# Petition for Writ of Certiorari — Titus v. Wallick

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1939
- **Citation:** 306 U.S. 282

## Text

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Ses -Seoreme Ceert, U.S

FiLwpD

Te COPY JUL 8 1938

CHARLES ELMORE PROPLEY

Cicrenw

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1938

No. 188.

EDWARD H. TITUS,

Petitioner,

LOU C. WALLICK.

PETITION FOR A WRIT OF CERTIORARI TO THE
SUPREME COURT OF OHIO AND BRIEF IN SUP.
PORT THEREOF.

Tuomas L. Suenman,

~ Aanonx FReaxk.

Caunxel tay Petitioner

° INDEX.

Suszect Iwvex.

Page
Petition for a writ ot certiorari. _. 1
Summary statement of the matter involved 2
Reasons relied ona for the allowance of the writ 9
Prayer for ee 13
Brief in support of petition for writ of certiorari 15
L. The opinions of the courts below 15
ar Jurisdiction 16
Statement of the case 19
IV. Specification of errors 20
V. Arguments. 21
Summary of argument 21

Point I—The Ohio courts refused, di-

rectly so, and contrary to constitu-

tional provision to give full faith and
credit to the New York judgment 22

Point [l—Frand in obtaining a judg-

ment furnishes no ground for col-
lateral attack 24

Point I1]—The judgment remains unim-

peached and unimpeachable in New

York and it is therefore not subject to
collateral attack in Ohio 25

Point IV—Petitioner was the rea! party
in interest in the New York suit 28

Point V—The New York judgment is

conclusive upon whether petitioner is
real party in interest 34

Point VI—The absence of extrinsic
fraud 36
Conclasion 40

Tape or Cases Crrep.

Armstrong v. Armstrong, 117 O. S. 558 y
Allen v. Brown, 44 N. Y. 228 30, 32, 33
Abram French v. Marz, 8 N. Y. Mise. Rep. 490 35

—6553

ii INDEX

g

Bryant v. Zimmerman, 278 U.S. 63 __.

Barbin v. Moore, 85 N. H. 362......

Brown v. Powers, 53 N. Y. App. Div. 251...

Birdall v. Read, 188 N. Y. App. Div. 46.

Bachman v. Hausman, 241 N. Y. App. Div. 153

Banca C. 1. Trust Co. v. Clarkson, 274 N. Y.69......

Brown v. Gim, 66 O. 8. 316................. ae

Borgos v. Price, 140 N. Y. Misc. Rep. 283

Boston € Mame R. Co. v. D. é H. Co., 268 N. Y. 382.

Crapo v. Kelly, 83 U.8.610........... 19,

Crescent City Livestock Co. v. Butchers’ Soaeen 120
Pad ns cece cawaeadecdes. es 19,

Christmas v. Russell, 72 U. 8. 290 . )

Cole v. Cunningham, 133 U. 8. 107...

Corley v.N.Y.d4 H. Rail Co.,12 N. Y. App. Div. 409

Casady v. Scott, 40 Idaho 137. tf

Cauldwell v. City of New York, 252 N. Y. “App. Div.
559, 278 N. Y. —, 15 N. E. (2d) 70.

Donlin v. Carlow, 120 N. Y. Mise. Rep. 698

Dockery v. Central,45 Arizona 434

Elmquist v. Markoe, 45 Minn. 305

Fiske v. Kansas, 274 U. 8. 380

Fauntleroy v. Lum, 210 U. 8. 230

Green v. Van Buskirk, 72 U.S. 307 19, 22

Great Western Telegraph Co. v. Purdy, 162 U.S. 329 19, 22

Gray vy. Richmond, 167 N. Y. 348

Hancock National ‘Bank v. Farnum, 176 U.S. 640 19,

Hanley v. Donoghue, 116 U.8. 1

Holden, Matter of, 271 N. Y. 212 27,

Horne v. McGinley, 252 N. Y. App. Div. 296

Hunter v. Allen, 106 N. Y. App. Div. 557

Hentschel v. Fidelity, etc., 87 F. (2d) 833

Hoffman v. Foote, 172 N. Y. 348.

Harrington v. Denny, 3 Fed. Supp. 584, 68 F. (2d)
1004 36,

Jacobowitz v. Herson, 268 N. Y. 130

Kansas City So. Ry. v. Albers Comm. Co., 223 U.S.
573 23

Kalb v. Leff, 138 N. Y. Mise. Rep. 830 32

Lentz v. Oregon, 116 Oreg. 683 30

ERSSSRE KBNSERNR RRESSSSSSss

SRLS

8

-

Los Robles Water Co. v. Stoneman, 146 Cal. 203

McNitt v. Turner, 83 U. 8. 352

McCauley v. Georgia R. R. Bank, 239 N.Y.514 .....

McCandless v. Furland, 293 U. 8. 67

Mutual Life Ins. Co. v. McGrew, 188 U.S. 291

Milwaukee County v. White Co., 296 U.S. 268 = 9, sees

Melgaard’s Will, 200 Minn. 493

Mayor v. Brady, 115 N. Y. 599

Meyers v. Credit Lyonnais, 259 N. Y. 399

Meeker v. Claghorn, 44 N. Y. 349

Moffett v. Robbins, 81 F. (2d) 431

Phillips v. Griffin, 236 N. Y. App. Div. 209

a a SS 8 ee

Roche v. McDonald, 275 U. 8. 449

Roby v. Rainsberger, 27 O. 8. 674

Stricks v. Siegel, 135 N. Y. Mise. Rep. 608, 138 N. Y.
Mise. Rep. 266.

St. Louis, L Mt. & So. Ry. Co. v. Starbird, 243 U.S.
592 |

Simmons v. ‘Saul, 138 U.S. 439

Shemdan v. The Mayor, 68 N. Y. 30

Schwartz v. Fletcher, 238 N. Y. App. Div. 554

Spencer v. Standard Corp., 237 N. Y. 479

Seybold v. Grand Forks,5 N. D. 460

Smead v. Fay, 1 Disney (Ohio), 531

Thompson v. Whitman, 85 U. 8. 457

Tioga v. Tidd, 164 N. Y. Misc. Rep. 273

Toole v. Fite, 57 Utah 1, 168 Pac. 427

Toledo Co. v. Computing Co., 261 U. 8. 399

Uni‘ed States v. Throckmorton, 98 U.S. 61 | 9,

United States v. Atkins, 260 U. 8. 220

United States v. California & Oregon Land Co., 192
U. 8. 355

Van Huffel v. Harkelrode, 284 U. 8. 225

Ward v. Southfield, 102 N. Y. 287

Warschauer v. Webb, 9 N. Y. St. Rep. 529

Webster v. Reid, 52 U.S. 437

Wolcott v. Hillman, 23 N. Y. Mise. Rep. 459

Wright v. Saltmarsh, 174 Oklahoma 226

s

Be
RRBRERSSESNERSE

35, 39
36
24, 38
24

35
19
27, 39
34
24
33
38

iv INDEX

Taste or Statutes Crrep.

Page
Section 237 (b), Judicial Code... s—ss.s—iw. 16
Section 344 (b), Title280f U.S.C.A.... .......... 16, 19
Section 350, Title 28 0f U.8.C.A.................. 16
Section 905, Revised Statutes... .ss—si—iéi(‘(<a SO vests 16
Section 687, Title 2 of U.S.C.A................ 16
Section 210, New York Civil Practice Act... 4, 23, 31

TexTsooxs anv Ewcyciopepias Crrep.

Freeman on Judgments (5th Ed.), p. 633,663... 4
Freeman on Judgments (5th Ed.), p. 2569 are 39
Freeman on Judgments (5th Ed.) pp. 753-756. 35
Williston on Contracts, Rev. Ed., p. 1296. . re 29
Williston on Contracts, Rev. Ed., pp. 1166 to 1170. 32
Williston on Contracts, Rev. Ed, p. 1294..... 32
Carmody’s New York Practice, Vol. 2, pp. 804 to

MC aah Pe stene eres Delete dior 29, 32
23 Cyclopedia 964 ................... 35
34 Corpus Juris, Section 859... | 35

EEE

SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1938

No. 188

EDWARD H. TITUS,
Petitioner,
vs.

LOU C. WALLICK.

PETITION FOR A WRIT OF CERTIORARI TO THE
SUPREME COURT OF OHIO.

To the Supreme Court of the United States and the Honor-
able Justices thereof:

The petition of Edward H. Titus, praying for a writ of
certiorari on the ground that the courts of Ohio have denied
full faith and credit to a final judgment rendered in the
Supreme Court of the State of New York, and in support
thereof, respectfully shows to this Honorable Court:

There is presently pending in this case a motion by peti-
tioner to print an abbreviated record and by reason thereof
references herein refer to the typewritten record and the
exhibits annexed thereto.

ln

A.

