Shary v. Eszlinger

• Decision Date: 02 March 1920
• Docket Number: 1915
• Citation: 176 N.W. 938,45 N.D. 133
• Court: North Dakota Supreme Court

176 N.W. 938

45 N.D. 133

JOHN H. SHARY, Respondent, v. CHRISTIAN ESZLINGER and Otillia Eszlinger, Appellants

No. 1915

Supreme Court of North Dakota

March 2, 1920

From a judgment of the District Court of Logan County, Graham, J defendants appeal.

Reversed.

Reversed and remanded.

Geo. M McKenna and Miller, Zuger & Tillotson, for appellants.

The defense of fraud in the procurement of a sister state judgment is available as a defense upon an action upon such judgment, and that such attack is not collateral and is not contrary to the full faith and credit clause of the Federal Constitution, nor the Statute of 1790. Levin v Gladstin, 142 N.C. 482, 32 L.R.A. (N.S.) 905, 55 S.E. 371, and notes.

It was not incumbent upon the defendants to apply to the Texas court to be relieved of the judgment there obtained. Fleming v. Seligson, 57 Tex. 524; Delhart Real Estate Agency v. Le Masrer, 62 Tex. Civ. App. 579.

The facts pleaded in the answer herein, if addressed to the Texas court, would have authorized and made it the duty of that court to afford the defendants adequate relief. Mottu v. Davis, 151 N.C. 237, 65 S.E. 969.

It is sufficient to annual a judgment or restrain the enforcement thereof if the successful party has kept the unsuccessful party away from court by a false promise of a compromise. United States v. Throckmorton, 98 U.S. 61, 25 L.Ed. 93; Vance v. Burbank, 101 U.S. 514, 25 L.Ed. 929; Wilson v. Anthony, 72 N.J.Eq. 836, 66 A. 907; Snyder v. Critchfield, 44 Neb. 66, 62 N.W. 306; Keeler v. Elston, 22 Neb. 310, 34 N.W. 891; Payne v. O'Shea, 84 Mo. 129; Crim v. Crim, 162 Mo. 544, 54 L.R.A. 502.

The recent case of Levin v. Gladstin, 32 L.R.A. 905, is fully annotated and contains practically all the cases bearing upon the question before the court.

If the judgment was fraudulently obtained, then every defense which the maker of the notes had as against the bank might properly be shown upon the trial. Bank of Sharron v. Anderson (Wyo.) 48 P. 197; Same case, 53 P. 280; Drinkard v. Ingram, 21 Tex. 650.

R. H. Sherman, Arthur B. Atkins, Scott Cameron and E. T. Burke, for respondent.

The plea of nil debit is not good in an action brought in one state upon judgment rendered in another, after personal service of process upon the judgment debtor. Mills v. Duryee, 7 Cranch, 481, 3 L.Ed. 411.

A plea to an action upon a judgment rendered in a court of competent jurisdiction in a sister state, in a suit contested by the defendant, alleging that judgment was procured by the fraud of plaintiff is bad on demurrer. Christmas v. Russell, 5 Wall. 290, 18 L.Ed. 475; Maxwell v. Stewart, 21 Wall. 71, 22 L.Ed. 564; Simmons v. Saul, 138 U.S. 439, 34 L.Ed. 1054.

The Texas judgment is merely voidable, and not void, and the attack must therefore be made in a direct proceeding, and not collaterally. Mikeske v. Blum, 63 Tex. 46; Murchison v. White, 54 Tex. 46; Fleming v. Seligson, 57 Tex. 531; Williams v. Haynes, 77 Tex. 284; Marin v. Augendahl, 32 N.D. 536.

A judgment rendered by a court of competent jurisdiction may be impeached for fraud only in a direct proceeding brought for that purpose in the court in which it was rendered. McDonald v. Drew, 64 N.H. 547, 15 A. 148.

CHRISTIANSON, Ch. J. BIRDZELL and ROBINSON, JJ., concur, BRONSON, J., GRACE, J., (specially concurring).

OPINION

CHRISTIANSON, Ch. J.

This is an action upon a judgment rendered in favor of the plaintiff and against the defendants by the district court of Hidalgo county, Texas. A verdict was directed in favor of the plaintiff and defendants have appealed.

The defense pleaded was: that the defendants by reason of the fraud and deceit of the plaintiff were prevented from appearing and defending in the Texas court; that the judgment rendered by said court against the defendants was obtained by reason of the fraudulent acts of the plaintiff; and that defendants had a complete defense to the action, which defense they were prevented from asserting by reason of plaintiff's said fraudulent acts.

