Vaughan v. Morrison

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 *Page 587 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." *Page 588 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.