Opinion
12-06-1877
CHRISMAN'S adm'x v. HARMAN & al.
Richard Parker and H. Conrad, for the appellant. Barton & Boyd, for the appellees.
1. A surety on an injunction bond for the second endorser of a negotiable note, who has been compelled to pay said note, is entitled to recourse against the first endorser to recover the amount so paid.
2. Such surety is not barred from such recourse by the fact that in a suit in equity, brought by the holder of such note against the maker and endorsers, a decree was rendered in favor of the first endorser.
3. Nor is such surety barred of such recourse by the fact, that in another suit in equity, brought by the second endorser to establish the liability to him of the first endorser, the bill was dismissed upon answer and demurrer, there being set out several causes of demurrer, of which some went to the merits of the controversy, and others did not, and it not appearing for what cause the bill was dismissed.
4. It is settled law that a judgment of a court of competent jurisdiction, upon a question directly involved in one suit, is conclusive as to that question in another suit between the same parties. But to this operation of the judgment it must appear either upon the face of the record, or be shown by extrinsic evidence, that the precise question was raised and determined in the former suit. If there be any uncertainty on this head in the record, as for example, if it appear that several distinct matters may have been litigated, upon one or more of which the judgment was rendered, the whole subject matter of the action will be at large and open to a new contention, unless the uncertainty be removed by extrinsic evidence showing the precise point involved and determined.
5. The doctrine touching estoppel by matter of record, stated by Burks, J.
This case was heard at Staunton, but was decided in Richmond. It was an appeal from a decree of the circuit court of Frederick county, rendered in a cause in which M. G. Harman was plaintiff, and John H. Chrisman's administratrix and G. A. White were defendants. The object of the suit was to recover from Chrisman's estate the amount which Harman had paid as surety of White in an injunction bond, to the holder of a note made by Trussell & Coburn and endorsed successively by John H. Chrisman and G. A. White. The questions involved were whether Harman, having as the surety of White in the injunction bond, paid the debt to the holder, was entitled to be substituted to the rights of White against the prior endorser, John H. Chrisman; and whether Chrisman's estate was not protected from such liability by decrees made in prior suits between the holder and the other parties to the note, and one by White against Chrisman and others.
It appears that M. G. Tuley brought a suit in equity against Trussell & Coburn as the makers, and Chrisman and White as endorsers, of a note which the plaintiff alleged had been made and endorsed by these parties, and had been protested for non-payment, and notice given to the endorsers; and which was lost. The bill was taken for confessed as to the makers and White. Chrisman answered denying his endorsement and notice, and calling for proof. And there being no proof of Chrisman's having endorsed the note, when the cause came on to be heard the bill was dismissed as to him, and there was a decree for the amount of the note against the makers of the note and White.
Subsequent to the term at which this decree was rendered, White filed a petition for a rehearing and an injunction. An injunction was granted, upon the condition of White's executing a bond with surety in the penalty of $3,000, conditioned according to law; and the bond was given, with M. G. Harman as the surety. This was in April, 1870. In June, 1870, the case came on upon the petition, and the note with the protest and notice having in the meantime been found, the court refused the petition and dissolved the injunction; and Mrs. Tuley was authorized to proceed in her suit to subject White's land.
In November, 1870, White filed his bill to review the decree first rendered against him, on the ground of after discovered evidence, making M. G. Tuley, Trussell & Coburn, and Chrisman defendants, and asking that Chrisman, as the prior endorser on the note, might be held liable over to him for the amount by said decree adjudged against him (White).
To this bill Chrisman demurred and answered, the demurrer being in the answer; and he stated six grounds of demurrer. 1. That it did not appear from said bill or otherwise that leave had been obtained to file the bill 2. The plaintiff not having answered the original bill, but the same having been taken for confessed as to him, he will not be permitted to bring his bill of review to repair the consequences of his laches and neglect. 3. The decree was not a final decree as to the plaintiff. 4. The decree was a proper decree, even if the alleged newly discovered evidence had been before the court. 5?? That it did not appear by the bill of review that the decree complained of had been performed by the complainant. 6. Want of equity on the face of the bill and possession of the note precludes the jurisdiction of this court. And answering, he denies that plaintiff has any after discovered evidence which could not have been produced at the hearing of the cause by the exercise of reasonable diligence.
Chrisman having died, the case was revived against his administratrix; and the cause coming on to be heard in June, 1874, the bill of review was dismissed as to Chrisman's administratrix with costs against White. Tuley then sued upon the injunction bond, and recovered a judgment against White and Harman; which was satisfied by Harman. And he then filed his bill against Chrisman's administratrix and White, to have satisfaction out of the estate of Chrisman. And the court, at its June term, 1876, it being admitted that Trussell & Coburn and white were insolvent, made a decree against Chrisman's administratrix in favor of Harman for $2,003.92, with interest, subject to credits stated. And thereupon Chrisman's administratrix applied to this court for an appeal; which was allowed.
Richard Parker and H. Conrad, for the appellant.
Barton & Boyd, for the appellees.
BURKS, J.
This is a controversy between the representatives of the first and second endorsers of a negotiable note. The appellee, Harman, as the surety on an injunction bond of White, the second endorser, was compelled by suit to pay the amount of the note to the holder, and he filed his bill to be substituted for indemnity to the rights of White, who was insolvent, against the personal representative of Chrisman, the first endorser.
An examination of the record satisfies me that both of these endorsers had become bound to the holder for the payment of this note. The note was not paid at maturity by the makers, was duly protested for non-payment, and each endorser had due notice of the dishonor. This is shown by the notarial certificate filed with Harman's bill. The circuit court gave Harman a decree against the personal representative of Chrisman according to the prayer of his bill.
