Vaughan v. Morrison

| N.H. | Aug 12, 1875

Lead Opinion

Pleading — Effect of judgment discharging trustee in action by administrator of the defendant. It seems to me clear, that the judgment in favor or this defendant in the trustee suit cannot be a bar to the maintenance of the present action, for two reasons, — the parties are not the same, and the issue is not the same.

I do not find it alleged in the brief statement that Butler Co. have remained the owners of the notes given January 29, 1867. It is said that the defendant believes such to be the case, which is hardly a material or traversable allegation. Suppose however, the fact of such continued ownership were well stated, and that Butler alone is prosecuting the suit in the name of Vaughan, whom he has procured to be appointed administrator for that purpose: still, it would follow, that a recovery must be for the benefit of all the creditors, and if anything should be realized on such judgment, it must doubtless be administered and distributed according to law.

It is argued for the defendant, that an agreement is set up in the brief statement which constitutes an answer to the action, and we are referred to an observation made by me in delivering the opinion of the court upon a bill in equity, brought by the present defendant to enjoin the plaintiff from further prosecuting this suit, as sustaining that view. I should be sorry that any misapprehension should arise as to the ground upon which the demurrer to that bill was decided by the court. Whether I may have been mistaken in any suggestions made upon a point not necessary to the decision of the demurrer is of less consequence. The case was not reported, because it was not thought to establish any new or settle any doubtful point not before adjudicated. I think, however, it may be proper here to read the opinion as it was agreed to and announced in court. The bill alleged, "that, on the twenty-ninth day of April, 1867, one John L. P. Whipple was the owner of the stock in trade and fixtures in a certain saloon, situated in said Laconia, and also of a billiard table, then at Meredith village; that, on said twenty-ninth day of April, said Whipple was justly indebted to the plaintiff [this defendant] in the sum of about one thousand dollars; that, on said twenty-ninth of April, the plaintiff purchased said property of said Whipple in good faith, for the price of eleven hundred and fifty dollars, and paid him one hundred and fifty dollars in cash, and the plaintiff's note for one thousand dollars; that, on the fourth day of May, 1867, the plaintiff and said Whipple, in pursuance of an understanding between them on said twenty-ninth day of April, made a settlement of the accounts and claims existing between them, and said one thousand dollar note having been fully paid, the said Whipple gave it up to the plaintiff; that the plaintiff, on said twenty-ninth day of April, took possession of said property, and subsequently disposed of the same." Then follow various allegations which I believe are identical with those of this brief statement, the brief statement being copied literally and wholly from the bill, — the first five allegations quoted above being omitted, probably for the reason that those facts may be shown under the general issue. The opinion of the court, read by myself, was as follows: "We think the demurrer should be sustained, mainly for the reason that the bill shows that the plaintiff has a perfect defence to the suit at law. It is alleged that he bought the property in controversy of Whipple in good faith, paid him for it, and took possession of it before it was attached in any of the suits; — and to the same purport is the allegation that Whipple died January 21, 1869, leaving no goods or estate whatever. If these allegations are true, the suit at law must fail; and no reason is shown why their truth may not be as well and conveniently tried there as here. If the demurrer were overruled, and an answer filed denying these material allegations, the same issue would be presented as if they were pleaded in the suit; and the loss of W. L. C. Morrison's testimony (he being an important witness who had died pending the suit) would be an equal misfortune to this plaintiff in either event.

"Again: it is not seen how any greater or different effect can be given to the proceedings in the trustee suits here than they would have if shown in the suit at law. If that judgment could be available to this plaintiff in this bill in equity by way of estoppel, it will be equally available as a complete bar to the suit at law; and, so far as I can see, no effect could be given to any agreement, with respect to the prosecution and disposition of the trustee suits on the trial of this bill, which it would not have on a trial of the same issues at law.

"In a word, our view is, that a trial of this bill would be a trial of the merits of the suit at law, and of nothing else. If the facts set up in the bill are not disputed, or if they are found to be true, they constitute a perfect defence to the suit. If they are disputed, the same questions of law as well as of fact will be presented, whether they be raised in one proceeding or the other. The plaintiff, therefore, needs no injunction, and is entitled to none, and the demurrer must be sustained."

