Cole v. Boardman

The only objection of the defendants to a judgment against them is that the notes in suit were founded upon an illegal consideration. It appeared at the trial that the plain*551tiffs had obtained two judgments against the Bequest Iron and Manufacturing Company, a corporation established under the laws of the State of New Jersey. There is nothing to show that these judgments were obtained fraudulently. The fact that the defendants, as directors of the corporation, agreed as to the amount for which the larger judgment should be entered for the plaintiffs, and thus enabled them to obtain priority over other creditors of the corporation, does not show fraud. For aught that appears, the amount for which judgment was entered was justly due from the corporation; and, in a case not affected by the provisions of any bankrupt or insolvent law, a debtor has a right to confess judgment and thus give one creditor a preference. Nothing whatever was shown to impeach the smaller judgment. « \

The plaintiffs then, having two valid judgments against the corporation, levied upon its estate, and afterwards assigned the judgments to the defendants, such assignments being the consideration of the notes in suit. The defendants introduced evidence tending to show that, at the time the notes were given, the plaintiffs represented to them that if they would buy the judgments they would be enabled to acquire a title to all the property of the corporation by a legal early sale thereon, and exclude all other stockholders in said corporation from any interest therein, and prevent other creditors of said corporation from collecting their claims.

But this evidence does not show any fraud upon the part of the plaintiffs. They were pursuing their legal remedies against the corporation. The representations were merely statements that they had acquired certain legal priorities and advantages over the other creditors and stockholders, which, by an assignment of the judgments, would pass to the defendants.

We are of opinion that, upon the evidence, no fraud is shown upon the part of the plaintiffs which makes the consideration of the notes illegal or against public policy, and that they are entitled to judgment for the amounts of both notes.

Judgment for the plaintiffs.