National Exchange Bank of Tiffin, Ohio v. Solon Wiley

• Decision Date: 28 November 1904
• Docket Number: No. 53,53
• Citation: 25 S.Ct. 70,49 L.Ed. 184,195 U.S. 257
• Parties: NATIONAL EXCHANGE BANK OF TIFFIN, OHIO, Plff. in Err. , v. SOLON L. WILEY
• Court: U.S. Supreme Court

195 U.S. 257

25 S.Ct. 70

49 L.Ed. 184

NATIONAL EXCHANGE BANK OF TIFFIN, OHIO, Plff. in Err.,

v SOLON L. WILEY.

No. 53.

Argued November 4, 7, 1904.

Decided November 28, 1904.

Messrs.J. J. Boucher, Constantine J. Smyth, and Thomas D. Crane for plaintiff in error.

Mr. James H. McIntosh for defendant in error.

[Argument of Counsel from page 258 intentionally omitted] Mr. Justice Harlan delivered the opinion of the court:

This is an action upon a judgment rendered in one of the courts of Ohio, and the question to be considered is whether the final judgment under review gave to the proceedings in the Ohio court such faith and credit as are required by the Constitution and laws of the United States.

The Constitution, art. 4, § 1, provides that 'full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may, by general laws, prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.' The statute enacted in execution of that power (Rev. Stat. § 905, U. S. Comp. Stat. 1901, p. 677), provides for the authentication of the records and judicial proceedings of the several states and territories and any country subject to the jurisdiction of the United States, and declares that 'the said records and judicial proceedings, so authenticated, shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the state from which they are taken.'

The Wiley Construction Company, a Massachusetts corporation, and Wiley, the defendant in error, executed and delivered to the National Exchange Bank, the plaintiff in error, a written instrument,—being a note with warrant of attorney annexed,—dated Tiffin, Ohio, April 26th, 1884, in which, for value received, they jointly and severally promised to pay to that bank, or order, on the 1st day of October, 1884, at its office in that city, $10,000, with 8 per cent interest after maturity. The instrument authorized N. L. Brewer, or any attorney at law in the United States, or elsewhere, to appear before any court of record, after such obligation became due, waive the issuing and service of process, and confess judgment against the obligors or either of them 'in favor of the holder' for the amount then appearing to be due, together with the cost of suit; and thereupon to release all errors and writs of error, and, in behalf of the obligors or either of them, waive all right to appeal and stay of execution.

On the 31st day of July, 1899, nearly fifteen years after the maturity of the note, the National Exchange Bank instituted suit against both obligors in the court of common pleas of Seneca county, Ohio,—a court of general jurisdiction in that state,—to recover the balance due on that obligation, which was alleged to be $5,772.70, with interest from May 9th 1887, at 8 per cent. Upon it was credited a payment of $6,311.75, as of May 9th, 1887.

It may be here stated that there was no indorsement on the note showing that it had ever been assigned or transferred by the original payee.

With the petition in that suit were filed copies of the paper constituting the note and warrant of attorney. With it was also filed an answer, in which an attorney, assuming, by virtue of the above warrant, and not otherwise, to be the attorney of the construction company and of Wiley, confessed judgment against them for the full amount claimed by the bank.

On the very day of the bringing of that suit judgment was entered against the defendants therein for $11,419.68, being the amount of the obligation with interest as 8 per cent from May 9th, 1887; the judgment reciting that the attorney who acted under the warrant of attorney, naming him in person, by virtue of that warrant, entered the appearance of the defendants, waived the issuing and service of process, confessed judgment, and released and waived all exceptions, errors, and right of appeal.

The present action was by the National Exchange Bank against Wiley on the judgment rendered in the Ohio suit. The defendant disputed the plaintiff's right to recover upon several grounds, one of which was that, prior to the institution of the Ohio suit, and more than twelve years before the commencement of the present action, the note had been fully discharged, so far as he was concerned, pursuant to an agreement between him and the holder. But on this writ of error we are concerned only with the part of the defense which distinctly raises a Federal question.