This seems to make it quite clear that the demurrer was decided, upon the ground that the allegations of the bill with respect to a sale, c., of the goods to Morrison, showed a defence to this suit. Admitting that the remark as to the effect that might be given in this suit to the supposed agreement was too broad, the most that can be said of it is, that it was an erroneous dictum of a single judge, and does not affect the decision of the court. The remark would have been modified if it had been in my mind that the supposed agreement was made in the trustee suits and before the present action was commenced. It is certain that great doubts were entertained whether the bill showed an agreement to be enforced in equity. The language of the bill (which is also the language of the brief statement), on this point, is quite remarkable, if the defendant meant to set up a solemn agreement, made in open court, that in case the trustee should be discharged no other action should be brought against him. It is stated that the court ruled that the then plaintiff might be permitted to prosecute said actions. It does not appear that this ruling was made in consequence of any agreement, or was based upon or made with a view of facilitating and carrying into effect any mode of adjustment already settled upon by the parties between themselves. Nothing is stated to show that it was not an ordinary ruling upon a question of law, to which either party might have excepted; nor is it alleged in the bill or brief statement, that the understanding as to whether any other action should be commenced was mutual. The language is, "it being understood * * that, if the trustee should be discharged, no other action should be brought against him." From the connection in which this is said, it really does not seem quite clear whether the understanding was with the court, or a mutual arrangement and understanding between the parties, or the understanding of the defendant alone. If an agreement between the parties was made in open court, and subsequently acted on, of such character that a court of equity could and ought to have decreed a specific performance, it would have been a very simple thing for the defendant to say so in his bill. By doing that, and omitting the other allegations quoted, which showed a complete defence at law, the question as to the effect to be given such agreement, if proved, would have been presented to the court in a very different form, and would probably have been examined with more care.

I am of opinion that the brief statement does not show a legal answer to the action, and that the motion to reject it should be allowed.

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Concurrence Opinion

Three principal questions arise in this case: — 1. Could the verdict and judgment alleged in the brief statement be pleaded in bar to the plaintiff's action, supposing that the parties were the same? 2. Are the parties so far the same, i. e., is there such a privity between the plaintiffs, in the suit against Morrison as trustee and this plaintiff, as would cause the matter, which would be a bar against those plaintiffs, to be also a bar in this suit? 3. If the verdict and judgment in the suit against the defendant as trustee cannot be pleaded in bar in this suit can the agreement alleged in the brief statement be so pleaded?

The matter settled in the action against the trustee was, according to the record, whether he was chargeable or not chargeable. The point to be settled in the present suit is, whether the defendant has converted to his own use property belonging to the plaintiff.

We understand from the case and the brief statement, that in each case the real question which is to be determined is, whether or not the defendant, Morrison, is entitled to hold the property in dispute against the creditors of the plaintiff's intestate, Whipple. We understand the allegation to be, that the defendant, Morrison, so had the property in his hands, that, if his title was not good against these creditors, he would have been charged for it as trustee, and that therefore the allegation would be, if the attempt were made to plead specifically, that the fact, on which the question whether the trustee was or was not chargeable depended, was the fact whether the defendant's title to the property was good as against the creditors of Whipple, and that the question of the defendant's liability in the present suit depends upon the same fact; and that therefore the merits of the present action were substantially tried in the former action.

It is apparent on the face of the matter that this question cannot be directly in issue in the pleadings in either case. The issue in the first action was, as it appears in the case, whether the trustee was chargeable or not; and the issue in the present action must be, whether the defendant is guilty or not guilty of converting the property as alleged in the declaration. A special plea, setting out that the property, which is the subject-matter of the suit, was at the time of the alleged conversion the property of the defendant, and denying the plaintiff's property, would he held bad, on a special demurrer, as being equivalent to the general issue; and therefore the question could not, in the due course of the action, become a part of the record.

The verdict and judgment in the former action could not be pleaded in bar to the present action.

The case of King v. Chase, 15 N.H. 9" court="None" date_filed="1844-07-15" href="https://app.midpage.ai/document/king-v-chase-8504730?utm_source=webapp" opinion_id="8504730">15 N.H. 9, is directly in point, and is decisive of this part of the case. There, the plaintiff had brought an action of trespass against the defendant for the act of his deputy in taking and carrying away certain corn and hay. He had previously brought an action of trover against the same deputy, for the alleged conversion of a quantity of oats. The defendant alleged, that the plaintiff's title to the property described in the present suit was by virtue of a mortgage from one Oliver King to himself; that his title to the oats, which was the subject-matter to the former suit, was by virtue of the same mortgage; that the only question tried in the action of trover was as to the validity of that mortgage, which was found void against the creditor, who was the real defendant in both suits.

