149 P. 1023 | Or. | 1915
Lead Opinion
delivered the opinion of the court.
If we should concede that the defendant had a right to demand of the plaintiff that it commence in its own
“That the receipt signed by the plaintiff and admitted herein as evidence is not conclusive and was contradicted and entirely discredited by the oral evidence of the plaintiff, and that said receipt was only*377 accepted in settlement, upon condition that it he paid at maturity, and the other bills mentioned in plaintiff’s complaint be settled, which conditions have not been met.”
Upon these findings of fact the court entered conclusions of law to the effect that the plaintiff should have judgment against the defendant for $666.26, with interest amounting to $32.19, together with his costs, and should also have judgment against the plaintiff here as surety on the redelivery bond in the sum already stated. The judgment was entered accordingly against the defendant in the action and this plaintiff as surety on the redelivery bond.
It is written large throughout the pleadings and evidence in this case that the defendant Sheppard had notice of the pendency of the action and that he applied to the plaintiff for the redelivery bond to be used in that litigation. In furtherance of his undertaking to save this plaintiff harmless on its stipulation, he procured the receipt upon which he relies. It appears in evidence without dispute out of his own mouth that prior to the trial of the action he was notified by the attorney of record for the defendant that the aetion would be brought to trial. He testifies that he furnished to the counsel for the defendant there the writing already quoted, signed by Meach. The record shows that the answer was amended and the question of settlement raised upon the writing; that the defense was interposed based upon that instrument; that the identical proposition upon which the defendant here relies was litigated in the Washington court, where both parties were represented by their attorneys of record; and that the decision of that tribunal to which the parties submitted themselves was adverse to the
“Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.”
As before stated, it is unquestioned in the testimony that the defendant Sheppard had notice of the pendency of the Washington action from its conception; that he knew that the same was to be brought to trial; that to a certain extent he availed himself of the opportunity to interpose his defense; and that it was pleaded there. He states in his testimony that, having furnished the data to the counsel for the defendant in that action, he himself went away to another point in that state to attend to some other litigation, and hence was not present at the trial; but he does not pretend that he was lured away by any action of the plaintiff here. Having notice of the pendency of the action and that it would be brought to trial and being in position to urge the defense and to carry out the terms of his bond to save the plaintiff harmless, he is bound by the resulting judgment against the plaintiff here. In Carroll v. Nodine, 41 Or. 412 (69 Pac. 51, 93 Am. St. Rep. 743), the only notice given to the defendant indemnitor of the pendency of the action was that she was called as a witness and attended at the trial resulting in the judgment against her indemnitee, and it was there held that she was sufficiently vouched to make the judgment conclusive upon her. Again, in Astoria v. Astoria & Columbia Riv. R. Co., 67 Or. 538 (136 Pac. 645, 49 L. R. A. (N. S.) 404, 5 N. C. C. A. 442), this court held that, where the indemnitor has notice of the action and an opportunity to urge the defense, the judgment in that action is conclusive of the facts thereby established and cannot again be the subject of litigation between the indemnitor and the indemnitee. Mr. Justice McNajry, who wrote the opinion, adopts the follow
“It is sufficient that the party against -whom ultimate liability is claimed is fully and fairly informed of the claim and that the action is pending with full opportunity to defend or to participate in the defense. If he then neglects or refuses to make any defense he may have, the judgment will bind him in the same way and to the same extent as if he had been made a party to the record.”
In Bridgeport Fire & Marine Ins. Co. v. Wilson, 34 N. Y. 275, the rule is thus stated:
“(1) "Where the covenantor expressly makes his liability depend on the event of a litigation to which he is not a party, and stipulates to abide the result; and (2) where the covenant is one of general indemnity merely, against claims or suits. * * In cases of the first class, the judgment is conclusive evidence against the indemnitor, although he was not a party, and had no notice, for its recovery is the event against which he covenanted.”
The court goes on to hold, however, that in eases of the second class, where the indemnitor had notice of the pendency of the action and had opportunity to urge his defense, he is bound by the result of the litigation. Again, in Village of Port Jervis v. First National Bank, 96 N. Y. 550, it is said:
“But if the party who is ultimately responsible has notice of the pendency of an action against his indemnitee and is given an opportunity to defend, and neglects it, he is still bound by the result of the action and estopped from controverting in an action subsequently brought against him by such indemnitee the facts which were litigated in the original action.”
In cases of the first class mentioned in Bridgeport Ins. Co. v. Wilson, the reason for notice failed, and
“The effect of a judicial record of a sister state is the same in this state as in the state where it was made.”
