United States Nat. Bank v. Shehan

McBRIDE, C. J. 1. If our decision in the case of United States Nat. Bank v. Herron is res adjudicata as to plaintiff’s claim here, then the judgment in the case at bar must be affirmed. We are of the opinion that it is a bar. For a general statement of the pleadings and facts urged in the case of United States Nat. Bank v. Herron, reference is made to the majority and dissenting opinions therein. To make the matter clear it may be added that the complaint in that case set forth as an exhibit the power of attorney upon which Herron proposed to act in borrowing the money, which power this court held to be insufficient to authorize him to borrow the money upon the terms which he did. That this view might be taken by the court trying the case, from a mere inspection of the complaint and exhibits, namely, the notes, mortgage, and power of attorney, must have been in the mind [159] of the astute pleader who drew the complaint in that case, and the pleading was therefore reinforced by the following allegation: “That said notes and mortgage were given to secure a loan of five thousand dollars which sum in cash, lawful money of the United States of America, was on the execution and delivery of said instruments paid over to the said Charles E. Herron, ■and the whole thereof was thereupon,by said Herron applied wholly to the use and benefit of the defendant Catherine L. Shehan, by investments in her business pursuits and to the payment of her just debts and liabilities, all in Malheur County, Oregon, all of which benefits she, the defendant Shehan, then and there accepted and retained, and she does now still have and retain the same.” The view taken by this court was substantially that the mortgage and notes tried by the standard of the power of attorney pleaded in the complaint were beyond the authority of the agent to execute, and in that view, had it not been for the additional allegation that defendant Shehan had actually received and had the benefit of the money, we should have been compelled to hold that the complaint in that case did not state facts sufficient to constitute a cause of suit. It goes without saying that if Herron, as agent for Mrs. Shehan, had exceeded his authority in the manner in which he borrowed the money from Garrett, and yet in spite of that want of authority Mrs. Shehan had received the money and used it, these would have been such acts as would have cured the original lack of authority in Herron, and rendered the notes and mortgage enforceable, and would have authorized this court to enter a decree foreclosing the mortgage. The allegation quoted was therefore not only proper, but necessary to plaintiff’s cause of suit, and, being controverted, its truth or falsity was clearly put in [160] issue; and the determination as between these parties would be final in any tribunal wherein it might thereafter arise. To put the argument more clearly: This court could not have found, as it did in the foreclosure suit, that the equities were with the defendant, Shehan, without finding in fact that the allegation above quoted was not sustained by the evidence. We could not have found that the equities were with the defendant, Shehan, if we had found in fact that she had received and had the benefit of the money obtained by Herron from Garrett. Practically, this was the main point in dispute outside of the question of the validity of the power of attorney to authorize the borrowing of the money upon the terms upon which the loan was effected. That the allegation in question entered largely into the determination of the former case is indicated in both the majority opinion rendered by Justice Ramsey and in the minority opinion by Justice Bean, Justice Ramsey holding, in substance, that the notes and mortgage in suit were beyond the power of Herron to execute, and that there was no evidence that Mrs, Shehan had ever received the money, or that it had been expended for her benefit, and Justice Bean contending that Herron had acted within his authority in executing them, and alternatively that, even if such were not the case, the evidence indicated that she had the benefit of the money obtained by the loan. The dissenting opinion concludes thus: “Viewing the transaction as delineated by the documents and evidence contained in the record, we think that any departure from the terms of the power of attorney, in the execution thereof, was impliedly ratified by Mrs. Shehan. The plaintiff’s witnesses have given their version of the important dealings, and, [161] if their theory or delineation was incorrect, it was incumbent upon the defendants to explain or show wherein the evidence of plaintiff was wrong. The equities are with the plaintiff. The judgment of the lower court should be affirmed.” 2-4. We have referred to the opinion in the case because no findings were specifically made beyond the general one that ‘‘the equities are with the defendants,” and in such cases the court may have recourse to the opinion to show what actually'was decided: Gentry v. Pacific Livestock Co., 45 Or. 233 (77 Pac. 115). But beyond this we take if that the rule is firmly established that a fact properly in issue between parties, necessary to the determination of the case, will be finally concluded from re-examination in any subsequent suit or action between the same parties: Freeman on Judgments (4 ed.), § 249, p. 441 et seq.; and authorities there cited; Underwood v. French, 6 Or. 67 (25 Am. Rep. 500); Barrett v. Failing, 8 Or. 152; Glenn v. Savage, 14 Or. 567 (13 Pac. 442); Applegate v. Dowell, 15 Or. 513 (16 Pac. 651); La Follett v. Mitchell, 42 Or. 465 (69 Pac. 916, 95 Am. St. Rep. 780); Caseday v. Lindstrom, 44 Or. 309, 315 (75 Pac. 222); Wales v. Lyon, 2 Mich. 276; King v. Chase, 15 N. H. 9 (41 Am. Dec. 675). Nor is the form in which the subsequent action is prosecuted material. It would be intolerable if a party, having chosen his forum and presented an issue for trial, should be permitted after defeat, by simply changing the form of his action, to relitigate the same matter in a new form of action; Simpson v. Hart, 1 Johns. Ch. (N. Y.) 91; Putnam v. Clark, 34 N. J. Eq. 532; Phillips v. Pullen, 45 N. J. Eq. 830 (18 Atl. 849). The contention that plaintiff could not have recovered in the former suit on the ground that de [162] fendant had actually received and used the money is plausible, but unsound. If she had so received and used the money, the court would have been compelled to hold that she had thereby ratified the act of Herron in borrowing it and executing the mortgages, and, as she was subject to the jurisdiction of the court by her answer, a decree could have been rendered, foreclosing plaintiff’s mortgage, with a subsequent judgment against defendant in personam for any deficiency that might exist after sale of the mortgaged premises. As before intimated, the allegation quoted was the only thing that would have prevented plaintiff’s case from being dismissed on a general demurrer, as the pleadings themselves showed that the notes and mortgage were executed without authority. The conclusion here reached necessarily results in the affirmance of the judgment of the Circuit Court and renders it unnecessary to consider the objections raised by counsel to the admission of certain depositions offered by defendant. The judgment is affirmed. Affirmed.