Lead Opinion
This is an appeal from a summary judgment on a promissory note executed by the defendant Logosz, a farmer, in favor of Rugby Milling Company, owner and operator of a grain elevator.
We affirm.
Logosz asserts that the trial judge erred in granting Rugby Milling’s mоtion for summary judgment, and particularly in ruling that Logosz failed to affirmatively plead failure of consideration and in ruling that a stipulation and judgment of dismissal of a prior action, with prejudice and on the merits, was res judicata as to the claim in the present action.
The dispute between the parties arose in 1974, after they had dealt with each other for several years. Early in 1974, Logosz went to the office of Rugby Milling for the purpose of selling stored wheat at the then market value of $5.56 per bushel. He was told that Rugby Milling had already sold the wheat at a lower price to pay a prior indebtedness. At a subsequent meeting in the office of Rugby Milling’s attorney, at which the status of the account bеtween Logosz and Rugby Milling was discussed, Logosz signed a promissory note to Rugby Milling in the amount of $6,657.79, due October 26, 1974. Logosz asserts that he signed the note intending to sue Rugby Milling later, and that he did not feel he was indebted to the amount of the note. Rugby Milling contеnds that the promissory note was a novation.
The first action was commenced on September 4, 1974, when Logosz filed a complaint alleging wrongful conversion of his stored grain by Rugby Milling. He asked $3,474.83 damages for conversion and additional damages for fraud, as well as punitive damages. Rugby Milling answered, alleging the novation.
On March 22, 1976, the attorneys for the parties signed a stipulation for dismissal of the complaint “with prejudice and upon the merits” and the stipulation was аpproved
About three weeks later, the present action was commenced by complaint of Rugby Milling against Logosz to recover on the promissory note. Logosz answered admitting owing some money, but alleged that the аmount of the complaint “is excessive and exaggerated and does not truly represent the indebtedness.” He also claimed a setoff in the amount of $3,474.83, which, it will be noted, is the exact amount of the conversion claim in the former action which was dismissed with prejudice and on the merits. Rugby Milling moved for summary judgment based in part on Logosz’s deposition admitting execution of the note, and Logosz filed a return to the motion and an affidavit. The trial court granted summary judgmеnt in favor of Rugby Milling on two grounds: first, that the setoff claimed by Logosz was determined by the judgment in the prior litigation and was res judicata, and, second, that the execution of the note and the nonpayment of the note were admitted and that failure of consideration was not alleged as a defense. This appeal followed.
I. RES JUDICATA
Our most recent decision involving res judicata is Dolajak v. State Auto and Cas. Underwriters,
No distinction is to be made between judgments entered after stipulation by the parties and judgments entered after trial, unless fraud is involved in the former.
In Rummel v. Rummel,
“A judgment, entered pursuant to the stipulation of the parties to an action, is as effective an adjudication of the issues in the case as one entered upon an actual trial of such issues.”
The Minnesota Supreme Court has recently emphasized the same principle. In the ease of Application of Schaefer,
“An order dismissing an action with prejudice оperates as an estoppel to litigate again the issue raised in that action.”
The court there relied on its previous holding in Pangalos v. Halpern,
“In the absence of fraud, a valid judgment, decree, or as here an order which is the equivalent thereof, entered by agreement or сonsent, operates as res judicata to the same extent as if it had been rendered after contest and full hearing and is binding and conclusive upon the parties and those in privity with them.”
We are satisfied that the issues raised by Logosz in his claim of setoff in the second action were actually decided and necessarily involved in the determination of the first action, commenced by Logosz. The first adjudication, by judgment entered upon the stipulation of the рarties, which provided that the stipulation was with prejudice and upon the merits,
The cases cited by Logosz are not in point or not persuasive. Robertson Lbr. Co. v. Progressive Contractors, Inc.,
II. PLEADING AFFIRMATIVE DEFENSE
As we interpret the stipulation quoted in the footnote, supra, and the judgment entered in accordance with it, it has been conclusively adjudicated that Rugby Milling did not convert the grain of Logosz. It is not disputed that Logosz signed a note promising to pay Rugby Milling the sum of $6,657.79, due October 26,1974. When sued upon that note, Logosz answered alleging that the claim was exaggerated, excessive, and not truly representative of the indebtedness. The trial court held that this did not constitutе an assertion of the defense of failure of consideration, which is an affirmative defense required by Rule 8(c), N.D.R. Civ.P., to be pleaded affirmatively, and by Rule 8(e), to be “simple, concise, and direct.”