Final there, it is final here. We can inquire whether that tribunal had jurisdiction of the parties and of the subject matter, but further than that we cannot go. When these conditions appear, we must accept the determination of that court as conclusive without further inquiry. Such is the teaching of Foshier v. Narver, 24 Or. 441 (34 Pac. 21, 41 Am. St. Rep. 874). There the defendant was served with summons in Iowa in an action pending in a court in that state for the recovery of money due upon a promissory note. He suffered judgment to go against him there by default. An action to recover the amount of the judgment was instituted against him in Oregon. It appeared from the record that the Iowa court had jurisdiction of him and of the subject matter of the action, and he was denied the right to show in the court here that he had never signed the note; that he was not responsible for the instrument or the debt it represented; and that it was subscribed by a different person. The judgment was held to be conclusive even against the facts he offered to prove. The case of De Vall v. De Vall, 57 Or. 128 (109 Pac. 755, 110 Pac. 705), enunciates the same principle.
Having covenanted to save the plaintiff harmless from any judgment in the action wherein at his request it became a surety, the defendant formulated a plan,
“We will not give faith or credit to that determination until we first shall have examined into what we assume to be the merits of the controversy there and ascertained for ourselves whether the decision is such as we would have rendered under the same circumstances. ’ ’
We are forbidden to do this by the national Constitution, as well as by section 761, L. O. L. The Circuit Court was in error when it discredited the judgment of the court of a sister state in favor of the writing upon which the defendant depends; especially when it was before that court for consideration in that very action upon the contention here urg'ed.
The decision of the Circuit Court is reversed and the cause remanded, with directions to that court to enter a judgment in favor of the plaintiff according to the prayer of the complaint.
Reversed. Rehearing Denied.
Dissenting Opinion
delivered the following dissenting-opinion .
I am unable to concur in the majority opinion.
This is an action upon an indemnity contract. The cause was tried by the court without the intervention of a jury. Findings of fact were made and a judgment rendered in favor of defendant C. A. Sheppard, from which plaintiff appeals. Defendant G. F. Martin made no defense.
The facts and circumstances of the case are nearly all detailed in the findings of the trial court, the substance of which is as follows: The plaintiff is a Maryland corporation authorized to do business in Oregon. On December 2, 1910, one E. M. Meach had instituted an action in the Superior Court of Clarke County, Washington, against one C. Schley, doing business as the Vancouver Bill Posting Company and the S. S. S. Realty Company, to recover $767.67, and caused a writ of attachment to be issued and levied upon his property. Schley made application to the plaintiff to execute a bond in the sum of $1,536 conditioned that Schley would pay any judgment that might be rendered against him in the action, for the purpose of having the property released from the attachment. The bond was executed and the property released by the sheriff. At the time the plaintiff company signed the bond, C. A. Sheppard and G. F. Martin executed to it an indemnity agreement indemnifying and holding it harmless from any liability upon the bond signed as surety for Schley. On January 19,1911, the defendant Schley made a full and complete settlement of the action with plaintiff E. M. Meach and by the terms thereof agreed in writing to cause it to be dismissed. The agreement is as follows:
*386 “Portland, Oregon, January 19,1911.
“Received from the Northwest Bill Posting Company four hundred sixty-five and 50/100ths ($465.50) dollars in full settlement of all claims to date for which amount I agree to dismiss the suit now pending in the Superior Court of the State of Washing-ton for the county of Clarke in which I am plaintiff and C. Schley and the Northwest Bill Posting Company is defendant.
“[Signed] E. M. Meach.'”
Such writing was executed by E. M. Meach with the purpose and intention of being a full ánd complete settlement of the suit hereinbefore mentioned, and by it Meach agreed to dismiss the action. Relying upon the written agreement of Meach to dismiss the action, and believing that the same had been fully settled and satisfied, C. Schley left the State of Washington and has remained away ever since that time. Thereafter in violation of his agreement of settlement with Schley and with the purpose and intention of wronging, defrauding and cheating him and all other parties interested in such action, after ascertaining that Schley had left the State of Washington and that his whereabouts were at the time unknown, E. M. Meach refused to dismiss the action and caused the same to be set down for trial without notifying Schley, or the surety upon his bond, or any other person interested therein. Thereafter, in violation of his written agreement to dismiss the action, he wrongfully, unlawfully and by fraud practiced upon the court caused the same to be tried without the knowledge of Schley and without the latter being present in said court to protect his interest thereunder. By reason of this fraud practiced upon the court and upon Schley, Meach caused a judgment for the sum of $737.26 to be rendered in that action in his favor and against defendant Schley and the
Based on the findings of fact, tie court made the following conclusions of law:
“That tie said plaintiff, by reason of its refusal to permit tie said defendant, Sleppard to institute and carry on a suit in its name for tie purpose of laving said judgment set aside, deprived tie indemnitor Sleppard of a substantial right, and thereby released him upon lis indemnity agreement. That in paying said judgment against tie objection and protest of tie defendant Sleppard lerein,” and in said refusal, Sleppard is released from all liability to tie plaintiff.”
