J. L. Owens Co. v. Officer

STONE, Circuit Judge (after stating the facts as above). [1] The contentions of the parties are somewhat complicated. They involve not only the proceedings immediately attacked, but also those of the above preliminary injunction in Equity, No. 64. The company claims that the preliminary injunction proceedings in Equity, No. 64, constituted an adjudication of a right of set-off of the two judgments, with full settlement of the terms thereof, and also an order of preliminary injunction restraining execution in No. 338 until final determination of No. 351. Therefore the court, in ruling on the motions brought here, had no right to attach any additional conditions to the set-off of judgments, and it should also have recalled the execution because in violation of the injunction. Officer, on the contrary, claims that there was no adjudication of set-off in Equity, No. 64, but simply an order for a preliminary injunction to continue in force only until entry of judgment in the trial court in No. 351, which was on April 18, 1916. That even if the preliminary injunction be regarded as in force after April 18, 1916, the ruling upon the motion last filed in Equity, No. 64, constituted a final determination of the only question on the merits present in that case, and into it was merged and absorbed this preliminary order of injunction. That the determination of the motions in No. 338 and Equity, No. 64, was the first and a complete adjudication of the matter of set-off. It is therefore necessary to determine the scope of the order resulting in the preliminary injunction in Equity, No. 64, and afterwards the propriety of the orders involved here. Equity, No. 64, had as its aim the acquisition of a right of set-off of any judgment which might be obtained in No. 351 against the existing judgment in No. 338. A set-off of judgments presupposed a payment of any balance of one judgment over the other. Here it was definitely known to all parties that the judgment in No. 338 would exceed any possible recovery in No. 351 by more than $2,000, and the company did not seek to prevent or delay the payment of the recognized balance. But the set-off it sought would be defeated uñless execution in No. 338 for an amount sufficient to cover its hoped-for judgment in No. 351 could be prevented. Therefore the ancillary relief of a temporary order restraining execution in No. 338 until the amount, if any, of the judgment in No. 351 could be settled was vitally necessary. This was sought by the motion for a preliminary injunction filed in the equity suit. This motion also asked the rather unusual thing ■ that the only other point in the entire bill — the whole merits of the controversy in the equity suit, the matter of set-off of judgments — be determined in- this preliminary proceeding. In our judgment, tire order of January 8, 1916, was for a preliminary injunction pure and simple. This injunction was granted [51] upon conditions just and protective to both parties, with the object of maintaining the status quo until the amount of the judgment in No. 351 could be ascertained. There was no ruling at that time upon the merits of the case. We do not believe the trial court, if it had intended in that order to pass on the merits of the entire case, would have done so solely by faint inference in its statement of the conditions upon which immediate ancillary relief would be granted. It was natural and proper that the court, in considering the conditions upon which it would order the preliminary injunction, should have in mind and provide for the protection of both parties until its final decision on the merits. This it did and no more. What has just been said as to the character of this order must have been the view which counsel for the company took. Otherwise it is not clear why five months later, when the execution in No. 338 was issued and they endeavored to have it recalled, they sought to have this very matter of set-off adjudicated. If it had been finally determined in their favor in a court term then passed without appeal, why should they seek to open it again and ask for its entire readjudication? But this they did, for in the notices of the filing of the motions to recall this execution the objects of the motions are stated to be the recall of the execution, the taxation of the costs thereof, and the granting of “an order offsetting that certain judgment had and obtained in said court on the 18th day of April, 1916, in favor of J. E. Owens Company and against said I. E- Officer, in the sum of thirteen thousand two hundred ninety-one and 8/ioo dob lars ($13,291.08), against the judgment rendered in court docket No. 338 in favor of said Officer.” And such motions, after ten paragraphs of recital including no suggestion that the matter of set-off had already been anywhere adjudicated, pray for an order to show cause why the execution should not be recalled, and “also that said parties be required to show cause, if any there be, why the judgment obtained by the J. L. Owens Company against said I. K. Officer on April 18, 1916, in the sum of thirteen thousand two hundred ninety-one and 8/ioo ($13,291.08) dollars and costs to be taxed therein in the sum of twenty ($20.00) dollars statutory costs and clerk’s fees, shall not be set off against the judgment rendered October 25, 1916, in favor of said Officer pro tanto, and that said J. E. Owens Company be required to pay no other or greater sum, if any such there be, than the deficiency existing after this said judgment shall have been so offset, and that the court shall make an appropriate order whenever final judgment shall be arrived at in Case No. 351, J. L. Owens Company v. I. E. Officer, making such offset, and that the writ of injunction be declared in full force and effect until the final determination of the litigation between said parties, as also for such other relief as equity may direct.” [2] Counsel have called attention to the terms of the writ of preliminary injunction and of