would answer the question in the negative, unless there is a distinction between the foregoing case and the following:1 An action is brought upon a policy of insurance; the underwriter's defence is that the claim has been compromised with the plaintiff; the plaintiff offers to show that the compromise was obtained by the defendant through fraud, without offering (other) evidence of rescission, or tender of the sum received on the compromise. The evidence is refused; there should have been a rescission with tender before suit.2

Here too was a case in which the judgment might have adjusted the differences between the parties, by simple reduction of the claim; and at first it may seem perverse and unreasonable in a court to refuse. In reality however the court should firmly refuse; and the reason becomes evident upon reflection. The plaintiff has come into court with a demand upon which he knows, in contemplation of law at least (but whether so or not is no matter), he has no cause of action. The compromise is a binding contract until rescinded; it is binding then when he brings his suit. He may indeed rescind the contract after the suit is undertaken, but not for the

but the distinction, as applied to a replication, is too fine, though more satisfactory in regard to a plea. See Lord v. Brookfield, 8 Vroom, 552.

1 It is clear however that a vendor, in suing on the contract of purchase for the price, may repudiate a fraudulent insufficient payment, and recover the balance due to him; in such a case he need not tender back what he has received, since his action is not for or in consequence of a rescission. Repudiating the payment is no rescission of anything. Martin v. Roberts, 5 Cush. 126; Bridge v. Batchelder, 9 Allen, 394; Pierce v. Wood, 23 N. H. 519, 534; Moody v. Brown, 58 N. H. 45. Substituting a new contract for the old one is a different thing. A person might well hesitate about suing for a balance

if (because of fraud) he must first return what was already safe in his hands, and it would be senseless to require him to do so; whereas if a new contract stand in his way, he must clearly get rid of it before he can sue. To do that he must rescind, with restoration of any thing of value.

2 Brown v. Hartford Fire Ins. Co., 117 Mass. 479; Potter v. Monmouth Fire Ins. Co., 53 Maine, 440. To the same effect, with an elaborate judgment, Gould v. Cayuga Bank, 86 N. Y. 75. There indeed the plaintiff, after the close of the evidence on the trial, and after the objection of want of tender, paid the sum received into court, with interest; but this was held insufficient.

8 See Gould v. Cayuga Bank, 86 N. Y. 75, 82.

purposes of that suit; his situation is not that of a defendant who has been forced into court. To permit the plaintiff to gain a right of action in the particular case by act after suit would be destructive of the fundamental principle upon which suits are brought. Whether in an equitable action for rescission the plaintiff could not in his complaint offer to restore is another question; there the objection would be very technical, and not favored,2 for an equity suit is begun by the bill, and not, as a suit at law, by writ. The rescission is thus contemporaneous with the action.

The result is (1) that there can be no such thing in principle as rescission by reply, (2) that this involves no conflict with the rule that a defendant may rescind by plea, and (3) that the fact that the differences between the parties may on proper offer be adjusted by the judgment furnishes no general ground upon which to excuse want of rescission before suit. A further result is that whether a defendant can avail himself of the fact that the judgment may be adjusted to the situation, where that is true, will depend upon the question whether he has by delay after knowledge of the facts, or in any other way, waived his right to rescind, or has in fact misled the plaintiff into suing as if the contract had been affirmed.3 Where however it is doubtful whether he may not be entitled to keep what he has received, it would seem that no inference based on failure to make tender can be drawn against his right to rescind by plea.*

161.

1 Herman v. Haffenegger, 54 Cal. by any reconstruction of the courts. Gould v. Cayuga Bank, supra.

2 Ib.; Allerton v. Allerton, 50 N. Y. 670. The distinction between an action for rescission and an action consequent upon rescission is not to be abrogated

3 Clough v. London Ry. Co., L. R. 7 Ex. 26.

4 The substantive law of rescission will be considered later, in its appropriate place.

CHAPTER VI.

INJUNCTIONS, VACATING JUDGMENTS, AND NEW

TRIALS.

§ 1. INJUNCTIONS.

WE have already seen under what circumstances the law will enjoin proceedings upon a written contract obtained by fraud, and order it to be delivered up for cancellation; we have seen that by the current of authority the law will authorize the injunction and cancellation where the invalidity of the instrument is not apparent upon its face, and where further there is danger that the evidence to support the defence of fraud may be lost by delay of the opposite party to sue upon it, or where for any reason the instrument may be wrongfully used.1 We have also seen that courts of equity in some states have refused to entertain jurisdiction over fraud in conveyances of land in which, as in the foregoing, there is a plain remedy at law;2 for these and other cases of the kind the reader is referred to the chapter on Jurisdiction.

