Mahoney v. State Ins. Co.

• Decision Date: 09 March 1907
• Citation: 110 N.W. 1041,133 Iowa 570
• Parties: MAHONEY v. STATE INS. CO.
• Court: Iowa Supreme Court

133 Iowa 570

110 N.W. 1041

MAHONEY

v.STATE INS. CO.

Supreme Court of Iowa.

March 9, 1907.

Appeal from District Court, Polk County; Hugh Brennan, Judge.

This is an action upon a judgment rendered in the district court of Seward county, Neb. Defendant pleaded many defenses which will be noticed in the body of the opinion. Judgment for plaintiff, and defendant appeals. Affirmed.Carr, Hewitt, Parker & Wright, for appellant.

Dudley & Coffin, for appellee.

DEEMER, J.

The New Hampshire Trust Company recovered judgment against defendant in the district court of Seward county, Neb., upon a policy of fire insurance in the sum of $2,000, with interest. This judgment was appealed to the Supreme Court of that state, where it was affirmed on the 4th day of February, 1896. The judgment was rendered in the name of the New Hampshire Trust Company under an allegation of the original petition that it was the legal owner and holder of a mortgage upon the property insured. The policy was issued to one Brown, who was the owner of the property, and it provided that “loss if any is payable to the New Hampshire Trust Company, mortgagee, as their interest may appear at the time of loss.” After the judgment was rendered, and on or about the 4th day of October, 1899, the New Hampshire Trust Company assigned the judgment to the plaintiff herein. It is claimed that when the original action was brought, and at all times since, plaintiff herein was in fact the owner of the note and mortgage; that the New Hampshire Trust Company had no interest in the note and mortgage; that it had assigned the same to plaintiff; and that the judgment was obtained through fraud and false swearing. The testimony shows that on or about March, 1889, the New Hampshire Trust Company assigned the note and mortgage held by it to plaintiff herein, and as part consideration therefor guarantied the payment of the note by the following instrument: “For value received, the New Hampshire Trust Company hereby guaranties the payment of the interest coupon hereto attached when due and the principal sum within two years after maturity with interest semiannually thereafter at six per cent., but the said company reserves the right to purchase the obligation at any time by paying the holder the face of said note and interest to date of payment. In case the holder shall elect to retain this note after a tender of payment, said company shall be released from all further liability herein.” Upon the back of the mortgage appeared the following assignment: “For value received, I, Hiram D. Upton, the mortgagee named in the within mortgage, it being the same mortgage recorded in the office of the county clerk in and for the county of Seward, Nebraska, in Book 33 of Mortgages, on page 541, do hereby sell, transfer and assign to Eugene H. Mahoney all my right, title and interest in and to said mortgage and the debt thereby secured. Witness my hand and seal this 16th day of May, A. D. 1888. [Signed] Hiram D. Upton. [Duly acknowledged.]”

The name of the assignee was originally in blank, but plaintiff's name was inserted therein on March 21, 1889. The loss occurred January 10, 1891, and the action upon which the judgment was rendered was commenced in May of the year 1891; the allegation in the petition being that plaintiff, the New Hampshire Trust Company, was the owner and legal holder of the note and mortgage. The defendant in its answer denied generally plaintiff's ownership of the note and mortgage. It seems that the action was brought by an agent and attorney of the New Hampshire Trust Company upon instruction from his principal. Mahoney never had the policy in his possession, but at the request of the trust company he redelivered the note and mortgage to an agent thereof “to be used in court in the insurance suit.” He did not know in whose name the suit had been brought, but thereafter was informed of the situation when demand was made upon him to pay the cost of printing a brief for use in the Supreme Court of Nebraska. Before the note and mortgage reached the attorney in Nebraska, an indorsement without recourse of the signature of one H. D. Upton, who it appears was treasurer of the trust company, was erased, as also was the name of plaintiff, from the assignment on the back of the mortgage. These erasures were not expressly authorized by plaintiff herein, and, when the instruments were returned to him after the Nebraska judgment was obtained, they were in the same condition as when redelivered to the trust company; that is to say, they bore the name of Upton as indorser, and also the name of plaintiff herein as assignee of the mortgage. There is no showing as to who made the erasures and interlineations.

