Levin v. Gladstein

• Decision Date: 07 November 1906
• Parties: LEVIN et al. v. GLADSTEIN.
• Court: North Carolina Supreme Court

55 S.E. 371

142 N.C. 482

LEVIN et al. v. GLADSTEIN.

Supreme Court of North Carolina

November 7, 1906

Appeal from Superior Court, Durham County; Ferguson, Judge.

Action by Philip Levin and another against M. Gladstein. From a judgment for defendant, plaintiffs appeal. Affirmed.

A defendant in justice's court may interpose an equitable defense.

A defendant sued in justice's court on a foreign judgment may set up the equitable defense that the judgment was procured through fraud.

This was a suit upon a judgment obtained in the superior court of Baltimore City, Md. Personal service was had upon said defendant while in Baltimore. Action was instituted upon said judgment before a justice of the peace of Durham county, and from a judgment therein defendant appealed to the superior court. At the beginning of the trial in the superior court counsel for defendant stated that he admitted the regularity of the judgment sued upon, and withdrew all pleas and defenses to said action, save and except that the judgment upon which the action was brought was procured by a fraud practiced by plaintiffs upon the defendant, and that he insisted upon that plea alone. Thereupon the plaintiffs moved for judgment for that the judgment rendered by the court of Maryland was not open to attack in this action for fraud. Motion overruled, and plaintiffs excepted. His honor held that the burden of proof was upon the defendant, and he proceeded to introduce testimony. Mr. Gladstein testified that he was the defendant in the case; that he knew Philip Levin and Simon Levin, and had bought goods of them; that some time prior to his going to Baltimore he bought a bill of goods of plaintiffs, but had shipped some of them back to Baltimore because they were not up to the sample; that plaintiffs had refused to take the goods out of the depot in Baltimore; that upon his visit to Baltimore, summons was served upon him in the action brought there by the plaintiffs, but after said summons was served upon him, and before the return day, he saw one of the plaintiffs and had an interview with him at the store of L. Singer & Son, during which interview plaintiffs agreed with him to withdraw said suit and return the goods to him at Durham, provided he would, upon their receipt, pay the plaintiffs a sum of money which they agreed upon, to wit, $133, and freight and storage not to exceed $3; that relying upon this agreement he returned to Durham, and made no defense to the action; that plaintiffs never returned the goods to him at Durham; that the first time he knew of the judgment was when called upon by attorneys for plaintiffs to pay said judgment. There was testimony contradicting defendant. After hearing testimony from both parties, the court submitted the following issue to the jury: "Was the alleged judgment rendered for $143 bearing date April 27, 1904, in the superior court of Baltimore City, in favor of Philip Levin and Simon Levin copartners, trading as P. Levin & Co., against M. Gladstein obtained by the fraud of plaintiffs?" To which the jury responded "Yes." Judgment was thereupon rendered that the plaintiffs take nothing by their action, and that the defendant go without day, etc. Plaintiffs excepted and appealed.

Biggs & Reade, for appellants.

Winston & Bryant, for appellee.

CONNOR, J. (after stating the case).

