49 A.D. 302 | N.Y. App. Div. | 1900
Lead Opinion
On the 18th of October, 1892, the plaintiff brought an action in the Superior Court of the city of New York to recover upon three promissory notes made by the defendant to the order of the plaintiff. On the 21st of October, 1892, an amended complaint was served. Upon the same day another action was brought in the same court by the plaintiff, against the defendant, to recover the amount due upon a fourth promissory note. On the 16th of November, 1892, upon the consent of the attorneys for the respective parties, the said two actions were consolidated into one action. On the 22d of November, 1892, the defendant served his answer in the consolidated action, admitting the making of the notes set forth in the compdaint, and that they were due and unpaid, and then alleging by way of defense and counterclaim, in substance, that at the time of the execution of the first three notes, he deposited with the plaintiff as security therefor 100 of the first mortgage bonds of the Hoffman House Corporation of the actual and par value of $100,000, and 30 bonds of the United Lines Telegraph Company, of the actual and par value of $30,000; that thereafter and as further security for said notes, he deposited with the plaintiff 25 additional bonds of the Hoffman House Corporation of the actual and par value of $25,000, and that all said bonds were held by the plaintiff as collateral security for said three notes and for no other purpose; that thereafter and upon the execution of the fourth note, it was agreed that the plaintiff should hold said 155 bonds as security for that note also; that on the 15th day of November, 1892, the defendant duly tendered to the plaintiff $3'7,500, the amount of said four notes, with interest and costs, upon condition that said plaintiff should surrender to him said 155 bonds ; that the plaintiff refused to receive the money or deliver the bonds, and thereby converted said bonds to his own use; and alleging that the bonds were worth the sum of $155,000, and claiming judgment for that sum.
The plaintiff replied to the defendant’s counterclaim on the 12th of December, 1892, and denied that the 125 Hoffman House bonds had been deposited with him solely7 as collateral security for the payment of the four notes in question, but admitted that the 30 United Lines Telegraph bonds had been so deposited and alleging that he had offered to redeliver said United Lines Telegraph bonds
This action first came on for trial before the court and a jury on the 20th of November, 1893. Certain evidence was thereupon offered, and a verdict was directed by the court in the plaintiff’s favor for the amount due on the four notes with interest. Upon appeal the judgment was affirmed by the Court of Appeals. Subsequently a motion was made for a new trial on the ground of newly-discovered evidence. This motion was granted and a new trial had, which also resulted in a direction by the court of a verdict in favor of the plaintiff, judgment .being suspended and the exception ordered tobe heard in the first instance at the Appellate Division ; and the questions now presented to the court arise upon a motion for a new trial upon the exceptions contained in that record. The issues which were tried were those presented by the counterclaim, and were whether the said collaterals were pledged only for the payment of the notes in suit and for no other purpose, or, if some other obligation was covered by the pledge, that such other obligation was discharged and not in force at the time of the tender. The court held as matter of law that the agreement of August 18,1891, was in force and consequently that the said tender was not sufficient.
The said agreement of August 18, 1891, is as follows :
*306 “ This agreement made the 18th day of August, 1891, between Edward S. Stokes and W. E. D. Stokes, wiinesseth,
“ Whereas, the said W. E. D. Stokes has heretofore, with the consent of said Edward S. Stokes, purchased from Cassius H. Eead 1,250 shares of his preferred stock and 500 shares of his common stock of the ‘ Hoffman House,’ a corporation, and with the knowledge and consent of the said Edward S. Stokes- is about to purchase from said Eead the remainder of his stock, to wit, 1,963 shares of common stock, or a portion thereof, with the intent that they may together be the owners of the whole of the ' stock of said corporation;
“Whereas, the whole of the issue of five hundred thousand dollars of bonds of said ‘ Hoffman House,’ secured by a mortgage to the Farmers’ Loan and Trust Company — except twenty-five thousand dollars given up and cancelled — are now owned and held by said Edward S. Stokes, except a portion held and controlled by him as a pledge from said Eead, for money due by him to • said Edward S. Stokes.
