Hughes v. Blake/Opinion of the Court

by Henry Brockholst Livingston

Mr. Webster, and Mr. Jones, contra, insisted, that no question could arise on the sufficiency of the plea in point of law, for by going to issue on the facts alleged in the plea, the parties have waived all objections of that nature: or, in the words of Gilbert, 'if a party replies to a plea before it comes on to be argued, this is as full an admission of the plea, as if it had been argued and allowed; for the plea by this replication is allowed to be good; only the defendant is put to the proof thereof; and so he may be, when it is argued and allowed. But if he proves his plea, the bill must be dismissed at the hearing.' Gilb. For. Rom. 98. (Mitf. Eq. Pl. 244; Beames' Eq. Pl. 317; 2 Eq. Cas. Abr. 79; Wyatt's Pr. Reg. 376; 1 Sch. & Lef. 725.) Thus, if the defendant, in pleading a purchase for a valuable consideration, omits to deny notice; if the plaintiff replies to it, all that the defendant has to do, is to prove his purchase; and even if the plaintiff proves notice, it is immaterial; for it is the plaintiff's own fault if he does not set down the plea to be argued, in which case it would be overruled. Harris v. Ingleden, 3 P. Wms. 95. So here, if the plea had been bad, the plaintiff should have set it down for argument. The plea consists of two material parts; it alleges a judgment at law, for the same cause of action, in a Court of competent jurisdiction; and it avers that there is no ground to impeach that judgment, and no new evidence discovered to enable the plaintiff to go behind it. There is the same strictness of pleading in equity, as at law (2 Atk. 632); but if the rule were not so, this plea is sufficient. The general principle is clear, that a judgment in a competent Court, is a bar to a proceeding for the same cause of action in any other Court. It is conclusive as to every matter which might have been litigated and decided in the first suit. The rule in equity is the same in this respect as at law. 3 Atk. 626. Nor does it make any difference, that the case is proper, in itself, for equity jurisdiction. If so, a judgment at law could never be pleaded in bar of a suit in equity. Questions of fraud and trust are not the peculiar and exclusive subjects of equity jurisdiction. Whenever Courts of common law can reach these subjects, they dispose of them effectually and conclusively. 1 Burr. 396; Mitf. Eq. Pl. 90; 3 Bl. Com. 431; 2 P. Wms. 156; 1 Ibid. 154. If a particular subject is common to the two jurisdictions, the judgment of that tribunal which first appropriates it to itself, must necessarily be conclusive, otherwise the party might speculate upon his chances of recovery in both: and as the Courts of the Union are now constituted, we should be presented with the novel spectacle of a party suing on both sides of the Circuit Court for the same cause of action. Here the judgment is as good a bar to the discovery as to the relief. Mitf. Eq. Pl. 193. So, a plea of the statute of limitations, or the statute of frauds, is a bar to discovery as well as relief. Coop. Eq. Pl. 251, 255, 257; 1 Bro. C. C. 305. And it is now the settled course of proceeding, that if a bill is filed for discovery and relief, and the plea is sufficient to bar the relief; it is held sufficient to bar the discovery. 9 Ves. 75. It is the general rule, that a plea confesses and avoids; but that principle does not apply in this case, where the defendant denies every allegation of the bill, and supports his denial by the former trial and verdict. Had it been a plea of payment, or release, or of the statute of frauds, or limitations, the rule might be applicable. The real defence is, that this matter has been before tried, and found against the plaintiff. If the defendant had answered more, he would have overruled his own plea.

