Chase v. Tuckwood , 1898 Ill. App. LEXIS 848 ( 1899 )

Mr. Justice Freeman

delivered the opinion of the court.

Counsel for appellants discuss at considerable length in their brief the question whether the Superior Court had power to grant the relief sought by the attaching creditors in the intervening petition.

If the judgment by confession was collusively entered, no indebtedness whatever existing, the transaction would be fraudulent and void, and could be attacked by any one whose interests were thereby adversely affected. Martin v. Judd, 60 Ill. 78-85, and cases there cited.

It is upon such contention that appellant’s attack is based. But there was evidence in this case tending to prove the existence of an actual indebtedness as consideration for the judgment note and there was no evidence disproving such claim. The judgment based upon such note can not then be regarded as void, and it. is said, in the case above referred to, that only the party himself can impeach it.

The petition charged that the alleged indebtedness was fictitious, that the company was never indebted to appellee in any sum whatever, and asked the court to exclude appellee from participation in the proceeds of the sheriff’s sale. The court would, it is conceded, have had power, under this proceeding, to enter into an investigation of the good faith of the claim upon which the judgment by confession was based, had the attaching creditor reduced his claim to judgment. Brewster v. Riley, 19 Ill. App. 581.

But it did, we think, have the power at the instance of the attaching creditors, the question being whether the judgment was absolutely void because' based upon no indebtedness. If it was thus void appellee could take nothing under it, when that fact was once established. It could in such case be assailed by a stranger to the record, and the appellants’ rights under the attachment writ would be not only superior, but exclusive as against appellee. Martin v. Judd, supra; Freydendall v. Baldwin, 103 Ill. 325-329. See also Havens & Geddis Co. v. First Nat. Bank, 162 Ill. 35. The evidence, however, did not sustain the petition in this respect.

It is urged that the' alleged indebtedness was not a bona fide debt of the corporation, but the individual debt of the president.

There is evidence tending to show that the money borrowed from appellee was used in the business of the Bombay Tea Company, part of it before the incorporation and a part afterward. The proof rests mainly upon the testimony of the president of the company, who is the son of appellee. While such testimony, under the circumstances of this case, is open to suspicion, it is not disproved, and we can not say the trial court erred in its findings. Appellee states that she loaned money to the Bombay Tea Company in response to requests from her son. If the statements of these witnesses are true, they seem to show that appellee let her son have this money for use in the business. So much of it as went into the business before incorporation was undoubtedly the personal debt of the son, and the assets of the business turned over to the corporation in payment for its capital stock may not have been chargeable with his personal debt.

The corporation paid him therefor by its capital stock, and ' appellee had loaned the money to him individually. But, however that may be, the loan made subsequently, if it went into the business of the company, was its own debt. This, according to the evidence, was about seven hundred dollars. The proceeds of the sheriff’s sale amounted to less than three hundred dollars. The fact that the judgment was for a sum larger than the actual indebtedness is .not, therefore, material. The appellants are not thereby injured. The judgment debtor may impeach the judgment but the appellants can not. Havens & Geddis Co. v. First Nat. Bank, 162 Ill. 35, and cases there cited.

the judgment of the Superior Court must be affirmed.