The masterly and exhaustive discussion of that case by C. J. PARKER leaves nothing to be desired. He shows that the judgment is conclusive only upon the matter which was directly in issue upon the former trial; that by the matter in issue is to be understood that matter upon which the plaintiff proceeds by his action, and which the defendant controverts by his pleading; that facts, offered in evidence to establish a matter which is in issue, are not themselves in issue within the meaning of the rule, although they may be controverted on the trial.

These principles are easily applied, and are conclusive on the point in question. The defendant's ownership of the property, though a fact doubtless controverted in the first trial and to be tried in the present suit, is not the matter alleged by the plaintiffs or controverted by the defendants in their pleadings. Therefore the former verdict and judgment could not be pleaded in bar to the present action, if the parties were held to be substantially the same. Whether or not they are so, need not be settled in the present action.

The only question remaining is as to the alleged agreement. It is not alleged that the agreement was reduced to writing or put on file. Hanover v. Weare, 2 N.H. 131" court="None" date_filed="1819-11-15" href="https://app.midpage.ai/document/town-of-hanover-v-town-of-weare-8503248?utm_source=webapp" opinion_id="8503248">2 N.H. 131, Alton v. Gilmanton, 2 N.H. 520" court="None" date_filed="1823-02-15" href="https://app.midpage.ai/document/town-of-alton-v-town-of-gilmanton-8503381?utm_source=webapp" opinion_id="8503381">2 N.H. 520, Fernald v. Ladd,4 N.H. 370" court="None" date_filed="1828-09-15" href="https://app.midpage.ai/document/fernald-v-ladd-8503629?utm_source=webapp" opinion_id="8503629">4 N.H. 370, Olcott v. Banfill, 7 N.H. 469" court="None" date_filed="1835-07-15" href="https://app.midpage.ai/document/olcott-v-g-banfill--e-carlton-8504035?utm_source=webapp" opinion_id="8504035">7 N.H. 469, are cases in which this matter is discussed. The general doctrine derived from them is, that if agreements are made in writing in court, and put upon the files, they will be specifically enforced, and that, if an agreement is entitled as of term, it will be taken to have been made in court; and that agreements not so made will not be specifically enforced. The alleged agreement, therefore, cannot be enforced by the court, and the brief statement, being insufficient, must be rejected.

SMITH, J. The defendant's counsel, in his argument, says, — "It is not contended that, if this case were brought in good faith by the administrator in the general interest of the creditors, the plaintiff would be precluded from maintaining it by what occurred in the Butler-Tilton trial and judgment."

I. It may be conceded, for the purposes of this occasion, that Butler was the real party in interest in the suits brought in the name of Tilton against Whipple, and Morrison as his trustee. Conceding this, are the parties to the trustee suits and to this action the same? or, are they privies, either in blood, in estate, or in law ? In the trustee suits, Butler was plaintiff, Whipple was principal defendant, and Morrison was trustee. Before the trial Whipple died, and Vaughan, as his administrator, came in to defend. As to the issue between the plaintiff and trustee, the principal defendant was not a party, and had no interest in it or control over it, and the determination of that issue in favor of the trustee could in no way prejudice or bar his right to maintain a suit against the trustee. The trustee process is joint in form, but is considered a several process against the principal defendant and trustee. Ingraham v. Olcock,14 N.H. 243" court="None" date_filed="1843-12-15" href="https://app.midpage.ai/document/ingraham-v-olcock-8504680?utm_source=webapp" opinion_id="8504680">14 N.H. 243.

In Wallace v. Blanchard, 3 N.H. 398-9, this matter is clearly stated by RICHARDSON, C. J., thus: "This process against a principal debtor and his trustee in fact embraces, in one writ, always at least two distinct suits, on two distinct causes of action, between different parties; and the object of the plaintiff is to obtain at least two distinct judgments. The object or one of these suits is a judgment against the principal debtor in favor of the plaintiff, upon a declaration in the usual form. To this suit, the plaintiff and the principal debtor are the only parties. The trustee is as much a stranger to it as if his name were not in the writ. * * The object of the other suit embraced in this process is a judgment against the trustee for the amount of the debt due from him to the principal debtor. To this suit, the plaintiff and trustee are the only parties: the principal debtor is a stranger to this suit. It has been decided that a judgment in favor of the trustee, in this suit, does not find the principal debtor; but he may, in an action in his own name, still show that there was a debt due to him. Groves v. Brown,11 Mass. 334" court="Mass." date_filed="1814-09-15" href="https://app.midpage.ai/document/groves-v-brown-6404207?utm_source=webapp" opinion_id="6404207">11 Mass. 334. This could not be if he were properly a party to the suit between the plaintiff and the trustee, because he would in that case be bound by the judgment."

