Opinion
December Term, 1897.
Clarence E. Akin and W.E. Kisselburgh, Jr., for the appellants.
James C. Fursman, for the respondent.
Respect for judicial decisions, stability to rights of persons and of property, wise public policy, and the public and private necessity that litigation should be terminated, all require that, as a general rule, the decision and judgment of a court as to any matter within its jurisdiction should be conclusive upon the parties to it and that any error in it should be corrected by motion or appeal in the action itself.
Like all other general rules, however, this rule is subject to exceptions.
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.)
It may be well to say here that most of the cases wherein the question of fraud invalidating a judgment has been discussed are cases where attempts have been made in actions brought for that purpose, to vacate or set aside judgments; but I cannot see that any different principle is applicable to an affirmative action to set aside a judgment from that which applies to a defense asserting the same matter against the enforcement of such a judgment; the practical result is the same in each case, and my discussion of the case proceeds upon that assumption.
The fraud for which a judgment will be set aside is one in the concoction of the judgment. (Story's Eq. Juris. § 1575; Ross v. Wood, 70 N.Y. 8.)
The fraud and imposition relied upon here as entering into the concoction of the judgment is not that the plaintiff in the former action did not disclose the fact of payment, but that it affirmatively asserted that the note had not been paid and made the person who paid it a party to the record.
The fact of the payment of the note, as now asserted by the appellants, of course is a defense that could have been asserted in the former action. Whether it could have been proved under the pleadings in that action, I will not now stop to consider; assume that it could not have been proved, still that alone does not relieve the appellants.
If the pleadings were not in form such as to permit them to prove the facts, that is their fault, and the court cannot remedy it now; that should have been cared for in the former action.
"Equity will not interfere to set aside proceedings in an action in another court upon charges of fraud which could have been tried and decided in that action or where relief is open in the action to the complaining party by motion, appeal or otherwise." ( Sanders v. Soutter, 126 N.Y. 193.)
But it is said that at that time the appellants were in ignorance of the facts, and, therefore, could neither plead nor prove them.
"It is not sufficient to authorize the interference of the court that it is shown that * * * the defendant omitted to avail himself of his defense, if before the judgment was rendered the facts were known or might by the exercise of reasonable diligence have been ascertained by him. It is the duty of a defendant to make his defense, if he has any, when he is sued, and if he omits to do it, he is in general concluded by the judgment." ( Stilwell v. Carpenter, 59 N.Y. 414.)
Again it has been said that, "Ignorance of the facts constituting the defense does not excuse the omission of the party to make it nor entitle him to the aid of equity, unless it can be shown that he could not have acquired the information by diligent and careful labor in preparing the cause for trial.
"The rule is inflexible that a party seeking the aid of a court of equity must show diligence, and that the obstacles which prevented him from maintaining his legal rights could not have been overcome or avoided by any reasonable care or diligence on his part." ( Mayor v. Brady, 115 N.Y. 599, and cases cited.)
Could the facts now asserted by the appellants have been ascertained by diligence in preparing for their defense? It is apparent from the answers they interposed in the former action that they had been in some way apprised that the bank was not then the owner of the note, but that it was really owned by Phillips and Gardiner; for they asserted in such answers that they were informed and believed such to be the case.
And such would have been the case if the bank had been paid in the manner now claimed by the appellants. Conceding that they had no actual and full knowledge of the true state of facts, still from their sworn answers they had information, which they believed, amply sufficient to put them upon inquiry, and it would have required no great diligence in preparing for trial, or upon the trial itself, to ascertain the facts; but, apparently, after putting in their answers they ceased all effort to defend, not even appearing upon the trial to examine the plaintiff's witness or witnesses, but permitting the action to go by default.
It seems to me that they have utterly failed to show that, by the exercise of diligence, they could not have discovered, before the trial of the former action, the existence of the facts which they now assert constitute the fraud that entered into the concoction of the judgment.
Without discussing what effect the acquiescence of the appellants in the judgment for so many years after they claim they were apprised of the fact of the payment to the bank should have, it seems to me that, for the reasons above set forth, the appellants ought not to be permitted to question the validity of the judgment sued upon, and that, therefore, the judgment and order appealed from should be affirmed.
All concurred.
Judgment and order affirmed, with costs.