Haley v. Eureka County Bank , 21 Nev. 127 ( 1891 )

This case came before this court on appeal from an order of the district court, setting aside the default of the defendants. The order was reversed and the cause remanded. (20 Nev. 410.)

It is unnecessary to repeat the history of the case here.

On the return of the case to the district court, the plaintiff, by his attorney, appeared in court and asked for judgment on the pleadings, for the full amount prayed for in the complaint, no answer having been filed; which motion was by the court denied, on the ground that the plaintiff was not entitled to a judgment without proof of the value of the property alleged to have been converted.

In an action arising upon contract, for the recovery of money or damages only, a default and final judgment may be entered by the clerk. In all other cases the plaintiff must apply to the court for the relief prayed for in his complaint, and when he does so the court may require additional proof, and it is not error for the court to refuse to enter judgment on the pleadings alone, and the proof must be made when demanded. (Parker v. Wardner, 13 Pac. Rep. 173.)

G. W. Baker, as an officer of the court, and as amicuscuriœ, submitted a written motion to the court, "to dismiss the action as to all the defendants, except the Eureka County Bank, upon the ground and for the reason that the same was and is a sham action, colorably instituted between the plaintiff and the defendants Sadler, Torre, Barbieri, and the Nevada Stage Transportation Company, without any intention of ever determining any dispute, or litigating any question, or ever having any adversary trial, but simply to obtain the judgment and decision of the court upon a feigned issue, which might affect other parties not impleaded; and that said action between the parties last above mentioned was amicably instituted, without any real dispute between them, and their interest in the question when the said suit was brought was one and the same, and not adverse. That in these proceedings the plaintiff and said defendants mentioned were seeking to secure such a judgment to be entered as might result to the advantage of the defendants, with reference to the title of the property mentioned in the complaint, and adversely to the interest of other parties not before the court, and who had no knowledge of the suit, and no opportunity to be heard, and have any interest they might have in the subject matter of the suit determined. That the attorney for the plaintiff, who brought the action for the defendants last above mentioned, was employed and paid by them, and such suit was simply a scheme to in some way obtain a judgment of the court upon a feigned issue, which it was conceived might be of advantage to the defendants, and for which purpose the plaintiff permitted his name to be used in instituting the same." In support of this motion, the amicus curiœ offered the affidavits of Sadler and Rives, and it was stipulated between the parties that the testimony taken on the hearing of the motion to open the default, should be considered admitted as evidence on the hearing of this motion, in so far as the same was applicable.

The plaintiff objected to the consideration of the motion, upon the ground that the same had not been noticed.

The court permitted the motion and affidavits to be filed, and informed the plaintiff that he might have all the time he required to prepare counter-affidavits and argue said motion. The plaintiff denied the right of counsel to make the motion, and excepted to the ruling of the court.

The objection of the plaintiff to the filing and hearing of the motion to dismiss, on the ground that the same was not noticed, is without merit: (1) Because upon the reading and filing of the motion the court informed counsel for plaintiff, that they should have all the time they desired to file counter-affidavits and argue the motion, which offer they declined to avail themselves of, but stipulated that the affidavits, submitted to the court on the consideration of the motion to open up the default, on the former hearing of this case, should be admitted as the evidence on this motion, in so far as the same was pertinent to the question submitted for decision. And (2) a motion of this character is in the nature of a suggestion to the court, that the action then pending is not a real, but a fictitious one, to obtain a judgment of the court, not upon any issue then involved between the parties to the action, but that might be used by either the plaintiff or the defendants, against strangers to the action who might thereafter come in and claim an interest in the property sued for.

When actions are brought in a court of law, a duty devolves upon the judge, and that is, scrupulously to guard its proceedings from being used by the parties collusively, and not suffer a judgment to be entered without being fully satisfied that a cause of action really exists, as provided for by law.

Whenever facts are placed before a court, which cause any suspicion that there is any collusion between the parties, no matter in what way or form, the facts are brought to the knowledge of the court, it is the duty of the judge at once to institute such an examination as will satisfy him of the truth or falsity of the charge.

