Town of Andes v. Millard

70 F. 515 | U.S. Circuit Court for the District of Connecticut | 1895

TOWNSEND, District Judge.

The bill herein alleges that the complainant, a town in the state of New York, was alleged to have issued bonds in aid of a railroad; that in 1883 the court of appeals of said state held said bonds to be void; that thereafter John B. Gleason, the attorney for certain bondholders, proposed to seek to enforce the collection of the coupons from said bonds in the federal courts, and that thereupon said attorney falsely and fraudulently represented to the supervisor of complainant that he had arranged for a transfer bona fide of said coupons to a nonresident of the state of New York, so that the federal courts could have jurisdiction of all actions thereon; that he would consolidate all such actions into one for a large amount, and thus enable the complainant, if defeated, to procure a review by the supreme court of the United States, and also to avoid the necessity' of defending a multiplicity of actions, provided this complainant would waive proof of title in the plaintiff in such action; that said supervisor, relying upon said representations, signed a stipulation stating that this complainant would not, in said action, “deny the citizenship of the plaintiff, nor the sales to him, nor claim that the action should be dismissed as collusively made or brought,” and that “neither the plaintiff nor any person from whom he purchased shall be examined upon the subject of the sale to the plaintiff or the nature thereof.” The bill further alleges that, although said stipulation was entered into without authority, yet that afterwards, upon the trial of said action in the circuit court •of the United States for the Northern district of New York, this complainant, relying upon such representations, withdrew all and every issue as to the ownership of said coupons by the plaintiff therein, conceded the ownership thereof, and refrained from asserting the defense of nonownership of plaintiff, and want of jurisdiction in said court. It is admitted that said defense was originally put in issue in said suit. The bill further alleges that said plaintiff was not the owner of said coupons, but they were all owned by residents of the state of New York, and were collusively transferred to said plaintiff without consideration, solely for the purpose of bringing said collusive suit, and to give the court apparent jurisdiction; that this complainant Avas ignorant of said facts until long after the trial of said action and judgment therein against it, and the expiration of the time within which application for relief could be made in said circuit court; that immediately upon such discovery it brought a bill in the- state court to vacate said judgment for want of jurisdiction and fraud, which bill Avas dismissed. The bill further alleges that by reason of said fraud this complainant was> deprived of a good, valid, and effectual defense in said action; and that, if the defendant herein is permitted to proceed to the collection of said judgment, it will suffer irreparable injury; and prays that said judgment may be set aside, or that the respondent herein may be enjoined from attempting to enforce or collect the same, and for general relief. The defendants demur for yant of equity in the bill.

It may be admitted that, if these facts had been brought to the attention of the court during the trial, the case would probably have been dismissed for want of jurisdiction. The attorney, upon being defeated in the state court, stated that he had arranged for an actual sale and transfer of the coupons to a nonresident, for the purpose of bringing suit -in a federal court. It was admitted that they were bought after the decision in the state court Avas made, and Avith knoAvledge of that decision. It Avould be difficult to convince a trier that the real facts differ materially from those in Farmington v. Pillsbury, 114 U. S. 138, 5 Sup. Ct. 807.

Complainant claims that the judgment is absolutely void, and that defendants, after trying the suit on the merits in the circuit court, appealing to the supreme court of the United States, and being beaten in each court, may set aside the judgment on these grounds. I do not understand that this course is open to the defendants. If the court had ascertained these facts before final judgment, it might have been its duty to dismiss tbe action without any request from either party; but after final judgment, and after all opportunity for appeal is past, 1 do not understand that a defendant may call upon the court which tried the case to review its action, and declare its judgment \ oid, upon proof of the falsity of a necessary allegation in the pleadings which might have been controverted at the trial. Much hiss may any other court do so. In Fisher v. Shropshire, 147 U. S. 133, 146, 13 Sup. Ct. 201, the court says: “We are not prejiared to hold that the circuit court should be deprived of jurisdiction at the sugges lion of the party who voluntarily invoked it.”

Complainant further claims that the enforcement of the judgment may he enjoined on the ground of fraud, the fraud being the statement out of court by the attorney for the prevailing party that certain allegations in his complaint as to the transfer of the dioses in action were true. It is set iled that false testimony, or suppression of the truth, in a trial of the action, would not have this effect, and neither would the oatli of the party to the truth of the complaint. U. S. v. Throckmorton, 98 U. S. 61. I know of no authority for the Imposition that a false statement out oí court, to the effect that the allegations in the complaint are true, can be shown to prevent the enforcement of the judgment. Such statements can have this effect: only where they affect the conduct of the case; as, for instance, if they have induced the defendant to default under a promise that his case would not he claimed for trial, or in consequence of deceit; as to the amount to be claimed, etc.

The statement of the attorney for the bondholders that he would have the assignments made for the purpose of giving the federal courts jurisdiction, and the terms of the stipulation signed by the .supervisor, as well as those signed by the attorney for the town, were; sufficient to put the attorneys of this complainant on their guard, and to make it their duty to examine the facts before signing the stipulation. I think the facts stated show that the town was negligent in making the stipulation, and justify the inference that:, i> bringing't he suit to the federal court: was colluidve, the town was a party to the scheme. ,

There is no allegation that the facts were not. fairly tried and correctly found in the circuit court, and in the appeal from that court (Town of Andes v. Ely, 158 U. S. 312, 15 Sup. Ct. 954.) the supreme court; held that, these bonds were valid. Therefore, even if this complainant was induced by false representa lions to refrain from raising the jurisdictional question, and has not been guilty of laches, it does not appear that it has suffered any damage by reason of said fraud.

The judgment herein sought to be vacated is only for the amount due from this complainant on account of said bonds. It is immaterial 1o whom this complainant pays said debt, so long as it pays it to the holder of said bonds or coupons, and is not liable to be sued by any one else thereafter. Bank v. Perkins, 29 N. Y. 554; Sheridan v. Mayor, etc., 68 N. Y. 30.

As no grounds are shown in the allegations of the bill which would justify the interposition of a court of equity, the demurrer is sustained.