Numerous judgments at law were rendered in the state court in
favor of the same party, against the same defendant; in each case,
the judgment was for less than five hundred dollars, but the
aggregate of all the judgments was over three thousand dollars.
After the close of the term, the defendant against whom the
judgments were rendered filed a petition in the same court for the
annulment of the judgments upon the ground that, without
negligence, laches, or other fault upon the part of the petitioner,
they had been fraudulently obtained.
Subsequently the petitioner filed a proper petition and bond for
the removal of the case into the circuit court of the United
States. The application was refused, and the state court proceeded
to final judgment.
Held:
(1) Upon the tiling of a proper petition and bond for the
removal of a cause pending in a state court, such cause, if
removable under the act of Congress, is in law removed so as to be
docketed in the circuit court of the United States notwithstanding
the state court may refuse to recognize the right of removal.
(2) As all the judgments in law were held in the same right and
against the same parties, and as their validity depended neon the
same facts, the defendant therein, in order to avoid a multiplicity
of actions and the vexation and costs arising from numerous
executions and levies, was entitled to bring one snit for a final
decree determining the matter in dispute that was common to all the
parties, and as, under the rules of equity, such a suit could be
brought in a court of the United States, the aggregate amount of
all the
Page 141 U. S. 590
judgments sought to be annulled was the value of the matter in
dispute; consequently, the cause was removable so far as the amount
involved was concerned.
(3) A circuit court of the United States in the exercise of its
equity powers, and where diverse citizenship gives jurisdiction
over the parties, may deprive a party of the benefit of a judgment
fraudulently obtained by him in a state court, if the circumstances
are such as would authorize relief by a federal court if the
judgment had been rendered by it and not by a state court, as a
decree to that effect does not operate upon the state court, but
upon the party.
(4) Where a suit in equity is, in its general nature, one of
which a circuit court of the United States may rightfully take
cognizance, upon removal, it is not for a state court to disregard
the right of removal upon the ground simply that the averments of
the petition or bill in equity are insufficient or too vague to
justify a court of equity in granting the relief asked. It is for
the federal court, after the cause is docketed there, and upon
final hearing, to determine whether, under the allegations and
proof, a case is made which entitles the plaintiff to the relief
asked.
Barrow v. Hunton, 99 U. S. 80;
Johnson v. Waters, 111 U. S. 640, and
Arrowsmith v. Gleason, 129 U. S. 86,
distinguished from
Nougue v. Clapp, 101 U.
S. 551, and
Graham v. Boston, Hartford & Erie
Railroad, 118 U. S. 161.
The Court stated the case as follows:
On the 20th day of April, 1885, the plaintiff in error, Mrs.
Sarah E. Marshall, a citizen of New York, filed in the eighth
District Court for the Parish of Madison, Louisiana, a petition for
injunction representing that David Mayer, one of the defendants in
error, had then recently obtained, in a suit in that court, a
judgment against her for the sum of $127.50; that in pursuance of
an agreement, that judgment in one suit should be decisive of other
suits in the same court between the same parties and relating to
the same subject matter, judgments had been entered against her in
his favor in other actions, twenty-three in number, for sums
aggregating $3.089.31. Each judgment was for less than $500.
