Berger v. . Varrelmann

We are unable to concur with the majority of the court. The record does not contain the evidence. And the facts found do not warrant the conclusion that the appellant took the judgment by confession otherwise than in good faith for a valid debt and without any knowledge or information that the debtors contemplated making an assignment for the benefit of their creditors.

In that view no reason appears to us for setting aside the judgment; and it is the right of the creditor to retain it, as it was to take it pursuant to the statute providing for that method of taking judgments. But inasmuch as the confession of it was made by the judgment debtors in contemplation on their part of the general assignment which was soon after made by them, and treating it as part of the scheme or transaction of their assignment so far as they were concerned, the sale on *Page 295 the execution of the judgment was properly set aside and direction given for the payment of the proceeds of the sale to the assignee for distribution in execution of his trust. In that view the creditor taking the judgment should not be denied entirely the benefit of the preference which it and the levy of his execution apparently gave him, but he should at least be treated as a preferred creditor, and the amount of one-third of the estate of the assignors left after making the deduction directed by the statute should, treating him as such, be applied pro rata amongst the preferred creditors as their rights in that respect may appear. Otherwise, his means as such judgment creditor to realize anything upon his debt may be entirely defeated. And the rule adopted that the judgment in such case be set aside may well have the effect to discourage the taking of judgments by confession as perchance it may be followed by a general assignment of a debtor making such confession. It would seem to us in such case more in accordance with principle to set aside the assignment as well as the judgment confessed rather than to set aside the latter and permit the former to stand; and such discrimination against the judgment creditor cannot properly be made unless he is chargable with a fraudulent intent as against the creditors of his judgment debtor in taking his judgment.

Our conclusion is that unless the plaintiffs stipulate to modify the judgment as above suggested the judgment should be reversed and a new trial granted, costs to abide the event, and in case they do so stipulate the judgment be modified accordingly without costs.

All concur with FOLLETT, Ch. J., except BRADLEY, HAIGHT and BROWN, JJ., dissenting.

Judgment affirmed. *Page 296