“Whereas, the said Edward S. Stokes hereby declares that the indebtedness of the old firm of C. H. Eead & Co. has been paid and extinguished, except the contested claim now in suit against them by John W. kiackay, except the claim against them by Edward S. Stokes, and except about fifteen thousand dollars for taxes which said C. H. Eead & Co. are bound to pay; and further declares that there is no indebtedness of the 1 Hoffman House,’ except as shown in their balance sheet of 31st July, 1891, for $66,353.49-100, and for current expenses.-
“Wow, therefore, in consideration of the premises, and of the covenants herein by each made to the. other, and for a good and valuable consideration by each paid to the other, the said parties hereby covenant and agree as follows:
“First. Heither of said parties will sell any of his stock of the ‘ Hoffman House ’ without first consulting with, and offering to sell the same to the other, and if a sale is made by one, the other party shall have the option to make it a sale for joint account.
“ Secondly. Said Edward S. Stokes shall have for his services, as an officer of said corporation, a salary not to exceed four hundred dollars a month. Ho» new enterprises or business shall be*307 undertaken or any liability incurred by said corporation outside the regular business of, managing the present hotel, restaurants and cafés, except with the express consent in writing of said W. E. D. Stokes.
“ Thirdly. The said W. E. D. Stokes shall have two of the directorships of said corporation for himself or his nominees.
“ Fourthly. For the consideration aforesaid, the said Edward S. Stokes guarantees the said W. E. D. Stokes that there are no other claims and debts against the 1 Hoffman House,’ except those shown on said oalance sheet of 31 July, 1891, and the current expenses, and guarantees and indemnities him against all claims against the ‘ Hoffman House,’ by said C. II. Read & Co., or John W. Mackay, or said Edward S. Stokes, or any other persons as .the creditors of said C. IT. Read & Co.
“Fifthly. The said Edward S. Stokes further covenants and agrees not to sell or dispose of any of the bonds of the • ‘ Hoffman House,’ owned or held by him as aforesaid, without the express consent of said W. E. D. Stokes, and also that the $25,000 of the $50,000 of bonds received from said Read, not yet cancelled, shall be cancelled pursuant to the terms of' the mortgage, on 1st July, 1892, and meantime held solely for that purpose, and no interest shall be paid thereon.
“ Sixthly. And as security for these guarantees, for a loan of about $32,000, and for any obligations of said Edward S. Stokes to said W. E. D. Stokes connected with said Read and against any foreclosure of the said mortgage, said Edward S. Stokes has deposited with said W. E. D. Stokes bonds of said ‘ Hoffman House ’ to the par value of $150,000.
“ Seventhly. The said W. E. D. Stokes agrees to sell and transfer to said Edward S. Stokes one-half of the whole, or of such portion of said 1,963 shares of common stock as he may purchase from said Read, at the price he pays for said shares, with interest at six per cent on his note at twelve months, with one renewal, if he desires, for twelve months longer, with the stock so sold as collateral. Upon payment of said price at the time above specified the shares sold shall be delivered to said Edward S. Stokes, and he shall, in the meantime, receive the dividends thereon.
“ Eighthly. For any violation of this agreement each party shall*308 have a claim and charge against the other on the books and accounts of the ‘ Hoffman House.’
“ In witness tohereof, we have hereto set our hands and seals on the day above written.
“ E. S. STOKES [seal].
“ In presence of “ W. E. D. STOKES [seal].
“ War. R. Martin.”
It will not be necessary, in discussing these exceptions, to consider at length the oral evidence which was adduced upon the trial. It would seem that the main question arises upon the effect of the legal proceedings which had culminated in the judgment between these same parties, and involving the agreement of August 18, 1891, and the transactions which were the subject-matter of the present litigation. If, however, this question is resolved in favor of the plaintiff herein, there would in any event seem to be questions which should have been submitted to the jury.
