Bolton Mines Co. v. Stokes

McSherry, J.,

delivered the opinion of the Court.

In Dеcember, 1889, the Bolton Mines Company contracted to sell to the Waring Manufacturing Company a quantity of fertilizers. The sale was made, the goods were delivered and the purchaser gave its promissory note to the vendor on March the fifteenth, 1890, for the price agreed on, payable in four months after its date. On the twenty-third day of May, 1890, before the maturity of this note, the Waring Manufacturing Company executed to Hanson H. Haines and Francis Stokes, trustees, a deed of trust for the benefit of its creditors, and the trustees filed their bond in Cecil County on May the thirty-first, and in Baltimore City on June the eleventh, 1890. On June the ninth, of the same year, the Bolton Mines Company sued out a writ of replevin, and under it the sheriff seized and took from the possession of the trustees and turned over to the Bolton Company the same fertilizers that had been sold by it to the Waring Company under the contract of Decernber, 1889, and five days afterwards the Bolton Company tendered to the trustees the promissory note given for the purchase price, but the trustees declined to receive it. After the Bolton Mines Company got possession of the fertilizers under the writ of replevin, it discontinued or dismissed the replevin suit without trial, and thereafter, on April the tenth, 1891, the trustees instituted suit in the Superior Court of Baltimore City against the surety of the Bolton Mines Company on the replevin bond which had been given by it; and that suit resulted in a judgment in favor of the trustees for the penalty of the replevin bond, to be released on the payment of the sum of four thousand four hundred and sixty-four dollars and seventy-two cents, the value of the replevied fertilizers at the datе of their seizure under the writ of replevin, together with interest to the date of the verdict. Part of this judgment has been paid and the residue is to await the result of this proceeding, but may be treated as actually paid. The Bolton Mines Company then filed in the Waring Company’s trust estate proceeding the note of the Waring Company held by the Bolton Company, and when the auditor made his report distributing the cash assets in the hands of the trustees amongst the creditors of the Waring Company, he allowed to the Bolton Mines Company its ratable share or percentage upon the note of March the fifteenth. To this allowance Haines and Stokes, who are creditors as well as trustees, filed objections. The ground upon which these trustees in their character as creditors object to this allowance is, that the Bolton Mines Company having by replevying the fertilizers for the payment of which the note was given, disaffirmed the sale and having treated the contract of purchase as rescinded, cannot, after a judgment has been obtained against it on the replevin bond for the value of the identical articles replevied, reaffirm the sale and claim to participatе in a distribution of the proceeds of the debtor’s assets. The Court below so decided, and hence this appeal.

Does the fact, then, that the Bolton Mines Company sued out a writ of replevin and seized thereunder the same fertilizers which it had previously sold to the Waring Company preclude the vendor, the Bolton Company, from asserting a claim to a proportion of the creditor’s assets, if the vendor abandoned the replevin suit without triаl, and then paid to the vendee’s trustees the full value of the replevied articles ? This is the single question which the pending appeal presents.

The situation is a peculiar one. The Bolton Mines Company and the trustees are precisely in the position both would have occupied had not the replevin been sued out, for the Bolton Mines Company still has the note of the vendee; the trustees have in money the value of the fertilizers and the note is unpaid. This being so, the Bolton Company asks a Court of Equity to allow to it from the assets of the debtor — in which assets are included the values of the creditor’s fertilizers — a percentage equal to that distributed to the debtor’s other general creditors; but the Court, by its order, refuses this request and excludes the Bolton Company from participating in the distribution of even the very funds which have been realized from the identical property that the Bolton Company sold and delivered to its insolvent debtor, and for which the vendor has received no payment whatever. Can that order be maintained ?

It is not pretended that it can. be supported upon any other theory or ground than this : That the creditor having by the replevin suit elected to trеat the original contract of sale as rescinded, cannot afterwards assert the validity ojf that same contract and claim to be paid for the goods furnished under it; that having two alternative remedies and having selected one of them and having failed to prosecute it to a final judgment, it cannot resort to the other.

Thus, abstractly put, the proposition appears far morе reasonable and just than when it is practically applied. The actual result of its application to the facts of this case is, that the Bolton Company loses the full value of the fértilizers which it sold to the insolvent vendee, and is, besides, entirely cut out from sharing in the vendee’s assets. The vendor, the Bolton Company, therefore, gets nothing, and the other creditors get the value of ‍‌​​​‌​​‌‌​​‌‌‌‌‌‌‌​‌​​​‌‌​‌‌​‌​​​​‌​‌​​​‌​​‌​‌​​‍the Bolton Cоmpany’s fertilizers. It must be an exceedingly rigid and stringent rule of law that will constrain a Court of Equity to work out such a singular and inequitable result. Is there such a rule as that ?

