Ferguson v. Kumler

• Decision Date: 01 January 1865
• Citation: 11 Minn. 62
• Parties: JOSEPH FERGUSON vs. JOSEPH KUMLER et al.
• Court: Minnesota Supreme Court

11 Minn. 62

JOSEPH FERGUSONvs.

JOSEPH KUMLER et al.

Supreme Court of Minnesota.

Appeal from order of district court, Scott County.

Points and authorities for appellants: —

1. Upon a motion for judgment upon the pleadings, notwithstanding the answer, all facts, well or properly pleaded in the answer, are admitted to be true.

2. The appellants have the right to assail the supposed judgment for the same reasons and upon like grounds as they might do in case of a contract or other proceeding. "Fraud and imposition invalidate a judgment, as they do all acts." Dobson v. Pearce, 12 N. Y. 156, and cases there cited.

3. The respondent cannot, it is respectfully submitted, now claim to enforce his judgment upon the land described in the complaint, as an equitable lien for purchase money, after having obtained a general judgment upon his notes, and docketing his judgment in several counties, as a general lien upon the property of his debtor; he, by so doing, elects to rely upon his remedy as a general creditor, and thereby waives his equitable lien, and his equities are not superior to those of any other creditor at large, although his legal lien would give him preference in collecting his debt. The respondent, by so doing, takes other security for his debt, and is within the principle laid down in Selby v. Stanley, 4 Minn. [65].

4. If, then, the respondent has no equitable lien upon the premises, he can have no claim to a preference over Michael Kumler, who has taken the conveyance of the land in Scott County in payment of a just debt, and security upon the land in McLeod County for another just debt. Joseph Kumler had the right to give preference to his creditors, and his acts amount to nothing more. Michael Kumler was a bona fide purchaser for a valuable consideration. Seymour v. Wilson, 19 N. Y. 417.

5. The appellants, Michael Kumler and Elizabeth J. Kumler, were not parties or privies to the judgment mentioned in the complaint, and have the right now to show that the respondent was not in fact a creditor of Joseph Kumler, and thereby to protect their own property from being sacrificed in payment of a groundless debt. The judgment is not conclusive against them. They have not had their day in court. Bruggermann v. Hoerr, 7 Minn. [337].

6. Michael Kumler was a purchaser in good faith, and for a valuable consideration, even within the rule laid down in Dickerson v. Tillinghast, 4 Paige, 215; he surrendered up the note which was a security for and evidence of his debt. Van Heuson and Charles v. Radcliff, 17 N. Y. 582.

7. The respondent can have no shadow of right to appropriate the land in McLeod County to the payment of his judgment as against the appellant Michael Kumler, as Michael Kumler holds it only as security for money directly advanced to Joseph Kumler, with which to pay the purchase price.

Points and authorities for respondent: —

1. The judgment described in the complaint, and on which the plaintiffs' application for relief in this case is founded, is conclusive. That plaintiff was a creditor of Joseph Kumler at the time of the commencement of the action in which said judgment was recovered, and the amount of his demand, have by the said judgment become res adjudicata. Duchess of Kingston's Case; 2 Smith Lead. Cas. (Hare & Wal. ed.) 573, et seq.; 1 Greenl. Ev. §§ 522-3-4-7; 2 Saund. Pl. 608; 2 Parsons Cont. 234, et seq.; Farrington v. Payne, 15 Johns. 432; Brockway v. Kinney, 2 Johns. 210; Young v. Rummell, 2 Hill, 478; Miller v. Manice, 6 Hill, 114; Candee v. Lord, 2 N. Y. 269; Embury v. Conner, 3 N. Y. 511; Doty v. Brown, 4 N. Y. 71; Green v. Clark, 5 Denio, 497; Miller v. Covert, 1 Wend. 487; Story Eq. Pl. § 782. In an action like this, to reach the property of the defendant in the hands of his fraudulent grantee, for the purpose of applying it to the payment of the judgment, no inquiry can be made into the validity of the judgment. 2 Hoffman Ch. Pr. 120; Hone v. Woolsey, 2 Edw. Ch. 289; Candee v. Lord, 2 N. Y. 269. It follows that all that part of the defendant's answer attempting to impeach the demands on which the judgment was recovered, and the proceedings in the action in which it was rendered, is inadmissible in this case, and must be excluded from consideration; that part of the answer is not well pleaded, and therefore is not admitted by the motion for judgment; the motion stands as if that part of the answer was a blank. Candee v. Lord, 2 N. Y. 269.

2. The answer concedes that Joseph Kumler, the judgment debtor, conveyed the land in Scott County to his father (the defendant Michael Kumler), with intent to hinder, delay, and defraud, the plaintiff as a judgment creditor. The conceded object of that conveyance was to defeat the collection of the plaintiff's debt. He and wife made and recorded the conveyance voluntarily, and without the knowledge of the grantee. So far as Joseph Kumler and wife are concerned, the fraud alleged is established. The fact that he owed a debt to his father does not divest the conveyance of its fraudulent character. An honest debt cannot, nor can a valuable consideration, be allowed to be used for a fraudulent purpose. Beals v. Guernsey, 8 Johns. 446; Wickham v. Miller, 12 Johns. 320.

3. The defendant Michael Kumler, is not, in good faith and for a valuable consideration, a purchaser of the said land in Scott County. But even if he did not participate in such actual fraud, he is not a purchaser for a valuable consideration. The statement in the answer is, that the deed was made and recorded without his knowledge; and without having seen the land, and without any knowledge of its value, he accepted it in satisfaction of a pre-existing debt of $1250 and interest thereon at eight per cent. per annum, from October, 1859, to June, 1861. Root v. French, 13 Wend. 570; Jackson v. Myers, 11 Wend. 535; Foynes Case, 1 Smith Lead. Cas. 33, from 3 Coke, 80; Payne v. Cutler, 13 Wend. 605; Baze v. Arper, 6 Minn. [220]; Dickerson v. Tillinghast, 4 Paige, 215.

4. As to the lands in McLeod County, the statement in the answer is such as to concede, in the law, the right of the plaintiff to sale of it on his judgment. Michael Kumler does not show any valid right in or lien upon it, as against the plaintiff's judgment. The plaintiff's rights in that case can be adjusted in settling the decree.

L. M. Brown, for appellants.

A. G. Chatfield, for respondent.

BERRY, J.

This action is brought for the purpose of setting aside certain alleged fraudulent conveyances made by the appellant Joseph Kumler and his wife, to Michael Kumler. Prior to, and at the time when the conveyances were executed, the respondent held two notes for $500 each, against Joseph Kumler, and these notes were in suit when the conveyances were made. Subsequent to the conveyances, judgment was rendered for said notes and interest, in favor of the respondent, and against Joseph Kumler. The respondent seeks to set aside the conveyances, in order that the lands conveyed may be subjected to execution on his judgment. For the purpose of showing that the conveyances were not made with the intent to defraud any lawful creditor, the answer attempts to attack the judgment, by setting up certain matters which were litigated in the action upon which the judgment was rendered, and as to which there can be no question that Joseph Kumler, who was defendant in that action, is concluded by the judgment. But it is insisted that within the principle enunciated in Bruggerman v. Hoerr et al., 7 Minn. [337], Michael Kumler, who was not a party to that action, and who is the grantee named in the alleged fraudulent...