Nelson v. Meehan

WICKERSHAM, District Judge. This is a suit in equity brought by plaintiffs against defendants to enforce specific performance of a contract to convey an interest in real property. No execution has issued. No final record has been made or applied for by either party, as provided for by sections 264 and 380 of the Code of Civil Procedure. The original action is still pending, and the motion was made therein to open the judgment while plaintiffs were before the court demanding relief other than and in addition to that given by the judgment, and before execution or final record therein. The plaintiffs “appear specially for the purpose of objecting to the jurisdiction of the court to entertain or pass upon the motion filed by the defendants in the above-entitled cause, and they appear for no other purpose.” Plaintiffs have, however, heretofore entered a general appearance in the action, and the court will now treat their special objection as in the nature of a demurrer to the motion, and for the purpose of its consideration must treat the facts stated in support of it as admitted. The question for determination is, Upon the motion and the facts stated in support thereof has this court jurisdiction to open or vacate its judgment made herein on August 17, 1904? • 1. The fact that á judgment was obtained through fraud or collusion is universally held to constitute a sufficient reason for opening or vacating such judgment after the term at which it — 490 — was entered. 17 Am. & Eng. Ency. of Law (2d Ed.) p. 827, and citations; 1 Black on Judg. (2d Ed.) § 321. Where a party obtains a judgment by his own willful perjury, or by the use of false testimony, which he knows at the time to be false, he practices a fraud for which the judgment may be vacated (17 Am. & Eng. Ency. of Law [2d Ed.] p. 828, and citations; 1 Black on Judg. § 323); and the Supreme Court of the United States has distinctly held that a decree may be impeached for fraud not appearing upon the face of the appellate record, “even after the decree has been affirmed by an appellate court” (Kingsbury v. Buckner, 134 U. S. 650, 670, 10 Sup. Ct. 638, 644 [33 L. Ed. 1047]; Pacific Railroad v. Ketchum, 101 U. S. 289, 296, 25 L. Ed. 932; Pacific Railroad v. Mo. Pac. Ry., 111 U. S. 505, 519, 4 Sup. Ct. 583, 28 L. Ed. 498; Hilton v. Guyet, 159 U. S. 113, 207, 16 Sup. Ct. 139, 40 L. Ed. 95). The rule is stated in the syllabus to Kingsbury v. Buckner, supra, as follows: “A decree is subject to attack by original bill for fraud even after judgment in the appellate court; but a party, whether an infant or adult, against whom a decree is rendered by direction of the appellate court, cannot impeach it, by bill filed in the court of first instance, merely for errors apparent on the record that do not involve the jurisdiction of either court.” In the case at bar the decree attacked was affirmed by the Circuit Court of Appeals, Ninth Circuit, but the ground of fraud upon which it is now attacked was not apparent upon the face of that record, and was not raised therein or considered by that court. 2. By the seventh section of the act of Congress entitled “An act providing a civil government for Alaska,” approved May 17, 1884, it was provided: “That the general laws of the state of Oregon now in force are hereby declared to be the law in said district, so far as the same may be applicable and not in conflict with the provisions of this act or the laws of the United States.” Chapter 53, 23 Stat. 25. — 491 — One of these general laws of Oregon which was so extended to Alaska was section 102 of the Code of 1887, which reads as follows: “See. 102 (100). The court may likewise, in its discretion, and upon such terms as may be just, allow an answer or reply to be made, or other’ act to be done after the time limited by this Code, or by an order enlarge such time; and may also, in its discretion, and upon such0terms as may be just, at any time within one year after notice thereof, relieve a party from a judgment,'order or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect.” This section was the statute law of Alaska from May 17, 1884, to the adoption by Congress of the Alaska Code of June ,6, 1900, and was adopted as a part of that Code. Section 93, Code Civ. Proc. Neither in the Oregon Code nor in ours is fraud mentioned as a ground for vacating a judgment, and the argument is advanced that, since the statute provides for vacating a judgment for “mistake, inadvertence, surprise, or excusable neglect”, the failure to mention fraud excludes it as a ground for vacating the judgment. 3. Such was not the rule in Oregon. In Ladd & Tilton v. Mason, 10 Or. 308, the Supreme Court of Oregon held that: “Every court possesses the inherent power to vacate entries in its record of judgments, decrees, or orders, rendered or made without jurisdiction, either during the term at which the entries are made, or at any subsequent term.” In Marsh v. Perrin, 10 Or. 364, the court held that: “Where, by the improper management or fraud of the opposite party, and by reason thereof, a judgment has been obtained which it is against good conscience to enforce, equity will interfere to restrain the use of an advantage thus gained.” And in Thompson v. Connel, 31 Or. 231, 235, 48 Pac. 467, 468 (65 Am. St. Rep. 818), the same court said: “But it is made a question whether the statute comprehended; fraud as a ground for such relief.” — 492 — After discussing that question, the court concludes: “So that, in either view, whether the acts complained of are such as may be denominated by one of the statutory appellations, or from their general nature and effect fall within the mischief sought to be relieved against, it is apparent that the statute is broad enough to afford ample relief by motion in the action.” The congressional adoption of the Oregon laws for Alaska also adopted their prior construction by the Oregon courts. 4. Nor is this court’s general jurisdiction to relieve against a judgment obtained by fraud in anywise limited by the phraseology of section 93. Norton v. Atchinson Ry. Co., 97 Cal. 388, 30 Pac. 585, 32 Pac. 452, 33 Am. St. Rep. 198; McNeil v. McNeil (C. C.) 78 Fed. 834. The power to vacate or open a judgment or to set it aside is a common-law power possessed by the court as a part of its necessary machinery for the administration of justice, and hence may be exercised without the grant of special statutory authority. 