Court Opinion

ID: 3883180
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:14:01.599727+00
Date Added: 2024-06-11T07:41:59.529600
License: Public Domain

The question of resjudicata is close and difficult, but I think the conclusions reached by Mr. Justice Gary is right on principle and authority.
The Virginia-Carolina Chemical Co., defendant in this action, sued the plaintiff, Kirven, in the Federal Court on notes aggregating $2,228, given for the purchase money of fertilizers. Kirven set up, among other defenses, failure of consideration, in that the fertilizers were not only worthless but positively deleterious. Subsequently, this defense was withdrawn, and on the trial of other issues the defendant recovered judgment for $1,723.40.
While the suit on these issues was pending in the Federal Court, Kirven commenced action against the Virginia-Carolina Chemical Company in the Court of Common Pleas for Darlington County to recover damages to his crop from the use of the fertilizer for which the notes were given; the essence of the complaint being contained in this paragraph: "That the said fertilizers, to wit, acid phosphate and dissolved bone, had been manufactured with such gross negligence and want of skill that, instead of being of advantage to the crops to which they were applied, they destroyed the same in large part, and were not only worthless to the plaintiff, but, by destroying his crops, damaged him very heavily, and by the injury which was inflicted on his crop *Page 501 
of cotton and corn, by fertilizers which were manufactured and sold for use upon them, he was damaged in the sum of $1,995 and costs."
The Virginia-Carolina Chemical Company answered by a general denial, but, after the determination of the suit on the notes, by supplemental answer, alleged that the claims set up by Kirven had been adjudicated in the action on the notes in the Federal Court. Having introduced the record in the Federal Court. Having introduced the record in the Federal Court, on this ground the defendant requested the State Court to direct a verdict in its favor.
It is clear that Kirven's claim might have been set up as a counter-claim in the Federal Court; and the appellant first contends the Code of Procedure expressly requires all counter-claims to be set up in the answer. This position is thoroughly unsound.
Section 170, which is relied on, is "The answer of the defendant must contain: 1. A general or specific denial of each material allegation of the complaint controverted by the defendant, or of any knowledge or information thereof sufficient to form a belief. 2. A statement of any new matter constituting a defense or a counter-claim, in ordinary and concise language, without repetition." All that this means is that any paper purporting to be an answer must contain either a denial of a material allegation of the complaint or new matter constituting a defense or a counter-claim, or it will be no answer. It cannot in any view be considered a legislative enactment that any separate cause of action which might have been, but was not, used as a counter-claim, shall not be available in a separate action.
There are such enactments in the Codes of some States, but they are very different from section 170 of our Code. The Codes of California and Minnesota are examples.Brosnau v. Kramer (Cal.), 66 Pac., 979; Lowry v. Hurd;7 Minn., 356. Mr. Pomeroy clearly lays down the rule that provisions for the counter-claim, such as are contained in our Code, do not preclude the defendant from bringing a *Page 502 
separate suit on a cause of action which might have been set up as a counter-claim. Pomeroy's Rem., 804. Counsel for appellant strongly argued, however, even if this is true, as a general rule, "this rule does not apply where the subject matter of the set-off or counter-claim was involved and adjudicated in the former action in such wise that the judgment therein necessarily negatives the facts on which the defendant would have to rely in order to establish his demand." This statement of an exception to the general rule, taken from 23 Cyc., 1202, may be accepted as true, yet I do not think this case falls under it. Had Kirven gone to trial on the plea of failure of consideration, saying nothing of his counter-claim for damages, and had lost on that issue, the judgment would have been conclusive that there was no failure of consideration, and hence obviously no basis for a separate action for damages for injury done by the fertilizer sold. The case in that condition would have been within the exception.
But he had his election to use the fact, if fact it be, of the worthlessness of the fertilizer as a defense by pleading failure of consideration; or, by separate suit, assert as a distinct cause of action the fertilizer to be positively deleterious, and claim damages for the injury which resulted from its use.