Upon the trial there was introduced in evidence a judgment roll in an action commenced in the Supreme Court in or about the month of November, 1892, brought by the defendant in this action against the plaintiff in this action. In his complaint in that action Edward S. Stokes alleged that, on and prior to the 9th of July, 1891, he was indebted to W. E. D. Stokes in the sum of $36,300, which were represented by four notes, being the notes upon which the present action was brought; that on or about the 10th of July, 1891, there was paid on account of the indebtedness represented by said notes the sum of $2,000, leaving a balance of $34,300 still due and owing. He further alleged that as collateral security for the payment of the indebtedness he had delivered the 125 Hoffman House bonds, heretofore mentioned, and the 30 bonds of the United Lines Telegraph Company, and that the actual value of these securities was $150,000. He then alleged the organization of the Hoffman House Corporation, with a share capital of $150,000, divided into 2,500 shares of preferred stock and 5,000 shares of common stock, for the purpose of acquiring the hotel property and business which had theretofore been conducted by Edward S. Stokes and one Cassius H. Read as partners under the firm name of C. LI. Read ; that the corporation duly acquired from said firm the said hotel property and business and issued in part payment thereof the said
On or about the 19th of November, 1892, W. E. D. Stokes served his answer in the Supreme Court action. He admitted the allegations of indebtedness and deposit of collaterals, denied .the value of the securities, and alleged that he had no knowledge or information to fo'rm a belief as to the relations between Edward S. Stokes and Cassius H. Head. He also alleged that whatever representations were made by W. E. D. Stokes were made or had during negotiations between the defendant and the plaintiff, which resulted in the execution of the contract of August 18, 1891. The answer then alleged that the contract was deliberately entered into and was executed on or before August 24, 1891, after numerous conferences and negotiations were had between the parties to the contract. The answer then denied that W. E. D. Stokes had made any agreement by which said contract of August 18, 1891, was abandoned or modified in any respect. The said W. E. D. Stokes then alleged that the plaintiff prior to the 18th of October, 1892, proposed and asserted his willingness to pay the indebtedness and interest arising upon the notes mentioned in the complaint upon the return and surrender to him of said 125 Hoffman House bonds and 30 United Lines Telegraph bonds, but no valid tender was made prior to the 15th of November, 1892, on which day the plaintiff made a tender of the principal and interest of said indebtedness together with the costs in the two actions pending in the Superior Court upon said promissory notes (being this action), , and that said tender was then made upon condition that the defendant should deliver to the plaintiff all of said securities; that the defendant had theretofore offered and at the time of said tender offered, and in said answer offered to deliver unconditionally the said 30 United Lines Telegraph bonds upon the receipt of the moneys described in said tender, but as to the 125 Hoffman House bonds the said W. E. D. Stokes had theretofore claimed, and at the
The answer further alleged that a certain note of $15,000 made by said Cassius H. Head was one of the obligations of the plaintiff referred to and described in the agreement of August 18, 1891, and that he claimed the right to hold said Hoffman House bonds as collateral for the payment of said note of $15,000. The defendant admitted that the plaintiff had tendered the amount due on said $15,000 note with interest, and alleged that said tender was made upon condition that the collateral security of said note, which said collateral security was the property of said Head and to which the plaintiff had no right, or possession, should be surrendered and delivered to the plaintiff.
The defendant W. E. D. Stokes further answering, by way of counterclaim repeating all the allegations, admissions and denials in said answer contained, alleged that at all times since tire making, execution and delivery of said contract of August 18, 1891, lie had been and was then entitled to have deposited with him by the plaintiff the whole of said bonds of said Hoffman House to the par value of $150,000 to be held by him as security pursuant to the terms and provisions of said agreement of August 18, 1891, and that plaintiff
The said E. S. Stokes in January, 1893, replied to the counterclaim. He denied that said W. E. JD. Stokes since the execution of the contract of August 18, 1891, had been or was entitled to have deposited with him Hoffman House bonds of the par v,alue of $150,000, or that said W. E. D. Stokes was entitled to hold such amount as security pursuant to the terms and provisions of the agreement of August 18, 1891. He admitted the refusal to deposit said bonds, and reiterated his allegations in the complaint of an agreement between the parties that the contract of August 18,1891, should be abandoned; and, further replying, claimed that the construction asked by the defendant to be placed upon, said contract of August 18, 1891, was inequitable, and that the terms and conditions thereof were so indefinite, uncertain and oppressive that it would be inequitable to enforce them.
The trial of the issues thus raised between the parties resulted in a judgment by which it was adjudged that the complaint be dismissed, without costs, and by Avhich it Avas further adjudged that the cause of action set forth in the defendant’s counterclaim be dismissed on the merits, without costs. If the judgment had stopped here it would have been a complete adjudication. But it goes on further and gives a reason for the adjudication. After adjudging that the plaintiff was not, at the time of the commencement of the action, entitled to the temporary injunction granted to him (which necessarily followed from the dismissal of his complaint), it further adjudged that the true construction of the contract of August 18, 1891, was that the understanding of the parties was that the defendant should purchase from Read the whole of his 1,963 shares oi stock, or such portion thereof as should be sufficient to make the
Section 1209 of the Code of Civil Procedure seems to dispose of the question as to any right to maintain any action upon that contract by anybody, the counterclaim which was founded upon that agreement having been dismissed upon the merits. The section is as follows: “ A final judgment dismissing the complaint, either before or after a trial, rendered in an action hereafter commenced, does not prevent a new action for the same cause of action, unless it expressly declares, or it appears by the judgment roll, that it is rendered upon the merits.”