It cannot be denied that “ the law is adverse to multiplying suits ; and if a party has a choice between two actions upon the same demand, and he selects one, which is decided by a competent tribunal, either for or against him, as a general rule, he will not be permitted to resort to the other.” Beall v. Pearce, Admr., 12 Md. 366; Walsh and McKaig v. C. and O. Can. Co., 59 Md. 427. And so in Edes v. Garey and Lanahan, 46 Md. 24, where Carson was both executor and trustee under a will, and as executоr transferred certain funds to himself as trustee, and to secure these funds executed a deed to himself as trustee, conveying certain lots in Baltimore City, but failed to place the conveyance on record. After his death a creditor’s bill was filed and these lots were sold. The parties for whose benefit the unrecorded deed was executed claimed the proceeds of the sаles of the lots conveyed thereby ; and these proceeds were allowed to them. They afterwards filed a bill in equity against the sureties on Carson’s bond as executor, but this Court held, “ that common sense and common justice require that, having claimed and having received the entire proceeds from the sale of the property conveyed by the unrecorded deed upon the exрress ground that it was executed by Carson to secure the complainants, on account of the money belonging to them, and which he held as trustee under the will, they should not be permitted to deny those facts in a suit brought against the sureties on the administration bond.” And so in the still more recent case of Fisher et al. v. Boyce et al., 81 Md. 46, it appeared that the will of James Boyce was duly admitted to probate by the Orphans’ Court of Bаltimore County; that thereupon the executors filed a bill in equity against all the parties interested in the estate of the decedent, asking the Court to construe the will and to assume jurisdiction over the administration and settlement of the entire estate. This bill was answered by all parties in interest, including those who subsequently sought to caveat the will. In those answers the defendants (two of whom were the same persons who after-wards assailed the will by caveat), unequivocally admitted the due execution, publication and probate of the will. Later on the Circuit Court, by its decretal order, assumed jurisdiction of the whole estate and of its administration. Afterwards one of the defendants filed a petition in the equity case, claiming that she was entitled under the will to certain income, and praying an allowance tinder the will for her maintenance pending the settlement of the estate. This petition was answеred, and both petition and answer were heard upon proof adduced, and finally the petition was dismissed by the Court. Two years later, two ‍‌​​​‌​​‌‌​​‌‌‌‌‌‌‌​‌​​​‌‌​‌‌​‌​​​​‌​‌​​​‌​​‌​‌​​‍of the defendants in the equity proceeding filed in the Orphans’ Court a caveat to a part of the will, and upon appeal this Court held they were estopped to question its validity. They had taken a beneficial interest under the will, whose validity they formally and solemnly asserted, and they were thereafter prohibited from setting up any adverse right, which, if successfully asserted, would have defeated the full operation of the instrument. And so in Keedy v. Long, 71 Md. 385, it was held that where a person had two alternative remedies open to him, and proceeded upon one to a final judgment, he would be precluded from resorting to the other one afterwards. And to the same effect is Bach and Son v. Olmstead, 78 Md. 132.

