Carl v. Knott

Wright, Ch. J. It is very manifest, from the report of the referee in the former case, the final decree, and from his testimony in this, (admitted without question or objection) that the account now sued for was not included in the final adjudication. From the record we conclude that the bill and pleadings contemplated a settlement of the entire accounts of the respective parties, plaintiff claiming that in such settlement-(including what he had paid for the firm and received of its assets, as well as from his individual accounts), defendant was largely his debtor. On the other hand, defendant, by his answer, insisted that plaintiff was indebted to him. The referee proceeded to hear the case, [382] for the purpose of settling and adjusting their respective rights and liabilities, and, beyond question, his investigation extended to the very accounts sued upon in this case. The testimony, however, developed the fact that a proposition had been made and accepted, which made it the duty of the plaintiff to pay all the liabilities, (except the judgment to Ad. Knott), and that he was to have all the assets. Finding that the parties had thus arranged their matters, he proceeded no further, but reported as a fact that all their previous liabilities pertaining to the partnership were merged in this contract, that plaintiff had paid the judgment to Ad. Knott, which, under the agreement, defendant was bound to refund, and that all other assets should be the property of Carl. This report was confirmed, and an express order made that plaintiff might recover on all accounts, &c., owing to the firm, in his own name. In reaching this conclusion, the referee had no reference whatever to the individual accounts of the parties. And it is by no means a fair construction of the language of his report, that he meant that all liabilities of the parties, as between themselves, except the $800 owing to Ad. Knott, were merged in the settlement. Not only so, but his testimony shows that the evidence on the subject of the settlement “overshadowed the whole case,” and this determined his finding. The question to be determined is not alone whether the matter now in controversy was included in the issues joined in the former suit, but whether the judgment or determination was such as to estop the party from again claiming for the same demand. 1 Grreenl. Ev., §§ 529, 530. It would be thus included, if it was covered by or embraced in the pleadings; and to be so embraced, it is not necessary that it should always appear affirmatively from the face of the record. Thus, under the former practice, when the party might plead specially, or give the matter in evidence under the general issue, if the point was actually tried and deter [383] mined, tbe estoppel was as effectual in tbe one case as tbe other. If so tried, arid the record did not disclose it, it was competent to prove, in connection with the record, by parol, that the matter did arise, and was adjudicated. George v. Gillespy, 1 G. Greene, 421; Lawrence v. Hunt, 10 Wend., 89. But still, if the cause of action was not embraced in the judgment in the former suit, the party is not estopped. By this it is not meant that the bar would not apply to a case when it appeared that the judgment was general for one party or the other, there being several distinct causes of action, covered and disposed of by such general adjudication. In such a case, the identity of the causes of action being once established, the law will not allow them to be again drawn into question. Young v. Black, 7 Cranch, 564; Haight v. City of Keokuk, 4 Iowa, 207. But it is a very different thing when, in a decree in chancery, it appears, affirmatively, that the rights of the parties were adjusted upon a ground which neither, in its general or special statement, includes the matter now in controversy, but which, on the contrary, excludes and leaves it open. And see McDowell v. Langdon, 3 Gray, 513; Buttock v. Holden, 8 Cush., 233; Henderson v. Kenner, 1 Rich., 574; Goddard v. Selden, 7 Conn., 521; Croft v. Steel, 6 Watts, 373; Snyder v. Cory, 2 Johns., 227; Wright v. Batter, 20 Id., 367; Wood v. Jackson, 18 Wend., 10; Millett v. Foxcroft, 1 Story, 474. So far, therefore, as the instructions given relate to the question of former adjudication, they are substantially correct. If the Court had explained and illustrated more at length the office of the parol evidence introduced, and how far it could legitimately be considered in determining what was in controversy in the former suit, the jury would doubtless have had a clearer and better defined idea of the object of such testimony, and of their duty in the premises. It was the duty of the Court, however, to construe the record offered in evidence, and to state to the jury what it [384] did or did not include, the Question of the identity of the transaction being left for their determination. And while some of the instructions, touching this subject, asked by defendant and refused, were, as abstract propositions, correct, we would not, under all the circumstances, for this reason alone, reverse the case. There is one feature of the transaction, however, which we think was not properly submitted to the jury. By the propositions made to plaintiff through Snyder and accepted, he was to take the assets and pay the debts. By this was it meant and intended between the parties, that defendant was to pay plaintiff what he might be owing the firm— was this a part of the assets — or did they mean that each party should be relieved of any liability to the firm or each other, so far as related to their partnership accounts, plaintiff taking all the accounts and demands owing by others, and all the property, and paying all the debts except one? The arguments for and against either construction we need not advance, it being sufficient to say that the question should have been submitted to the jury, whether there was any agreement that defendant should pay this account. In the absence of agreement, of course as a partner, he would only be liable to plaintiff, in their accounting, for so much as his account exceeded plaintiff’s, and not for the whole amount. If there was a contract, however, which entitled plaintiff to the entire amount owing by defendant to the firm, by which it was understood to be assets, by this the parties should be governed, and under it their rights must be adjudicated. The third instruction, asked by defendant, sought to get this question to the jury. It was refused, however, and the jury were not allowed to take into consideration the true nature and scope of the contract. And as it seems to us, that while the judge below took the correct view of the main issues in the case, he nevertheless withheld from the jury a question [385] manifestly material in settling tbe rights of these parties, we are constrained to hold that the judgment should be reversed. The order of the Court, in the former proceeding, on the subject of assets,' must be construed in the light of the contract, the facts found, and the final report of the referee. Reversed.