This section recognizes the rule that, in actions tried before the court without a jury, or before a referee, where the complaint is dismissed upon the merits, the judgment is a bar to any new action for the same cause of action; and it seems to have been adopted in order that there should be no uncertainty, such as had previously existed in this country, as to whether a bill was so dismissed as to be a bar to a new action, or not. In England the rule of the Court of Chancery was that where the decree dismissing a bill makes no reservation it may be pleaded in bar to any new bill for the same
In this State, both prior to the Code and under the Code, the practice was settled in actions at law that a plaintiff could be non-suited after all the evidence on both sides had been received and both parties had rested, whether such action was tried before the court with a jury, or by the court without, a jury, or before a referee, and a simple dismissal of the complaint in either form of action was not a bar to the -maintenance of a new action. Where, however, the dismissal was upon the merits, the judgment in that form was a bar to any other action for the same cause. But in equity, even where such words were not contained in the judgment, it was frequently a question as to whether, the merits of the controversy between the parties having been gone into, the simple dismissal should not be held to' be equally a bar; and to avoid any uncertainty as to whether the judgment was intended to be a bar or not, and to make the practice in all forms of action the same, this section 1209 was introduced into the Code of Civil Procedure, it not having formed a part of the Code of Procedure which preceded it. It is apparent from an inspection of this judgment that the learned court which directed its entry had sharply in mind this distinction, because the plaintiff having offered no proofs in support of the allegations of his complaint, such complaint was dismissed simply,, The issues which were tried were those raised by the
It is certainly clear that if W. E. D. Stokes had brought an action for damages because of his failure to deposit the twenty-five bonds referred to in the contract, the judgment in question would have been an absolute bar to such a suit: and if he cannot enforce any rights in this particular under the contract, because he had sapped it of its vitality by reason of his failure to comply with those things which were required of him under said contract, I cannot see upon what principle he could hold the other parts of the contract which depended upon precisely the same consideration.
An appeal was taken from this judgment to the General Term of the Supreme Court, and the judgment was there reversed. An appeal from such reversal was taken to the Court, of Appeals, where the judgment of the General Term was reversed and that of the Special Term affirmed, sustaining the construction given to the contract by the court at Special Term.
In the case at bar the learned court below held that, notwith
In this, we think, the learned court erred. There has not yet-been any adjudication by the court of last resort that the judgment in the equity action has not established that, because of the failure of consideration, the agreement of August 18, 1891, could not be enforced.
The fourth judge who concurred in the affirmance of the judgment in this action in the Court of Appeals puts his decision expressly upon the ground that Edward S. Stokes had failed in showing, upon the previous trial of this action, that the bonds were held by the plaintiff for the payment of the notes and for no other ■purpose, and that they were not held upon some consideration independent of the agreement of August 18, 1891, expressly reserving any expression of opinion as to -whether, on account of the failure of the principal part of the consideration of the contract, it should not be, or had not been, held to be abrogated as a whole, thus leaving the question, both as to the effect of the adjudication upon that contract and as an original proposition, open and undetermined. Even if it is admitted that the adjudication in the equity suit (the nature of which, it seems to me, was to some extent overlooked by the learned court above in discussing the question on appeal before it, because that adjudication was not an answer to the question: “ Ought specific.performance under the circumstances to be now decreed ? ” but “ Is it possible to decree such specific performance, the consideration for the contract having failed ? ”) was not conclu
But it is said that, because of a finding contained in the judgment roll in the equity suit that the contract had not been abandoned, as claimed by Edward S. Stokes, therefore, the adjudication in question did not establish the fact that the contract of August 18, 1891, •could not be enforced. This finding is to be considered, in view of the issue which was presented, namely, it was claimed by Edward S. Stokes that by an agreement the contract had been abandoned; this was denied by W. E. D. Stokes; and the court held that there was no sufficient evidence establishing the claim that the contract • had been abandoned by agreement; and. that was all that it then •decided. But it further held that the contract was unenforcible, because it had been sapped of its vitality by reason of the failure of W. E. D. Stokes to do that which formed the consideration for the contract. It was immaterial whether it had been abandoned by the parties or not, if the consideration had failed and it could not be enforced. Under such circumstances the contract would be ended whether both parties agreed to such a result or not. Either could insist upon the fact that it had become null and void, even against the will of the other. Therefore, such being the effect of the evidence offered, under the decision of the Court of Appeals when this case was heretofore before it for consideration, the question remaining to be determined was whether Edward S. Stokes has proven that, outside of the contract of August 18,1891, there was any'other agreement under which these securities were held. Evidence upon both sides was offered upon this issue, and we think that it was a question for the jury to determine, and that it could not be disposed
It would seem, therefore, that the judgment in the equity suit was conclusive as to the enforcibility of the contract of August 18, 1891; and that, therefore, the question should have been submitted as to whether, outside of the contract, there was any agreement upon a sufficient consideration, under which the plaintiff in this action had a right to hold the bonds in question.
