Case ID: ohio-st_25/html/0340-01.html
Source: Caselaw Access Project
Author: {"author": "McIlvaine, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James Watson et al. v. John W. Paine.
    1. In a proceeding instituted by the defendant, under sections 634 et seq.,. of the code, to vacate or modify a judgment, the original action being-one in which either party, on issue joined, would be entitled to demand a jury trial, it is error for the court, after finding grounds to vacate or modify to exist as provided in section 537, to proceed, without a jury,, where the jury trial is not waived, to adjudge the validity of the alleged defense, and thereupon set aside tbe judgments and dismiss the action.
    2. After the existence of one or more of the causes enumerated in section 534, as grounds to vacate or modify a judgment, has been found by the-court, an issue or issues as to the validity of the alleged defense should, be made up by proper pleadings, and tried as in other cases.
    3. When the alleged defense has been thus adjudged to be valid, and not before, the court is authorized to make a final order of vacation or modification of the original judgment.
    4. A party, by making application to vacate or modify a judgment under section 535 or 536, voluntarily submits himself to the jurisdiction of the court, and is bound by any judgment or order which may be afterward rendered in the action.
    Error to the District Court of Seneca county.
    At the March term, 1869, of the Court of Common Pleas-of Seneca county, the defendant in error as indorsee of a promissory note, recovered a judgment against the plaintiffs in error for $255 and costs. The issuing and service of' process were waived, and judgment was taken by confession under a warrant of attorney attached to the note. By its-terms, the note was payable to N. O. Eausler or order, sixty days after date, and was indorsed to the plaintiff in the action after maturity. The power of attorney was to John C. Lee, or any attorney at law in the United States, with authority to • appear in any court of record in the United States, after maturity of the note, and, waiving the issuing- and service of process, to confess a judgment for the amount of the note against the defendants below (the makers), and in favor of the holder of the note.
    
    After the term at which the judgment was rendered, the-■defendants therein proceeded under sections 534 and 536, by petition in the same court, to vacate the judgment so rendered.
    The petition to vacate set forth, in substance, that the note, on which the judgment was taken, had been fully paid, etc., and that the judgment had been taken on a warrant of attorney, without process; and that the power to confess judgment under the warrant had become wholly inoperative after the note had passed out of the hands of the payee. The prayer of the petition was that the judgment might be set aside and that the defendants might be ■allowed to answer and otherwise defend the action.
    Afterward the defendants in the action moved the court, under section 535, to set aside the judgment on the ground that the power of attorney attached to the note was not negotiable; and that the note had been fully paid to the payee, long before it had been transferred to the plaintiff.
    Afterward, at the November term, 1868, the court, upon submission, found the facts stated in the petition to vacate to be sufficient in law to set aside the judgment; and thereupon ordered, “that all other questions of law and fact .arising out of the several matters and things alleged in said paper be and the same are hereby continued for trial and judgment.”
    At the November term, 1869, the court, upon hearing of the said motion of defendants, found “ that the judgment had been irregularly obtained against the said defendants; that neither of the said defendants was summoned. or otherwise legally notified of the time or place of hearing ■.said case, or taking said judgment, and that nothing was due the plaintiff at the time of taking said judgment, the said note having been fully paid as alleged in said motion by the defendants.” It was therefore ordered that the judgment be set aside and held for naught, and that defendants recover of the plaintiff their costs.
    Thereupon the plaintiff moved the court to place the case on the trial docket for trial, and that the defendants be required to answer his petition and that he have leave to reply. This motion the court overruled, and on its own. motion dismissed the action ; to all which the plaintiff duly-excepted.
    On petition in error by the plaintiff below, the District Court reversed the judgment and order of the Common Pleas dismissing the action, and ordered that the-original action of the plaintiff against the defendants be set. down for trial in the Court of Common Pleas upon its merits,, and remanded the cause to the Common Pleas for further-proceedings.
    To reverse this judgment of the District Court, this petition in error is now prosecuted.
    
