I. Appellants' first point is, that " the jury having found that the debt due from Harris & Co. to Galland was bona fide, the Court erred in deciding that the confession to Galland was void, etc."
Twoissues are presented in the complaint: 1st, that the debt of Galland was fraudulent; and 2d, that the judgment was confessed for the purpose of hindering and delaying Meeker & Co. in the collection of their debt.
Section twenty of our Statute of Frauds provides, that every decree or judgment suffered with intent to hinder and delay creditors of their lawful suits, damages, debts, or demands, as against such person so hindered or delayed, shall be void. This implies that, although the debt may be bona fide, if the judgment was confessed with intent to hinder or delay creditors in the collection of their demands, the judgment as to such creditors is void.
" If one purchases property from another, either real or personal, for its full value, and pays the price in money, it is still a fraudu lent transaction, provided the purchaser did it with the intent to aid the seller in defrauding his creditors." (Parsons' Mer. Law, 283.)
The debt, then, may be bona fide, and as between parties to it there may be no objection as to the object and purposes of the judgment, or the manner in which it is to be used; yet the objects and intentions of the parties in pursuing theirlegal rights may render the judgment void as to third persons. A party may, as in this case, obtain judgment for a bona fide debt, (that is, by confession) and he may have a perfect right to collect it; but if his primary object is not to collect his debt, but to prevent or embarrass some one else in the collection of theirs, then his judgment quoad hoc, that is, as to the person prevented or embarrassed, is void. The bona fides of the judgment then depends upon the intent with which the judgment was confessed by Harris & Co., and received by Galland. (Parsons, supra ; Bunn v. Ahl, 29 Penn. 387; Jones v. Nautright, 2 Stockton's Ch. 303.)
A judgment may be confessed to be entered at a subsequent day, or upon the happening of a particular contingency, in the absence of collusion and fraud, we admit; but that a judgment is good confessed to be entered if another creditor shall attempt to assert his rights against the common debtor, or be abandoned if he does not, we doubt; at all events, admitting that the action in itself is not prima facie fraudulent, we say that it is a fact, taken in connection with other facts and the attending circumstances, from whichfraud may be inferred. And this is sufficient in this case. Our position is, that the intention not to use the confessions of judgment in the event that Meeker & Co. would not proceed against Harris & Co. was a fact, and a very weighty fact, taken with others, from which the jury and Court might infer that those judgments were intended to hinder and delay Meeker & Co. in collecting their debt. The question, therefore, of intent, enters to give validity, or render void, the judgments, and this is the tenor of the authorities. This covers appellants' second and third points.
II. Appellants' fourth proposition we admit to be correct. If Galland and Goldman were innocent of the admitted fraud of Harris & Co., they ought not to be affected by it. But the Court in its findings says that they did participate in the fraud; that they did aid Harris & Co. in concocting, procuring and using the judgments confessed for fraudulent purposes; that their object was not to take judgments so as to collect their own debts in good faith, but to prevent Meeker & Co. collecting theirs.
III. The Court in an equity suit may send the case to a jury without the consent of the parties, and adopt orreject the findings, as the Court may deem proper. (Still v. Saunders , 8 Cal. 186; Smith v. Rowe , 4 Id. 6; Domingues v. Domingues , 7 Id. 426; Good v. Smith and wife , 13 Id. 81; Gray v. Eaton , 5 Id. 48.)
It was a matter of discretion, then, with the Court to send the case to a jury or not, or to adopt or reject the findings of the jury in whole or in part.
Counsel argues that the Court had assumed the fraud as a presumption of law. The fraud was treated, or rather tried, as a question of fact, and from the facts the fraud was deduced. We charged that the judgments were confessed to hinder and delay Meeker & Co. in the collection of their debt. The Court says, that all the facts and circumstances of the case show that the judgments were confessed for fraudulent purposes with a fraudulent intent. This, then, was determining the point as a question of fact.
Counsel says, that the judgment is based upon two considerations: " 1st, Galland's agreement that he would not enter judgment if the other creditors would extend; and 2d, Galland's notice to the Sheriff not to hold under strict execution, exempt from use, more property than was sufficient to protectthe execution." These considerations, as he terms them, were facts which, taken in connection with other facts, authorized the finding and judgment. The proof shows a combination between Galland and other parties, having a common purpose in view. Their acts in carrying out that common purpose were as much his acts as if performed by himself; and if these acts indicated the intention to commit a fraud, then Galland was guilty of that fraud.
IV. Appellants' seventh point is, that " the complaint does not aver a legal or constructive fraud in the confession of judgment to Galland, but a fraud in fact, namely: that Harris and Morris were not indebted to him in the sum confessed; that the confession was for a simulated debt," etc.
In the first place, if the objection was ever good, it comes at this time too late; it should have been raised in the Court below. Reference to the motion for nonsuit, and to the motion for new trial, will show that this was not done. No objection was raised to the introduction of proof on that ground. Had such objections been made, the complaint could have been amended. The findings of the Court and jury cured all objections to the complaint--if itwas amenable to any--on the ground of its generality. And this is consistent with the rule, or rather principle, of Gamble v. Voll, (15 Cal). In that case, the fraud charged was ignored by the findings; in this case, the general charge of fraud is aided or cured by the special finding.
The verdict non obstante veredicto was correct. The finding of the Court that the judgment was confessed for fraudulent purposes, and with a fraudulent intent, was a finding upon the merits of the case, and the jury having found the debt of Galland bona fide, made the judgment technically correct, nor was the case so cloudy but the Court could see plainly the fraud contemplated by the appellants.
Out of the points of error insisted upon by appellants, not one exhibits such error as would authorize this Court to interfere.
The whole evidence goes to show a design on the part of Harris and Morris to defraud Meeker & Co., and that the judgments were confessed as the best means of effecting that purpose. The findings are to this effect, and where there is any evidence to sustain the findings, the Court will not set them aside. (13 Cal. 40; 5 Id. 90; Lyons v. Lyons , 18 Id. 447; Baxter v. McKinley , 16 Id. 76.)
JUDGES: Cope, J. delivered the opinion of the Court. Field, C. J. concurring.
OPINION
COPE, Judge
On petition for rehearing, the opinion of the Court was delivered by Cope, J.--Field, C. J. concurring.
The petition for a rehearing in this case must be denied. We ordered a judgment in favor of Galland and Goldman, for the reason that the evidence was wholly insufficient to warrant the conclusion which had been arrived at by the Court below. We proceeded in this respect independently of the objections to the complaint, and we still entertain the same opinion of the merits of the controversy. There is nothing in any of the points suggested.
Petition denied.