There are many circumstances connected with this case, which certainly give a strange appearance to the mode in which this action was commenced and has been prosecuted, sufficient, in our opinion, to sustain the order of dismissal. It appears from the uncontradicted testimony that one Townshend had a contract from the government of the United States for the transportation of the United States mail from Eureka, in Eureka county, to Pioche, in Lincoln county, all in this state. He was in possession of horses, wagons, and harness sufficient to stock the route. R. Sadler and John Torre were his bondsmen. Townshend became indebted to the Eureka County Bank in the sum of "four thousand eight hundred dollars, to Torre, Sadler. and Barbieri in the sum of two thousand dollars, and there was still due to the Utah, Nevada California Stage Company the sum of two thousand dollars, balance of purchase money for the stock on the road; making a total indebtedness of eight thousand eight hundred dollars." The Eureka County Bank, insisting upon the payment of its claim, Townshend, on the 11th day of March, 1887, sold and delivered to the bank all the property used in transporting said mail, and his interest in the said contract with the government. That the said Sadler, Torre, and Barbieri, in order to protect themselves from loss, upon the failure of the parties to carry said mail in accordance with the contract for which they were bondsmen, with the knowledge and consent of Townshend, purchased the property and contract from the Eureka County Bank, paying therefor the sum of four thousand eight hundred dollars. They also assumed the indebtedness due from Townshend to the Utah, Nevada California Stage Company.

That after the purchase of said property by Sadler, Torre, and Barbieri, they organized the Nevada Stage Transportation Company, and they subscribed for and owned all the stock. That in order to qualify Thomas E. Haley, the parties above named gratuitously transferred to him twenty-five shares of the capital stock of said company, and made him secretary thereof. The Utah, Nevada California Stage Company, setting up its claim to the property, E. Sadler purchased all the right, title and interest of the said Utah, Nevada California Stage Company, for himself, Torre, Barbieri and the Nevada Stage and Transportation Company, agreeing to give notes signed by himself, Torre and Barbieri for the sum of two thousand dollars. When the time come for the giving of Said notes, Torre was absent from Eureka, and the notes of Sadler, Haley and Jackson were offered in lieu thereof; but the same were not accepted by the company, and they were returned to the makers thereof, and the notes of Sadler, Torre and Barbieri were made, and accepted by the company, and, through the advice of Henry Rives, the title of the Utah, Nevada California Stage Company was taken in the name of Haley, for the purpose of commencing a suit and clearing the title to the property, which was to be done for the use and benefit of Sadler, Torre and Barbieri, and the Nevada Stage Transportation Company, but that the said Haley never bargained for, purchased, or paid one dollar for said property, and only received the legal title to said property at the request of Sadler, and with the express understanding and agreement, that he was in all things to be governed by the advice of the said Henry Rives, and that, if a suit was to be instituted, it was to be conducted in a friendly manner, and under the control of the defendants, and in their interests, and, when the title thereto was settled, to convey all of said property to the said Sadler, Torre and Barbieri, or to any person whom they might designate.

This suit was commenced by the plaintiff while he was acting as secretary of a corporation, against the corporation and three of the stockholders. The defendants, Sadler, Torre and Barbieri employed and paid the fees of the attorney for the plaintiff and all the costs of court.

Haley testified, and denied that there was any agreement between himself, Sadler, Torre, and Barbieri, that a judgment should not be taken against the defendants, Sadler, Torre, Barbieri and the Nevada Stage Transportation Company; or that the suit should be a friendly one, and should inure to the use and benefit of the defendants above named. He admits that Sadler first spoke to him about purchasing the title of the Utah, Nevada California Stage Company; admits the giving of the notes of Sadler, his own and Jackson's, and the return of them to him; admits that he never paid any money whatever for the property, but says he expected to pay his notes. But they were returned to him, and Sadler, Torre, and Barbieri gave notes, and paid them as they became due. They had prior thereto paid the Eureka County Bank the sum of four thousand eight hundred dollars, and had been in possession of all the property.

