Court Opinion

ID: 8761880
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:09:56.429888+00
Date Added: 2024-06-11T17:01:37.408774
License: Public Domain

ALDRICH, District Judge
(dissenting). I cannot agree with the result reached in this case. I do not question, however, the general proposition that a judgment upon the merits by a state court having jurisdiction of the parties and the subject-matter is entitled to full credit, and conclusive as a bar to further litigation in another jurisdiction. This rule unquestionably applies, not only to cases where the judgment is upon actual trial, but to cases heard upon demurrer, going to the merits, and to cases set down for hearing upon bill, and answer.
In my view the case under consideration is not fairly in either class, or in any class of cases to which the rule of res judicata applies. It is a fundamental and familiar principle that it is only in cases where it is clearly beyond question that a party’s rights have been determined upon the full merits that the rule of res judicata holds good.
The majority opinion accepts the situation as one to be solved as though it were a judgment in a case standing upon general demurrer. I do not think it is at all like that. In a case on general demurrer, the defendant in effect says, take all the plaintiff alleges to be true, still he is not entitled to recover.
In the Montana case the defendants did not and could not stand upon general demurrer, for the reason that the complaint as amended contained general allegations of the • plaintiff’s rights, which, upon his theory, entitled him to judgment if all alleged was to be accepted as true. This was so because the plaintiff alleged the fact of the contest, which involved vast preparation and a six weeks’ jury trial,' in which the jury disagreed. He also alleged the compromise in which it was claimed that Col. Ingersoll and the other parties to the contract participated, and which it is allegéd was an expedient and effective means adopted by the parties for defeating the substantial provisions of the will, and of giving Col. Ingersoll’s clients all and more than they would have received if the contract had been literally and technically fulfilled and the estate administered intestate.
Under these allegations, uninfluenced by the probative force of an answer, the plaintiff might have fairly contended that the contest and the disagreement of the jury at least suspended the probate of the will, and rendered it inoperative as an instrument to pass the property according to its terms, and that his evidence would show that the parties verbally accepted the compromise result in lieu of performance according to the strict letter of the contract.
To all intents and purposes, so far as the interests of those who employed Col. Ingersoll were concerned, the will was defeated because it did not under the compromise operate in any substantial sense according to its terms. Its substantial provisions were defeated.
Where allegations are general in the assertion of a right, it is permissible to explain them by evidence, and, if there is any view upon which the allegations can be accepted as sufficient in law, judgment will not go against the plaintiff upon demurrer.
Although the allegations of a complaint may not show performance strictly like that provided for in the contract, if the allegation is that th.at kind of - a performance was performance under the contract, it necessarily presents a situation to be aided by subsequent pleadings and *179by proofs, as, for instance, where it is claimed that the alleged performance was to be accepted and paid for as a better, though technically somewhat different, performance than that contemplated by the original contract. Rike a contract to build a house or a bridge according to written specifications, and where the parties by agreement, and in order to meet exigencies developed in the progress of performance, substitute a different way of doing it at and for the contract price. The allegations of performance must be aided in such a case bv proofs upon issues properly joined by subsequent pleadings. At all events, the defendants did not demur, but answered, alleging certain facts and setting forth their side of the controversy, and, among other things, they alleged that the consideration for the contract was not truly stated in the complaint; that Col. Ingersoll received $5,000 in full for his services and expenses and in revocation of the contract; that the compromise was not effectual in defeating the will, so far as the rights of Root and the other Ingersoll clients were concerned; that the compromises were negotiated by the parties and counsel other than Ingersoll; and that Col. Ingersoll did not perform any services other than those in assisting in and endeavoring to enforce the contest of Root and others.
To the answers, and upon all these matters, the plaintiff filed a replication, joining issue, and denied that the contract for the $100,000 fee was ever abandoned, and alleged that it was in force and fully performed as alleged.
To the answers, thus raising mixed questions of law and fact as to performance, and as to other aspects of the' case, as well as the question of fact as to Col. Ingersoll’s service in procuring the compromise, which, it is alleged, was effectual in defeating the will, the plaintiff had the right to reply, and to controvert the various matters alleged therein. United States v. Dalles Military Road Co., 140 U. S. 599, 616, 617, 11 Sup. Ct. 988, 35 L. Ed. 560.
