Milbank v. Jones — 60 N.Y. Super. Ct. 259

Majority

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ROBERT W. MILBANK, Respondent v. MORGAN JONES, Appellant.

Headnote

Motion to be allowed to amend the answer after a like motion had been made to the court and denied and no appeal taken from the order.

In this case, the defendant being in default, his attorney entered into a stipulation, by which the default was waived without the payment of costs, on condition that defendant should not interpose any defence except a general denial. Afterwards, the defendant, who claimed that such stipulation was made without his knowledge or consent, changed his attorneys and moved to setasidetliis stipulation andfor leave to serve an amended answer, setting up in addition to the general denial, the statute of limitations, and an allegation that the agreement of trust mentioned in the complaint, was void as against public policy. This motion was denied, and an order was duly entered denying said motion April 9, 1888, and from that order no appeal was ever taken. The case was tried in November, 1888, and resulted in a verdict for defendant, and on an appeal taken from the judgment, by plaintiff, it was affirmed at general term, and thereupon plaintiff appealed to the Court of Appeals where the judgment was reversed and a new trial granted on the ground of error in the admission

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of defendant’s testimony, in regard to the illegality of the contract and trust under an answer containing merely a general denial; the cause was thereupon placed on the calendar for trial, and noticed for the October Term, 1891. In September, 1891, the defendant made a second motion to set aside the stipulation aforesaid and for leave to serve an amended answer on substantially the same grounds and state of facts as appeared in the first motion. This second motion was also denied, and from the order so denying the motion of defendant he appeals to the general term.

Held, that the defendant is guilty of laches. He should have appealed • from the order denying his first motion. The court has power to set . aside or modify such stipulations .as the one in question, nor will it be disputed that the defendant has suffered injury by reason of the stipulation made by his attorney. In view of the conflict of evidence on the question of defendant’s knowledge and approval of the act of his attorney in making the stipulation, and in consideration of the laches of defendant, this is not a ease in which the court should interfere and set aside a stipulation made by the attorneys for the respective parties, by which one gave up a right in return for the waiver of a right by the other.

Before Freedman, P. J., McAdam and Gildersleeve, JJ.

Decided January 11, 1892.

Appeal from an order denying a motion of defendant to set aside a stipulation, and for leave to amend the answer.

John M. Jones, attorney, and Joseph Fettretch of counsel, for appellant, argued :—

I. Defendant did not know of the fact that he was in default, nor of the making of the stipulation by his attorneys until informed thereof by his son in December, 1887. This appears from his own affidavits and those of his son above referred to. The defendant’s former attorneys do not attempt to controvert this statement of the defendant. ,

II. Defendant never authorized the making of any stipulation, nor does his former attorney or either of them, claim that he did.

III. Judge O’Gorman, who originally heard the

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motion, was under the idea that the stipulation was within the general powers of an attorney, and this was evidently a controlling feature of his decision.

IV. The defendant submits that he has not been guilty of any laches. He first learned of the making of the stipulation in December, 1887, and it would have been idle for him to have requested his then attorneys, S. A. & D. J. Noyes, to make an application to serve an amended answer, in view of the fact that they had, in cold blood, stipulated away any right to ever serve, or ask for leave to serve an answer containing anything but a general denial, (a.) The delay in procuring the substitution was not the fault of the defendant. (5.) D. J. Noyes of the firm of attorneys for defendant, who had charge of the case, had gone to Europe in January, 1888, and did not return until near the 1st of March, and his brother, S. A. Noyes, the other member of the firm, declined to do anything, on the ground that he knew nothing whatever of the matter, (c.) The defendant procured an order of substitution of attorneys on the 9th of March, as soon after D. J. Noyes’s return as possible, and the substituted attorney prepared the papers and procured an order to show cause, dated the sixteenth day of March, 1888, which, after adjournments for the purpose of getting affidavits, was heard, and the matter decided, on the 6th of April, 1888. (d.) In view of the fact that the defendant never knew of the stipulation until December, 1887, nor of its real contents and sweeping character until March, 1888, and of the fact of his inability to obtain a substitution of attorneys until March, 1888, and of the fact of his making the motion for leave to amend his answer within seven days after procuring the substitution of attorneys, no charge of laches can be made against him in making the motion. (e.) Judge O’GormajST, who heard the motion originally, evidently misunderstood the facts when in his opinion denying the. motion, he speaks of the long delay which

