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George W. RUCKMAN, Appt., | cruing interest and costs. Default was made

in payment of the note, and the bank elected UNION RAILWAY et al., Respts.

and undertook to foreclose its lien upon the

bonds in the manner provided in the agree. (......Or......)

ment, whereupon the defendant the Union 1. A decree for defendant in an action chased the mortgaged property after the

Street Railway Company, which had purto compel the surrender of corporate bonds to a corporation which had

bonds had been transferred to the bank, ceeded to the rights of the one which issued brought a suit in equity to compel the bank them, on the ground that they had been to surrender up such bonds for cancelation, wrongfuliy transferred by one in whose

on the ground that they were issued in trust hands they had been placed for negotiation to Shelton, in order that he might negotiate for the benefit of the corporation, will estop them to intending purchasers for the use the corporation plaintiff, in a subsequent suit to foreclose the mortgage by which the and benefit of the company, and had been bonds are secured, from setting up that they delivered to the bank by Shelton for safehad been paid, or that the present plaintiff's keeping until so sold and disposed of; that grantor was present when the corporation no sale had been made, and therefore, in that issued the bonds transferred its property to the present defendant, and knew that equity, they belonged to the plaintiff, as the the latter understood that it was acquiring purchaser of the property covered by the the property free from the lien of the mort. mortgage given to secure the payment theregage, since these were matters which should of. Issue was joined, and the suit tried and have been tried in the former suit.

determined on the merits, resulting in a de2. A decree denying the right of a cor

cree in favor of the defendants. Union poration to have bonds secured by mortgage property

Strcel R. Co. v. First Nat. Bank, 42 Or. 606, dered by a pledgee who was seeking 72 Pac. 586, 73 Pac. 341. The bank thereto foreclose its lien on the bonds against the after foreclosed its lien upon the bonds, and pledgeor, on the ground that the bouds had sold them to the present plaintiff, who been wrongfully put upon the market and brings this suit to enforce the mortgage had never been rightfully negotiated, is no bar to a subsequent suit against the corpora

given by the railway company to secure the tion to foreclose the mortgage by which they payment thereof. For a defense to the presare secured, since the latter question could ent suit, the defendants allege, in brief, (1) not have been determined in the former ac- that the bonds were paid in full to the bank tion.

out of the money paid by the promoters of

the Union Street Railway Company for the (December 12, 1904.)

mortgaged property; and (2) that W. T.

, the Circuit Court for Union County in ent at, and participated in, the negotiations favor of defendants in an action brought to for the purchase, and knew that such pro

moters understood and believed at the time foreclose a mortgage. Reversed.

that such purchase would be free of all liens Statement by Bean, J.:

and encumbrances, notwithstanding which In January, 1893, the Union Railway he failed and neglected to disclose to them Company issued and delivered to J. W. Shel. the lien of the bank on the four bonds in ton twenty bonds, of the par value of $1,000 suit, but permitted them to pay over the each, secured by mortgage on its property. money and take a conveyance of the propShelton sold four of the bonds, and they erty in ignorance thereof, and therefore the came into the hands of F. L. Richmond and bank and its successor with knowledge W. T. Wright. Wright and Richmond bor should now be estopped from asserting that rowed $1,500 of the First National Bank of such bonds are a lien upon the property. The Union on their promissory note, and depos- plaintiff pleaded the decree in the former ited the four bonds as collateral security suit as a bar, and averred that all the mattherefor, under an agreement that in case

ters and things now alleged as a defense to the note was not paid at maturity the bank the present suit were known to the defendmight, at its option as to time and manner, ants at the time the former suit was comand without notice to the pledgeors, sell the menced, and should have been alleged therebonds at public or private sale to pay the in as a ground of recovery. The court below amount due on the note, together with ac

held the former decree not a bar or estoppel,

found the facts in favor of the defendants, Note.--For a collection of authorities upon and dismissed plaintiff's complaint. the doctrine of res judicata, see notes to Wiese v. San Francisco Musical Fund Soc. 7 L. R. A.

Messrs. C. E. Cochran and Crawford 577, and Shores v. Hooper, 11 L. R. A. 308, and also the case of Draper v. Medlock, which im- & Crawford, for appellant: mediately follows this, and which takes a some

The terms of the contract of security gov. what different view of the question involved. ern the parties, and it was the duty of the First National Bank of Union to sell there 177 N. W. 1041; Stone v. United States, 12 under.

