Statement of case.

Also, held, that the action was properly tried without a jury, but if a trial by jury was the right of either party it was waived by not being demanded in proper time.

((Argued April 23, 1878; decided May 21, 1878.)

APPEAL from judgment of the General Term of the Supreme Court, in the fourth judicial department, affirming a judgment in favor of plaintiff entered upon a decision of the court on trial at Special Term.

This action was brought by plaintiff as receiver of the Excelsior Hay Carrier Company to set aside a judgment obtained by plaintiff against said company; plaintiff also asked that it be adjudged that defendant has no claim against said company or against the plaintiff as its receiver. The facts appear sufficiently in the opinion.

George Raines, for appellant. The court erred in refusing to grant judgment because the complaint failed to state a cause of action. (Smith v. Nelson, 62 N. Y., 289; Dobson v. Pierce, 12 id., 164; Tracy v. First Nat. Bk., 37 id., 523; Ac. Tr. Co. v. Garrison, 9 Abb., 141; Lawber v. Mayor, etc., 5 id., 325; Chap. Co. Bk. v. White, 6 N. Y., 258; Dudley v. Scranton, 57 id., 428; Lefler v. Field, 52 id., 621; Coffin v. Reynolds, 37 id., 640; Higgins v. Freeman, 2 Duer, 650; M. Co. Bk. v. Alb. City Bk., 7 N. Y., 459; De Witt v. Chandler, 11 Abb., 459; Bennett v. Juăson, 21 N. Y., 240; Bawdom v. Coleman, 6 Duer, 183; Morton v. Pinkney, 8 Bosw., 135.) The findings of fraud were erroneus, as there was no proof warranting them. (Marsh v. Falker, 40 N. Y., 562; Warner v. Blakeman, 4 Keyes, 504; Jaeger v. Kelly, 52 N. Y., 274; Gardiner v. Ogden, 22 id., 332; Butts v. Wood, 37 id., 319; Scott v. De Peyster, 1 Ed. Ch., 513; Coleman v. Second Ave. R. R. Co., 38 N. Y., 201; Hoyle v. P. and M. R. R. Co., 54 id., 314; 36 id., 430; 58 id., 606.) Plaintiff's proper remedy was to apply, in the former action, to be substituted as defendant, and that the default should be opened and he let

Statement of case.

in to defend. (Hackey v. Draper, 60 N. Y., 92; 37 id., 523; 9 Abb., 141; 5 id., 325; Mut. L. Ins. Co. v. Supr's, 42 N. Y., 184; Chat. Co. Bk. v. White, 6 id., 256; Van Doren v. Mayor, etc., 9 Paige, 388; Cox v. Cliff, 2 N. Y., 118; Me. Ins. Co. v. Hodgson, 7 Cranch, 332; Dobson v. Pearce, 12 N. Y., 165; Stillwell v. Carpenter, 59 id., 423; Smith v. Nelson, 62 id., 288; Foster v. Wood, 6 J. Ch., 89; Simpson v. Ld. Howden, 3 N. Y. & Cr., 108; Powers v. Battle, 3 Green Ch., 465; Krekeler v. Ritter, 62 N. Y., 373; Hale v. Clawson, 60 id., 399.) Defendant had a good cause of action against the corporation. (Warner v. Blankman, 4 Keyes, 487; People v. A. and S. R. R. Co., 57 N. Y., 161; Elder v. Rouse, 15 Wend., 218; Storey v. Conger, 36 N. Y., 673; Pitcher v. Hennesy, 48 id., 416.) The defense of former action pending was fully proven and a perfect defense to this action. (Embury v. Conner, 3 N. Y., 522; Nones v. Home, 12 Abb., 247; Mahon v. N. Y. C. R. R. Co., 24 N. Y., 659.)

Theodore Bacon, for respondent. The instruments dated July 31, 1873, between the same parties, relating to the same subject-matter and referring to each other, are to be construed together. (Marsh v. Dodge, 66 N. Y., 533.) It was not necessary to allege in the complaint fraud in set and technical terms. (Att'y-Gen'l. v. Corp. of Poole, 4 Myl. & Cr., 28; Farnam v. Brooks, 9 Pick., 212; Bromley v. Smith, 26 Beav., 671-672; Kennedy v. Kennedy, 2 Ala. [N. S.], 571, 608, 609; Shrine v. Simmons, 11 Geo., 401– 410; Kerr on Fraud and Mistake [Am. ed.], 366; Koop v. Handy, 41 Barb., 454, 463; Lounsbury v. Purdy, 18 N. Y., 515; Cythe v. La Fontaine, 5 Barb., 186, 194; Warner v. Blakeman, 4 Keyes, 487, 506; Bate v. Graham, 1 Kerr, 237, 240-242.) This action by the receiver is the proper remedy. (Tracy v. First Nat. Bk., 37 N. Y., 523; Ac. Tr. Co. v. Garrison, 9 Abb., 141, 149, 150; Knickerbocker v. Smith, 16 Abb., 241, 246; Hackley v. Draper, 4 T. & C., 614; 60 N. Y., 88; Gillet v. Moody, 3 id., 479; Tallmage

Opinion of the Court, per ALLEN, J.

