Stuhlbarg v. West Norwood Bldg & Loan Co.

In the petition in this case the only ground alleged for enjoining the enforcement of the judgment in case No. 36246 is that it "was obtained through fraud in that no notice was given to them of the taking said judgment." At the original hearing the only claim was that no notice had been received. Notwithstanding the absence of any allegation of an agreement not to take a personal judgment, the appellees attempted for the first time on the rehearing to prove such an agreement, and in this attempt they failed. The only evidence offered by them was the deposition of their attorney. I quote the only pertinent question and answer:

"Q. What, if anything, did Mr. Hauer say to you regarding the taking of a judgment against the Stuhlbargs at that time? A. He said he would not take a judgment against them owing to our answer and cross-petition until such time as our matter therein had been disposed of."

Mr. Hauer's recollection of that conversation was that he said that he would not take a personal judgment at that time, but would wait until it was determined by the sale whether there would be a deficiency. He testified on direct examination:

"Q. Did you make an express promise, or any other kind of a promise that no deficiency judgment would be taken? A. No, I did not, because the understanding was that a deficiency judgment would be taken if necessary."

And, on cross-examination, he said:

"Q. Yes, but you told him no deficiency would be entered? A. Absolutely not. At that time we were taking the judgment against Conover."

When it is remembered that the issue between the defendants in that case as to the order of their liability was of no concern to the plaintiff, it seems to me that the testimony of Mr. Hauer, that the taking of the personal judgment was to be postponed until it was determined by the sale whether it would be necessary, is more likely to conform to what was said. The burden was on the appellees. I cannot agree with my associates that any promise was violated by the taking of this deficiency judgment. The greater weight of the evidence is the other way. However, assuming that the other testimony is accepted, to wit, that a deficiency judgment was not to be taken until the issues between the cross-petitioners had been decided, that certainly should not have led the appellees into believing that no deficiency judgment would ever be entered against them. Just the contrary — it shows that a deficiency judgment was contemplated. It is true that if that version of what took place is accepted, the deficiency judgment was entered before the time agreed upon had expired, but absolutely no prejudice has or could result to the appellees because of that fact. The amount of the deficiency had been determined. The appellees were the original borrowers, had never at any time in any way, and do not now, dispute the amount, and could not under the law if there had been originally any basis for such a claim. It had become res judicata.

Some question is raised as to whether this action is a direct attack upon the judgment rendered in No. A-36246. In the original opinion, it is referred to as a collateral attack, and in the opinion of the court on rehearing it is called a direct attack. That it is a collateral attack is sustained by many authorities. 1 Freeman on Judgments (5 Ed.), 604, Section 306; 15 Ruling Case Law, 838 to 841, Sections 311, 312, 313 and 314; and 23 Ohio Jurisprudence, 1144, Sections 998 and 999. However, the distinction is academic, at least so far as this case is concerned. No matter how the judgment is regarded it is certainly not a void judgment. The court had jurisdiction of the persons and the subject-matter. Whether the attack be regarded as direct or collateral, relief should not be granted in the absence of a showing of a meritorious defense. 23 Ohio Jurisprudence, 1286, Section 1238. If this proceeding could be construed to be an effort to invoke Section 11631, General Code, the appellees could not succeed for the same reason because it is expressly provided in Section 11635, General Code, that the petition must allege the defense to the original cause of action, and by Section 11637, General Code, it is enacted that: "A judgment shall not be vacated on motion or petition until it is adjudged that there is a valid defense to the action in which the judgment was rendered * * *." This rule, requiring proof of a meritorious defense as a condition precedent, is a recognition of the principle that substance should not be sacrificed to form. The rule was applied in a case in which it was sought to have a judgment vacated on the ground that it had been taken in violation of an agreement. First Natl.Bank of Newton v. Federal Reserve Bank, 210 Iowa 521,231 N.W. 453, 69 A.L.R., 1329. No attempt even to prove a defense has been made, indeed, none has been alleged in the pleadings in any of these cases, or suggested orally at any time.

My reasons for concluding that the appellees had failed at the first trial to show a right to relief are set forth in the opinion of the court handed down at that time, which is subjoined and made a part of this dissenting opinion. For those reasons and the reasons here set forth, I cannot concur in the opinion of the court on the rehearing.

The opinion of the court at the first trial is as follows: