65 S.E. 969 | N.C. | 1909
Action, heard as on demurrer to the answer. The plaintiff instituted the action to recover on a judgment of the Corporation or Hustings Court of the city of Manchester and State of Virginia, in the sum of $1,848.25, with interest and cost, and filed his complaint, alleging the rendition of the judgment in a court of general jurisdiction, and annexing a transcript of same, properly certified, and showing that the plaintiff had instituted said action in the court in Virginia against the present defendant; that personal service was obtained on defendant in said city of Manchester, and defendant appeared in said court and answered or entered pleas in bar of plaintiff's demand, among other pleas, that such demand was on a wagering contract or by reason of a deal in cotton futures between them, and same was prohibited by law and no recovery could be had thereon; that on issues framed there was verdict and judgment for plaintiff for the amount indicated.
In the present action the defendant appeared and answered, denying that the Corporation Court of the city of Manchester was a court of general jurisdiction, or that it ever had acquired any jurisdiction over the defendant or the subject-matter of the demand. In this connection the answer further averred, in effect, that defendant was and since always had been a citizen and resident of Edgecombe County, N.C. and plaintiff was and always had been a citizen and resident of Norfolk County, Va.; that service was obtained on defendant while he was temporarily in the city of Manchester attending a reunion of Confederate veterans, and that said Corporation Court, in which the judgment was obtained, had never had or acquired any jurisdiction either over defendant's person or the subject-matter of the litigation, and that said judgment was void for lack of such jurisdiction.
In addition, the defendant made answer, styled by said defendant a further answer, averring that said judgment was obtained on a gambling debt, arising by reason of a deal in cotton futures, and that said demand was illegal and any and all recovery thereon was forbidden by public policy and by express provision of our statute laws; and, further, that said judgment had been obtained by means of fraudulent, false and material and pertinent testimony, etc. *234
At March Term, 1908, the plaintiff replied to the further answer of defendant, and alleged that all of the matters and things contained in said further answer were concluded by the judgment of the Virginia court, and pleaded same as an estoppel of record; and at April (240) Term, 1909, the plaintiff demurred to said further answer, and, the cause coming on for hearing at the June Term of the court, his Honor gave judgment sustaining the demurrer, in form as follows:
This cause coming on to be heard, and being heard by the court, and the same being heard and considered by the court, upon the pleadings filed in said cause, the complaint, answer and demurrer to the answer, and the court being of opinion that the demurrer is well taken, and the same is hereby sustained: Now, on motion of counsel for plaintiff, it is ordered and adjudged that the plaintiff do recover of the defendant the sum of $1,898.99 and interest, as alleged in the complaint, and cost of this action, to be taxed by the clerk."
From said judgment defendant excepted and appealed. After stating the case: The pleading on the part of plaintiff, styled a reply, and the demurrer, are both addressed, in terms, to the defendant's "further answer." Ordinarily this is irregular and not permissible. 6 Enc. Pl. Pr., 382. As this further answer, however, is designed and intended to set up two defenses — one, that the judgment was rendered on a demand growing out of a gambling transaction, and that same was procured by fraud — the course pursued in this instance seems to be sanctioned by the Code, sec. 485, and, in any event, as this reply only amounted, in effect, to a demurrer, the court below very properly treated the demurrer as the only additional pleading on the part of plaintiff; and, being of opinion that the position presented was well taken and that the same went to the entire merits of the defense as contained in the answer, his Honor entered judgment sustaining the demurrer and awarding plaintiff recovery for the amount demanded. Assuming that the Corporation Court of Manchester, Va., had jurisdiction of the cause and of the parties, we concur in the ruling of the court below that the matter contained in the former answer does not set forth any valid defense to plaintiff's claim.