Where is the authority for asserting, that it is no objection to the present bill, that a discovery was not sought pendente lite? What use could now be made of a discovery? It could not aid any proceeding elsewhere: and could only be used as a ground for relief in the present suit. The whole of the argument on the other side, on this point, rests on the notion, that the plaintiff may sue at law, and being defeated there, may, of course, file a bill in equity for the same matter. The unavoidable consequence of that doctrine would be, that in no case could the judgment of a Court of law be pleaded in bar to a suit in equity. Here the cause of action is equally within the jurisdiction of a Court of law, which has pronounced upon it, and whose judgment must, therefore, be conclusive in all other Courts: and the argument against its conclusiveness, in this case, goes on the supposition, that the defendant cannot set up the judgment without undertaking to prove, that it was a correct judgment on the merits, or, in other words, without going through the whole process of trial again. The plaintiff had to choose between three different courses. He might sue in equity; he might sue at law, and file a bill for discovery, lite pendente; or he might bring an action at law, and go to trial without the aid of a discovery. He elected the latter course, and must be bound by it. The verdict and judgment constitute a flat bar. The plaintiff is not now entitled to a discovery, unless he is entitled to relief; he is not entitled to relief, because it is a res judicata. A Court of equity cannot try over again the merits which were full tried in the former cause. To revise the merits of a cause which has been once tried between the same parties, and in a competent Court, is the province of an appellate Court, and not of a co-ordinate tribunal, or one of a different jurisdiction. Parties must prosecute their rights in due time, and before the proper forum; and having once elected their forum, the decision is conclusive, not only as to the matter actually adjudged, but as to every matter which might have been litigated and decided. La Guen v. Gouverneur, 1 Johns. Cas. 436, per Kent, C. J.; Bateman v. Willoe, 1 Sch. & Lef. 201. In the action at law, the judge's charge might have been excepted to, if erroneous, and a new trial granted, which is in itself a sort of equitable right; but if the charge was correct, no injustice has been done. The present bill avows it to be for the same cause of action, and does not allege any incompetency in the jurisdiction of the Court of law. It sets up no new right, but merely contends, that the plaintiff had a right then, on matter discovered since, but existing at the time. The question now is, not as to the goodness of the counts in the plaintiff's declaration, but whether the merits have been substantially tried upon them: not intending, however, to admit, that the counts were not sufficient. The regular course of the Court of Chancery, in such a case, is to refer them to the master to report whether the cause of action be substantially the same. 1 Vern. 310, note (Raithby's Ed.).

As to the principles which govern Courts of equity in setting aside verdicts as against equity: it must be shown that at the time of the trial at law some material fact existed, within the defendant's own knowledge, different from the finding of the jury. Williams v. Lee, 3 Atk. 224. Here there is no such fact: and even if there had been, if it was also within the plaintiff's knowledge, he should have filed a bill of discovery, lite pendente, to obtain the defendant's answer on oath. Supposing the testimony of E. Williams to be true, it establishes no fact existing at the time, which is essential to entitle the plaintiff to relief in equity. Standish v. Radley, 2 Atk. 178. But his testimony is explicitly contradicted by the defendant's answer: and the plea must therefore stand, being supported by the answer, and contradicted by the testimony of a single witness only, unsupported by circumstances to strengthen its credibility. Walton v. Hobbes, 1 Atk. 19, and the cases there cited; 2 Ves. jr. 243; 1 Bro. C. C. 52; 1 Johns. Ch. 459; 3 Ves. jr. 170. The transactions between the parties took place more than twenty years ago. The plaintiff had an opportunity of establishing his pretended claim in the tribunal which he had elected, and in which he failed; and the defendant has a just right to avail himself of that failure as a bar to any further proceedings in a case where, besides the solemn trial which has already been had at law, he has now purged his conscience of the allegations of fraud, which have been made against him without the slightest foundation in the facts and circumstances of the case.

Mr. Justice LIVINGSTON delivered the opinion of the Court, and after stating the pleadings, proceeded as follows:

In examining whether there be any error in the decree of the Court below, we shall have to inquire whether the plea of the respondent is proved; and if so, whether any other decree, except that of dismissing the bill, could have been made by the Court below.

