Hyperlawhypertext legal database Marsh v. Masterson 50 N.Y. Super. Ct. 187

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Marsh v. Masterson

50 N.Y. Super. Ct. 187 18 Jones & S. 187 Court N.Y. Super. Ct. Decision date 1884-03-03 English

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FRANKLIN MARSH, Respondent, v. JOHN H. MASTERSON, Appellant.
Decided March 3, 1884.

Headnote

Bes adjudieata.—Action for copartnership accounting.—Action at law for balance due.
The complaint alleged an agreement between plaintiff and defendant, whereby the plaintiff, in consideration of certain services to be rendered by him in defendant’s business, was to be paid on half of the profits thereof, after making certain deductions, and it stated the amount of said profits and of said deductions, and demanded judgment for the balance. The answer set up as a defense in bar, a judgment in a former action brought by plaintiff against defendant to recover the same profits upon an allegation of copartnership, in which former action a judgment of dissolution and an accounting was asked by plaintiff. It appeared that the proof in the two actions was identical, except that in the present action no reference was made to a copartnership, and the referee in this action found that the proof in the former action sustained the allegations of the complaint herein. Upon a trial of the first action, judgment was entered; which, after reciting the finding of the referee that there was no copartnership, dismissed the complaint.
Held, that said judgment was not a bar to the present action ; that the present cause of action was not litigated in said former action, and could not have been without an amendment of the complaint, which would not have been proper, and which, in any event, plaintiff was not bound to ask for.
Before Sedgwick, Truax and O’Gorman, JJ.
Appeal by defendant from judgment entered on the report of a referee.
The action was for the recovery of an amount equal to half of the profits of a business done by the defendant as a
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builder, as compensation to plaintiff, for his services under a special agreement with the defendant.
The facts appear in-the opinion.
Wheeler H. Peckham, for appellant.
In the complaint in the former case, the plaintiff alleged that he was entitled to half the profits of a certain business, and asked to have them ascertained and paid to him. In the complaint in the present suit, it appears that he alleges that he is entitled to the same half of the same profits of the same business—but he alleges that they amount to a certain sum, and asks to recover such sum. Both suits are brought on the same contract. Plaintiff in one suit calls that contract a contract of partnership, and in the other a contract for hiring; but in each suit the contract sued-on is the one which was made on the 6th May, 1872, in the conversation between plaintiff and defendant. Whether this- contract is called one of partnership or of hiring is unimportant. It is the one contract sued on in both suits. There is, then, absolute identity in the contract and the breach which form the subject matter of the two suits, the only difference is in the name which the plaintiff chooses to give to the contract, and in the form of the remedy asked. The prayer, however, is of no consequence; for, where there is an answer, any relief may be granted consistent with the case made. For instance, in the complaint herein and calling the contract one of hiring for half the profits as compensation, the plaintiff is entitled to an account precisely the same as if it be called á partnership (Collyer's Partnership, note 2, to § 44, p. 44, 5th Am. Ed.; 7 Jarman Conv. by Sweet, 11, note a). In many of the cases it will be seen that notwithstanding a clear right to an account, no partnership was held to subsist either as between the parties or as to third persons (Holmes v. Old Colony Railroad Corp., 5 Gray, 58 ). There would indeed seem to be no doubt that had the' plaintiff’s alleged agreement for compensation been proved in the former case it would have sustained his bill and en
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titled him to an account (1 Story's Equity, §§ 442-459 c ; Fairchild v. Robinson, 7 Robt. 572).
Now, if this same claim could have been made in the first suit, if in that suit the plaintiff could have proved the very contract he now alleges, and have had an accounting thereon, then the former suit is a bar, for a former adjudication is quite as much a bar, for all that could have been proved therein, as for all that was proved therein (Embury v. Connor. 3 N. Y. 522 ; Clemens v. Clemens, 37 Id. 74; Bloomer v. Sturges, 58 Id. 176; Jordan v. Van Epps, 85 Id. 436). The court says: “It is not necessary that it shall appear by the record of the prior suit that the particular controversy sought to be precluded was then necessarily tried and determined ; it is sufficient if there might have been judgment in the first action for the same cause alleged in the second” (Smith v. Smith, 79 N. Y. 634 ). It was never intended that a plaintiff should claim a right in successive different actions alleging in each a different reason. He is bound in the first to allege all his reasons and to bring forth every ground for his claim.
John Todd and William A. Coursen, for respondent.
A matter or cause of action is res adjudícala when it is actually merged in a judgment, or the same point has already been decided between the same parties; and if, by law a judgment could have been given for the plaintiff in a former suit, for precisely the same cause of action as that for which the present suit is brought, it has within the rule, passed into judgment, and is res adjudícala. But in order to bar the second action the circumstances must be such that the plaintiff might have recovered in the first for the same cause alleged in the second (Stowwell v. Chamberlain, 60 N. Y. 272 , 276 ; Palmer v. Hussey, 87 Id. 303 ). And whether the matter might have been tried in the former action must appear from the record alone: whether it was tried may be proved by parol (Campbell v. Butts, 3 N. Y. 173 ; Smith v. Smith, 79 Id. 634; Young v.
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Rummell, 2 Hill, 479 , 481; Dunckle v. Wiles, 6 Barb. 515 , 529).
The record shows that the first action between the parties in this case was an action in t he nature of a suit in equity, wherein the plaintiff sought relief: 1st. That the partnership between the plaintiff and the defendant be dissolved. 2d. That a receiver be appointed, in the usual form and with the usual powers, to wind up the affairs of the partnership ; to pay the creditors and to divide the surplus between the plaintiff and the defendant, etc. The answer of the defendant was a general denial, and the decision of the court on the trial was as follows ; “ This cause having come on to be heard in its regular order on the calendar, and having heard the allegations and proofs of the parties, I do find the following conclusions of fact: 1st. That the plaintiff and defendant did not enter into any co-partnership as alleged in the complaint herein of at all. And as a conclusion of law, I find that the complaint herein be dismissed, and that the defendant have judgment with costs.” And judgment was entered accordingly simply dismissing the plaintiff’s complaint. The case at bar is an action at law to recover for work, labor and services rendered by the plaintiff to the defendant under a special agreement between them. The trial of the first action having been had before the court without a jury, the facts found by the court are conclusive upon the parties, and will be considered as res adjudícala, for all purposes (Bissell v. Kellogg, 60 Barb. 617 ).
The pleadings in the first action show that the only issue raised in that action was the issue of partnership between the plaintiff and the defendant, and the record shows that the issue of partnership was the only one litigated upon the trial and the only one decided by the court, and it was the only one which could be tried in that action, for when the issue of partnership was decided against the plaintiff, the action was at an end, and the defendant was entitled to judgment (Arnold v. Angell, 62 N. Y. 508 ). The doctrine of res adjudícata applies only where a party has
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had a full opportunity to assert his rights, and ask for the remedy, in an action presenting or affording the opportunity to present the claim and where an issue is or can be legitimately framed to try it, and the court has jurisdiction, both of the parties and of the subject matter (Dawley v. Brown, 79 N. Y. 390 , 397; Stowell v. Chamberlain, 60 Id. 272 ; Matthews v. Duryee, 4 Keyes, 525, 538; Campbell v. Consalus, 25 N. Y. 613 ; Burdick v. Post, 12 Barb. 168 ; Baker v. Rand, 13 Id. 152, 160).
On the face of the record the judgment in the first action decided only that the plaintiff and the defendant were not copartners, and there is nothing before the court to show that anything else was decided in that action. A judgment is no evidence of a matter to be inferred from it by argument. The rule is, that it must clearly and distinctly appear from the record, or from proof aliunde the record, when such proof is admissible, that the particular ground urged was considered and passed upon by the court, in the former suit, or the adjudication will not operate as a bar in a subsequent action. The onus of proof, too, in such case, is on the party who relies upon the adjudication as a bar, and he must make it appear that the precise point was considered and passed upon in the former suit (Vaughan v. O’Brien, 57 Barb. 491 , 495).

