Court Opinion

ID: 9832162
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:40:45.868032+00
Date Added: 2024-06-11T07:43:43.208975
License: Public Domain

On Motion for Rehearing.
[4] The turn of this case upon rehearing requires a decision of the questions of res adjudicata, and of jurisdiction) each rather complicated, as applied to the condition of the record.
The defendant in error, in his motion for rehearing, admits that the holding on the original hearing as to the Tarrant county judgment on the $750 note ends the matter against him as to that phase of the litigation. He asks that the former order, reversing and remanding the case as a whole, be set aside, and for an affirmance of that part of the judgment for the $250 recovered by him, and that this court reverse and render against him the judgment of the trial court canceling the $750 note. The $750 note upon which judgment was rendered in the district court of Tarrant county against Blasingame was a part of the same transaction with the execution and delivery of the subscription contract and the $250 note which Blasingame was required to pay, the amount of which payment he was permitted to recover in the district court of Ochiltree county against the Trust Company. The issue of fraud which permitted a recovery of the $250 against the trust company in the suit in Ochiltree county would have defeated the $750 note, if it had been interposed and successfully maintained against the latter note in the suit in Tarrant county. We do not think that the question of fraud as a litigated issue properly belonged to nor was within the scope of the litigation in the Tarrant county suit, the petition containing the usual allegations for recovery upon a promissory note, the judgment being one by default.
Plaintiff in error cites the case of Town of Beloit v. Morgan, 7 Wall. 619, 19 L. Ed. 205, as “peculiarly apt under the facts of this case.” Analyzing the material facts in the majority and dissenting opinions in the case of Cromwell v. Sac County, 94 U. S. 351, 24 L. Ed. p. 197, as basis for the majority opinion, it would seem, on principle, in attempting to apply each case to this record, that the Morgan Case is robbed of its legal significance as an authority, both cases decided by the Supreme Court of the United States.
The Beloit-Morgan Case involved a judgment by default upon certain bonds. The same defendant, the city of Beloit, attempted to enjoin Morgan in a subsequent suit from proceeding in certain suits upon other and different bonds, but of the same series and held by the same title and owner as in the previous suit. The court said:
“All the objections taken in this case might have "been taken in that. * * * Under such circumstances a judgment is conclusive, not only as to the res of that case, but as to all further litigation between the same parties touching the same subject-matter, though the res itself may be different. * * * A party can no more split up defenses than indivisible demands, and present them by piecemeal in successive suits growing out of the same transaction.”
The court also held the bonds were required to be paid under a subsequent statutory enactment.
In the case of Cromwell v. Sac County a party was the owner of four bonds of the county, to which .were attached numerous coupons. The first suit was upon some of the coupons, and the question was one of innocent purchaser. The county answered that the bonds originated in fraud, and it seems that the plaintiff failed to prove that he paid value. The second suit was on the four bonds owned by the plaintiff and four coupons for interest attached thereto. In that cause plaintiff proved that he was an innocent purchaser, and the headnotes written by Justice Field as reflecting the opinion in part state:
“ * * * Where the second action between the same parties is upon a different claim or demand, the judgment in the pi-ior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.”
Justice Field does not comment on the case of Town of Beloit v. Morgan, though Justice Clifford, the dissenting judge, quotes therefrom, unless the following in the majority decision would be' considered a difference of opinion affecting the Beloit Case:
“A judgment by default only admits for the purpose of the action the legality of the demand or claim in suit. It does not make the allegations of the declaration or complaint evidence in an action upon a different claim. The declaration may contain different statements of the cause of action in different counts. It could hardly be pretended that a judgment by default in such a case would make the several statements evidence in any other proceeding.”