There is, however, still another error which necessitates a new trial.- The learned trial justice directed a verdict for the plaintiff and thus, as matter of law, dismissed the counterclaim. It is difficult to see upon what principle he refused to submit to the jury the questions of fact, which, by his ruling as to the equity judgment, were left entirely undetermined. When he decided that the judgment was not conclusive upon the plaintiff’s right to hold the bonds as security against any foreclosure of the Hoffman House mortgage, that left the case, for the purposes of that trial, practically as though the judgment were not in existence. The question of the plaintiff’s right to hold the bonds under the contract was then res nova; and indeed the learned justice so treated it. That necessitated the submission to the jury of several questions of fact which seem at this stage of the case to have been entirely overlooked. There was the question as to whether the contract had been abrogated. There was also the question as to whether there had been a breach on the plaintiff’s part of the essential covenant to purchase the stock, and which was the only consideration for the contract. There was the still further- question as to whether the plaintiff had in fact notified the defendant that he would not purchase the stock; that he had determined not to proceed under, or fulfill, the contract; that instead of fulfilling the contract, his pur
We say that the learned justice must have overlooked these questions, for he certainly could not have supposed they were foreclosed by any finding in the equity suit, if the judgment in that suit had in fact been rejected and treated as inconclusive. But, as we have shown, the finding that the contract had not been abandoned was not conclusive as to the non-enforcibility of the contract in any aspect of the equity case. It was not necessary to the judgment, and it related solely to an abandonment by the agreement of the parties, not certainly to an abrogation by a breach of the contract; for the latter was found as a fact in the very judgment which followed this finding of non-abandonment. It is clear, therefore, that the learned justice could not have ruled, as he did, upon the theoiy that while the equity judgment itself was not res adjudicata, the findings which preceded it were. It seems to have been taken for granted by the court, in view of the elaborate discussion as to the conclusiveness of the judgment, that the issue of the trial depended exclusively upon the ruling on that head. We can account in no other way for the refusal to submit the questions of fact which, upon the learned justice’s view of the judgment, were distinctly presented for .the decision of the jury.
The exceptions should be sustained and a new trial ordered, with costs to the defendant to abide the event.
Barrett and Ingraham, JJ., concurred; Rumsey and McLaughlin, JJ., dissented.
Dissenting Opinion
When this case was before the Court of Appeals, on appeal from the former judgment (155 N. Y. 581), a majority of the members of that court held that the trial court properly directed a verdict in favor of the plaintiff, because the. defendant failed to establish his counterclaim by proving that the bonds were “ held by the plaintiff as collateral for the payment of the notes and for no other purpose.” This is the law of the case, and there can be no doubt that the verdict, upon which the judgment from which the present appeal is taken, was properly directed, unless upon the trial evidence was introduced which would have justified the jury in finding that the bonds referred to were held as collateral security for the payment of the notes and for no other jpxvrjpose.
After a careful consideration of the record, I am entirely satisfied that the defendant not only failed to introduce evidence from which a finding to that effect could have been made, but, on the contrary, the evidence is uncontradicted that the bonds were held not only as ■collateral security for the payment of the notes, but also for the faithful performance by Edward S. Stokes of all of the covenants specified in the 6th paragraph of the agreement of August eighteenth one of which was against the foreclosure of the Hoffman House mortgage.