As we have said, this further answer alleges that the original demand was on a gambling contract; that a recovery thereon is forbidden, both by our public policy and our statute law, and contends that this defense is now open to the defendant, notwithstanding the rendition of the Virginia judgment, but the question presented has been recently decided *235
against the defendant's position by the Supreme Court of the United States, the final arbiter in such matters, in Fauntleroy v. Lum,
In that case the pertinent facts are thus summarized in the opinion of the Court, delivered by Associate Justice Holmes: "This is an action upon a Missouri judgment, brought in a court of Mississippi. The declaration set forth the record of the judgment. The defendant pleaded that the original cause of action arose in Mississippi out of a gambling transaction in cotton futures; that he declined to pay the loss; that the controversy was submitted to arbitration, the question as to the illegality of the transaction, however, not being included in the submission; that an award was rendered against the defendant; that thereafter, finding the defendant temporarily in Missouri, the plaintiff brought suit there upon the award; that the trial court refused to allow the defendant to show the nature of the transaction, and that by the laws of Mississippi the same was illegal and void, but directed a verdict, if the jury should find that the submission and award were made and remained unpaid; and that a verdict was rendered and the judgment in suit entered upon the same. The plea was demurred to on constitutional grounds, and the demurrer was overruled, subject to exception. Thereupon replications were filed, again setting up the Constitution of the United States (Article IV, p. 1), and were demurred to. The Supreme Court of Mississippi held the plea good and the replications bad, and judgment was rendered for the defendant. Thereupon the case was brought here." And on these facts it was held that —
1. A judgment is conclusive as to all the media concludenti, and it cannot be impeached, either in or out of the State, by showing that it was based on a mistake of law.
2. A judgment of a court of a State in which the cause of action did not arise, but based on an award of arbitration had in the State in which the cause did arise, is conclusive, and, under the full faith and credit clause of the Federal Constitution, must be given effect in the latter State, notwithstanding the award was for a claim which could not, under the laws of that State, have been enforced in any of its courts.
It was contended before us that the decision referred to is not conclusive in this case, because it proceeds on the assumption that the defense there insisted on could not be made available in the State of Missouri, where the judgment was rendered, and if it had been otherwise the case would have been differently decided; the argument being that the clause in the National Constitution controlling the matter (Article IV, sec. 1) only requires that the judgment of a sister State shall be given that faith and credit which they are allowed in the State where (242) rendered; that, in Virginia, courts of equity will relieve against *236
a judgment had on a gaming transaction, and, this being true, the defense should be made available in the courts of North Carolina. The defendant here takes a correct position as to the meaning and proper application of this clause of the Federal Constitution. As shown in the case we are now discussing (Fauntleroy v. Lum, supra), many authoritative decisions so hold (Christmas v. Russell,
But the argument is at fault in the premise that the courts of equity in Virginia would interfere for defendant's protection on the facts presented in the case before us. True, in the case to which we were referred by counsel (White v. Washington,
Speaking to this question, Baldwin, J., delivering the opinion of the Court, among other things, said: "It must be admitted, however, that in an action founded upon a gaming promise or security, if the defendant elects to make his defense at law, and upon a full and fair trial of the question in that forum a verdict is rendered against him, he cannot be permitted to renew the controversy, upon adverse testimony, in a court of equity; for if this were allowed, it would, in effect, be an (243) appeal from the verdict of a jury. And yet, notwithstanding such election, if the defendant has been surprised at law, by reason of some fraud, misfortune or accident, which has prevented him from having a full and fair trial before the jury, he may still resort for *237 redress to a court of equity. Nor will he be precluded from doing so by its appearing that he had an adequate opportunity of obtaining a new trial by application to the court of law. The case of a gaming promise or security is an exception to the general rule on the subject, that rule being derived from the obligation of the party, in most cases, to avail himself of his opportunity to defend himself at law; whereas, in the case of a gaming promise or security, he is under no such obligation."
In this case, as stated, the defendant was served with process within the State of Virginia; he appeared, and by full and proper pleas raised the issue that the plaintiff's demand arose out of a gaming transaction, and on investigation and trial had the question was resolved against him and verdict and judgment entered for plaintiff.