The Montana court ignored the issues raised by the answer and the replication, denied to the plaintiff his right of trial and all opportunity to introduce proofs, and assumed to decide the case upon the bill of complaint, notwithstanding the fact that the bill had been answered and issues joined by replication upon questions of fact and upon mixe ! questions of law and fact.
It is quite difficult to find warrant for this, or for basing the decision, as was done, upon the ground of mutual abandonment in view of the emphatic allegations of the replication to the contrary effect. This is, however, a question not to be discussed here except so far as it bears upon the question, which we must consider, whether there was a determination of the rights of the parties in Montana upon the full merits.
The case was never set down for determination upon demurrer. The case was never set down for hearing upon bill and answer, nor was it a case where the defendant moved for judgment on all the pleadings. The plaintiff never waived his constitutional right to a trial or his right to introduce proofs, but, on the contrary, insisted upon his rights in that respect. .Issues of fact being joined, it was the funda*180mental right of the plaintiff to introduce his proofs, explaining- the allegations of performance and his proofs controverting the allegations of the answer.
In Martin v. Texas, 200 U. S. 316, 26 Sup. Ct. 338, 50 L. Ed. 497, the right to introduce proofs in support of a material allegation was recognized as an essential right, and it was there said if the court had refused to admit evidence, or if the opportunity to establish the alleged facts had been denied, the judgment would be reversed.
The state law as applied in the Montana case did not accord to the plaintiff “due process of law.” It is said in Howard v. Kentucky, 200 U. S. 164, 173, 26 Sup. Ct. 189, 50 L. Ed. 421, that it may be admitted that the words “due process of law,” as used in the fourteenth amendment, protect fundamental rights, and that the inquiry is, did the state law as applied afford due process as those words are used in the fourteenth amendment? Therefore, under- the circumstances, it is not so much a question here as to what the Montana law and practice is as whether the kind of a trial had in Montana afforded to the plaintiff the opportunities usually accorded to a party under “due process of law” in courts administering justice and establishing rights according to the general course of law and equity. Still, while saying this, I by no means concede that the Montana law is correctly stated in the majority opinion, or thát the Montana Code practice is such as justifies what was done in this case in that state.
The Montana record shows, as will be seen by reference to the statement which precedes the opinion of the Montana Supreme Court, that the case regularly came on for trial in Montana upon the issues raised by the bill and answer, and that the plaintiff offered to introduce proofs in support of his allegations, yet the motion and the order of court, as already pointed out, entirely ignored the issues joined, and denied to the plaintiff -the fundamental right of an opportunity to prove his case, which was taken from the jury and judgment rendered therein against him upon the ground that the complaint in the abstract did not state a cause of action.
It is one thing to hold against a plaintiff upon demurrer where the plaintiff after demurrer elects to stand upon his declaration. That is regular and involves “due process of law.” It is, however, quite another thing to ignore an answer and the replication and to deny the plaintiff all opportunity of explaining and sustaining his allegations of fact by proofs, or even of explaining and sustaining allegations which involve mixed questions of law and fact. That would not be regular and would not be according to a party “due process of law.”
We should assume here that the plaintiff was prepared upon the trial, for which he contended and to which he was entitled under “due process of law,” to offer proofs tending to show that Col. Ingersoll, as alleged, advised about and actively participated in the effective and beneficial compromise, and that the substantial defeat of the terms of the will, as the result of the contest, the trial, and the compromise which secured to the Ingersoll clients greater beneficial results than would the technical defeat which it is contended was contemplated by the original *181contract, was accepted by the Ingersoll clients in lieu of the kind of a defeat perhaps originally intended, and that his evidence would tend to show that it was a result or a defeat, as in effect alleged in the bill before us, upon which Root and Coram had in interviews and correspondence admitted their indebtedness under the contract.
In that part of the contest involving the preparation and trial Col. Ingersoll performed valuable and effective service — service which left the probate of the will at least suspended. Having incurred expense and so far entered upon performance, his rights under the contract were substantive, and he was entitled to an opportunity to continue the contest to defeat the will. The Montana answer contained an allegation, which was denied by the plaintiff, that the favorable compromise was effected by counsel other than Col. Ingersoll. When and where and upon what trial, pray, was this issue determined upon “due process of law,” and upon what process and what trial was it determined that Root and Coram, after part performance and the creation of substantive rights, might compromise and might exercise the right to withdraw from Col. ingersoll the opportunity to perform the contract according to its terms, and that nonfulfillment of the" contract should, under such circumstances, be their defense, which should leave the Ingersoll interests and rights remediless?
