Solly v. Clayton

Rising, C. The ruling of the court in instructing the jury to bring in a verdict for the defendant was based — 33 — upon two grounds: First, that the admitted and uncontradicted evidence in the case presented a question of law for the court, and left nothing for the jury to determine; second, that the defense of res adjudiccita, as pleaded and proved, constituted a complete and perfect defense to the action. In support of the ruling of the court upon the first ground, counsel for defendant in error contends that u where the facts are undisputed, it is the province of the court to settle the question of negligence as a question of law.” It is contended by counsel for plaintiff in error that “ when the question arises upon a state of facts on which reasonable men may fairly arrive at different conclusions, the fact of negligence cannot be determined until one or the other of those conclusions has been drawn by the jury.” There seems to be an irreconcilable conflict in the decisions of the courts upon the question so presented, yet the question is not an open one in this state. In Railroad Co. v. Martin, 7 Colo. 592, 599, Chief Justice Beck, speaking- for the court, says: “ It has been well said that to warrant the court in instructing the jury that a party is guilty of negligence the case must be such as to allow no other inference from the evidence; and, if the question depends upon a state of facts from which different minds may honestly draw different conclusions, the question must be submitted to the jury.” . We do not think the evidence in this case presents a state of facts from which no inference of negligence can be drawn. That reasonable minds might honestly draw different conclusions from these facts seems clear to us; and under the ruling in Railroad Co. v. Martin, the question of negligence in this case should have been submitted to the jury, unless the defense of res adjudicata had been fully established. It is contended by counsel for plaintiff in error that it is shown by the record that the judgment in the circuit — 34 — court might have been rendered upon either one of two distinct grounds: (1) That Norwood was the duly-authorized agent of the plaintiff to receive from Barnes the payment of the note at the time such payment was made; (2) that plaintiff was. estopped by her conduct from denying such agency as to Barnes. Counsel further contends that it does not appear from the record, and that it was not shown by extrinsic evidence, upon which of those grounds the judgment was based, and that, therefore, the judgment in that case cannot operate as a bar or estoppel to a recovery by the plaintiff in this case. Counsel for defendant in error contends that in the circuit court “the main and vital issue was whether or not Norwood was the plaintiff’s agent.” The first question to be determined is whether or not the record shows that two grounds of defense were presented in the case in the circuit court, as contended by plaintiff in error. The bill of complaint in that ac-. tion alleged that complainant loaned Barnes the sum of $3,500; that Barnes gave her his note therefor, and made a trust deed to Clayton as trustee to secure payment thereof; that she placed said note in'the hands of Nor-wood to collect the interest thereon, as the same became due and payable, and for no other purpose; that the time of payment of said note was extended from the 29th day of December, 1875, to the 29th day of December, 1876, and from the 29th day of December, 1876, to the 29th day of December, 1877; that said Barnes, well knowing that said Norwood had no authority to receive payment of said note, or to surrender the same to him, paid said note to Norwood; that Norwood procured from Clayton, by false representations, a release of said trust deed; that Norwood converted said money so collected to his own use; and prayed that the deed of release from Clayton to Barnes be canceled, anulled and for naught held, and that complainant be reinvested with and reinstated in all her former lights under said trust deed in all re — 35 — spects; that Clayton be decreed to sell the premises described in said trust deed and apply the proceeds of such sale to'the uses and purposes prescribed in said deed; that Barnes be decreed to pay to complainant any balance which should remain due on said note after the application of the proceeds of said sale to the payment thereof. The defendant Barnes, answering said bill, denied that complainant placed said note in the hands of said Nor-wood for the sole purpose of collecting the interest thereon, and alleged that, at the time he paid said note to Norwood, Norwood was the duly-authorized, agent of the complainant, and was invested with full power and authority to accept and receive said payment and to surrender and cancel said note. The defendant Barnes, further answering, alleged that he was not personally acquainted with the complainant; that said loan was not made by complainant in person, but by and through one Bucklin, “who was at that time engaged in the city of Denver in the general business of negotiating loans, collecting interest and receiving payment of loans and the like, as the