Under White v. Washington, supra, and other decisions of like effect, unless more was shown, this concludes the parties in the State of Virginia, and, under the Federal Constitution, the same effect must be allowed the proceedings when offered here.
And this, too, is the answer to another position urged by defendant, that the Legislature of North Carolina, pending the present action, and before judgment rendered in this State, has amended our statute on gaming (Revisal 1905, sec. 1689) by adding thereto: "Nor shall the courts of this State have any jurisdiction to entertain any suit or action brought upon a judgment based on any such contract." Laws 1909, ch. 853. While judgments are sometimes said to be contracts of record, and are regarded as possessing some of the incidental features of contracts, particularly in reference to joinder of causes of action and other regulations affecting the jurisdiction of courts concerning them, they are not in reality contracts, lacking as they do the great essential of all contracts, mutuality of consent; and it is well established that they are not considered contracts in reference to the clause in the Federal Constitution which forbids that contracts should be impaired by State legislation, and there are notable decisions upholding legislation affecting pending litigation, both before and after judgment rendered.Evans v. McFadden, 105 Fed., 293, affirmed on appeal to Supreme Court of the United States,
Again, in Provision Co. v. Davis,
The question is expressly reserved in Provision Co. v. Davis, supra, and is not necessarily determined in Fauntleroy v. Lum, supra, as that decision is chiefly made to rest on the fact that the legislation there presented was addressed to the rights of the parties and the duty of the domestic courts concerning them, and not to their jurisdiction and power, though the opinion arguendo gives decided intimation against the validity of such legislation, except to the extent that like defense and inquiry would be open to defendant in the courts of the sister state where the judgment was obtained. But, however this may be, we are clearly of opinion that the legislation relied upon by defendant for his protection is not available for that purpose on the facts presented here, and for the reason indicated, that on pleas properly entered in the Virginia court the very question was raised whether the plaintiff's demand arose out of a gaming transaction, and on investigation had was (245) determined against the defendant; and when this occurs, as indicated in Fauntleroy v. Lum, supra, an erroneous ruling of the trial court would be an error of law, to be corrected only by some procedure in the court rendering the judgment; and while the judgment stands unreversed and unassailed, it comes directly within the protection of Article IV, sec. 1, its recognized and established purpose being to prevent any question in the domestic court as to the validity of a claim which had been considered and adjudged in the courts of another state.
Defendant further insists that the demurrer to his further answer should be overruled because the same contains a valid and sufficient plea of fraud, as follows: "That plaintiff obtained said judgment upon *239
fraudulent, false, material and pertinent testimony offered by him." Some of the appellate courts of our sister states whose decisions are always received with the greatest respect and consideration have held that the plea of fraud is never available as a defense to a judgment rendered by the courts of another state, when such courts had jurisdiction of the cause and the parties, basing such ruling upon decisions of the Supreme Court of the United States construing Article IV, sec. 1, of the Federal Constitution. As in Mooney v. Hinds,
Undoubtedly, if the cases referred to correctly interpret the decisions of the Supreme Court of the United States, they must be followed here and elsewhere, for such decisions are final and controlling on the question presented; but, while there are many expressions in the opinions of our highest court which seem to sanction the position contended for, we are of opinion that no authoritative decision of that tribunal directly so holds, and that the great weight of well-considered authority is to the effect that in states such as ours, where all distinctions between actions at law and suits in equity have been abolished and relief is administered in one form of action, fraud in the procurement of a judgment, when properly pleaded, is available as a defense to an action on a judgment recovered in a sister state, though such state may have had jurisdiction of the cause and the parties; and that this term, "fraud in the procurement of a judgment," should and does include all such facts and circumstances as would induce and enable the courts of equity or courts having jurisdiction of the matter in the state where the judgment was rendered to interfere to prevent the enforcement of an unconscionable recovery.
