165 S.W.2d 155 | Ky. Ct. App. | 1942
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *670 Reversing.
The joint appeals are from judgments dismissing petitions for new trials, brought under Section 518, subsection 4, of the Civil Code of Practice, upon the ground of fraud practiced by the successful party in obtaining judgments dismissing as settled two actions for damages. The new suits and the appeals are against the defendants in the tort actions and their attorneys; also against plaintiff's attorneys of record in those cases. The questions are whether an order overruling a motion to set aside an original judgment from which no appeal was taken is a bar to the maintenance of a suit for a new trial under Section 518 of the Code, and, if not, whether the *671 plaintiffs proved their cases. The court had sustained demurrers to the pleas in bar but when the cases were submitted on the evidence the court (a different judge presiding) set aside the former orders and ruled that the orders on the motions to vacate the original judgments were res adjudicata of these proceedings. The court also ruled that the plaintiffs had not proved fraud in obtaining the judgments.
The essential record may be summarized as follows: An alleged roadhouse gambling establishment in Campbell County was destroyed by an explosion and fire of incendiary origin on the night of February 3, 1936. Carl Fillhardt was living in the building as a caretaker and an infant, Mary Lou Rardin, was in his home. The child died from burns and injuries. One man pleaded guilty to murder and two others were convicted, all being sentenced to life imprisonment. Whitfield v. Commonwealth,
These suits for new trials were later filed. The defendants traversed the allegations of the petitions, pleaded that Lester and Riedinger had had full authority to settle the cases; and, further, that the plaintiffs were estopped from maintaining these suits by filing the motions to set aside the orders dismissing the actions, having elected to proceed in that manner. It is noted that the answers are signed by Lester and Riedinger as attorneys for the defendants and that they continue to represent them in opposition to their former clients whom they and others are charged with defrauding.
The general construction of Section 518 and accompanying provisions of the Code authorizing proceedings in the trial court to vacate or modify a judgment after the expiration of the term, as they have been related to a condition like the one at bar, is given in Commonwealth *674
ex rel. v. Weissinger, Judge,
"We are of the opinion that in every action or proceeding pending in a court of justice, by whatever name it may be called, and without regard to the purpose of it, if either party is prevented by fraud, casualty, or misfortune from presenting his claim or defense, or from prosecuting an appeal from a judgment against him, if an appeal is allowed, he may have relief under Section 518 of the Code, unless the right to secure relief under this section is denied by express statute or necessary implication. It cannot be tolerated that by the judgment of a court of justice a party who is without fault and who has not been guilty of laches shall by fraud, casualty, or misfortune be denied the privilege to assert his claim or defense or the opportunity to prosecute an appeal from a judgment against him. Section 518 of the Code was intended to and does furnish a remedy whereby injustice and wrong may be prevented in the course of a judicial or other proceeding pending in court, and we want to make it broad enough to embrace every state of case in which injustice would be done except for the remedy which it affords."
However, this declaration of the broad scope of the proceeding is thus qualified:
"This section was designed to supplement, but not to supersede, other provisions authorizing motions for a new trial and allowing appeals, and can only be invoked by a party when the other remedies are not available."
This interpretative language as to the limitation of the remedy should not be too strictly or technically applied. Instances of application will be found where the remedy has been recognized although the ground for relief might have been availed of in the original case. At least in respect to some of the grounds specified in Section 518, the real distinction is not that of election of remedies but of relitigation. These Code provisions do not authorize a mere retrial of issues; and that limitation is a rule of practice rather than an express statutory prohibition. Thus, in Ison v. Buskirk-Rutledge Lbr. Co.,
The proceeding under Sections 518 and 520 (which prescribes the manner) is available more specially for the presentation of grounds for a new trial which did not exist or, if they did, were unknown to the party and he has a legal excuse for not having previously presented them. However, it is significant that, unlike a suit to vacate a judgment under Section 344, on the ground of newly discovered evidence, there is nothing in Section 518 or 520 restricting the right to proceed thereunder unless the plaintiff pleads and establishes that the fraud practiced by the successful party was not discovered by him until it was too late to question the judgment in the case in which it was rendered or that he did not have opportunity to raise it before the term expired.
The cases relied on in support of appellees' argument that the orders on the motions made in the original cases to set aside the judgments bar the proceedings under Sections 518 and 520 are not in point. They relate to election of remedies or to suits under the Code provisions which dealt with conditions apparent on the record or with judgments that were only erroneous. See as to erroneous judgments, Combs v. Allen,
Regarding the broad scope and ultimate purpose of the provisions of Sections 518 and 520, as declared in Commonwealth ex rel. v. Weissinger, Judge, supra, and the fact that the proceeding partakes of the nature of a suit in equity, if indeed it is not altogether so (Reinicke v. Morse, Ky.
"We are not disposed to adjudge that a mere motion to set aside a judgment, with leave to make a defense, will preclude a party from afterwards filing a petition in equity to vacate the judgment upon the ground of fraud in obtaining it. There is nothing in the record showing the grounds relied on in the motion, and the fair inference is that it was not such as would deprive a court of equity of the power to vacate, when the facts alleged give that court jurisdiction."
Reverting to the evidence relating to the merits of *677
the plaintiffs' claims for new trials on the ground of fraud practiced by the defendants. The appellees say the real and only question is lack of authority of appellants' attorneys, Lester and Riedinger, to compromise and settle the cases. We agree that this record discloses the attorneys acted without authority. We think it justifies the conclusion they acted wrongfully. The rule is almost universal that an attorney, clothed with no other authority than that arising from his relationship, has no implied power to compromise and settle a client's claim or cause of action except, perhaps, when he is confronted with an emergency and prompt action is necessary to protect the interest of his client without an opportunity for consultation with him. Jenkins v. City of Bowling Green,
Of the inferences of fraud reasonably deducible from the facts related, there are two particularly forceful. It seems to us they certainly bind the defendants to the unauthorized action of plaintiffs' attorneys. Having knowledge that the clients had refused to endorse their check, made payable to them and their attorneys, and thereby had repudiated the settlement, the defendants did the very unusual thing of paying the equivalent of cash to the court clerk, and then while it was in their power to stop it learned it was going into the hands of the attorneys whose action in settling the cases had been repudiated. Daly emphasizes in his testimony that he was general *678 claim attorney for several public utility companies and that he was always careful to see that releases were procured from parties whose claims he settled. In this instance he did not do that, but filed orders of dismissal in the circuit clerk's office before the releases were obtained; and, while he says he had nothing more to do with the matter, the cashier of the bank testified that he had consulted Daly about honoring the cashier's check because of the irregular endorsement and that Daly approved it, and, apparently, consented to paying the money to Lester and Riedinger. The circuit clerk testified that Daly later inquired about the order of dismissal, which had not then been actually filed but only lodged, and the judge directed the clerk to file it. This apparently was on the date of the later stamp, April 22nd. The parties are chargeable with knowledge of the law that the attorneys had no implied authority to settle the cases, and the circumstances surely brought notice to Daly of the plaintiffs' repudiation of the settlement.
We think the plaintiffs made out a prima facie case which authorized the court to vacate the judgments and grant them new trials.
The cases were properly tried as in equity, the testimony being heard in open court. The defendants chose to submit them on the plaintiffs' evidence although several of the defendants had testified as on cross examination, and their defense was at least partially disclosed thereby. Ordinarily, in reversing a judgment rendered in equity this court directs what entry shall be made, but it is fair that the defendants should be given an opportunity to develop their side of the case.
The judgments are reversed for consistent proceedings.