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James H. Persons v. Bergmann

Decided: January 28, 1982.

JAMES H. PERSONS, PLAINTIFF-RESPONDENT,
v.
GERD BERGMANN, DEFENDANT-APPELLANT



On appeal from the Superior Court, Law Division, Monmouth County.

Botter, Antell and Furman. The opinion of the court was delivered by Furman, J.A.D.

Furman

Plaintiff, successful bidder at an execution sale of real property, was awarded summary judgment in the amount of his bid and court costs, $4,848, against defendant, judgment creditor of his former wife, Victoria Bergmann. At the time of the execution sale Charming and Eileen Eng, concededly bona fide purchasers for value, were in possession of the property.

Defendant appeals, urging that his lien as judgment creditor was paramount to that of the Engs even though they were bona fide purchasers for value because his former wife Victoria conveyed the property in fraud of his claim against her, contrary to the Fraudulent Conveyance Laws. N.J.S.A. 25:2-1 et seq. Defendant also seeks a reversal of the order denying his motion for leave to file a third-party complaint against Victoria, Alexander Eller, Soya Michalewsky and the Engs.

Victoria held title to this property in Howell Township, Monmouth County, in the name of Victoria Eller, widow, as tenant in common with Soya Michalewsky. On November 8, 1977 Victoria and Michalewsky conveyed the property to Alexander Eller, then 24, her son by a prior marriage, for a stated consideration of one dollar. On November 21, 1977 an order was entered in an action in the Chancery Division, subsequent to a final divorce judgment between defendant and Victoria, providing that defendant was entitled to a judgment in the amount of $4,270 against Victoria. An abstract of judgment in favor of defendant against Victoria Bergmann was filed on August 3, 1978. A writ of execution was issued to the Sheriff of Monmouth County on September 8, 1978. Subsequently, in December 1978, defendant submitted an affidavit to the Sheriff of Monmouth County identifying the Howell Township property as having been fraudulently conveyed by defendant and as her only property, real or personal, on which execution could be levied in this State. The execution sale was held on April 6, 1979. The proceeds of the sale were paid by the sheriff to defendant in satisfaction of his judgment against Victoria, except for a $258.62 deficiency.

Meanwhile, Alexander Eller had conveyed the property back to Soya Michalewsky by quitclaim deed for a nominal consideration on September 26, 1978, and Michalewsky had conveyed the property to the Engs for $25,000 on January 23, 1979.

Plaintiff brought this action in the Chancery Division in two counts: the first count to quiet title against the Engs and the second count, in the alternative, to recover the amount of his bid from defendant on the ground that the sheriff's deed to him was a nullity. The Chancery Division judge granted a dismissal on motion by the Engs "without prejudice" and transferred the second count to the Law Division.

No appeal is brought from the dismissal in favor of the Engs. At oral argument we were informed that the Chancery Division judge granted this dismissal because plaintiff was not in peaceable possession of the property, a jurisdictional prerequisite to an action to quiet title. N.J.S.A. 2A:62-1 et seq.; Braue v. Fleck , 23 N.J. 1, 14 (1956); Penrose v. Absecon Land Co. , 94 N.J. Eq. 436 (E. & A. 1922).

The status of the Engs as bona fide purchasers for value without notice of any judgment lien against the property is conceded by defendant. Nevertheless, he urges on appeal that the conveyance by Victoria to her son for inadequate consideration, two weeks prior to the order for judgment in favor of defendant against her, was "utterly void and of no effect" in the language of N.J.S.A. 25:2-3, and that the Engs, after mesne conveyances, acquired no better title than Alexander Eller's and were subordinate to his judgment lien.

We reject this argument. The Uniform Fraudulent Conveyance Law, N.J.S.A. 25:2-7 to 19, controls whenever in conflict with the earlier enactment, N.J.S.A. 25:2-1 to 6. Conway v. Raphel , 101 N.J. Eq. 495 (Ch. 1927), aff'd 102 N.J. Eq. 531 (E. &

A. 1928); see, also, Smith v. Whitman , 75 N.J. Super. 228 (App.Div.1962), mod. on other grounds 39 N.J. 397 (1963). Under N.J.S.A. 25:2-15 a creditor, when his claim has matured, may disregard a fraudulent conveyance by his debtor and levy execution on the property conveyed against any person "except a purchaser ...


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