Summary Statement of the Matter Involved.

On May Ist, 1934, petitioner recovered a judgment in
the Supreme Court of the State of New York against the
respondent in the sum of $389,103.21 (R. 27-30). There-
after petitioner instituted an aetion in the Common Pleas
Court, Franklin County, Ohio (hereinafter referred to as
the Common Pleas Court) for the purpose of making the
judgment in the Supreme Court of the State of New York
a judgment in the State of Ohio (R. 8).

Petitioner’s action in the State of New York was insti-
tuted on December 22, 1925 (R. 147, folio 2) and was bit-
terly contested by respondent. Said action was tried twice
in the Supreme Court of the State of New York (R. 144,
page 41 of Case on Appeal; R. 146, page 52) and it was sub-
mitted upon five occasions to the Appellate Division of the
Supreme Court of the State of New York, First Department
(R. 144, page 53; 227 N. Y. App. Div. 789; R. 146, page 784;
R. 147, page 42; R. 129), and once to the Court of Appeals
before final judgment was obtained by petitioner (R. 133-
135). In addition, three references were had (R. 144, folio
22; R. 145, pages 2-5; R. 30). The Ohio courts have predi-
cated refusal to recognize the New York judgment on the
ground of fraud (R. 176; 229, 233, 234) although the leading
case of United States v. Throckmorton, decided by this Hon-
orable Court in 1878, indicates that extrinsic fraud—possi-
bly a method of attacking a judgment—cannot be found
where an adversary trial is had and the merits of a cause
are disposed of.

The action in the State of New York was instituted by
petitioner, by reason of a fraud perpetrated by respondent,
to impress 4 trust on 250 shares of the Secor Hotel Com-
pany, an Ohio corporation, representing a one-quarter in-

terest therein (R. 12, 15-18). Petitioner’s complaint set
forth the fraudulent conduct of respondent in connection
with said stock and the resultant injury to petitioner (R.
14-17). In deciding that petitioner was entitled to the re-
turn of the stock the Appellate Division of the Supreme
Court of the State of New York stated that petitioner’s
version was amply supported by the documentary evidence
in the ease (222 N. Y. App. Div. 17); and wheu said Appel-
late Division of the Supreme Court of the State of New
York again recognized petitioner’s ownership of said stock,
after a new trial had been granted on the ground of newly
discovered evidence, that court stated that the additional
testimony was not of sufficient weight to cause the court to
change the determination, in favor of petitioner, reached
on the original appeal and for the second time rendered

judgment for petitioner (235 N. Y. App. Div. 662). This—

judgment was affirmed by the Court of Appeals of the State
of New York on July 19th, 1932 (260 N. Y. 519) and there-
after a reference was had which resulted in the award to
petitioner in the sum of $389,103.21 (R. 27-30; 130, 131).

At the time of the institution of the action by petitioner,
as plaintiff, in the Common Pleas Court, and at the present
time, the judgment in the State of New York in favor of
the petitioner and against respondent was and is a final]
jadgment in said State of New York (R. 90, 103). The
jurisdiction of the Supreme Court of the State of New
York has been conceded by respondent and'no attempt has
been made by him to impeach or set aside said judgment
on any ground in the State of New York (R. 95, 102, 167).

The petition filed by petitioner in the Common Pleas
Court, on August 20th, 1934, alleged the recovery of the
aforesaid judgment and attached to said petition was a
transcript of the judgment recovered in the State of New
York, authenticated as required by the Act of Congress
(R. 10, 27-31).

ee me

4

Respondent’s amended answer thereto averred three de-
fenses: (1) that the judgment sued upon was not responsive
to the issues made by the pleadings; (2) that petitioner was
not the real party in interest; and (3) that the judgment in
the State of New York was procured by-fraud practiced
upon the Supreme Court of that Staté and uron the re-
spondent, in that petitioner was not the real party in interest
and suppressed and withheld this fact from the Supreme
Court of the State of New York (R. 69, 70). By further
amendment respondent’s answer set up Section 210 of the
Civil Practice Act of the State of New York, requiring, with
certain exceptions, that every action must be prosecuted in
the name of the real party in interest (R. 73).

Petitioner and respondent waived a trial by jury in the
Common Pleas Court (R. 89). The evidence in the case was
largely documentary and petitioner relied wholly upon the
judgment recovered by him in the Supreme Court of the
State of New York, duly objecting and taking exception
to the introduction of any evidence by respondent in dero-
gation of said judgment (R. 99, 103-105, 106, 107). The
trial court found against the respondent on the first defense
(R. 166) but in favor of respondent on the second and third
defenses, thereupon entering judgment for the respondent
on December 3, 1936 (R. 167, 176, 193, 194). The judgment
of the Common Pleas Court was affirmed by the Court of
Appeals, Franklin County, Ohio (hereinafter referred to as
the Court of Appeals) and judgment was entered, with re-
spect thereto, on the 14th day of February, 1938 (R. 235).
Petitioner then appealed to the Supreme Court of Ohio (R.
238, 241) under Article IV, Section 2 of the Constitution of
Ohio, which gives that court jurisdiction as a matter of
right in cases, among other things, involving questions
arising under the Constitution of the United States; and
petitioner further moved said Supreme Court of Ohio for an
order directing the Court of Appeals to certify to the Su-

5

preme Court of Ohio its record for review (R. 245, 246).
Said appeal as of right was based upon the decisions of this
Honorable Court that where a claim is made upon or under
a judgment of-a sister state, it is a question arising under
the Constitution of the United States. On April 27th, 1938,
the Supreme Court of Ohio dismissed petitioner’s appeal as
of right and granted respondent’s motion to dismiss the ap-
peal as of right, so ordering and adjudging on the ground
that no debatable constitutional question was involved (R.
240). The Supreme Court of Ohio likewise denied peti-
tioner’s motion for an order directing the Court of Appeals
to certify to the Supreme Court of Ohio its record for review
(R. 240). Five of the seven Judges sitting in the Supreme
Court of Ohio rendered the aforementioned decision without
opinion (reported in XI Ohio Bar 612).

A brief summary of the facts leading up to the rendition ~
of the judgment in the Supreme Court of the State of New
York and the subsequent judgment in the Common Pleas
Court, gives full expression to petitioner’s claim that the
Court of Appeals failed to give full faith and oredit to the
judgment of the Supreme Court of the State of New York,
to the end that the Court of Appeals and the Common
Pleas Court denied to petitioner rights, privileges and im-
munities properly claimable under the Constitution and the
Statuces of the United States.

Prior to 1924 petitioner had a substantial claim against
respondent based upon respondent’s fraud in connection
with petitioner’s 250 shares of stock of the Secor Hotel
Company of Toledo, Ohio, which had been withheld from
him by respondent for many years (R. 12-17). On or about
March 31, 1924, petitioner assigned said claim to his brother,
Walter Titus, under an oral understanding with regard to
the use of any funds which might be derived therefrom in
part to pay off and discharge certain indebtedness of peti-
tioner and in part for the benefit of petitioner’s wife (R.

2n

165; 137-139). Said assignment was in writing and absolak
upon ite face.

On or about December 1, 1925, in order to define more ef.
fectively the rights of the various interested parties in said
claim and in order that suit mi¢ht be brought thereon
Walter Titus, by an imstrument in wrifing (R. 137-139; 14
142; Petitioner's Exhibits D, E), reassigned said claim t
petitioner. This instrument, after referring to the prior
assignment and the oral understanding pursuant to which it
peta psa ott esa ger neath Are
words appointed petitioner as attorney-in-fact to ef.
‘eetuate collection of the claim. This instrument then pro
vided that any money or other property collected upon said
claim should be turned over to Walter Titus to be held and
used by him, first, toward the payment of the expenses in-
curred in the collection of the claim, second, to the payment
of one-half thereof to the wife of petitioner, third, to the
payment or discharge of certain indebtedness of petitioner,
and forth, the balance remaining, if any, to be paid to peti-
tioner. Shortly after said reassignment, suit was instituted
by petitioner on this claim in the Supreme Court of the State
of New York, and said suit resulted in the judgment herein.
before referred to (BR. 147, folio 2).