The complaint alleges that the plaintiff and defendant entered into an agreement, whereby in consideration of the plaintiff’s overseeing, taking charge of and laboring in the business of defendant, the defendant agreed to pay the plaintiff for such services one-half of all the profits of said business, after making specified deductions. It further alleged what the profits had been after making the deductions; that the half of the profits amounted to $10,500 ; and that the defendant was indebted to plaintiff in such sum, less the credit hereinafter mentioned ; that the defendant was entitled “to a credit on account of $2,637.80 and it demanded judgment for the difference.

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The answer made a general denial, and for a separate defense, that the plaintiff had commenced another action in this court for the same identical cause of action in the complaint herein set forth; that the defendant appeared and answered therein ; that such proceedings were therein had that it was by the court duly considered and adjudged, on the merits, that the complaint of the plaintiff be dismissed, etc.

The complaint in the action pleaded in the answer, alleged that the plaintiff entered into partnership with the defendant for the purpose of carrying on a certain business ; that by the terms of the copartnership agreement, each partner was to share equally in the profits, the defendant to be allowed certain amounts. These amounts are the deductions referred to in the present complaint. It made further allegations of fact relevant to a right of plaintiff to dissolve the partnership, and asked judgment of dissolution and for an accounting.

The answer to this complaint was a general denial. Upon the trial of the issues, the court found that the plaintiff did not enter into any copartnership as alleged in the complaint or at all, and the judgment, after reciting this finding, was that the complaint be dismissed.

The referee found in the present action, that the former action referred to the business described in the present complaint, and that the profits, one-half of which the plaintiff here claimed, were the one half profits referred to in the former complaint. He also found that the testimony in this action proved the allegation of the present complaint.' The testimony in the two actions was about the same, the important difference being that in the former action the plaintiff testified to the defendant’s proposing to him to go into the partnership business, and in this action the plaintiff left out the word partnership.