Two questions are presented upon the plaintiffs' appeal First. Can the defendant, in the manner proposed herein, resist a recovery upon the judgment rendered against him by the Maryland court? Second. If so, has the justice of the peace jurisdiction to hear and determine such defense? The plaintiffs, relying upon the provision of the Constitution of the United States, art. 4,§ 1, that "full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state," earnestly contends that the defense is not open to the courts of this state; that the remedy for the fraud in procuring the judgment, if any, must be sought in the courts of Maryland. The well-considered brief of plaintiffs' counsel thus states the question involved in the appeal: "The case presents the question of the right of a defendant to avail himself of the plea of fraud as a defense to an action in one state based upon a judgment obtained in a sister state." When a judgment rendered by the court of one state becomes the cause of action in the court of another state, and the transcript, as made in such state, duly certified, as prescribed by the act of Congress, is produced, it imports verity, and can be attacked for only one purpose. The defendant may deny that the court had jurisdiction of his person or of the subject-matter, and for this purpose may attack the recitals in the record. Bailey on Jurisdiction, § § 198, 199. Jurisdiction will be presumed until the contrary is shown. If not denied, or when established after denial, defendant cannot interpose the plea of nil debet. This was held in Mills v. Duryee, 7 Cranch, 480, 3 L.Ed. 411, and has been uniformly followed by both state and federal courts. 2 Am. Lead. Cases, 538. In Christmas v. Russell, 72 U.S. 290, 16 L.Ed. 475, Mr. Justice Clifford said: "Substance of the second objection of the present defendant to the fourth plea is that, inasmuch as the judgment is conclusive between the parties in the state where it was rendered, it is equally so in every other court in the United States, and consequently that the plea of fraud in procuring the judgment is not a legal answer to the declaration. Principal question in the case of Mills v. Duryee was whether nil debet was a good plea to an action founded on a judgment of another state. Much consideration was given to the case, and the decision was that the record of a state court duly authenticated under the act of Congress must have in every other court of the United States such faith and credit as it had in the state court from whence it was taken, and that nil debet was not a good plea to such an action." The learned justice proceeds to say: "Domestic judgment, under the rules of the common law, could not be collaterally impeached or called in question if rendered in a court of competent jurisdiction. It could only be done directly by writ of error, petition for new trial or by bill in chancery." It will be found upon careful examination of Hanley v. Donoghue, 116 U.S. 1, 6 S.Ct. 242, 29 L.Ed. 535 (Id., 59 Md. 239, 43 Am. Rep. 554) that the question under consideration here was not involved. It is true that in the discussion Mr. Justice Gray uses the language cited by counsel which excludes the right of the defendant to impeach the judgment "for fraud in obtaining it." So, in Cole v. Cunningham, 133 U.S. 107, 10 S.Ct. 269, 33 L.Ed. 538, Chief Justice Fuller, after quoting the language of the Constitution, says: ""This does not prevent an inquiry into the jurisdiction of the court, in which judgment is rendered, to pronounce the judgment, nor into the right of the state to exercise authority over the parties or the subject-matter, nor whether the judgment is founded in and impeachable for a manifest fraud. The Constitution did not mean to confer any new power on the states, but simply to regulate the effect of their acknowledged jurisdiction over persons and things within their admitted territory." The learned Chief Justice relies upon the same line of cases cited by Judge Gray. Neither of them were discussing the question here presented, nor was it presented by the record in those cases. The case of Dobson v. Pearce, 12 N.Y. 156, 62 Am. Dec. 152, was cited in Cole v. Cunningham, and as we shall see later, was approved. In Maxwell v. Stewart, 89 U.S. 77, 22 L.Ed. 564, the court simply reiterated the doctrine announced in Mills v. Duryee, supra, that the plea of nil debet could not be interposed in an action upon a judgment. Bissell v. Briggs, 9 Mass. 462, 6 Am. Dec. 88, Bailey on Jurisdiction, 191-192. This court, in Miller v. Leach, 95 N.C. 329, by Ashe, J., said that the judgment of a sister state was put by the Constitution upon the same footing as domestic judgments precluding all inquiry into the merits of the subject-matter, "but leaving the question of jurisdiction, fraud in the procurement, and whether the parties were properly before the court, open to objection--citing Mills v. Duryee, supra. See, also, Coleman v. Howell, 131 N.C. 125, 42 S.E. 555. It is elementary learning that this plea was not proper in actions founded upon a specialty or a record. Shipman, Com. Law Pl. 196. But, if plaintiff, in an action on a record, instead of demurring to the plea, accepts it and joins issue, the defendant is at liberty to prove any and every special matter of defense which might be proved under the same plea in debt. *** For the plaintiff, by accepting the plea, founds his demand solely upon the defendant being indebted and thus waives the estoppel, or conclusive evidence of the fact," etc. Overman v. Clemmons, 19 N.C. 185; Gould's Pl. 287. Hence we find that in all of the cases in which the plea of nil debet was entered, the defendant demurred, and the decision was on the demurrer, which was uniformly sustained. Mills v. Duryee, supra; Maxwell v. Stewart, supra; Benton v. Burgot, 10 Serg. & R. (Pa.) 240; Carter v. Wilson, 18 N.C. 362; Knight v. Wall, 19 N.C. 125. In Allison v. Chapman (C. C.) 19 F. 488, Nixon, J., says: "This subject is fully discussed *** and the conclusion is reached that the allegation in a plea that a judgment was procured through fraud is not a good common-law defense to a suit brought upon it in the same or a sister state." This conclusion is fully supported by all of the authorities, and in this we concur with the learned counsel for the plaintiff. Notwithstanding the well-settled rule that the...