Arnold v. Gifford

Mr. Justice Thornton delivered the opinion of the Court: The equity of redemption, which existed in the judgment debtor, was disposed of by him to hinder, delay, and defraud his creditors. The proof abundantly shows that he surrendered the defeasance for this purpose. He then, on the 24th day of January, 1865—nearly one year after the surrender of the defeasance—executed his note to one Lyon, payable in twenty days, with a power of attorney attached thereto to confess judgment. Lyon assigned the note to the appellee; and judgment by confession was rendered on the 16th day of February, 1865. The answer set up that this j udgment was not founded on any bona fide indebtedness, and that it was obtained by collusion between the parties, to defraud Mrs. Arnold of the land, which had been conveyed to her. The proof is entirely satisfactory, if not conclusive, that there was no consideration whatever for the making of the note or for its assignment; and that the entire transaction was for the benefit of the grantor in the deed, which was claimed to be a mortgage. It is true, as urged by the counsel for the appellee that a stranger to the judgment can not question its regularity, collaterally. It may be erroneous and voidable; but if the court had jurisdiction of the subject-matter and the person, its determination is conclusive, until reversed by an appellate court, unless the judgment was absolutely void. A judgment- may be impeached for fraud; and, if found tainted with fraud, must be pronounced void. In this case, one party bases his right to relief upon a judgment, which the other party insists is fraudulent. The fact that a debtor confesses judgment in favor of a creditor, for the express purpose of enabling a creditor to redeem, will not invalidate, if there be no fraud in the consideration. It is the policy of the law to encourage redemptions. Karnes v. Lloyd, 52 Ill. 114. But a very different question is presented when the note, which is the foundation of the judgment, is without any consideration, and when it is apparent that the parties acted in bad faith, and colluded to accomplish an object in violation of right and of the law. The policy of the law, in the encouragement of-redemption, is to enable the debtor to discharge his liabilities. If there is no relation of debtor and creditor in fact, then a plan concocted to effect a redemption is a fraud. In the case of Phillips v. Demoss, 14 Ill. 410, this court said that it was the policy of the law for the debtor to confess a judgment for an honest debt; but if the judgment, under which the redemption was made, had been confessed when no debt in fact existed, the case would be widely different. In the case at bar there was no debt, and therefore the judgment formed no- basis in equity for redemption. From the facts presented in the record, the whole scheme was a fraud, which can receive no aid from a court of equity. The complainant below comes before the court as a mere volunteer—as a party to a fraudulent plan, conceived and attempted to be carried out, for the purpose of forcing a redemption. He therefore has no standing in a court of equity, and can receive neither encouragement nor assistance at our hands. The decree of the court below is reversed and the cause remanded. Decree reversed.