Spence v. Hull

Mr. Justice Bean delivered the opinion of the court. 1. It is the contention of counsel for defendants in this suit that the action in Clackamas County is a bar — 271 — to the same. It is settled law that a judgment or decree rendered upon the merits is a final, conclusive determination of the rights of the parties and a bar to a subsequent proceeding between them on the same claim or cause of suit, not only as to the matter actually determined, but also as to everything else which the parties might have litigated, and had decided as an incident to or essentially connected therewith, either as a matter of claim or defense: Ruckman v. Union Ry. Co., 45 Or. 578, 581 (78 Pac. 748, 69 L. R. A. 480); Morrill v. Morrill, 20 Or. 96 (25 Pac. 362, 23 Am. St. Rep. 95, 11 L. R. A. 155); La Follett v. Mitchell, 42 Or. 465 (69 Pac. 916, 95 Am. St. Rep. 780). 2, 3. Counsel for plaintiff contend that the counterclaim attempted to be pleaded in the action at law in Clackamas County was not decided upon its merits and is not res adjudícala. A judgment which is not based on the merits of the action is no bar to another action or suit on the same issues: Section 759, L. O. L.; 23 Cyc. 1131, 1132; Pruitt v. Muldrick, 39 Or. 353 (65 Pac. 20); Burnett v. Marrs, 62 Or. 598 (125 Pac. 838); Foster v. Busteed, 100 Mass. 409, 411, 412 (1 Am. Rep. 125). A party is not barred from instituting a suit or action on a claim or demand because the same was pleaded as a setoff or counterclaim in a former action or suit, if the same was not adjudicated or allowed in such action in consequence of being excluded or rejected by the court, or voluntarily withdrawn: 23 Cyc. 1204. In a note on the same page of Cyc., we find the following: “The rule stated in the text applies, not only where the setoff was excluded, because not proper matter of setoff in such an action, but also where it was so ill pleaded that it could not be considered (Maillet v. Martin, 7 La. Ann. 635), where it was dismissed be — 272 — cause defendant failed to present any proof in support of it (Jarvis v. New York House Wrecking Co., 84 N. Y. Supp. 191), where he failed to appear at the trial (Litch v. Clinch, 35 Ill. App. 654; Anderson v. Rogge [Tex. Civ. App. 1894], 28 S. W. 106). * * But if the setoff is well pleaded, is supported by evidence, and is submitted to the jury, and passed upon by them, the judgment will be a bar to any further prosecution of the same claim, although the jury decided not to allow it: Baker v. Stinchfield, 57 Me. 363.” In such case a setoff or counterclaim is treated practically as a separate action. Prom a careful examination of the record in the case now before us, it appears that all that was decided in regard to the claim of Spence by reason of the alleged fraud, in the action at law either by the court or jury, was the decision of the court to the effect that the claim for damages could, not be tried in that action under the state of the pleadings. There was no judgment upon the merits of the demand of plaintiff Spence; therefore, under the rules stated above, the judgment in the action at law is not a bar to the prosecution of this suit. The case of Glenn v. Savage, 14 Or. 567 (13 Pac. 442), cited and relied upon by counsel for defendant, is a good illustration, although the statement in the syllabus is more general than the opinion. The pleadings in the case there relied upon as a former adjudication of the questions in controversy set up the identical matter that was alleged in the last case. The record showed that the claim was withdrawn from the jury, though for what reason did not appear; but on page 575 of 14 Or. (on page 447 of 13 Pac.), we find that the trial court determined as to the right of recovery, to quote from the opinion: — 273 — “It decided that Glenn was not entitled to recover damages against Savage for the breaches of that agreement. ’ ’ In the action in Clackamas County, the record of which is now before us, the court merely decided that the claim of Spence there set up could not be tried in that action. 4, 5. By virtue of the negotiations between Hull and Spence which were carried on in behalf of the latter in part by his son in law, A. G. Vaughn, who was inexperienced in business, and on the other side by Taylor and Geis, both experienced real estate dealers, and defendant Hull, also a shrewd business man, we think that Spence was led to believe, as an inducement to make the contract, that there were 25 acres of oats, 50 acres of clover, and 25 acres of potatoes on the farm. The crop was in several irregularly shaped fields, which could not be accurately estimated or easily measured. By a measurement made soon after the contract, there appeared to be 69 acres and a fraction, and by an actual survey made thereafter, 67.79 acres. When the negotiations were first commenced, the number of acres and a typewritten list of the personal property, with an estimate of what the crop and the property were worth, was made in the office of the realty company and furnished to Spence and Vaughn. When they visited the farm to inspect the crops and property, they took this estimate, and it is claimed by Hull that he corrected the figures of the number of acres of potatoes from 25 to 15, and stated that he did not know the number of acres of crops. It is clear, however, from the evidence, that the correction was not made in such a way as to be understood by Mr. Spence; that, when the agreement was made, Spence — 274 — offered to trade on the condition that there were 100 acres in crop. It is shown by the evidence that soon after the agreement it was ascertained that there was a shortage of nearly one third in the area of the crops. We do not think there was a meeting of the minds, or that Spence agreed to the exchange of his house and lot for about 68 acres of crops and the personal property. We think plaintiff has conformed to the rule stated in Scott v. Walton, 32 Or. 460, 464 (52 Pac. 180, 181), as follows: “A party who has been induced to enter into a contract by fraud has, upon its discovery, an election of remedies. He may either affirm the contract, and sue for damages, or disaffirm it, and be reinstated in the position in which he was before it was consummated. These remedies, however, are not concurrent, but wholly inconsistent. The adoption of one is the exclusion of the other. If he desires to rescind, he must act promptly, and return or offer to return what he has received under the contract. He cannot retain the fruits of the contract awaiting future developments to determine whether it will be more profitable for him to affirm or disaffirm it. Any delay on his part, and especially his remaining in possession of the property received by him under the contract, and dealing with it as his own, will be evidence of his intention to abide by the contract.” The matter was submitted to the jury, and the trial court, who saw and heard the witnesses and passed thereon, found for the plaintiff. The decree should not be disturbed. Defendant Ada E. Hull makes objection to the form of the judgment against her. Defendants should be given an opportunity to reconvey lot 12 in block 5, Oakhurst Addition to the City of Portland, if it is possible for them to do so. In the event that they fail to reconvey such real estate to plaintiff within ten days — 275 — from the entry of this decree in the Circuit Court, the judgment against defendant O. J. Hull for the value thereof, to wit, $3,000, with interest from July 22, 1912, at 6 per cent per annum, shall he enforced; plaintiff to recover costs in this court and in the lower court. With this slight correction as to form the decree of the lower court is affirmed. Modified. Mr. Chief Justice Moore, Mr. Justice Benson and Mr. Justice Harris concur.