The petition alleges that all the judgments were obtained on
false testimony and forged documents, and that equity and good
conscience required that they be annulled and avoided for the
following reasons:
Page 141 U. S. 591
"That your petitioner, as usufructuary of the plantation Cabin
Teele, in your said parish, employed one Elijah Boyd as an agent on
the said plantation to collect the rents and ship the cotton
received; that the said Boyd died in the year 1884, and that said
Mayer, pretending to have a contract with said Boyd by which your
petitioner was bound to him as a furnisher of supplies
in
solido with the several defendants named in the suits
hereinbefore mentioned, brought said suits, and made petitioner a
party defendant thereto; that petitioner answered in the several
suits petitioner a party defendant thereto; that said Boyd, if he
made any such contract as alleged, had no power, right, or
authority to do so; that a trial was had of the suit No. 607, and
the said Mayer introduced evidence of the existence of a letter
from your petitioner to the said Boyd authorizing him, the said
Boyd, to make a contract by which her lien as lessor on the crops
produced by the several defendants and other tenants on said
plantation should be waived in favor of the said Mayer or of others
as furnishers of supplies to said tenants; that upon such evidence
so offered, and of the existence of which petitioner could not
possibly be aware, and of which she had no knowledge until
subsequent to the trial, judgment was rendered against her in said
suit and in the several other suits mentioned. Your petitioner
shows that the said Boyd, who was an agent, with only a general
power of administration, had no authority to bind her or to waive
her lien as lessor in order to procure supplies for the several
defendants and other tenants, and that the pretended letter
authorizing him to make such contract, if it ever had an existence,
which petitioner denies, was a false and forged document, not
written and not signed by her; that your petitioner has never
authorized the said Boyd, or any other person whatsoever, to waive
her lien as lessor in favor of the said Mayer or any other
furnisher of supplies, and has never written the pretended letter,
or any other letter, to the said Boyd, or to any other person
whatsoever, containing such authority; that, to the contrary, as
soon as she was informed after the death of said Boyd that he had
made such pretended contract and other contracts by which it was
sought to bind her, she instructed
Page 141 U. S. 592
her agents and attorneys to take immediate steps to disavow the
authority of said Boyd to make such contracts; that the testimony
of said Mayer as to the existence of said pretended letter is
false, and in pursuance of a conspiracy to defraud petitioner, or
that said pretended letter, if it ever had an existence, is a false
and forged document; that this testimony, and much more testimony
necessary to establish the falsity of said evidence upon which said
judgments were obtained, and the forgery of said pretended letter
to said Boyd, was unknown to petitioner at the time of the trial,
and could not have been known to or anticipated by her, and has
been discovered by her since the rendition of said judgments in
said suit, and since the lapse of the legal delays within which a
motion could be made for a new trial, and that there has been no
laches on her part in failing to show the falsity of such evidence
and the forgery of such pretended letter on the trial of the
cause."
Such was the case made in the petition. The relief asked was an
injunction against Mayer and the defendant in error, Holmes,
sheriff of the parish, restraining them from executing the above
judgments or any of them; that Mayer be cited to answer the
petitioner's demand; that the judgments be annulled and avoided as
obtained upon false testimony and forged documents, and that the
petitioner have general and equitable relief.
A writ of injunction was issued as prayed for, and upon a
supplemental petition, showing Mayer to be a nonresident of
Louisiana, a curator
ad hoc was appointed to represent
him.
Mayer appeared and filed exceptions and pleas of estoppel and
res adjudicata.
Subsequently, June 5, 1885, Mrs. Marshall filed a petition,
accompanied by a proper bond, for the removal of her suit into the
circuit court of the United States upon the grounds that she was a
citizen of New York, and the defendants, respectively, were
citizens of Mississippi and Louisiana; that the controversy was
wholly between citizens of different states, and that it could be
fully tried and determined between them. The court made an order
refusing the application for removal. The pleas were referred to
the merits, and ordered to stand as
Page 141 U. S. 593
an answer. Mayer answered, reiterating the allegations of the
pleas previously filed by him, excepting to the petition as not
disclosing any cause of action, denying each averment of the
petition not admitted in the pleas, and praying that the
plaintiff's demand be rejected.
Upon the trial of the case, judgment was rendered dissolving the
injunction and authorizing Mayer to execute the judgments enjoined.
Judgment was also rendered in his favor on the injunction bond for
ten percent on the amounts enjoined (special damages as attorney's
fees) and for twenty percent on such amounts as general damages. An
appeal by the plaintiff to the Supreme Court of Louisiana was
dismissed for want of jurisdiction in that court to review the
judgment. It was held that the appeal should have gone to the
proper state court of appeals. 39 La.Ann. 313. Thereupon an appeal
was prosecuted to the � for the Second Circuit of the State
of Louisiana, where the original judgment, after being amended by
reducing the general damages to ten percent, was affirmed. From
that judgment Mrs. Marshall has prosecuted the present writ of
error.
Page 141 U. S. 594
MR. JUSTICE HARLAN, after stating the case, delivered the
judgment of the Court.
