Court Opinion

ID: 6670441
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:09:31.447915+00
Date Added: 2024-06-11T16:00:29.918261
License: Public Domain

Talbot, J.,
dissenting:
In the suit of the Farmers’ and Mechanics’ Bank of Sacramento, brought in the district court' at B,eno against the Pollocks and Powell to foreclose its trust deed on property in Washoe County, the parties hereto and others were made defendants under the usual general allegation that they claimed or had some interest in the property which was subject and subsequent to the trust deed. Gulling promptly, and before the sale by the trustees in California, answered the complaint in that action, and admitted the execution and priority of the trust deed, and claimed a second lien against the property under the mortgage executed to him by the Pollocks and Powéll, but this answer was not served upon *267them so as to warrant the judgment directed to be entered against them by the decision of the district court. Several months after Gulling filed his answer, and after the trustees’ sale, the Washoe County Bank filed its answer against the complaint, and therein set up the trustees’ sale, having demurred in the meantime. The answer of Gulling did not refer to this sale, which had not taken place until after it was filed. No cross-complaint or allegation of fact was made or served between Gulling and 'the Washoe County Bank, and it seems to be conceded that the pleadings raised no issue between them.
We have for consideration a question of law relating to the validity of a judgment against a defendant and in favor of a codefendant between whom there was no cross-complaint, no allegation of fact, no denial, no issue pleaded. If such a judgment is binding between eodefendants without pleadings between them, when they have appeared in court and litigated the matter on which it is based, is there evidence in the record to show as a fact that the Washoe County Bank and Martin Gulling as hostile eodefendants and adversary parties litigated the question of the validity of the trustees’ sale on which the judgment in that ease was rendered? It is generally and properly held that an allegation between the parties which is not denied, or which is defective and is not attacked by demurrer or in some manner on the trial, is sufficient to sustain a judgment. This is not a case of that kind, for there is not, as between the eodefend-ants concerned, even a defective statement of fact, nor one side of an issue as constituted by allegation and denial under the usual rules of pleading. Good reasons are apparent for sustaining a judgment in favor of a plaintiff, which rests on an allegation in his complaint which is not denied or which, if defective, was not attacked by demurrer or motion, or in some way, in the nisi prius court. But if a judgment is to be conclusive between codefendants without any allegation between them^ as now held'by the court, consistently and, a fortiori, it should be good between a plaintiff and defendant without allegation, and parties may in the future try their eases without any pleading. Will the estates, heirs, and *268successors in interest of litigants always be sufficiently protected by any judgment the court may enter, even in the absence of, and without notice to, the parties concerned, and without any pleadings or showing of any action on their part, if they and their estates are to be bound after the original litigants, their attorneys, and all present in court by whom the matter litigated can be proved are dead? All the attorneys then residing in the state who appeared for the various parties in the.original case, as well as Martin Gulling, have since died. One or two text-writers without considering all the distinctions made by the courts or mentioning statutory provisions which may control in a few states, and while admitting that the authorities. are conflicting, assert that the parties ought to be bound by a judgment based on matters which they have litigated, but which were not put in issue by the pleadings. Begarding this question, Mr. Black in his work on Judgments, wherein he cites with approval Sherman v. Dilley, 3 Nev. 24, decided in 1867, appears oblivious to the provisions of our practice act approved on March 8,1869, two years after that case was decided. The decision was by only two of the justices, and was rendered, it would seem, after the court had changed its opinion, and while it was not entirely certain regarding the position taken. It was said in the decision: "By the former opinion of a majority of the court in this case, the judgment of the lower court was reversed, and a new trial ordered. Upon further examination of the authorities, however, I am satisfied that we were incorrect in our conclusions, and that the judgment of the lower court must be affirmed.” And, referring to the-matter covered by the estoppel: "It is, perhaps, not necessary that it should have been directly and specifically put in issue by the pleadings.” The case was essentially different from the one at bar. It was an action to enjoin the diversion of water, and the pleadings in the former suit between the same parties related to certain premises. Under the riparian theory then claimed and the decisions, the water was appurtenant to the land, and it could have been assumed that the complaint and judgment for the premises carried the water with the other appurtenances without mentioning *269them. The opinion seems to have been criticised in another regard in a later one by this court. (Lawson’s Nevada Digest, p-. 266, sec. 68.) At section 614 of Black on Judgments (2d ed.) the author states: "We have now seen that the estoppel of a judgment does not extend to such matters as come only incidentally or collaterally into the controversy, but only to points actually and necessarily adjudicated. In other words, that a former judgment is conclusive only as to matters in issue or points in controversy, upon the determination of which the finding or verdict was rendered. But what is the 'matter in issue’ within the meaning of this rule? Is the test to be furnished solely by the issues framed in the suit, or also by the course and nature of the evidence? . Suppose that a question arises on the trial which, per se, has nothing to do with the cause of • action, and is not mentioned in the pleadings, but which materially affects the stated issue and must be determined before the issue can be found either way. Suppose, further, that such question, thus becoming necessary to the decision of the cause, is controverted between the parties, and is made the subject of evidence, argument, and instructions, and that its resolution in effect determines the verdict of the jury. Now, is the question to be considered res judicata between the parties or not? Unfortunately the authorities are in conflict upon this subject, and the matter rests in much doubt and confusion.” At section 25 of Chand’s Treatise on the Law of Bes Judicata, he says: " The important question, however, is: What is the matter in issue within the meaning of the rule? And, unfortunately, there is a considerable conflict of authority on that point.” Section 428 of volume 2, Van Fleet’s Former Adjudication, states that "parol evidence is not competent to show that matters outside of the issues were passed upon.”
