Titus v. Wallick

• Decision Date: 27 February 1939
• Docket Number: No. 188,188
• Citation: 306 U.S. 282,83 L.Ed. 653,59 S.Ct. 557
• Parties: TITUS v. WALLICK
• Court: U.S. Supreme Court

306 U.S. 282

59 S.Ct. 557

83 L.Ed. 653

TITUS

v WALLICK.

No. 188.

Argued Jan. 30, 1939.

Decided Feb. 27, 1939.

Messrs. Thomas I. Sheridan, Aaron Frank, and Lewis F. Glaser, all of New York City, for petitioner.

Mr. William M. Summers, of Marietta, Ohio, for respondent.

Mr. Justice STONE delivered the opinion of the Court.

The question for decision is whether the Supreme Court of Ohio, by denying recovery upon a judgment procured by petitioner against respondent in the courts of New York, has failed to accord to the New York judgment the full faith and credit which Article 4, § 1 of the Constitution, U.S.C.A. commands.

Petitioner brought the present suit against respondent in the Ohio Court of Common Pleas upon a judgment recovered by petitioner against respondent in the Supreme Court of New York on May 1, 1934. Transcript of the New York judgment for $389,103, duly authenticated in conformity to the Act of Congress, R.S. § 905, 28 U.S.C. § 687, 28 U.S.C.A. § 687, was filed with the petition in the Ohio court. Defenses interposed by respondent, so far as now material, were that petitioner was not the real party in interest in the Ohio suit and that the judgment had been procured in New York by fraud on the court and on respondent, in that petitioner was not the real party in interest entitled to assert the claim litigated in that suit as required by § 210¢of the New York Civil Practice Act, and that petitioner, in procuring the judgment, suppressed and withheld that fact from respondent and the New York courts.

The Court of Common Pleas, after a trial without a jury, sustained these defenses and gave judgment for respondent, which the Ohio Court of Appeals for Franklin County affirmed, with an opinion in which it ruled that the judgment sustaining the defenses did not deny the New York judgment the full faith and credit required by the Constitution. Appeal to the Supreme Court of Ohio assigning as error the denial of full faith and credit to the New York judgment was dismissed on the ground that the case involved 'no debatable constitutional question'. 133 Ohio St. 612, 15 N.E.2d 140. We granted certiorari October 10, 1938, 305 U.S. 585, 59 S.Ct. 80, 83 L.Ed. —-, the constitutional question presented by the petition being of public importance and the federal right asserted having been ruled upon and denied by the highest court of the state. Matthews v. Huwe, 269 U.S. 262, 46 S.Ct. 108, 70 L.Ed. 266; Tumey v. Ohio, 273 U.S. 510, 515, 47 S.Ct. 437, 438, 71 L.Ed. 749, 50 A.L.R. 1243.

Petitioner brought the New York suit in December, 1925, alleging that he was the owner of a quarter interest in two hundred and fifty shares of the stock of an Ohio corporation which respondent here, the defendant there, had fraudulently appropriated to his own use. The relief sought was that respondent be directed to deliver to petitioner certificates of stock representing his interest in the corporation and to account for the dividends and earnings on the stock received by respondent. Respondent appeared personally and defended the suit. It was twice tried in the Supreme Court of New York and was five times before the Appellate Division of the Supreme Court, 222 App.Div. 17, 225 N.Y.S. 263; 277 App.Div. 789, 237 N.Y.S. 908; 235 App.Div. 662, 255 N.Y.S. 905; 240 App.Div. 818, 266 N.Y.S. 969; 244 App.Div. 789, 280 N.Y.S. 969, and once before the New York Court of Appeals, 260¢n.Y. 519, 184 N.E. 75, which affirmed a judgment establishing the liability of respondent. An accounting, at the end of nine years of litigation, resulted in the final judgment sued upon, which was affirmed by the Appellate Division. 244 App.Div. 789, 280¢n.Y.S. 969.

