Opinion
June 28, 1967
Appeal from an order of Special Term, Albany County, entered on September 21, 1966 which denied appellant's motion to vacate a judgment by confession, and vacated the stay of execution of said judgment. The appellant, a junior judgment creditor of Clifton W. Vogt, moved for an order to vacate a judgment by confession entered by the respondent, County National Bank, in the office of the Clerk of the County of Albany on November 12, 1965 in the amount of $40,000 upon the grounds that the affidavit upon which the judgment was based is insufficient, and substantially varies from the affidavit made on behalf of the County National Bank in connection with an attachment proceeding. CPLR 3218 which governs judgments by confession insofar as it is pertinent, provides: "(a) Affidavit of defendant. Except as provided in section thirty-two hundred one, a judgment by confession may be entered, without an action, either for money due or to become due, or to secure the plaintiff against a contingent liability in behalf of the defendant, or both, upon an affidavit executed by the defendant; 1. stating the sum for which judgment may be entered, authorizing the entry of judgment, and stating the county where the defendant resides * * *; 2. if the judgment to be confessed is for money due or to become due, stating concisely the facts out of which the debt arose and showing that the sum confessed is justly due or to become due". The affidavit of the debtor, Clifton Vogt, states that he resides in Albany County, authorizes the entry of judgment in the sum of $40,000, and states that the confession of judgment is "for a debt justly due to the plaintiff arising from the following facts: Money loaned by Plaintiff to Defendant and not repaid." The appellant's moving affidavit states that the affidavit on behalf of the County National Bank, in a prior attachment proceeding, apparently involving the same obligation, in substance, states that Vogt's liability to the bank was as guarantor for certain obligations of R. V. Sales, Inc., with reference to financing contracts. The answering affidavit partly substantiates this, although it indicates that there was also involved other personal obligations of Clifton Vogt. The predecessor statutes from which CPLR 3218 is derived, contained similar language to the effect that the statement, or affidavit upon which a judgment by confession may be entered, for money due or to become due, must state "concisely the facts out of which the debt arose". (Civ. Prac. Act, §§ 540-545; Code Civ. Pro., §§ 1274-1278; Code of Pro. [Field Code], §§ 382-384.) In the case of Wood v. Mitchell ( 117 N.Y. 439) which arose under section 1274 of the Code of Civil Procedure, judgment was entered upon a statement which stated: "'This confession of judgment is for a debt now justly due to the said plaintiff from me arising from the following facts, viz.: the said sum of $5,000 is a balance due to said plaintiff of various sums of money loaned and advanced by him to me, the said defendant, during a period from about July 1, 1886, to date and includes interest upon such loans and advances to this date'". The Court of Appeals held (pp. 441-442): "The concise statement of facts out of which the indebtedness arose is required so that any party interested may be able to investigate the matters and thus ascertain whether the confession of judgment was accurate, honest and bona fide. * * * This statement is in the highest degree indefinite. * * * The statement should, at least, have stated the interest and principal separately, or have given the data from which the amounts of the two items could be ascertained." The respondent relies upon the case of Neusbaum v. Keim ( 24 N.Y. 325, 329) wherein the following statement was held sufficient, to wit: "The said plaintiff, at various times in the years 1854 and 1855, sold and delivered to me large quantities of meat, and upon such a sale there is now justly due to the plaintiff, as aforesaid, a balance of the said $2,114 with interest thereon from the 18th day of January, 1855." This case antedates the Wood case by some 27 years and the statement therein is definitely more specific than the statement in the instant case. The right to enter judgment, based upon a statement of confession, is derived from the statute and is dependent upon strict compliance with the pertinent statutory provisions. "The courts have made it plain that the requirement that the affidavit state the facts underlying the obligation is designed for the protection of third persons who might be prejudiced in the event that a collusively confessed judgment is entered, rather than for the protection of the defendant. * * * The formal objection to the statement should be distinguished from the question whether the transaction was bona fide. A junior judgment creditor, mortgagee or purchaser for value without knowledge of the judgment may vacate the confessed judgment if the affidavit is formally insufficient, whether or not the transaction was in fact bona fide." (4 Weinstein-Korn-Miller, N.Y. Civ. Prac., par. 3218.03.) The statement of confession here is clearly insufficient since no information is given as to the amount of the loan, the date of the loan, the amount of repayment, if any, or how much of the amount confessed is principal or interest. The motion by the respondent for permission to amend the statement and thus preserve the lien of the judgment is denied. Such an amendment the respondent is not entitled to, but is one which the court might, in its discretion, refuse or grant. ( Mitchell v. Van Buren, 27 N.Y. 300; Symson v. Selheimer, 105 N.Y. 660.) In view of our determination, the award of costs on the motion must be vacated. Order reversed, on the law and the facts, and motion to vacate judgment granted, with costs. Gibson, P.J., Reynolds, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum by Staley, Jr., J.