Case Name: Casilear F. Hartnett, Resp't, v. Samuel B. Adler, App'lt
Court: New York Court of Common Pleas
Jurisdiction: New York
Decision Date: 1888-12-03
Citations: 19 N.Y. St. Rep. 798
Docket Number: 
Parties: Casilear F. Hartnett, Resp’t, v. Samuel B. Adler, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 19
Pages: 798–801

Head Matter:
Casilear F. Hartnett, Resp’t, v. Samuel B. Adler, App’lt.
(New York Court of Common Pleas, General Term,
Filed December 3, 1888.)
1. Judgment—When decision einai.
When a question of fact lias been once fairly litigated upon its merits, the decision thereon is final, as between the same parties and their privies, no matter how 'different may be the technical form of the action or proceeding in which such question subsequently arises. Where two questions have been raised and submitted to a jury, a general finding will be presumed to include them both.
.2. Same—Effect of—Res adjudicata.
In an action on a note given by defendant to one Watts and transferred by Watts to plaintiff, plaintiff offered in evidence the record of a judgment in an action by defendant against Watts, in which the complaint alleged that the note was given to Watts to be discounted for defendant’s benefit. The answer denied this and alleged that the note was given to Watts in payment of a partnership debt. Watts also denied that he had discounted the note. On the trial the jury found in favor of Watts. Held, that in this action defendant was barred by the former judgment from setting up in defense that the note was given to be discounted.
:3. Assignment—Of note—Amount of recovery by assignee.
An assignee for value of a note may in the absence of fraud recover from the malrer the face of the note with interest, although the note was bought by him after maturity, for less than its face value.
Appeal from a judgment of the general term of the city court of New York, affirming a judgment of the trial term in favor of the plaintiff, and affirming an order denying a motion made for a new trial.
The following are the facts referred to in the opinion: This action was commenced to recover the sum of $1,000, apparently due on a promissory note made by the defendant to the order of James R. Watts, and by him indorsed over to this plaintiff after maturity for $100 only. The complaint is in the usual form. The answer comprises defenses of a two-fold nature, i. “diversion” of the note from its purposes and after maturity, so that plaintiff is not a lawful or bona fide holder thereof; and, secondly, that there was no consideration, for Watts, the payee, was (according to defendant’s contention herein) not to transfer the note for himself, but had it only to get it discounted for the defendant’s use.
After putting in evidence the note, and showing the transfer of it unto plaintiff after its maturity for only $100, the plaintiff rested. It consequently became incumbent on plaintiff to prove that he was a lawful and bona fide holder of such note, and that there wei’e no equities against the same. Evidence of a diversion of the note from its purpose was thereupon given on the defendant’s part.
The plaintiff then introduced in evidence the judgment-roll and judge’s charge in the superior court action of Adler v. Watts, relying thereon alone for proof on his part that when he received said note no defenses existed against the note. The plaintiff claimed an estoppel or res adjudicata thereby, between the indorser Watts and his indorsee, the plaintiff and defendant. A verdict was thereon directed for the plaintiff against defendant, S. B. Adler, for the full face amount of the note and interest.
Jacob F. Miller, for app’lt; Evarts, Choate & Beaman, for resp’t; Treadwell Cleveland, of counsel.

Opinion:
Larremore, Ch. J.
Statements of the facts involved on this appeal precede both of the opinions rendered by the general term of the city court; it is therefore unnecessary to re-state such facts. It also seems to us best to take up the discussion of the main question, without prehminaries, where the city court left it.
In the first place, then, it may be said that we concur in the conclusion expressed in one of the opinions that the case of Yonkers and New York Fire Ins. Co. v. Bishop (1 Daly, 449) was a controlling authority upon the decision in the city court. The cited case was a suit for rent. The defense was that in a prior summary proceeding between the same parties, to recover possession of the premises, the jury had found in favor of the defendant.