agent, factor or broker for others, and collecting and receiving the principal and interest upon loans, from time to time, as such agent, factor or broker, in such general business as aforesaid;” that said Bucklin presented said note to said Barnes for the payment of interest thereon from month to month as the same became due, until about the month of March or April, 1875, which interest said Barnes paid to said Bucklin; that in March or April, 1875, said Bucklin transferred and turned over his said business to one Norwood, who continued the said general business in said city of Denver to the knowledge of the complainant; that complainant placed said note in the hands of said Norwood for the purpose of having him collect the interest thereon from time to time as such interest became due and payable, and also for the purpose of receiving payment of the — 36 — principal; that said Norwood presented said note to said Barnes for the payment of the interest thereon from time to time as such interest became due and payable, and also presented said note for the payment of the principal, all of which complainant well knew; that said Norwood negotiated an extension of the time of payment of said note when the same became due and payable by the terms thereof, and negotiated a further extension of the time of payment of said note when it became due and payable by the terms of the first extension, all of which the complainant well knew; that believing said Norwood, as agent of the complainant, had full power and authority to take the money due and payable upon said note, and believing the said deed of release was executed in pursuance of the authority and direction of the complainant, said Barnes paid to Norwood the full amount of said note. The defendant Clayton, in said action, answering said bill of complaint, alleged that he was informed and believed that said Bucklin was the fully-authorized agent of the complainant, not only to collect the interest on said note, but also to collect the principal thereof, and that said Bucklin, with the assent of complainant, transferred said note to Norwood, and, with the consent of complainaut, transferred all the authority he had in relation thereto to Norwood; that he had no knowledge that Norwood was not the agent of complainant to receive full payment of said note, if in fact Norwood was not such agent, until after the execution and delivery of the release deed; that he was applied to by Norwood, as the agent of the complainant, to execute the release deed, and that when Norwood made such application he first became aware, by the statement of Norwood, that he had been made the trustee in said deed of trust; that, at that time, Norwood exhibited to him the note and the trust deed; that Norwood represented to him that the note was paid in full; that from the possession of said note — 37 — and said trust deed by Norwood, and from his general knowledge of the business conducted by Norwood, he had full confidence in the authority of Norwood to receive payment of said note and to direct the execution of the release deed. We think the issues tendered by the answer of Barnes and by the answer of Clayton are substantially the same, but, as the statement is more fully made in the Barnes answer than in the Clayton answer, we will examine it for the purpose of determining what defense or defenses were therein set up. The allegation of the bill that the note was placed in the hands of Norwood for the purpose of enabling him to collect the interest thereon is expressly denied. The allegation in the answer that Norwood was the duly-authorized agent of the complainant, and was invested with full power and authority to accept and receive payment of, and to surrender and cancel, said note, at the time the same was paid by Barnes, states a full and complete defense to the action. The answer of Barnes also contains statements and allegations setting out the circumstances under which the loan was made; alleging the general business conducted by Bucklin, through whom the loan was made; the possession of the note by Bucklin, and the collection of the interest by him; the transfer by Bucklin of his business to Norwood; the continuation of such business by Nor-wood; the complainant’s knowledge of the kind of business Bucklin and Norwood carried on; the possession of the note by Norwood, and the collection of the interest by him; the negotiation by Norwood of the extension of the time of payment of the note, with the knowledge of complainant; the payment of the note by Barnes in good faith, he believing at the time that Norwood had full power and authority to receive the money, and believing that the deed of release was executed by the direction of the complainant. It is further alleged by Clayton in his — 38 — answer that from the possession of the note and trust deed by Norwood, and from the knowledge he had of the business conducted and carried on by Norwood, he had full confidence in the authority of Norwood to receive payment of said note, and to direct the execution of the release deed. These several statements and averments in no manner tend to strengthen the allegation setting up the defense that Norwood was the