City Trust, Safe Deposit & Surety Co. v. Glencove Granite Co.

ACHESON, Circuit Judge. This writ of error is brought for the reversal of a judgment entered against the defendant below (the plaintiff in error) for want of a sufficient affidavit of defense. The Giencove Granite Company, a corporation of the state of Maine, on February 25, 1901, brought an action in the court below against the City Trust, Safe Deposit & Surety Company, a corporation of the state of Pennsylvania, upon a bond given to the plaintiff by Patrick Costello, as principal, and the defendant company, as surety, whereby the obligors jointly and severally undertook to pay to the Giencove Granite Company the amount of any judgment, not exceeding $8,279, which might be recovered in an action upon the claim or demand specified in a certain notice of lien filed by the plaintiff against moneys due Costello from the city of New York under a specified street-paving contract; and the plaintiff’s statement of claim in this suit averred that the plaintiff brought an action in the supreme court of the state of New York, in the county of New York, to foreclose said lien, against said Patrick Costello, and that therein a judgment or decree was entered in favor of the plaintiff against Costello in the sum of $5,860.31, together with the stun of $402.22 costs, — in all, the sum of $6,266.53. The defendant company filed an affidavit of defense, which averred that on or about May 5, 1899, the plaintiff, the Giencove Granite Company, brought suit against Patrick Costello and the City Trust, Safe Deposit & Surety Company in the supreme court of the county of New York, in the state of New York, to recover such moneys as might be in said suit determined to be due said Giencove Granite Company by [178] said Patrick Costello and said the City Trust, Safe Deposit & Surety Company by virtue of the terms and provisions of their bond sued upon in the present action; that the defendant company was served with process in said former suit, and entered an appearance in that action, and that the same “was duly proceeded with, fully and upon the merits thereof, for the same cause of action as now here and again sued upon, and between the same parties, with the addition of said Patrick Costello and the city of New York”; that after issue joined, in accordance with the practice and law of the state of New York, and by consent of all the parties, the case was tried upon all questions of fact and law before one of the justices of said supreme court without a jury; and that, in pursuance of the decision rendered in that proceeding, “a judgment was rendered by said court, and duly filed, in favor of the said the City Trust, Safe Deposit & Surety Compariy, and against the Glencove Granite Company, whereby it was adjudicated that the said Glencove Granite Company could not recover anything whatsoever against the City Trust, Safe Deposit & Surety Company, with a 'further order or judgment against said plaintiff for the payment of costs.” And the affidavit of defense averred that said judgment “now stands unappealed from and unreversed, and as a final judgment in said cause.” A rule for judgment for want of a sufficient affidavit of defense having, been taken, the defendant company, “with leave of, and in pursuance of, the order of the court,” filed a supplemental affidavit of defense, and, as part thereof, attached thereto a full and true copy of the judgment entered by the supreme court of the state of New York, referred to in the original affidavit of defense. Referring to this copy, we find that the judgment recites that the “issues in this action to foreclose a municipal lien against the defendant Patrick Costello, as contractor, and the defendant the City Trust, Safe Deposit & Surety Company of Philadelphia, as surety therefor,” came on for trial before the Honorable Charles H. Truax, one of the justices of the court, who made and filed his decision, “wherein and whereby he found and decided that the plaintiff was, and still is, a foreign corporation organized under the laws of the state of Maine, and that the defendant the City Trust, Safe Deposit & Surety Company of Philadelphia was, and still is, a foreign .corporation organized under the laws of the state of Pennsylvania, and lawfully transacting business in the state of New York; that, as against the defendant the said City Trust, Safe Deposit & Surety Company of Philadelphia, the plaintiff, the Glen-cove Granite Company, liad failed to prove that it had procured from the secretary of state the certificate required by section 15 of the general corporation law, for the purpose of authorizing the said plaintiff to do business in, and sue in the courts of, the state of New York, as a foreign corporation; that the plaintiff cannot recover in this action against the bond of the said defendant the City Trust, Safe Deposit & Surety Company of Philadelphia, given to discharge the plaintiff’s lien herein, and that the complaint of said plaintiff, as against said defendant, be dismissed, with costs to said defendant the City Trust, Safe Deposit & Surety Company of Philadelphia, against said plaintiff”; and then, after further recitals of findings by [179] said justice as to the paving contract between Patrick Costello ana the city oí New York, the work done, and amount due thereunder, the furnishing of materials for the work to Costello by the plaintiff, the tiling of the plaintiff’s notice of lien, and the giving by Costello, as principal, and the City