v. Pell, 7 id., 328; Leavitt v. Yates, 4 Edw., 134; Osgood v. Laytin, 5 Abb. [N. S.], 1; Dutchess of Kingston's Case, 2 Smith's L. Cas., 431; Wing v. Wing, 9 Mod., 109; Dobson v. Pearce, 2 Kern., 156, 165; Clark v. Underwood, 17 Barb., 202, 221; Kerr on Fraud and Mistake [Am. ed.], 293-295; Bargate v. Shortridge, 5 H. of L. Cas., 297; Horn v. Kilkenny, etc., R. Co., 1 K. & J., 397; Fernihaugh v. Leader, 15 L. J. [N. S.], 458.) The court, being rightly in possession of the action, it was its duty to determine the whole matter in controversy. (Story's Eq. Jur., §§ 64–68, 71; Armstrong v. Gilchrist, 2 J. Cas., 424, 428-430; Rathbone v. Warren, 10 J. R., 587; King v. Baldwin, 17 id., 384, 388; Hepburn v. Dunlop, 1 Wheat., 179, 197; 3 Cond. [U. S.], 529, 540; Doughty v. Doughty, 12 C. E. Green, 315.)

ALLEN, J. The plaintiff sues as receiver of "The Excelsior Hay Carrier Company" to set aside and vacate a judg ment recovered by the appellant Delaney against the company upon the ground that it was without consideration, obtained by collusion with the officers of the company in fraud of the rights of creditors. The action was properly brought in the name of, and by the receiver as the representative, as well of creditors, as the debtor corporation. It was his duty in behalf of the creditors to resist the judgment and assert the rights of creditors against the fraudulent or illegal acts of the corporation by which their rights were affected. (Gillett v. Moody, 3 Comst❜k, 479; Bate v. Graham & Jordan, 1 Kern., 237; Talmage v. Pell, 3 Seld., 328; Hackley v. Draper, 60 N. Y., 88.) He could have had no relief in the action, as he was not a party to it, and would have had no standing in court to move in the action for relief. (Tracy v. First. Nat. Bk. of Selm, 37 N. Y., 523.) Fraud vitiates a judgment as well as even the most solemn transaction, and any one affected by a fraudulent judgment may invoke the aid of a court of equity for relief. Ordinarily, strangers to the judgment who have had no day in court can only have

Opinion of the Court, per ALLEN, J.

relief through the instrumentality of a court of equity, and in a suit brought directly for that purpose. Whenever the party liable to be injured by a judgment, tainted by fraud, has had no opportunity to protect himself against it at law, a court of equity is open to him. (Dobson v. Pearce, 2 Kern., 156; Warner v. Blakemen, 4 Abb. Ct. of App. Dec., 530; S. C., 4 Keyes, 487.) The only question therefore for consideration is whether a case was made by the complaint and upon the evidence for the interference of the court. It is not expressly averred in the complaint that the judgment was fraudulent in fact, or that the officers of the corporation colluded with the plaintiff in suffering it to go by default; but there were facts averred which, if proved, authorized the inference that the judgment was without consideration, and fraudulently and collusively obtained. This is sufficient after judgment.

If the complaint was technically defective, the objection should have been taken by demurrer, or otherwise, before issue upon the facts. (Bate v. Graham, supra; Lounsbury v. Purdy, 18 N. Y., 515.) The facts substantially as proved upon the trial, and found by the court, were averred in the complaint, although the precise and particular charge of fraud, as the ground of relief is not specifically, and in terms, put forth. It was not necessary to employ the word "fraud," or "fraudulent" in order to characterize the transaction or specify the ground of relief. (Warner v. Blakeman, supra; Maher v. Hibernia Ins. Co., 67 N. Y., 283.) The trial court has found that the judgment was without consideration, and was suffered to be entered by default, by fraud and collusion between the plaintiff therein, and the officers and trustees of the corporation.

The recovery was for moneys claimed to be due upon the sale of the right secured by patent to manufacture, use, and sell to others "Smith's Excelsior Hay Slings and Carrier." The agreement for the sale and the sale was evidenced by three several instruments, all bearing the same date, and which are found to have been executed at the same time, and

Opinion of the Court, per ALLEN, J.

which must, therefore, be read and construed as one instrument, and as together, constituting the agreement between the parties. (Marsh v. Dodge, 66 N. Y., 533.) The first paper in order is a transfer of the right to make, use and sell the patented machine, in consideration of $10,800 in hand paid by the corporation, and "the further consideration of $14,200 to be paid by said company, and for other valuable considerations by them granted," signed only by Delaney, the grantor. The second paper in order is a power of attorney from the corporation to Delaney, irrevocable until the latter shall have received the full compensation "by said transfer, and the contract under which it was made," to sell, assign and transfer all the title and interest of the company in the patent rights and the patented machinery, with full power of substitution, etc. The other paper is signed by both parties, reciting the agreement of the company to pay to Delaney, for the rights transferred, 500 shares of the capital stock of the corporation, and the sum of $25,000, of which there had been already paid $10,800, and reciting, also, the irrevocable power of attorney to Delancy, followed by the agreement of the parties that the company should receive all the proceeds of sales which Delaney should make, less the expenses of the latter, until the company should be fully reimbursed from such sales, and the sale of the stock of the company, the $10,800 paid to Delaney; that thereafter Delaney should be entitled to one-half of all proceeds that might come to his hands until the $14,200 should be fully paid him, and that all the balance should be paid over to the company. Although, by reason of the fact that the agree ment has to be collected from the three instruments, and the first two being given for a special purpose, the terms and conditions of the agreement, with all its limits of liability and obligation, do not appear, the intention of the parties is quite manifest, when the third paper, which alone professes to state the terms of the agreement, is considered. The company, after having issued to Delaney certificates for $50,000 of its capital stock, only put at risk the $10,800 paid at the time of the