It will be observed and must be borne in mind that- in all these and similar cases, it was not the mere institution of a suit which was abandoned before a final judgment had been reached, that operated to' estop the prosecution of a subsequent suit between the same parties and founded on the same cause of action, but that it was the selection by the plaintiff of one of two remedies that were open to him, and a decision thereon by a competent tribunal that precluded a resort to the other inconsistent remedy. The obvious principle which underlies this class of cases, must therefore be, that when a party has deliberately selected his form of action and has pursued it to a final judgment, and whether that judgment be for or against him is wholly immaterial, he shall not be at liberty to again vex the same defendant with anothеr suit in a different form of action for the identical demand involved in and passed upon by the antecedent litigation. Where the remedies are alternative and not cumulative, his choice of the one and his pursuit of it to a final judgment will exclude the other or opposite remedy; and having thus repudiated the latter, he cannot afterwards ignore the judgment actually rendered, change his рosition and adopt the remedy he had repudiated and repudiate the one he had adopted. Upon the plainest principles of public policy he would be absolutely estopped to do this, because “ a man who obtains or defeats a judgment by pleading or representing an act in one aspect, will be precluded from giving it a different and inconsistent character in a subsequent suit upon the same subject.” McQueen's Appeal, 104 Pa. St. 595. It is an inflexible and invariable rule that when the cause of action is substantially the same, and is or might be sustained by the same evidence, no change in the form of the suit or of the pleadings shall avail to withdraw a matter, which has once been judicially determined, from the estoppel of the adjudication. Consequently a judgment in one suit will be conclusive in еvery other where the cause of action is substantially identical, notwithstanding a change in the form in which the action is brought. But for this defense to be availing there must have been a judgment; for a discontinuance of the suit before judgment will create no such estoppel. It has been established both in this country and in England, that whenever an act is done or a statement is made by a party which cannot be сontravened or controverted without fraud on his part and injury to others whose conduct has been influenced by the act or admission, the character of an estoppel will attach to what would otherwise be mere matter of evidence, and it will become binding, ‍‌​​​‌​​‌‌​​‌‌‌‌‌‌‌​‌​​​‌‌​‌‌​‌​​​​‌​‌​​​‌​​‌​‌​​‍even in opposition to proof of a contrary nature. But it is perfectly obvious that the case at bar does not belong to this class of estoppels, for the change in the character of the claim by the appellant has resulted in no fraud or injury. The case of Farwell v. Myers, 59 Mich. 179; S. C., 25 Am. L. Reg. 243, and the case of Washburn v. Great West. Ins. Co., 114 Mass. 175, both cited by the appellee, sustain our conclusions.

In the Michigan case, the claimants sold to the defendant goods to the value of. ten thousand dollars. The defendant a few days afterwards executed a deed of trust for the benefit of his creditors, and the vendors sued out a writ of reрlevin for the goods so sold to the insolvent. Under the writ a portion of these goods valued at about four thousand dollars, was recovered, but the rest could not be found. The vendors thus got possession of and retained the part of the goods which they had replevied. They then filed their account against the insolvent estate for ten thousand dollars, less four thousand dollars, the value of the goods replevied. The Court held that having elected by the replevin suit, 1which went to trial and to final judgment, to rescind the contract, they were bound by that election, and could not in the distribution of the insolvent’s estate treat the contract as in force after having proceeded.in the replevin suit upon the assumption that it had been rescinded. The Court held that by rescinding the sale and prosecuting to judgment an action of replevin for the goods sold, on the theory that the fraud of the assignor had vitiated the contract and that they owned said goods, the plaintiffs had elected their remedy, and cannot be allowed to come into Court a year afterwards, because of their failure to secure adequate relief in the replevin suit and base a claim upon the inconsistent idea that the goods were sold to the assignor. It may not be amiss to observe that in Powers v. Benedict, 88 N. Y. 605, a case quite similar to the one at bar, a conclusion precisely the reverse of that announced in the Michigan case was reached, and the doctrine was recognized that a partial recovery of goods under a replevin, sued out under circumstances such as we have here, did not bar an action for the remainder, or preclude the vendor from filing a claim in the insolvent vendee’s estate for the value of the balance of the goods, which he failed to recover under the writ of replevin. In the Mass, case, where a person filed a bill in equity to reform a policy of insurance by striking out a clause of warranty, and afterwards brought an action at law upon the policy as written, alleging compliance with the warranty, and after a trial on that issue had judgment rendered against him, it was hеld that he had elected his remedy and had waived his right to prosecute his bill for the reformation of the policy. And to the same effect are Sanger v. Wood, 3 John. Ch. 416, and Steinbach v. Fire Ins. Co., 77 N. Y. 498.

