Where the highest court of the state does not pass on the merits
of the case, but dismisses the appeal because of defect of parties,
the case stands as though no appeal had been taken, and as this
Court, under § 709, Rev.Stat., can only review judgments or
decrees of a state court when a federal question is actually or
constructively decided by the highest court of the state in which a
decision in the suit can be had, no judgment or decree has been
rendered reviewable by this Court, and the writ of error must be
dismissed.
Writ of error to review 15 Ind. 171 dismissed.
Jacob Newman, George Northrop, Jr., and S. O. Levinson commenced
this action in the Superior Court of Marion County, Indiana,
against the defendant in error, Harry B. Gates. Recovery of the sum
of $1,400, was sought upon a judgment obtained by Newman and his
co-plaintiffs against Gates in the Circuit Court of Cook County,
Illinois. The defendant filed an answer in two paragraphs, but, as
the defenses therein
Page 204 U. S. 90
asserted were ultimately abandoned, they need not be detailed. A
counterclaim was also filed in which it was alleged that the
plaintiffs were, and for more than two years had been, attorneys at
law engaged in the practice of their profession at Chicago,
Illinois, under the firm name of Newman & Northrop; that the
Illinois judgment sued upon was founded upon a claim for legal
services rendered to the defendant; that the services had been
rendered in advising the defendant, as trustee in and about the
management of the property and assets of a corporation known as the
American Motor Company while in course of administration in
insolvency proceedings, and that the defendant had sustained damage
to the extent of $2,000 by reason of a breach of duty alleged to
have been committed by the plaintiffs in the course of their
employment in failing to obtain an order of the court in the
insolvency proceedings relieving the defendant from personal
liability for attorney's fees, and providing for payment of his
compensation, etc. It was also charged that the plaintiffs had been
guilty of a breach or neglect of duty in connection with a sale of
the trust property in the insolvency proceedings, whereby defendant
had sustained damages in the sum of $2,500. A reply was filed to
the counterclaim, in two paragraphs, one embracing a general denial
and the other setting up the Illinois judgment as
res
adjudicata as to all the matters embraced in the
counterclaim.
In due course, the case came on for trial and the plaintiffs
recovered a judgment for the amount of their claim. The case was
taken to the appellate court of Indiana. That court reversed the
judgment and remanded the case for a new trial,
Gates v.
Newman, 18 Ind.App. 392 and for want of authority, a petition
for a writ of certiorari was denied by the Supreme Court of
Indiana. 150 Ind. 59. In the opinion of the appellate court, as
also in a dissenting opinion, the character of the counterclaim and
the question whether, as respects the matters therein set forth,
the Illinois judgment was
res judicata, were considered at
great length. Following an inspection
Page 204 U. S. 91
of the record of the Illinois action, the court held that the
counterclaim stated matters which constituted something more than a
mere defense to the claim asserted in the Illinois action, that it
could not be said that, under the plea of the general issue,
interposed by the defendant in that action, the matters averred in
the counterclaim were necessarily adjudicated, and that it was a
question to be determined upon the trial whether in fact such
matters had been theretofore litigated and determined. On the new
trial, the court held that certain of the issues made by the
counterclaim and reply had been litigated in the Illinois action
and that the Illinois judgment was
res adjudicata as to
such issues, but submitted to the jury the question of the alleged
neglect of plaintiffs in failing in the insolvency proceedings to
procure an order charging the trust estate with the fees in
question and the compensation earned by defendant as trustee. And
the court left it to the jury to determine, upon a preponderance of
evidence, whether or not it was the law of Illinois that the
failure of plaintiffs to procure such an order- -- f they did so
fail -- was a matter which was adjudicated in the Illinois action,
whether evidence was introduced on such point or not, and the jury
was instructed that if such was the law of Illinois, recovery could
not be had upon the counterclaim.
The second trial resulted in a verdict of $181.74 for the
defendant Gates, that being the sum found to be due him in excess
of the amount of the judgment sued upon. After the entry of
judgment and before the taking of an appeal, George W. Northrop,
Jr., one of the original plaintiffs, died. An appeal, however, was
taken to the appellate court of Indiana by Jacob Newman and S. O.
Levinson, describing themselves as surviving partners of the firm
of Newman, Northrop & Levinson. The personal representative of
the deceased partner was not made a party to the appeal. The
appellate court of Indiana overruled an objection to the
sufficiency of the appeal and on the merits reversed the judgment
and ordered the cause remanded for a new trial. On the petition of
the
Page 204 U. S. 92
defendant Gates, the Supreme Court of Indiana removed the cause
into that court for decision and subsequently dismissed the appeal,
holding that, on account of the omission to make the personal
representative of George W. Northrop, Jr., a co-appellant, the
appeal could not be determined upon the merits. 165 Ind. 171. A
petition for a rehearing having been denied, the cause was brought
here.
MR. JUSTICE WHITE, after making the foregoing statement,
delivered the opinion of the Court.
A motion has been filed to dismiss the writ of error or to
affirm, and we proceed at once to its consideration. Several
grounds are urged in argument in support of the motion, but we do
not find it necessary to do more than consider an objection based
upon the absence of a federal question.