Extracts from some decisions holding this view are:
Davidson v. Shipman, 6 Ala. 33: "The general rule of the conclusiveness of judgments is the one laid down by Chief Justice De Grey, in the Duchess of Kingston’s Case. 'That the judgment of a court of concurrent jurisdiction directly upon the point is as a plea, a bar, or as evidence conclusive, between the same parties, upon the same matter -directly in *270question in another court.’ This celebrated judgment has been ever since recognized in England and the United States as a correct exposition of the rule. Some difficulty has, however, been found to exist, and some discrepancies will be discovered upon an examination of the numerous cases on this question as to the mode of ascertaining what was the point in issue between the parties, and whether proof, aliunde, for that purpose is admissible, or whether the point must not appear from the record. See the numerous cases on this head collected, and arranged by Cowen and Hill, vol. 3, Phil. Ev. 826, 848. Necessarily parol evidence must be admitted to identify the subject-matter of the suit. 'Every fact which exists on record must be proved by the record, but, when the question is as to the real subject-matter of the suit, or to show a bar to another suit, the identity of the cause of action may be proved by other than record evidence.’ (Parker v. Thompson, 3 Pick. 429.) See, also, Gist v. Zeigler, 16 Serg. & R. 282, 16 Am. Dec. 573; Robinson v. Windham, 9 Port. 397. A former judgment is a bar only in reference to the subject-matter of the suit, and the points there put in issue and determined. Where, therefore, it is proposed to show, by the record of a judgment, that a certain matter was decided, it must appear from the record that such matter was in issue, and then parol testimony may be admitted to show that the matter was in fact submitted to the jury. If the matter was not within the issue, such testimony is not admissible.”
Towne v. Nims, 5 N. H. 259, 20 Am. Dec. 578: "The same principle is applied and illustrated in a great many cases to be found in the books. (Kent v. Kent, 2 Mass. 338; Bank v. Robinson, 2 N. H. 126; Rice v. King, 7 Johns. 20; Kitchin v. Campbell, 3 Wils. 304; Adams v. Barnes, 17 Mass. 365; Tilton v. Gordon, 1 N. H. 33; Rex v. Pancras, Peake’s N. P. C. 219; Strutt v. Bovingdon, 5 Esp. N. P. C. 56; Da Costa v. Villa Real, 2 Stra. 961; Smith v. Whiting, 11 Mass. 445; Burt v. Sternburgh, 4 Cow. 559, 15 Am. Dec. 402.) In all these cases the point upon which the judgment was held to be conclusive; was directly in issue on the face of the record; and was the foundation of the judgment. The judgment, to be *271conclusive, must be upon tbe precise point. (2 Stark, Ev. 198-201; Bull. N. P. 244.) It is also a settled principle of law that wben a fact, directly in issue on tbe face of tbe pleadings, is determined by a jury in one case, tbe verdict may operate as an estoppel, if properly pleaded, in another suit brought diverso intuitu between tbe same parties. But to constitute a legal estoppel in such a case, the fact must have been in issue on tbe face of tbe pleadings in tbe first case, and tbe verdict must be pleaded as an estoppel. (3 Stark, Ev. 1280, note y; Evelyn v. Haynes, cited 3 East, 365; Outram v. Merliwood, Id. 346; Vooght v. Winch, 2 Barn. & Ald. 662; Manny v. Harris, 2 Johns. 24, 3 Am. Dec. 386; Sintrenick v. Lucas, 1 Esp. N. P. 43; Blackham’s Case, 1 Salk. 290.)”
