedings. It is obvious, that as the plaintiffs, and those under whom they claim title, had

'Part of the statement of facts, the arguments of counsel and part of the opinion are omitted.

ATKINSON V. ALLEN

559 possession of the premises prior to Alpha Allyn, and were forcibly ousted by him, they can upon this first seizin only, recover of Allyn and all who have entered, either under him, or upon his possession, whether with or without his consent, unless they can shield themselves under a title older and better than that of the plaintiffs. This they attempted by force of the judgment in favor of Murray, the original proprietor, against Alpha Allyn, he being put out of possession and the present defendant and those under whom he claims. title, being put in under color of this judgment. This judgment the plaintiffs were permitted to avoid, by proof addressed to the jury, in the manner above stated. As the plaintiffs were neither parties, nor privy to this judgment, and could have brought no process or suit whatever to reverse or set it aside, they must be permitted to avoid the effect of the judgment in this manner, if at all. The rule that a judgment of a court of competent jurisdiction is conclusive, until reversed or in some manner set aside and annulled, and that it can not be attacked collaterally, by evidence tending to show that it was irregularly or improperly obtained, only applies to parties and privies to the judgment, who may take proceedings for its reversal, and in no sense extends to strangers. It is obvious, if the facts found by the jury in this case are to be regarded, that the defendant is the tenant of Alpha Allyn, and has no more connection with the title of Murray than if he had attempted to show title from him, by means of a forged deed. And it is not, for a moment, to be tolerated, that the rights of parties to the title of lands, are to be shifted and postponed, to their juniors, by merely colorable proceedings of this character. This mode of redress has always been allowed to strangers or third persons. Dutchess of Kingston's Case, 11 State Tr. 230; Crosby v. Leng, 12 East, 409; Lloyd v. Maddox, Moore, 917, II State Tr. 262, 1 Stark Ev. (6th ed.) 259.*

The judgment of the county court is affirmed.

A stranger to the record may impeach a judgment in a collateral proceeding, either on the ground of want of jurisdiction in the court to render it or of fraud or collusion between the parties in obtaining its entry, if, and only if, it injuriously affects his rights. Warter v. Perry, Cro. Eliz. 199 (1589); Fermor's Case, 3 Coke 77 (1601); Veale v. Gatesdon, W. Jones 91 (1625); Randal's Case, 2 Mod. 308 (1678); Pierce v. Jackson, 6 Mass. 242 (1810); Griswold v. Stewart, 4 Cow. (N. Y.) 457 (1825); Vose v. Morton, 58 Mass. 27 (1849); Douglass v. Howland, 24 Wend. (N. Y.) 35 (1840); Downs v. Fuller, 43 Mass. 135, 35 Am. Dec. 393 (1840); Gurnsey v. Edwards, 26 N. H. 224 (1853); Vanderveer v. Gaston, 24 N. J. L. 818 (1854); Golahar v. Gates, 20 Mo. 236 (1855); Brunner's Appeal, 47 Pa. 67 (1864); Sidensparker v. Sidensparker, 52 Maine 481, 83 Am. Dec. 527 (1864); Annett v. Terry, 35 N. Y. 256 (1866); Lee v. Back, 30 Ind. 148 (1868); Meckley's Appeal, 102 Pa. 536 (1883); Biddle v. Tomlinson, 115 Pa. 299, 8 Atl. 774 (1886); Safford v. Weare, 142 Mass. 231, 7 N. E. 730 (1886); Smith v. Cuyler, 78 Ga. 654, 3 S. E. 406 (1887); Eureka Iron & Steel Wks. v. Bresnahan, 66 Mich. 489, 33 N. W. 834 (1887); McCanless v. Smith, 51 N. J. Eq. 505, 25 Atl. 211 (1893); Roberts v. Yancy, 94 Ky. 243, 21 S. W. 1047, 42 Am. St. 357 (1893); Sager v. Mead, 164 Pa. 125, 30 Atl. 284 (1894); Shamlin v. Hall, 123 Ala. 541, 26 So. 285 (1898); Safe Deposit Co. v. Wright, 105 Fed. 155 (1900); Brownwell v. Snyder, 122 App. Div. 246, 106 N. Y. S. 771 (1907); Sache v. Wallace,_101 Minn. 169, 112 N. W. 386 (1907); Harpold v. Doyle, 16 Idaho 671, 102 Pac. 158 (1908); Wick v. Rea, 54 Wash. 424, 103 Pac. 1462 (1909); Northern Pac. R. Co. v. Boyd, 177 Fed. 804 (1910); Hall v. Hall, 139 N. Y. App. Div. 120,

