Case Name: Michael v. The American National Bank
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1911-06-30
Citations: 84 Ohio St. 370
Docket Number: No. 12649
Parties: Michael v. The American National Bank.
Judges: Spear, C. J., Davis, Shauck, Price and Donahue, JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 84
Pages: 370–384

Head Matter:
Michael v. The American National Bank.
Final judgment — Will not be set aside for new trial — Except for fraud, etc. — Fraud mitst consist of extrinsic acts■ — Court procedure.
1. Where a cause has proceeded to trial and final judgment, a court of equity will not vacate or open up the judgment and grant a new trial of the same issue determined in the former hearing, in the absence of fraud or undue advantage by the prevailing party.
2. The fraud or undue advantage for which a court of equity will set aside a judgment or decree, must consist of extrinsic acts outside of and collateral to the matter actually tried by the first court and not related to the matter concerning which the judgment or decree was rendered.
(No. 12649
Decided June 30, 1911.)
, Error to the Circuit Court of Allen county.
The amended petition of the plaintiff in the court of common pleas in this cause is as follows:
“Now comes the plaintiff, and for his cause of action avers:
“That the defendant, The American National Bank of Lima, Ohio, is a corporation, duly organized under the laws of the United States of America, and, on the 24th day of December, 1898, it was engaged in the business of conducting a bank, under the national banking laws of the United States of America, at the city of Lima, in the county of Allen and state of Ohio.
“That at said date of December 24, 1898, Joseph Goldsmith was president; this plaintiff, Nathan L. Michael, was vice-president and Gus Kalb was the cashier of said bank; and said'cashier at the close of business on said 24th day of December, 1898, had in his custody, of the moneys deposited in said bank and for which said bank was responsible as custodian aforesaid, the sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars.
“That at the close of business on the said 24th day of December, 1898, said sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars was deposited and locked in a safe inside of the vault in the room where defendant conducted its banking business, and said vault was provided with an outer steel door three, inches in thickness, with a combination lock to which was attached a time-lock. And said time-lock was properly wound and set, and said vault door closed and bolted, and the combination thereon was distributed, and said appliances for the safe-keeping' of said money were properly used and said vault door securely locked by the. cashier, Gus Kalb.
“That on the 26th day of August, 1899, the-defendant, The American National Bank of Lima, Ohio, filed its petition in the court of common pleas of Allen county, Ohio, in case No. 10050 of said court, making Gus Kalb and this plaintiff defendants in an action for money had and received, and praying for a judgment against said Gus Kalb and this plaintiff for the said sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars, with interest from the 27th day of December, 1898; that thereafter, to-wit, on December 4, 1899, this plaintiff filed his amended separate answer in which he averred as a defense that between the dates- of December 24 and December 27, 1898, the vaults of said The American National Bank of Lima, Ohio, were-entered and robbed, and the said sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars was stolen and carried away by some person or persons unknown to Nathan L. Michael, one of the defendants in said cause No. 10050, a$d without his neglect or default.
“That thereafter on the 4th day of December, 1899, the said, The American National Bank of Lima, Ohio, plaintiff in said cause No. 10050, filed its reply to the amended answer of Nathan L. Michael in said cause, and denied the allegations of the amended answer, of Nathan L. Michael filed in said cause No. 10050.
“That said averment of plaintiff in his answer, as defendant in said cause No. 10050 and the denial of said averment by The American National Bank of Lima, Ohio, as plaintiff in said cause, made up a material issue of fact, and that said cause was tried to a jury on the issue thus made up; and on December 12, 1899, said jury rendered a verdict on behalf of the defendant, The American National Bank of Lima, Ohio, as .plaintiff in said action, against the defendants Gus Kalb and Nathan L. Michael, in the sum of nineteen thousand sixty-nine and 4-100 ($19,069.0.4) dollars.