Page 141 U. S. 595
After the filing of the petition for removal, accompanied by a
sufficient bond, and alleging that the controversy was wholly
between citizens of different states, the state court was without
authority to proceed further in the suit if, in its nature, it was
one of which the circuit court of the United States could
rightfully take jurisdiction. If, under the act of Congress, the
cause was removable, then, upon the filing of the above petition
and bond, it was, in law, removed so as to be docketed in that
court, notwithstanding the order of the state court refusing to
recognize the right of removal.
Steamship Co. v. Tugman,
106 U. S. 118,
106 U. S. 122;
St. Paul & Chicago Railway v. McLean, 108 U.
S. 212,
108 U. S. 216;
Stone v. South Carolina, 117 U. S. 430;
Crehore v. Ohio & Miss. Railway, 131 U.
S. 240.
Is the right of removal affected by the fact that no one of the
judgments against the plaintiff in error exceeded the amount --
$500, exclusive of costs -- limited by the act of 1875 for the
jurisdiction, whether original or upon removal, of a circuit court
of the United States in suits between citizens of different states?
We think not. The judgments aggregate more than three thousand
dollars. They are all held by Mayer, and are all against Mrs.
Marshall. Their validity depends upon the same facts. If she is
entitled to relief against one of the judgments, she is entitled to
relief against all of them. The cases in which they were rendered
were, in effect, tried as one case, so far as she and Mayer were
concerned, for the parties stipulated that the result in each one
not tried should depend upon the result in the one tried. As all
the cases not tried went to judgment in accordance with the result
in the one tried, as the property of Mrs. Marshall was liable to be
taken in execution on all the judgments, as the judgments were held
in the same right, and as their validity depended upon the same
facts, she was entitled, in order to avoid a multiplicity of
actions and to protect herself against the vexation and cost that
would come from numerous executions and levies, to bring one suit
for a decree finally determining the matter in dispute in all the
cases, and as, under the rules of equity obtaining
Page 141 U. S. 596
in the courts of the United States, such a suit could be
brought, the aggregate amount of all the judgments against which
she sought protection upon grounds common to all the actions is to
be deemed, under the act of Congress, the value of the matter here
in dispute.
According to the averments of the original petition for
injunction filed in the state court -- which averments must be
taken to be true in determining the removability of the suit -- the
judgments in question would not have been rendered against Mrs.
Marshall but for the use in evidence of the letter alleged to be
forged. The case evidently intended to be presented by the petition
is one where, without negligence, laches, or other fault upon the
part of petitioner, Mayer has fraudulently obtained judgments which
he seeks, against conscience, to enforce by execution. While, as a
general rule, a defense cannot be set up in equity which has been
fully and fairly tried at law, and although, in view of the large
powers now exercised by courts of law over their judgments, a court
of the United States sitting in equity will not assume to control
such judgments for the purpose simply of giving a new trial, it is
the settled doctrine that
"any fact which clearly proves it to be against conscience to
execute a judgment, and of which the injured party could not have
availed himself in a court of law, or of which he might have
availed himself at law, but was prevented by fraud or accident,
unmixed with any fault or negligence in himself or his agents, will
justify an application to a court of chancery."
Marine Ins. Co. v.
Hodgson, 7 Cranch 332,
11 U. S. 336;
Hendrickson v.
Hinckley, 17 How. 443,
58 U. S. 445;
Crim v. Handley, 94 U. S. 652,
94 U. S. 653;
Metcalf v. Williams, 104 U. S. 93,
104 U. S. 96;
Embry v. Palmer, 107 U. S. 3,
107 U. S. 11;
Knox County v. Harshman, 133 U. S. 152,
133 U. S. 154;
2 Story's Eq.Jur. §§ 887, 1574;
Floyd v. Jayne,
6 Johns.Ch. 479, 482.
See also United States v.
Throckmorton, 98 U. S. 61,
98 U. S. 65.
But it is contended that it was not competent for the circuit
court of the United States, by any form of decree, to deprive Mayer
of the benefit of the judgments at law, and that Mrs. Marshall
could obtain the relief asked only in the court in
Page 141 U. S. 597
which the judgments at law were rendered. Is it true that a
circuit court of the United States, in the exercise of its equity
powers and where diverse citizenship gives jurisdiction over the
parties, may not, in any case, deprive a party of the benefit of a
judgment fraudulently obtained by him in a state court, the
circumstances being such as would authorize relief by the federal
court if the judgment had been rendered by it and not by a state
court?