the supporting bond in this connection. The writ and bond cannot narrow or broaden the application of the order upon which they are based. If the order was doubtful or ambiguous, a consideration of the writ and bond would be allowable and [52] helpful in ascertaining its undisclosed boundaries, but here the order is clear. [3] Having defined the character of the order of January 8, 1916, as purely injunctive, the next inquiry regarding it is as to the termination of the restraint of that writ. Officer contends that it terminated when judgment was entered April 18, 1916, in the trial court in No. 351; the company, that it continued until any judgment secured in No. 351 should become final and fixed. We think the latter correct. The terms of the order permit that interpretation, and any other construction would place the court in the position of doing a fruitless thing. The sole object of the injunction was to prevent an execution in No. 338 until any judgment procured in No. 351 could, if the court should so decide, be used as a set-off. Unless the company procured a judgment there would be nothing to set off, and if it should do so Officer could thereafter long keep such a judgment uncertain by motion for new trial and later by writ of error. The futility, as a protection to the company, of air injunction which died when the trial court judgment might be entered, is evident. The court intended and ordered that the injunction should continue until the judgment in No. 351 was final. We think, therefore, that the issue of the execution in No. 338 was improvident and in direct opposition to the existing order of injunction. Up to this time the company had made two unsuccessful attempts to secure rulings on the matter of set-off of judgments — once by motion in No. 338, which was denied without prejudice to renewal in some other form, and again in connection with its application for a preliminary injunction in Equity, No. 64, when the court had confined its ruling to the matter properly then in hand, to wit, the issuance of the preliminary writ. Now the proposition of set-off was again presented to the court in connection with these motions filed in No. 338 and Equity, No. 64, to recall the execution. Omitting the prayers regarding costs and for general relief, these motions presented two questions — the recall of the execution and the set-off of the judgments. The court in its rulings fairly passes upon both propositions. The substance of the orders was that the set-off would be allowed and the execution recalled on condition that the company reduce its judgment in No. 351 by $5,100; otherwise the entire motion would be denied. [4] As set out above, we believe that that part of the orders denying recall of the execution was error, because execution was then under the restraint of the preliminary injunction issued in Equity, No. 64. As to the proposition of set-off also, we think the orders were erroneous. A px-oceeding to set off judgments is no place to adjudicate the rights of the parties as involved in the cases resulting in those judgments. So far as the set-off proceeding is concerned, the judgments come to it immune from attack, and as having foreclosed and finally settled the issues which gave rise to them. A very extensive examination of the authorities has failed to discover an exception to this rule. Such search reveals no attempt in any order of set-off to impose conditions which would affect -the amount of either judgment. The only instance in which the full amount of a judgment [53] has not been used is where some portion of it has been assigned under circumstances which gave the assignment precedence over the set-off. Ex parte Wells, 43 S. C. 477, 21 S. E. 334; Hroch v. Aultman & Taylor Co., 3 S. D. 477, 54 N. W. 269; Burns v. Thornburgh, 3 Watts (Pa.) 78. In none of these cases was the integrity of the judgment questioned, but rights of third parties had attached to portions of those judgments — rights which desired the validity of the judgments to remain unassaulted. The present litigation well illustrates why there should be no departure from the rule. Here the trial court in requiring the reduction of the judgment secured by the company against Officer in No. 351 was evidently striving to rectify what it regarded as an unjust deficiency in the amount of-the judgment for Officer in No. 338, caused by the denial of the request to amend the petition through augmentation of the damage prayed. If such denial was error, it was error in that case and should have been corrected therein. That it was not so corrected was no fault of the trial court, which intimated that it would grant plaintiff a new trial because of this ruling, but it was the fault of the plaintiff, who, by declining to file a motion for new trial, refused to give the court an opportunity for such correction. The issues in that case were in law and for a jury and were tried by a jury. Each party had a right to a jury trial. Besides, there was a completed adjudication in that case which so far accorded with the desires of both parties that neither filed a motion for new trial. All matters properly within the issues and judgment of that case have become res adjudícala for all time and for all purposes between the parties to that suit, and cannot be again raised by them before the chancellor or the judge exercising (as in a motion for set-off) a power in its nature equitable. For the reasons above given, our conclusion is that the orders brought here should not have been made. Therefore they are reversed, with instructions to deny the motion in the equity case, No. 64; to deny so much of the motion in law case, No. 338, as prays a set-off of judgments; and to allow so much of that motion as prays a recall of the execution, the costs of the execution to he taxed against Officer, the plaintiff therein. All without prejudice to either party taking any proper steps to present the matter of set-off of judgments after any judgment in law case, No. 351, has become final.