After petitioner recowered judgment’in the Supreme
Court of the State of New York, one London 1. Wallick, the
brother of respondent, made claim against petitioner for
a share in the proceeds, if any, to be realized from said
jadgment (Respondent's Exhibit 7; BR. 151-163). Said
London 1. Wallick claimed that an agreement to that effect
was made with petitioner on or about November 23, 1925
(BR. 157; 144, Folios 104, 105). Petitioner and London L
Wallick were in sharp conflict over whether any such agree-
ment hadebeen made and as to the validity and effect of any
writing @ evidence of such agreement. Approximately

7

nine years after the institution of suit in the State of New
York by petitioner against respondent, said London 1.
Wallick filed suit against petitioner in the Supreme Court
of the State of New York, in which he asked for an injunc-
tion pendente lite, restraining petitioner from disposing of
ony of the moneys received or collected upon said judgment
recovered by petitioner against respondent. Petitioner de-
fended said suit and submitted therein an affidavit, dated
August 17th, 1934, in opposition to the prayer for said in-
junction. Said affidavit set out at considerable length the
history of the transactions between petitioner and respond-
ent and London 1. Wallick, relative to the subject matter of
the action upon which judgment had been entéred for peti-
tioner and, among other things, petitioner's affidavit (KR.
156, 157, 162, 163; Respondent’s Exhibit 7) set forth the
following: *‘I told him (London 1. Wallick) at that time
(November 23, 1925) that I had already assigned any inter-
est in the proceeds of said action against Lou C. Wallick to
Walter L. Titus and Emilie F. Titus. * * *° The plain-
rat gee enytechagione “rigs, ~eepsmmtincteryer
Prior to my execution of the instrument of No-
vember 23, 1925 (between plaintiff and London 1. Wallick),
I assigned my interest in my claim against Lou C. Wallick
to Walter L. Titus, my brother, and Emilie F. Titus. The
plaintiff herein knew of this assignment before the instru-
ment of November 23, 1925, was executed. It is respect-
fally submitted that it does not lie within the jurisdiction
of this court to now enjoin what has already been accom-
plished."’ The words within parenthesis are petitioner's,
submitted, presently, for explanatory purposes. '
The Court of Appeals, adopting reasoning other than
that adhered to by the Common Pleas Court (R. 223, 227),
held that petitioner was not the real party in interest in
the State of New York under the written reassignment of
December 1, 1925, because that instrument constituted peti.

8

tioner an attorney-in-fact only (R. 225). Such holding is
contrary to the decisions of the State of New York and t
the general principles as enunciated by other courts as t
what

tion of the reassignment of December 1, 1925, that the peti.
tioner was not the real party in interest, then held that be
had suppressed and concealed this fact from the New York
court, as evidenced by the statements contained in the af
davit (RB. 229, 233). While characterizing the statements a
mere conclusions (R. 227, 228), referring to a status prior
to the commencement of the New York action, that court

In arriving at its conclusion to affirm the judgment in
favor of the respondent granted by the Common Pleas
Court, the Court of Appeals virtually disregarded the fact
that in 1929 respondent moved in the Supreme Court of the
State of New York for a new trial on the ground of newly
discovered evidence and that respondent submitted therein
an affidavit of one Gentach, sworn to on March 9, 1929, in
which certain matter is set forth with regard to an arsign-
ment by petitioner to Walter L. Titus and to petitioner's
wife (R. 234; 144, pages 115-122). Respondent possessed
knowledge in March 1929 of a prior assignment made by
petttioner, and respondent made imquiry with regard thereto
on the second trial held in 1930 (R. 146, folios 489-491).

At that time petitioner testified, on cross-examination, with
regard to the assignment. Petitioner testified that he did
have an agreement with his brother, Walter Titus, and that
it had always been a matter between them. Respondent 's
counsel proceeded to interrogate petitioner with regard
thereto but did not press the point, in his cross-examina-
tion, to the extent of ascertaining the exact character of
said assignment; and despite said evidence, putting the
respondent on inquiry as to a prior assignment of peti-
tioner’s claim, respondent made no effort to amend hi«
pleading for the purpose of setting forth a defense with
respect thereto.

3.

Reasons Relied on for the Allowance of the Writ.

1. This Honorable Court expressed doubt in Milwaukee
‘ounty v. White Co., decided in 1935, as to whether fraud
n the procurement of a judgment will serve as a bar to
m action thereon. In any event it has never determined
hat « judgment may be collaterally attacked for the kind
{ fraud that was considered in this case. Such decisions
s it has rendered, particularly United States v. Throck-
orton, decided in 1878, indicate that a judgment is not
pptathable for intrinsic fraud and that extrinsic fraud
mnot be found where an adversary trial was had. A
termination as to whether the defense of fraud in the
rocurement of a judgment is available collaterally to a
dgment-debtor and further amplification of the meaning
extrinsic fraud are necessary to insure protection of the
ununities, with respect to judgments, set forth in the Con-
itution and Statutes of the United States, since the court«
Ohio gave consideration to a defense purely technical in
ture and ignored the adversary trial had in the State
New York.

10

2. The present status of the litigation between petitioner
and respondent is such that an unimpeached judgment ren-
dered in the State of New York because of a fraud per.
petrated by respondent is, from the practical standpoint
at least, uncollectible, while that same unimpeached New
York judgment is disregarded in Ohio—the State in which
respondent resides and in which his property interests are
apparently centered—on the theory that the cause of action
should have been prosecuted by petitioner’s brother. If
the present status is perpetuated by this Honorable Court's
refusal to assume jurisdiction the aforementioned anoma-
lous result would harden into grave injustice, because the
statute of limitations would bar recovery in suit insti-
tuted by petitioner’s brother. It would mean that while
the courts of New York have decreed that respondent per.
petrated a fraud upon petitioner and deprived him of
$389,000—a fraud proved by documentary evidence—re-
spondent may, nevertheless, continue ‘‘to enjoy his ill.
gotten plunder’’.

3. If petitioner were not the real party in interest and
if such fact had been concealed from the Supreme Court
of the State of New York this would not render the judg.
ment recovered by petitioner against respondent in the
State of New York impeachable in that State and the same
credit, validity and effect should have been given thereto
in the courts of Ohio.

t. The judgment recovered in the Supreme Court of the
State of New York by petitioner against respondent is
conclusive upon whether petitioner was or is the real party
in interest since that question was necessarily determined
by the Supreme Court of the State of New York in render
ing its judgment in favor of petitioner.

5. Under the instrument of reassignment from peti
tioner’s brother, Walter Titus, to petitioner, dated Decem

11

her 1, 1925 (R. 137-139), petitioner was and is the real
party in interest, possessing legal title to the cause of
action against respondent at all relevant times and pos-
sessing, as well, a definite beneficial interest by reason of
the fact that the proceeds of suit were to be applied in
liquidation of petitioner’s indebtedness, with part of the
proceeds payable to petitioner directly. Petitioner pos-
sessed full power to discharge respondent on respondent's
indebtedness as reflected in the cause of action. In so far
as the instrument of reassignment appointed petitioner a»
attorney-in-fact for his brother, Walter Titus, said appoint.
ment was not in derogation of the legal title and entirely
consistent therewith by reason of the fact that in non-
statutory jurisdictions an assignee is compelled to main-
tain suit in the name of his assignor.

6. Whatever statements were contained in petitioner's
affidavit of August 17, 1934 (R. 151-163), when considered
and interpreted in the light of the entire affidavit and in
the light of the circumstances under which it was given,
do not Warrant the interpretation that petitioner perpe-
trated a fraud upon the Supreme Court of the State of
New York. Said affidavit was directed specifically to occur-
rences on and the status us of November 23, 1925 (R. 227,
228). London I. Wallick was not seeking to enjoin pet-
tiomer’s interest in the judgment obtained against respond-
ent, but was seeking to enjoin the disposition of all of the
proceeds of the judgment (R. 152). In opposing the motion
for the all-inclusive temporary injunction petitioner was
entitled to every possible proper legal objection. London
L. Wallick was not entitled to the temporary injunction
because he knew of the prior assignment made by petitioner
to his brother on March 31, 1924 (R. 144, pages 115-122;
R. 156, 157) and said London I. Wallick was not entitled
to more than the alleged contract itself contemplated, that

12

is, an interest subject to a known prior assignment. Spe-
cifically, whatever occurred after November 23, 1925, did
not concern London 1. Wallick and as far as the latter was
concerned, petitioner was entitled to assert such facts as
would reveal to the Supreme Court of the State of New
York that London L Wallick; based upon his alleged con-
tract of November 23, 1925, was not entitled to the unusual
remedy of an injunction. Said London 1. Wallick could
not enjoin what be knew and contemplated could not be
enjoined as of November 23, 1925. His proper remedy, if
any, was indicated to him in said affidavit interposed by
petitioner, to wit, an action to set aside the assignment
under the Debtor and Creditor Law of the State of New
York. It remains, however, that in attempting to limit
said London I. Wallick in his application for a temporary
injunction no fraud was perpetrated upon the Supreme
Court of the State of New York in the action commenced
by petitioner against respondent, at which time petitioner
was the possessor of the reassignment of December 1, 1925,
which had been duly executed and delivered. The fore-
going destroys any possibility of inferring extrinsic fraud.

