Adler v. Vankirk Land & Construction Co.

Decision Date09 February 1897
Citation114 Ala. 551,21 So. 490
CourtAlabama Supreme Court
PartiesADLER ET AL. v. VANKIRK LAND & CONSTRUCTION CO.

Appeal from chancery court, Escambia county; Jere N. Williams Chancellor.

Bill by the Vankirk Land & Construction Company against Morris Adler and others to review a decree of foreclosure. A motion to dismiss the bill for want of equity was overruled, and defendants appeal. Reversed, and bill dismissed.

John P Tillman and John B. Knox, for appellants.

George F. Moore and Gordon Macdonald, for appellee.

BRICKELL C.J.

On the 24th day of March, 1894, by consent of parties, a decree was entered by the chancery court of Escambia county, in vacation, upon a submission duly made by the parties under the statute and rule 80a of chancery practice, for a final decree in vacation, in favor of Morris Adler, against the Vankirk Land & Construction Company, foreclosing of mortgage upon a large body of lands, executed by that company to Worthington, Elliott & De Bardeleben, and by them assigned together with the demands thereby secured, to said Adler. After the register, proceeding to the execution of the decree, had advertised the lands for sale, on the 9th day of February, 1895, the land and construction company filed the bill in this cause, seeking to review the proceedings had and the decree rendered in the foreclosure suit, and to vacate and set aside the decree, and for an accounting, and, as an incident to the main relief prayed, an order temporarily restraining the sale under the decree. The bill is essentially a bill of review, based upon alleged newly-discovered evidence, which, it is the theory of the bill, shows that by false and fraudulent representations made several months prior to the rendition of the consent decree, upon an accounting and settlement then had between the parties touching the demands secured by the mortgage, the land and construction company, relying upon such representations, and believing them to be true, had been induced to admit and to bind itself to pay an amount largely in excess of what was in fact owing by it upon those demands, which amount, by the consent decree, the company was ordered to pay in redemption of the mortgage. The chancellor overruled a motion interposed by the defendants (the appellants here) to dismiss the bill for want of equity, and that ruling is the only error assigned.

The argument in support of the motion and against the ruling of the chancellor is that, while in the bill it is averred that the fraud alleged was not discovered by the complainant until after the consent decree was entered, the bill is wholly wanting in averments showing the exercise of any diligence whatever by the complainant, its officers or agents, in ascertaining the facts out of which the fraud arose, or the evidence relied upon to establish it, or that such facts or evidence, by the use of reasonable diligence, could not have been discovered prior to the rendition of the decree, or the execution of the agreement upon which it was based. The doctrine is now too well settled to admit of controversy, and is upheld by a sound and conservative public policy, that, to maintain a bill of review upon newly-discovered evidence, the matter must not only be new,-that is, ascertained or discovered after the court has passed its decree,-but it must also affirmatively appear, by appropriate averments and by proof, that the party complaining, by the use of reasonable diligence, could not have, prior to the decree, ascertained or discovered it. If such matter was known to him before decree entered, and he failed to avail himself of it, or if unknown, but, by the exercise of proper diligence, he could have known it, the court will afford him no relief. A wrong may have been inflicted, rather than a right enforced, by the decree; yet, according to the uniformly declared policy of the court, it is better that such wrong should go unredressed than that the solemn decree of the court should be set aside at the suit of a party who, having had his day in court, failed, by reason of his own negligence or laches, to timely present the matter of his defense for adjudication. Diligence in this respect is of the essence of the equity of the bill. Laches or negligence is as fatal to relief as the actual absence of a matter of defense. In Young v. Keighly, 16 Ves. 348, Lord Eldon says: "The question always is, not what the plaintiff knew, but what, using reasonable diligence, he might have known." And this court, in Banks v. Long, 79 Ala. 319, speaking through Chief Justice Stone, said: "The equity of a bill of review for newly-discovered testimony is the fact that it is newly discovered, and that, with the other testimony, it entitles the complainant to a decree different-beneficially different-from that rendered in the cause. It must be newly discovered, for if known before the trial, or if with proper diligence it would have been known, this is a complete bar to such relief." This principle is uniformly recognized and upheld by the text writers and adjudged cases. Story, Eq. Pl. § 414; 2 Daniel, Ch. Pl. & Prac. (5th Ed.) p. 1578; 2 Beach, Mod. Eq. Prac. § 862; Dexter v. Arnold, 5 Mason, 312, 321, Fed. Cas. No. 3,856; Wiser v. Blachly, 2 Johns. Ch. 488; Traphagen v. Voorhees, 45 N. J. Eq. 41, 16 A. 198; Machine Co. v. Dunbar (W. Va.) 9 S. E. 237; Murrell v. Smith, 51 Ala. 301; Randall v. Payne, 1 Tenn. Ch. 142. Considering a similar question in Waring v. Lewis, 53 Ala. 625, the court said: "There must be an end to litigation; and without offending principles of public policy, endangering the order and peace of society, and deranging the whole structure of our judicial system, a court of equity cannot intervene against the decree of judgment of a court of competent jurisdiction because of facts known, or capable of discovery by reasonable injury, at the time of its rendition. Fraudulent practices or concealments may be resorted to by an unscrupulous suitor. Witnesses may be corrupted, or evidence suppressed, and an unjust, unconscientious judgment wrested from the court. These must have been unknown, and reasonable diligence not sufficient to have guarded against them. The judgment must stand, or the conservatism of the law will be violated. Freem. Judgm. §§ 493-506."

Turning to the bill, an examination of its averments leaves it free from doubt that it wholly fails to show that the complainant made any effort whatever, prior to the rendition of the consent decree, to ascertain for itself the true status of the accounts between it and Worthington, Elliott & De Bardeleben, secured by the mortgage, or to ascertain whether the representations made upon the settlement were true or false; nor does the bill contain any averment that shows or even tends to show that such effort, if made, would have then been unavailing and fruitless. The settlement was effected in July, 1893, more than eight months before the agreement was made for the consent decree, and before that decree was entered, and the amount then agreed upon as due from the company to Worthington, Elliott & De Bardeleben was extended until the 27th day of December, 1893, the company executing to them its several promissory notes in evidence of the indebtedness. Not only is this true, but it is fair to presume from the averments of the bill and the exhibits thereto that, prior to the settlement, the company had several months in which to ascertain the extent of its liability upon the secured demands. It was not until Adler was proceeding to have his decree executed by a sale, nearly one year after its rendition, that the company, for the first time, so far as disclosed by the bill, took any steps to ascertain whether the representations made upon the settlement were true or false. So far as disclosed by the bill, it then did what it could easily have done before; it caused estimates to be made of the embankment and excavation done by Worthington, Elliott & De Bardeleben under its contract with the Mobile & Girard Railroad Company, and inquiries to be made as to payments made on the indorsed note by Worthington, Elliott & De Bardeleben; and, upon information thus and for the first time obtained, it files its bill, seeking to have the consent decree vacated and set aside, and the accounts between the parties reopened. It is a clear inference from the averments of the bill that the complainant was as fully possessed of the facilities for prosecuting its inquiries before as it was after the consent decree was entered; that it then knew of the location of the railroad upon which the work was done, and of the holder and owner of the indorsed note, and...

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