Justice Cooley of the Supreme Court of Michigan, in the case of Jacobson v. Miller, 41 Mich. 90, 1 N. W. 1013, applying the Cromwell Case, went a considerable distance along that line. That cause involved a previous judgment for rent upon a lease contract, the defendants pleading the general issue, with*579out denying under oath the execution of the lease required under the statute of that state in order to put its execution in issue. In a subsequent suit upon the same lease Justice Cooley held the actual execution of the instrument could be litigated, saying:
“The execution of the lease was not denied in the former suit. No issue was made upon it, and the defendant, by not denying it, suffered a default in respect to it which left it wholly outside the issue made and .actually passed upon. Consequently it was not and could not have been considered by the court as a point which in that suit was open to controversy. * * * It is said, however, that the defendants in the first suit were at liberty to put the execution of the lease in issue, and that it was their duty to do so then if they proposed to contest it at all. This is upon the ground that public policy will not suffer the withholding of a defense with ,a view to further litigation, when a single suit might determine the whole controversy. This is, no doubt, true where the defense is sought to be made use of in the retrial of a dispute respecting the same subject-matter of the former litigation. * * * The question now is whether the proposition is applicable to a case where the subject-matter of a second suit is different.” 41 Mich. 90, 1 N. W. 1016, 1017.
The Supreme Court of Alabama held, in the case of Crowder v. Red Mountain Co., 127 Ala. 254, 29 South. 847, where a judgment was rendered by default for accrued interest upon a promissory note (the note stipulating annual installments of interest) it was not res adjudicata in a subsequent action, brought by the same plaintiff against the same defendant, to recover the principal sum due upon the note; the defendant pleading in the second suit a want of consideration for the note sued upon. To the same effect as to a judgment by default is the case of Unfried v. Heberrer, 63 Ind. 72. Also see Williams v. Williams, 63 Wis. 58, 23 N. W. 111, 53 Am. Rep. 253; Shirland v. First National Bank, 65 Iowa, 96, 21 N. W. 201.
The case of Adams v. Adams, 25 Minn. 72, is directly on the point. It involved a judgment by default upon one of several negotiable promissory notes founded upon the same illegal consideration, and it was held that, no issue upon the facts of consideration having been tendered by the petition, the defendant was not estopped from setting up in a second action upon another of said notes the defense of illegality of consideration. The Supreme Court of Minnesota said:
“The operative effect” of the default judgment as estoppel “in another action between the same parties upon another of said notes not directly involved, * * * though resting upon the same * * * consideration, is limited to the precise points which were then _ actually controverted, and to the matters which were embraced in the issue there tendered, upon the determination of which such judgment was rendered.”
The case of Worth v. Carmichael, 114 Ga. 699, 40 S. E. 797, is directly in point. Where two notes were given upon a consideration arising upon the same transaction, a judgment by default rendered in favor of the payee against the maker upon one of such notes was not a bar in a subsequent action to the defense of fraudulent representation. The court said:
“The rule is well settled that a judgment rendered in litigation between the same parties does not operate as an estoppel in a subsequent suit between them on a different cause of action, except as to such issues as were actually tried and determined in the former litigation; and the fact that the cause of action in the two suits arose out of one .and the same transaction does ,not alter the rule.”
The case of Andover Savings Bank v. Adams et al., 1 Allen (Mass.) 28, involved a previous judgment for the plaintiff in an action in installments of interest due on a certain note. Plaintiff also subsequently sued for the principal of the note, which had really matured when the former action was begun. Chief Justice Bigelow of the Supreme Court of Massachusetts said:
“The promises to pay the debt at one time and the interest at another are several, and afford distinct causes of action.”
It is understood that we are not approving the principle as applied to the basis of facts in all the cases above cited, but the same are used argumentatively.
Justice Hurt said, in the case of H. & T. O. Ry. Co. v. Perkins, Adm’r, 2 Willson, Civ. Cas. Ct. App. § 520:
“ * * * A judgment ori one does not bar a new action on the other, unless by establishing some matter fatal to both.”
The case of Moore v. Snowball, 98 Tex. 16, 81 S. W. 5, 66 L. R. A. 745, 107 Am. St. Rep. 596, the majority opinion of the Supreme Court holds that a suit to cancel a tax judgment of foreclosure upon land, on the ground that it is void, and the sale thereunder likewise void, is not res adjudicata in another suit between the same parties wherein the subsequent suit admits the validity of the judgment, but attacks the sale under the execution on account of irregularities and inadequate consideration.
If Blasingame had interposed the defense of fraud against the $750 note (it being a companion to the $250 note), and had not succeeded in the defense, the judgment upon the $750 note would present a different question. Gardner v. Buckbee, 3 Cow. (N. Y.) 120, 15 Am. Dec. 256, squarely on the point. The logic of plaintiff in error is that the judgment upon the $750 note merges the subscription contract in the judgment; hence the $250 note, a part of the same transaction, in so far as the particular defense is concerned is also merged. The fact remains, however, that in reality there was no such issue tendered, litigated, or decreed upon in the Tarrant county suit. It was outside the issue.