If I am right in this conclusion, then it necessarily follows that the verdict was properly directed and that the exceptions should be ■overruled and the motion for a new trial denied. It is contended-, however, that this conclusion is erroneous, for the reason that it has been determined in another action between the same parties (148 N. Y. 708) that the contract of August.18, 1891, had been abrogated, because W. E. D. Stokes had not purchased from Read all •of the 1,963 shares of stock referred to in the contract. I do not
The judgment demanded in that action was that W. E. D. Stokes be enjoined from prosecuting this action upon the notes; that he be adjudged to hold the $125,000 Hoffman House bonds as security only for the payment of the notes and that on payment of said notes, with interest, he surrender said securities; that he also be adjudged to hold the title to the Virginia, West Virginia and Kentucky lands as security for the repayment to him of sums advanced by him to Bead, and to secure any and all indebtedness from' Bead to the Hoffman House, from Bead to E. S. Stokes, arising out of the partnership accounts of C. IT. Bead & Go., and that he account to E. S. Stokes for said lands and convey to him the interest which he had agreed to convey.
The answer interposed in that action admitted the making of the contract of August eighteenth, but denied that it had ever been abandoned, or that a supplemental agreement had been made in reference to the subject-matter of it; and alleged affirmatively, and as a counterclaim, that that contract was stiL in force and by its terms W. E. D. Stokes was entitled to have deposited with him $150,000 Hoffman House bonds, “ as security, pursuant to the terms and provisions of said agreement dated August 18, 1891;” that E. S. Stokes had only deposited $125,000 of such bonds, and judgment was demanded that E. S. Stokes be directed to specifically perform the contract by depositing the $25,000 additional bonds. To this counterclaim E. S. Stokes served a reply, in which he alleged, in substance, that after the contract of August eighteenth was made,
At the trial, E. S. Stokes offered no evidence to sustain the allegations of his complaint, and in open court consented that the same be dismissed. W. E. D. Stokes insisted upon trying the counterclaim set up in his answer, and this was the issue, and the only one, tried in that action. What was it? Whether the contract of August eighteenth had been abandoned, and if, it had not, whether, in view of the fact that W. E. D. Stokes had not purchased all of the stock from Bead, E. S. Stokes should be required to specifically perform by putting up the §25,000 additional bonds. Edward S. Stokes in his reply thus gave two reasons why W. E. E>. Stokes should not succeed upon his counterclaim. The first was that the contract under which he claimed had been abandoned, and the. second was that if it had not been abandoned then it would be inequitable to require E. S. Stokes to specifically perform it, because William had not yet performed it on his part. Each of these propositions was put in issue and all the evidence introduced was directed to those issues. It is apparent that if E. S. Stokes had succeeded in showing that the contract had been abandoned he would for that reason have procured a dismissal of the counterclaim, but if he had failed upon that issue and established his second defense to the-counterclaim he would have succeeded in dismissing it all the same. It is evident by the findings that the trial court so understood the-case. It found that “ Since the making, execution and delivery of said contract or agreement, the parties thereto have not agreed to-abandon the same, or to modify it in any respect, and it has not beeti abandoned,” but that E. S. Stokes ought not to be compelled to specifically perform it.
It is apparent, therefore, that both of these questions were
U pon the issue of the abandonment of the contract there was an ’--express finding, and upon that issue W. E. D. Stokes succeeded, and "when the court held that that contract had not been abandoned that •question was finally determined between the parties. E. S. "Stokes "failed upon that issue, and he was remitted for his recovery to the second defense in his reply and upon that he succeeded. If the court had found that the contract had been abandoned and was at an end nobody would question but that the issue so found would have been conclusive between the parties. What is there to change the effect of this finding when it is the other way ? It is said that that finding goes for naught because the counterclaim was dismissed upon the merits. But what were the merits % The merits of the action involved the right to the specific performance of the contract then upon the facts then appearing. As long as the contract was held to be in force as it was, it cannot be said that the contract, that was determined by the judgment still to be. in existence, was abrogated solely because at the time of the trial it had not been performed by the party seeking relief under it.
The defendant’s position in this case in this regard requires him ■absolutely to ignore the finding of the court upon his first defense, and to insist that although he was beaten upon that it is nevertheless a determination in his favor in that regard because he succeeded ■upon the second issue.