A leading case upon this subject is
Barrow v. Hunton,
99 U. S. 80,
99 U. S. 82. That
was a suit in one of the courts of Louisiana to annul a judgment
rendered in a court of that state upon the ground that it was
founded upon a default taken, without lawful service of the
petition and a citation, and because, prior to the judgment, the
party seeking to have it set aside had been adjudged a bankrupt.
The case was removed to the circuit court of the United States and
was subsequently remanded to the state court. This Court held that
the jurisdiction of the circuit court depended upon the question
whether the action to annul the judgment was or was not in its
nature a separate suit, or only a supplementary proceeding, so
connected with the original suit as to form an incident to it and
to be substantially a continuation of it. It said:
"If the proceeding is merely tantamount to the common law
practice of moving to set aside a judgment for irregularity, or to
a writ of error, or to a bill of review or an appeal, it would
belong to the latter category, and the United States courts could
not properly entertain jurisdiction of the case; otherwise, the
circuit courts of the United States would become invested with
power to control the proceedings in the state courts, or would have
appellate jurisdiction over them in all cases where the parties are
citizens of different states. Such a result would be totally
inadmissible. On the other hand, if the proceedings are tantamount
to a bill in equity to set aside a decree for fraud in the
obtaining thereof, then they constitute an original and independent
proceeding, and according to the doctrine laid down in
Gaines
v. Fuentes, 92 U. S. 10, the case might be
within the cognizance of the federal courts. The distinction
between the two classes of cases may
Page 141 U. S. 598
be somewhat nice, but it may be affirmed to exist. In the one
class, there would be a mere revision of errors and irregularities,
or of the legality and correctness of the judgments and decrees of
the state courts, and in the other class the investigation of a new
case arising upon new facts, although having relation to the
validity of an actual judgment or decree, or of the party's right
to claim any benefit by reason thereof."
Referring to the provisions of the Louisiana Code of Practice
authorizing an action to annul a judgment obtained through fraud,
bribery, forgery of documents, etc., the Court said that it was not
disposed to allow the fact that by the local law an action of
nullity could only be brought in the court rendering the judgment,
or in the court to which the judgment was taken by appeal, to
operate so far as to make it an invariable criterion of the want of
jurisdiction in the courts of the United States. "If," the Court
said,
"the state legislatures could, by investing certain courts with
exclusive jurisdiction over certain subjects, deprive the federal
courts of all jurisdiction, they might seriously interfere with the
right of the citizen to resort to those courts. The character of
the cases themselves is always open to examination for the purpose
of determining whether,
ratione materiae, the courts of
the United States are incompetent to take jurisdiction thereof.
State rules on the subject cannot deprive them of it."
As that proceeding was equivalent in common law practice to a
motion to set aside the judgment for irregularity or to a writ of
error
coram vobis, and as the cause of nullity related to
form only, the case was held not to be cognizable in the courts of
the United States.
The rules laid down in
Barrow v. Hunton were applied in
Johnson v. Waters, 111 U. S. 640,
111 U. S. 667,
and
Arrowsmith v. Gleason, 129 U. S.
86,
129 U. S. 101. In
Johnson v. Waters, this Court upheld the jurisdiction of
the circuit court of the United States, by a decree in an original
suit, to deprive parties of the benefit of certain fraudulent sales
made under the orders of a probate court of Louisiana, which court,
by the law of that state, had exclusive jurisdiction of the subject
matter of the proceedings out of which the sales arose. After
observing
Page 141 U. S. 599
that the court of chancery is always open to hear complaints
against fraud, whether committed
in pais or in or by means
of judicial proceedings, the Court said:
"In such cases, the court does not act as a court of review, nor
does it inquire into any irregularities or errors of proceeding in
another court, but it will scrutinize the conduct of the parties
and, if it finds that they have been guilty of fraud in obtaining a
judgment or decree, it will deprive them of the benefit of it and
of any inequitable advantage which they have derived under it."