The decision of the Montana Supreme Court is grounded upon the idea that duty required Col. Ingersoll to contest, and that the compromise in which he participated created a situation which made performance impossible. In this connection, it is interesting to note that the defendants’ answer alleges that Ingersoll did not participate in the compromise, that the parties and other counsel made the compromise without his help or assistance, and thus, if the defendants’ allegation be true, the defendants themselves, and not Ingersoll, made strict and literal performance impossible.
The decision also proceeds upon the idea of a mutual arrangement between Col. Ingersoll and his clients, a mutual arrangement which, according to the decision, in effect amounted to an abandonment of the contract. Whether there was a mutual arrangement and abandonment was largely a question of fact, upon which the plaintiff took issue and about which the plaintiff was never heard or allowed to produce. his proofs. There was no hint or suggestion in the complaint of an abandonment. The allegations in effect are that the desirable result was reached upon different lines than those contemplated by the contract, and that that was done under an arrangement between the parties.
The very nature of the controversy which involved mixed conditions relating to the question whether there was a substantial defeat of the will; the question of fact whether Col. Ingersoll received $.1,000 in full for his services, and whether the contract was abandoned and rescinded, or whether what was done by way of compromise was under an arrangement between the parties with the idea that it was to be accepted in lieu of literal performance and the technical defeat, perhaps, contemplated by the original contract; the question whether the parties acknowledged indebtedness under the contract and agreed to pay — made it peculiarly a case for issues of fact through an answer4 *182and a replication upon which the plaintiff was entitled to such a trial as would allow the questions of fact to be settled under instructions, and, this being denied, it follows that the “due process of law” contemplated by the Constitution was not accorded to him.
I think it quite clear, and so clear that it needs no extended elaboration, that the Montana court had no right to disregard the issues joined and to foreclose the plaintiff’s rights upon assumptions of fact, and upon assumptions upon mixed questions of law and fact, which were contrary to the allegations of the complaint upon which issue had been joined.
Moreover, the conclusion is irresistible, upon a critical examination, of the reasoning of the Montana Supreme Court, that the court, having denied to the plaintiff the right to be heard upon proofs in support of the allegations of the complaint and in support of his side of the issues raised by the replication, which was a denial of “due process of law,” proceeded to determine the rights of the parties under the influence of the probative force of the answer, though the case was never submitted for hearing on bill and answer. I say this because the reasoning of the Montana court is based upon substantial matter contained in the answer,, matter contrary to the express allegations of the complaint.
The majority opinion here is based upon the assumption that no evidence consistent with the complaint could have changed the result in Montana, and upon the further assumption that, if the fee was contingent, there was no cause of action. The fundamental error in the Montana judgment, and in the majority opinion here as well, resides in these assumptions in respect to controverted questions involving law and fact, and in deciding against the plaintiff without hearing his evidence. It is plainly deciding against a party without hearing him. Iiow was it possible for the Montana court, without hearing the proofs, to rightfully pass upon the controverted question of waiver of contract, or upon the controverted questions relating to the waiver of the contingency and to the agreement to pay, and how is it possible for this court to rightfully say that no evidence would have changed the result in Montana?
As has already been observed, the subject-matter of the controversy was such that the rights of the parties could not fairly or intelligently be ultimately concluded by a court except upon pleadings and proofs, and upon such a trial as would give the parties an opportunity to be heard, a trial conducted under such conditions as would allow the disputed questions of fact to be determined by the court upon evidence, or by a jury upon evidence under proper instructions to that end. This is so, because under the changed conditions resulting from the admitted departure from the contract in respect to literal performance, and under the issues Joined in respect to the circumstances which varied the kind of performance, the situation became such that the rights of the parties could not be ascertained and established, under reasonable rules of interpretation, by taking the contract by its four corners. From the very nature of the resultant situation the plaintiff was entitled under due process and procedure to introduce his explanatory proofs.
*183It results, therefore, in my view, that the Montana judgment was not based upon such á trial as entitles it to be accepted as conclusive of the merits, and as one which settles the ultimate rights of the parties and becomes a bar to proceedings involving the merits in another jurisdiction.