Rosema v. Porter, 112 Mich. 14, 70 N. W. 317: "We think it cannot be said that tbe former judgment is res judicata as to tbe extent of tbe defendant's lien upon tbe horse. Tbe bill of particulars fixed tbe issue under tbe general pleadings. This being tbe case, tbe record cannot be contradicted by showing that other matter has been adjudicated. (Mondel v. Steel, 8 Mees. & W. 858; Campbell v. Butts, 3 N. Y. 173; Burdick v. Post, 12 Barb. 168; Hatch v. Benton, 6 Barb. 28; Meredith v. Mining Assn., 56 Cal. 178; Green v. Clark, 5 Denio, 497; Jones v. Perkins, 54 Me. 393; Chapman v. Smith, 16 How. 114, 14 L. Ed. 868; 2 Van Fleet, Former Adj. 428; 2 Smith, Lead. Cas. 784.)”
Lewis’ and Nelson’s Appeal, 67 Pa. 165: "But it is too well settled to need either argument or authority to maintain it that tbe estoppel of a judgment extends only to tbe question directly involved in tbe issue, and not to any incidental or collateral matter, though it may have arisen and been passed upon. This is clearly stated in the language of Lord Chief Justice De Grey in tbe Puchess of Kingston’s Case, 11 Harg. State Trials, 261, 20 Howell’s State Trials, 538, 2 Smith, Lead. Cas. 424.”
Jones v. Perkins, 54 Me. 396: "There are cases where parol evidence is admissible in aid of tbe record. * * * It is never allowed to contradict or vary tbe record. (Gay v. Wells, 7 Pick. 217; McNear v. Bailey, 18 Me. 215; Sturtevant *272v. Randall, 53 Me. 149.) The evidence must be confined to the proof of such facts and issues as were, or might have been, legitimately decided under the declarations and pleadings. If otherwise, it might contradict or vary the record. The record is conclusive evidence that the judgment was rendered upon some one or more of the issues legitimately raised by the pleadings of the parties. The parol proof is only to distinguish which of those several issues were decided, or to show that some particular fact was decided in the determination of some of those issues.”
Jones v. Davenport, 45 N. J. Eq. 77, 17 Atl. 570: "A decree or judgment on the matter outside of the issue raised by the pleadings is a nullity.” And: "Courts can only hear and determine causes on the pleadings actually filed, and not on what parties may agree they shall be.”
Campbell v. Consalus, 25 N. Y. 616: "To make such proceedings and judgment thus conclusive, it should have appeared, not only that the amount due on the mortgage was litigated, and found by the referees in such prior action, but it should also have appeared by the record of the judgment in such prior action that the amount due on the mortgage was put in issue by the pleadings in such prior action. (Campbell v. Butts, 3 N. Y. 173; Manny v. Harris, 2 Johns. 24, 3 Am. Dec. 386: Young v. Rummell, 2 Hill, 481, 38 Am. Dec. 594; Burdick v. Post, 12 Barb. 168; Doty v. Brown, 4 N. Y. 71, 53 Am. Dec. 350; Standish v. Parker, 2 Pick. 20, 13 Am. Dec. 393.) Even an agreement between the parties that matters foreign to the pleadings shall be given in evidence and decided by the verdict of a jury will not, it seems, enlarge the operation of a judgment entered on such verdict by way of estoppel. (Wolfe v. Washburn, 6 Cow. 262; Guest v. Warren, 9. Ex. 379; 2 Smith, Lead. Cas. 672.)”
In the opinion by Field, C. J., in Boggs v. Merced Mining Co., 14 Cal. 279, 380, it was held that "a court cannot properly, even upon the consent of the parties, pass upon questions not raised by the written allegations of the pleadings.”
Justice Sanderson, speaking for the court, in Garwood v. Garwood, 29 Cal. 521, said: " The judgment of a court having jurisdiction directly upon the point in controversy is, as a *273plea, a bar; and, as evidence, competent and conclusive as between the same parties. * * * This rule, however, is restricted to facts directly in issue, and does not embrace facts which may be in .controversy, but rest in evidence and are merely collateral. A fact or matter in issue is that upon which the plaintiff proceeds by this action, and which the defendant controverts in his pleadings, while collateral facts are such as are offered in evidence to establish the matters or facts in issue, and, notwithstanding they may be controverted at the trial, they do not come within the rule. (King v. Chase, 15 N. H. 16, 41 Am. Dec. 675.)”