C. C. A. 451, 29 U. S. App. 32, 64 Fed. 667. Colebrooke, Collateral Securities, § 118; Messrs. Leroy Lomax and C. H. Finn, Foote v. Utah Commercial & Sav. Bank, 17 for respondents: Utah, 283, 54 Pac. 104; Union Trust Co. v.

One who advises another to purchase propRigdon, 93 11. 458; Griggs v. Day, 136 N. erty, without mentioning a lien which he Y. 152, 18 L. R. A. 120, 32 Am. St. Rep. claims thereon, is estopped from asserting it 704, 32 N. E. 612; Waring v. Gaskill, 95 Ga. after the negotiations are completed and the 731, 22 S. E. 659.

purchase price paid. Having followed the terms of the contract Alabama G. S. R. Co. v. South & North strictly, the appellant, as purchaser of the Ala. R. Co. 84 Ala. 570, 5 Am. St. Rep. 401, bonds, acquired a valid title to the property 3 So. 286; Jones v. Gates, 24 Or. 411, 33 pledged, -all the property of the pledgeors Pac. 989: Titus v. Morse, 40 Me. 348, 63 and pledgee therein.

Am. Dec. 665; Copeland v. Copeland, 28 Me. 22 Am. & Eng. Enc. Law, 2d ed. p. 893, 1 525. 4; Halliday v. Bank of Stewart County, 112 A former judgment or decree can operate Ga. 461, 37 S. E. 721; Rozet v. McClellan, as a bar or estoppel only as to matters in is48 Ill. 345, 95 Am. Dec. 551; Potter v. sue which were actually litigated or deterThompson, 10 R. I. 1.

mined. A judgment of a court of competent juris- Gentry v. Pacific Live Stock Co. (Or.) 77 diction, delivered upon the merits of the Pac. 115; La Follett v. Mitchell, 42 Or. cause, is final and conclusive between the 46.5, 95 Am. St. Rep. 780, 69 Pac. 916; parties in a subsequent action or suit upon Cromwell v. Sac County, 94 U. S. 351, 24 L. the same cause, not only as to all matters ed. 195. actually litigated and determined in the The essential qualities of res judicata former action, but also as to every ground are:

“There must be a suit, actor, reus, of recovery or defense which might have juder, and the judgment must be final; that been presented and determined therein. is, it must settle the matter which it pur.

24 Am. & Eng. Enc. Law, p. 781, note 3 ; ports to conclude.” Barrett v. Failing, 8 Or. 152; Neil v. Tol.

Wells, Res Adjudicata, p. 8. man, 12 Or. 289, 7 Pac. 103: Belle v. Brown, 37 Or. 592, 61 Pac, 1024; White v. Ladd, 41

Bean, J., delivered the opinion of the

court: Or. 332, 93 Am. St. Rep. 732, 68 Pac. 739; 2 Black, Judgm. § 731 ; Cromwell v. Sac Coun

Upon the record, we have substantially

this state of facts: ty, 94 U. S. 351, 24 L. ed. 195; Lake County

A party commenced a v. Platt, 25 C. C. A. 87, 49 U. S. App. 216, suit against another to compel the surren79 Fed. 571; Holt County v. National L. Ins. dering up for cancelation of negotiable in

struments on the ground that they were Co. 25 C. C. A. 469, 49 U. S. App. 376, 80 Fed. 689; Stewart v. Stebbins, 30 Miss. 66: the suit tried on the merits, and a decree

never issued for value. Issue was joined, Burford v. K'crsey, 48 Miss. 642; Patterson. rendered in favor of the defendant. At the v. Wold, 33 Fed. 793 ; Farwell v. Brown, 35 time the suit was commenced, the plaintiff Fed. 811.

therein had two other grounds upon which The issues in linion Strcet R. Co. v. First he might have recovered, neither of which, Vat. Bank, 42 Or. 606, 72 Pac. 586, 73 Pac. however, he set up or alleged in the com341, were: First. Plaintiff's right to have the bonds and mortgage securing the same the former suit, or the party who had suc

plaint. Thereafter, when the defendant in surrendered up and canceled, and the de- ceeded to his interest with knowledge, fendant's corresponding primary duty so to brought an action to enforce the payment do; and second, the delict or wrongful act or of the instruments, and to foreclose the lien omission of defendant by which primary given as security therefor, the defendant right and duty have been violated.

therein and the plaintiff in the former suit Pom. Rem. & Rem. Rights, [ 3, c. 3, $ pleads as a defense the two matters which 518, also § 519; Patterson v. Wold, 33 Fed. he might have relied upon for relief in his 793.