“That within three days after the rendition of said verdict, each of said defendants filed his separate motion for a new trial, which was overruled by the court of common pleas, and a bill of exceptions was prepared, allowed, signed, sealed and made a part of the record in said cause, but not spread upon the journal; and each of said defendants thereafter filed his petition-in-error in the circuit court of Allen county, Ohio, praying for the setting aside of said verdict and for a new trial, but the judgment of the court of common pleas was duly affirmed.
“That thereafter each of said defendants, within the time allowed by law,, prosecuted error in the supreme court of Ohio, to the affirmance of said judgment by the circuit court of Allen county, Ohio, and said cause was fully reviewed by the supreme court of Ohio, and by it, the said judgments of the lower courts were affirmed and a mandate was directed and issued on October 23, 1901, to the clerk of the court of common pleas for Allen county, Ohio, commanding him to carry into effect the judgment and orders of said court of common pleas.
“That by reason thereof, on the 25th day of October, 1901, this plaintiff, as a defendant in said cause No. 10050 aforesaid, was compelled to pay to the defendant, The American National Bank of Lima, Ohio, as plaintiff in said cause, and did pay to the clerk of the courts for Allen county, Ohio, the one-half (J4) of said judgment, interest and costs, amounting to the sum of ten thousand, eight hundred eighty-six and 74-100 ($10,886.74) dollars.
“That the defendant, Gus Kalb, was a co-defendant of this plaintiff in said cause No. 10050 of the Allen county common pleas court, in which cause, The American National Bank of Lima, Ohio, recovered the verdict and judgment heretofore mentioned; that the consent of said ■Gus Kalb to be joined as plaintiff herein cannot be obtained, and that by reason thereof, the said Gus Kalb is made a defendant in this action.
“That between the date of closing and locking said vault on the 24th day of December, 1898, aforesaid, and the 27th day of December, 1898, the aforementioned appliances for the safe-keeping of said sum of eighteen thousand two hundred fifty-three and 72-100 ($18,253.72) dollars were tampered with and rendered useless by a thief in the person of one at the time of action heretofore mentioned and for a long time thereafter unknown to this plaintiff, and said sum was taken, stolen and carried away bv said thief, whom the plaintiff avers to be one Eliiah Bowsher.
“That the plaintiff at the time of said action in cause No. 10050, aforesaid, had no knowledge and no means of knowing the connection of Elijah Bowsher with the theft from said bank of said sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars, and that he had no knowledge of the same until the fall of the year 1905.
“That said Elijah Bowsher at the September term of the court of common pleas for Allen county, Ohio, in the year of 1905,. was indicted by the grand jury of said county for the larceny of said sum of eighteen thousand, two hundred fifty-three and 72-100 ($18,253.72) dollars of the moneys and property of The American National Bank of Lima, Ohio, so by him stolen and carried away and was convicted and sentenced for said crime to the Ohio Penitentiary for a period of seven years.
“Plaintiff further avers that owing to the lapse of time between the time of the trial of said action in said cause No. 10050, and the time of the discovery and disclosure of the fact that the theft heretofore referred to was committed by said Elijah Bowsher, plaintiff is without adequate remedy at law.
“Wherefore, plaintiff prays that said verdict in said cause No. 10050 of Allen county, Ohio, common pleas court, entitled The American National Bank of Lima, Ohio, plaintiff, vs. Gus Kalb, and Nathan L. Michael, defendants, may be set aside and a new trial of said cause awarded; and that plaintiff may have any other and further orders necessary to have adequate relief In equity.”
A demurrer was filed by the defendants to this amended petition, which was sustained by the common pleas court, and the plaintiff not desiring to plead further, judgment was entered dismissing the petition at the costs of the plaintiff. On error proceedings in the circuit court _ of Allen county this judgment was affirmed and the action here is to reverse the judgments of the courts below.
Messrs. Half hill, Quail & Kirk, for plaintiff in error.
