National Broadway Bank v. Hitch

O’BRIEN, J. This appeal brings up for review an order granting leave to plaintiff to vacate a judgment in its favor entered against two of the defendants. This action was brought in June, 1886, on a promissory note made by the defendants under their firm name of H. H. Swift & Co., which firm was composed of Humphrey H. Swift, Alfred G. Swift, and Henry F. Hitch. The defendants Swift separately appeared and interposed a demurrer to the complaint, which was overruled, and the action severed as to them by order of the court, and judgment upon [396] the demurrer entered as against them. Thereafter an answer was-served on behalf of Hitch, setting up the judgment thus entered against the Swifts as a bar. The plaintiff moved to overrule this answer as frivolous, which motion was granted, and a separate judgment was entered thereon against Hitch; but, an appeal having been taken from the order overruling the answer as frivolous, it resulted in this court reversing the order and judgment against Hitch. Thereafter the cause was placed on the calendar for trial, and although once set down for the 17th of June, 1892, it did not come up until after the plaintiff’s application to vacate the judgment as to the other defendants Swift, which was granted; and from such order this appeal is taken. It will thus be seen that the plaintiff, while correct in its view that the defense of Hitch was not a meritorious one, was in error in assuming that it was bad in law. Throughout the litigation, and down to the decision of the court of appeals in June, 1892, in the. case, of Heckemann v. Young, 31 N. E. Rep. 513, the plaintiff.refused to assent to the doctrine laid down in that case, which held that— “It is the rule of the common law, recognized and enforced by the courts of this state, except as modified by section 1278 of the Code of Civil Procedure, [relating to judgments by confession,] that a judgment rendered against one of several joint debtors in an action against him alone is a bar to an action against the others. ” From 1886 to 1892, a period upwards of five years, the plaintiff knew that the defendant Hitch relied upon this rule of law as a defense; and the excuse presented for not making the motion sooner was principally based upon the error into which the plaintiff seems to have fallen as to the law governing the liability of joint debtors, and the rule that the entry of judgment against any merged the claim and would release from obligation the other joint debtors. In addition, the respondent undoubtedly had confidence in the validity of the order obtained by him severing the action as to the parties hereto, and reliance upon .the efficacy of the order so entered may for a time have prevented him from moving. As, however, the section of the Code (section 456) relating to the severance of parties has reference to cases where persons are severally, and not jointly, liable, the entry of such order did not prevent, upon the entry of the judgment against two of the joint debtors, the merging of the entire debt, and the releasing of the other joint debtor. Assuming, however, that the loches in moving could be excused, the question would still be presented whether the plaintiff could obtain any relief, whether the mistake in entering the judgment was one of law of of fact.- That no relief can be afforded upon the first ground, we think, is settled by the cases of Jacobs v. Morange, 47 N. Y. 57, and Weed v. Weed, 94 N. Y. 243, 247. If, however, it could be regarded as an érror in fact, not arising upon the trial, then, not having been made within two years, the court could not upon this ground have afforded any relief. Code-, §§ 1290, 1291. But the respondent insists that the court has full and inherent power over its judgments to amend or vacate them, and is not confined or limited in its action by section 724 of the Code, or the sections 1290, [397] 1291, last referred to. It is true, as held in the cases referred to by the respondent, that this court has power to open defaults and to vacate judgments, and that such power does not depend upon section 724, but exists independently of that, and inheres in the very constitution of the court. Vanderbilt v. Schreyer, 81 N. Y. 646; Dinsmore v. Adams, 48 How. Pr. 274. But while the court has ample power in respect to the correction of omissions or mistakes, and can grant relief to a party “ from a judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect,” it can only exercise such power where the relief relates to a- judgment or order affecting only the original parties in the proceeding, and does not affect, impair, or destroy vested rights of third persons. The difficulty that is presented, and which rendered the court upon the motion powerless to grant relief against “the technical and harsh rule of the common Jaw,” resulted from the fact that, by the vacating of this judgment, a new liability was created against the defendant Hitch. That this is so becomes apparent when we consider the situation of the parties at the time the motion to vacate the judgment was made. It being now conceded that the liability of Hitch for the partnership debt was wholly extinguished by the entry of judgment against his partners, the only purpose sought to be served by vacating such judgment is to create a new liability on his part to the plaintiff, or, what is the same thing, resuscitate the extinguished liability by vacating the judgment against his partners. This, we think, the court was powerless to do. We have been referred to no authority changing the rule at common law “that a right of action once extinguished, as by merger, though for never so short a time, is gone forever, and cannot again be revived.” Sinclair v. Hollister, (Com. Pl. N. Y.) 16 N. Y. Supp. 529; People v. Bowe, 81 N. Y. 45; 2 Bl. Comm. 177; 3 Steph. Comm. 316. On the other hand, while no precedent for the precise question here presented is afforded by the decisions of our own state, we are referred by the appellant to some English cases which uphold this rule of the common law relating to the revival of a cause of action once extinguished, and go to the extent of holding that a court has no-power to create a new liability by vacating a judgment which merged the debt, and discharged the person sought to be held liable thereon. Hammond v. Schofield, [1891] 1 Q. B. Div. 453; Odell v. Cormack, 19 Q. B. Div. 228; The Bellcairn, 10 Prob. Div. 161. We think, therefore, apart from the question of plaintiff’s loches in moving, that the principle contended for by appellant is correct,—that, inasmuch as the judgment against his copartners merged the partnership debt, and discharged the defendant Hitch from liability thereon, the court could not create a new liability against Hitch by vacating it. We should have been pleased to have found support for the position of the learned judge below in seeking to relieve the plaintiff from the harshness of the rule at common law; but, as the relief sought to be obtained was beyond his power to grant, our conclusion is that the order appealed from must be reversed, with costs and disbursements, and the motion to vacate denied. All concur.