It is objected in the first place, by the appellant's counsel, that this was not a case for the application of the equitable doctrine of subrogation. I do not think the objection well founded. The endorsers were severally and successively bound by their respective endorsements, and inter se Chrisman was primary debtor and White a quasi surety. If White, as endorser, had paid the note to the holder, it would not have been discharged or extinguished, but he would have had the right to hold it as a subsisting security against the prior endorser for the amount paid. A bill is not discharged and finally extinguished until paid by or on behalf of the acceptor, nor a note until paid by or on behalf of the maker. Byles on Bills, side p. 220.
Harman, as surety on the injunction bond, became bound for the payment of the note on which a decree had been rendered against White, and when and as soon as payment was made by him he became entitled in equity to the benefit of all the securities held by White, his principal, for his indemnity, and to be substituted in equity to all the remedies of White to enforce such securities. The note, although thus paid, was not extinguished, but continued a security for the amount paid, to which Harman became entitled in equity to resort for his indemnity. This conclusion results from the equitable doctrine of subrogation, and is supported, I think, by the authorities.
But it is further contended by the appellant's counsel, that even if a court of equity had jurisdiction to grant relief upon the principle of subrogation, yet Harman, standing in White's shoes, is concluded by the decrees of November, 1869, and June, 1874. The doctrine of res judicata and estoppel generally is stated at large by Mr. Conway Robinson, in the 7th volume of his Practice, from page 1 to page 482. The rule, as stated by Mr. Justice Field, of the supreme court of the United States, will suffice for this case. In Hughes v. U. States, 4 Wall. U. S. R. 236, he says: " In order that a judgment may constitute a bar to another suit, it must be rendered in a proceeding between the same parties or their privies, and the point of controversy must be the same in both cases, and must be determined on its merits. If the first suit was dismissed for defect of the pleadings, or parties, or a misconception of the form of proceeding, or the want of jurisdiction, or was disposed of on any ground which did not go to the merits of the action, the judgment rendered will prove no bar to another suit."
Again, in a still more recent opinion, the same learned judge says: " It is undoubtedly settled law that a judgment of a court of competent jurisdiction upon a question directly involved in one suit, is conclusive as to that question in another suit between the same parties. But to this operation of the judgment it must appear, either upon the face of the record or be shown by extrinsic evidence, that the precise question was raised and determined in the former suit. If there be any uncertainty on this head in the record, as for example, if it appear that several distinct matters may have been litigated, upon one or more of which the judgment was rendered, the whole subject matter of the action will be at large and open to a new contention, unless the uncertainty be removed by extrinsic evidence showing the precise point involved and determined. To apply the judgment and give effect to the adjudication actually made, when the record leaves the matter in doubt, such evidence is admissible. * * * * * * * *
According to Coke, an estoppel must be ‘ certain to every intent’ ; and if upon the face of a record, anything is left to conjecture as to what was necessarily involved and decided, there is no estoppel in it when pleaded, and nothing conclusive in it when offered as evidence." Russell v. Place, 94 U. S. R. 4 Otto 606.
Applying the law thus laid down, I am of opinion that neither the decree of November, 1869, nor the decree of June, 1874, constitutes any bar to the relief which was prayed and granted in this case.
The first named decree was made in a suit brought by the holder of the note against the makers and the two endorsers, equitable jurisdiction being based on the ground that the note was lost. Chrisman answered the bill and denied his liability as endorser. White made default, and at the hearing of the cause, no evidence being offered by the complainant to contradict Chrisman's answer, the bill was dismissed as to him and a decree entered against the makers and White for the amount of the note. No question was raised or decided between the endorsers as to their respective rights and obligations touching the note. The litigation was wholly between the complainant in the bill on the one side, and the defendants on the other, nor was any such case made either by the pleadings or proofs as warranted any decree between these defendants. After this decree, the lost note was found, and with it the notarial certificate, from which it appeared that the note had been regularly protested for non-payment, and that each endorser had due notice. Thereupon White filed his bill against the holder of the note, the makers and Chrisman, alleging the finding of the note and the facts connected with it, and praying that the decree of November, 1869, be reviewed and reversed, or at least modified so far as to hold Chrisman liable as prior endorser and compel him to make payment of the note to the exoneration and relief of White, who was only secondarily bound.
Chrisman answered and demurred to the bill in the same pleading, and at the hearing the bill was dismissed. In the decree no mention is made of the demurrer as distinguished from the answer, for the reason, no doubt, that the demurrer was regarded and treated as of the same pleading with the answer. Six causes of demurrer were specially assigned, and most of them, as will appear on examination, do not touch the merits of the controversy. For example, one cause assigned is, that the bill was filed without the leave of the court; another, that the decree complained of was not final as to the complainant; and another, that the decree had never been obeyed and performed by the complainant; by which was doubtless intended that the complainant had not paid the sum (the amount of the note) decreed against him, and therefore his bill was prematurely filed.
It does not appear by the record upon what grounds the bill was dismissed, whether upon the merits or upon some of the special causes of demurrer not involving the merits; and as no extrinsic evidence was furnished in the subsequent suit, if indeed any could be in such a case, showing the precise point involved and decided in the former suit, according to the authority of Russell v. Place, supra, " the whole subject matter of the action was at large and open to a new contention."
In this " new contention," I am satisfied that justice has been done between the parties, and I am of opinion to affirm the decree of the circuit court.
DECREE AFFIRMED.