Keith v. Alger

114 Tenn. 1

• Court: Tennessee Supreme Court
• Decided: December 15, 1904
• Status: Published

Opinion

Mb. Justice Neil,

after making the foregoing statement of facts, delivered the opinion of the Court.

1. There is no doubt as we think, that a State court may entertain a bill to restrain the enforcement of a decree or judgment of a federal court on the ground that the latter was procured by fraud. This is an independent right of action, that does not involve a retrial of the issues disposed of in such former cause. It has been held that the federal courts may entertain such a cause of action against a judgment of a State court. The reasons and the authorities on which they are based are fully considered in the case of Marshall v. Holmes, 141 U. S., 589, 12 Sup. Ct., 62, 35 L. Ed., 870; likewise in the case of National Surety Company v. State Bank, 56 C. C. A., 657, 120 Fed., 593, 61 L. R. A., 394. The same reasons control an application in a State court to restrain the enforcement of a decree or judgment rendered by a federal court.

2. While the writer of the present opinion was a member of the court of chancery appeals of this State that court had occasion to consider the nature of the action in the case of Noll v. Chattanooga Company, decided August 28, 1896, in an opinion reported in 38 S. W., 287. In that case the following excerpt from Pico v. Cohn, 91 Cal., 129, 25 Pac., 970, 27 Pac., 537, 13 L. R. A., 336, 25 Am. St. Rep., 159, was quoted Avith approval :

“That a former judgment or decree may be set aside and annulled for some frauds there can be no question,

but it must be a fraud extrinsic or collateral to the questions examined and determined in the action. . . . The reason of this rule is that there must be an end of litigation; and when parties have once submitted a matter, or have had the opportunity of submitting it, for investigation and determination, and when they have exhausted every means for reviewing such determination in the same proceeding, it must be regarded as final and conclusive, unless it can be shown that the jurisdiction of the court has been imposed upon, or that the prevailing party has by some extrinsic or collateral fraud prevented a fair submission of the controversy. Whát, then, is an extrinsic or collateral fraud, within the meaning of this rule? Among the instances given in the books are such as these: Keeping the unsuccessful party away from court by a false promise of a compromise, or purposely keeping him in ignorance of the suit, or where an attorney fraudulently pretends to represent a party and connives at his defeat, or, being regulaidy employed, corruptly sells out his client’s interest.” Citing the case of U. S. v. Throckmorton, 98 U. S., 65, 66, 25 L. Ed., 93, The court of chancery appeals in the Noll Case refused to set aside the decree attacked for fraud. On appeal to this court the decree of the court of chancery appeals was affirmed.

The two cases last referred to (Pico v. Cohn and U. S. v. Throckmorton) are leading cases upon the subject of which they treat, and they are sustained by the very great weight of authority. It would be an idle undertaking, if we should endeavor, within the limits of a judicial opinion, to discuss a tithe of the vast number of cases bearing upon the point. We shall only refer to the following extended notes containing a collection of the authorities bearing upon the various phases of the inquiry. The most extended discussion of the subject which we have encountered is to be found in the very able note to Little Rock, etc., Ry. Co. v. Wells, 54 Am. St. Rep., 218 to 261, inclusive. Other cases and notes in the same series are 25 Am. St. Rep., 159 to 171, containing the above-mentioned case , of Pico v. Cohn, with a note attached thereto; Fealey v. Fealey (Cal.), 43 Am. St. Rep., 111 to 118; Friese v. Hummel (Or.), 46 Am. St. Rep., 610-613; Camp v. Ward (Vt.), 60 Am. St. Rep., 929-933. See, also, Merriman v. Walton (Cal.), 30 L. R. A., 786, and extended note appended thereto; Dowell v. Goodwin (R. I.), 51 L. R. A., 873. See, also, on the general subject of the jurisdiction of equity in regard to injunctions against judgments, an extended note to Jarrett v. Goodnow (W. Va.), 32 L. R. A., 321-329, and note to Jno. V. Farwell Co. v. Hilbert (Wis.), 30 L. R. A., 235-242.