A decree was entered in favor of defendant and for costs. Plaintiff objected to tie findings of fact made by tie trial court for tie reason that tie same were not supported by tie evidence and requested findings in favor of tie plaintiff.
It appears that the amount of cash demanded by the company to be deposited was afterward reduced to $800. The record disclosed that there was a lengthy correspondence between one G. E. Hamaker, the attorney whom Sheppard employed to institute a suit to set aside the judgment, and the representatives of the guaranty company at Portland, and at Tacoma, Washington, which was finally submitted to the home office of the company at Baltimore, Maryland. The correspondence culminated in the refusal of the company to assist the indemnitor, as shown by the following letter:
“United States Fidelity & Guaranty Company, Baltimore, Md.
“November 18th, 1911.
“Claim #32769.
“Messrs. Hubbert & Stanton, Tacoma, Washington—
‘ ‘ Gentlemen: Be Schley for the Northwest Bill Posting Company. We have your communication of November 10th with inclosures and have considered this proposition with a great deal of interest. In the first place, it is clear to us that we should not sign the complaint or affidavit submitted. The allegations of fraudulent practice on the part of the defendants’ attorney are matters entirely without our knowledge and, moreover, it is contrary to our policy to ever make allegation of this sort in any suit if it can be avoided, especially when we have no direct interest as in this case. * * If as Mr. Hamaker states there is no other manner of securing justice to his clients, we regret the situation but do not see that the company is under any*391 obligation to take care of bis clients; on the other hand, they obligated themselves to hold this company harmless and we must insist upon their complying with this obligation. * * ”
The conclusion reached by the home office of the company was communicated to Sheppard as shown by the following letter:
“United States Fidelity & Guaranty Company, Balti- - more, Md.
“Portland, Oregon, Nov. 28th, 1911.
“Messrs. Hubbert & Stanton, Tacoma, Washington—
“Gentlemen :• — Re T#32769, C. Schley for the Northwest Bill Posting Company. Tours of the 24th instant in the above connection was duly received, together with copy of letter addressed to you by the home office of the company. We are, accordingly, advising the attorney for our indemnitors that the company has refused to assist them in this matter. The complaint and affidavit submitted to you were not returned as they should have been, with your letter. Kindly see that they are sent to us at the earliest moment.
‘ ‘ Tours very truly,
“Hartman & Thompson, “General Agents,
“By Douglas R. Tate/’’
It appears that after the judgment was rendered in the Washington court a motion for a new trial was filed which was denied. It also appears that a judgment was rendered against the surety company under the statute of the State of Washington at the same time as that against Schley. This was when the company was first made a party to the record. Defendants Sheppard and Martin, who were not parties to the record in the action of Meach v. Schley, failing to obtain the assistance of the surety company to bring a suit to set aside the judgment, filed a complaint to restrain
It is the position of counsel for plaintiff that as to his liability on the indemnity agreement defendant Sheppard had an adequate remedy at law by a motion for a new trial, and that a suit in equity to set aside the judgment as desired by him could not be maintained. The record shows that the defendant Sheppard exhausted all the means at his command to obtain a trial of the issues involved and did not secure such until the trial of the present case. From the manner of the presentation of this case upon appeal, it might be inferred that it was the impression of counsel that the cause would be tried de novo. Under Section 159, L. O. L., in an action at law the findings of the trial court on the facts are deemed a verdict. This court has uniformly held that such findings cannot be set aside on appeal if there is any competent evidence to support them: Astoria R. R. Co. v. Kern, 44 Or. 538 (76 Pac. 14); Flegel v. Koss, 47 Or. 366 (83 Pac. 847); Courtney v. Bridal Veil Box Factory, 55 Or. 210 (105 Pac. 896); Sun Dial Ranch v. May Land Co., 61 Or. 205 (119 Pac. 758). The appellate court will examine the evidence in an action tried by the court without a jury only to the extent of determining if there is any competent evidence to support the findings. We cannot review the weight or sufficiency of the evidence: Seffert v. Northern Pac. Ry. Co., 49 Or. 95 (88 Pac. 962, 13 Ann. Cas. 883). In such a case the trial judge acts as a jury. The findings in this cause may be referred to as a verdict.