In such proceeding two defenses had been raised, viz.: 1. Whether the rent was due; 2. Whether there had been a proper demand. It is to be noticed that a finding favorable to defendant on either one of these issues would have been sufficient to entitle him to the verdict he received. Defendant was not inquired to have both questions determined in his favor in order to obtain a dismissal of dispossess proceedings. But as both questions had been raised and sub mitted, and the result had been a general finding for defendant, it was held that it would be presumed that both questions had been passed upon, and that the verdict was presumably res adjudicate as to either of the questions subsequently arising, and therefore a bar to the claim for rent. We approve of the principle laid down in that case, and think it is in accordance with sound sense. In fact we do not see how any other presumption could be entertained under such circumstances; and the opportunity will always exist to overcome mere presumption by positive testimony when the same can be given.
In the prior action in the superior court between the present plaintiffs' assignor and the present defendant there were raised two questions; the first was whether the note here in suit had been, delivered by defendant to said assignor, simply that the latter should procure its discount for defendant's benefit; and the second was, whether said note had been given to said assignor by defendant in payment of a bona fide debt. The general verdict in favor of plaintiff's assignor in the superior court action was therefore presumptively an adjudication against the present defendant on both questions. Furthermore, counsel for plaintiff in the case at bar have not relied on a mere presumption. 'They have offered in evidence the judgment roll in the superior court action, which affords affirmative proof that the precise question here involved was actually submitted to and passed upon by the jury. The following is an extract from Judge Truax's charge upon the trial of such prior action. The person designated as plaintiff by Judge Truax is the defendant Adler in this action, and the person designated by him as defendant is plaintiff's assignor, the payee of the note in suit:
" The defendant denies that the plaintiff gave him the notes to be discounted; the defendant denies that he discounted the notes, and he alleges that the notes were given by the plaintiff to him in payment of a debt the plaintiff then owed to him in a matter that related to a partnership that had theretofore existed between the plaintiff and defendant. Those allegations and denials make the issue for you to try, and the only issue."
We find nothing, either in the authorities cited or in the arguments advanced on behalf of appellant, which leads to a different conclusion from that reached by the city court. The recent tendency has been toward a widening of the scope of the doctrine of res acljudicata, so that the principle seems now reasonably well established that when a question of fact has been once fairly litigated on its merits, the decision thereon shall be final as between the same parties and their privies, no matter how different may be the technical form of the action or proceeding in which such question subsequently arises.
It is the duty of a court, in determining whether the principle of res adjudicata applies, to examine the record in the former suit, not for the purpose of spelling out some .artificial theory on which the result may possibly have been reached without passing upon the question now raised, but for the sake of ascertaining whether, according to the ordinary processes of thought and significance of language, the court, or jury, must be presumed to have considered such question. We are of opinion that no fair-minded man could inspect the record in the superior court case, without being convinced that both parties thereto intended to litigate the question of the ownership of plaintiff's •assignor, in his own right, of the note here sued upon, and also that the court and jury considered the verdict given an adjudication of such question.
We are further of opinion that the verdict was properly directed for the whole face of such note, with interest, and that plaintiff is not to be limited in his recovery to the actual amount paid by him to his assignor on the purchase of the same. Plaintiff acquired the note after maturity, and he sues here not as an indorser of commercial paper, but simply as assignee of a chose in action. His title as such would be given, even if the assignment to him expressed but a nominal consideration. It appears that he has paid a valuable consideration for the note, though the same is much lees than the face thereof.
The remarks of Danforth, J., in Nickerson v. Ruger (76 N. Y.), at page 284, have no application to the case at bar. That was an instance of alleged fraudulent diversion of a note, and Judge Danforth's remarks were made upon the express assumption that the fraud might exist and be shown, and in that event he said that " only to the extent that the plaintiff has paid value for the note can he recover, and not for that even, if he is chargeable with notice of the diversion of the note." Into the case at bar the element of fraudulent diversion cannot enter, because all equitable defenses were raised and disposed of in the superior court action ; and it was therein decided that the note was given to plaintiff's assignor in judgment of a bona fide debt owed by defendant. Said assignor, being thus the lawful owner and holder of said note, had the option of collecting it himself, or of transferring it, as had been done ; and his right to sue upon and enforce the payment thereof passed as an incident of ownership to his assignee. The judgments and order appealed from should be affirmed, with costs.
Van Hoesen, J., concurs.