We have several cases in this State, other than Noll v. Chattanooga Company, in which the doctrine is recognized that the fraud complained of must be some matter extrinsic to the issues tried, although the principle is not distinctly formulated therein. Pyett v. Hatfield, 15 Lea, 473; Gaugh v. Henderson, 2 Head, 628; Smith v. Harrison, 2 Heisk., 230; Mathews v. Massey, 4 Baxt., 450-458; Talbot v. Provine, 7 Baxt., 502-507 et seq.; Mabry y. Churchwell, 1 Lea, 416, 432; Haskins v. Rose & Turner, 2 Lea, 708; McDowell v. Morrell, 5 Lea, 278; Boro v. Harris, 13 Lea, 36; Williams v. Pile, 104 Tenn., 273, 56 S. W., 833.

We have been referred by counsel for complainants to the cases of Randall v. Payne, 1 Tenn. Ch., 137, 142 et seq., and Maddox y. Apperson, 14 Lea, 596 as holding a contrary doctrine.

There is nothing in the first of these cases which is necessarily in conflict with the rule formulated in Noll v. Chattanooga Co., supra.

In the second case referred to, in the discussion of the learned justice who delivered the opinion of the court, there seems to be a disposition to repudiate the doctrine laid down in United States v. Throckmorton, supra; but, when the case is closely examined, it will be seen that the objections stated consist not so much in a denial of the rule, as in a criticism of its want of definiteness, and of its uncertainty in practical application. It is true that courts will constantly experience embarrassment in deciding Avhether this or that fraud is extrinsic or intrinsic. While it is very clear that some are of the former character and others of the latter, there may be various occurrences which it will be found difficult to assign to one or the other classification; but the difficulty suggested, Ave think, cannot be soundly urged as a sufficient objection to the existence of the rule. It is perfectly clear that no one should be allowed to enforce a judgment which was procured by any of the fraudulent practices catalogued in Pico v. Cohn, supra, and United States v. Throckmorton, supra, or other similar fraudulent practices; but it is equally clear that there must be at some time an end of litigation, and that the parties to a record, or the privies thereto, should not, in general, be allowed to retry the same issues after final judgment and the exhaustion of correctory and appellate proceedings. Carried to its ultimate, there would be no end to such retrials. The second case could be retried by a third, and the third by a fourth, and so on ad infinitum, and nothing would ever be settled.

The case of Marshall v. Holmes, supra, is also cited as an authority in opposition to the rule above announced. An examination of the statement of facts preceding the opinion in that case will show that the ground of relief asserted against the judgment was, in effect, that the plaintiff in the judgment attacked in that case had entered into a conspiracy with the agent of the petitioner to defraud the petitioner by Means of a forged letter; that the petitioner was not present at the original trial, had no knowledge of the forged letter or of its use on the trial, and did not discover any of these matters until too late to make use of them, otherwise than by the petition to set aside the judgment. This is the substance of the statement, as we construe it, and from these facts it appears there was really a fraud extrinsic to the issues in the' cause for which relief might have been had, under the rule as laid down in the Throckmorton case. It is true that Mr. Justice Harlan, in laying down the basis of the court’s action, while referring to the Throckmorton case, does not place the decision, in terms, upon that rule, but upon the broader rule “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.” Still there is no criticism of the rule as announced in the Throckmorton case, and, as already stated, the facts on which the decision was rested bring it within the rule of that case. At all events, we are of the opinion that the rule as stated in the Throckmorton case is the one supported by-the weight of authority and by sound reason, when judgments are attacked for fraud only.