      W. P. Noble for plaintiff in error:
    1. Where a plaintiff illegally and fraudulently obtains a judgment in his favor without notice to the defendant, and the defendant procures such judgment to be vacated and set aside, the plaintiff is not entitled to have his case docketed and tried, but must commence de novo. 6 Johns. 331; 24 Penn. St. 289.
    2. The power of attorney was not negotiable. Osborne v. Hawley, 19 Ohio, 130, and no jurisdiction was obtained of the person of the defendants below: hence the judgment of the Common Pleas was right. Dunn v. Hazlett, 4 Ohio St. 435.
    If, in passing upon the validity of the defense, it was possible for the court to have before it such evidence as would authorize the court to vacate or strike off" the judgment, or warrant a refusal of the motion to docket the case and set it down for hearing, the presumption is that such evidence.was before the court, and the finding of the court is final.
    
      Or. H. Seney, for defendant in error.:
    I. A court, upon vacating its judgment, rendered upon-a warrant of attorney, at a former time, should retain the-case for trial upon its merits. Civil Code, secs. 534, 542. The code has no provision as to the duty of the-court, or the rights of the parties, after the judgment is vacated.
    Under the common-law system of pleading and practice, upon setting aside a judgment, rendered upon a warrant of attorney, the action was set down for trial on the merits,, with leave to plead. This practice is contemplated by the code, and is, we think, observed, generally, in the courts of the state.
    II. Is it contended, that as the code requires the court, before vacating a judgment, to try and decide that there is a valid defense to the action, that this trial involves the merits of the case, and therefore the decision is final between the parties.
    This position can not be maintained:
    1. Upon such a trial, if the decision is final, either party may, of right, demand a trial by jury. The code makes no provision for a jury, but obliges the parties to submit their controversy to the court.
    2. If the decision is final, the party aggrieved should have, as in other cases, the right to appeal, or to a second trial, or to review upon the facts.
    3. In Taylor v. Fitch, 12 Ohio St. 169, it is held that a proceeding to vacate a judgment is not appealable. The statute allows a second trial, in a civil action, where an issue of fact has been joined. In Taylor v. Fitch, the court hold, that a proceeding to vacate a judgment is not a civil action. In the case at bar no issue of fact has been joined. "While the decision may be reviewed upon the facts, yet the rule that a finding of facts will not be disturbed, unless it is clearly against the evidence, makes this remedy of little avail. Pomeroy v. Drake, 1 Western Law Monthly, 282.
    III. If the decision is not final, the court erred in refusing to retain the ease for trial:
    1. Upon a reversal of a justice’s judgment the case is retained for trial and final judgment. Code, sec. 532. ■
    2. The action in which the judgment was rendered, was properly commenced, and is still pending, with both parties before the court.
    
      3. Another action between the same parties, in the same ■court, upon the same subject-matter, is avoided by retaining the pending action for trial.
    IY. If the decision is not final, the court erred in dismissing the action in which the judgment was rendered :
    1. The action was not dismissed upon the motion of ■either party.
    2. The court of its own motion has no power to dismiss an action, except in cases provided for in section 372 of the code.
    Y. The eases in which the court may dismiss an action are:
    1. Where the plaintiff fails to appear on the trial.
    2. Eor the want of necessary parties.
    3. On the application of a defendant where there are ■others whom the plaintiff fails to prosecute with diligence.
    4. Eor the disobedience by the plaintiff' of an order concerning the proceedings in the action.
   McIlvaine, C. J.

There is no error in the record and judgment of the District Court. It was manifest error in the Court of Common Pleas to dismiss' the original action without permitting a trial to be had upon its merits. An opportunity should have been given to the plaintiff below to take issue upon the alleged payment of the note; and to have such issue tried by a jury. These opportunities were denied to him by the court.

The court must have been led into error, either through ■a misconstruction of sections 534 et seq. of the code, or through a misapprehension of its jurisdiction over the ■persons of the defendants.

