## Facts

- In 1846, Olney sued Pearce in New York after serving process on Pearce while he was briefly in New York; Pearce remained a Connecticut resident.
- Pearce claimed Olney had no valid claim and that Olney induced Pearce not to appear by assuring no further proceedings would be taken.
- Olney nonetheless obtained a New York judgment in April 1846 for $612.93, allegedly on a claim Olney knew was unfounded.
- In 1848, Olney sued on the New York judgment in Connecticut; Pearce filed an equity action there alleging the New York judgment was procured by fraud and seeking to stop enforcement.
- The Connecticut court, with both parties before it, found the fraud allegations true and entered a decree enjoining Olney from prosecuting the Connecticut action on the New York judgment.
- Olney assigned the New York judgment to Dobson, who then sued Pearce in New York in 1850 to recover on the 1846 judgment.
- Pearce defended by alleging the judgment was obtained by fraud and by relying on the Connecticut decree adjudicating that fraud and restraining enforcement.

## Issues

1. Whether a judgment creditor may be barred from enforcing a judgment when the judgment was procured by fraud that prevented the debtor from defending.
2. Whether, under New York procedure, fraud in obtaining a prior judgment may be pleaded and proven as a defense in an action on that judgment.
3. Whether a final decree of a sister-state court, rendered with jurisdiction over the parties and subject matter, is conclusive in New York as to issues actually litigated and decided.
4. Whether an assignee of the judgment is bound as a privy by the sister-state decree finding the judgment fraudulent.

## Decision

- The New York Court of Appeals held that equity may grant relief against a judgment procured by fraud.
- The court held that, under the Code of Procedure, a defendant sued on a judgment may plead and prove that the judgment was obtained by fraud.
- The court held that a properly authenticated judgment or decree of a sister-state court, entered with jurisdiction, is conclusive in New York between the same parties or their privies on issues actually litigated and decided.
- The court treated Dobson, as assignee of Olney’s judgment, as a privy bound by the Connecticut decree.
- Because the Connecticut court conclusively determined the New York judgment was procured by fraud and restrained its enforcement, Dobson could not recover on the judgment in New York.

## Legal Principles

- Equity may restrain enforcement of a judgment obtained by fraud that prevented a fair opportunity to appear and defend.
- Under New York’s procedural system, facts that would support equitable relief against a judgment may be asserted defensively in an action at law on the judgment.
- A sister-state judgment or decree, when the rendering court had jurisdiction over parties and subject matter, is conclusive between the same parties or their privies as to issues actually litigated and decided.
- An assignee of a judgment takes subject to prior adjudications binding the assignor; assignment does not avoid preclusion.

## Conclusion

The court denied enforcement of the New York judgment because fraud could be raised as a defense and, in any event, the Connecticut decree—binding on the judgment creditor and his assignee—conclusively established that the judgment had been procured by fraud and could not be collected.


Dobson v. Pearce, 12 N.Y. 156 (N.Y. 1854)