The learned counsel for defendant claims that as the plaintiff sought to recover one half of the same profits in both actions, and could have had a jndgment.for an accounting as to the profits in the former action, and as the right

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is based by the plaintiff here upon the same contract, that he formerly brought his action upon, the former judgment is conclusive.

The identity of the relief demanded, for instance, as the defendant’s counsel claims, an accounting, does not of itself make the former action a bar. In Child v. Gibson (2 Atk. 603), Lord Hardwick said, ‘1 Every plea that is set up as a bar must be ad idem. Therefore if a judgment or decree be pleaded, it must appear to be ad idem.....The defendant only pleads that a bill was brought for an account and a decree made. For it is extremely hard to say that because the plaintiff failed in the case which he made on the former account, that now he has made a new case and brought a new bill, he shall not be allowed to go on, but be barred by a plea of a former decree in the same matter.” And it is not enough that the property in controversy in both actions is the same (Dawley v. Brown, 79 N. Y. 398 ).

It is necessary to show that the proof in the second action would have been available in the first action. In Miller v. Manice ( 6 Hill, 122 ), the court said, “It is no answer to the defense óf a former recovery that the form of action in both suits is not the same. . . . For if the same question was submitted to the jury in the first action and the evidence in the last suit, if it had been given in the first action, would have been equally available as in the last, to entitle the plaintiff to recover under the state of pleadings in both, then the verdict and judgment in the first action .... is an absolute .bar to any recovery,” in the second action. “But where the form of the first action was such that the proof necessary to a recovery could only be brought forward in a different form of action .... the failure of the plaintiff in one suit is no bar to their recovery in the other, although it is for the same cause of action for which they attempted to recover in the first suit.” In the present case, the cause of action is upon a contract to pay money for services, while the first was an action based

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upon the alleged existence of a partnership.. The case of Rice v. King ( 7 Johns. 20 ), cited in several cases down to Steinbach v. Relief Fire Ins. Co. ( 77 N. Y. 501 ), declares that “ What is meant by the same cause of action, is where the same evidence will support both the actions, although they happen to be grounded on different writs.” In fact, the testimony given in the present action was irrelevant in the first action, in a substantial sense. The court had to hear it, in the first place, but when in the end it appeared to have no tendency to support the case of a partnership, it then wras shown to be irrelevant. For instance, if the acts sworn to by plaintiff had been in a paper signed by the defendant, the court would have excluded it as not tending to show a partnership.

In substance, the defendant’s position is that the plaintiff might have, in the first instance, brought an action like the present, but that does not show that the present claim was ever adjudicated, or that it might have been, in a former action. It could not have been, except by an amendment of the complaint. An amendment to conform the pleadings to the proof would not have been proper, for the amendment would have introduced another cause of action. If asked for upon motion, it would at least have been within the discretion of the court to deny the application. But the plaintiff is not now to be held to an obligation to have made such an application, any more than the defendant was under obligation to disregard the form of the first ‘ action, and to have allowed plaintiff to take a judgment for an accounting. The defense on this ground must be overruled.

The objection to the finding of the referee, upon the main issue of fact, is based substantially upon the idea that the referee was confined to the testimony given by the plaintiff. In reality, the referee was bound to look also at the testimony for the defendant which supported the plaintiff’s claim in important respects.

Some objections were taken to the admission of certain books. The testimony shows that the defendant proved

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all the matters that the books were intended to prove. In some cases, the contents were admissible against the defendant, because made by Ms agents. There was a certain presumption that he had seen them and recognized their correctness. In one instance, a witness testified to certain things in a book, as having occurred, when all he knew was that the book contained them, and the book was not itself verified. In this case, the defendant himself swore to the facts set out in the book.

In estimating the price to be asked for constructing a building, the defendant considered that by the proposed arrangement, he was to be paid in a second mortgage upon the lot and building, to the extent of $15,000. He inquired what the cash value of such a mortgage would be and was told, and it could be sold for not more than its face less ten per cent. He thereux^on added $1,500 to this estimate. In order to carry on the work, he procured money by selling certain securities that he had theretofore held for investment, which was made necessary, perhaps, because of what would otherwise be money jjayments made from time to time, being made in gross at the end in a second mortgage. He did not sell the mortgage, but kept it and was paid in full. He claimed a right to deduct from the XU'ofits the discount referred to. This was inadmissible, for whatever his expectation as to a possible loss in disXiosing of his security, he in fact received the whole and lost no part of the sum by which he increased Ms estimate. The terms of his contract with the plaintiff, justified his charging interest on the juoceeds of his securities, that he used in carrying out the contract.

He further claimed a right to charge certain sums he X>aid to architects for their favor in supervising work done by him. The plaintiff was not asked for a consent to this and gave none. As against him, it was not j>retended to be a charge usual in such business, even if the law could recognize it at any time.

He also claimed a credit for taking, in lieu of money due to him, two bonds which turned out to be worthless.

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This was a voluntary act on his part, for his debtor was responsible and could have paid in money. This gratuity to another was not a business expense.

Judgment affirmed, with costs.

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