Case ID: ohio-st_31/html/0397-01.html
Source: Caselaw Access Project
Author: {"author": "McIlvaine, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Moses Bell v. Samuel McColloch’s Executors.
    Where an action was prosecuted to set aside a contract on the ground of ' fraud, and to cancel an unmatured note given in pursuance of the con- • tract, which resulted in a judgment affirming the validity of the contract and note; Held, that in a subsequent action on the note, the defendant is estopped, by the judgment in the former action, from setting up ■ that the contract and note were executed by the parties under a mutual. mistake.
    
      . Motion for leave to file a petition in error to the District ■Court of Logan county.
    The original action was brought by McColloch’s executors .against Moses Bell, on his note for $1,732.30, dated December 25, 1867, payable to plaintiffs five years after date.
    The defendant made answer that plaintiff's ought not to have their action, because of a mutual mistake in the transaction out of which the note originated. He alleged that the piaintiffs5' testator, at his death, held a title bond from •one Marshall for certain lands, on which one Winner held a mortgage lien, and that a portion of the purchase money from McCólloch to Marshall was unpaid. That by a verbal .agreement between the plaintiffs and defendant, the plaintiff's undertook to remove the incumbrances and convey the lands to defendant, in consideration whereof the defendant undertook to pay the plaintiffs $6,950 in five years from the date of the agreement, to wit, June 5, 1867. That afterward, to wit, December 25, 1867, the parties undertook to put their said agreement in writing and employed a scrivener, ■who, without authority, wrote an assignment of the title bond, upon the back thereof, from the plaintiffs to the defendant, in which it was stipulated that defendant assumed to pay the mortgage debt aud the purchase money to Marshall, and agreed to take a conveyance from Marshall. That the note sued on was for the difference between the incumbrances and the price the defendant had agreed to pay for the land. He also alleged that neither the plaintiff's nor the defendant intended to modify their said verbal agreement, and that the written stipulations aforesaid were signed by him without knowledge of their terms on his part, being unable to read them, aud so, he alleged, the contract and the note were executed in ignorance of their •contents and by mutual mistake of the parties. He further .alleged, that in a proceeding afterward had to foreclose the mortgage, the lands were sold and the proceeds applied ■to the payment of the mortgage debt, and the purchase ■money to Marshall, so that the consideration of said note has wholly failed, and the plaintiffs are unable to convey to him said lamjs, as by their contract they had agreed to do.
    The plaintiffs replied that in the action by Winner to foreclose his mortgage, said Marshall, defendant Bell, and the plaintiffs were parties defendant, and that, the same matters and things now set up in the defendant’s answer were in issue between the parties in that action, and were found and adjudged by the court against the defendant and in favor of the plaintiffs.
    On the trial below, the plaintiffs put in evidence the re•cord in the Winner suit, from which it appears that Bell, in that action, by cross-petition sought to cancel the said written agreement and note upon the same grounds now .alleged in his defense, save only that fraud, instead of mistake, was alleged ; and nothing was alleged as to failure of ■consideration or incapacity of the plaintiffs to perform their agreement. By the decree in Winner’s case, the validity •of the contract was declared, and the right of the plaintiffs to demand payment of said note after maturity.
    Thereupon the defendant offered to prove the allegations of his answer; but the court refused to hear the testimony, and upon the pleadings and proof above stated, rendered judgment for the plaintiffs.
    This judgment was afterward affirmed by the district •court.
    
      William Lawrence and Joseph H. Lawrence, for the motion:
    The sole question is, whether Bell has lost his right to •make'defense.
    I. Bell has lost no right of defense by the principles of •law relating to the finality of judgments.
    1. The-general rule is that the parties to an action are concluded by a final judgment obtained by either, and “ can not canvass the same question again in another action, although some objection might have been urged upon the ffirst trial which would have led to a different.judgment.”
    This is the rule as stated by Broom, founded on the maxim “ interest reipublicce ut sit finis litium,” as to every “ matter in dispute,” which has passed in rem judicatam.. Broom L. M. 131; 6 Rep. 9; 7 Term, 2(j9; Co. Litt293, b ; 5 Rep. 61; Broom L. M. 135; Duchess Kingston,. 20 Howell St. Tr. 538.
    ■ The whole doctrine in brief is that the “ same question ” —the una et eadem causa—can not be twice considered between the same parties after a final judgment in the same or any other court of competent and concurrent jurisdiction.
    2. The application of this principle to this case is this: The una et eadem causa of the plaintiff below was the question of his right to a judgment on the note. The una et' eadem causa of the defendant below was his right to cancel as in chancery the same note, or to defeat a judgment-thereon either at law or in equity by proof of mutual mistake, failure of consideration, or inability of the plaintiff below to perform conditions.
    Now, if the plaintiff's right to a judgment had previously passed in rem judicatam, “ that same question ” could not be. relitigated.
    But until this happened, the note is open to every defense-which has not in some form “passed in rem judicatam.”
    