Upon the trial, the defendants offered to prove such defense, but the trial court ruled that by virtue of the full faith and credit clause of the Federal Constitution (U. S. Const. art. 4, § 1) the judgment could not be assailed on the ground that it was procured by fraud. The correctness of such ruling is challenged on this appeal.

The provision that "full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state" was intended to prevent discrimination by the several states against the citizens and public authority and proceedings of other states. Cooley, Const. Lim. 7th ed. pp. 36-41. In his work on the Constitution, Story suggests that the motive for the full faith and credit provision in the Federal Constitution "must have been, 'to form a more perfect union,' and to give to each state a higher security and confidence in the others by attributing a superior sanctity and conclusiveness to the public acts and judicial proceedings of all. There could be no reasonable objection to such a course. On the other hand, there were many reasons in its favor. The states were united in an indissoluble bond with each other. The commercial and other intercourse with each other would be constant and infinitely diversified. Credit would be everywhere given and received; and rights and property would belong to citizens of every state in many other states than that in which they resided. Under such circumstances, it could scarcely consist with the peace of society, or with the interest and security of individuals, with the public or with private good, that questions and titles, once deliberately tried and decided in one state, should be open to litigation again and again, as often as either of the parties, or their privies, should choose to remove from one jurisdiction to another. It would occasion infinite injustice, after such trial and decision, again to open and re-examine all the merits of the case." Story, Const. 5th ed. § 1309.

Story further says that the true intent and meaning of the full faith and credit clause, as applied to judgments, is that "it gives them the same faith and credit as they have in the state court from which they are taken. If in such court they have the faith and credit of the highest nature, that is to say, of record evidence, they must have the same faith and credit in every other court. So, that Congress have declared the effect of the records, by declaring, what degree of faith and credit shall be given to them. If a judgment is conclusive in the state where it is pronounced, it is equally conclusive everywhere. If re-examinable there, it is open to the same inquiries in every other state." Story, Const. 5th ed. § 1313.

The views thus expressed by Story were afterwards approved and adopted by the Supreme Court of the United States. See M'Elmoyle v. Cohen, 13 Peters 312, 10 L.Ed. 177. See also Hampton v. M'Connel, 3 Wheat. 234, 4 L.Ed. 378. In Embry v. Palmer, 107 U.S. 3, 27 L.Ed. 346, 2 S.Ct. 25, which was an action to restrain the enforcement of a judgment of the District of Columbia, when sued upon in Connecticut, on the ground of fraud in procuring the judgment, the court said: "The rule for determining what effect shall be given to such judgments is that declared by this court in respect to the faith and credit to be given to the judgments of state courts in the courts of other states in the case of M'Elmoyle v. Cohen, 13 Pet. 312, 326, 10 L.Ed. 177, 185, where it is said: 'They are record evidences of a debt or judgment of record, to be contested only in such way as judgments of record may be, and consequently are conclusive upon the defendant in every state, except for such causes as would be sufficient to set aside the judgment in the courts of the state in which it was rendered.' The question then arises, what causes would have been sufficient in the District of Columbia according to the law there in force, to have authorized its courts to set aside the judgment recovered there by Embry against Stanton & Palmer?

This is answered by the decision of this court, upon the point in the case of Marine Ins. Co. v. Hodgson, 7 Cranch 332, 3 L.Ed. 362. That was a bill in equity, filed in a court of the District of Columbia, perpetually to enjoin the collection of so much of a judgment at law recovered in the District as was in excess of an amount claimed to be the sum equitably due. The grounds of relief alleged were, that a fraud had been practised upon the underwriters in a valued policy of marine insurance, by an overvaluation of the ship, and that the complainant had been prevented from making the defense at law. Chief Justice Marshall, delivering the opinion of the court, affirming the decree of the court below dismissing the bill, stated the rule as follows:

"Without attempting to draw any precise line, to which courts of equity will advance and which they cannot pass, in restraining parties from availing themselves of judgments obtained at law, it may safely be said that any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party could not have availed himself in a court of law or of which he might have availed himself at law but was prevented by fraud or accident, unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery. On the other hand, it may with equal safety be laid down as a general rule that a defense cannot be set up in equity, which has been fully and fairly tried at law although it may be the opinion of that court that the defense ought to have been sustained at law.' . . .

"This was held to be the law prevailing in the District of Columbia, not by reason of...