The law furnishes one of several remedies for fraud successfully committed in the course of a trial; among them a bill in equity to enjoin enforcement of the judgment. This remedy is commonly given after the expiration of the term during which the fraudulent judgment was rendered. Generally speaking, it is given to supply the defect in legal procedure arising from the fact that, apart from statutory provision to the contrary, the power of a law court over its judgments ceases with the term in which they were rendered. It sometimes happens to a party to discover, after 2 Ante, pp. 46, 47.

1 Ante, p. 46.

the expiration of the term, that a judgment pronounced against him was obtained by the fraudulent conduct of the successful party; and to provide for such cases, the injured party has the right to file a bill in equity, praying for the proper relief.1

The remedy by bill in equity is also proper during the term in which the judgment of the law court was rendered, when the circumstances disclosed are such as to indicate that complete relief cannot be obtained by means of a new trial. But inasmuch as this relief is supplementary, it is a general rule of law that it will be granted only when the complainant has been guilty of no negligence in respect of his rights at the trial in question.2 If the fraud were of such a nature as (in case of knowledge of it) to require presentation to the court, the party cannot safely forego the opportunity of pleading it, or of moving the court for a new trial by reason of it. For example if the action were upon a promissory note, and the defendant should discover in the course of the trial that his signature thereto was forged, it would be his duty to bring the fact at once to the notice of the court; failing which, he would be bound, if judgment was rendered against him, to pay the sum decided to be due. He could not afterwards file a bill in equity for relief. And the same would be equally true in case, without actual knowledge of the fraud, he were put upon such inquiry as, diligently prosecuted, would be apt to lead to a discovery of the wrong done him. If however the fraud were not discoverable before the judgment was rendered, or afterwards within the time allowed by law for motions for a new trial, he could apply to equity for the redress desired.

1 See for example Edson v. Edson, 108 Mass. 590, where a decree of divorce of a previous term was set aside for fraud.

2 Equity will not grant an injunction or a new trial by way of relief

against a judgment at law obtained by fraud in a case where the party seeking relief has an adequate remedy by application to the court in which the fraud was perpetrated. Lyme v. Allen, 51 N. H. 243.

But the criterion of the right to call upon the court of equity for relief does not, it seems, depend in all cases upon the complaining party's knowledge or upon notice of the fraud before judgment. We have elsewhere suggested that there may exist frauds in connection with claims prosecuted against a party which, not being necessarily connected with the validity of the claim, he may prefer to avail himself of in a proceeding instituted by himself instead of by his adversary; and in cases of this kind the law might well allow the party his own election in the matter, and not impute to him laches for not doing that which it may not have been for his just interest to do.1

§ 2. VACATING AND IMPEACHING JUDGMENTS AND AWARDS.

It is well-established law that a judgment may be set aside or impeached collaterally during the term, or afterwards, for fraud.2 But this does not mean that a question involving a fraud put in issue in the case may be reopened (except on mo tion for a new trial, or on appeal or writ of error or the like) after the rendition of the judgment, so as to retry the matter of fraud; nothing of the kind is allowed. Thus a judgment cannot be set aside (except as above indicated), or impeached collaterally, upon the mere ground that false evidence, such as a forged document, was given on the trial; nor can an 1 Ante. p. 71.

2 It matters not that the judgment has been acted upon, as by suing upon it in another state. Edson v. Cummings, 52 Mich. 52. See Rush v. Rush, 46 Iowa, 648.

3 Vance v. Burbank, 101 U. S. 514; Sample v. Barnes, 14 How. 70; State v. Holmes, 69. Ind. 577; Emerson v. Udall, 13 Vt. 477; Atkinsons v. Allen, 12 Vt. 619; Ward v. Southfield, 102 N. Y. 287; Verplanck v. Van Buren, 76 N. Y. 247, 257; Ross v. Wood, 70 N. Y. 8; Otterson v. Middleton, 102 Penn. St.

78; Payne v. O'Shea, 84 Mo. 129; Mechanics' Bank v. Barnet Manuf. Co., 33 N. J. Eq. 486; Patch v. Ward, L. R. 3 Ch. 203, 207.

4 Vance v. Burbank, supra; United States v. Throckmorton, 98 U. S. 61; Ward v. Southfield, supra; Verplanck v. Van Buren, supra; Patch v. Ward, supra; Galena R. Co. v. Ennor, 116 Ill. 55; Hartman v. Ogborn, 54 Penn. St. 120; Fisk v. Miller, 20 Tex. 579. See Field v. Flanders, 40 Ill. 470; Dilling v. Murray, 6 Ind. 324.