The defendant contends that proceedings under the statute for the vacation or modification of judgments or for a new trial are exclusive, and that, unless authority can be found in these statutes, the plaintiff is without remedy either at law or in equity. This contention is not, and cannot be sustained by the authorities of this state. These authorities hold the very reverse to be true; that the statutory proceedings are not exclusive, but simply cumulative. Long v. Mulford, 17 Ohio St., 508; Coates v. Bank, 23 Ohio St., 415; Darst v. Phillips, 41 Ohio St., 514.
It is also the rule that new trials may be granted on other than statutory grounds. Brenzinger v. Bank, 19 C. C., 536.
The statute does not say that a new trial shall not be granted for any other causes than those enumerated therein. It does not take away the ancient power inherent in the court. 1 Spence’s Equitable Jurisdiction, *407, *412, *413.
It is a well recognized principle,, a maxim, in fact, that “equity will not suffer a wrong to be without a remedy.” Colyer v. Langford, 1 A. K. Marsh. (Ky.), 237; Tarnow v. Carmichael, 116 N. W. Rep., 1031; 1 Spence’s Equitable Jurisdiction, *430.
Every just order or rule known to equity was born of some emergency, to meet some new condition, and was, therefore, in its time, without a precedent. Railway Co. v. Pennsylvania Co., 54 Fed. Rep., 746.
The law of a case decided by this court does not sustain the theory of the defendant in this regard. Hiler v. Hiler, 35 Ohio St., 645; Scholey v. Halsey, 72 N. Y., 578.
There is nothing to prevent the court, in aid of justice, from exercising its undoubted power- to set this judgment aside, and we direct the attention of the court to authorities in support of our view. Hatch v. Bank, 78 N. Y., 487; Shepherd v. Marvel, 45 N. E. Rep., 526; Ferguson v. Millender, 9 S. E. Rep., 38; Osborn v. Railroad Co., 18 Fed. Cas., 844; Richeson v. Ryan, 14 Ill., 74, 56 Am. Dec., 493.
The books are full of cases wherein it has been urged upon the court that because no case has been found, no precedent discovered, there is, forsooth, no remedy. Pasley v. Freeman, 3 Term R., 51; Kujek v. Goldman, 150 N. Y., 176; Harrigan v. Gilchrist, 121 Wis., 127, 99 N. W. Rep., 909.
Messrs. Richie & Richie, for defendant in error.
Throughout the whole system of jurisprudence, ■ we-find that this is true: That while the inherent right of a court of equity to relieve against fraud or injustice, which is fairly• enunciated in the cases of Darst v. Phillips, 41 Ohio St., 514; Brenzinger v. Bank, 19 C. C., 536, and Coates v. Bank, 23 Ohio St., 415, and no quarrel made as to this primary right, yet, through all these cases, as well as many that might be cited, it is evident that this inherent right, in contradistinction to the statutory right, shall not be exercised when the statute makes a procedure governing the prescribed case definitely. In other words, where the statute points out a way and a method, that method shall be followed by the courts to the exclusion of the inherent equitable right of the court. Darst v. Phillips, 41 Ohio St., 514.
In considering the motion, the court will not inquire, whether, taking the newly discovered evi dence in connection with that exhibited on the trial, a jury might be induced to give a different, verdict, but whether the legitimate effect of such evidence would be to require a different verdict. Lessee of Ludlow’s Heirs v. Park, 4 Ohio, 44.
The above holding is fully quoted and has the approval of this court in the case of Moore v. Coates, 35 Ohio St., 181; Briggs v. Rowley, 7 N. P., 651; Sanders, Admx., v. Loy, 45 Ind., 229; Gottlieb Bros. v. Jasper & Co., 27 Kans., 770; Stineman v. Beath, 36 Ia., 73.
In Indiana, under the statutes of Garbín & Plorde, in the edition of 1862, on page 215, is found the statute precisely similar to our statute, Section 5309, and in construction of that statute, we call attention to the case of Sanders, Admx., v. Loy, 45 Ind., 229.