The trust company paid plaintiff herein the interest coupons as they matured, from April 1, 1889, to April 1, 1893, and for three of the years only were they reimbursed by the maker of the notes and mortgage. No portion of the principal of the loan, or of any other interest coupons, has been paid. This action was commenced April 8, 1902, and judgment was rendered in the district court of Polk county, October 24, 1905. For a reversal of this judgment appellant relies upon two propositions: First, that the action upon the foreign judgment is barred by the statute of limitations; and, second, that the judgment was procured by fraud and false swearing.

1. As to the first proposition: The action is not barred by the statute of this state. If there be a bar, it must be by the statutes of Nebraska, where the original judgment was obtained. By section 482 of Cobbey's Annotated Statutes of 1903 of the latter state, a judgment becomes dormant, if execution be not sued out within five years, or if there be an interval of five years between the suing out of executions, and it ceases to operate as a lien upon the estate of the judgment debtor. The general statutes of limitations of that state do not specifically refer to judgments, but they do provide that an action for relief not hereinbefore provided can only be brought within four years after the cause of action shall have accrued. The Supreme Court of that state has held that this latter provision does not apply to domestic judgments. Snell v. Rue, 101 N. W. 10. By section 1463 (Cobbey's Ann. St. 1903) of the statutes of our sister state, it is provided that dormant judgments may be revived in the same manner as is provided for reviving actions before judgment, and the courts of that state have held that a dormant judgment has validity and may be revived or action brought thereon as of debt. Wright v. Sweet, 10 Neb. 190, 4 N. W. 1043;Furer v. Holmes, 102 N. W. 764;Gillespie v. Switzer, 43 Neb. 772, 62 N. W. 228. Testimony was also given by witnesses qualified to speak to the effect that there was no statute in Nebraska limiting the time within which actions may be brought upon domestic judgments. Indeed, the question now before us was practically settled in David v. Porter, 51 Iowa, 254, 1 N. W. 528, wherein it was held that action might be brought upon a Nebraska judgment which was dormant. See, also, Meek v. Meek, 45 Iowa, 294. Action upon the judgment is not barred by the statutes of Nebraska, and manifestly not barred by the statutes of this state, which permit actions thereon within 20 years from date.

2. We come now to the more serious and only debatable question in the case. Was the judgment obtained by fraud? And, if so, was it such fraud as may be pleaded in defense to an action on that judgment? We have recently had occasion to consider the question as to whether or not false swearing or perjury is such a fraud as will justify the setting aside of a judgment, and, after fully reviewing the authorities and unraveling the apparent confusion in our own cases, came to the conclusion that it was not such a fraud as to justify the setting aside of a judgment obtained thereby. See Graves v. Graves (Iowa) 109 N. W. 708. In view of the discussion to be found in that case, nothing further need be said upon that proposition. The fraud which will justify the settingaside of a judgment must be something extrinsic and collateral to the question examined and determined in the action. As said in Pico v. Cohn, 91 Cal. 129, 25 Pac. 970, 27 Pac. 537, 13 L. R. A. 336, 25 Am. St. Rep. 159: “A decree will not be vacated merely because it was obtained by forged documents or perjured testimony.” See, also, Hilton v. Guyot, 159 U. S. 113, 16 Sup. Ct. 139, 40 L. Ed. 95;Cromwell v. Sac County, 94 U. S. 351, 24 L. Ed. 195. This seems to be the rule in Nebraska, although not so strictly applied as in some other jurisdictions. See Secord v. Powers, 85 N. W. 846, 61 Neb. 615, 87 Am. St. Rep. 474. But in that state the district court rendering the judgment may vacate and modify the same for fraud practiced by the successful party, provided application be made within two years after the judgment is rendered. See sections 602 and 609 of the Code of Civil Procedure of that state.

The defendant learned of the alleged fraud in the procurement of the judgment in May of the year 1896, and the judgment was affirmed on appeal in the Supreme Court of Nebraska February 4, 1896. Defendant took no steps to set aside that judgment for the alleged fraud, but waited until sued in the courts of this state to set it up as a defense to the judgment. If the judgment be void for want of jurisdiction in the court pronouncing it, of either the parties or the subject-matter, it may, of course, be attacked at any time or in any proceedings whereby it is sought to be enforced; and the same may be true as to any fraud which renders it void, and not simply voidable. We shall assume that the law of Nebraska upon this proposition is similar to our own, as we have no evidence to the contrary. Now, it is well settled by the authorities everywhere that a judgment cannot be collaterally attacked for fraud, unless that fraud be such as to render the judgment absolutely...