The present record discloses that after entry of this judgment London Wallick, a brother of respondent, brought suit in the Supreme Court of New York to recover from petitioner a share of the judgment pursuant to a contract alleged to have been entered into by him with London Wallick on or about November 23, 1925. In resisting a motion made in that suit for an injunction restraining petitioner from disposing of the judgment or its proceeds, petitioner prepared and filed an affidavit reciting that on or before November 23, 1925, he had informed London Wallick that he had already assigned his interest in the claim against respondent to his wife and to Walter Titus, his brother, and asserting that 'it does not lie within the jurisdiction of this court to enjoin what has already been accomplished'.

The assignment by petitioner and a later reassignment of the claim to him were introduced in evidence in the present suit. The assignment, dated March 31, 1924, purported to 'sell, assign, transfer and set over unto' Walter Titus 'any and all claims' which petitioner then had against respondent. The reassignment, described by its terms as an 'Agreement', bears date December 1, 1925, prior to the suit brought by petitioner against respondent in New York. It recites that the earlier assignment was made upon an oral agreement that Walter Titus was to 'use any funds that might be derived' from the claim to the two hundred and fifty shares of stock to pay certain indebtedness of petitioner and that petitioner 'wishes to institute an action against' respondent 'to recover said stock.' It states that Walter Titus 'does hereby sell, assign, transfer and set over' to petitioner 'all his right, title and interest' in the claim and appoints petitioner his attorney to collect the claim. It further recites an agreement between the assignor and petitioner that the latter will turn over the proceeds of the claim to the assignor, who agrees, after paying the expenses of collection, to pay over one-half of the net recovery to petitioner's wife, to discharge certain indebtedness of petitioner, and to pay the balance to him.

The Ohio Court of Appeals disagreed with the conclusion of the trial court that petitioner's affidavit in the London Wallick suit conclusively established that petitioner had no interest in the claim prosecuted against respondent in New York. It held that his interest was to be ascertained by examination of the reassignment from Walter Titus to petitioner. But interpreting that document in the light of the New York law it concluded that the reassignment was no more than a power of attorney authorizing petitioner to collect the claim in behalf of Walter Titus and did not operate as an assignment to vest any right or interest in petitioner upon which he could maintain suit in the New York Courts. Upon examination of petitioner's affidavit indicating, as the court thought, that petitioner had construed the reassignment correctly as not transferring to him any right or interest in the claim against respondent, it accepted the affidavit as evidence that petitioner had fraudulently prosecuted the New York suit against respondent with knowledge that he was not entitled to maintain it. The court accordingly affirmed the judgment of the trial court denying recovery, on the ground that the New York judgment, impeachable there for the fraud, was to the same extent impeachable in Ohio.

By R.S. § 905, 28 U.S.C. § 687, 28 U.S.C.A. § 687, enacted under authority of the full faith and credit clause, Article 4, § 1 of the Constitution, the duly attested records of the judgments of a state are entitled to 'such faith and credit * * * 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 jurisdiction of the New York court over the subject matter and the person of respondent, established prima facie by the present record and the duly authenticated record of the judgment, is not questioned. But respondent argues, as the state court held, that under the Constitution and Act of Congress the judgment is entitled to no more credit in Ohio than is accorded to it in New York and that in New York the judgment is impeachable for petitioner's fraud in prosecuting the suit, knowing that he had no interest in the cause of action sufficient to enable him to maintain it.

The right asserted by petitioner to have the New York judgment enforced in the courts of Ohio is one arising under the Constitution and a statute of the United States. And since the existence of the federal right turns upon the legal effect of the proceedings in New York and the validity of the judgment there, the rulings on those points by the Ohio court are reviewable here. Adam v. Saenger, 303 U.S. 59, 64, 58 S.Ct. 454, 457, 82 L.Ed. 649. While they involve questions of local law and are of a character such that this court ordinarily reexamines them with deference after they have been passed upon by a state court, its determination cannot be accepted here as decisive if the constitutional command is to be observed, especially as the decision of the state court rests not on the law of its own state or matters...