Southern Pacific Co. v. Edmunds

LORIGAN, J. Plaintiff having declined to amend its complaint after a demurrer to it was sustained, judgment was entered against it, from which it appeals. The complaint alleged .that on December 19, 1909, defend-, ant herein, while riding in a mail coach in a train operated by plaintiff, was, through an accident occurring from its negligence, seriously injured, to his damage in the sum of five thousand dollars; that on January 11, 1910, plaintiff and defendant agreed to settle and compromise the claim of defendant for said injuries for the sum of one thousand two hundred and fifty dollars, which plaintiff then.paid him, and the latter thereupon executed and delivered to plaintiff a full release of all claims on account of said injuries; that thereafter and on February 21, 1910, defendant commenced an action against plaintiff to recover thirty thousand dollars’ damages on account of said accident, claiming that said settlement had been procured through false representations made by-plaintiff to defendant; that plaintiff answered in said action, and, among other defenses, set up as a bar to any recovery by defendant, the making of said settlement and the execution of said release; that thereafter said cause was tried before a jury, and on the trial defendant introduced evidence tending to prove that the making of said settlement and the execution of said release were procured by misrepresentations on the part of plaintiff; that before the submission of said cause to the jury defendant herein requested the court to instruct the jury as follows: “You are instructed . . . then you will disregard said release or said settlement (referring to the $1250.00 theretofore paid), except, if you find for the plaintiff damages as defined *417 in the instructions herein, you will' credit the sum by the amount of money admitted to have been received in such settlement”; that said instruction was rejected by the court, and thereupon, with the consent of both parties, the court instructed the jury that, “In case you find for the plaintiff, you are instructed that you shall find and insert in your general verdict the full amount of his damages without crediting defendant for the $1250.00 which it has paid, and without making any allowance therefor,” and gave no instruction as to the amount of damages to be allowed, or as to any deduction on account of the previous payment to defendant of the sum of one thousand two hundred and fifty dollars; that the jury returned a verdict for defendant herein, assessing his damages at five thousand dollars, and judgment in his favor was entered accordingly, which on appeal by plaintiff was affirmed by the district court of appeal; that thereafter plaintiff tendered to defendaiit the sum of $4360.72, being the amount of said judgment and interest, less the sum of one thousand two hundred and fifty dollars and interest thereon, and demanded that defendant accept said amount and satisfy said judgment, which he refused to do; that thereupon plaintiff paid the defendant $4360.72 under a stipulation between the parties that such payment should not constitute a waiver by defendant of his right to recover the full amount of said judgment, nor of the right of plaintiff to have a deduction of one thousand two hundred and fifty dollars with interest from the amount of said judgment, it being agreed that plaintiff should commence an action at once to determine the claims of the respective parties, and that execution on the judgment should be stayed until the question should be determined ; that defendant has never tendered or refunded said one thousand two hundred and fifty dollars to plaintiff, nor has plaintiff received any credit in any way for the payment of said amount. The relief asked was that it be decreed that plaintiff is entitled to a credit for said one thousand two hundred and fifty dollars and interest on said judgment; that it has made full payment thereof to defendant and that defendant be required to enter a satisfaction of said judgment. The trial court sustained a demurrer to the complaint on the ground that the matter of credit set up in the present action was res adjudicata by the judgment in the damage suit. *418 The rule undoubtedly is that a former judgment between the parties to an action is conclusive in all subsequent actions involving the same question, not only as to the matters actually decided in the former controversy, but as to all matters belonging to the subject of the controversy and properly within the scope of the issues which also might have been raised and determined; the presumption being that all such issues were presented and decided. (Bingham v. Kearney, 136 Cal. 175, [68 Pac. 597]; Rucker v. Langford, 138 Cal. 611, [71 Pac. 1123].) As to matters, however, which might have been litigated and decided in a former suit as within the scope of the issues, but which were not actually or expressly in issue and adjudicated, only a presumption is indulged in that they were decided. This presumption is, however, a disputable one and may be overcome by showing, that although a particular matter was involved in the former action, it was by consent of the parties withdrawn from„consideration at the trial and did not at all enter into or constitute any part of the verdict of the jury or final determination of that action. If this is the situation here, defendant certainly cannot invoke the doctrine of res adjudicata against the assertion by plaintiff in this action of a right to the credit claimed. He cannot assert the conclusiveness of the former judgment on that matter if he consented with plaintiff that it might be withdrawn from consideration by the jury as an issue in the former action and it was in fact withdrawn. While it is doubtless true that this credit for the amount paid as a release was technically within the issues raised in the damage suit, it was never an issue over which there was any controversy between the parties in that action; there never was any question made on the part of the defendant but that plaintiff was entitled to a credit for that amount in any assessment of damages which the jury might make against it. The real issue in the case (because the defendant did not deny that the injuries to defendant were caused by its negligence) was as to the release—its validity. And however that question of validity might be determined by the jury, the plaintiff here was entitled to the benefit of the one thousand two hundred and fifty dollars it had paid defendant, because if the release was valid, such payment was in satisfaction of the claim of defendant for damages, and *419 if it was invalid the plaintiff was undoubtedly entitled to it as a credit against any verdict or judgment which might be found against it. As we have said, the right of plaintiff to the credit was not questioned by defendant in the damage suit. He knew that as a mattter of law, plaintiff was entitled to it in some way and conceded that it might be given to plaintiff by the jury in the damage suit when estimating his damages if their verdict was favorable to him, because he asked the court to so instruct the jury to credit plaintiff with that amount in any verdict it might find. This, however, the court refused to do. It does not appear that the defendant objected to the giving of this instruction; it is rather a reasonable assumption to make that it did not. The refusal of the court to so instruct at the request of defendant was followed by the giving of the consent instruction heretofore quoted, in which the jury was told that in any verdict for damages they might find they were not to credit defendant with the one thousand two hundred and fifty dollars it had paid, and without making any allowance therefor. Had this consent instruction not been given, and had plaintiff itself failed to ask an instruction to the jury to credit it with this one thousand two hundred and fifty dollars payment in estimating any damages against it, there might be room for the application of the doctrine of res adjudicate, as defendant invokes it. But the giving of this consent instruction obviated any necessity on the part of plaintiff of asking for a credit instruction or complaining of the action of the court in refusing the credit instruction asked by defendant because the consent instruction withdrew that issue entirely from the ease. As the defendant was conceding that plaintiff was entitled to the credit and had asked the court to so instruct the jury and there was no dispute but that as a matter of law the latter was entitled to it, the apparent purpose of the consent instruction immediately following the refusal of the court to give the credit instruction was to withdraw the matter of the right of plaintiff to such credit from present consideration by the jury, leaving its application on any judgment which might be obtained against plaintiff for consideration when it should be called on to satisfy it. Plaintiff, by consenting to the instruction given, was probably entirely willing and prepared to have the jury try out the question of the validity or invalidity of the release, unembarassed by *420 any question of credit payment, reserving that matter for consideration at some future time, and defendant, as he freely conceded its right to this credit, was agreeable that this might be done. In any event, the consent instruction withdrew the matter from the case, and being so withdrawn it was not a matter which was concluded by the judgment in the former action. The judgment is reversed. Henshaw, J., and Melvin, J., concurred. Hearing in Bank-denied.