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had occurred between the service of the original answer and the time of the making of the motion. (/".) This delay was in no wise chargeable to the defendant. He made the motion as soon as it could be made after he learned the facts, (g.) Had the defendant known of the stipulation, and waited a year and a half, which, evidently, Judge O’Gorman, thought he had (overlooking the fact that nobody claimed that the defendant knew of any stipulation until December, 1887, or of its sweeping character until March, 1888), his remarks on the defendant’s delay would have been appropriate. Evidently, he either overlooked or misapprehended the undisputed facts on this subject as they appeared before him. (7i.) The period of time which has elapsed since the original motion was made and the present time are not chargeable against the defendant, he having succeeded on the trial, and the time having been consumed in the táking and prosecuting of the plaintiff’s appeals to the general term of this court and to the Court of Appeals.

, V. The assumption of Justice O’Gorman, that the defendant suffered no injury by reason of the stipulation, can only be explained or justified by keeping in view his opinion, subsequently given at, and conduct on, the trial, as to what evidence was admissible under the general issue. On the trial, after lengthy discussion, and after his decision at special term denying motion had been brought before him and offered in evidence, he held that evidence of illegality of consideration was admissible, and admitted it. This would be an explanation of his remarks as to defendants not being injured, (a.) The Court of Appeals having reversed the judgment, on the ground that Justice O’Gorman erred, then the defendant was injured, and, in view of the decision of the Court of Appeals, the defendant was injured by the stipulation, and counsel believe that if Judge O’Gorman were still justice he would so hold and grant a motion to set aside, and for leave to serve an amended answer.

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(b.) It does not need any argument to show that a stipulation made without defendant’s knowledge or consent, which bars out the three defences set up in defendant’s proposed amended answer, injures a defendant and practically denies him justice.

VI. We will now proceed to examine the authorities as to the power, right and duty of the court in the matter of enforcing or setting aside stipulations made by attorneys during the course and progress of an action. In The People v. The Mayor, 11 Abb. Pr. Reports, the court, on pages 72 and 73, state various matters in which an attorney exceeds his authority, and on page 74 the court says: “The court has the power, without doubt, in case of fraud or mistake, to relieve a party from the effects of an agreement.” And in affirming the words of Judge Mullen in ■ Sharp v. The Mayor, quote his language, to wit: “The recent, and in my opinion, the more just, practice, is for the court to relieve the client without reference to the responsibility of the attorney where a proper case for granting relief is established. There is no justice in permitting one party to obtain an undue advantage over another through the neglect or misconduct of the other party’s attorney. Courts of law are not to be used by parties in perfecting through the forms of law the ruin of a party who has employed a negligent or unworthy attorney.” * * * Other cases cited as follows: Quinn v. Lloyd, 7 Robt., 540; Galliard v. Smart, 6 Con., 388; Shaw v. Kiddes, 2 How., 246 ; Howe v. Lawrence, 22 N. J. Law Rep., 99.

VII. It will be suggested that no appeal was taken from the original order made by Judge O’Gorman. Defendant submits that this is not of the slightest importance, for Judge Dugro allowed the motion to be reargued, and after reargument denied tifié motion. The appeal from his order brings up the whole matter, both under his order and Judge O’Gorman’s order, and

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if the motion should have heen granted either on the original hearing, before Judge O’Gorman, or on the rehearing and reargument before Judge Dugro, then the order should be reversed, and defendant have an order setting aside the stipulation and granting leave to serve an amended answer. It is but fair to say that on the rehearing before Judge Dugro, he stated that had the matter been heard by him originally, he would have granted it at least in part, but that he felt it would be improper to grant the motion after Judge O’Gorman had denied it.

