Crouse v. Frothingham

Landon, J.: The objections urged by the defendants, that the declarations of' one defendant not forming part of the res gestas of sale, were-received in evidence against the others, do not appear to be sustained by the record. The declarations of a defendant are competent against himself, and the court was not asked to receive them against the others. Both Randolph and Frothingham in substance-had stated, as witnesses testified, that part of the consideration of the sale was, that Randolph was to have the use of the building-after sale, and the finding by the court in that regard is supported by evidence competent against each of them. It was competent for the plaintiff to rebut the testimony of the-defendants, though introduced as witnesses by himself. (Code Civ. Pro., § 838 ; old Code, § 393.) An effective way to do this was to-prove the untruth of such testimony. As against either defendant his declarations out of court were competent for this purpose. That such evidence may incidentally tend to impeach the party called as a witness, does not impair its value as evidence upon the-question at issue. It is a proceeding very different from introducing him as worthy of credit, and then directly proving that he is not. The court found that the conveyance by Randolph was upon the consideration in part that Randolph was to have the use and occupation ' of part of the premises for three years without rent, and that such use and occupation was worth $750. If such reservation was effectual to vest in Randolph a legal [126] interest in the premises to that extent, his judgment creditors can reach it. If the grantor simply obtained a parol lease for three years, and that is void by the- statute of frauds, then, since the consideration for it was wholly paid, ás between Randolph and his grantee, equity, in order to prevent irreparable loss, would decree the performance of it, and thus Randolph has an equitable interest of the same value, which his creditors can also reach. The statute of frauds cannot be set up as the support and protection of fraud. (Story’s Eq. Jur., § 330; Hosford v. Merwin, 5 Barb., 51, 58; Willink v. Vanderveer, 1 Barb., 599.) In either case, fraud upon the part of the grantee, or notice of any fraudulent intent upon the part of the grantor, is not essential, since the proceeding touches only the property, legal or equitable, which the grantor retains. Fraud upon the part of.the grantor ■exists. A conveyance by one indebted at the time, by which the grantor secures some benefit to himself at the expense of his creditors, is fraudulent upon the part of the grantor as to his creditors. (Young v. Heermans, 66 N. Y., 382.) In this ease the purchaser is protected to the extent of his actual purchase. His grantor only is deprived of that which he reserved, or intended to reserve, out of the' property for his own benefit. It is urged that since the grantor made a general assignment for the benefit of creditors before the plaintiffs obtained their judgments, the action cannot be maintained by the judgment creditors, but should have been brought by the assignee; or, if by virtue of the refusal of the assignee to bring the action it may be properly-brought by the judgment creditor upon making the assignee a party, the recovery, when had, must be for the creditors generally and in aid of the assignment. The assignee having been made a party and suffered default, does not raise the question. No other party can assert his rights. The judgment in this action concludes him and protects the defendants from prosecution for the same cause at his hands. The right to maintain this action, residing either in the assignee or the judgment creditor, the default of the assignee when made a party leaves the judgment creditor’s right uncontested; and since, but for the assignment, the judgment creditor’s right by virtue of his vigilance to apply the property of the debtor to the payment of his own [127] judgment to the exclusion of the creditors generally would be complete, the same default leaves that right uncontested. If there were to be any distribution of the assets of the judgment debtor among the creditors generally, it would have to be through the medium of the assignee. Frothingham is a creditor of the judgment debtor. He now claims that he can resist discovery until , defeated, and then share in the assets discovered. It would be singular if, having aided the judgment debtor to create and to conceal these equitable assets, Frothingham could deny their existence and resist their discovery, and then when the plaintiffs, in a struggle with Frothingham, in which they are abandoned by the assignee, finally wrest them from his hands, they should be obliged to force the fruits of their victory into the hands of the reluctant assignee, and crave leave to share ratably with Frothingham in their distribution. Having made his election to resist the discovery of assets, Frothingham cannot now change sides and share in their distribution. If this action had been brought in behalf of creditors generally, no doubt the assets discovered could be administered by the assignee. (Sands v. Codwise, 4 Johns., 586; Bate v. Graham, 11 N. Y., 237.) But our courts have- not felt it to be a duty to assert the rights of the assignee when he himself has abandoned them (Fort Stanwix Bank v. Leggett, 51 N. Y., 552); or to look beyond the record for other creditors among whom to dissipate the proceeds of the plaintiff’s vigilance. (Dewey v. Moyer, 72 N. Y., 70.) The judgment should be affirmed, with costs. Learned, P. J., and Boardman, J., concurred. Judgment affirmed, with costs.