7. The judgment of said Court of Appeals, Franklin
County, Ohio, and the judgment of said Common Pleas
Court, Franklin County, Ohio, and tue findings and conclu-
sions thereof, are, by reason of the foregoing, in violation
of Article IV, Section 1 of the Constitution of the United
States, each of said Courts having failed and refused to
give to the judgment secured by the petitioner agains
respondent in the Supreme Court of the State of New York.
the full faith and credit required to be given said judgmen'
by said Article IV, Section 1 of the Constitution of th
United States and the Statutes of Congress enacted pur
suant thereto. Said findings, conclusions and judgment«
are contrary to the manifest weight of evidence: there is

————————— src es —~—~—~—~—

13

no evidence in the record to support them and they are,
farther, contrary to law, and said courts thereby denied
the title, right, privilege and immunities which your peti-
tioner claims under the Constitution and the Statutes of
Congress enacted pursuant thereto.

' @ The Supreme Court of Ohio, in determining that it

would not take jurisdiction of petitioner’s appeal as a-

matter of right, on ground that said appeal involved
no debatable consti question, acted in derogation of
petitioner's rights under Article IV, Section 2 of the Con-
stitution of the State of Ohio, and further failed to protect
and, in fact, denied the title, right, privilege and immuni-
ties which your petitioner claims under the Constitution
of the United States and the Statutes of Congress enacted
pursuant thereto and failed and refused to give full faith
and credit to the judgment secured by the petitioner against
respondent in the Supreme Court of the State of New York

as required to be given said judgment by said Article IV, .

Section 1, of the Constitution of the United States and the ”
Statutes of Congress enacted pursuant thereto.

Wueaerone your petitioner respectfully prays that this
petition for a writ of certiorari to the Supreme Court of
Ohio to review the judgment of the Court of Appeals,
Franklin County, Ohio, and the order or judgment of the
Supreme Court of Ohio in this case be granted.

Eowagp H. Trtvs,
By Tuomas |. Suenmman,
Aazonw Frayk,
His Attorneus.

SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1938

No. 188

EDWARD H. TITUS,
Petitioner,
vs.

LOU C. WALLICK.

BRIEF IN SUPPORT OF PETITION FOR WRIT OF
CERTIORARI.

L
The Opinions of the Courts Below.

The written opinion, dated November 30, 1937, of the
Court of Appeals, Franklin County, Ohio, is not reported
but it is set forth at length in the record on pages 220 to
234. The written opinion dated Apri! 21, 1936, rendered in
the Common Pleas Court, Franklin County, Ohio, is not re
ported, but it is set forth at length in the record on pages
166 to 176. No written opinion was rendered by the Su
preme Court of Ohio (XI Ohio Bar 612).

The written opinion dated December 2, 1927, of the
Appellate Division of the Supreme Court of the State of

16

New York, First Department, after the first trial, and by
virtue of which it was held that petitioner was entitled to
recover from respondent 250 shares of stock of the Secor
Hotel Company, is reported in 222 N. Y. App. Div. 17; and
the written opinion rendered by said Appellate Division
of the Supreme Court of the State of New York after a see-
ond trial, granted upon newly discovered evidence, pur-
suant to which that court’s original determination was ad-
hered to, is reported in 235 N. Y. App. Div. 662. The affirm.
ance thereof by the Court of Appeals of the State of New
York was rendered without written opinion and a report
thereof appears in 260 N. Y. 519.

No written opinion was rendered by the Appellate Divi-
sion of the Supreme Court of the State of New York when
said court affirmed an order granting a second trial on
the ground of newly discovered evidence ; nor did said Court
render written opinions when it vacated the second refer-
ee’s report and appointed Honorable Jeremiah T. Mahoney
as Referee and when it affirmed the judgment in favor of
petitioner and against respondent in the sum of $389,103.21.
Said decisions are reported in 227 N. Y. App. Div. 789; 240
N. Y. App. Div. 818; and 244 N. Y. App. Div. 789, respeec-
tively.

0.
Jurisdiction.

1. Jurisdiction of this Court is invoked under the Judi-
cia] Code, Section 237 (b), as amended by the Act of Feb-
ruary 13, 1925, U. S. C. A. Title 28, Section 344 (b); Sec-
tion 350, Title 28 of U. S. C. A., as amended: and Revised
Statutes, Section 905, Title 28 of U. S. C. A. Section 687.

2. The date of the judgment to be reviewed, as deter-
mined by the order of the Supreme Court of Ohio, dated
April 27, 1938, adjudging its dismissal of petitioner’s appeal

17

to said Court on the ground that no debatable constitu-
tional question is involved, is April 27, 1938 (BR. 240).

3. The petition filed by petitioner in the Common Pleas
Court, Franklin County, Ohio, on August 20th, 1934, was
predicated entirely upon the judgment, properly authenti-
cated, recovered by petitioner against respondent in the
Supreme Court of the State of New York (R. 8; 10; 27-31).
Respondent’s answer thereto set forth affirmative defenses
presumably predieated upon exceptions to the rule that full
faith and credit shall be given by each State to the judg-
mente of a sister State (R. 69, 70, 73). The pleadings in
the cause drew into question, directly so, the full faith and
credit clause of the United States Constitution. In estab-
lishing a prima facie case at the trial held in the Common
Pleas Court, Franklin County, Ohio, petitioner relied en-
tirely upon the properly authenticated judgment recovered
in the Supreme Court of the State of New York and during
the course of the trial petitioner duly objected and excepted
to the admissibility of any and all evidence offered by re-
_ spondent in derogation of said judgment (R. 99; 103-107).

Petitioner placed full reliance upon the judgment recovered
by him in the New York Court. In refusing to enforce the
judgment in Ohio the Common Pleas Court, of necessity,
gave consideration to the constitutional question because it
subjected the New York judgment to collateral attack, and
it invoked in its conclusions an exception to the full faith
and credit clause when extrinsic fraud is established. In
addition, the constitutional question was squarely presented
to the trial court because a motion was filed by petitioner to
respondent's answer, seeking to strike it from the files as
frivolous on the ground that under the full faith and credit
clause of the Constitution the judgment became final in the
State of New York and the defenses raised by the answer
were, therefore, unavailing (R. 45-47; 101). This motion
was overruled (R. 52).

18

The Court of Appeals considered and passed upon the
corstitutional question, as is apparent from the language
of its opinion (R. 230-232), where the Court discussed the
authorities determining under what circumstances a judg-
meni of a sister State may be assailed despite the immunities
set forth under Article 4, Section 1 of the United States Con-
stitution. The contention that the New York judgment could
not be denied the protection of the full faith and credit
clause of the Constitution in the Courts of Ohio was again
presented to the Supreme Court of Ohio by the Assignments
of Error (R. 242). Moreover, arguments of counsel and all
briefs submitted set forth full discussion of the immunity
claimed by petitioner by reason of Article 4, Section 1 of the
United States Constitution (R. 222, 230, 231). After af-
firmance of the judgment of the Common Pleas Court,
Franklin County, Ohio, and within eighteen days thereof
and on or about the 4th day of March, 1938, petitioner duly
appealed to the Supreme Court of Ohio as a matter of right,
by reason of a debatable constitutional question (R. 238,
241) and petitioner also moved said Supreme Court of Ohio
for an order directing the Court of Appeals, Franklin
County, Ohio, to certify to the Supreme Court of Ohio its
record for review (R. 245, 246). Petitioner’s appeal as of
right to the Supreme Court of Ohio was dismissed on the
ground that no debatable constitutional question was in-
volved and petitioner’s motion for an order directing the
Court of Appeals, Franklin County, Ohio, to certify its ree-
ord for review was overruled on the 27th day of April, 1938
(R. 240). The aforementioned decisions and rulings of the
Supreme Court of Ohio, as found particularly in its entry
dismissing the appeal (R. 240), thereupon became the final
judgment of the highest State court in which a judgment
could be had. The decision of the Supreme Court of Ohio
whereby it refused to assume jurisdiction of the appeal on

19

the ground that no debatable constitutional question was in-
volved, constituted a decision of the case on the merits.

By reason of the failure of the Courts of Ohio to give fuli
recognition to the judgment recovered by petitioner against
respondent in the Supreme Court of the State of New York,
the title, right, privilege and immunity of petitioner, claimed
under the Constitution and Statutes of the United States,
which title, right, privilege and immunity were claimed by
petitioner at all relevant times during the proceedings in
Ohio and were dealt with by the courts of Ohio, were denied
by the Common Pleas Court, Franklin County, Ohio, the
Court of Appeals, Franklin County, Ohio and the Supreme
Court of Ohio. It is respectfully submitted that this Hon-
orable Court has jurisdiction to review the judgment ren-
dered in this cause in Ohio under the provisions of Section
344 of Title 28, United States Code.