    If the defendant’s causes of defense had each previously “ passed in rem judicatam,” that “ same question ” could not be relitigated.
    This is the utmost that can be claimed from these maxims, and principles of the law. And it must be apparent that if Bell, by his cross-petition (equivalent to a bill in chancery in which he was plaintiff), presented a claim to relief (the cancellation of the note on the ground of fraud), and that single question “passed in rem judicatam,” and that, too,, before the note was due, and hence before the una et eadem causa of the plaintiff below had arisen, every other question or ground of defense is open when the cause of action on the note is presented to pass for the first time in rem judicatam.
    
    There is no “ one question ” in this case about which either party has been, or under the pleadings could be, “ twice-vexed.”
    
      3. There has been no judgment on the cause of action* alleged by the plaintiff in the common pleas.
    
      (a.) The case below involved the right of the executor to-a judgment on the promissory note. That cause of action was never passed on, and this is the “tma et eadem causa ” which has for .the first time passed in rem judicatam iff this ease in the court below.
    In the former action {Winners. Marshall etal.) nojudgment was or could have been asked on the note, for it was not then due. In that action Bell occupied the position of a. plaintiff in his cross-petition, equivalent to a bill in chancery, seeking to cancel a note obtained, as he alleged, by fraud, and that was all the -question he made. He could not, in that case, make any question of mutual mistake,, because that was inconsistent, with the case he did allege. He could not then allege the failure of consideration, or inability of the executors to convey the land to him, because-the land was sold- after he filed his cross-petition.
    The decree decided nothing as to him, and could not,, "except that he failed to prove the fraud, and was not entitled to a decree canceling the note for fraud. If he had been sued on the note after maturity, and failed to make-defense and suffered judgment, his right of defense would be lost. But he interposed his defenses on the first occasion when he could.
    If it be said the decree adjudges that the executors “do-hold the note until the same becomes due, and do have and maintain the right to have and recover the principal and interest which may then be due,” it must also be said this-only establishes the right to recover, as against any subsequent defense of the alleged fraud, for that was the una et eadem causa—the onty question decided. The note was left, open to contest—with no judgment in its favor as against any other defense. It was uot merged in a judgment.
    
      (b.) But there is even no such judgment or decree as suggested.
    The language is, it is “ ordered.” The distinction be~ tween an order and a judgment is settled by the code, sections 370 and 509. The order concludes no right. It is a mere direction as to the duty of the executor. Fourniquet v. Perkins, 16 Howard, (U. S.) 82 ; Kelly v. Stanberry, 13 Ohio, 421; Teaffv. Ilewitt, 1 Ohio St. 520.
    (c.) The right of defense is saved by the maxim, lex semper dabit remedium.
    
    Bell must now be permitted to make his defenses, or it is not true that the law gives every party a right to make ■every legal defense. He could not have made them sooner. Under his former cross-petition it was not competent to prove them, because the onty allegation was fraud, and the ■allegata et probata must correspond. 1 Greenleaf Evidence, see. 51.
    (ii.) There is no authority for saying that a party who seeks to cancel a note for fraud must unite with it all other ■equitable grounds for cancellation. He could not unite the -charge of fraud and mutual mistake, for they are inconsist•ent with each other.
    (e.) He could not unite in such .action defenses which" ■could only be made as defenses at law. These could not be a ground of relief in equity.
    (/.) And in any event until the note became due, its holder could not require the maker to'present all his objections to it.
    (y.) The right of defense is not barred by those cases which hold that a judgment is conclusive not only on “the points put in issue by the pleadings, but on every point which properly belonged to the subject of litigation.” 2 "Wharton Evidence, sec. 788, and authorities cited. This -covers only all defenses which could have been proved under the pleadings, whether iu fact proved or not.
    A judgment on default or defense when one might have been made, or on one defense, which failed when another might have been successful, is conclusive on every point •“which properly belonged to the subject of litigation.”
    But none of the defenses which Bell now seeks to make, belonged to or could have been made in the former case.
    
      No court ever passed on the right of the plaintiff to a judgment on the note until Bell made his defenses by answer, on which the court refused to receive evidence.
    
      (hi) This question is settled by authority.
    In the former trial there was no judgment as to the right of action on the note, and the defenses now sought to be made, could not have been heard on the pleadings.
    In 2 Wharton Evidence, sections 789 and 791, it is shown that where there is a defense of which the court on the former trial could not take jurisdiction, there is no bar .against a new defense so long as the plaintiff's cause of action is not merged in a judgment, and so is an open question. Gordon v. Kennedy, 36 Iowa, 167; Davis v. Hedges, L. R., 6 Queen’s Bench, 687; Hadley v. Green, 2 Tyr. 390 ; Bridge v. Gray, 14 Pick. 55 ; Mondell v. Steel, 8 M. & W. 858; Bascom v. Manning, 53 N. W. 132; Burnett v. Smith, 4 Gray, 50; Ihmsen v. Ormsby, 32 Penn. St. 198; Hiowlett v. Tcirte, 10 C. B. N. S. 813 ; Crandall v. Gallup, 12 Conn. 365.
    II. Bell has lost no right of defense by reason of any adjudication.
    1. The reply of the plaintiff below to Bell’s answer alleges that his “ defense is res judicata.”
    