Under the circumstances, whether specific performance should be ■decreed was a matter for the trial court. The right to have specific performance, by a decree of a court of equity, always rests in the •sound discretion of the trial court. But it is said that because the ■court determined, in that action, as a conclusion of law, that W. E. D. Stokes not having purchased all of the Bead stock within a reasonable time, and for that reason the contract could not be -enforced against E. S. Stokes, and the judgment so provides, that
This rule is well illustrated in Campbell v. Consalus (supra). There the action was brought to procure the cancellation of a mortgage upon the ground that it had been paid, and the pleadings put in issue that fact. The trial court found that the mortgage had not been paid and that the sum of $2,754 remained unpaid. In a subsequent action to foreclose the mortgage, the court held that the prior judgment was conclusive upon the parties only as to the fact that something was due, but not the amount.
In Woodgate v. Fleet (supra) Judge Eabl, referring to this rule, said : “ A judgment is conclusive upon the parties thereto only in respect to the grounds covered by it, and the law and facts necessary to uphold it; and although a decree in express terms purports to affirm a particular fact or rule of law, yet, if such fact or rule of law was immaterial to the issue, and the controversy did not turn upon it, the decree will not conclude the parties in reference thereto.” In Stowell v. Chamberlain (supra) Judge Allen said: “ Stated in another form, the rule is that the judgment of a court of competent jurisdiction, directly upon the point, is as a plea, a bar, and as evidence conclusive between the same parties upon the same matter directly in question in another action or court. (Barrs v. Jackson, 1 Y. & C. 585.) A matter or cause of action is res jxidicata when it is actually merged in a judgment, or the same point has already been
The question whether W. E. D. Stokes held the $125,000 in bonds — which he then held as collateral security for the payment of the notes in suit, and for no other purpose — as I have already said, was not considered in that action. It was not passed upon by the court, and under the condition of the pleadings, after E. S. Stokes had consented to the dismissal of the complaint, it could not have been there determined. It was not a relevant or necessary fact to be determined in that case, and, therefore, the learned trial justice, at the conclusion of the trial which resulted in the judgment from which the present appeal is taken, correctly held that that question was an open one; that it was not controlled or affected in any way by the former judgment, except so far as that judgment necessarily established that the contract was still in force and that it must be passed upon and determined de novo. He then construed the contract of August eighteenth, and held: “ That at the time of the tender of Hovember 15th, 1892, the plaintiff had the right to con. tinue to hold the bonds in suit as collateral security against the obligation of the defendant not to foreclose the mortgage ” on the Hoffman House. This construction was substantially the same as that given by Judge Martin (155 N. Y. 581), in which at least two of his associates agreed. Judge Mabtin said : “ As the judgment in the former action between the parties was not conclusive against the right of William to hold the bonds remaining in his hands as security for all the claims provided for in the agreement of August eighteenth, I think they may be held for all the guaranties contained in
But it is suggested in the prevailing opinion that when the learned trial justice held that the judgment in the other action was not conclusive upon the plaintiff’s right to hold the bonds in suit as security against a foreclosure of the Hoffman House mortgage, that necessitated the submission to the jury of certain questions of fact, among others (1) whether the failure to purchase all of the Bead stock constituted a breach on plaintiff’s part; (2) whether plaintiff had notified defendant that he would not purchase all the stock; and (3) whether the contract had been abrogated. These questions and the others suggested were necessarily disposed of by the judgment in the other action. The construction of the contract was for the court, and whether the contract had been abrogated or abandoned, prior to the tender of the amount due upon the notes and the demand for the return of the bonds, was finally and conclusively settled by the judgment in the other action. In the other action, as has already been indicated in this opinion, the principal issue was whether the contract of August eighteenth had been, by act of the parties or either of them, terminated. The court found, when the defendant made the tender of the amount due upon the notes and demanded the return of the bonds referred to in the complaint in this action, that it had not — that it was still in force, and that settled and determined for all time that question. The parties could not thereafter question that fact or relitigate it in a subsequent action between them. The general rule is that the judgment of a court of competent jurisdiction is final and conclusive upon the parties not only as to the matters actually determined, but as to every
Every fact which it is suggested should have been submitted to the jury, bearing upon an abandonment or an abrogation of the contract, came within the issue in the other action, and necessarily was there determined.
For the foregoing reasons I am of the opinion that the verdict was properly directed for the plaintiff, and that the exceptions should be overruled and the motion for a new trial denied.
Rumsey, J., concurred.
Exceptions sustained and new trial ordered, with costs to defendant to abide event.