Opinion
Decided January 13, 1930.
Judgment — Vacating default — Vendor's failure to disclose resale price, not fraud warranting vacation — Section 11631, General Code — Fraud must consist of extrinsic acts collateral to matter adjudicated — Court determines existence of ground for vacation and validity of defense — Only prima facie showing of defense required, when — After default vacated, trial on merits is for jury, when.
1. Failure of vendor, suing for breach of contract to trade property, to disclose resale price of premises under subsequent exchange contract did not constitute fraud warranting vacation of default judgment against first vendee (Section 11631, paragraph 4, General Code).
2. "Fraud" for which courts of equity will set aside judgment must consist of extrinsic acts collateral to matter actually tried (Section 11631, paragraph 4, General Code).
3. In suit to vacate judgment, court determines existence of ground for vacation and validity of defense (Section 11631, General Code).
4. Only prima facie showing of defense is required, provided ground for setting aside default judgment is shown (Section 11631, General Code).
5. Where court has set aside default judgment on finding ground for vacation and prima facie defense, trial on merits is for jury, if jury case is presented (Section 11631, General Code).
ERROR: Court of Appeals for Hamilton county.
Mr. Lester B. Butterworth, for plaintiff in error.
Mr. Charles H. Elston, for defendant in error.
This case comes into this court on error from the court of common pleas of Hamilton county, wherein judgment was rendered in favor of the plaintiff below, Aaron Einhorn, defendant in error in this court.
Einhorn filed a petition June 30, 1928, in the court of common pleas of Hamilton county, Ohio, to vacate a judgment rendered in the court of common pleas on the 10th day of February, 1928. In the proceeding in which this judgment was rendered, Frank N. Minetti, plaintiff in error here, had commenced an action against Einhorn upon a contract, praying for a judgment in the sum of $1,539.50. An answer was filed to this petition.
In the petition in the instant cause it is alleged that neither the plaintiff Einhorn, nor his attorney, had notice of the setting of said cause for trial, and that "default" judgment was taken against Einhorn without notice to him or his attorney, although Einhorn had filed an answer.
A demurrer was filed to this petition, and the demurrer was overruled. Thereafter, an answer was filed by Minetti, admitting that he had commenced an action against Einhorn in March, 1927, and had recovered a "default" judgment against him in February, 1928, for the full amount prayed for, to wit, $1,539.50. A general denial was filed as to all other allegations of the petition.
The court heard evidence upon the questions whether, under the statute, ground existed for vacation, and whether there was a prima facie defense, and found in the affirmative on both of these questions. An entry was then made by the court, suspending the original judgment until the final hearing of the case. A motion for a new trial was thereafter overruled.
The controlling question presented by this proceeding is: Was a ground for vacation of the original judgment alleged and proved? Such ground must be found in Section 11631, General Code, this not being a proceeding in equity to set aside a void judgment.
The petition filed in the case, purporting to set forth ground for vacation, alleges no ground under the statute. An amended petition was filed after the entry of the court suspending the original judgment, which alleged, in addition to the statements of the petition, that the original judgment was obtained through the fraud of Minetti, plaintiff in the original proceeding, in that the plaintiff failed to disclose at the time of taking the so-called "default" judgment that the sale price of the premises involved in the original action was $12,250 instead of $10,500, and that, if such fact had been testified to, the judgment rendered in the original case could not have been rendered against Einhorn.
It is further alleged that the plaintiff Minetti in the original proceeding offered in evidence a contract which indicated that the sale price of the premises traded was $10,500, when in truth and fact said amount was not the correct sale price.
It is further alleged that Einhorn has a valid defense, in that the plaintiff Minetti, in the original proceeding, actually suffered no loss when he traded the property covered by the original contract. The amended petition, giving it full force and effect, as if filed previous to the judgment of the court suspending the original judgment, attempts to bring the grounds for vacation within clause 4 of Section 11631, General Code, to wit: "For fraud practiced by the successful party in obtaining a judgment or order."
The evidence showed that Einhorn, defendant in the original case, failed to carry out his contract with Minetti to purchase a certain piece of real estate; that thereafter Minetti traded the property, and it is in evidence that he placed a valuation upon this property greater than that mentioned in the contract of sale with Einhorn. Minetti, however, testifies that the property which he took in trade was of less value than the property which he had contracted to sell to Einhorn, and that he lost the amount he claims, to wit, $1,539.50, in the transaction.
Even granting that the evidence does show that Minetti placed a larger valuation upon the property in making the trade with his vendee than that mentioned in the contract with Einhorn, such evidence is not conclusive of fraud or perjury, in that such valuation may have been the ordinary course followed by a vendor of property in inflating the value of his property to as large an extent as possible. However, giving this testimony the most favorable aspect to the defendant in error, under the decision in the case of Michael v. American National Bank, 84 Ohio St. 370, 95 N.E. 905, 38 L.R.A. (N.S.), 220, the plaintiff in this instant proceeding, seeking vacation, cannot prevail. The first and second propositions of the syllabus in that case are:
"1. Where a cause has proceeded to trial and final judgment, a court of equity will not vacate or open up the judgment and grant a new trial of the same issue determined in the former hearing, in the absence of fraud or undue advantage by the prevailing party.
"2. The fraud or undue advantage for which a court of equity will set aside a judgment or decree, must consist of extrinsic acts outside of and collateral to the matter actually tried by the first court and not related to the matter concerning which the judgment or decree was rendered."
While the Michael case was a proceeding in equity to set aside a judgment on the ground of fraud, the case is unquestionably an authority for a proceeding under Section 11631, General Code. The ground for vacation in the instant proceeding is related to the matter concerning which the judgment in the original proceeding was rendered. As it has been repeatedly said before by courts of this state, if judgments were vacated upon an allegation of perjured testimony, there would be no stability to any judgment, and no end to litigation. While, as has also been said in such cases, an injustice may be suffered by the party seeking vacation, it is more important that the litigation be ended and stability given to a judgment than that the grievance of an individual should be redressed. Further, a remedy under paragraph 10, Section 11631, General Code, is indicated in Mason v. Tremayne, 115 Ohio St. 398, 154 N.E. 732.
Counsel for plaintiff in error urges that the court should have submitted the question of the validity of the defense to a jury. It is for the court to determine the existence of the ground and the validity of the defense, and only a prima facie showing of a defense is required. A jury is not demandable on either of these issues after the court has concluded that there is a ground for vacation and a prima facie defense. The effect of the original judgment may be suspended pending the final adjudication of the case, and, if the basic case is of such character as to require the intervention of a jury, then the trial upon the merits should be to a jury, unless waived. Bulkley v. Greene, 98 Ohio St. 55, 58, 59, 120 N.E. 216.
Thus viewing the case, the judgment of the court of common pleas will be reversed, and, as no ground has been alleged in either the petition or the amended petition, bringing the case within the relief provided for in Section 11631, General Code, judgment may be entered for plaintiff in error.
Judgment reversed and judgment for plaintiff in error.
CUSHING, P.J., and HAMILTON, J., concur.