4. The following cases sustain the jurisdiction of this
Court to review the judgment of the Court of Appeals,
Franklin County, Ohio and the order or judgment of the
Supreme Court of Ohio:

Van Huffel v. Harkelrode, 284 U.S. 225;

Green v. Van Buskirk, 72 U. 8. 307;

Crapo v. Kelly, 83 U. 8. 610;

Crescent City Livestock Co. v. Butchers’ Union, 120
U. 8.141;

Great Western Telegraph Co. v. Purdy, 162 U.S. 329;

Hancock National Bank v. Farnum, 176 U.S. 640.

ITI.
Statement of the Case.

A fnll statement of the case has been given under the
heading in ‘‘A’’ in the petition and in the interests of
brevity no repetition of the statement will be made at this
point, except to set forth that the instrument of assignment,

dated March 31, 1924, ard the instrament of reassignment,
dated December 1, 1925, by virtue of which it is established
that petitioner was and is the real party in interest con.
stitute respondent's Exhibit 8 (R. 165) and petitioner's
Exhibits D, E, respectively (R. 137-142). It may also be
pointed out that the affidavit executed by petitioner on A»
gust 17, 1934, upon which respondent relied in order to bring
about the denia! of full faith and credit to the judgment re
covered by petitioner against respondent in the Supreme
Court of the State of New York, constitutes Respondent's
Exhibit 7 (BR. 151-1664).

The relevant portions of the affidavit of Gentech, sworn to
on March 9, 1929, which affidavit contains matter with re.
spect to an assignment by petitioner to his brother and to
petitioner's wife, is set forth in Respondent's Exhibit [,
folios 345 to 350 thereof inclusive (R. 144). The Gentech
affidavit was submitted by respondent when he made # mo-
tion in the Supreme Court of the State of New York for
new trial on the ground of newly discovered evidence, and
it is this affidavit which serves to spell out knowledge on
the part of respondent of such facts which would have
enabled respondent to plead lack of capacity in the action in-
stituted by petitioner against respondent in the State of
New York.

The testimony given by petitioner, in cross-examination,
at the second trial held in the Supreme Court of the State
of New York, as a result of which respondent again ac
quired sufficient knowledge with respect to an assignment,
enabling respondent, if he saw fit, to plead lack of capacity,
is set forth in respondent's Exhibit 3, at folios 489 to 491
thereof inclusive (R. 146).

IV.
Bpecification of Errors.
The reasons relied on for the allowance of the writ, ap-
pearing in the petition (ante pages 9-13), with the excep-

J 21

tion of the second paragraph thereof, contain the Specifica-
tion of Errors now urged and are here adopted.
. *

Summary of the Argument.

Point 1. The prosecution of petitioner's cause of action
against respondent in the courts of Ohio necessarily in-
volved a constitutional question since he sought to obtain
recognition in Ohio of a judgment recovered in New York.
The disposition of the constitutional question by the courts
of Ohio was directly in derogation of petitioner's constitu-
tional rights and therefore petitioner properly seeks to in-
voke this Court's supervisory jurisdiction.

Point 11. The controlling authorities in this Court indi-
cate that parties to an action cannot, in a collateral pro-
ceeding, impeach a judgment for fraud in the obtaining
thereof.

Point HL Petitioner's judgment remains unimpeached
and unimpeachable in the State of New York and, therefore,
it was not properly subject to collateral attack in the Ohio
courts.

Point IV. Petitioner was the real party in interest in the
suit commenced by him in the Supreme Court of the State
of New York by virtue of his legal ownership of the claim
against the respondent, as well as his beneficial interest
therein.

Point V. The judgment recovered by petitioner in the
State of New York is conclusive upon whether petitioner is
the real party in interest.

Point V1. Petitioner was guilty of no fraud on the New
York court and even if he was, it did not constitute ex-

trinsic fraud and it did not justify a denial of fall faith and
credit to the New York judgment.

Powr L

The Ohio courts refused, directly so, and contrary to cos
stitutional provision, to give fall faith and credit to the

New York judgment.

It is clear that the specific question in this case is whether
the New York judgment is within the protection of the fal
faith and credit clause of the Constitution. The Ohio trial
court and the Court of Appeals denied it this protection:
and when the Supreme Court of Ohio failed to see that nos
recognition of the New York judgment involved a debatabl
constitutional question it likewise struck at the constite
tional inviolability of the judgment.

The Supreme Court of Ohio achieved this result despite
its own decision in Armstrong +. Armstrong, 117 O. S. 554.
where suit was instituted in Ohio on a Kentucky jodgmest
for alimony payable in future installments. The court beld
that the question arose ‘‘under the provisions of the Fed
eral Constitution, Article IV, Section 1°’ and granted a peti
tion in error as of right.

This Court, in determining its own jurisdiction, has held.
uniformly and repeatedly, that where suit is filed in on
State on » judgment secured in a sister State, or where
defense in one State is based upon a judgment secured in «
sister State, the question presented is one arising under thr
Constitution of the United States.

Green +. Van Buskirk, 72 U. 8. 907; 74 0. S. 139, 145.

Crapo +. Kelly, 83 U. 8. 610, 620, 621;

Crescent City Livestock Co. +. Butchers’ Union, 1%
U.S. 141, 146, 147;

Hancock National Bank +. Farnum, 176 U. 8. 640;

Great Western Telegraph Co. +. Purdy, 162 U. 8. 329:

Mutual Life Ine. Co. +. McGrew, 188 U. 8. 291, 311.

The decisions state only what is apparent, that is, that the
ing of the petition itself presents the constitutional ques-
on, a8 it is only by virtue of the full faith and credit clause
‘the Federal Constitation that a court of one State is re-
dred to enforce a judgment rendered in a sister State.
: refusing to enforce the jndgment in Ohio the lower courts
ast necessarily have considered the effect of the judgment
sder those provisions of the Constitution. No other situa-
on is possible. The mere presentation of the yudgment for
forcement raves the question.

ln addition, the constitutional question was kept in the
weground by reason of respondent's affirmative defenses
lack of capacity to sue an extrinsic fraud, the latter
ing peculiarly applicable to suits on judgments and, fur-
er, by reason of respondent's specific amendment to the
wewer that Section 210 of the New Yo: « Civil Practice Act
wred recovery in Ohio on the New York judgment.

It is well-recognized that no particular words or phrases
« necessary for the assertion of the claim of consti-
tional rights and that it is sufficient if it appears from
« record, either expressly or by clear intendment, that
ch rights were brought to the attention of the State court
ith fair precision and in due time.

Bryant +. Zimmerman, 278 U.S. 63:

St. Lowis, 1. Mt. & So. Ry. Co. +. Starbird, 243 TU. S.

592, 599.

It may be stated, parenthetically, that this Court may
roperly review the findings upon which the Ohio courts de.
rmined that petitioner was not the real party in interest
xd that he perpetrated a fraud upon the New York court
cause the findings are completely interwoven with the
nial of fall faith and credit to petitioner's judgment re-
wered in the State of New York.

Piske +. Kansas, 274 U.S. 380, 385;

Kansas City So. Ry. v. Albers Comm. Co., 222 U. 8. 573,

51.

Porwr IL

Fraud in obtaining judgment furnishes no ground fe
collateral attack.

In Freeman on Judgments (Sth Ed), pages 633 and 663,
the view is expressed that parties to an action, as distin
guished from third parties, may not attack a judgment
collaterally for fraud, except possibly such fraud whid
goes to the question of jurisdiction.

This Court has stated, clearly and unequivocally, that
f in proctring a judgment cannot be set up, by way

collateral attack, to bar recovery thereon. The prin
ciple may be expressed by the statement that a judgment
may be assailed for want of jurisdiction, but not otherwise

Christmas +. Russell, 72 U. S. 290, 303-306: cited in
Fauntleroy v. Lum, 210 U. 8. 230, 236, 237.

Hanley +. Donoghue, 116 U. 8. 1, 4:

Swmmons +. Saul, 138 U. 8. 439, 458:

Thompson +. Whitman, 85 U. 8. 457.

an cases such as United States v. Throckmorton, U.S

; Cole +. Cunningham, 133 U. 8. 107, 112, and United
mado v. Atkins, 260 U. S. 220, when this Court discussed
the question as to whether extrinsic fraud will bar enforce
ment of a judgment, a direct proceeding, attacking the judz
ment, was under consideration: while in such cases as
Webster v. Reid, 52 U. 8. 437, and McNitt +. Turner.
U. 8. 352 (referred to in Milwaukee County +. White Co.,
296 U. S. 268, 276, on the subject of extrinsic fraud), suit
was brought not to enforce a judgment, but to recover land
purchased either under an execution sale or a court decree.
In the two latter cases vacation of « judgment was not ar
objective in the action; the judgment was brought colliat-
erally before the court as evidence and it was held there

ore that, similarly, consideration might possibly be given,
sliaterally, to the subject of extrinsic fraud. It is sub-
itted that the Webster and McNutt cases have no rel-
vancy in a case such as the instant one, which involves
ait on the judgment itself.