Hicks v. Murray, 43 Cal. 522: "Evidence of facts, or stipulations as to the facts of a ease, cannot make the case broader than it appears by allegations, nor can a party by mere force of facts admitted or proven become entitled to relief to which he would not have been entitled had his case been resisted only by general demurrer interposed to the pleadings upon which he relies.”
In Concannon v. Smith, 134 Cal. 18, 66 Pac. 40, the following from Freeman on Judgments is quoted with approval: "The general expression, often found in the reports, that a judgment is conclusive of every matter which the parties might have litigated in the action, is misleading. What is meant by this expression is that a judgment is conclusive upon the issues tendered by the plaintiff’s complaint. It may be that the plaintiff might have united other causes of action with that set out in his complaint, * * * but, as long as these several matters are not tendered as issues in the action, they are not affected by it.”
In Meredith v. S. Clara Min. Assn., 56 Cal. 180: "In Sintzenick v. Lucas, 1 Esp. R. 43, Lord Kenyon lays it down that, to make a record evidence to conclude any matter, it should appear that the matter was in issue, which should appear from the record itself; nor should evidence be admitted that under such a record any particular matter came in issue. And in Manny v. Harris, 2 Johns. 24, 3 Am. Dec. 386, Spencer, J., quotes Lord Kenyon approvingly, and says, in effect, that unless the issue in the former action embraced the consideration of the present cause of action *274evidence ought not to be received that the jury did decide upon it.”
Supporting the same principle are Shama Churn v. Prosunno Coomar, 34 V. C. L. B. 251; Topliff v. Topliff, 8 Ohio, Cir. Ct. 55, Sections 257 and 272 of Freeman on Judgments (4th ed.) and cases there cited, where it is said that the rule is inflexible that the estoppel is restricted to the controversy made by the pleadings. Some of the cases holding that evidence, aliunde, may be received to show what facts within the issue were or were not proved on a former trial may appear to conflict with the above, when they really do not, and are easily distinguished. This is true, regarding authorities cited by appellant, and by Professor Black in his article on Judgments in 23 Cyc. For example, in Spiers v. Duane, 54 Cal. 176, instead of the judgment covering matters outside of the pleadings, there was a complaint with allegations admittedly sufficient, and it was held that objections that the answer was defective could be made for the first time on appeal. Very correctly this and other cases hold that the judgment will be final in favor of the party who has alleged facts to sustain it, although denials may be defective or lacking. If it be claimed that part of the allegations in the complaint or of affirmative matter in the answer may be dispensed with, or that allegations between some of the parties may, for instance, as here, between eodefendants, when there are allegations between them separately and the plaintiff, but none directly between themselves, it would be difficult to draw any line between such dispensation of a part and of all pleadings between all parties, which would result in the lax practice of allowing litigants to try eases and have them adjudicated without any pleadings, and lessen the stability and certainty of judgments, thereby entailing greater hardships than by requiring litigants to properly plead.
If we had no statute or decision in point and swept aside the cases cited, and it were considered .the better rule to adopt in this state that regardless of pleadings parties are bound by all matters litigated, and which the judgment may cover, it may be doubted whether the record contains sufficient or proper evidence to indicate that the matter which *275controlled the court and resulted in the judgment, the trus tees’ sale, and its validity against the Gulling mortgage, or that anything else was litigated between the defendants there, who are parties here.
As it is a well-recognized principle, and one sustained by the authorities in the brief and others such as Keagy v. Bank, 69 Pac. 811, 12 Okl. 37, and Harvey v. Osborn, 55 Ind. 535, that defendants are not presumed to be adversary parties, it should not be inferred that they litigated anything between themselves from the fact that they were both in court when the answer of each was directed against the complaint, and contained no allegation of fact against the other, nor should it be so inferred because in advance of the trial as a matter of convenience and accommodation they joined in a stipulation to take depositions,which were signed: "Thos. E. Haydon and Robt. T. & Wm. H. Devlin, Attorneys for Plaintiff, W. Webster, Atty. for Deft. Washoe County Bank, T. V. Julien, of Counsel, Atty. for other defts. appearing in said action.”