first suit. The question for decision is The issues in the case at bar presented by whether he is estopped by the former dethe defendants are identical with those pre- cree against him from pleading such desented and tried in the former case, for the fenses. reason that the same evidence supports both It is settled law in this state, as elsethe present defense and the former suit. where, that a judgment or decree rendered

Freeman, Judgm. $ 259; Hahn v. Miller, upon the merits is a final and conclusive de68 Iowa, 745, 28 N. W. 51; Hawk v. Evans, termination of the rights of the parties, and 76 lowa, 593, 14 Am. St. Rep. 247, 41 N. a bar to a subsequent proceeding between W. 368; Prouty v. Matheson, 107 Iowa, 259, | them upon tlie same claim or cause of suit, not only as to the matter actually deter- , amount of $1,200, and that the land was mined, but as to every other matter which conveyed to him in payment of this debt, the parties might have litigated and had de and was a fraudulent preference under the cided as incident to or essentially connected statute, and therefore void. The court (Mr. therewith, either as a matter of claim or de Justice Brewer presiding) held that the first fense (Neil v. Tolmian, 12 Or. 289, 7 Pac. judgment was a bar to the second, although 103; Morrill v. Morrill, 20 Or. 96, 11 L. R. the grounds of recovery were different. After A. 155, 23 Am. St. Rep. 95, 25 Pac. 362; quoting Mr. Pomeroy's analysis of the eleBelle v. Brown, 37 Or. 588, 61 Pac. 1024; ments which constitute "a cause of action” White v. Ladd, 41 Or. 324, 93 Am. St. Rep. (Pom. Rem. & Rem. Rights, § 519), he 732, 68 Pac. 739) ; but that when the action says: “Now, what is the plaintiff's primary is upon a different claim or demand the for right, as alleged in these cases? Obviously. mer judgment can only operate as a bar or in each the same,—the right to have the an estoppel as against matters actually liti | land; and the defendant's corresponding gated or questions directly in issue in the primary duty is to let him have the land; former action (Barrett v. Failing, 8 Or. and the defendant's delict or wrongful act 152; Applegate v. Dowell, 15 Or. 513, 16 is the failure to let him have the land. Pac. 651; LaFollett v. Mitchell, 42 Or. 465. These exist in each case, and in each case 95 Am. St. Rep. 780, 69 Pac. 916; Caseday alike. It is true, the basis of complainant's v. Lindstrom, 44 Or. 309, 75 Pac. 222; Gent primary right is, as alleged, different in one ry v. Pacific Live Stock Co. (Or.) 77 Pac. case from that in the other, but this is 115). This distinction should always be mere difference, in the language of the Su. kept in mind in considering the effect of a preme Court, in the grounds of recovery.' foriner judgment or decree. If the second The mere fact that different testimony action or defense is upon the same claim or would be necessary to sustain the different demand, the former judgment is a bar, not allegations in the two bills does not of itonly as to matters actually determined, but self necessarily make two distinct causes of such as could have been litigated; but, if it action. Take this illustration: Suppose a is upon another claim or demand, the for- party bring suit to recover possession of mer judgment is not a bar, except as to real estate, and alleges in his complaint that questions actually determined or directly in he is owner by virtue of a patent from the issue. This case comes within the principle government. After a judgment against him. first stated. It is a suit between the same would he be permitted to maintain a second parties and upon the same claim or demand action, alleging that he was the owner by viras the former suit. The claim or demand tue of certain tax proceedings or by virtue of in the first suit brought by the defendant a judicial sale? Yet different testimony Union Street Railway against the bank was

would be required to sustain his allegations the validity of the bonds, and the right of in the two actions. In both of such actions the bank to enforce them as against it. This plaintiff's primary right—that of possession is the same identical question presented, based on ownership-would be the same, the and the only one for adjudication, in the "only difference being in the grounds of represent suit. It was determined in the for-covery. All the grounds of recovery, all the mer suit, and the decree therein is a bar to basis of plaintiff's title, must be presented further litigation thereof between the same

in the first action, or they are lost to him parties, although the plaintiff therein did forever, exactly the same as when a party not allege or urge all the reasons entitling fenses, pleads only one,-the balance are as

sued

upon a note, and having several deit to relief as demanded. The law requires though they never existed. The party who a party to try his whole suit or action at has his day in court must make his entire one time, and he cannot separate his claim or divide his grounds of recovery or defense. defense in different actions on different

showing. He cannot support a claim or a The application of this principle is illus- grounds." The recent case of United States trated by two Federal cases. In Patterson