CANDEE v. LORD AND OTHERS

COURT OF APPeals of New York, 1848

2 N. Y. 269

Appeal from the late Court of Chancery. The complainant Candee recovered judgment for $1,142.90 against Russel Lord on March 29, 1844, on a demand which existed prior to the judgments hereafter mentioned. After execution issued and returned unsatisfied, Candee filed this bill against the judgment debtor, Henry Lord and William Champlin, averring that in August, 1843, Russel Lord, without consideration and to defraud his creditors had confessed a judgment to Henry Lord for $1,400 upon which certain real estate had been sold by the sheriff and purchased by Henry Lord; that in the same month another fraudulent judgment had been confessed to William Champlin for $1,250 on which other real estate was sold and purchased by Champlin and another; that the sums bid on the sales belonged to Lord's creditors and claiming that the defendants Lord and Champlin should account therefor. The answers of Champlin and Henry Lord insisted, among other things, that complainant's judgment was obtained in a suit brought against Russel Lord upon a forged endorsement of a promissory note, and this was insisted upon as a ground of defense to the bill, so far as they were concerned. The chancellor, reversing a previous order of the vice chancellor, awarded issues for trial by jury, one of which was whether the endorsement upon which the complainant obtained his judgment was a forgery. From this order the complainant appealed."

123 N. Y. S. 1056 (1910). But he can not so attack it for mere irregularities. Swiggart v. Harber, 5 Ill. 364, 39 Am. Dec. 418 (1843); Secrist v. Green, 3 Wall. (U. S.) 744, 18 L. ed. 153 (1865); Dean v. Thatcher, 32 N. J. L. 470 (1865); State v. Rogers, 131 Ind. 458, 31 N. E. 199 (1891); Milleisen v. Senseman, 4 Pa. Super. Ct. 455 (1897); Allred v. Smith, 135 N. Car. 443, 47 S. E. 597 (1904); Pullman Palace Car Co. v. Washburn, 66 Fed. 790 (1895). Nor can a mere disseizor or volunteer collaterally attack a judgment to which he is a stranger. Wellington v. Gale, 13 Mass. 483 (1816); Baugh v. Baugh, 37 Mich. 59, 26 Am. Rep. 495 (1877).

Generally, the right or interest prejudiced, to come within the rule must have accrued prior to the rendition of the judgment attacked. Doe v. Derby, I Ad. & El. 783 (1834); Hunt v. Haven, 52 N. H. 162 (1872); Freydewall v. Baldwin, 103 Ill. 325 (1882); Hogg v. Link, 90 Ind. 346 (1883); Strayer v. Johnson, 110 Pa. 21, 1 Atl. 222 (1885); Peterson v. Weissbein, 80 Cal. 38, 22 Pac. 56 (1889); Chase v. Kaynor, 78 Iowa 449, 43 N. W. 269 (1889); Dull v. Blackman, 169 U. S. 243, 42 L. ed. 733 (1898); Bennett v. Wilson, 133 Cal. 379, 65 Pac. 880, 85 Am. St. 207 (1901); Hudkins v. Crim, 72 W. Va. 418, 78 S. E. 1043 (1913). Thus, where land is conveyed subject to a judgment and the judgment debtor fails to have the judgment opened or stricken off in proceedings brought for that purpose, the grantee can not in a subsequent action of ejectment collaterally attach the judgment as against one deriving title through a sheriff's sale under the judgment. Ross v. Dewey, 215 Pa. 526, 64 Atl. 674 (1906). Accord: Johns v. Pattee, 55 Iowa 665, 8 N. W. 663 (1881).

The statement of facts is abridged and the arguments of counsel and part of the opinion of the court are omitted.

GARDINER, J.: The most important question in this cause, is whether a judgment obtained without fraud or collusion, is conclusive evidence, in suits between creditors in relation to the property of the judgment debtor, of the indebtedness of the latter.

A debtor may be said to sustain two distinct relations to his property that of owner, and quasi trustee for his creditors. As owner he may contract debts to be satisfied out of his property, confess judgments, create liens upon it, sell or give it to others at pleasure; and so far as he is personally concerned, will be bound by his own acts. But the law lays upon him an obligation to pay his debts, and holds him in behalf of his creditors to the exercise of good faith in all transactions relating to the fund upon which they must depend for payment. He can, therefore, neither create a debt, or do any of the things above mentioned mala fide to their prejudice. The common law, of which the English statute and our own is but the exposition, declares that every such debt, judgment or assurance, contracted or given with the intent to hinder, delay or defraud his creditors, as against them, to be void. And equity in many cases holds the debtor and his confederates in the fraud as trustees for the parties aggrieved. The rights of creditors to the property of the debtor, are to be worked out through the different relations to which I have alluded.