Rule 8(b), N.D.R.Civ.P., requires that “A party shall state in short and plain terms his defenses . . .” and Rule 8(f) requires courts to construe pleadings so as to do substantial justice.
The trial court had before it, when it made its ruling, affidavits and a deposition in which Logosz admitted that he signed the note in question voluntarily. He did not specifically deny signing the note in his pleadings, nor did he at any time deny that the note was supported by some consideration.
Under Section 41-03-37, N.D.C.C. (U.C.C. § 3-307),
“1. Unless specifically denied in the pleadings each signature on an instrument is admitted. .
“2. When signaturеs are admitted or established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense.”
A prima facie case was therefore made out by Rugby Milling. See Loew v. Minasian,
We believe the trial court acted well within its range of discretion in holding that the affirmative defense of failure of cbnsideration was not pleaded. Prestin v. Baumgartner,
We also note in passing the existence of a serious question as to whether consideration for the note was required at all, in view of the fact that it was apparently given either in compromise or as a novation. See Section 41-03-45, N.D.C.C. (U.C.C. § 3-408), providing that “. . .no consideration is necessary for an instrument or obligation thereon given in payment of or as security for an antecedent obligation of any kind.”
Logosz next argues that the trial judge erred in finding that no issue of fact remained. He contends that under Rule 12(h), N.D.R.Civ.P., his affirmative defense was not waived even if nоt pleaded, citing Reishus v. Implement Dealers Mutual Insurance Co.,
Logosz next argues that even if this court finds that his affirmative defense was not well pleaded, it was improper for the trial court to grant Rugby Milling’s motion fоr summary judgment in light of the possibility of amendment to the pleadings under Rule 15(b), N.D.R.Civ.P. Since no amendment was ever requested, the possibility of amendment was only hypothetical. If the mere possibility of amendment were to be considered by a triаl court in deciding motions for summary judgment, successful invocations of summary judgment would be rare, and the purpose of Rule 56, N.D.R. Civ.P., to eliminate trials of actions in which there is no genuine issue of fact, would be subverted. The mere possibility that ingenuity оf counsel might make possible the pleading of an issue of fact does not preclude the granting of a motion for summary judgment on the pleadings and evidence as they exist when the ruling is made. Dardis v. Eddy Brothers,
Affirmed.
Notes
“IT IS HEREBY STIPULATED AND AGREED, by and between the parties hereto, by and through their( undersigned attorneys, that
“1. The above entitled action shall be and is hereby in all things dismissed with prejudice and without costs with the further understanding that the promissory note asserted by the Defendant in this case may be made the subject of separate litigаtion against the Plaintiff for the collection thereof, and
“2. That the judge of the above entitled Court, upon the presentation of a duly executed copy of this Stipulation, may order a Judgment of Dismissal of the Plaintiff’s Complaint in аll things with prejudice and upon the merits and without costs without any other or further notice to any party hereto.
“Dated this 22nd day of March, 1976.”
Dissenting Opinion
(dissenting).
Although I agree with the statements of the legal principles presented by Justice Vogel, I do not agree that we should permit Rule 56, N.D.R.Civ.P., to be utilized when there is some doubt, which arises from an inference from evidence before the court, that justice may not thereby be served.
The pertinent part of Rule 56(c), which is involved, provides:
“Judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no gеnuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” [Emphasis added.]
In Farmers Elevator Company v. David,
“ ‘However, under this rule a motion for summary judgment will be granted only if, after taking the view of the evidence most favorable tо the party against whom the summary judgment is sought, it appears there is no genuine issue as to any material fact and that the party seeking the summary judgment is entitled to it as a matter of law.’ ”
Giving Logosz the benefit of all favorable inferences which can be reasonably drawn from statements made by him when his deposition was taken — even though it appears that he has much difficulty in articulating his position and has some obvious misconceptions of the law — there aрpears to be a fact dispute. It is possible that if the matter was presented at a full trial and Logosz was fully examined by his counsel, the trier of the facts might believe that the amount of Logosz’s liability is not as great as Rugby Milling Company allеges. The mixed-up transactions between these two parties may never be satisfactorily explained. To impose all of the consequences of the confusion upon Logosz without an opportunity for a trial does not appear to be just. See the discussion of inferences from