The evidence was sufficient to satisfy the court that there was collusion between the plaintiff and the three defendants named, and that the action was not commenced for the purpose of settling any real controversy then existing between the parties.

In the case of Brewington v. Lowe,1 Ind. 23, the supreme court said: "We think these proceedings were instituted under a mistaken apprehension of the proper functions of the judiciary. Courts of justice are established to try questions pertaining to the rights of individuals. An action is the form of a suit given by law for the recovery of that which is one's due, or a legal demand of one's rights. * * * Indeed, it is well settled that courts will not take cognizance of fictitious suits, instituted merely to obtain judicial opinions upon points of law."

In the case of Loughead v. Bartholomew, reported in Wright, (Ohio) 91, Lane, J., said: "Courts are instituted to try questions pertaining to the real interests of individuals; to settle substantial controversies; to preserve the peace of society, and where questions submitted to their action are merely questions of speculation, and where their discussion is contra bonos mores, or against public policy, or where the inquiry tends to cast ridicule upon the court, or where the investigation is palpably injurious to the interests or feelings of third persons, without affecting the substantial rights of the litigants, some means will be found to arrest the inquiry."

In the case of Lord v. Veazie, 8 How. 255, Taney, C. J., said: "It is the office of courts of justice to decide the rights of persons and of property, when the persons interested cannot adjust them by agreement between themselves — and to do this upon the full hearing of both parties. And any attempt, by a mere colorable dispute, to obtain the opinion of the court upon a question of law which a party desires to know for his own interest or his own purposes, when there is no real and substantial controversy between those who appear as adverse parties to the suit, is an abuse which courts of justice have always reprehended, and treated as punishable contempt of court. * * * The objection in the case before us is, not that the proceedings were amicable, but that there is no real conflict of interest between them; and that the plaintiff and defendant have the same interest, and that interest adverse and in conflict with the interest of third persons. * * * A judgment entered under such circumstances, and for such purposes, is a mere form. The whole proceeding was in contempt of the court, and highly reprehensible, and the learned district judge, who was then holding the court, undoubtedly suffered the judgment pro forma to be entered under the impression that there was in fact a controversy between the plaintiff and defendant, and that they were proceeding to obtain a decision upon a disputed question of law, in which they had adverse interests. A judgment in form, thus procured, in the eye of the law is no judgment of the court. It is a nullity, and no writ of error will lie upon it. This writ is therefore dismissed."

In Smith v. Railroad Co., 29 Ind. 546, a fictitious name was used for plaintiff in the action. The testimony shows that the name of Smith, instead of Reeder, was more by accident than intentional. But the court did not dismiss the appeal on that ground, but that the interests of Reeder and the railroad company were not antagonistic, and the decision was intended to affect thirds persons. (See, also, Hotchkiss v. Jones, 4 Ind. 260.) The case of Cleveland v. Chamberlain, 1 Black 425, was a real action. The plaintiff had judgment. Thereafter defendant purchased the plaintiff's judgment, and perfected an appeal to the supreme court. These facts were called to the attention of the court. Mr. Justice Grier said: "This appeal must be dismissed. Selah Chamberlain is, in fact, both appellant and appellee. By the intervention of a friend, he has purchased the debt demanded by Cleveland in his bill, and now carries on a pretended controversy by counsel, chosen and paid by himself, and on a record selected by them, for the evident purpose of obtaining a decision injurious to the rights and interest of third parties."

In the case of Berks Co. v. Jones, 21 Pa. St. 416, Black, C. J., speaking for the court, said: "Without a doubt, the object of the proceeding was not to settle a real dispute, but merely to ascertain the law; in other words, to make the court act as counsel for the commissioners. But they have no right to get advice in this way. Courts ought to encourge amicable submissions of real disputes, but people have no right to propound abstract questions to them. For this there is not only the clearest reason, but the highest authority. * * * The judge of the common pleas, overindulgent to the parties, decided the law for them, when he might have stricken the case from the record. With an easy good nature, equally inexcusable, we have done the same thing. We have considered the subject with as much care as if it had been regularly before us; and we unanimously agree in pronouncing the opinion of the court below to be a perfectly sound exposition of the law. But because there was nothing on which a judgment could be entered, the writ of error must be quashed." (Pittsburg v. Allegheny, 1 Pitts, R. 99.)