Judge Putnam, in an elaborate opinion in the Circuit Court (Ingersoll V. Coram [C. C.] 127 Fed. 418; Id., 136 Fed. 689), decided the question of res judicata against the defendants upon an application of the rule that an ancillary administrator in one jurisdiction is not in privity with an ancillary administrator in another jurisdiction, and upon the ground that the parties in this case are not the same as the parties in the Montana case. Holding the view, as 1 do, that the Montana case was never determined upon its full merits, and that the plaintiff was denied the constitutional right of “due process of law,” I have no occasion to discuss that position, and therefore leave that phase of the case upon the reasoning of Judge Putnam and the authorities cited in his opinion in the Circuit Court.
Moreover, and entirely aside from the questions discussed in the majority opinion, there is another phase of the situation which should be taken into consideration. Upon this phase of the case I urge, as strenuously as I properly may, that the Circuit Court should not be directed to dismiss the bill in the equitable proceeding pending here, and it is upon this ground. The Montana Supreme Court, as will be seen by referring to its opinion, only undertook to determine the rights of the parties under the special contract in respect to the contingent fee, expressly leaving open and unadjudicated the quantum meruit rights of the plaintiff to recover for services other than those provided for by the contract. It is clear that the. Montana court intended to leave open the question as to the meritorious service, which, though actually performed, did not, according to the views of that court, accomplish the literal defeat of the will; that is to say, that what was done did not amount to the particular performance which in its view was contemplated by the special contract. The services thus referred to were at least substantial. They were services which were potential in staying a verdict sustaining the will, thereby paving the way for the favorable compromises (in which it is alleged Col. Ingersoll participated and about which the issue of fact raised by the pleadings has never been determined), through which, as is claimed, the Ing-ersoll clients, these defendants, received something like $5,500,000 in money and real estate titles — assets admitted to be in excess of their shares and which were apparently, in fact vastly, in excess — which they would not have received if the will had not been contested and had been probated in its original form and according to its terms. Therefore, if it shall be determined, upon the theory of the majority opinion, that the rights of the parties in respect to the contingent fee under the contract have been concluded by the Montana courts, still the questions relating to the quantum meruit are fairly open, and the plaintiff in this equitable proceeding should be allowed to recast her bill and have the question as to what she ought to recover upon quantum meruit and all questions of lien ascertained and established. That, *184at all events, is something which has never been actually determined or adjudicated here or elsewhere. No one pretends that it has. Manifestly, as before pointed out,1 the reference of the Montana court was to services for which the plaintiff could not, in the view of that court, recover under the contract. Accepting the theory of that court for the purpose of stating the question, the reference was to a service for which Col. Ingersoll, according to the plaintiff’s allegation, was never compensated, and this allegation holds for purposes of equitable considerations in respect to an amendment without regard to the ques-. tion whether the services were under or aside from the contract. If the plaintiff, under the operation of the rule of fses judicata, must accept as final the theory of the Montana court that recovery of the contingent fee cannot be had under the contract, then, as an equitable alternative in this equitable proceeding to recover upon a contract and to establish a lien, she should be allowed to turn her bill into an equitable proceeding to recover upon quantum meruit what is right and just for the manifestly important service for which, according to the allegations and the theory of the plaintiff, compensation has never in fact been made. If it shall be determined here that the question of .the right to recover under the contract is foreclosed by the Montana judgment, and if, in that event, opportunity is not given in this proceeding to recast the bill and have the value of the professional services actually rendered, ascertained and established, the plaintiff will go hence with an important and at least equitable claim defeated upon the somewhat technical, and under the circumstances inequitable, ground of nonfulfillment of a special contract, and the underlying equitable question as to the value of the services actually performed in respect to the subject-matter of the contract will be wholly unconsidered, and as a result the real value of the alleged meritorious services, in preparation for the contest, upon the trial and in connection with the compromises, through which the enormous financial returns were realized by these defendants, must forever remain untold and unrewarded,'and thus the plaintiff will have lost a well-known and familiar equitable right founded upon the principle that, if a laborer labors well and fails to perform the strict letter of the bond, he may still have what his labor merits.
Under all the circumstances, if the Circuit Court is peremptorily directed to dismiss the bill and the plaintiff is turned away under the rule of res judicata drastically founded upon the Montana situation, where the court only pretended to deal with the right of the plaintiff to recover the contingent fee under the special contract, she will not have been accorded the opportunities in this court which modern practice and procedure usually extend to a plaintiff whose case manifestly involves a right, and who, through inadvertence or oversight, has failed in the first instance to place the case upon the right ground. It is for this reason, if the Circuit Court is reversed upon the ground stated in the majority opinion, that the plaintiff should have an opportunity in that court to move to amend her bill.