The fundamenta! distinction between collateral! and direct
ttack, on the basi« of frand, led the Supreme Court of
finnesota in In re Melgaard’s Will, 200 Minn. 493, to state,
» discussing the Throckmorton case, that :

“Only after it has been determined, by other and ap-
propriate standards, to be direct attack, on the ground
of fraud, can the distinction between that which is
extrinsic and that which i intrinsic find the subject.
matter for its operation. In order to be open to col-
lateral attack a judgment must be void on the face of
the record, as for want of juriadiction.”’

In the light of the foregoing, the statement in Milwaukee
outy +. White Co., 296 U. 8S. 268, 276, that recovery on a
sigment may be resisted ‘‘possibly because procured by
aud’ is entirely clear and completely reconcilable with
w earlier authorities. It is expressive of the recognized
istinction between direct attack, which may be countenanced
od collateral attack, such as the instant case, which will not
+ countenanced.

Port IIL

The judgment remains unimpeached and unimpeachable
| New York and it is therefore not subject to collateral
tack in Ohio.

The law is well-settled that a judgment of « State court,
hich had jurisdiction, is entitled in the courts of other
lates to the same credit, validity and effect which it has in
State in which it was rendered.

Roche +. McDonald, 275 U. 8. 449, 451, 452.

a

At the outset it may be stated that the defendant bore the
burden of establishing, by a fair preponderance of the ev)
dence, that the judgment obtained by petitioner was im
peachabie in the State of New York by reason of extrinsic
fraud In other words, it was incumbent upon respondent &
show that the courts in the State of New York would ot
aside a judgment if suit therefor had been maintained by
one who was not the real party in interest. No authority
whatsoever was furnished on this point by the respondent or
by either of the lower courts in Ohio. Assumptions by «
foreign court as to what the New York court should regard
as extrinsic fraud are completely unwarranted. An (hic
court cannot assert that a New York court should consider
iteelf as having been subjected to extrinsic fraud. To dis
regard petitioner's judgment it was absolutely necessary
for respondent to establish that a New York court would
consider itself as having been subjected to extrinsic fraud—
and only adjudication on this point can be regarded as con
clusive. In summary, it is for the New York court—and
only the New York court—to state whether its judicial
process has been outraged. That statement must be found
in the litigated case or in cases of similar nature. Respond.
ent failed completely in bis efforts to meet this test.

The New York viewpoint with regard to the effectiveness
of a judgment is well stated in PAdllips +. Griffin, 236 N.Y
App. Div. 209, at p. 211:

**The question involves consideration of the ful! faith
and credit clause of the Federal Constitution. (Art. 4
Sec. 1.) A judgment of a sister state may be assailed
for want of jurisdiction over either the person or the
subject-matter but not otherwise. (Andrews ¥. Ax
drews, 188 U.B. 14; Clarke v. Clarke, 178 id. 186).""

See also:
Boston € Mame R.Co.+. D. 2 H. Co., 268 N. ¥. 382. 391

<r r——“‘=—CO—O:—:—:—t—SSPF'

27

The recent case of Matter of Huiden, 271 N. Y. 212 is abso-
tely conclusive upon the point that petitioner's judgment
ald not be impeached in New York.

As in the Holdem case no one may question the validity of
¢ reassignment to petitioner except the assignor and, pos-
bly, petitioner’s wife and Londou L Wallick who com-
enced suit in the State of New York against the petitioner,
questing therein a temporary injunction. As in the
olden case the respom ent is obligated to make payment to
¢ party who appears to be the legal owner of the claim and
| court is empowered to inquire into collateral matters
sich have no effect whatsoever upon respondent's obliga-
m to account with respect to petitioner's 250 shares of
cor Hotel stock.

Quite in aceord with the principles enunciated by this
yart, the New York authorities do not adhere to the view
st a judgment may be subjected to collatera! attack on
¢ ground of extrinsic fraud. Such New York cases as
syor v. Brady, 115 N. Y. 599; Ward +. Southfield, 102 N. Y.
7; Corley v. N.Y. @ H. Rail. Co., 12 N. Y. App. Div. 409
d Matter of Holden, supra, which gave consideration to
¢ question as to whether extrinsic fraud would bar en-
reement of the judgment, involved a direct attack, by way
motion for new trial or suit in equity, as distinguished
mm a collateral attack ; end it is apparent, therefore, that
¢ New York authorities adhere to the implied distinction
| forth in Milwaukee Cownty vWhite Co., 296 U. S. 268,
6. The case of Gray v. Richmond. 167 N. Y. 348, is of no
rnificance because the litigants therein proceeded upon the
cory that an Indiana judgment could be attacked col-
rally and the New York Court of Appeals relied upon the
peession.

Reference has been made to the New York authorities
der Point IV herein to the effect that the courts in the
ate of New York will disregard al! facts with respect

the purpose of an assignment and the disposition of pro-

coeds of suit if the assignment is fair upon its face. Refer.
ence has also been made under Points VI and V herein
respectively, to the view adhered to by the New York courts
that an adversary trial will bar attack on a judgment and
that technica] defenses, such as lack of capacity, will be dis
regarded.

Point IV.

Petitioner was the real party in interest in the New York
suit.

The trial court in Ohio and the Court of Appeals, pre-
requisite to their ultimate finding that the New York judg.
ment was obtained by fraud, held that petitioner was not
the real party in interest in the New York suit and had no
right to bring the suit in his own name. The Court of Ap
peals did not, however, concur in the reasoning by whid
the trial court reached this result (R. 223, 227).

The trial court disregarded, erroneously so, the reas-
signme: of the claim to petitioner on December 1, 195
and held that petitioner was bound by isolated statements
contained in his affidavit of August 17, 1934 (R. 172-176).
The Court of Appeals took the proper view, that the afi-
davit referred to petitioner’s status as of November 2,
1925, when legal title to the claim was in petitioner’s brother
and that whether petitioner was the rea! party in interest
depended upon the legal effect of the reassignment of De
cember 1, 1925 (BR. 223, 227, 228). The Court of Appeals
then proceeded to find as a matter of law—and in doing s0
it was completely in error—that the reassignment was 4
mere naked power of attorney (R. 225). It predicated its
decision upon (1) the second paragraph of the reassign-
ment which appointed the assignee (petitioner) as attor.
ney-in-fact for the assignor (petitioner’s brother) (R. 224
225) and (2) upon the fact that petitioner had only a con-
tingent right to share in the proceeds of suit after certain
payments (R. 225). The opinion concedes, however, thst

2

“it is true the payments in these subheadings were to be
made to liquidate the indebtedness’’ of petitioner (R. 225).

It is apparent, and the Court of Appeals so found, that
if the instrument of December 1, 1925 (R. 137), constituted
the petitioner the real party in interest in the New York
suit, then the petitioner should have prevailed in the Ohio
action. This fact would instantly remove any possibility
of fraud upon the New York court as the only fraud alleged
is the concealment from the New York court at the time the
suit was instituted that the petitioner was not the real party
in interest. The Court of Appeals also conceded that the
execution and delivery of the instrument of December 1,
1925, were undisputed (R. 227).

The reassignment of December 1, 1925, sets forth an un-
qualified assignment (Petitioner's Exhibits D, E), appoints
petitioner as attorney-in-fact for the assignor and provides
for the distribution of the proceeds as follows: (1) pay-
ment of expenses; (2) one-half of the balance to petition-
e's wife; (3) payment of petitioner’s debts; and (4) pay-
ment of the balance to petitioner.

The effect and validity of the reassignment must be de-
termined in accordance with the law of the place where the
reassignment was made, that is, in accordance with the law
of the State of New York.

Williston on Contracts, Revised Edition, page 1296;
Barbin v. Moore, 85 N. H., 362.

In Carmody’s New York Practice, the standard work on
procedure in that State, Vol. 2, pages 804 to 808, appears
the following in reference to the ‘‘real party in interest’’
statute when the question of an assignment is involved:

‘The consideration paid, the purpose of the assign-
ment, the use to be made of any proceeds collected, is
immaterial. The plaintiff must have some title, legal
or equitable, to the thing assigned. But if the assignee
have such title, it is enough. So it is of no moment

* —_ a
- ©

30

that no consideration was paid for the demand by the
assignee, or that others have a claim on the assignee
for a portion or for all the proceeds, or that the assign.
ment was made merely for the purpose of bringing m
action. The defendant has no legal! interest to inquire
as to this, for a payment to or recovery by the assignee
in such case is a protection to the defendant against
any claim that can be made by the assignor. Thu
where a judgment recovered by a bank, was, for the
bank’s convenience, assigned to the cashier by an in
strument absolute upon ite face, the cashier is the

roper party to bring an action upon the judgment as
ant in such case is that the title to the j ent is
sain ch cme i hat thy Fr that affects the defend

in the plaintiff, so that a payment to, or satisfaction
by him would be a full and complete satisfaction as to
all others who theretofore had or might thereafter
claim an interest in it.’’ (pp. 806, 807.)

