Kohly v. Fernandez

Scott J. : The facts in this case, although unusual are not complicated, and as we view it there is but a single,question of law which, requires serious consideration. The plaintiff and defendants are sister and brothers,- children of Pedro Lamberto Fernandez, deceased, a resident and large property Owner in Cuba. He died in 1892 and for some time his estate was managed in community without division among his heirs. In 1894-the plaintiff appears to have withdrawn from the community and her brothers executed and delivered to her the instrument, hereinafter for convenience called the mortgage, to enforce-which" is the object of this action. This instrument, executed by both of the "defendants, recites that plaintiff had withdrawn from the community constituted as to the property of the. estate of her father ; that her account having been liquidated, after deducting the. part "that she had to pay, showed a balance in her favor of $69,1)00 in gold-. Thereupon the defendants acknowledged themselves to be indebted to plaintiff in" said sum of $69,000, which they agreed to pay her in certain specified installments, "with the proviso that if default should be made, in the-payment of any installment, and should continue for two months, the whole amount should at once become payable, and" plaintiff should be entitled to demand ' the entire indebtedness by executory proceedings. As security for -the payments thus agreed to be made, the mortgáge was made a lien upon a plantation known as the “ Union,” and also upon certain other property, apparently of minor importance and .value. The defendants paid the installments as agreed for some- time -but then discontinued payment and plaintiff elected to declare the whole sum due. Meanwhile, a prior mortgage on thé “ ¡Union ” planta? tion hád been foreclosed and the property sold. Plaintiff there [725] upon instituted in the Cuban court having jurisdiction of such matters what is known as an executory action for the recovery of the money still unpaid to her, amounting to $56,000, and for. a foreclosure of her lien upon the property mortgaged other than the “ Union ” plantation. In this actioii she effected service of process only upon her brother Andres, the appellant Jose not appearing in the action. Judgment went in plaintiff’s favor, and upon appeal by Andres was affirmed. Foreclosure was decreed against the property mortgaged, except the “ Union ” plantation, and the properties were sold and apparently bought in by plaintiff or for her account. Plaintiff thereupon brought this action, serving only Jose, who is the present respondent. Her complaint is upon the mortgage, which is set forth. She also'' pleads the judgment and the affirmances thereof in the appellate courts to which Andres had appealed. Andres then began what is known as a declaratory action in the appropriate court in Cuba, being the court of first instance of the city of Colon, to review the executory action theretofore brought by plaintiff, and to re-examine the questions decided therein, and for a judgment declaring that the credit claimed by plaintiff under the aforesaid judgment could not be claimed, and declaring the nullity of the sales of mortgaged property made in pursuance of the judgment in the executory suit. In this action both plaintiff and the respondent Jose were made defendants. Both, appeared by attorneys, plaintiff answering and contesting the action, and Jose making no answer or defense, whereupon as to him, the. judgment recites he was held “ as in default and the complaint as answered.” Judgment was entered in this action to the effect “ that payment cannot be enforced of the credit of $69,000 — in which amount Andres and Jose Miguel Fernandez y Morrell declared they were indebted towards Carolina Fernandez y Morrell de Kohly as appears from deed Ho. 426, executed on the 13tli of July, 1894, before the notary of Habana, Jose Miguel Huno, which was basis of the executive suit prosecuted by that lady in this court against her brothers Andres and Jose Miguel Fernandez y Morrell, likewise declaring void the public sales effected in said suit of the properties * * * sold on foreclosure in the said executive suit.” Upon the rendition of this judgment, the respondent set it up in a supplemental answer, alleging “ that the said judgment so [726] rendered in said action against the plaintiff in this action as herein-above set forth, still remains in full force and effect, and is a bar to the maintenance of this action by the plaintiff, and that the matters alleged in the complaint herein by reason of said judgment have become and now are' res adyudieata, as between the parties to this action.” The plaintiff herein appealed from the foregoing judgment to the Audiencia- or Superior Court of Matanzas, which On August 14, 1905, in all things reversed said judgment. She thereupon served a reply setting up said judgment of reversal and alleging “ that the said judgment of the Audiencia or Superior Court of Matanzas was the judgment of a competent court and was rendered after the commencement of this action, and after the service of the