Opinion
Argued January 18, 1878
Decided January 29, 1878
Nelson Smith, for appellant. George H. Forster, for respondents.
The issue relating to the execution and delivery of the undertaking upon which this action is brought was properly submitted to the jury. There was prima facie proof of its due execution, and the evidence on the part of the defense tending to impeach it, although strong, proceeded from interested witnesses, and was not conclusive. The verdict cannot, therefore, be reviewed here.
Upon the authority of the Methodist Church v. Barker ( 18 N Y, 463), we must hold that the report of the referee assessing the damages, having been duly confirmed, was conclusive upon the appellant, notwithstanding that he had no notice of the proceeding, and that the question of the amount of damages could not be retried in this action, unless the defendant established the allegation in his answer that the report was obtained by fraud. The most embarrassing question arising on the present appeal is whether the evidence offered by the appellant and excluded was competent on that issue.
It appeared that the appellant had no notice of the reference and did not attend, and that his principal, the plaintiff in the original injunction suit, although notice was served on his attorney, was not represented on the hearing before the referee. The reference proceeded ex parte, and one of the defendants in the injunction suit was the main witness in his own behalf. He testified that the defendants sustained damages by being kept by the injunction out of possession of the lands in controversy from July, 1869, when the injunction was served, until April, 1870, when judgment was rendered, and that the value of such possession was $4,000 per annum during that time, and the damages were assessed on that basis.
The appellant, on the trial of this action, put the question to a witness, what was the fair value of the rental or use of the lands during the period in question? This evidence was objected to on the ground that the report assessing the damages was conclusive, and the court sustained the objection on that ground. The appellant then offered the same evidence on the question of fraud in the assessment of damages. The court, in rejecting the evidence, stated that it would allow the appellant to prove fraud, but not, in the first instance, to show that the assessment of damages was too high.
If the only tendency of the evidence offered was to prove that the damages were assessed too high, it was properly excluded. But if it tended to prove the allegations of fraud contained in the answer, we think it should have been received. The allegations of the answer are that the plaintiffs in this action procured the assessment by falsely and fraudulently representing that the value of the use of the premises was $4,000 per annum, when in truth it did not exceed $500 per annum, and we are not prepared to hold that if such a gross exaggeration of the rental value had been clearly and satisfactorily proved, it might not, in connection with the facts that the proceeding was being carried on without notice to the sureties, and in the absence of any party interested in opposing it, afford ground for the inference that advantage was taken of those circumstances, and the representation was made with fraudulent intent. A mere difference of opinion between witnesses, as to the value of the rental within a reasonable range, would not afford just ground for such an inference, but when after the evidence had been rejected as improper for the purpose of reducing the damages assessed, it was again offered on the question of fraud, we think it fair to construe the offer as being to support the allegations of fraud set up in the answer. There can be no question that a judgment or award obtained by false testimony fraudulently given by the party benefited thereby is voidable, and we think that a gross exaggeration of value, knowingly and willfully made, especially in the absence of the adverse party, would be sufficient evidence of fraud to invalidate a judgment or assessment of damages. We cannot, of course, assume that the defendant would have succeeded in establishing his allegation, neither can we assume that he would have failed, and as the evidence offered bore upon the question, we conclude that it should have been received and its effect determined afterwards.
We also think that the proceedings and orders made upon the defendant's motion to set aside the report were improperly received in evidence. If the allegations of fraud were entirely unsupported, the report was conclusive, and these proceedings and orders were wholly immaterial. If evidence of fraud was given or offered, they were not competent for the purpose of rebutting it or justifying its rejection. They did not constitute an adjudication of the rights of the parties, the orders having been made upon a motion merely addressed to the discretion of the court, and were not evidence against the defeated party upon any issue in the action.
Many of the difficulties in this case could have been avoided by giving notice of the reference to the sureties who were the parties chiefly interested; and although, under the decision in Methodist Church v. Barker ( 18 N.Y., 463), notice to the surety is not indispensable, it is the much safer and fairer course to give it in all such cases.
The judgment should be reversed and a new trial ordered, with costs to abide the event.
All concur.
Judgment reversed.