3. While we are of opinion that the facts stated in the bill concerning the fraud' charged fall within the designation of matters extrinsic to the issues in the original cause, in that it appears from the allegations of the bill that Governor Alger did not content himself with the mere failure to divulge th.e fact that he had conveyed the land to Governor Bliss, but took active steps to conceal such conveyance, in receiving the money for the taxes from Governor Bliss and paying them through his own agent, J. C. McCaul, thus holding out to the world that be was still tbe owner of tbe property, instead of bis vendee, and also in bolding out Frank Bucbkosky as bis agent for tbe lands, when be was in fact tbe agent of Governor Bliss, thereby creating tbe impression that be still owned tbe lands, still complainants are not entitled to relief, tinder tbe facts stated in tbe bill, because they do not show any meritorious defense to tbe original cause of action. They do not really deny that tbe frauds were practiced as charged in tbe bill filed by Governor Alger in tbe United States circuit court. Likewise, they do not show that they were injured by tbe fraud now complained of, committed on tbe part of Governor Alger, since it appears from the bill that, notwithstanding tbe alleged conveyance to Governor Bliss, a rescission was really effected, and tbe land was sold in tbe proceedings referred to as tbe land of tbe Anderson estate, and they thereby got tbe full benefit of its value. It is true, under tbe allegations of tbe bill, they lost tbe technical advantage arising from tbe fact that tbe conveyance bad been made by Alger to Bliss. It is possible that if tbe existence of such conveyance bad been discovered in time, and proper pleadings bad been filed, bringing tbe matter to tbe attention of tbe court, and no further facts bad appeared, other than those appearing in tbe bill, it would have been decided by tbe United States circuit court, and- on appeal by tbe circuit court of appeals, that Alger bad lost tbe right to a rescission by such act of ratification; still it does not follow from this that tbe concealment of the evidence referred to was such a fraud as would justify this court in setting aside the former judgment or decree as one obtained by fraud. At last, in the light of events which have since followed, and which are shadowed forth in the bill, it is perceived that the conveyance was not intended really as a ratification of the fraud which had been practiced by Anderson upon Alger, but was merely a means of conveying to Bliss Alger’s interest in the litigation. Moreover, as the estate of Anderson has received the full benefit of the land, under the allegations of the bill, by reason of the sale made of it under, the decree attacked, it is perceived that the estate of Anderson was not, in a legal sense, injured by the fraud; that the claim now put forth is purely technical and is without any legal merit. In order to entitle a complainant to relief under the class of bills to which the present one belongs, it must appear that such complaining party has a meritorious case, and that he was injured by the fraud. Mathews v. Massey, 4 Baxt., 450-458; Little Rock & Ft. S. Ry. Co. v. Wells (Ark.), 33 S. W., 208, 30 L. R. A., 560, 54 Am. St. Rep., 222; White v. Grow, 110 U. S., 183, 4 Sup. Ct., 71, 28 L. Ed., 113.

4. Relief must also be denied to the complainants on the ground that their first duty was to apply to the court in which the case was tried by a proceeding for the correction of errors; that they have made such application by a petition for leave to file a bill of review for newly-discovered evidence; and that relief has, according to the forms obtaining in that jurisdiction, been denied to them. See the full citation of authorities in note to Jarrett v. Goodnow, 32 L. R. A., 326-329; also Merriman y. Walton, supra, 30 L. R. A., 793, and authorities cited.

It is no objection to the eonclusiveness of the proceedings in the United States circuit court of appeals instituted to obtain relief that those proceedings were not conducted according to the forms of practice obtaining in our own courts in similar matters. Hilton v. Guyott (C. C.), 42 Fed., 252. And see Telford v. Brinkerhoff, 163 Ill., 443, 45 N. E., 156.

It is insisted for complainants that they should not be bound by the adjudication, because the truth of the matters contained in the petition filed in the circuit court of appeals was settled against them on ex parte affidavits, .and they had no opportunity of examining and cross-examining witnesses upon the matters involved. But the circuit court of appeals placed its action upon two grounds, one of which was that the facts now before us, as set forth in the present bill, did not justify the granting of the relief sought.

. It is perhaps true that the action of a court upon a bill of review could not in all cases be treated as res adjudieata of matter proper for a bill attacking the same decree for fraud in its procurement, and that there may be some cases wherein a bill of the latter description will be entertained, even after the refusal of a bill of review, or other effort to obtain a retrial in the original action, because of inadequacy of such relief; but we do not think that the present case falls among such exceptional instances, since the circuit court of appeals had power to grant complete relief, had the facts stated authorized such relief, and since, further, the basis of the court’s action on the present application must be the same as that which controlled the circuit court of appeals in its action upon the face of the petition in that cause, viz., the absence of any real or legal injury inflicted upon them by the fraud charged, and the want of any real equity in complainants’ claim.

It results that both assignments must be overruled and the judgment of the chancery court dismissing the bill affirmed.