The errors assigned are as follows:
"The Supreme Court of Indiana erred in holding and
deciding:"
"1. That the counterclaim set up by appellee Gates, the
defendant in the trial court, based upon a breach of the same
contract of hiring, which was the basis of the action of the
appellants against the appellee Gates in the Circuit Court of Cook
County, Illinois, was not adjudicated by the judgment in the
Circuit Court of Cook County, Illinois, and by so deciding denied
to the judgment of the Circuit Court of Cook County, Illinois, the
force and effect which it has between the parties in the State of
Illinois, wherein it was rendered, and denies full faith and credit
to said judgment, contrary to and in
Page 204 U. S. 93
violation of Article IV, Section 1, of the Constitution of the
United States."
"2. That the appellee's counterclaim being valid, and not merged
and adjudicated by the judgment of the Circuit Court of Cook
County, Illinois, it was of a nature which survived against the
personal representatives of a member of the partnership of Newman,
Northrop & Levinson, and that the personal representatives of
the deceased partner were necessary parties to the appeal, and, not
having been made parties, that neither the appellate court of the
State of Indiana, nor the Supreme Court of the State of Indiana has
jurisdiction to determine the appeal, and the same must be
dismissed, and judgment of dismissal was so rendered. Which final
judgment of the supreme court necessarily involved the adjudication
of the claim of the appellants to the protection of Article IV,
Section 1, of the Constitution of the United States, 'that full
faith and credit shall be given in each state to the public acts,
records, and judicial proceedings, of every other state,' which
adjudication was adverse to appellants' claim under said provision
of the Constitution of the United States."
These assignments plainly import that the Supreme Court of
Indiana, on dismissing the appeal, considered and decided a
question which had been submitted to the jury on the trial;
viz., whether the matters alleged in the counterclaim as
the basis for a recovery over against the plaintiffs had or had not
been concluded by the Illinois judgment sued upon by the
plaintiffs. We do not so construe the opinion and decision of the
court.
The appellate court of Indiana had held on the first appeal that
the action of the trial court, in refusing to admit evidence in
support of the counterclaim, because the Illinois judgment
constituted
res judicata, was error. It had further
decided that the counterclaim was "based upon a breach of
contract," and constituted an independent, affirmative cause of
action in favor of the defendant, and that whether the questions
therein involved were in fact adjudicated in the Illinois
action
Page 204 U. S. 94
was a question for the jury. As a result of this ruling,
evidence was introduced at the subsequent trial to establish what
were the questions litigated and determined in the Illinois action
and the extent to which, by the laws of Illinois, the judgment in
that case possessed conclusive force.
Now, in the opinion delivered by the Supreme Court of Indiana,
on dismissing the appeal, the court did not discuss or in any wise
refer to the scope and conclusive effect of the Illinois judgment.
Undoubtedly, the court, in view of the law of the case as declared
on the first appeal, treated the counterclaim as containing
allegations of actionable breaches of duty which might have formed
the subject of an independent action, and it is likewise evident
that the court was of opinion that the plaintiffs were bound to
perfect their appeal from the judgment upon the counterclaim, upon
the hypothesis that the counterclaim set forth a valid cause of
action against three individuals --
viz., the plaintiffs
in the main action. But substantially, the court only considered
and disposed of a preliminary question as to its authority to pass
upon the controverted questions contained in the record before it.
It found that there were in the counterclaim averments which it had
been held early in the litigation required to be submitted to a
jury, that the record exhibited a recovery upon the counterclaim
against three persons, and that one of such persons had died after
the rendition of judgment against him and his associates.
Construing the statutes of Indiana, the court held that the cause
of action asserted in the counterclaim survived the death of the
party deceased, against whom a recovery had been had, that such
cause of action could have been revived against the personal
representative of the deceased, and that the personal
representative was a necessary party appellant, and, not having
been made a co-appellant and served with notice of the appeal, the
court was without jurisdiction to pass upon the errors assigned
upon the appeal. To give effect to the assignments of error, we
should be obliged to make the impossible ruling that, despite the
overruling of a demurrer
Page 204 U. S. 95
to the counterclaim by the trial court, and the decision in
respect to that pleading made by the appellate court on the first
appeal, a mere inspection of the counterclaim so plainly
demonstrates that the pleading is destitute of merit that it should
be held to have been the duty of the state court of last resort to
have treated the pleading as a sham and to have disposed of the
appeal upon the hypothesis that the counterclaim was
nonexistent.
The removal of the cause from the appellate court into the
Supreme Court of Indiana vacated the decision of the former
tribunal, and after transfer, the case stood in the highest court
of Indiana as though it had been appealed to that court directly
from the trial court.
Oster v. Broe, 161 Ind. 114. Had the
appeal been properly taken, it would have been the duty of the
Supreme Court of Indiana to pass upon the questions presented by
the record before it, including, it may be, a federal question,
based upon the due faith and credit clause of the Constitution,
which, on various occasions, was pressed upon the attention of the
trial court. In legal effect, however, the case stands as though no
appeal had been prosecuted from the judgment rendered by the trial
court. As the jurisdiction of this Court to review the judgments or
decree of state courts when a federal question is presented is
limited to the review of a final judgment or decree, actually or
constructively deciding such question, when rendered by the highest
court of a state in which a decision in the suit could be had, and
as, for the want of a proper appeal, no final judgment or decree in
such court has been rendered, it results that the statutory
prerequisite for the exercise in this case of the reviewing power
of this Court is wanting.
Writ of error dismissed.