    It is a maxim that res judicata pro veritate accipiuntur. Broom, 428; Co. Litt. 103; Magrath v. Hardy, 4 B. N. C. 796. Bouvier says “res judicata,” in practice, is “the decision of a legal or equitable issue by a court of competent jurisdiction,” and that “in order .to make a matter res adjudicata there must be a concurrence of four conditions (1.) Identity in the thing sued for; (2.) Identity of the cause of action ; (3.) Identity of parties to the action ; (4.) Identity in the quality of the persons. To some extent this doctrine is the same as those referred to above, but it is less comprehensive according to Bouvier, as it only extends to judgment on an issue. But the whole argument above is equally conclusive here against the claim that Bell is barred of his defenses by a res judicata. There is no res judicata, because of the lack of identity in the cause of action, and ex act “point in issue.” Gelton v. JFIoyt,l Johns. Ch. 543 y Lessee of Lore v. Truman, 10 Ohio St. 45; Babcock v. Gam.'p, 12 Ohio St. 27-36 ; G. S. ¡¡¡¡ G. JR. JR. v. Watson, 26 Ind. 50..
    “ It is only the matters involved in the issues made by the pleadings in a cause that are considered res judicata.” Duncan v. JBJolcomb, 26 Ind. 378.
    2. “ The effect of the adjudication made is to establish a defense for Bell.”
    The executors in the original action asked that Bell be-adjudged liable on his contract to pay Winner and Marshall. The court found that he made the contract, hut did not adjudge him liable to pay Winner or Marshall, and did not charge him with “ any personal liability” on any contract, but did adjudge a liability in favor of Winner against Marshall, and in favor of Marshall against the executors. And as one of the executors purchased the land, the effect was that he held it for the estate, and hence the executors-were ordered to hold Marshall’s deed, conveying the title to-them. It can not be possible that the estate can hold the-land and require Bell to pay for it.
    III. The reply to Bell’s answer was insufficient in form.. Story Eq. PI., sec. 780; 2 Nash PI. 646, 647; Lockwood v. Wildman, 13 Ohio, 430; Wood v. Jackson, 8 Wend. 18;. Lyon v. Tallmadge, 14 Johns. 501; G. 8. G. JR. JR. v.. Watson, 26 Ind. 50.
    
      West, Walker § Kennedy, contra.
   McIlvaine, J.

The principal objection urged by the plaintiff in error against the judgments below is, that the issue-of fact tendered by his answer in this case is not the same issue, or involved in the issue, tried between the same parties in the Winner suit. That the issue in that case was fraud! in this, mistake. That the issue of mistake could not have been tendered in the former suit, because it would have-been inconsistent with the plea of fraud, and, therefore, it is-claimed that the court, in the former action, having found. ■that fraud did not exist, it is competent to show in this case that- a mutual mistake did exist.

The answer to this argument is that the real issue in the former action was as to the validity of the written contract and note, and the same issue was tendered below. "Where ■a person seeks, by action, to cancel an alleged invalid agreement, he is bound to allege every existing ground which affects its validity, and if two or more supposed grounds be inconsistent, so that, under the rules of pleading, but one can be alleged, he must elect between them at his peril; for, after final judgment upou the question—to •wit, the validity of the agreement—the maxim applies, nemo debet bis vexari pro una et eadem causa.

If the fraud alleged against the note in the former suit was inconsistent with the mistake alleged nowq they are inconsistent still, and if, by the rules of pleading, the mistake could not have been joined with the fraud in the former suit, the election of the party to rely upon the allegation of fraud in that case, estops him from setting up the allegation of mistake in this case.

It is claimed that this ruling deprives a party of a valid -defense. If so, why? It is admitted that'if these grounds ■could have been united in the former suit, the defendant would be without remedy, simply because he failed to set up the mistake. Suppose the former adjudication had not taken place, and in this action for a judgment on the note fraud only had been pleaded, for the reason that the two ■defenses could not be joined. What then would have become of the valid defense of mutual mistake, after the defense of fraud had been adjudged invalid? It would most clearly be lost, simply because the defendant elected to rely ■on a false, instead of a good defense. The supposed hard.ship results from the fact that the party having made a false defense, deprived himself of a good one.

The contract and note being valid, of course the alleged failure of consideration, etc., by reason of the sale of the laud in the foreclosure suit, can not avail the defendant.

Motion overruled.