Trust, Safe Deposit & Surety Company, as surety, of the bond aforesaid, whereby the plaintiff’s lien wai discharged, the judgment proceeds thus : “Now, on reading and filing tlie summons, complaint, answers of the defendants. Patrick Costello and the City Trust, Safe Deposit & Surety Company of Philadelphia, the decision of Mr. Justice Truax, and on motion of Frederick J. Swift, Esq., attorney for the defendant the City Trust, Safe Deposit & Surety Company of Philadelphia, it is ordered and adjudged that the complaint of the plaintiff herein, the Glencove Granite Company, as against the defendant the City Trust, Safe Deposit & Surety Company of Philadelphia, be dismissed, and that the defendant the City Trust, Safe Deposit 6 Surety Company of Philadelphia recover of, and have judgment against, the plaintiff, the Glencove Granite Company, for its costs, amounting to ¡he sum of $89.10. And it is further ordered, adjudged, and decreed that the plaintiff, the Glencove Granite Company, recover of, and have judgment against, the defendant Patrick Costello for the sum of $5,8(50.31, together with the sum of $400.22, costs adjusted as aforesaid, amounting in all to the sum of $0,206.53.” Evidently this judgment against Costello is the same judgment briefly recited in the plaintiff’s statement of claim, and which recital is an essential part of the statement. It thus appears that in the same action in which the plaintiff company recovered its judgment against Costello, upon which it relies to make out its case here, the plaintiff proceeded against the present defendant company to charge it upon the bond here sued on, and it was there decided that the plaintiff could not recover thereon, and judgment was rendered dismissing the plaintiff’s complaint as against this defendant. We do not have before us the whole record in the former action, but the original affidavit of defense here averred that that action “was duly proceeded with, fully and upon the merits thereof, for the same cause of action as now here and again sued on,” and that it was there “adjudicated that the Glencove Granite Company could not recover anything whatsoever against the said the City Trust, Safe Deposit & Surety Company”; and those averments, we think, are consistent with the terms of the judgment brought upon this .ecord by the supplemental affidavit of defense. The controlling question, then, is whether the original and supplemental affidavits of defense were sufficient to prevent a summary judgment against the defendant company, which deprived it of the opportunity of proving the facts alleged. Upon this question our opinion is with the plaintiff in error. We .think that the averments of the defendant’s affidavits, taken in connection with the New York judgment itself, presented a good prima facie defense to the plaintiff’s statement of claim. Extrinsic evidence, not inconsistent with the record, nor impugning its verity, is admissible to show what matters were involved in a former action, and to apply the judgment and give effect to the adjudication actually made. Miles v. Caldwell, 2 Wall. 35, 17 L. Ed. 755; Davis v. Brown, 94 U. S. 423, 24 L. Ed. 204; Wilson’s Ex’r v. Deen, 121 U. S. 525, 7 Sup. Ct. 1004, 30 L. Ed. 980. But, independently of the averments [180] of the affidavits of defense, the judgment in the former action, upon its face, discloses enough to prevent a summary judgment, without trial, against the defendant in the present suit. The finding that the plaintiff, a foreign corporation, had failed to show that it had procured the certificate required by law to authorize it to do business in the state of New York, undoubtedly was a finding responsive to an issue tendered by the pleadings, as between the Glencove Granite Company and the City Trust, Safe Deposit & Surety Company. W. P. Fuller & Co. v. Schrenk, 58 App. Div. 222, 225, 68 N. Y. Supp. 781. Moreover, that finding went to the merits of the case. It related to a substantial matter. It sustained a defense which involved the rights of the parties. It went to the plaintiff’s right of action. McCanna & Frazer Co. v. Citizens’ Trust & Surety Co., 24 C. C. A. 11, 76 Fed. 420, 39 U. S. App. (third circuit) 332; Miller v. Ammon, 145 U. S. 421, 12 Sup. Ct. 884, 36 L. Ed. 759. Now, the situation is this: The judgment against Costello is an essential part of the plaintiff’s case against the surety in the bond in suit. Yet the record showing that judgment also shows a judgment in favor of the surety, and a finding and decision adverse to the plaintiff’s right of action. We think, therefore, that, as the case now stands, there appears at least a prima facie defense. The apparent obstacle to a recovery may be open to explanation, and thus put out of the way. Again, if the statutory inhibition against doing business operates only on the remedy, and may be lifted if the delinquent corporation is able to procure out of time the issuance by the secretary of state of the required certificate (Neuchatel Asphalte Co. v. City of New York, 155 N. Y. 373, 377, 49 N. E. 1043), it may be competent for the plaintiff to show here that it obtained such a certificate since the former trial, or even before. Upon these questions we intimate no opinion. We hold simply that the affidavits of defense sufficiently met the plaintiff’s statement of claim, and that the same should have gone to trial. The judgment for want of a sufficient affidavit of defense is reversed, and the cause is remanded to the circuit court for further proceedings.