In examining the question of fact, that is, whether the plea were proved or not, it will be borne in mind, that no decree can be made against a positive denial of the defendant, of any matter directly charged in the bill, on the testimony of a single witness, unaccompanied by some corroborating circumstance. There is no pretence that there is any thing untrue in any of the averments which the plea contains on the subject of the proceedings at law-such as that a judgment was obtained by the respondent-that the same is in full force, &c. The first averment in the plea, which will require a more particular consideration, is the one denying that the respondent had at any time obtained from E. Williams, any allowance or payment, for, or on account of his being bail for Gibson, in an action brought against him by one Evans. The respondent had been permitted, as appears by the facts of the case, to retain out of a fund, on which the appellant had a claim, a considerable sum to save him harmless against this responsibility, and which was, in all probability, allowed to him, on the trial at law. If, therefore, it could have been shown that Blake had been fully indemnified, or paid for this liability from any other quarter, and that this fact had come to the appellant's knowledge since the judgment at law, it would seem no more than equitable, notwithstanding these proceedings, thus far to open the account between them. But has this been done? The allegation of the bill in substance is, that Blake has been twice indemnified for the same loss, or, in other words, that he had been twice reimbursed the monies which he paid as the bail of Gibson. This fraud, which is so unhesitatingly charged upon the respondent, is not made out by any testimony in the cause. Independent of Blake's positive and absolute denial, which is equivalent to the testimony of one witness, there is nothing in the deposition of Williams, who is the only witness to this point, to establish the fact as stated in the bill. This gentleman has been twice examined, once in the year 1805, as a witness in the trial at law; and again, as a witness in this cause. On his first examination, he stated that he was informed by Blake that he held in his hand about 6,300 dollars, which had been received of Henry Newman, as an indemnity for his having become bail for Gibson in an action by some person whose name he did not recollect, on which pretence Blake refused to pay him this sum. In his second deposition, which was taken in this cause, he swears that he was informed by Blake, that he had received from Newman about 6000 dollars, which he should retain, in consequence of his liability to Evans, as the bail of Gibson; and that he, Williams, allowed the respondent to apply this money for that purpose. Now, admitting that Blake retained these monies, and with the consent of Williams, who, it appears however, had no interest in, or control over them, with intent to apply them in this way, where is there any proof whatever, in contradiction of Blake's answer that he ever did make that use of them. He might have securities of Gibson of various kinds, the avails of which he might have a right to retain for the same object, but if he actually made only one appropriation for such object, no one could complain. That the fund spoken of by Williams, which arose out of Newman's note, was not applied to the indemnity which has so often been mentioned, appears not only by an averment in Blake's plea to that effect, but by the testimony of Gibson himself, a witness of the appellant, who declares, that the note of Newman was subject to his order; that no privity existed between Williams and Blake respecting the same; and that it had not been placed in Blake's hands as an indemnity for becoming his bail. It follows, therefore, that Blake could not have obtained from Williams any allowance or payment on account of this responsibility; and we accordingly find, from the bill itself, that on a settlement which took place between Blake and Gibson, in November, 1796, about two months after the acceptance in favour of the appellant, the former fell in debt to the latter a sum exceeding two thousand dollars, the payment of which, by Blake, is one subject of complaint in the appellant's bill. Now, it is more than probable, that in this settlement, Gibson received a credit for the very money of which Williams speaks, as Gibson acknowledges it to have been a final settlement of all the accounts between him and Blake. The Court, therefore, is entirely satisfied, that the averment in the respondent's plea, which it has just been considering, is fully established, and that the proof is such as to leave no room whatever to believe, that Blake was ever repaid the moneys he advanced as the bail of Gibson, from any other fund than that which the appellant had consented should stand pledged for that purpose. As little truth is there in the allegation, that what Williams could testify on this subject, was unknown to Hughes during the pendency of the action at law; for Williams, who is examined as a witness for the plaintiff in this suit, swears to the very fact, which he had been produced to prove in the action at law respecting the declarations of Blake concerning Newman's note; and this he does without any variation from his former testimony, materially affecting the present suit. The other averment, therefore, in the plea, that no new evidence has come to the appellant's knowledge respecting the matters in litigation, is fully and satisfactorily established.

