Magnolia Metal Co. v. Pound — 60 A.D. 318

Majority

p. 318

Magnolia Metal Company, Appellant, v. John Lulham Pound, Respondent, Impleaded with Others.

Headnote

Stipulation, inadvisedly entered into—when the court will set it aside.

The court has power to relieve parties from stipulations made during the progress of an action, and when both parties can be restored to substantially- their former position, will, as a general'rule, exercise such power, if it appears that the stipulation was entered into inadvisably or that it would be inequitable to hold the parties to it.

p. 319

Where the parties to an action enter into a stipulation that the determination of the issues in another action pending between them shall be “conclusive upon and as to the issues herein,” and the court holds that a recovery cannot be had in the other action, assigning for so holding a reason which neither of the parties had in mind when the stipulation was entered into, the court considered that such stipulation should be set aside upon terms in order to enable the rights of the parties in the action in which the stipulation was made to be determined on the merits.

Appeal by the plaintiff, the Magnolia Metal Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 29th day of March, 1901, denying the plaintiff’s motion to be relieved from a stipulation.

Alexander S. Bacon, for the appellant.

Cephas Brainerd, for the respondent.

Shortly after this action was begun the defendants brought suit against the plaintiff, and both actions having been referred to a referee to hear and determine the same, and both coming on for trial at the same time, for the purpose of facilitating the trial of this action a stipulation was entered into between the parties to the effect that a determination of the issues in the other action should be “ conclusive upon and as to the issues herein.”

In the other action this plaintiff (the defendant therein) recovered a judgment of several thousand dollars on a counterclaim. The evidence taken in that action having been considered by the referee—together with the stipulation referred to—he rendered a judgment in this action for the plaintiff. An appeal was taken to this court from each judgment. In the other action the judgment was modified to the extent of striking out the recovery and in its place inserting a provision dismissing the complaint; and in this action the judgment was reversed and a new trial ordered, on the ground that it did not appear by the record that a judgment had been recovered in the other, action, and according to the terms of the stipulation, to entitle the plaintiff to recover it was necessary to

p. 320

prove the judgment recovered in the other action. After the appeals had been thus determined the defendants moved upon the stipulation for judgment absolute in this- action. The motion was denied and thereafter this plaintiff moved to vacate, set aside and cancel the stipulation. This motion was also denied and the plaintiff has appealed.

There is no doubt that the court has power to relieve parties from stipulations made during the progress of an action (Higgins v. Starin, 39 App. Div. 533 ; Van Nuys v. Titsworth, 57 Hun, 5 ; Sperb v. Metropolitan Elevated R. Co., Id. 588; S. C., 10 N. Y. Supp. 865 ), and where both parties can be restored to substantially their former position the court, as a general rule, exercises such power if it appears that the stipulation was entered into inadvisedly or that it would he inequitable to hold the parties to it.

Here, the defendants have lost nothing by reason of the stipulation, and if it be set aside both of the parties will be restored to their former position and the issues in the action can then be tried in the ordinary way and a decision rendered on the merits, which cannot. be done so long as the stipulation remains in force and the decision of this court in the other case stands unreversed. To permit the defendants now to enforce the stipulation would prevent the plaintiff ever having a trial of the action which under the circumstances would be very unjust and inequitable to it. What the parties had in mind when the stipulation was made was that the issues in the other action were to be determined upon the merits, and that such determination would practically and effectually determine upon the merits the issues in this one, inasmuch as the evidence would he practically the same in both cases. Neither of the parties then had in mind that a recovery could not be had in the other action for the reason assigned by us on the appeal. This being so, it seems to us that the stipulation should be set aside, upon terms, in order that the rights of the parties may be determined after a trial had, and not by a stipulation inadvisedly entered into by counsel.

The order appealed from, therefore, is reversed, with ten dollars costs and disbursements, and the motion granted, on condition, however, that the appellants pay to the defendant, within twenty days after service of a copy of the order of this court, all of the costs and disbursements of the action after notice of trial down to and

p. 321

including the trial of it, and in addition thereto the costs and disbursements of the appeal from the judgment.

Yah Brunt, P. J., Patterson, Ingraham .and Hatch, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion granted upon payment by the appellant within twenty days after service of a copy of the order of this court of all the costs and disbursements of the action after notice of trial, down to and including the trial fee, and in addition thereto the costs and disbursements of the appeal from the judgment.

Cases cited

Higgins v. Starin 39 App. Div. 533 N.Y. App. Div. 1899-04-07 p. 320