It ought not to be implied that Gulling was an adverse party to the Washoe County Bank because he made this stipulation with the plaintiff and the other defendants any more than if he had merely stipulated with the plaintiff when the other defendants did not join. Nor should it be so inferred from the fact that they both appeared on the trial or in court at other times. Nor are we warranted in presuming that they litigated between themselves questions relating to the validity and effect of the trustees’ sale because these appeared most important and controlling to the district judge, and so seem to us now. On the trial below in this case the record in the former action was admitted, and has been-brought here on appeal, but no testimony was introduced to show what questions had been litigated.
The findings recite that the defendants, which would include the parties here, introduced evidence in support of the issues made by their answers, thereby implying that they did not introduce other evidence. With the answers of the two defendants there, who constitute the parties here, containing no issue nor allegation of fact between themselves, the intro*276duction of evidence to support the issues made by either or both of these answers and the complaint would not indicate that either of these parties introduced evidence against the other, nor that anything was litigated between them. In the absence of presumptions and of any written stipulation, or an oral one made in open court and entered in the minutes, and with no showing that any, evidence was introduced on the original trial by either of the parties here against the other, it would seem that the pleadings and the findings of the trial court are the only authorized or proper evidence of . the facts which were in issue and were litigated. There is nothing in the record from which it may be suspicioned that anything was litigated between these parties as adversary codefendants in the former action, except the opinion of the district judge filed after the trial and separately from the findings and judgment. This opinion was beyond the control of the parties, and is quite different from the testimony of a trial judge if given as a witness and subject to cross-examination, and its competency as evidence may be doubted.
In Buckingham’s Appeal, 60 Conn. 143, 22 Atl. 509, it was said: "In admitting the record itself, therefore, under the circumstances disclosed by the finding, we do not think the court below erred. But the court also admitted in evidence the written opinion of the judge who tried the case in the United States court. This was no part of the record. It was admitted for the purpose of showing the grounds of the decree. The decree itself did not show on what facts it was based. After the record was admitted the question then was whether the validity of the gifts to the nieces, which was in issue in the.case at bar-, had been in issue and had been determined in the prior suit. In such a case, if the record does not clearly disclose the facts upon which the judgment or decree is based, they may be shown by any proper evidence outside of the record. (Supples v. Cannon, 44 Conn. 424; Mosman v. Sanford, 52 Conn. 23.) But the witnesses who give such evidence must give it in the ordinary way, and under the conditions imposed upon all witnesses. It must be given under oath and subject to right of cross-examination, and it must not be what is termed 'hearsay ’ evidence. By *277the admission of the opinion aforesaid, as evidence to show the grounds of the decree, these fundamental rules of evidence were violated, and the court committed an error.”
In Keech v. Beatty, 127 Cal. 183, 59 Pac. 839: "If it' be conceded that parol evidence may be given as to what the issues were in the former suit, the parol evidence would have to be Competent. The written opinion, without even the form of having been made under oath, was not competent evidence for the purpose for which it was offered.” In the decision of this court in Wheeler v. Floral Mill and Mining Co., 9 Nev. 258, "the court found as a fact that the offset pleaded by respondent was a ' proper matter of offset ’; but we cannot presume that this fact was properly found, because there were no averments in the answer to base such a finding upon. (Barron v. Frink, 30 Cal. 489; Burnett v. Stearns, 33 Cal. 473.)”
If without pleadings matters in dispute may be tried and adjudicated by judgments which are to be conclusive against the parties and act as estoppels against their heirs and successors in interest, there should be proof competent within the ordinary rules for the admission of evidence to indicate the things which were litigated, and, when the judgment is between codefendants, it should especially be clearly shown that they had acted as adversary, parties. The eases seem to be uniform in requiring full and satisfactory evidence to establish matters which have been litigated within the issues. If the practice act controls, it seems unnecessary to determine whether it is the better doctrine where there is no statutory enactment to hold that the parties are bound by all matters litigated, regardless of any issue or allegation in the pleadings, as now seems to be advanced by a majority of this court, or, whether, in the absence of such enactment, an issue, or at least an allegation in the complaint or answer, even if defective or undenied, is necessary to support the judgment and conclude the parties as held in the cases cited and others. As we have a statute clearly covering the matter involved, it is more apropos to consider its language and meaning and the decisions in this state rendered since its passage, and we should not forget that questions relating to its policy are for-*278the legislature, and that it ought not to be repealed and nullified by the courts, whether it be deemed that some other rule would be better or more in consonance with the views of this and other tribunals. The practice act provides:
" Sec. 150. The relief granted to the plaintiff, if there be no answer, shall not exceed that which he shall have demanded in his complaint; but in any other case the court may grant him any relief consistent with the case made by the complaint and embraced within the'issue.” (Comp. Laws, 3245.)