Robb v. Security Trust Co., 121 Fed. 460 (57 C. C. A. 576), was originally an action by the latter
“We only differ from the learned judge of the court below, in that we think there was testimony in this case tending to show that the security company did do something to impair the right of Mr. Robb to have the judgment against the said security company reviewed in the appellate court by a writ of error, and we think that it should therefore have been submitted to the jury to say whether the testimony so tending was sufficient to establish the fact of an improper and unjustifiable interference by the security company with that right of the plaintiff in error. * * The well-settled interpretation of such undertaking is that the liability*394 of the indemnitor is not fixed, except by definitive judgment against him on the replevin bond referred to. In any such suit, the indemnitee must, under the contract of indemnity, either in good faith defend himself, or vouch the indemnitor to defend the suit at his (the indemnitor’s) own costs and charges, rendering such assistance as he may be called upon by the indemnitor to render in facilitating and furthering such defense. * * That is, the indemnitor is entitled, under such circumstances, to all the rights of defense to such a suit, including the right of review, which belonged to the indemnitee as the real party thereto. ’ ’
In regard to the demand for further indemnity, the case at bar is similar to that from which we have quoted. The latter case shows that where the question of the good faith of the indemnitor in making a further defense, and the fairness of the indemnitee in permitting and assisting in making such defense, are involved, whether the right of the indemnitor to make a full defense has been impaired by the act of the indemnitee is a proper question for the jury. In the case under consideration, Sheppard, the indemnitor, insisted upon and earnestly endeavored to obtain a full trial in the original case of Meach v. Schley. Eelying upon the settlement which he had made for Schley, Sheppard was not present at the trial. A motion for a new trial, as its name indicates, is an application for, and not, as a rule, a full trial of a cause. It is not enough to say that Sheppard if he was not satisfied with the decision in that case should have appealed therefrom. What he asked was to have an original trial in the name of the United States Fidelity & Guaranty Company in order to produce evidence and complete the record so that an appeal would properly present the issues. If upon such trial he did not then win, an appeal would be a matter for consideration. Schley,
“In order to become thus bound, the covenantor must be tendered ‘a full, fair and previous opportunity to meet the controversy,’ ” and that he should be allowed all the means of defense open to him had he been made a party.
In Oceanic Steam Nav. Co. v. Campania Transatlantica Espanola, 144 N. Y. 663 (39 N. E. 360), the rule is stated as follows:
“It is sufficient that the party against whom ultimate liability is claimed is fully and fairly informed of the claim and that the action is pending with full opportunity to defend or to participate in the defense.”
In Eaton v. Lyman, 26 Wis. 61, the court in considering a case where the defendant was sued to contest his title to land, and where he brought in his grantor to bind him by the judgment, says:
*396 “It should appear, not only that the grantor was notified of the suit and requested to defend it, but that he was allowed to do so to the utmost extent of the law, if he desired to. Otherwise a defendant in ejectment might acquiesce in an erroneous result of a trial, and refuse his grantor an opportunity to correct it by appeal, and still conclude him by the judgment in an action on his covenants. This would be clearly unjust.”
See, also, City of New York v. Baird, 176 N. Y. 269 (68 N. E. 364); Garrison v. Transportation Co., 94 Mo. 130 (6 S. W. 701); City of St. Joseph v. Union Ry. Co., 116 Mo. 636 (22 S. W. 794, 38 Am. St. Rep. 626); Ladd v. Kuhn, 154 Ind. 313 (56 N. E. 671). We know of no hard-and-fast rule that would prevent a court of equity from entertaining a suit by one against whom a fraudulent judgment had been entered to set aside such judgment. Marsh v. Perrin, 10 Or. 364, is authority for such a suit. See, also, Dist. etc. v. White, 42 Iowa, 608. Mr. Pomeroy, in 4 Pom. Eq. Juris. (13 ed.), Section 1357, states in effect that, while the inadequacy of legal remedies is professed to be the test and limit of equitable jurisdiction in applying this criterion the modern decisions with some exceptions have certainly held “the legal remedy inadequate in many instances and under many circumstances where Chancellor Kent would probably have refused to interfere.” Under the facts found by the trial court, the judgment in the action of Meach v. Schley was prima facie evidence only of the liability of Sheppard as indemnitor, and the latter had the right to interpose a defense in the present case: 22 Cyc. 93. The document signed by Meach is more than a receipt. It contains a contractual stipulation to dismiss the Washington case. Under Section 761, L. O. L., as well as under the federal
It follows that the judgment of the lower court should be affirmed.