Still v. Lombardi

HEAD, Associate Justice. On March 7, 1887, William Still executed to C. Lombardi a note for the sum of $542, payable to his order on or before March 7,1891, with interest at the rate of 10 per cent per annum from date, and stipulating for the payment of 10 per cent as attorney’s fees, in case of legal proceedings. This note, with others, *317 was given for the purchase money of the land described in the petition herein, and a vendor’s lien to pay the same was expressly reserved. This note was by the payee, C. Lombardi, indorsed in blank and delivered to the Houston Land and Trust Company; and said indorsee instituted suit thereon in the District Court of Wichita County at its April term, 1891, alleging in its petition, that it was a private corporation, organized, chartered, and doing business under and by virtue of the laws of the State of Texas. It averred the execution and indorsement of the note as above set forth; that it was given for part of the purchase money of the land herein described; that appellants Ward and Flood had purchased said land from appellant Still, and prayed judgment against said Still as maker and said Lombardi as indorser, and for the foreclosure of its vendor’s lien against all of the parties. To this petition Lombardi answered, admitting all the allegations therein contained. The other defendants therein, Still, Ward, and Flood, answered by general denial, and specially, that the said Houston Land and Trust Company was a private corporation chartered under the laws of this State, as alleged in its petition, and that it acquired said note by discounting the same and paying therefor much less than its face value, in violation of the Constitution and laws of this State prohibiting the creation of corporations for such purposes, and was therefore not the owner of the note, and had no right to maintain suit thereon.. Hpon the trial of this case, the court made special findings of law and fact, setting forth the execution and indorsement of the note, and that it was given for the land, as alleged by the plaintiff therein, and that the defendants Ward and Flood had subsequently purchased said land from the maker of said note; also, that said Houston Land and Trust Company was incorporated as alleged by it, and had .acquired said note by discounting the same, as alleged in defendants’ answer; and concluded, therefore, that it had no right, to maintain said suit. Hpon these conclusions, judgment was rendered in favor of. the land and trust company against Lombardi for the principal, interest, and attorney’s fee due upon the note, but as to the other defendants, adjudged that it take nothing by reason of its said suit, and a foreclosure of the lien was refused. After the rendition of said judgment, Lombardi paid the same and received said note back from said land and trust company, and instituted this suit thereon against the maker,- Still, and Ward and Flood as subsequent purchasers of the land, to recover of the maker the amount of principal, interest, and attorney’s fees evidenced by the note, and to foreclose the vendor’s lien against all the parties. To this petition all of the defendants answered, pleading the proceedings in the former suit, as herein before set forth, as res adjudicata of the matters herein involved. • • The court below found in favor of the plaintiff Lombardi for the amount of the note and foreclosure of the lien, as prayed for by him, *318 and rendered judgment accordingly; from -which this appeal is prosecuted. Opinion. — We are of opinion that the judgment rendered in the case of the Houston Land and Trust Company v. William Still et al., as set forth in the conclusions of fact, is not a bar to the prosecution of this suit by Lombardi, the payee in the note. It will be observed that the record in that case shows, that the court found affirmatively that Still gave the note to Lombardi for the purchase price of the land upon which the lien was sought to be foreclosed, and only gave judgment in favor of the appellants herein upon the ground that the plaintiff in that suit was not the owner thereof. Under such circumstances, we believe it can not be maintained that the judgment rendered upon that ground can operate as a bar to the prosecution of a suit by one who, at the time of its institution, is shown to be the owner, unless perhaps it be in a case where the sole title of such subsequent owner was derived from the defeated plaintiff after the rendition of the judgment relied upon. In this case, Lombardi was the payee in the note, and had attempted to transfer it to the plaintiff in that suit. If that transfer was ineffectual, he still remained the owner. If it was a good indorsement, he had the right at any time to pay the note to the indorsee, with or without suit, and either before or after judgment, and take it up and institute suit thereon in his own name against those primarily liable for its payment. Upon this subject, in 1 Freeman on Judgments, section 227, it is said: “The merger of the cause of action has no effect upon the liabilities of the coplaintiffs or the codefendants between each other. Those liabilities are not in issue in the case, and therefore are not affected by the final determination of the action. In extinguishing a demand, a judgment has no greater effect than mere payment. It leaves the liability of other parties to the defendant unaffected. A recovery upon a note against the maker and indorsers does not so merge the note as to prevent the indorsers from paying the judgment, receiving the note, and maintaining action on it against the maker.” Also see 15 Am. and Eng. Encyc. of Law, 342. If the indorser is not precluded from maintaining a suit against the maker of the note by reason of its previous merger into a judgment in favor of the indorsee, we think, a fortiori, he is not precluded by a judgment which expressly refuses to merge the note, upon the ground that the one bringing the suit is not the owner thereof. Again, we believe it can not be successfully maintained that there has been an adjudication either of the question of ownership or liability, as between the parties to this record. It is true, they were all parties defendant to the suit instituted by the land and trust company, and in that suit, by reason of our statute, Lombardi might have been authorized to plead over against his codefendants; but this was *319 only a privilege and not a duty, and if lie saw proper not to have the question of suretyship adjudicated in that proceeding, the relation of the parties, as between themselves, would not be changed by a joint and several judgment rendered against them. Wren v. Peel, 64 Texas, 375. Delivered June 20, 1894. In 1 Freeman on Judgments, section 158, it is said: “Parties to a judgment are not bound by it in a subsequent controversy between each other, unless they were adversary parties in the original action. If A recovers judgment against B and C upon a contract, which judgment is paid by B, the liability of C to B in a subsequent action for contribution is still an open' question, because as to it no issue was made or tried in the former snit. As between the several defendants therein, a joint judgment establishes nothing but their joint liability to plaintiff. Which of the defendants should pay the entire judgment, or what proportion each should pay, in case each is partly liable, is still unadjudicated.” The record in the case in which the former judgment was rendered leaves no doubt as to what was adjudicated therein; and we think that the issue determined — that is, the ownership of the plaintiff in that suit — will not preclude the indorser, who was therein adjudged in effect to have always been the owner, from recovering herein, although it may appear that he saw proper to repay the money he obtained for an ineffectual transfer. We therefore conclude, that the judgment of the court below should be affirmed. Affirmed.