"Sec. 155. An issue of fact arises: First, upon a material allegation in the complaint, controverted by the answer; and, second, upon new matter in the answer, except an issue of law is joined therein.” (Comp. Laws, 3250.)
" Sec. 65. The allegation of new matter in the answer shall ,on the trial be deemed controverted by the adverse party.” (Comp. Laws, 3160.)
Provisions similar to section 150 are in force in New York, California, Iowa, Indiana, South Carolina, Colorado, Kentucky, and Missouri. (Bliss, Code Pleading, 3d ed. 160.)
In Mitchell v. Mitchell, 28 Nev. 123, we have already had occasion to construe the fore part of section 150, and to hold that upon default the court had no power to enter judgment for more than the relief demanded in the complaint.
In McLeod v. Lee, 17 Nev. 112, 117, 28 Pac. 125, this court stated: "The general principle that a judgment of a court of competent jurisdiction between the same parties and upon the same issues is, as a plea, a bar, or, as evidence, conclusive, is too well settled to require discussion. Such a judgment is not only conclusive of the right which it establishes, but of the facts which it directly decided. This rule is necessary for the repose of society. It is in the interest of the public that there should be an end of litigation. * * *• The estoppel 'extends to every material allegation or statement which, having been made on one side and denied on the other, was at issue in the cause, and was determined in the course of the proceedings.’ ”
In that case evidence was allowed to identify a dam. It was said that " this testimony was admissible, not for the purpose of varying, controlling, or contradicting, the record, *279but for the purpose of more clearly showing that the dam in question in this suit was the same dam that was in issue in the former action.”
The cases are numerous and uniform holding that extrinsic evidence is not admissible to impeach or contradict statements in the record with reference to points or matters in litigation, or which have been adjudicated.
In Low v. Blackburn, 2 Nev. 73, it was stated: "Even in equity, where technicalities are mostly discountenanced, a party can have relief, if at all, only upon the allegations in the pleadings. No decree can be made in favor of a party upon grounds not set forth in his complaint or answer. The rule is absolute, in chancery, that a party can only recover upon the case he presents. ' Secundum allegata et probata.’ (Bailey v. Ryder, 10 N. Y. 363, 370; Byrne v. Romaine, 2 Edw. Ch. 446, 447; Beaty v. Swarthout, 32 Barb. 293, 294.)”
Chief Justice Hawley, speaking for this court, in Perkins v. Sierra Nevada S. M. Co., 10 Nev. 412, 413, said; "The question whether the judgment in the ease under consideration was final must be determined with reference to the facts and issues presented by the record. * * * It is a well-established principle of law that the findings of a court should be confined to the facts at issue, and the judgment of the court must be warranted by the pleadings. (Burnett v. Stearns, 33 Cal. 473; Bachman v. Sepulveda, 39 Cal. 689; Marshman v. Conklin, 21 N. J. Eq. 548; Munday v. Vail, 34 N. J. Law, 418; Dodge et al. v. Wright, 48 Ill. 383.) And the fact that plaintiffs consented to this judgment does not change the rule. (Nastings v. Burning Moscow, 2 Nev. 96.)”
If parties are to be -bound by matters litigated without pleadings when the judgment is set up as res judicata in another action, they would likewise be concluded by the same judgment on appeal in the first action, for, by voluntary litigating matters outside of the issues, they would be without the proper objection and specification of error on which to base an appeal, and consequently the judgment would be equally conclusive and the rule the same in either case.
We should remember that we are acting on the chancery side of the court, and that equity principles should apply, *280and, as this action is one purely in equity, doubts, if any, would be more properly resolved in such a way that the rights of none would be cut off or lost. With this purpose in view, if we had no statute or decisions applicable in this state, it still would be better to hold that the parties are not concluded by the former judgment which is not supported by any issue or allegation in the pleadings, nor clearly shown by competent evidence to rest upon -matters which were litigated by the parties as adversary codefendants. It is apparent from the record and uncontradicted that the property was of the value of about $14,000, more than sufficient to pay the prior claim of the Sacramento Bank for $8,000 and interest, and the $2,000 mortgage of Gulling, which was the second lien on the property, and yet the Washoe County Bank has its unsecured debt for $5,000, which was subsequent to both of these claims, satisfied, while the Gulling mortgage remains unpaid.
The statute and decisions of this court rendered since its passage should be followed, and the judgment of the district court, and of this court sustaining the same, as rendered before the rehearing, ought to be affirmed.