Summary
In Brownell v. Snyder (122 App. Div. 246), relied upon by the learned court at Special Term (67 Misc. Rep. 267), the liability of a surety on an undertaking given on appeal in an action followed the affirmance of the judgment, and, of course, he could resist liability on the ground of fraud and collusion resulting in the affirmance.
Summary of this case from Hall v. HallOpinion
November 13, 1907.
Clark L. Jordan, for the appellant.
J. Keck, for the respondent.
The answer in alleging a conspiracy between this plaintiff and John M. Snyder to suffer judgment to be obtained against said Snyder to the end that this defendant, who was surety for said Snyder upon his undertaking on appeal, might be forced to pay the amount of such undertaking, seems to set out a good defense to an action brought to recover such amount. The liability of this defendant upon the undertaking in question is based upon the judgment heretofore obtained against said John M. Snyder, and a judgment ordinarily cannot be questioned in a collateral proceeding. But the rule as to collateral attack is subject to the exception that fraud or collusion in obtaining the judgment may always be shown collaterally by strangers to the judgment who are injured thereby. "A stranger may collaterally impeach a judgment which stands in his way, by plea and proof of fraud in obtaining it, because this is his only means of availing himself of the fraud." (17 Am. Eng. Ency. of Law [2d ed.], 849.) And such has always been the rule in this State. In the case of bonds for costs, etc., it is said in an early decision ( Douglass v. Howland, 24 Wend. 35, 55) that "the surety means to be concluded, always saving the right, as the law must in every case where a suit is between third persons, to contest the proceeding on the ground of fraudulent collusion, for the purpose of charging the surety." In a later case it is held that "fraud vitiates a judgment, as well as every contract tainted by it," and such fraud may be shown collaterally by sureties. ( Annett v. Terry, 35 N.Y. 256, 260.) "Fraud and imposition invalidate a judgment as they do all acts, and may be alleged, whenever the party seeks to avail himself of the results of his own fraudulent conduct by setting up the judgment the fruits of his fraud." ( Mandeville v. Reynolds, 68 N.Y. 528, 543.) " In the absence of fraud or collusion between the executor and the legatee, the decree of the surrogate is conclusive upon the sureties. It binds the principal and the sureties alike, and cannot be impeached in a collateral proceeding." ( Scofield v. Churchill, 72 N.Y. 565, 570. See, also, Bridgeport Ins. Co. v. Wilson, 34 id. 275, 281; Annett v. Terry, 35 id. 256; Conner v. Reeves, 103 id. 527, 530; Chandler v. Thompson, 120 Fed. Rep. 940, 941.) It accordingly follows that an allegation of conspiracy and collusion in obtaining the judgment in question may properly be pleaded as a defense to an action upon an appeal undertaking given to secure the payment of such fraudulent judgment.
Nor was the trial court justified in holding as matter of law that the defendant had failed to make a case for the jury upon the defense of collusion. At the date of the trial between Brownell, this plaintiff, and John M. Snyder, in Justice's Court, John M. Snyder was residing with his son, the defendant, Charles M. Snyder. He contested the action and judgment was recovered for only fifty dollars. Prior to the trial on appeal in County Court John M. Snyder left the defendant's residence and went to live with the plaintiff Brownell. When the case came on for trial in County Court he did not appear or present any defense. His attorney appeared, but without a client. In County Court judgment was obtained for $196.79 damages, besides a large amount of costs. The declarations of this plaintiff are sworn to, from which the jury might find that he and his father-in-law had united to make defendant pay a judgment, and as large a judgment as could be obtained. In this trial the defendant offered proof that at the time John M. Snyder went to live with the plaintiff he had sufficient property with which he could have paid the judgment in Justice's Court, but that such property had been turned over to the plaintiff by John M. Snyder, who was residing with him, for board accruing subsequent to the entry of the judgment in Justice's Court. While this evidence was rejected, it was clearly competent, as bearing upon the charge made by the defendant that the plaintiff and John M. Snyder had colluded for the purpose of charging the defendant with the full amount of this bond. I have no doubt that the evidence was sufficient to authorize the jury to find collusion. The judgment should, therefore, be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred, except COCHRANE, J., dissenting.
Judgment reversed and new trial granted, with costs to appellant to abide event.