The record now before us discloses the fact that the replevin suit was not pressed to trial, and that a judgment was not entered therein. The suit was voluntarily discontinued. To hold that the vendor by merely suing out the writ, though it, the vendor, subsequently abandoned the proceeding and pfiid to the vendee’s trustees the value of the goods replevied, forfeited all right to claim payment for these very same goods, would be to stretch the doctrine of election of remedies and to widen its consequences far beyond ‍‌​​​‌​​‌‌​​‌‌‌‌‌‌‌​‌​​​‌‌​‌‌​‌​​​​‌​‌​​​‌​​‌​‌​​‍any limits heretofore recognized in Maryland. It would, in fact, prescribe as a penalty for a mere mistake in bringing a suit, not the usual one оf costs, but the far graver one of a forfeiture of a just and meritorious claim ; and its adoption would place a Court of Equity in the anomalous situation of being forced to say to a suitor: You made a mistake in suing out this writ of replevin, but you recognized your error and promptly discontinued the action,your mistake has hurt no one because the trustees have recovered from you the full, value of the goods you took, and the creditors have, therefore, not been prejudiced. Confessedly, you delivered the insolvent the goods, and confessedly you have not been paid for them. Their value forms part of the insolvent’s estate, but because you inadvertently supposed you had a right to reclaim the goods (though when you discovered you had not such right you abandoned your suit;) you shall not receive a dollar of your debtor’s estate — you shall not get even a part of the money realized from the,very property which you sold and delivered to the insolvent. With equal propriety could a legatee, who having caveated a will subsequently dismissed the proceeding without a trial, be deprived of his legacy; but it has been distinctly held, that he is not estopped to recover his legacy. State, &c., v. Adams, 71 Mo. 620.

Estoppels must be reciprocal, and bind both parties. They operate only on privies in blood or estate, and can be used neither by nor against strangers. He that shall not be concluded by the record or other matter of estoppel, shall not conclude another by it. Alexander v. Walter, 8 Gill, 239. The trustees of the vendee were not bound by the replevin suit, nor by the vendor’s election of thаt remedy. They brought suit upon the replevin bond and recovered a judgment for the full value of the replevied property, and this they did upon the claim that the title to the fertilizers had vested in the Waring Manufacturing Company under the contract of sale with the Bolton Company.' In other words, the.trustees successfully insisted on the contract of sale being a subsisting, unrescinded contract, notwithstanding the attempted repudiation of it by the Bolton Company. Having recovered a judgment, and having collected the money due under that judgment, upon the hypothesis that the contract was not rescinded, but was in fact in full force, what standing have they in their capacity as creditors to object to the payment of the promissory note held by the vendor of those goods for the price at which the goods were sold? Having recovered the value of the goods on the theory that the contract was not rescinded, they object to the payment of the note on the opposite ground that the contract had been rescinded. This is certainly, as the Scotch say, “to approbate and reprobate.” In re Chesham, 31 Ch. D., 466.

If the doctrine sanctioned in Thompson v. Howard, 31 Mich. 309, to the effect that it is immaterial whether the plaintiff obtains redress in the first aсtion or not, were adopted, and it were held that the mere fact of bringing a suit in one form of action, though abandoned without trial or without judgment, forever precluded a resort to any other form of action respecting the same subject-matter, it would when logically followed out prevent an amendment from one form of action to another, although the right to make such amendments is expressly given by sec. 34, Art. 75, of the Code. It would prevent such amendments, because if the mere naked selection of one remedy is such an exclusion of another inconsistent one as to estop the party who has selected the first from ever afterwards resorting to the second, the bare bringing of a suit in one form of action would necessarily preclude a resort, even by way of amеndment, to the opposite or inconsistent form of action. If the doctrine of Thompson v. Howard, were generalized “it would amount to this, that a litigant elects his remedy in every case in the first instance at his peril. If he finds that he has made a mistake, whether in consequence of erroneous views of law or fact, he has nevertheless estopped himself from retracing his steps. He cannot dismiss his suit and institute a new proceeding of a different nature against the same party. But no one supposes that this is the law.” Anchor Milling Co. v. Walsh, 20 Mo. App. 107.

We hold, then, .that the mere fact that the Bolton Mines Company sued out a writ of replevin to recover possession of these goods and then discontinued the proceeding without trial and before judgment, and without realizing .anything by its suit (for it paid the value of the goods to the trustees .of the vendee) does not estop it to claim out of the vendee’s assets, payment of the note given by the purchaser for the price of the fertilizers sold. The appellant is consequently entitled to participate with the other ‍‌​​​‌​​‌‌​​‌‌‌‌‌‌‌​‌​​​‌‌​‌‌​‌​​​​‌​‌​​​‌​​‌​‌​​‍creditors of the Waring Manufacturing Company in the funds 0 which the trustees hold for distribution. We therefore reverse the order appealed from.

(Decided December 6th, 1895.)

Order reversed with costs above and below and cause remanded for further proceedings.

Case Details

Case Name: Bolton Mines Co. v. Stokes

Court Name: Court of Appeals of Maryland

Date Published: Dec 6, 1895

Citation: 33 A. 491

Court Abbreviation: Md.