In
Arrowsmith v. Gleason, the grounds of the
jurisdiction of the circuit court of the United States to entertain
an original suit -- the parties being citizens of different states
-- to set aside a sale of lands fraudulently made by the guardian
of an infant, under authority derived from a probate court, are
thus stated:
"These principles control the present case, which, although
involving rights arising under judicial proceedings in another
jurisdiction, is an original, independent suit for equitable relief
between the parties, such relief being grounded upon a new state of
facts disclosing not only imposition upon a court of justice in
procuring from it authority to sell an infant's lands when there
was no necessity therefor, but actual fraud in the exercise, from
time to time, of the authority so obtained. As the case is within
the equity jurisdiction of the circuit court as defined by the
Constitution and laws of the United States, that court may, by its
decree, lay hold of the parties and compel them to do what,
according to the principles of equity, they ought to do, thereby
securing and establishing the rights of which the plaintiff is
alleged to have been deprived by fraud and collusion."
These authorities would seem to place beyond question the
jurisdiction of the circuit court to take cognizance of the present
suit, which is nonetheless an original independent suit because it
relates to judgments obtained in the court of another jurisdiction.
While it cannot require the state court itself to set aside or
vacate the judgments in question, it may, as between the parties
before it, if the facts justify such relief, adjudge that Mayer
shall not enjoy the inequitable advantage obtained by his
judgments. A decree to that effect
Page 141 U. S. 600
would operate directly upon him, and would not contravene that
provision of the statute prohibiting a court of the United States
from granting a writ of injunction to stay proceedings in a state
court. It would simply take from him the benefit of judgments
obtained by fraud.
It was contended at the bar that the cases of
Nougue v.
Clapp, 101 U. S. 551, and
Graham v. Boston, Hartford & Erie Railroad,
118 U. S. 161,
118 U. S. 177,
announce a different rule. We do not understand those cases to
proceed upon any ground inconsistent with the principles announced
in the cases above cited. It is true that in
Nougue v.
Clapp, the circuit court of the United States was asked to set
aside a decree of a state court, as well as a sale had under it,
upon the ground that the decree was obtained and the sale conducted
pursuant to a fraudulent conspiracy, to which the person obtaining
the decree, and who became the purchaser at the sale, was a party.
Here, the resemblance between that case and the one before us ends,
for in
Nougue v. Clapp, it did not appear, nor was it
alleged, that the facts constituting the fraud were not, before the
rendition of the decree, within the knowledge of the party seeking
its annulment or could not have been discovered in time to bring
them in some appropriate mode to the attention of the court while
the decree was within its control. For aught that appears, that
suit was brought simply to obtain a rehearing in the circuit court
of the United States, sitting in equity, of issues that were or by
proper diligence could have been fully determined in the suit at
law in the state court. The relief there asked could not have been
granted consistently with the rule that equity will not interfere
with a judgment at law, even where the party has an equitable
defense, if he could by the exercise of diligence have availed
himself of that defense in the action at law to which he was a
party. This requirement of diligence is, as it ought to be,
enforced with strictness.
The case of
Graham v. Boston, Hartford & Erie
Railroad does not differ in principle from
Nougue v.
Clapp.
The case before us is unlike the two last cited. While the
court, upon final hearing, would not permit Mrs. Marshall,
Page 141 U. S. 601
being a party to the actions at law, to plead ignorance of the
evidence introduced at the trial, it might be that relief could be
granted by reason of the fact, distinctly alleged, that some of the
necessary proof establishing the forgery of the letter was
discovered after the judgments at law were rendered, and after the
legal delays within which new trials could have been obtained, and
could not have been discovered by her sooner. It was not, however,
for the state court to disregard the right of removal upon the
ground simply that the averments of the petition were insufficient
or too vague to justify a court of equity in granting the relief
asked. The suit being in its general nature one of which the
circuit court of the United States could rightfully take
cognizance, it was for that court, after the cause was docketed
there and upon final hearing, to determine whether, under the
allegations and proof, a case was made which, according to the
established principles of equity, entitled Mrs. Marshall to
protection against the judgments alleged to have been fraudulently
obtained.
For the reasons stated, we are of opinion that this suit was
removable from the state court, and that the court below should
have reversed the judgment of the Eighth District Court for the
Parish of Madison and remanded the cause to the latter court with
direction to set aside all orders made after the filing of the
petition and bond for the removal of the suit into the circuit
court of the United States, and to proceed no further in it.
The judgment is reversed and the cause remanded for such
proceedings as are consistent with this opinion.