The cases supporting the same principles are:
Sheridan +. The Mayor, 68 N. Y. 30;
Schwartz v. Fletcher, 238 N. Y. App. Div. 554, 557;
Dontin v. Carlow, 120 N. Y. Misc. Rep. 698;
Horne v. McGinley, 252 N. Y. App. Div. 296;
Twga v. Tidd, 164 N. Y. Mise. Rep. 273, 286;
Spencer v. Standard Corp., 237 N. Y. 479;
McCauley v. Georgia R. R. Bank, 239 N. Y. 514;
Meyers v. Credit Lyonnais, 259 N. Y. 399;
Hunter v. Allen, 106 N. Y. App. Div. 557;
Allen v. Brown, 44 N. Y. 228;
Meeker v. Claghorn, 44 N. Y. 349:
Brown v. Powers, 53 N. Y. App. Div. 251;
Birdall v. Read, 188 N. Y. App. Div. 46;
Hentschel v. Fidelity, etc., 87 F. (2d) 833, 838;
Lentz v. Oregon, 116 Oreg. 683 ;
Seybold v. Grand Forks, 5 N. D. 460;
Los Robles Water Co. v. Stoneman, 146 Cal. 203;
Elmquist v. Markoe, 45 Minn. 305.

31

The authorities enumerated state not only the New York
but the general law as to who is a ‘‘real party in interest’’
under modern code provisions. With these authorities in
mind it is difficult to follow the reasoning of the Court of
Appeals that the reassignment of December 1, 1925, was
simply a naked power of attorney and did not constitute the
petitioner the real party in interest in the New York suit.

It may be noted, parenthetically, that Section 210 of the
Civil Practice Act (New York), pleaded by respondent in
tis amended answer (R. 73) provides that: ‘‘ Every action
nust be prosecuted in the name of the real party in interest,
cept that ° ° ° atrustee of anexpresstrust * * °
nay sue without joining with him the person for whose
enefit the action is prosecuted.’’ The very least that can
ye said of the reassignment is that petitioner was, by virtue
hereof, the trustee of an express trust. Hoffman v. Foote,
72 N. Y. 348, 355, expresses the general principle that it is
mnecessary to use any particular formula of words in order
0 create a trust and that principle was given full applica-
ion in Banca C. I. Trust Co. v. Clarkson, 274 N. Y. 69, 74.
n the latter case the loss suffered by plaintiff was made
ood by a surety company. It was agreed between plaintiff
nd the surety company that plaintiff would bring suit in
s own name, but for the benefit of the surety company, to
ecoup the losses, the recovery, however, to be paid to the
arety company. Based upon this simple arrangement,
evoid of formality, the Court of Appeals held that plaintiff
as a trustee of an express trust and that it was, there-
ore, entitled to bring suit in its own name. Banca C. 1.
rust Co. v. Clarkson, supra, is, in and of itself, complete
uswer to the contention that petitioner was not the real
arty in interest.

It is well settled, moreover, that an azsignor, assigning

claim as security for a debt, still retains sufficient interest )
Poot’ \

32

in the claim to constitute the assignor the real party in
interest. Petitioner had, therefore, a sufficient interest,
under the March 31, 1924, assignment alone, to have brought
suit in his own name.
Carmody’s New York Practice, Vol. 2, p. 808;
Bachman vy. Hausman, 2A1 N. Y. App. Div. 153.

In construing the reassignment, reference may be had to
the recitals which show the true intent to make an assign-
ment and not, merely, to appoint an attorney.

The words ‘‘sell, assign, transfer and set over’’ alone
effectuate an assignment.

Kalb v. Leff, 138 N. Y. Mise. Rep. 830.

In stressing the second paragraph of the reassignment,
where petitioner was appointed as the assignor’s attorney,
the Court of Appeals overlooked the fact that the para-
graph is nothing more than a survival of the early law upon
the subject of assignments and that it is just a precaution
adopted for use in such jurisdictions as still adhere to the
common law theory that an assignee must bring suit in the
name of his assignor.

Wuliston on Contracts, Revised Edition, pages 1166-
1170, 1294;

People v. Ladew, 237 N. Y. 413, at pages 436, 438;

Allen v. Brown, 44 N. Y. 228;

Casady vy. Scott, 40 Idaho 137.

The reassignment provides that petitioner, if he collects
anything, shall turn the proceeds back to petitioner’s
brother, but petitioner’s brother must use the proceeds in
discharging certain indebtedness of the petitioner to peti-
tioner’s brother and others, paying one-half thereof to peti-
tioner’s wife and the balance to petitioner. These provi-
sioris were held wholly inconsistent with an assignment such

33

3 woulc' eonstitute petitioner the real party in interest for
he reason that his interest by virtue thereof was only con-
ingen’. (R. 225) and not real, that is to say, he was simply
n attorney in fact. This holding is clearly wrong, because
shat is to be done with the proceeds is no concern of the
lebtor.

Allen v. Brown, 44 N. Y. 228;

Meeker v. Claghorn, 44 N. Y. 349;

Wolcott v. Hillman, 23 N. Y. Misc. Rep. 459.

In reaching the conclusion that the petitioner was not the
eal party in interest under the reassignment, the Court of
ippeals disregarded entirely the purpose in turning the
roceeds of the collection, if any, over to petitioner’s
rother. The dominant purpose was to pay petitioner’s
ebts to petitioner’s brother and others, and to pay peti-
ioner’s wife; the balance, if any, to be paid to the peti-
ioner. Petitioner’s brother had no interest in the claim
ther than as security for the payment of the petitioner’s
ebt to him—the balance belonged to the petitioner and his
ife. As part of petitioner’s brother’s security, he was to
andle the funds if the petitioner collected any, a provision
early incidental to the primary purpose of the instrument.

Had petitioner no interest other than payment of his
bligations to his brother, they were, after all, his own obli-
ations, which fact alone would give him a real substantial,
eneficial interest. On this point Brown v. Gimm, 66 O.S.
16, referred to by the Court of Appeals, is inapplicable ;
nd, moreover, that case involved a champertous trans-
tion.

Stricks v. Siegel, 135 N. Y. Mise. Rep. 608, affirmed as

modified 138 N. Y. Mise. Rep. 266.

The Court of Appeals hopelessly confused the question
title to the claim with the question of the disposition of

ci A Seleadeatiedl a

, the proceeds. The distinction was clearly pointed ost is

Warshauer v. Webb, 9 N. Y.
of one entitled to a part or

2 2
:
8
S
E

& F

a¢

satisfaction and extinguishment of the claim.

The Court of Appeals relied upon Spencer v. Standari
Chemicals Co., 237 N.Y. 479, 143 N. E. 651 as supporting i
conclusion and quoted from the headnote found in the
Northeastern Reporter (R. 226), which is inaccurate
cause, while the opinion itself says that a plaintiff must baw
‘some title, legal or equitable, to the thing assigned’’, th:
headnote omits the significant word ‘‘some’’.

ln summary, until the respondent is discharged—and br
cannot have any concern in what occurs thereafter—peti
tioner has legal title under paragraph | of the reassignment
By reason of the common law he is given protective power:
under paragraph 2—powers not in derogation of the legs!
title and quite consistent with the assignment itself. And
under paragraph 3 he has legal title t6 both the claim and the
proceeds at all relevant times (in so far ae respondent iv
concerned ).

Pott V.

The New York judgment is conclusive upon whether
petitioner is real party in interest.

Whether petitioner was the real party in interest is now
immaterial as the judgment of the New York court is con
clusive upon that issue and the question could not be raised
in the Ohio action. Lack of capacity to sue is not an objec
tion that goes to the jurisdiction of the court.

McCandless +. Furiand, 293 U. 8. 67, 75.

By paragraph II of his second amended complaint in the
New York action (BR. 12), petitioner asserted he was the
plaintiff in the action and *‘now is and since in or about the
month of October, 1906, has been the owner of « one-quarter
interest’’ in the Secor Hotel Company, represented by 250
shares of the common stock of that company. The owner.

fenses not going to the merits of the controversy, such as
real party in interest, capacity to sue, ete, and » judgment
cannot be impeached oollaterally by the assertion of such
defenses after judgment.

