First National Exchange Bank v. Harvey

Owen, J. The defendant seeks to invoke the aid of a court of equity to prevent the enforcement of the judgments sued upon on the ground that they were procured by means of perjury. True, fraud and conspiracy is also alleged, but it does not appear that such fraud and conspiracy in any manner restrained the defendant from interposing a defense to the original causes of action or- influenced his conduct with reference thereto in any way. He was not deceived or misled by the alleged conspiracy, and if the court was imposed upon in any manner it was by virtue of the perjury which the defendant alleges, upon information and belief, occurred at the trial. We treat the counterclaim, therefore, as one asking for equitable relief on the ground that the judgments were obtained through perjury. That' [68] this court will relieve from a judgment so obtained, where the defendant comes into court with clean hands and has been guilty of no laches, is established by Stowett v. Eldred, 26 Wis. 504; Boring v. Ott, 138 Wis. 260, 119 N. W. 865; and Lawn v. Kipp, 155 Wis. 347, 145 N. W. 183. We deem it unnecessary to consider whether the counterclaim sets forth a good cause of action under the doctrine of those cases, and pause, in passing to a discussion of the decisive question in the case, only to remark that a court of equity demands a very high degree of proof before it will restrain the enforcement of a judgment upon the ground that it was obtained by perjury, and the character of the allegations of this counterclaim affords little assurance that that high degree of proof is at hand. It will be noticed that the allegations of perjury are made upon information and belief and that no individual is named as having committed perjury in the procuring of the judgments sued upon. While it is quite probable that the defendant could make the allegation in no other form, it is not unreasonable to suppose that his then information pointed to some individual upon whose perjured testimony the judgments were procured. If his investigations and information had not gone to that extent at the time of the preparation of his pleading, there is little reason to believe that he could bring to the support of the allegations of his counterclaim that high degree of proof essential for the granting of the relief prayed for. Furthermore, it seems quite probable that the judgments were rendered upon the mere production of the notes and in the absence of any sworn testimony; all of which is said not for the purpose of demonstrating that the counterclaim is vulnerable upon demurrer, but to suggest that the general tone thereof does not give assurance of much probability that plaintiff could prove a cause of action even though he may have technically pleaded one. Passing to the decisive question in the case, we hold that the demurrer must be sustained, on the ground that the de [69] fendant is guilty of laches. The counterclaim contains no allegation that the defendant interposed any.defense in the original action resulting in the judgments sued upon. The counterclaim is silent as to whether he permitted the judgments to go against him by default, but such we deem to be the plain inference from the pleading. We have, then, a case where the defendant was sued upon promissory notes the consideration for which had utterly failed. He made no attempt to defend the action upon such ground. This fact is set forth in the counterclaim and sought to be excused on the ground that he did not know at that time that the plaintiff was not a holder in due course. This is not the conduct of one who is diligent in the protection of his legal rights. The most liberal construction that can be given to the allegations of the counterclaim is that he did not know that the plaintiff was a holder in due course. It was incumbent upon him to challenge that fact, to demand affirmative proof thereof, and to avail himself of his right of cross-examination. But there is no allegation in the counterclaim that he appeared in the action in any manner; that he interposed any defense whatever, or that he did anything to challenge the bona fides of the plaintiff’s title to the notes or to put it to its proof upon the question of whether it was a holder in due course. There is no allegation that- he made any attempt to ascertain what the fact was in that respect, and there is a lack of any showing that any diligence whatever was used to ascertain whether the plaintiff was in fact a holder in due course. If the pleading were used as the basis of a motion for a new trial on the ground of newly-discovered evidence, the motion would have to be denied under our rules of practice because of a lack of any showing upon the question of due diligence. It is a general principle of equity that it will not interfere to afford relief where legal redress is available, and in order for the defendant to have any standing in a court 'of equity to secure the relief sought by his counterclaim he must show that he made use of and ex [70] hausted the opportunities available to him in the original action. This he has failed to do, and as he was passive and indifferent at a time when he might have secured his rights in a court of law, equity will not now afford him relief. By the Court. — The order appealed from is affirmed.