Risman, Partners v. Krupar

In the municipal court of Cleveland, Joseph Risman and George W. Veres, the plaintiffs in error here, obtained a judgment against defendants in error George Krupar and Perez Krupar, in the sum of $302.10, upon a cognovit note. Thereafter the defendants in error paid the judgment. Subsequently, defendants in error filed a petition in the same court to recover the money paid; a demurrer to the petition was overruled, and upon trial the court below found for the plaintiffs below and entered a judgment on April 18, 1932, in the sum of $338.74. From this latter judgment, error has been prosecuted to this court.

In their petition the plaintiffs below averred that the defendants fraudulently obtained the plaintiffs' signature to the cognovit note; that certain false and fraudulent representations were made in connection with the execution of the note; that certain blank spaces in said note were later filled in; that said cognovit note was reduced to judgment; that the plaintiffs below in order to clear title to certain real estate owned by them, and to complete a real estate deal, were compelled to and did pay the said judgment.

In the trial below the plaintiffs introduced evidence to prove these allegations, and asserted that the payment of the judgment was an involuntary payment, and that therefore they had a right to recover the money paid under the cognovit judgment.

It is to be noted at the outset that no motion or petition was filed seeking to vacate the original cognovit judgment, nor is there any claim that there was any fraud in procuring the payment of the judgment.

Section 11582, General Code, reads as follows: "A judgment is the final determination of the rights of the parties in action. A direction of a court or judge, made or entered in writing and not included in a judgment, is an order."

It is well settled that a judgment rendered in a court having jurisdiction of the parties and the subject-matter is binding until set aside or vacated by proper procedure. The general rule is well set forth in the case of Moore v. Robison, 6 Ohio St. 302, which held that a judgment rendered by a court having jurisdiction of the subject matter and the person cannot be treated as a nullity; that it binds the parties until vacated by appeal or reversed upon error by a court having appellate jurisdiction, and cannot be collaterally attacked.

There are many authorities in Ohio that a judgment so rendered is not subject to collateral attack.

In the case of McAllister v. Schlemmer Graber Co., 39 Ohio App. 434, 177 N.E. 841 (1930), paragraph 4 of the syllabus reads: "Judgment by confession on warrant of attorney is as impervious to collateral attack as judgment obtained in open court if court had jurisdiction."

In 34 Corpus Juris, 524, Section 830, it is said: "The validity or correctness of a judgment cannot be impeached in a subsequent action brought by the former defendant against the former plaintiff, involving the same issues, [citing Smith v. Kelly, 2 N.Y. Super., 238], or in action to recover back the money paid under the judgment, [citing Hinds v. Wiles, 12 Ala. App. 596 [68 So. 556]; Carter v. Canterbury First Ecc. Soc., 3 Conn. 455;Peck v. Woodbridge, 3 Day [Conn.], 30; Brunson v. Bacon, 1 Root [Conn.], 210; Davis v. City of Rome, 23 Ga. App. 188 [98 S.E. 231]; Morton v. Chandler, 7 Me. [7 Greenl.], 44; Homer v. Fish, 1 Pick. [Mass.], 435, [11 Am. Dec., 218]; Loring v. Mansfield,17 Mass. 394; New Madrid County v. Phillips, 125 Mo., 61 [28 S.W. 321]; Pacific Lumber Co. v. Prescott, 40 Or. 374 [67 P. 207];Ogle v. Baker, 137 Pa., 378 [20 A. 998, 21 Am. St. Rep., 886];Boyd v. Graham, 42 Pa. Co. Ct. R., 632; Brooks v. Powell [Tex. Civ. App.], 29 S.W. 809], or for fraud and conspiracy in obtaining the judgment." Citing Morris v. Travelers' Ins. Co. [C.C.], 189 F., 211; Hall v. Hall, 91 Conn. 514 [100 A. 441];Duffy v. Frankenberg, 144 Ill. App. 103; Schultz v. Schultz,136 Ind. 323 [36 N.E. 126, 43 Am. St. Rep., 320]; Smith v. Abbott,40 Me. 442; Engstrom v. Sherburne, 137 Mass. 153; Stevens v.Rowe, 59 N.H. 578 [47 Am. Rep., 231]; Lyford v. Demerritt,32 N.H., 234; White v. Merritt, 7 N.Y. 352 [57 Am. Dec., 527];Tuttle v. Tuttle, 46 N.D. 79 [181 N.W. 888]; Purdy v. Winter,79 Or. 614 [156 P. 285].

In the instant case, the holders of the cognovit note caused the same to be reduced to judgment. Thereafter the judgment was paid, satisfied, and discharged. At that time the defendants could have filed a motion to vacate, or, after term, a petition to vacate the judgment under Section 11631, General Code, and could have then proceeded to have the judgment vacated and set aside on the ground of fraud. At that time it apparently seemed advantageous to defendants in the original action to pay the judgment in order to close a real estate deal. Although then cognizant of the alleged fraud, the defendants chose to pay the judgment. The conduct of a person in regard to a judgment obtained may be such as to estop him from asserting any invalidity thereof.

The situation in this case is analogous to that in the case ofBriggs v. Hutson, 27 Ohio App. 93, 160 N.E. 860 (1927). In that case there was an attempted ratification of a forged signature to a promissory note. While the court held that there could be no ratification of a forgery, yet a person could adopt the obligation of the forged instrument, or by conduct be bound thereby.

In the instant case the original defendants by failing to assert the invalidity of the judgment on the ground of fraud saw fit to pay the same, and by that conduct adopted the obligation of the judgment, and are likewise bound. If fraud had not only been practiced in obtaining the signatures to the note, but also in procuring the judgment and the payment of the judgment, a different situation would be presented. But in the case at bar the cognovit judgment showed no fraud or irregularity on its face and was obtained in a court having jurisdiction of the parties and the subject-matter. It therefore became a valid and binding judgment, or, at least, voidable.

Public policy requires that at some point in the course of litigation there shall be a final determination of the rights of the parties. Where the court has jurisdiction of the parties and subject-matter, as in this case, the judgment is a final determination unless set aside by proper judicial procedure, as provided by law.

There is no claim or allegation that there was any fraud in procuring the payment or satisfaction of the judgment, nor is there any claim made that defendants in the original action did not know of the fraud at the time the judgment was paid and satisfied. Under these circumstances this court is of the opinion that the plaintiffs below were estopped, and having paid the original judgment could not maintain a separate action for the recovery of the money paid. Nor do we believe that there was such duress or involuntary payment as would allow a recovery of the money paid, with the judgment still unimpeached.

It follows that the court erred in finding for the plaintiffs below, for the reason that the judgment is contrary to law. Accordingly the judgment is reversed, and final judgment is hereby entered for plaintiffs in error, to all of which defendants in error except.

Judgment reversed and judgment for plaintiffs in error.

LIEGHLEY, P.J., concurs in judgment.

LEVINE, J., concurs in judgment of reversal, but dissents to entering final judgment.