The truth of the plea being thus made out, what is to be the consequence? If the rule of Courts of equity in England is to be applied, there can be no doubt. If a plea, in the apprehension of the complainant, be good in matter, but not true in fact, he may reply to it, as has been done here, and proceed to examine witnesses in the same way as in case of a replication to an answer: but such a proceeding is always an admission of the sufficiency of the plea itself, as much so, as if it had been set down for argument and allowed; and if the facts relied on by the plea are proved, a dismission of the bill on the hearing is a matter of course. Whatever objection there may be to adhering strictly to this course of proceeding in every description of cases, it is considered as the long and established practice of a Court of equity, which ought not lightly to be departed from. It is not perceived, that any serious mischief can arise from it. Counsel will generally be able to decide on the merits of any defence which may be spread on a plea, and if insufficient, it is not probable they will do otherwise than set it down for argument. Nor will they ever take issue on it, but in a case which presents a very clear and sufficient defence, if the facts be proved. If a replication should be filed inadvertently, the Court would have no difficulty in permitting it to be withdrawn. But if the plaintiff will persevere in putting the defendant to the trouble and expense of proving his plea, it must be from an entire conviction that it contains a substantial defence, and in such case there is no hardship in a Court's considering it in the same light. But without applying the rule which has been mentioned, to the present case, the Court has no difficulty in saying, that the matters set forth in this plea, which has been drawn with great care and judgment, constitute a complete defence to the present action, and that the appellant has failed in showing any good cause why the judgment at law should not be conclusive on all the matters stated in the bill. Whatever claim he may at one time have had on Blake for one fourth of 75,000 dollars, securred by Barrel's notes, if Blake knew at the time of taking them of his interest to that extent, or for not taking a note for that amount in the name of Hughes himself, it is very certain, that with a full knowledge on his part, that Blake utterly denied a liability to account with any one but Gibson, he came to a settlement with him, by allowing him to accept of Gibson's draft, in his favour, in such way as to charge the fund on which it was drawn with so many deductions as entirely to exhaust it. And when he is apprised of this conditional acceptance by his agent, or the person who presented the draft, instead of returning it, or making any complaint, he acquiesces in it for seven or eight years, and then brings an action to enforce this very contract of acceptance, which he must have known put it in the power of the acceptor to make all the deductions from the fund in his hands, which were designated in the act of acceptance. After six years litigation in a Court of law, it is now attempted to revive the same controversy, at least in part, on an allegation that Blake received a compensation in some other way than out of the fund, on which the bill in his favour was drawn, for one of the liabilities mentioned in the acceptance. That this was not the case, is abundantly proved. But if Blake had other funds of Gibson, besides the note of Barrel, which he also considered as under Gibson's exclusive control, out of which his indemnity as bail might have been obtained, what right has Hughes now to complain, that such other funds were not applied in that way, after he had agreed or consented that this indemnity should come out of those funds of Gibson in the hands of Blake, out of which he was to be paid. Having come into the arrangement, Blake might well think himself at liberty, as it seems he did, to apply the other funds of Gibson in any other way which he and Gibson might think proper. Whether Gibson be liable to the appellant for the subtraction of any part of his fund for the payment of his debt, is a question not before the Court; but we cannot see that an application of them in express conformity with the agreement of the parties to this suit, can give the appellant any claim on the respondent. At any rate, the plea having denied all the allegations which were relied on as grounds for removing the bar which it was anticipated would be interposed to the appellant's bill, and all the matters stated in the plea, on which issue was taken, having been fully proved, the Court is of opinion, that the decree of the Circuit Court must be affirmed, with costs.

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