VIII. The papers before Justice Dugro presented a new case for the granting of defendant’s motion, (a.) He had all the proceedings on the trial, including Justice O’Gorman’s views of the effect of the general denial as to admissibility, evidence, illegality, and the proceedings at, and opinion of, the general term, and the result; and also the evidence at the trial of both plaintiff and defendant, showing the real transaction and its illegality. These facts called for the granting of the motion, irrespective of Judge O’Gorman’s decision on the former hearing, and should have relieved him from all delicacy in deciding differently from Judge O’Gorman. (6.) He also had Judge O’Gorman’s opinion, which showed that he evidently did not consider the defence of the extension of time of performance, and which defence it would be inequitable to exclude.

Booraem & Hamilton, attorneys, and Ira Shafer and William H. Hamilton of counsel, for respondent, argued :—

I. This motion is without precedent in practice. No new facts whatever are stated, except the fact that the plaintiff has finally succeeded in getting the erroneous ruling of Judge O’Gorman at the trial corrected by the Court of Appeals. The stipulation stands in full force, and, by its terms, the defendant is precluded from all

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defences except that of the general denial. In fact, the motion papers served on this motion hy the defendant are not nearly as strong in his favor as those previously submitted to Judge O’Gorman. This motion is made nearly six years after the action was commenced, nearly four years after the first motion was denied, and three months after the order entered on the decision of the Court of Appeals. Judge O’Gorman has long since left the bench, although he remained a member of this court for a considerable period after the first motion was decided by him. The defendant preferred not to appeal from Judge O’Gorman’s decision, and elected to go to trial upon his answer of a general denial. Meanwhile, the plaintiff has been put to a great amount of trouble and expense in getting the mistrial corrected, and now in consequence of age and severe illness, his presence and testimony at the new trial will be lost. ■Under these circumstances, without considering the merits of- the original motion, could Judge Dugro do otherwise than deny this motion ? The granting of it would have been a most flagrant abuse of power and discretion, and contrary to every notion of fairness and orderly procedure. This court, as long ago as 1869, in the case of Mayer v. Apfel, 2 Sweeny, 729 , at a general term, has for all time adopted a good and salutary rule, which, if applied in this case, will make short ’work of this appeal. Spencer, J.: “ Whatever may he the power or authority for such a proceeding ” (i. e., one judge reviewing and reversing another judge), “ it is, in my opinion, bad in practice, and the cases where the power is exercised should be very extreme and exceptional, and I believe this practice has never been tolerated in this court. I think I can speak for myself and associates when I say that we feel hound to sustain and to abide by the decision of any one of the judges of this court when acting within his power and jurisdiction as a judge, until the same shall be reversed by the

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general term. A late decision of Mr. Justice Cardozo, at a special term of the Supreme Court of this District, to this effect, meets with my full and cordial approval.” In addition to the foregoing case, we cite Hallgarten v. Eckert, 1 Hun, 117 ; Bolles v. Duff, 56 Barb., 568 .

II. Let us analyze this motion a little, (a.) It is a motion for the reargument of a motion made by the defendant to set aside the stipulation, and for leave to amend his answer as he desired on the prior motion, which was denied. (1.) Why does he make this motion ? Because he was beaten in the Court of Appeals. (2.) When does he make it ? Three years and seven months after the decision of the former motion. (3.) Is this laches ? It would be in any case hut this ; nothing deters the defendant and his counsel. (4.) Was any point overlooked by Judge O’Gorman ? No one pretends there was. So much for the motion for re-argument. (b.) They move for leave to renew the motion on new facts ? No: on what ground, then ? Because if leave is not given, and their answer is not amended, under the decision of the Court of Appeals, the plaintiff must succeed, the defendant, having abandoned his general denial at the trial. (1.) Is their motion based upon the same state of facts as the prior one ? Yes; unless they be more favorable to the plaintiff. (2.) Is the now proposed amended answer the same as the prior one ? Yes, identically the same, (c.) In the prior motion, they moved to set aside the stipulation in the case, that only a general denial should be interposed, on the ground that the Messrs. Noyes had no power to make it and to amend their answer. In both respects they were defeated. Judge O’Gorman’s masterly opinion should be read. We have not stopped to argue the gross injustice that would be done to the plaintiff’s cause, of his inability to he in court to make suggestions to his counsel, to aid in selecting the jury, and to give evidence in court, or elsewhere for that mat

