The general rule of law is that the judgment of a court of law
or a decree of a court of equity, directly upon the same point and
between the same parties, is good as a plea in bar and conclusive
when given in evidence in a subsequent suit.
Where the court left it to the jury to say whether the defense
made at law was the same which was made in a prior equity suit,
this error, if it be one, does not invalidate the judgment of the
court below.
The parties to the suit at law having been parties to the suit
in equity, the subject matter and defense being the same, it is not
a sufficient objection to the introduction of the record in the
equity suit that other persons were parties to the latter.
No good reason can be given why the parties to the suit at law
who litigated the same question should not be concluded by the
decree because others, having an interest in the question or
subject matter, were admitted by the practice of a court of
chancery to assist on both sides.
Page 65 U. S. 234
In consequence of some negotiations relative to coal lands, and
their eventual purchase by Pickell and Thompson, they executed to
Mr. Smith the following notes:
"
Promissory Note No. 1"
"BALTIMORE, June 2, 1853"
"On the 31st of December, 1856, we promise to pay William H.
Smith, or order, two thousand dollars, with interest from July 20,
1853. Value received."
"$2,000.00"
"JOHN PICKELL"
"WM. THOMPSON"
"Endorsed: WM. H. SMITH"
"
Promissory Note No. 2"
"BALTIMORE, June 2, 1853"
"On the first day of July, in the year 1856, we promise to pay
William H. Smith, or order, two thousand dollars, with interest
from July 20, 1853. Value received."
"$2,000.00"
"JOHN PICKELL"
"WM. THOMPSON"
"Endorsed: WM. H. SMITH"
The time for the payment of these notes was afterwards, by
agreement, extended to 15th January, 1857.
On the 12th of July, 1853, Thompson and Pickell executed a
mortgage of the property purchased to Smith, for the purpose of
securing the payment of the purchase money, of which the notes were
only a part.
On the 2d of October, 1856, Smith assigned the mortgage, as also
the two notes in question, to Lewis Roberts, Gidson R. Burbank, and
Addison Roberts.
The next step in the proceedings was the filing of a bill in the
Circuit Court of the United States for the District of Maryland for
the foreclosure of the mortgage. To this bill the following were
the parties:
William H. Smith, of the City of Richmond, and State of
Virginia, and a citizen of the said State of Virginia, and Lewis
Roberts, Gideon R. Burbank, and Addison F. Roberts, of the City of
New York, and State of New York, and citizens of
Page 65 U. S. 235
said State of New York, bring this their bill of complaint
against William Thompson, a citizen of the State of Maryland, and
residing in the City of Baltimore in the said state, and John
Pickell, a citizen of the said State of Maryland, and residing in
Alleghany County in said state, and the Pickell Mining company,
incorporated by the laws of the said State of Maryland, mining and
transacting business in Alleghany County in said state, and having
an office for the dispatch of business in the City of Baltimore, in
said state.
The Pickell Mining company were made a party because, as the
bill alleged, Thompson and Pickell had, since the date of the
mortgage, assigned their equity of redemption to that company.
This gave rise to a protracted and warmly contested litigation,
the defendants alleging that Smith had represented the land to
contain at least three hundred acres of the big vein of coal,
whereas it did not contain more than one hundred and fifty.
It is not necessary to state the evidence taken on both
sides.
On the 31st of October, 1857, whilst this controversy was
pending in chancery, the defendants in error brought a suit on the
common law side of the court upon the two notes above mentioned,
which is the present case.
In April, 1858, the court on the equity side decreed a sale of a
part of the mortgaged property, but the most valuable part of it
was excepted, so that the residue was not worth the debt. The suit
at law therefore went on.
In November, 1858, the case came up for trial. The defendants
offered a part of the chancery record for the purpose of showing
that the plaintiffs were not holders of the notes for value, when
the plaintiffs offered the entire record, and insisted that the
decree was conclusive, and estopped the defendants from again
alleging the same matter as a defense to the suit at law on the
notes.
Four long prayers were made to the court on each side, which
were all rejected, and the following instructions given to the
jury:
"If the jury shall find from the evidence that the
promissory
Page 65 U. S. 236
notes offered in evidence in this case were duly executed and
delivered by the said defendants to William H. Smith, and by him
endorsed over to the said plaintiff for value, and that in the
cause on the equity side of this court, in which the said
plaintiffs, with the said Smith, were complainants and the said
Thompson and Pickell, with the Pickell Mining company, were
defendants, the record of which has been offered in evidence, the
same defense was made and set up in said cause to prevent the
passage of a decree for the sale of the said lands to pay the said
notes as is now made to prevent a recovery in this case, then the
decree passed in that case is conclusive upon the point of this
defense, and the plaintiffs are entitled to recover in this
action."
"To which said rejection of the prayers offered on the part of
plaintiffs the said plaintiffs prayed leave to except, and the said
defendants prayed leave to except to the rejection of the prayers
as offered by the defendants, and to the instruction given by the
court to the jury, and the said parties, plaintiffs and defendants,
prayed the court to sign and seal this their several bill of
exceptions which is accordingly done this 18 November, 1858."
"WILLIAM F. GILES [SEAL]"
Page 65 U. S. 239
MR. JUSTICE GRIER delivered the opinion of the Court.