23 Cye. 9Gs;

HC. J. Bee. 80;

Freeman on Judgments, th Ed., pager 753-756;

Roby v. Raimaberger, 27 O. 8., 674;

Smead v. Pay, 1 Dieney (Ohio) 531;

Abraham French +. Marz, 6 N. Y. Mise. Hep. 499;

Phillips +. Griffin, 236 N.Y. App. Div. 209;
U. 8. +. California & Oregon Land Co., 192 U. 8. 355.

It matters not that the plaintiff may have falsely repre
sented or withheld from the defendant his lack of capacity
to eve or the fact that he was not the real party in interest.

Toole +. Fite, 57 Utah 1, 168 Pace. 427.

Whether the respondent knew of the defenses which »
failed to assert in the original action is immaterial

Cauldwell +. City of New York, 252 N. ¥. App. Div.
562 ; affirmed 278 N. ¥.—, 15 N. E. (2nd) 70.

Toledo Co. +. Computing Co., 261 U. &. 399, 421;

Mayor, etc. ¥. Brady, 115 S. ¥. 999:

Harrington +. Denny, 3 Ved. Sapp. 584, 903, appeal de
missed 68 Ped. (2) 1004,

Moffett +. Robbins, 81 F. (2d) 431.

Surprising as it may seem, there is no discussion by the
Court of Appeals of this elementary principle of res judicate
and its application to the instant case (R. 234).

Port V1.
The absence of extrinsic frand.

The Céurt of Appeals, having determined that the peti
tioner was not the real party in interest under the reassign
ment of December 1, 1925, then proceeded to determine
whether he suppressed and concealed that fact from the New
York court and if he did, whether he committed such a {rand
on the New York court as would deny to the New York jude.
went fall faith and credit in Ohio. The court found the sole.
tion of the question ‘difficult’ (BR. 229).

In reaching its conclusion that petitioner has concealed
and suppressed from the New York court the fact that be
was not the real party in interest, the court had recourse to
the affidavit filed by the petitioner in the London Wallia

a ve,

37

ction some nine years after the beginning of the original
ction. The circumstances surrounding the affidavit are
ally eet forth in the petition (ante, pages 6,7, 1) and 12).
Although the Court of Appeals had previously in its opin-
ma characterized parts of the affidavit as simply conclusions
ad of no effect whatever in determining petitioner's actual!
tates before the New York court in the original action (R.
2, 277, 228), nevertheless, it held that these ‘‘conclusions"’
ude nine years later were evidence establishing that whe:
be petitioner filed hie original action he knew that he was
ot the real party in interest under the reassignment of De-
ember 1, 1925. Thi« line of reasoning cannot be followed.
The fact remains, and it is undisputed, that when peti-
ener originally filed his suit in New York he had the re-
mignment of December 1, 1925, duly executed and de-
ered, in hie possession (R. 119, 143, 227). Even if that
wtroment did not constitute the petitioner the real party
| interest as « matter of law, it was such an instrument as
wuld justify any layman in thinking that it did give him
sthority to institute the suit; and, therefore, failure to
close any supposed information in the instrument would
warty not be fraudulent. To hold that because of state-
ents mac 60+ * «petitioner nine years later, in a collateral
roceeding, he therefore had interpreted an instrament to
« disadvantage nine years before and concealed this in-
tpretation from the court, is extending the probative value
| wach evidence beyond sound legal principles. The state-
ents contained in the affidavit, when considered and in- |
rpreted in the light of the entire affidavit and in the light
| the circumstances under which it was given, do not war-
it any such extension of its probative value (ante, pages |
7, 11 amd 12).

There is a legal principle of universal recognition and ac-

ptance that the fraud which may possibly render a judg-

ent vulnerable to impeachment is ‘‘extrinsic’’ fraud as

distinguished from *‘intrinsic’’ fraud, or, in other work
fraud collateral to the matter tried as distinguished free
fraud connected with the merits of the controversy. In ds
cussing what constitutes ‘‘extrinsic’’ fraud, this Cour.
in the leading case of U.S. v. Throckmorton, 98 U. 8. 1,
said at pages 65 and 66:

‘*But there is an admitted exception to this gener
rule in cases where, by reason of something done by the
successful party to a suit, there was in fact no od
versary trial or decision of the issue in the case. Wher
the unsuccessful party has been prevented from a
hibiting fully his case, by fraud or deception practice
on him by his opponent, as by keeping him away from
court, a false promise of a compromise; or where th
defendant never had knowledge of the suit, being kerr
in ignorance by the acts of the plaintiff; or where an at
torney fraudulently or without authority assumes te
represent a party and connives at his defeat; or where
the attorney regularly employed corruptly sells out bis
client's interest to the other side,—these, and similar
cases which show that there has never been a real con
test in the trial or hearing of the case, are reasons for
which a new suit may be sustained to set aside and a»
nul the former judgment or decree, and open the case
ior a new and fair hearing. See Wells, Res Adjudicata.
Section 499; Pearce v. Olney, 20 Conn., 544; Wierich +.
DeZoya, 7 Til. 385; Kent v. Ricards, 3 Md. Ch. 292:
Smith v. Lowry, 1 Johns. (N. Y.), Ch. 320; DeLouis. 4
al. v. Meck, et al., 2 lowa 55.""

See also:

Wright v. Saltmarsh, 174 Oklahoma 226;
Jacobowite v. Herson, 268 N. Y. 130, 133, 134.

The distinguishing character of ‘‘extrinsic’’ fraud is that
it is that kind of fraud which prevents an adversary trial
upon the issues. If a party has lost his case by false swear-
ing, perjury, concealment, etc., all of which go to the merits
of the controversy and the issue before the court and nove
of which prevents him from having an adversary trial on

the merits, then he has his remedy by way of new trial, ap-
peal, error, vacation, ete., but once the judgment has become
final it is conclusive upon him and cannot be collaterally
sttacked. The principle, although it may operate harshly in
some instances, is a rule of necessity—the public necessity
that there be some time an end to litigation. As has been
shown, heretofore, non-disclosure of lack of capacity to sue
or that the petitioner is not a real party in interest does not
constitute fraud under any definition for the obvious reason
that a party is not required to disclose to his adversary
facts which would defeat his recovery. If such nondis-
slosure be accompanied by concealment or false swearing or
perjury, it can rise only to the dignity of ‘‘intrinsic’’ fraud
and furnishes no basis for a collateral attack upon the
judgment.

Toole v. Fite, 57 Utah 1;

Borgos v. Price, 140 N. Y. Misc. Rep. 287 ;

Harrington v. Denny, 3 Fed. Supp. 584, 593, 594 (appeal

dismissed 68 F. (2d) 1004) ;

Matter of Holden, 271 N. Y. 212.

It should be noted, moreover, that the term ‘‘extrinsic
fraud’’ means actual fraud. It signifies a case where one
knowingly and deliberately seeks to take undue advantage
of another for the purpose of defrauding him; and this is
true as well, in a case where the fraud consists of a
roncealment.

Freeman on Judgments, Sth Ed. page 2569;
Dockery +. Central, 45 Arizona 434;
Ward +. Southfield, 102 N. Y. 287.

In this case there is absolutely no connection whatsoever
between petitioner's arrangement to distribute the proceeds
of suit and the respondent's obligation to return petitioner's
2 shares of stock and his obligation to account with re-
spect to the moneys received by him during his possession

#0

thereof. What undue advantage was taken when pet
obligated himself to make distribution of the proceeds
claim to his wife and to creditors, retaining the right
balance remaining thereafter! What fraud was p
by this arrangement upon respondent—one who has
interest whatsoever in what petitioner seeks to ‘
with the proceeds of his claim! If petitioner had
his claim to petitioner's brother and if petitioner's
had reassigned it by simple instrument prior to petiti
suit against respondent, then, certainly, it could not be
ee ee, eee
occurred to the New York court. This hypothetical i
tion is, in effect, the instant case. The only diff
that the reassignment under review provides for «
beneficial intereste—a matter that does not concern
respondent. The hypothetical illustration and the i
case are the same in that in both there is the complete
ment of legal! title.

Petitioner proceeded under an instrament of reassign
ment which indicated to him that he had a perfect right &
sue in his own name and it is inconceivable that any
would contend, that petitioner, a layman, armed with that
strument, intended to perpetrate a fraud upon the New Yat
court.

Conctusion

For the foregoing reasons it is respectfally submitted that
the writ of certiorari should issue.
Tuomas |. Saxena,
Aanow Faarx,
Attorneys and Cownsel for Petitioner.

Tromas |. Suzetvay,
Lew F.. Gissen,
Aasson Fuarx,

Of Cowneel.

(6553)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0117%3A02. Public record. Not legal advice.