In creating debts, or establishing the relation of debtor and creditor, the debtor is accountable to no one unless he acts mala fide. A judgment, therefore, obtained against the latter without collusion, is conclusive evidence of the relation of debtor and creditor against others. First, because it is conclusive between the parties to the record who in the given case have the exclusive right to establish it; and second, because the claims of other creditors upon the debtor's property are through him, and subject to all previous liens, preferences or conveyances made by him in good faith. Any deed, judgment or assurance of the debtor, so far at least as they conclude him, must stop his creditors and all others. Consequently, neither a creditor nor stranger can interfere in the bona fide litigation of the debtor, or re-try his cause for him, or question the effect of the judgment as a legal claim upon his estate. A creditor's right, in a word, to impeach the act of his debtor, does not arise until the latter has violated the tacit condition annexed to the debt; that he has done, and will do nothing to defraud his creditors.

Where, however, fraud is established, the creditor does not claim through the debtor, but adversely to him, and by a title paramount, which overreaches and annuls the fraudulent conveyance or judgment by which the latter himself would be estopped. It follows

'Statute of 13 Eliz. ch. 5 (1571). See Twyne's Case, 3 Coke 80 (1602); I Smith's Leading Cases, I and note.

'Pabst Brewing Co. v. Jensen, 68 Minn. 293, 71 N. W. 384 (1897); Mengel v. Connecticut Fire Ins. Co., 5 Pa. Super Ct. 491 (1897); Newark City Nat. Bank v. Crane, 60 N. J. Eq. 121, 45 Atl. 975 1900); Comer v. Shehee, 129 Ala. 588, 30 So. 95, 87 Am. St. 78 (1900).

866

"A judgment which has been procured by the fraudulent contrivance of the debtor or the collusion of both parties is subject to collateral attack by any one a stranger to the judgment who has been injuriously affected there

36-CIV. PROC.

from the principles suggested, that a judgment obtained without fraud or collusion, and which concludes the debtor; whether rendered upon default, confession, or after contestation, is upon all questions affecting the title to his property, conclusive evidence against his creditors, to establish first, the relation of creditor and debtor between the parties to the record, and second, the amount of the indebtedness. This principle is assumed in our statute in relation to creditor's bills, 2 R. S. 174, section 38, and decided in Rogers v. Rogers, 3 Paige, 599; 2 Greenlf. Ev. 531; Marsh v. Pier, 4 Rawle, 288, 9.

It is immaterial whether the debt was created prior or subsequent to the fraudulent lien, or conveyance, which was sought to be removed. The right of the creditor to impeach the assurance of the debtor, arises out of the relation which exists between them at the commencement of the suit for that purpose, and does not depend upon the time when the fraud was consummated. Hence a conveyance made with intent to defraud subsequent creditors is void at their election. And the fraudulent grantee would not be permitted to allege, in bar of the action against him, that the parties seeking relief were not creditors prior to, or at the time of the conveyance. Walker v. Burrows, 1 Atkyns, 94; Stillman v. Asdown, 2 Atkyns 481, 512; Seward v. Jackson, 8 Cowen 431, 441; Hind v. Longworth, II Wheaton, 209; 1 Story's Eq., section 356; Jackson v. Myers, 18 John R. 425; 20 John R. 472. The only difference in the two cases is found in the degree of evidence necessary to establish the fraud. In this case, the defendants have not alleged that the judgment of the complainant was not obtained in good faith. But they insist that there was error in the suit in which it was obtained, in the determination of a question of fact; and that they are not concluded by the defense of the debtor, because they are not in privity with him. We think otherwise. The law which gave the judgment debtor the unlimited right (when honestly exercised) to contract debts, to settle and adjust their amount, to secure and to pay them, made him to this extent the representative of all his creditors who should seek the satisfaction of their demands out of his property; so far at least they are in privity with, and claim under their debtor. If, as the defendants insist, they hold the property in question by a title derived under a valid judgment, prior to that of the complainant, their rights can not be affected by this evidence. If, however, as the bill alleges, their judgment was fraudulent, the complainant, as a creditor, can repudiate it, and claim the property as that of his debtor, his acts to the contrary notwithstanding, and

by." Northern Pac. R. Co. v. Boyd, 177 Fed. 804 (1910). Accord: Earl of Brandon v. Becher, 3 Cl. & F. 479 (1835); Townsend v. Kerns, 2 Watts (Pa.) 180 (1834); Hammock v. McBride, 6 Ga. 178 (1849); Parkhurst v. Summer, 23 Vt. 538, 56 Am. Dec. 94 (1851); Raymond v. Whitney, 5 Ohio St. 201 (1855); Hackett v. Manlove, 14 Cal. 85 (1859); Sidensparker v. Sidensparker, 52 Maine 481, 83 Am. Dec. 527 (1864); Streety v. McCurdy, 104 Ala. 493, 16 So. 686 (1894); Cook v. Morris, 66 Conn. 137, 33 Atl. 594 (1895); Brownell v. Snyder, 122 App. Div. 246, 106 N. Y. S. 771 (1907); Nixon v. Loundes (1909), 2 Irish Rep. K. B. 1.