duly-authorized agent of the complainant. What Barnes believed in relation to Norwood’s authority in the premises was not a material fact in the case, unless he was led to such belief by the conduct of the complainant; and the fact that Clayton executed the release deed because he had confidence that Norwood had authority to demand it is not material unless the conduct of the complainant induced such confidence. It seems clear to us that it was the intention of the pleader, by incorporating in the answers these statements and allegations, to set up the defense of estoppel in pais, and, this being so, two grounds of defense were presented in the action in the circuit court. The record in that case does not disclose upon which of these defenses the dismissal of that action was based, and such fact is not shown by extrinsic evidence. Must the defense of res adjudicata, set up in this case, be held insufficient by reason of the failure to show upon which defense the judgment was based? Upon the question of the conclusiveness of a former adjudication, when pleaded as an estoppel, it is said in Russell v. Place, 94 U. S. 606, 608: “It is undoubtedly settled law that a judgment of a court of competent jurisdiction, upon a question directly involved in one suit, is conclusive as to that question in another suit between the same parties. But to this operation of the judgment it must appear, either upon the face of the record or be shown by extrinsic evidence, that the precise question was raised and determined' in the former suit. If there — 39 — be any uncertainty on this head in the record,— as, for example, if it appear that several distinct matters may have been litigated, upon one or more of which the judgment may have passed, without indicating which of them was thus litigated, and upon which the judgment was rendered,— the whole subject-matter of the action will be at large, and open to a new contention, unless this uncertainty be removed by extrinsic evidence showing the precise point involved and determined.” If the evidence in the suit in the circuit court was sufficient to establish the defense of estoppel in favor of Barnes, the complainant could not have recovered in that case. If Barnes was authorized, by the conduct of the complainant, in assuming that Norwood was authorized to receive payment of the note, the court would not grant the relief prayed for. In the case brought in the circuit court, the whole object of the action would be defeated by a showing that Barnes had made a valid payment of the note, and, after a finding of such fact by the court, it would be a useless thing for it to do to decree the cancellation of the trust deed given to secure the payment of such note. The object of the action being to preserve a security for a debt, and to enforce the payment of such debt, the action must fail upon a showing made that no debt exists. From this reasoning' it will be seen that the court- did not necessarily have to determine that the execution of the release deed was duly authorized, in order to enable it to render the judgment it did. Evidence which would be quite sufficient to protect Barnes in paying the note might be wholly insufficient to authorize Olayton to release the trust deed. This is clearly shown by the evidence in this case. Barnes testifies that he would not have paid the note to Norwood if Norwood had not presented the deed of release to him. That Norwood had the note in his possession; that he had collected the interest thereon from time to time as the same became due and payable; that he had acted for the complainant in — 40 — extending the time of payment of the note, and the nature of the business conducted by him,— were circumstances that might have influenced Barnes in believing, as he alleged in his answer, that “the said deed of release was executed in pursuance of the authority and direction of the complainant.” The circumstances we have recited would have m> weight as evidence to establish an estoppel unless they did induce such belief, so that the fact that Barnes did so believe was a most material fact to be shown, tending to establish the defense of estoppel; and the possession by Norwood of such release deed was a circumstance that would strongly tend to create such belief, and it appears to have been the governing circumstance with Barnes, for he says he would not have paid the note if Norwood had not presented the release deed to him. We think it clearly appears from the character of the defenses presented in the suit in the circuit court that the judgment therein might have been based upon matters which could have no weight in this case, and that, therefore, the defense of res adjudícala, must be held insufficient. We think the conclusion we have reached is warranted by the facts in the case, and by the law as-held in the following cases: Russell v. Place, 94 U. S. 606, and cases cited; Campbell v. Rankin, 99 U. S. 261; Bank v. School Disk 25 Fed. Rep. 629, 633; Clark v. Blair, 3 Colo. Law Rep. 2l4. The judgment should be reversed. De France and Stallcup, 00., concur. Per Curiam. For the reasons stated in the foregoing opinion the judgment is reversed and the cause remanded. Beversed.