The defendant alleged that the warrant of attorney annexed to the note of April 26th, 1884, did not authorize a confession of judgment against the obligors except in favor of the 'holder;' that so far from the National Exchange Bank being such holder when it brought the Ohio suit, the Tiffin National Bank, as early as March 2, 1885, purchased, received, and became the holder of the obligation, and thereafter remained and still was the holder; that, therefore, the attorney professing to act in behalf of the defendants in the Ohio suit had no authority, in virtue of such warrant of attorney, to represent them in that suit, or to confess judgment in favor of the National Exchange Bank; that the defendant was neither served with process in the Ohio suit nor had any notice thereof; that the Ohio court was entirely without authority or jurisdiction to render judgment against him in favor of the plaintiff bank; and that its authority or jurisdiction could not be upheld consistently with the 14th Amendment of the Constitution of the United States.

The plaintiff insisted that it was the holder of the note when put in suit; further, that the court in Ohio had full power and jurisdiction to render the judgment in question, and that neither personal service of process, on nor notice to the obligors was necessary in order to give that court jurisdiction of the parties and subject-matter.

Both at the trial and in the supreme court of Nebraska the bank contended that full faith and credit, as required by the Constitution and laws of the United States, would not be given to the proceedings in the Ohio suit if the judgment in its favor was held not to be conclusive in respect of the authority of the Ohio court to render such judgment.

It is unnecessary to set out all the instructions. It is sufficient to say that the jury were, in substance, instructed that the warrant of attorney authorized a confession of judgment in favor of the holder of the note; that it was to be presumed upon the showing made by the record of the Ohio court that it had jurisdiction to render the judgment sued on; and that such presumption continued throughout this case unless the defendant, by a preponderance of evidence, proved that the plaintiff bank was not, in fact, the holder of the note when put in suit in Ohio. The jury were also instructed that if the plaintiff was found not to be such holder, the verdict should be for the defendant.

The jury's verdict was for the defendant, and the judgment thereon was affirmed. Upon the issue as to the ownership of the note at the time it was sued on in Ohio there was, as the supreme court of Nebraska held, proof both ways.

Did the Ohio court have jurisdiction to render the judgment in question? It is a settled doctrine, Chief Justice Marshall said, in Rose v. Himely, 4 Cranch, 269, 2 L. ed. 617, that the effect of every judgment must depend upon the power of the court to render that judgment. In determining whether the Ohio court had authority to render the judgment against the obligors in the note, we must look first into the decisions of the highest court of that state.

In Osborn v. Hawley (1850) 19 Ohio, 130, the plaintiff declared as indorsee of a promissory note, to which was attached a power of attorney to confess judgment. The report of that case is very meager, but in the course of the opinion the court said: 'The power of attorney is not negotiable, and when the legal title to the note is transferred the power of attorney becomes invalid, and no power whatever can be exercised under it, for the benefit of the indorsee; and he holds the note as if no such power had ever been attached to it.'

In Marsden v. Soper (1860) 11 Ohio St. 503, the plaintiff declared on a note to which was attached a warrant of attorney authorizing a confession of judgment 'in favor of any holder.' A suit was brought on the note in one of the courts of Ohio by the indorsee thereof, and judgment was confessed under a warrant of attorney annexed to the note. The question was whether the court had jurisdiction of the persons of the defendants so as to authorize a judgment affecting their rights. The supreme court of Ohio said: 'It will be noticed that the plaintiff in this judgment is not the payee of the note on which judgment is taken, but an indorsee; and that the warrant of attorney under which judgment was confessed purports to authorize such confession 'in favor of any holder of this obligation,' after the same becomes due. But, it was held, in broad and general terms, in the case of Ocborn v. Hawley, 19 Ohio 130, that a warrant of attorney to confess judgment, attached to a note, and forming a part of the same instrument, is not negotiable, and when the note is transferred becomes invalid and inoperative. It is true, the report of that case does not inform us whether the warrant of attorney in that case purported to authorize the confession of a judgment in favor of the payee of the note alone, or whether its terms extended, as in this case, to any holder of the note after due. But, however this may have been in that case, we suppose that, if this judgment rested upon the confession under the warrant of attorney alone, it would be very questionable whether the court of common pleas had any rightful jurisdiction of the defendants in the judgment.'

In Cushman v. Welsh, 19 Ohio St. 536, 539, the warrant of...