Inasmuch as he did not submit the issue of failure of consideration in the Federal Court, the judgment in that Court did not adjudicate that there was no defect in the goods or injury from their use. It only precluded Kirven from setting up defects as a defense ever thereafter, on the familiar rule that a defendant must set up all his defense or lose the benefit of them. Therefore, as a defense, failure of consideration was gone.
But when Kirven elected not to use, as a defense, the fact of worthlessness, which might have been available in the action of the Virginia-Carolina Chemical Company against him, he was not precluded from using the very different *Page 503 
facts of deleteriousness and positive injury caused by appellant's alleged negligence in the manufacture of the fertilizer as the basis of an independent cause of action.
Having such a cause of action against the Virginia-Carolina Chemical Company. Kirven had a right to choose his own time and his own tribunal for asserting it, and could not be forced to assert it at the time and before the tribunal chosen by the company. This conclusion is, I think, in accord with the principles laid down in Hart v. Bates, 17 S.C. 40.
The reason for it is thus clearly stated in the lucid opinion of Judge Sanford, in Brown v. Bank, 132 Fed., 450, 452; "The reason for this rule is that the damages resulting from the plaintiff's wrongful act may be indeterminate, or may not have entirely accrued, when he brings his action, and it might be unjust or inequitable to permit him to determine the time when the defendant must present and prove his claim for the damages which he has suffered from the breach of the plaintiff's contract."
In Cromwell v. Sac. County, 94 U.S. 351, Justice Field uses this language: "But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points contraverted; upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action." This language is quoted with approval in Willoughby v. R.R. Co., 52 S.C. 174, 29 S.E., 629, where, however, the doctrine of res judicata was held to apply because the very questions made in the second suit had been actually litigated and decided in the first. *Page 504 
It has been repeatedly held that a judgment for the purchase price of goods does not preclude a separate action against the seller for breach of warranty, and the principle has been extended to other like cases, unless the purchaser had set up the breach as a defense or counter-claim. Black on Judgments, secs. 761-769; Van Fleet on Former Adjudication, secs. 168-170; 23 Cyc., 1202; Pomeroy's Rem., sec. 804; 24 Am.  Eng. Enc., 785; Riley v. Hale (Mass.),33 N.E., 491; Dewsnap et al. v. Davidson (R.I.),26 Atl., 902; Jones v. Witousek et al. (Iowa), 86 N.W., 59;Upfalt v. Woreman et al. (Neb.), 46 N.W., 419; Kennedy
v. Davisson (W.Va.), 33 S.E., 291; Van Epps v. Harrison
(N.Y.), 40 Am. Dec., 326, note; Johnson v. Reeves
(Ga.), 37 S.E., 980; Pub. Ass'n v. Fisher (Mich.),54 N.W., 759; Green v. Bank, supra.
Cases like Ryan v. Association, 50 S.C. 185,27 S.E., 618, are not opposed to this conclusion. There Ryan sued to recover double the sum alleged to have been received by the defendant association for usurious interest. The charging of usurious interest was under the statute a defense to the action on the debt, but the penalty was recoverable as a counter-claim or in a separate action only for usurious interest actually received. Before any action was brought on the debt, usurious interest had been charged but not received. To this action, therefore, Ryan had a defense for usury but no counter-claim for a penalty. He did not set up the defense and therefore it was held, after judgment against him on the debt, the defense of usury was forever shut off, just as the defense of payment would have been.
It was held, further, that the excess of interest having been received, not on the contract but on the judgment into which the agreement had been merged, the penalty could not be recovered. But it was not held nor intimated that if usurious interest be received on a contract before judgment, the debtor could not bring a separate action for the penalty, though he had chosen not to set up the defense of usury against the suit on the contract. On the contrary *Page 505 
the opinion was expressed that he could bring such an action without having set up the defense of usury.
It is difficult to understand how the failure of the crops on the land, where the fertilizer in question was used, could have been caused by negligence in its manufacture, but there was much evidence for the consideration of the jury on that point, and the judgment, therefore, cannot be reversed for an entire lack of testimony to sustain it.