Lyon ex rel. First National Bank v. Phillips

Mr. Justice Clark

delivered the opinion of the court,

Edward Lyon held three judgments against Griffith Phillips, which were entered in the Court of Common Pleas of Sullivan Co. as follows: .

1. Judgment: — No. 53, February Term, 1869, entered February 19, 1869, for $800; scire facias, No. 89, February Term, 1874, issued 19th February, 1874; judgment of revival March 4, 1876, for $467.76; scire facias, No. 35, February Term, 1881.

2. Judgment: — No. 56, May Term, 1869, entered April 26,. 1869, for $200; scire facias, No. 88, February Term, 1874, issued February 19, 1874; judgment of revival entered for $257.80. No. 73, February Term, 1880; judgment confessed February 12, 1880, for $849.35.

3. Judgment: — No. 10, February Term, 1871; entered January 11, 1871, for $125. No. 10, February Term, 1876; judgment of revival for $168.90, confessed February 5,1876; scire facias, No. 36, February Term, 1881.

On the 18th day of December, 1882, the court, upon application of the defendant, and examination of testimony, taken upon a rule, opened the original judgment, entered to No. 53, February Term, 1869, and all the subsequent revivals thereof. At the same time, the judgments of revival, entered to No. 73, February Term, 1880, and to No. 10, February Term, 1876, were also opened, and the defendant was admitted to a defence in all. Issues were formed in the several cases, and it was ordered just before trial, that the three issues, thus formed, should be tiled together, before one jury.

The first four assignments of error are to the action of the court, in opening these several judgments, and ordering the issues formed to be tried together. The opening of a judgment is a matter in the sound discretion of the court, and in this instance is not reviewable here, either upon appeal or writ of error; an appeal brought to the present term, from the decree opening the original judgment, entered to No. 53, February Term, 1869, after argument was quashed. Some confusion might have been saved, if the issues had been separately tried, but no objection was made to the order of the court in this respect, until after the jury was sworn, and the plaintiffs opening to the jury had been made; this was too late. The conduct of the parties implied an assent to this mode of trial, and it was not in the power of either of them to withdraw that assent after the jury had been selected and sworn.

The record of the United States District Court, exhibiting the proceedings in the bankruptcy of Edward Lyon, was certainly not a bar to the plaintiff's recovery; from the intimation of counsel, at the time of the offer, it would appear that it was supposed to have that effect, and to afford a complete defence. It was, however, as the records and proofs then stood, properly receivable in evidence, for the purposes indicated in the ruling of the court. No assignment, oral ox-written, had as yet been shown, or proof given, which exhibited the right of the First National Bank of Muncy to the ownership of the judgments, and whilst this was not necessary perhaps in the prosecution of the scire facias, yet in the absence of such proofs, the fact that the judgments were not embraced in the schedules filed by Lyon, was as an admission some evidence from which the jury might infer that Lyon, at the time of his adjudication in bankruptcy, claimed nothing upon them. It was afterwards shown that the bank claimed these securities, under a pending writ of attachment in execution, issued upon a judgment held by the bank against Lyon, and that Lyon, acting under the advice of counsel, did not embrace them in the schedules, because of the attachment. The 5th assignment is therefore not sustained.

The allegation of the defendant below was that the plaintiff plied him with intoxicating liquor, and, whilst he was in a state of extreme drunkenness, fraudulently obtained his signature to the note for $800, the obligations in suit.

If this allegation were true, it was unimportant and immaterial, whether a credit for the amount of the note was, at the time or at any time, entered upon the plaintiff’s books. The note, thus obtained by fraud and artifice, was void or voidable as against the maker, no matter what entry of it was made on the books. The court was certainly right in refusing the ledger which it was asserted contained the credit alleged. The 6th assignment is therefore without merit.

The seventh assignment of error is to the affirmance of the defendant’s fourth point, which contains the assertion of a principle of law in such general form, that neither a negative nor an affirmative answer, without qualification, would correctly declare the law as now established. The court was requested to charge the jury that: “A contract, affected by fraud, is void and not merely voidable; confirmation without a new consideration would be nudum pactum.” This point, whether regarded as an absolute statement .of the law, or as specially applicable to the case on trial, was not entitled to the unqualified affirmance which it received. It is certainly true that contracts which are forbidden by statute, or are inconsistent with public policy, are absolutely void, and the ratification of such a contract, in any form, carries with it the taint of the original. So where fraud is of such a character as to involve a public wrong or a crime, the adjustment of which public policy forbids, the ratification of the act in which the fraud originates is also opposed to public policy and-cannot be permitted; the confirmation is held, to be a fraud in law as the original was a fraud in fact; but as was said in Shisler v. Vandike, 8 W. N. C., 234, “where the transaction is eontrary'only to good faith and fair dealing, where it affects individual interests and nothing else, ratification is allowable.” It is true that in Duncan v. McCullough, 4 S. & R., 487, which was followed by Chamberlain v. McClurg, 8 W. & S., 31; Goepp’s Appeal, 3 Harris, 428; and Miller’s Appeal, 6 Casey, 478, it was held “ that where there has been actual and positive fraud, or the adverse party has acted mala fide, there can be no such thing as a confirmation. What was once a fraud will always be so,” and that “ confirmation without a new consideration would be nudum pactum.” But Duncan v. McCullough, supra, as far at least as it applies this principle to frauds affecting merely individual interests, is now, as was said in Negley v. Lindsay, 17 P. F. S., 217, regarded as overruled in Pearsoll v. Chapin, 8 Wright, 9, where a different doctrine is distinctly declared. The case of Pearsoll v. Chapin, was followed by Negley v. Lindsay, supra; Seylar v. Carson, 19 P. F. S., 81; Learning v. Wise, 23 P. F. S., 173; Shisler v. Vandike, 8 W. N. C., 234; Lauer’s Appeal, 12 W. N. C., 165; all of which are in accord with it. The dictum in McHugh v. County of Schuylkill, 17 P. F. S., 391, went beyond the point ruled by it, and that case is only recognized as far as it determines the real question involved; to that extent it is in harmony with the cases last cited. It cannot be doubted, therefore, if there be no other defect from want of consideration, or otherwise, there can be ratification of a fraudulent act which affects individual interests only, without a new consideration.

If the judgment note of $800 was obtained by fraud, that fraud, as alleged, was not of such a character as to involve a crime, the adjustment of which was forbidden under any principle of public policy, it was such as affected the individual interests of the parties merely; if, therefore, the obligation was upon a sufficient consideration, and was without other legal defect, the transaction was the proper subject of ratification. The jury having found that the obligation was obtained through fraud and artifice, their next inquiry should have been directed to this question.

There was some evidence bearing on that subject, but we will neither refer to it nor express any opinion concerning it, as the cause must go back for re-trial it would be improper for us so to do. Payments made by the defendant to be applied to judgments generally, should, of course, be applied to such as are ascertained to be legally valid or binding upon him; but apart from the question of fraud, if the $800 judgment was in fact supported by a valid consideration, the defendant cannot gainsay any actual specific appropriation of money, made by himself, with full knowledge on his part, and without fraud of the plaintiff.

The seventh assignment, and those following the seventh, - are all involved in the same fundamental error, the effect of which was to withdraw from the consideration of the jury a question distinctly raised in the proofs.

The three causes having been tried together, we cannot separate them here.

The judgment in each of the three issues is therefore reversed, and a venire facias de novo awarded in each case.