In this suit, Vaughan, as administrator of Whipple, is plaintiff, and Morrison is defendant, and the brief statement sets forth that it is brought to recover for the same property for which it was sought in the former suits to charge Morrison as the trustee of Whipple. If Butler had prevailed in the former suits, he would have appropriated the avails of his judgment in discharge of his debt against Whipple. If the administrator succeeds in this suit, even though it is prosecuted by Butler in his name, the avails of the judgment become assets in the hands of the administrator, and are appropriated by law, — 1st, to the payment of the expenses of administration, including funeral expenses and taxes; 2d, to the payment of preferred claims; 3d, to the payment of the other creditors; and 4th, the balance, if any, to the heirs of Whipple. The trustee suits were prosecuted by Butler for his own exclusive benefit. This suit is prosecuted in the administrator's name for the benefit of the estate, that is, of the creditors and heirs of Whipple. In the former suit, but one creditor (Butler) was heard: here, all the creditors and the heirs, represented by the administrator, are entitled to be heard. The judgment in Butler v. Whipple Morrison, trustee, is clearly res inter alios acta. If Whipple were alive, it is clear he could sustain this suit. Wallace v. Blanchard, supra. No reason is suggested why Vaughan as his legal representative may not do the same, except that he permitted Butler to use his name as administrator, and understood that the former trial should be final. Nor do I think it makes any difference that Butler prosecutes this suit in the name of the administrator, if the administrator, from want of funds or for any other reason, does not choose to incur the expense of a lawsuit. Butler (including the debt proved in Tilton's name) is a heavy creditor, and if he sees fit to advance the funds to prosecute this suit, he does so only for the benefit of the estate, and can reap only his proportionate share in the benefits that may result therefrom.

II. Nor are the issues the same. In the former suit the issue was, whether the trustee was or was not chargeable. Under that issue, the plaintiff could show in evidence that the principal defendant had a right of action against the trustee for some indebtedness or property in his possession, or that he had in his hands property belonging to the principal, which the latter had the right to carry away; but he could not be charged on account of any tort, although a right of action might have existed in favor of the principal, nor if the claim was for unliquidated damages only. Getchell v. Chase, 37 N.H. 109-110.

In this case the issue is, whether the defendant has converted the property to his own use.

By "matter in issue," says PARKER, C. J., in King v. Chase, 15 N.H. 9" court="None" date_filed="1844-07-15" href="https://app.midpage.ai/document/king-v-chase-8504730?utm_source=webapp" opinion_id="8504730">15 N.H. 9, is meant "that matter upon which the plaintiff proceeds by his action and which the defendant controverts by his pleadings, which is in issue." But facts offered in evidence to establish matters in issue are not themselves in issue within the meaning of the rule, although they may be controverted on the trial. Deeds which are merely offered in evidence are not in issue, even if their authenticity be denied."

Assuming for the moment that the parties are the same, the issues in the two suits are not the same. Under the issue of chargeable or not chargeable, evidence was introduced upon the question of the ownership of the property in dispute, involving the question of a valid purchase of the same from Whipple by Morrison: the same evidence would be admissible in the present suit under the issue of guilty or not guilty, and the fact of ownership and of a valid purchase undoubtedly was and is in controversy in the evidence; still it is not the matter put in issue by the parties in their pleadings, and for that reason cannot be pleaded in bar of this suit.

Neither the judgment of a concurrent or exclusive jurisdiction is evidence of any matter which came collaterally in question, though within their jurisdiction, nor of any matter to be inferred by argument from the judgment." Duchess of Kingston's case, 11 St. Tr. 261; King v. Chase, supra, 15.

III. Assuming as most favorable for the defendant that "the understanding" set forth in the brief statement was mutual, yet it does not appear that it was reduced to writing and placed on file, or was entered upon the docket by the clerk. When this is not done, the court will not enforce an agreement entered into by parties to an action, or by their counsel, but will leave the aggrieved party to his remedy by action. Fernald v. Ladd, 4 N.H. 370.

The motion to reject the brief statement must be allowed.

Exceptions overruled.