Where the statute does prescribe the cases for which a judgment may be set aside and does provide a mode of procedure, then, of course, the statute controls and is to be followed and obeyed. Nealis v. Dicks, 72 Ind., 374.
In the absence of any such statute, we maintain that the amended petition would still be without merit. Pico v. Cohn, 91 Cal., 129.
Decree of divorce a vinculo cannot be set aside on the ground that it was obtained by false testimony and fraud, upon an original libel filed at a subsequent term of the court. Greene v. Greene, 2 Gray, 361, 61 Am. Dec., 454.
There is scarcely a controversy in the courts in which there is not a conflict of testimony, and there are quite often charges of false swearing, and seldom is a case tried and decided in which new evidence cannot be obtained after people suppose it to be ended. Gray v. Barton, 62 Mich., 196.
That the mischief of retrying every case in which the judgment or decree was rendered on false testimony given by perjured witnesses, or on contracts or documents whose genuineness or validity was in issue, and which are afterwards ascertained to be forged or fraudulent, would be greater by reason of the endless nature of the strife, than any compensation arising from doing justice in individual cases. United States v. Throckmorton, 98 U. S., 68.
The foregoing decision has been followed' and frequently applied by other courts, among which we cite: Cotzhausen v. Kerting, 29 Fed. Rep., 821; Hilton v. Guyott, 42 Fed. Rep., 252; United States v. White, 17 Fed. Rep., 561; United States v. Hancock, 30 Fed. Rep., 858.
He does not even hint by any allegation of fact, or even conclusion of law, that the new fact alleged by him would have had or could have had any effect upon the verdict and judgment in that case. Much less does he present anything herein to warrant the court in concluding that “the legitimate effect of such evidence would be to require a different verdict.” Lessee of Ludlow’s Heirs v. Park, 4 Ohio, 44.

Opinion:
Johnson, J.
It will be observed that the amended petition specifically avers, that "owing to lapse of time between the time of the trial of said action in cause No. 10050 and the time of the discovery and disclosure of the fact that the theft heretofore referred to, was committed by said Elijah Bowsher, plaintiff is without adequate remedy at law."
It is conceded that there is no statutory authority for the relief prayed for. Proceedings under Sections 5309 and 5354, Revised Statutes, to open up and vacate a judgment after the term at which it was made must be commenced within times shorter than the time which elapsed in this case.
Therefore the question presented here is whether the amended petition states a case which warrants' the exercise of the equitable jurisdiction of the court.
Where a judgment is attacked for fraud the statutory remedy is not exclusive but cumulative. This principle is well settled in Ohio. Long v. Mulford, 17 Ohio St., 485; Coates v. Bank, 23 Ohio St., 415; Darst v. Phillips, 41 Ohio St., 514.
The syllabus in Darst v. Phillips is as follows: "The special proceeding provided by Section 5354, Revised Statutes, authorizing courts tó vacate their own judgments rendered at a previous term, for fraud practiced by the successful party is a cumulative remedy and does not exclude or limit the right of a party by original action to impeach a judgment or enjoin its collection for such fraud."
It would seem to follow, that where a proper case is stated in a petition calling for the exercise of the equitable powers of the 'court, to set aside a judgment for fraud, the statute would not begin to run until the discovery of the fraud.
But the acts of fraud which confer jurisdiction are such as are extrinsic and outside of the matter directly tried and determined, and do. not relate to the matter 'on which the judgment was rendered.
This was the contention in each of the three Ohio, cases cited above. The fraud related to the manner of acquiring jurisdiction in the original eases, and amounted to a fraud on the court as well as on the party.
In Darst v. Phillips, supra, the judgment had been entered on a promissory note with warrant of attorney attached. There was no service of process. The note had actually been paid, and the court say: "The fraud charged was one upon the court as well as upon the judgment defendants. The payment of the debt revoked the power and left the cognovit without any support, and there was no iurisdiction actually acquired."