The defendants in error were plaintiffs below, and brought this
suit as endorsees of two notes given by the plaintiffs in error to
William H. Smith. These notes were given in part payment of some
tracts of coal land sold and conveyed to Thompson and Pickell by
Smith, and the defense endeavored to be established on the trial
was a want of consideration, in that Smith had falsely represented
the lands to contain 300 acres of "big-vein" coal, when in fact
they contained but 150 acres. A mortgage had been given to secure
these notes; a bill had been filed in chancery to foreclose this
mortgage, in which Smith, the assignor, and Roberts and others, the
equitable assignees of the mortgage, and endorsees of these notes,
were complainants, and Thompson and Pickell, together with their
assignees, the Pickell Mining company, were respondents. They put
in a joint and several answer admitting the execution of the notes
and mortgage, and alleging as a defense the representations made by
Smith, by which Thompson and Pickell were induced to purchase the
lands, supposing them to contain 300 acres of the "big-vein" coal,
when in fact, as they afterwards discovered, the lands contained
but 150 acres of the same. For this reason, and
"because they did not receive a valuable consideration for said
notes or mortgage, respondents aver that plaintiffs are not
entitled to demand payment of them, or any part of them, but the
same are to be regarded as absolutely void."
This case was fully heard by the chancellor on the pleadings and
evidence, who overruled the defense set up, and decreed a sale of
the mortgaged premises. The record of that case was put in evidence
on the trial of this case by the defendants
Page 65 U. S. 240
below, for the purpose, as they alleged, "of showing that the
plaintiffs were not holders for value."
They offered for that purpose a part only of the record.
Whereupon the plaintiffs gave in evidence the entire record, and
insisted that the decree is conclusive, and estops the defendants
from again alleging the same matter as a defense to the suit at law
on the notes. The evidence was, however, again presented to the
jury, without a waiver of plaintiffs' right to treat the decree as
an estoppel.
The court rejected a number of prayers offered by each party,
and gave the following instruction to the jury, which is the
subject of exception:
"If the jury shall find from the evidence that the promissory
notes offered in evidence in this case were duly executed and
delivered by the said defendants to William H. Smith, and by him
endorsed over to the said plaintiffs for value, and that in the
cause on the equity side of this Court, in which the said
plaintiffs, with the said Smith, were complainants, and the said
Thompson and Pickell, with the Pickell Mining company, were
defendants, the record of which has been offered in evidence, the
same defense was made and set up in said cause to prevent the
passage of a decree for the sale of the said lands to pay the said
notes as is now made to prevent a recovery in this case, then the
decree passed in that case is conclusive upon the point of this
defense, and the plaintiffs are entitled to recover in this
action."
The plaintiffs in error have not called in question the
correctness of the general principle of law assumed by the court
below,
viz.:
"that the judgment of a court of law, or a decree of a court of
equity, directly upon the same point, and between the same parties,
is good as a plea in bar, and conclusive when given in evidence in
a subsequent suit."
But it is objected to this instruction, that it submits as a
question of fact to the jury what ought to have been decided by the
court as matter of law from the face of the record produced. This,
if an error, was one favorable to the plaintiffs in error, as it
gave them the chance of a verdict on a point which, if decided by
the court, must have been decided against
Page 65 U. S. 241
them; for the record shows conclusively that the very same
defense against these notes was the only point in dispute in the
court of equity, to-wit, whether plaintiffs in error were
"
deceived by" the alleged misrepresentations of Smith,
fraudulent or otherwise, and whether the notes were therefore
"without consideration," and "absolutely void."
The objection that the parties were not the same in both suits
cannot be sustained.
Both parties to this litigation were parties in that suit; the
subject matter was the same; the defense now set up was the same
which the pleadings and the evidence show to have been adjudicated
in the court of chancery.
It is true, Smith, who endorsed the notes to the plaintiffs
below, and who was interested in the question, was joined as
complainant, and the Pickell Mining company, who had purchased the
mortgaged property, were made respondents, according to the
practice in courts of chancery, where all parties having an
interest in the question to be tried are made parties, that the
decree may be final as to all the matters in litigation. No good
reason can be given why the parties in this case, who litigated the
same question, should not be concluded by the decree, because
others having an interest in the question or subject matter were
admitted by the practice of a court of chancery to assist on both
sides.
The question as between the present parties is
res
judicata, and nonetheless binding because others are concluded
also. A contrary doctrine would sacrifice a wholesome principle of
law to a mere technical rule having no foundation in reason; making
a distinction where there is no difference.
Such was the ruling of the court in the case of
Lawrence v.
Hunt, 10 Wendell 82, where it was objected that in the former
suit there was another plaintiff joined. Where the former suit was
at law, this objection might have some weight, for it could not
well be said that a contract of A and B with D and C was the same
as that in another suit where A was sole plaintiff and D sole
defendant. But this objection cannot apply where the first issue is
in chancery, and parties collaterally interested are made parties
to the litigation, that it may be
Page 65 U. S. 242
final, and not because they were legal parties to the original
contract on which the litigation is founded. In such a case the
pleadings may show the contract or subject matter of the litigation
to be the very same, and directly in issue; in the other, it could
not be well so. As we are of opinion that there was no error in
this instruction, it will not be necessary to notice the other
points alluded to in the argument, this one being conclusive of the
whole case.
The judgment of the circuit court is therefore affirmed,
with costs.