In the case of Meeker v. Stralt,38 Mo. App. 243, the supreme court said: "This decree cannot stand. Suits contemplate adversary parties, although amicable suits may be brought to determine the respective rights of the party thereto. When a suit is brought with a view of affecting the rights of third parties, and it is apparent that that is its sole object, the suit ceases to be adversary, and becomes collusive. No court should lend its aid to such a proceeding, least of all a court of equity. * * * All these considerations lead to the inevitable conclusion that the decree in the present case was unwarranted by the law and the evidence, and that the trial court instead of rendering a decree for plaintiff should have dismissed her bill. Judgment reversed and bill dismissed."

Courts of justice are established for the purpose of deciding really existing questions of right between parties who, in good faith, submit a case to the court for a decision, and the court should, not try an action upon a feigned issue, or an abstract question of law, or judicial practice, not arising out of circumstances really existing, in which the parties have a legal interest. An action is a legal prosecution by a party complainant, against a party defendant, to obtain the judgment of the court in relation to some rights claimed to be secured, or some remedy claimed to be given by law to the party complaining. It is given by law, for the recovery of that which is one's due, or a legal demand of one's rights.

From the evidence in this case, we are satisfied that, at the time of commencing this action, the plaintiff had no legal demand against the defendants, and they did not infringe upon any of the plaintiff's rights in relation to the property in controversy; that the action was commenced by the plaintiff as the agent and trustee of the defendants, and his denial "that there was no agreement between himself and Sadler that no judgment should be taken against Sadler, Torre, Barbieri, or the Nevada Stage Transportation Company," need occupy but little attention, as all the circumstances connected with the purchase and possession of the property, as well as the affidavits of Rives, Sadler and Torre, in support of the motion to dismiss, clearly show that plaintiff had agreed to and was holding the bill of sale of the property in trust for the defendants named, and for their use and benefit, and for the purpose of protecting their title to the property, and, as they supposed, to prevent Townshend from asserting any claim to the property, under an agreement entered into by Townshend on the one part, and Sadler, Torre and Barbieri on the second part, wherein they covenanted and agreed, "that immediately upon the receipt by us of all moneys which we have agreed to pay said Eureka County Bank, and all money now due us from W. J. Townshend, together with all which we may hereafter have to pay out in order to conduct said stage line, and upon our being secured from loss by reason of our being sureties upon the mail contract bonds of said W. J. Townshend, we will transfer and set over unto said Townshend, or his order, all of said property connected with said lines which we may acquire in connection with the conduct of said lines, and which we may charge as having been necessarily purchased in the conducting of said lines and business. It is also understood and agreed that, in case we have to pay interest, and any money, to the Utah, Nevada California Stage Company, in order to carry on said stage lines, or to retain possession of the property hereinbefore mentioned as having been transferred to us, this agreement to reconvey shall become operative until such interest and payment to said Utah, Nevada California Stage Company shall be repaid to us;" and, as was said in the case of Lord v. Veazie,supra, any judgment, entered under the above state of facts, would be a nullity; and a right of action must be complete before the suit is brought, and no subsequent occurrence of a material fact will avail the plaintiff in maintaining the suit. (Moore v. Maple, 25 Ill. 343.) Therefore the assignment of the judgment by Haley to Ahern did not change the condition of things as to the fictitiousness of the action when commenced. There could be no rights, under such a judgment, to assign.