pleadings herein and determines the matters in controversy herein or a part thereof.” Thereupon Andres appealed to the Supreme Court of the island of Cuba, the court of final appeal, which reversed the judgment of the Superior Court of Matanzas and in all things affirmed the judgment of the court of first instance of the city of Colon. Respondent' thereupon, by a second supplemental answer, set up the judgment of this final court of appeal again alleging that it constituted a bar to this action and that by reason thereof the matters alleged in the complaint had become' res aJgiidicata'hetweea. the parties to this action. The record shows-that the respondent took no part iii the action either in the court of first instance or upon either of the appeals, except, as already stated, to appear by attorney in the court of first instance and default.. The sole question, as we regard it, is whether as between the plaintiff and her brother Jose, the present respondent, the judgment in the declaratory action in the court of first instance is res adjudieata of the matters alleged in the complaint herein. The two appeals.in the declaratory action may be disregarded because their final result was to affirm the judgment of the court of first instance. The competency of the Cuban courts to entertain the declaratory action does not seem to be open to-serious question. It was admitted in the action itself and both parties to this action have pleaded and relied upon one or the other of the judgments therein rendered. Of course a judgment to be res adjudhatw as to one of the parties must be so as to "both, and, therefore, if the judgment [727] in the Cuban court would have been conclusive upon respondent if it had established the validity of the mortgage, it is conclusive upon the appellant to establish its invalidity. The mortgage was clearly a joint obligation of the brothers who signed it. It may also have been several, but it was certainly, joint as was their obligation to pay under its terms. Hence, any judgment that determined its invalidity as to one must of necessity equally determine its invalidity as to the other. The fact that the respondent, after entering an appearance in the action, did not answer but permitted judgment to go by default, did not affect the binding force of the judgment as to him. (Bell v. Gittere, 9 N. Y. Supp. 400; affd., 134 N. Y. 616.) FTor does the fact that appellant and respondent were codefendants in the action in Cuba deprive the judgment of its conclusive force as between them. 'They were essentially adversary parties. . A judgment in favor of or against Andres, the plaintiff in that action, would necessarily'determine Jose’s liability to his codefendants, for it is inconceivable that a joint obligation can be void as to one obligor and valid as to the other. The plaintiff here might, of course, have a cause of action against one brother and none against the other, but not upon the mortgage upon which alone she sues. As was said by the Court of Appeals in Craig v. Ward (3 Abb. Pr. [N. S.] 235): “ The general rule is that all are bound by a judgment who had a right to be heard therein and all who are in privity with them, and that all who are bound by a judgment az'e entitled to the benefit of it against parties to it or their privies. * * "x" Q-reenleaf thus explains it: 6 Uzider the term parties izi this connection the law includes all who are directly interested in the subject matter and had á right to znake defense or to control the proceedings .and to appeal from the judgment-.’ * * * I do not find in the cases any such qualification of the rule that defendants are bound by a judgment to which they ai*e parties as that this -effect is not produced as between themselves. The rule is general and reciprocal. Its object is to produce that '■finis litium ’ which the law so greatly desires, and with so much difficulty finds. The plaintiffs and the defendants, and each plaizitiff and each defendant, and as between each plaintiff and each defendant finds'here an estoppel upon every question involved in the judgment. There is no such limitation as the defendants con [728] tend for, and a defendant can claim the advantage of the termination of the controversy against his codefendants in the same manner as against a plaintiff.” In Tuska v. O’Brien (68 N. Y. 446) a judgment in favor of a plaintiff against several defendants respecting the right to a fund was held to be res adgudicata, upon that question in a subsequent action by one of the codefendants against the sheriff to recover the property, Our conclusion is that the judgment of the Cuban court in the declaratory action, which was unquestionably .conclusive as between Andres Fernandez and bis sister, the plaintiff here, is equally conclusive as to the parties to this action, and as that judgment determined that the mortgage upon which plaintiff sues here was invalid and unenforcible, it follows that it stands as a. bar to a recovery herein. The; judgment appealed from must 'he affirmed, with costs. Ingraham, McLaughlin, Laughlin and Houghton, JJ., concurred. ( Judgment affirmed, with costs.