v. California &0. Land Co. 192 U. S. 355, 48 v. Wold, 33 Fed. 791, the plaintiff, a re- L. ed. 476, 24 Sup. Ct. Rep. 266, was a suit ceiver of an insolvent estate, brought a suit by the government for the purpose of having to set aside a deed from the insolvent to his

a certain patent of land declared void on son, and a mortgage given by the son to the ground that the land was in Klamath certain creditors of the insolvent; alleging Indian reservation, and therefore not within the deed to be without consideration, and the provisions of the grant to the company. the mortgage a fraudulent preference. Judg. One plea of the land company was that the ment rendered for the defendants. plaintiff had filed an earlier bill against it Thereafter the plaintiff brought another to avoid the same patent, that it had pleadsuit to avoid the same deed, alleging that ed matter showing the patent to be valid. the son was a creditor of the father to the and that it was an innocent purchaser, and

was

that a final decree on the merits had been missed, was barred as to all by the decree." rendered in its favor. The circuit court These two cases and the principles applied held the plea to be bad, but upon an appeal are decisive of the present suit. The claim the Supreme Court reversed the case, hold- or demand of the defendant Union Street ing that the former decree was a bar, al- Railway Company in the suit brought by it though the grounds of recovery were essen was that the bank had no interest in the tially different, and it was urged that the bonds, and they should be surrendered up plaintiff was suing in a different capacity for cancelation. The reasons why this from that in which it brought the first suit. should be done were not the cause of action The court, by Mr. Justice Holmes, said: “On or primary subject of incuiry. There may the general principles of our law, it is toler. have been many reasons why the bonds ably plain that the decree in the suit, under should have been surrendered up and canthe foregoing statute, would be a bar. The celed, and why the bank could not enforce parties, the subject matter, and the relief them as against the property of the railway sought all were the same.

Here the company; but, if the plaintiff in that suit plaintiff is the same person that brought was content to rely upon only one of such the former bill, whatever the difference of reasons as a ground for recovery, the others the interest intended to be asserted.

are lost to it as completely as if they never The best that can be said, apart from the act existed. just quoted, to distinguish the two suits, is The position that the decree in the forthat now the United States puts forward a mer suit is a bar to the right of the plain. new ground for its prayer. Formerly it tiff to foreclose the mortgage given to sesought to avoid the patents by way of for- cure the payment of the bonds is untenable, feiture. Now it seeks the same conclusion because that matter was not germane to or by a different means; that is to say, by evi- connected with the cause of action or suit, dence that the lands originally were except and did not in any way affect the merits of ed from the grant. But in this as in the the controversy then before the court for former suit it seeks to establish its own determination. The bank was not the owner title to the fee. It may be the law in Scot of the bonds, but held them as collateral se. land that a judgment is not a bar to a sec curity for the debt of persons not parties to ond attempt to reach the same result by a the suit. It was bound by the terms of the different medium concludendi. . . But contract between it and the pledgeors, and the whole tendency of our decisions is to re no decree of foreclosure could have been quire a plaintiff to try his whole cause of made in the former suit, because the proper action and his whole case at one time. He parties were not before the court. Union cannot even split up his claim ... and Street R. Co. v. First Nat. Bank, 42 Or. 606, a fortiori he cannot divide the grounds of re- 72 Pac. 586, 73 Pac. 341. covery. Unless the statute of 1889 put the The decree of the court below will, there. former suit upon a peculiar footing, the fore, be rerersed, and one entered here as United States was bound then to bring for prayed for in the complaint. ward all the grounds it had for declaring the patents void, and, when the bill was dis Petition for rehearing overruled.

GEORGIA SUPREME COURT.

William W. DRAPER et al., Exrs., etc.,

Plffs. in Err.,

v.

sustain the plea by showing that the particular matter in controversy was necessarily or actually determined in the former litigation : and if it appear, from the record introduced in support of the plea, that several issues were involved in such litigation, and the verdict and judgment do not clearly show that this particular issue was then decided, before such plea can be sustained this uncertainty must be removed by extrinsic evidence showing that such matter was then decided in accordance with the contention of the party

R. O. MEDLOCK.

(...... Ga......)

*1. Where a judgment is pleaded as an

estoppel, the burden is upon the party relying upon the estoppel to

relying upon the plea. 2. Evidence o IYered in opposition to

such plea, which shows that in the former litigation the parties alleged to be es. topped

the jud ment therein sought to so amend their pleading as to have the question in controversy in the subsequent litigation

*Headnotes by FISH, P. J.