When a proceeding by petition or by motion to vacate or modify a judgment is instituted, under section 535 or 536, the first thing to be done by the court, is to try and decide whether or not a “ ground ” to vacate or modify exists. :Sec. 537. “The grounds” referred to in this section are those enumerated in the nine subdivisions of section 534. In some cases, the question thus to be tried and de•tided, can be determined by inspection of the record; in others the testimony of witnesses must be heard. But in all cases, this question must be tried and decided by the judge or judges.

When the existence of ground to vacate or modify is thus decided, the case is not yet ready for a final judgment of vacation or modification. Before such judgment can be entered, if the petition or motion be filed by the defendant in the original action, it must be adjudged that there is a valid defense to the action. Sec. 538. In order that 'the validity of the defense maybe adjudged, an issue or Issues should be made up by proper pleadings. If the proceeding to vacate or modify be by motion, the defendant should be required to file his answer to the original petition, with leave to the plaintiff to reply. If the proceeding be by petition, in which the matters of defense are set forth in issuable form, it would be sufficient, no doubt, to take issue thereon by reply or demurrer. When the issue is thus made up, it should be tried as in other cases. Frazier v. Williams, 24 Ohio St. 625. After such trial, and not before, the court is authorized to render a final judgment or order of vacation, or modification of the original judgment.

The Court of Common Pleas, in this case, erred in not .allowing an issue to be made up, as to the alleged payment of the note, and in proceeding, without the intervention of a jury, to find that the note on which judgment had been taken, was paid by the makers to the payee before its transfer to the plaintiff, and in dismissing the action at the costs-•of the plaintiff". •

It is claimed, however, by the plaintiffs in error, that the judgment was right; because, as it .is alleged, the court had no jurisdiction of the persons of the defendants in the .action.

The point made is, that the warrant of attorney attached to the note, did not authorize the waiving of process or an appearance for them in an action brought by an indorsee of the note; in other words, that the power of attorney was not negotiable.

Upon this point the members of the court are not fully-agreed. For my own part, while admitting that a power-addressed to an individual attorney can not be exercised by another, and that an authority to confess judgment in favor of the payee alone can not be used in favor of an indorsee, I am still wholly unable to find a reason why a power to confess judgment in favor of any holder of the note may not as well be used in favor of an indorsee as in favor of the payee. That such warrant may be used in favor of the-payee is not doubted. It is also clear that the negotiability of commercial paper is not affected by attaching thereto,, as part of the instrument, a power of attorney to confess judgment thereon. The law regards a cognovit attached to commercial paper as a valuable security in the hands of the payee; and to hold that such security can not, in any ease, follow the note into the hands of an indorsee, would' materially depreciate the value of such paper. It appears to me unreasonable that the law should permit the payee-of a note intended for circulation to take such security, and then restrain the negotiation of the paper by declaring a forfeiture of the security if the paper be put in circulation. Commercial policy does not, in my opinion, require' such restriction upon the power to contract.

I know of no decided case in which the doctrine contended for by plaintiffs in error has been recognized. In Osborne v. Hawley, 19 Ohio, 130, it does not appear that the warrant by its terms authorized the confession in favor of any holder other than the payee. If the power was so limited in that case, the decision was clearly right. If it was not so limited, then the authority of that case has already been doubted in Marsden v. Soper, 11 Ohio St. 503.

In England, it was held at an early day, that a cognovit, in favor of the payee, Ms executors and administrators, was available in an action by the personal representative. Cole’s Ex’r v. Haden, Barnes, 44.

Although this point is .fairly made in the case, it is not,, however, necessary that it should now be decided. If it were admitted that jurisdiction of the persons of the defendants was not acquired by tbe appearance of tbe attorney under the warrant, such jurisdiction was undoubtedly obtained by their voluntary appearance in tbe case, by filing’ their motion and petition,' under sections 535 and 536, asking to be let in to defend, etc. By making such application the defendants submitted their persons to tbe jurisdiction of tbe court, and must be bound by any judgment' afterward rendered in tbe action. Marsden v. Soper, supra.

Judgment of the District Court affirmed.

'Welch, White, Rex, and Gilmore, J.J., concurred.