The plaintiff also objected to the reading of the affidavit of Rives, for the reason that the same was incompetent, irrelevant, and immaterial, and discloses information which was obtained when he was acting as attorney for the plaintiff, and discloses privileged communications between attorney and client, and that it attempts to prove facts contrary to the admitted allegations of the complaint. It did not disclose privileged communications. Some of the statements made by him were in the nature of communications received while acting as the agent and attorney for the defendants in the purchase of the property from the Eureka County Bank, Townshend, and the Utah, Nevada California Stage Company, and conversations had by Haley and Sadler, in the presence and hearing of Rives; and such statements are not privileged, when the action is between the parties to the conversation. (Michael v. Foil,6 S. E. Rep. 264.) Where an attorney was acting for both plaintiff and defendant in drawing a contract for them to sign, communications of the parties to such attorney are not confidential. (Appeal of Goodwin Gas-Store, M. Co., 12 Atl. Rep. 736; Griffin v. Griffin, 17 N. E. Rep. 782;Hurlburt v. Hurlburt, 2 N. Y. Supp. 317.)

In the case of Bauer's Estate, reported in 21 Pac. Rep. 762, the supreme court of California said: "When two persons address a lawyer as their common agent, their communications to the lawyer, as far as concerns strangers, will be privileged, but as to themselves they stand on the same footing as to the lawyer, and either can compel him to testify against the other as to their negotiations." The appellant claims: "That the court erred in granting said motion to dismiss, and in entering said judgment, for the reason that no jury was ever waived in this action." An answer to that objection is, that a jury was not demanded, and by the silence of the plaintiff he waived his right thereto if any he had.

In the case of Sheets v. Bray, 24 N. E. Rep. 358, the supreme court of Indiana said: "We have been unable to find any bill of exceptions in the record showing a request on the part of appellants for a jury trial, and a refusal and exception thereto, nor is any such bill referred to by counsel in their brief. In the absence of such request, the right to a trial by jury, if such right existed in this case, must be regarded as waived." (Grant v. Hughes, 2 S. E. Rep. 345.)

The objection of the plaintiff to G. W. Baker, as amicuscuriœ, making the motion to dismiss the action, is without merit. In the earlier English cases, we find that any stranger as amicus curiœ may move the court of matters apparent in the writ, and the courtex-officio is bound to abate the writ if it be vicious, for false Latin or default of form, or that the one plea goes to the whole, and the court will discharge all others; or may move to quash an indictment apparently vicious, be the crime what it will; and a party was permitted to state in court that he was present at the making of the statute, and what was the intention of parliament in enacting the law; and, if an action be abated, any one may move to have the verdict set aside, even the defendant himself. (2 Vin. Abr. 175.) If a judge by doubtful, or mistaken in a matter of law, a stander-by may inform the court, as amicus curiœ. In some cases, a thing is to be made apparent by suggestion; on the roll, by motion; sometimes by pleadings, and sometimes as amicuscuriœ. (Tayl. L. Gl. 43, and 29 Ind., supra.)

In the case of Ex-parte Randolph, 2 Brock. 454, Mr. Nichols appeared as amicus curiœ at the request of the court, and argued the question therein pending And inEx-parte Yeager, 11 Grat. 656, where the petitioner had made application for a license to keep a public house, Fry, who was counsel in a similar action, was permitted to appear as amicus curiœ, and argue against granting the same.

In the case of People v. Gibbs, reported in 8 N. W. Rep. 258, "Thompson asked permission of the court to assist in the prosecution of the case, he having theretofore had something to do with the prosecution, but his request was denied. Thompson then suggested to the court that the defendant be required to plead to the information. Counsel for the defendant objected to Thompson addressing the court, the objection was overruled, and the defendant required to plead." On appeal, the supreme court said: "The suggestion of Thompson was one which might very properly have been made as amicus curiœ, by any member of the bar." The court may, and often does, of its own motion, ask of counsel information upon a point in doubt, or in relation to the merits of the case on trial. (State v. McCullough, 20 Nev. 154.)

It is not only the right, but the duty, of an attorney of the court, if he knows or has reason to believe that the time of the court is being taken up by the trial of a feigned issue, to so inform the judge thereof; and it is discretionary with the court to stay proceedings, make due inquiry, and if the facts warrant the suggestion, then dismiss the case.

The judgment of dismissal is affirmed.