In United States v. Throckmorton, 98 U. S., 68, the court say: "The acts for which a court of equity will on account of a fraud set aside or annul a judgment or decree, between the same parties, rendered by a court of competent jurisdiction, have relation to frauds, extrinsic and collateral, to the matter tried by the first court, and not to a fraud in the matter on which the decree was rendered."
And Mr. Chief Justice Shaw, in Greene v. Greene, 2 Gray, 361, says: "But where the same matter has been actually tried or so put in issue that it might have been tried oroof of fraud is not aerain admissible."
In Dringer v. Receiver, 42 N. J. Eq., 573, the court say: "tie (the defendant) may sue out a writ of error, apply for a new trial, or rehearing, or take an appeal, but he cannot maintain a bill in equity or retry the case on its merits or any of the questions settled by the judgment."
Other cases in which these principles are declared and enforced are: Pico v. Cohn, 91 Cal., 129; Hilton v. Guyot, 42 Fed., 252; United States v. Hancock, 30 Fed. Rep., 858; Gray v. Barton, 62 Mich., 186.
When tested by well settled rules, does the amended petition in this case state facts on which the court would be warranted in granting relief?
It sets out that in the original action against Michael by the bank, he Michael, filed an answer in which he averred as a defense that between' December 24, 1898, and December 27, 1898, the vaults of the bank were entered and robbed by persons unknown to him and without his fault.
He avers that the bank filed a reply denying said allegations and that the issue thus made was tried to the court and jury.
In the amended petition in the present case, Michael sets up the same facts, and in addition avers that he now knows the name of the person who robbed the bank.
The amended petition herein contains no allegation of fraud in the original action, on the part of the bank or of anyone. It is not claimed that the bank perpetrated any fraud at any time on the court, or on the defendants, nor that the verdict in that case was the result of fraud. There is no averment that there was any false testimony introduced by the bank.
The newly discovered evidence set out in the amended petition is merely cumulative.
If evidence was offered on the trial of the original action in support of the defense set up, it must have been to the effect that the bank had been robbed, and the additional evidence now tendered-is to the same claim, and that the name and identity of the robber is'now known.
There is no allegation in this amended petition from which any inference can be drawn, other than that the original action was fully and fairly tried without improper conduct by any one of the parties.
Counsel for plaintiff state in their brief that they have been unable to furnish a precedent for the decree prayed for in their petition, but they insist that the facts set out present a case which calls for the assertion of. the equitable- power of the court without reference to any prior fixed rule.
They cite authorities in which the inherent power of the court to grant relief demanded by good conscience, is stated and upheld. But those authorities, and the reasons upon which they are based, have no application to a proceeding in which the rights of the parties have been submitted to a court and jury, under rules securing to each a full and fair hearing, and in which there was no suggestion or claim of fraud, or improper conduct.
It is insisted that this case presents a great hardship, and that in the result of the original action, injustice was done the defendants. That may be true. Courts at their best can only approx imate exact justice. Where such hardships and imperfections seem to be apparent, courts would gladly redress them if a rule could be contrived that would remedy the evil without producing worse conditions.
The mischief of endless litigation in which nothing is finally determined, is a thing more to be dreaded than an occasional miscarriage of justice. If by allegation in a bill in equity, that false testimony had been given, or forged documents introduced or new evidence discovered, controversies which had been regularly adjudicated could be opened up, there could be no assurance of the conclusive effect of final judgments.
In the case referred to in the amended petition, the defendants Michael and Kalb filed their answers setting up what they claimed and believed to be the truth. The trial of that case was their opportunity for making the truth appear. Unfortunately they failed (not by perjured testimony, or unfair practices by their opponents), and in the reviewing courts they were not able to show that injustice had been done them or that there was any error in the proceeding.
Judgment affirmed.
Spear, C. J., Davis, Shauck, Price and Donahue, JJ., concur.