[5] It is asserted that, if the district court of Ochiltree county had sustained the plea in abatement, the court would not have had jurisdiction for the recovery of the $250. Plaintiff alleged that defendant’s agent made false representations as to past dividends by the company. The evidence was sufficient to put it to the jury. The special charge submitted by defendant and given *580by the court required the jury to believe all the allegations of fraud before a verdict could be rendered. Defendant’s petition on the $750 note was filed subsequent to Blas-ingame’s petition in Ochiltree county.
“All of the oases seem to concur in the proposition that the ‘plaintiff’s demand, as set out in his petition, and not the amount of the verdict, iá, in general, the criterion by which to determine the question of jurisdiction.’ * * * They likewise concur in the conclusion that the case should be dismissed for the want of jurisdiction ‘when it appears that the plaintiff, in stating his demand, has improperly sought to give jurisdiction where it did not rightfully belong'.’ ” Hoffman v. Building & Loan Ass’n, 85 Tex. p. 410, 22 S. W. 154.
Also:
“It is now the settled law in this court. (Supreme Court] that, although the amount claimed in the petition may be sufficient to give the court jurisdiction of the case, yet, if the facts alleged * * * show no cause of action as to such part of’ the whole sum sued for as to reduce it below the amount [on demurrer] for which the court has jurisdiction, the suit should be dismissed.” Carswell v. Habberzettle, 99 Tex. 1, 86 S. W. 738, 22 An. St. Rep. 597; Telegraph Co. v. Arnold, 97 Tex. 365, 77 S. W. 249, 79 S. W. 8.
The case of Railway Company v. Grayson County Nat. Bank, 100 Tex. p. 17, 93 S. W. p. 431, by the Supreme Court, is analogous. The bank asserted liens on three cars of wheat shipped over defendant’s road, and claimed by plaintiff to have been unlawfully delivered to other parties. The original petition in the district court alleged the damages for wrongful delivery of the three cars at $1,641.45. Pending the litigation the railway company settled with the bank for two of tne cars of wheat, which reduced the claim to $377.79 on the remaining car. The case was tried on an amended petition setting up this amount, and a motion to dismiss the case was made in the Supreme Court, on the ground that the district court had no jurisdiction over the amount in controversy in the amended petition. The Supreme Court said:
“The suit as made by the original petition, being for more than $1,000, the district court alone has jurisdiction to try it. Where a plaintiff sues for an aiñount sufficient to give that court jurisdiction, the court may proceed to judgment, although the amount he is entitled to recover be found to be less than $500. In the absence of a plea to the jurisdiction averring that the sum claimed is fraudulently alleged for the purpose of giving jurisdiction to the court, the amount claimed as shown by the petition is ‘the amount in controversy,’ and fixes the jurisdiction. Where the court acquires jurisdiction by the original petition, it retains it to the end of the suit.”
it is difficult at times to determine in which category, upon a question of jurisdiction, a case belongs, and which principle will control. .Here the plaintiff, Blasingame, in the Ochiltree district court, filed a petition involving a subject-matter clearly within that court’s jurisdiction. Thereafter the defendant in that suit, and, as shown by this record,. after citation upon it, filed the suit on the $750 note in Tarrant county, recovering the judgment stated. We can see no difference in principle between the .elimination of a part of a demand by settlement and an elimination of a part by subsequent judgment in a subsequent suit between the same parties, where rendered by default. There is no fraud in either case, and upon the influence of the case last cited, 100 Tex. 17, 93 S. W. 431, we think the district court of Ochiltree county could have litigated the allegations in plaintiff’s petition for the $250.
The testimony complained of in appellant’s brief, though it may have been erroneously admitted, did not affect the issue of false representation with reference to past dividends.
The motion for rehearing of defendant in error is granted. The judgment reversing and remanding this cause as a whole is set aside. That part of the judgment of the district court of Ochiltree county overruling plaintiff in error’s plea in abatement in regard to the $750 note is reversed and rendered. The judgment for the defendant in error, Blasingame, for the recovery of the $250 is affirmed.