1 Black on Judg. (2d Ed.) § 297. The power to set aside judgments for fraud of collusion, though expressly granted by statute in many of the states, is not dependent upon legislative recognition. It is a common-law power, inherent in all courts of record, and may be exercised after the expiration of the term at which the judgment was rendered, on the application of the party injured. 1 Black on Judg. (2d Ed.) §§ 321, 334. 5. The case of United States v. Throckmorton, 98 U. S. 61, 25 L. Ed. 93, was based upon an altogether different state of facts from the case at bar. That was a suit in chancery to vacate two judgments at law — the first rendered by the board of commissioners of private land claims of California, and the second the decree of the United States District Court affirming the first — both of which confirmed a Mexican land grant. The case was brought 20 years after these decrees had become final, after the original parties had died, and they tendered only issues which had been tried and determined in the former cases. — 493 — The case at bar, however, is between the same parties, in the original equity action, before execution or final record. The case of Marshall v. Holmes, 141 U. S. 589, 12 Sup. Ct. 62, 35 L. Ed. 870, is more nearly in point with the case at bar, and the rule there laid down must govern. Mr. Justice Harlan, in delivering the opinion of the court in that case, said: “According to the averments of the original petition for injunction died in the state court — which averments must be taken to be true in determining the removability of the suit — the judgment in question would not have been rendered against Mrs. Marshall, but for the use in evidence of the letter alleged to be forged. The case evidently intended to be presented, is one where, without negligence, laches, or other fault upon the part of petitioner, Mayer has fraudulently obtained judgments which he seeks, against conscience, to enforce by execution. While, as a general rule, a defense cannot be set up in equity which has been fully and fairly tried at law, and although, in view of the large powers now exercised by courts of law over their judgments, a court of the United States, sitting in equity, will not assume to control such judgments for the purpose simply of giving a new trial, it is the settled doctrine 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 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.’ Marine Ins. Co. v. Hodgson, 7 Cranch (U. S.) 332, 336, 3 L. Ed. 362; Hendrickson v. Hinckley, 17 How. (U. S.) 443, 445, 15 L. Ed. 123; Crim v. Handley, 94 U. S. 652, 653, 24 L. Ed. 216; Metcalf v. Williams, 104 U. S. 93, 96, 26 L. Ed. 665; Embry v. Palmer, 107 U. S. 3, 11, 2 Sup. Ct. 25, 27 L. Ed. 346; Knox Co. v. Harshman, 133 U. S. 152, 154, 10 Sup. Ct. 257, 33 L. Ed. 586; 2 Story’s Eq. Jur. §§ 887, 1574; Floyd v. Jayne, 6 Johns. Ch. (N. Y.) 479, 482. See, also, United States v. Throckmorton, 98 U. S. 61, 65, 25 L. Ed. 93.” The fraud complained of in Marshall v. Holmes was the production by the plaintiff Mayer of evidence that the defendant Mrs. Marshall had written a letter to her agent authorizing him to make the contract sued on — a perjury in support of the issue on trial, and upon which the judgment was based. The court held such a fraud to be a sufficient ground for impeaching the judgment. In the case at bar the perjury al — 494 — leged was that certain holes had reached bed rock. The evidence was that subsequent to plaintiffs’ labors therein the holes had so caved and filled with water and gravel that defendants could not at any time prior to the trial enter to ascertain that fact. The only person who knew the truth was plaintiff, and he is alleged to have willfully misstated it. The facts seem to me to bring the case clearly within the rule in Marshall v. Holmes. Even if it be conceded that the defeiidants could, by extraordinary efforts in subterranean work, have so run a tunnel underneath these shafts that they could have demonstrated this perjury at the other trial, still, if it be an admitted fact that plaintiffs did not sink these shafts to bed rock in good faith, and did commit perjury at the trial upon the main issue, and did thereby so mislead this court as to procure it to decree specific performance when it would not have done so if the plaintiffs had stated the truth, ought this court in good conscience to enforce that decree? Ought a court of equity to enforce a decree obtained from it by a willful perjury of one party, against the prayer of the other for relief ? Certainly not. If, as a matter of fact, the plaintiffs did not sink the holes to bed rock, they did not pay the consideration for the property for which they ask this court to decree specific conveyance; and if it is now shown to the court beyond doubt that they procured the court to enter the decree in their favor by willful false swearing upon that point, it would be a “fact which clearly proves it to be against conscience to execute” the judgment. 6. Some objection is suggested to the form of the proceeding. It is a motion supported by affidavits filed by leave of the court in the original case between the original parties before execution or final record; it is a continuation of the original suit. As was said by Mr. Justice Miller in Minn. Co. v. St. Paul Co., 2 Wall. (U. S.) 609, 633, 17 L. Ed. 886: — 495 — “An unjust advantage has been obtained by one party over another by a perversion and abuse of the orders of the court, and the party injured comes now to the same court to have this abuse corrected, and to carry into effect the real intention and decree of the court, and that while the property, which is the subject of the contest, is still within the control of the court, and subject to its orders. Krippendorf v. Hyde, 110 U. S. 276, 4 Sup. Ct 27, 28 L. Ed. 145.” A motion in the original suit is the proper form of proceeding. Thompson v. Connell, 31 Or. 231, 236, 48 Pac. 467, 65 Am. St. Rep. 818; Cowley v. Northern Pac. R. R. Co., 159 U. S. 569, 16 Sup. Ct. 127, 40 L. Ed. 263; 1 Black on Judgments (2d Ed.) §§ 303, 346, 347; section 723, Code Civ. Proc. Alaska. The objection to the jurisdiction of the court was overruled, and, after notice and a full and searching inquiry, the former judgment was vacated for fraud and perjury practiced by the plaintiffs.