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ter, upon the question of the proposed additional defences if, in violation of the stipulation, the court should allow them to he set, up by amendment.

III. But the original motion was rightly decided by Judge O’Gorman, if the merits of it are still open to discussion. The general authority of the attorneys was sufficient to bind the defendant. The following cases cited and set forth in argument by the counsel for respondent. Palen v. Stair, 7 Hun, 422 ; Ross v. Ferris 18 Ib., 211; Keogh v. Main, 52 Supr. Ct., 160; Rust v. Hunselt, 43 Ib., 571; Metropolitan v. Abbey, 49 Ib., 294.

The defendant being in default, his attorney entered into a stipulation, by which the default was waived, without the ¡payment of costs, on condition that defendant should interpose only a general denial. Afterwards, the defendant, who claims that such stipulation was made without his knowledge or consent, which assertion is denied by his former attorney who made it, changed his attorneys, and moved to set aside this agreement and for leave to serve an amended answer, setting up, in addition to the general denial, the statute of limitations and an allegation that the agreement of trust mentioned in the complaint was void as against public policy. This motion was argued at special term in March, 1888, and denied; whereupon, on April 9, 1888, an order was duly entered denying said motion, from which order no' appeal was taken. The case came on for trial in November, 1888, and a verdict was rendered for the defendant, the trial judge allowing the defendant to give affirmative testimony tending to show the illegality of the contract and trust set forth in the complaint. An appeal was taken by the plaintiff to the general term, where the judgment in favor of the defendant was affirmed. Thereupon, the plaintiff appealed to the Court of Appeals, where the judgment was reversed and a new trial granted, on the

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ground of tlie inadmissibility of the defendant’s testimony regarding the illegality of the contract and trust under an answer setting up merely a general denial. See this ease in 38 State Rep., 910. On July 1, 1891, the judgment of the Court of Appeals was duly made a judgment of this court, and on the same day a copy of the order was duly served on defendant’s attorney, with notice of entry. The cause was thereupon placed on the calendar for a new trial, and notice of trial was served for the October term, 1891. On September 26, 1891, the defendant made a second motion, on substantially the same state of facts as the first motion, to set aside the stipulation and for leave to serve an amended answer. This second motion was also denied, and from the order denying the same defendant appeals to the general term.

We are of the opinion that the defendant is guilty of laches. His proper course.would have been to appeal from the order denying the first motion to amend the answer and set aside the stipulation. He was not justified in speculating as to what the result of going to trial on the original answer would be, and then, on finding the Court of Appeals against him, in renewing his motion to amend the answer, nearly four years after making the original motion.

It will not be denied that the court has power to set aside or modify such stipulations as the one in question. See Barry v. Mutual Life Ins. Co., 53 N. Y., 536 ; People v. The Mayor, 11 Abb., 74 ; Quinn v. Lloyd, 7 Robt., 542. Nor will it be disputed that the defendant has suffered injury by reason of the stipulation made by his attorney. But in view of the conflict of evidence on the question of defendant’s knowledge and approval of the act of his attorney, and in consideration of defendant’s laches, we do not think this is a case in which the court should interfere to set aside a stipulation^ made by the attorneys for the respective parties, by

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which one gave up a right in return for the waiver of a right by the other.

The order appealed from is affirmed, with ten dollars costs and disbursements.

Freedman, P. J., and McAdam, J., concurred.