Note.-As to estoppel by julgment. See also In this series, notes to Fowler v. Bowery Sav. Bank, 4 L. R. A., on page 148, and Morrill v. Morrill, 11 L. R. A. 155.

See, upon the doctrine of res judicata generally, the proceeding case of Ruckman v. Union Railway, and note thereto.

as

determined, and that the court disallowed between the same parties is not conclusive such amendment, is admissible.

in a subsequent suit between them on a dif

ferent cause of action, except as to issues (March 4, 1905.)

actually made and determined in the forRROR to the Superior Court for Gwin. mer litigation. Accordingly, where two ERI

nett County to review a judgment in notes were given upon a consideration arisfavor of defendant in an action brought to ing in one and the same transaction, a judg. enforce defendant's liability as indorser of ment rendered in favor of the payee against a promissory note. Reversed.

the maker upon one of such notes did not The case sufficiently appears in the opin- operate to estop the latter from setting up jon.

in a subsequent action brought by the forMessrs. N. L. Hutchins and C. H. mer against him on the other note a defense Brand for plaintiffs in error.

which was not in issue when the judgment Messrs. T. M. Peeples, N. L. Hutchins,

was rendered.” If two notes given by the Jr., and Atkinson & Barn for defendant

same maker to the same payee upon a conin error.

sideration arising in one and the same

transaction, when sued upon separately, Fish, P. J., delivered the opinion of the represent different causes of action, then it court:

is perfectly obvious that the suit against The plea of res judicata in the present Medlock in the city court of Lawrenceville case is more properly a plea of estoppel by upon the three promissory notes payable to judgment, as the decree relied on in support the order of Moore, Marsh, & Co., signed by of the plea was not rendered in a case in him as maker, was upon a different cause volving the same cause of action. Medlock's of action from that involved in the present equitable action against Moore, Marsh, & suit in the superior court of Gwinnett Co., in which this decree was rendered, was county against him upon his indorsements brought for the purpose of setting up his of two notes payable to his own order, and defenses to the suit which they had insti- executed by Zachry and Richmond tuted against him in the city court of makers. Even if, in comparing the causes Lawrenceville upon the three promissory of action, we look merely to the present notes which he individually had executed to case, and to whatever cause of action Medthem, and obtaining certain equitable relief. lock may be said to have had in his equisuch as the cancelation of a security deed, table action against Moore, Marsh, & Co., igetc., which he could not obtain in the city noring the fact that that was merely in the court. This action by Medlock was not an nature of an equitable answer to their suit independent suit, but was merely in the na. against him, it seems hardly necessary to ture of an equitable answer to the suit say that his cause of action in that proceedagainst him in the city court. It is evident ing was different from the cause of action that the cause of action in the suit brought of the plaintiffs in the present case against by Moore, Marslı, & Co. against Medlock in him. Whatever cause of action he had and the city court, which was tried under his set up then is obliged to be different and equitable action in the superior court, was distinct from the cause of action set up entirely different and distinct from the against him now. cause of action in the present case. In the As “a judgment rendered in litigation besuit in the city court the action was based tween the same parties is not conclusive in upon three promissory notes given by Med- a subsequent suit between them on a differlock to Moore, Marsh, & Co., payable to ent cause of action, except as to issues actheir order, and signed by him alone as tually made and determined in the former maker. In the case in hand the suit is litigation,” the question arises whether, in based upon Medlock's indorsements of two the

under consideration, Medlock promissory notes, each payable to his own showed that in the former litigation, upon order, signed by Zachry and Richmond as the result of which he relied to support his makers, indorsed in blank by Medlock, and plea of res judicata, the issue as to his liatransferred to Moore, Marsh, & Co. It is bility to Moore, Marsh, & Co. upon his inclear that the two suits were upon different dorsements of the two Zachry and Richinstruments or obligations, and the liability mond notes now sued on was both made and upon which the plaintiff's in the suit in the determined. For him to sustain his defense city court sought to recover against Med- of estoppel by judgment, it was necessary lock was different from that upon which the for him to show not only that this issue was plaintiff's in the present case seek to recover raised in the former litigation, but also that against him. Hill v. Freeman, 7 Ga. 211. it was then determined in his favor. The 2:20: Worth v. Carmichael, 114 Ga. 699, 40 defenses which he then set up were contraS. E. 797. In the case last cited it was dictory and inconsistent. One of them was held: “A judgment rendered in litigation that the two notes of Zachry and Richmond,

case

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