We have recently considered this question, and so held in Lewisv. Gladstein,
There are decisions to the effect that when a judgment has been procured by means of an ordinary perjury on the part of a witness, without more, this does not present a case for the interference of a court in the exercise of its equitable powers, and it is very generally held that this plea of fraud, considered as available, does not apply to fraud anterior to the judgment, or rather the inquiry, and which by proper effort could have been asserted by way of original defense; but wherever, as *240 stated, without fault or neglect on part of defendant, there has been fraud successfully practiced in procuring a judgment, and under circumstances that would authorize the courts of the state where same was rendered to interfere by action to stay the enforcement of an unconscionable recovery, the same defense can in some way be made available when the judgment is made the basis of an action in another state.
Referring to the decisions of the Supreme Court of the United States cited and usually relied upon to support a contrary position: In Christmasv. Russell, supra, the judge delivering the opinion evidently had in mind the plea of fraud when attempted to be set up in an action at law, and when by the form of procedure it could not be regarded as a direct proceeding to impeach the judgment; and, as pointed out in Levin v. Gladstein, AssociateJustice Clifford, for the court, said: "Domestic judgments, under the rules of the common law, could not be collaterally impeached or called in question if rendered in a court of competent jurisdiction. It could only be done directly by writ of error, by petition for a new trial or by bill ofchancery."
And the same may be said in the case of Maxwell v. Stewart, supra, where the decision of Christmas v. Russell is referred to as authority and without further comment or inquiry; and, as further pointed out inLevin v. Gladstein, the question was really not presented or involved in the case of Hanley v. Donaghue, supra, and in the case of Simmons v.Paul, supra, some of the objections to the judgment were on matters of form, where only a motion in the cause could be considered as a direct proceeding to impeach it, and on the further and substantial objection the decision was properly made to rest on the fact that the judgment (247) in question was an adjudication of probate and the granting of letters of administration, citing and relying on the case ofBroderick's will,
This question of fraud involves an issue of fact, and it is no sufficient averment to allege in general terms that a judgment was procured by fraud, but the facts constituting the alleged fraud must be set out with sufficient certainty and fullness to indicate the defense and apprise the opposing party of what he is called on to answer. This is not done in the further answer of defendant, and the general allegation designed and intended to raise the issue of fraud must be held sufficient and was properly disregarded in the court below. Ritchie v. McMullen,
While we agree with the judge below that the plaintiff's demurrer should be sustained, we do not concur in the ruling of his Honor to the effect that the demurrer went to the merits of the entire answer, and that in sustaining it the plaintiff was entitled to recover the sum demanded. From a perusal of this answer, it appears that in the first or first portion of it is contained a denial of jurisdiction on the part of the Corporation and Hustings Court in which the judgment was obtained. While there is some difference in the decisions as to the power of a domestic court to entertain the plea of fraud to a judgment rendered in a sister state, there is no such diversity as to a plea averring lack of jurisdiction. This is always open to defendant, and both as to the parties and subject-matter, and even when the jurisdictional (248) facts are recited in the judgment. Thompson v. Whitman,
It may be that the Constitution and laws of the State of Virginia have conferred on these courts general jurisdiction to hear and determine claims of this nature, as the complaint alleges, but at present we are not so advised, and, denial having been made, the issue must be submitted and determined as a question of fact. Hilliard v. Outlaw,
On the whole matter, we are of opinion, and so hold, that as to matters set out in the further answer the demurrer of plaintiff was properly sustained, and as to any defense therein the defendant is concluded, but that an issue is raised by the pleadings, in this State an issue of fact, as to whether, under the Constitution and laws of Virginia, and on the facts appearing in that trial, the Corporation Court of Manchester had jurisdiction to hear and determine the matters in litigation and render the judgment on which the present suit is brought.
The opinion will be certified down, that a trial of the issue indicated may be had.
Error.
Cited: Billings v. Joines, post, 365; Worth v. Trust Co.,
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