Cressler v. Brown

• Decision Date: 07 September 1920
• Docket Number: Case Number: 9741
• Parties: CRESSLER v. BROWN et al.
• Court: Oklahoma Supreme Court

1920 OK 291

192 P. 417

79 Okla. 170

CRESSLER v. BROWN et al.

Case Number: 9741

Supreme Court of Oklahoma

Decided: September 7, 1920

Syllabus

¶0 1. Bills and Notes--Indorsement of Note Without Recourse-- Effect.

Under the Negotiable Instruments Law (section 4088, Rev. Laws 1910), the indorsement of a promissory note, without recourse, is a qualified indorsement, constituting the indorsee a mere assignee of the title to the instrument.

2. Same--Warranty of Indorser.

Under the Negotiable Instruments Law (section 4115, Rev. Laws 1910), the indorser without recourse warrants (1) that the note is genuine and in all respects what it purports to be; (2) that he had a good title to it; (3) that the makers had capacity to contract; and (4) that the indorser has no knowledge of any fact which would impair the validity of the instrument or render it valueless.

3. Same.

The indorsement without recourse by the payee of a negotiable promissory note contains as a term thereof, with the same force and effect as if expressly written therein, the statutory warranty on the part of the indorser, "That he has no knowledge of any fact which would impair the validity of the instrument or render it valueless."

4. Same.

The indorsement of a promissory note without recourse, known to the indorser at the time the note was executed or at the time it was indorsed to be invalid for want of consideration, renders the indorser liable to the indorsee for a breach of warranty.

5. Same.

The indorsement of a negotiable promissory note without recourse does not impair the negotiable quality of the paper.

6. Same--Note Worthless Through Fault of Indorser--Liability of Indorser to Indorsee.

While an indorser without recourse neither warrants payment nor binds himself to pay, nevertheless, if judgment for the amount of the note is defeated by the maker on the ground that the indorser, as payee, obtained it by fraud or without consideration, the assignee under such qualified indorsement may recover from the indorser the amount paid by him, with interest thereon, the indorser being estopped by the former judgment, provided he had notice of the former suit and an opportunity to control the proceedings.

7. Judgment--Res Judicata.

A former judgment cannot be relied upon in support of a plea in bar unless the former suit in which the judgment was rendered was based on the same cause of action upon which the latter suit is based.

8. Same--Matters Concluded.

A judgment rendered by a court of competent jurisdiction on the merits is a bar to any future suit between the same parties or their privies on the same cause of action so long as the judgment remains unreversed. And this is true because the cause of action and all defenses made or which might have been made are merged in the judgment. The former judgment in a suit between the same parties or their privies, involving the same cause of action set forth in the second suit, is conclusive not only as to all matters actually litigated and determined in the former action, but conclusive on the parties and their privies as to all matters germane to the issues which could or might have been litigated and availed of by the parties. The cause of action thus being merged in the former judgment, the parties and their privies are precluded in a subsequent suit, involving the same cause of action, from availing themselves of any point of law or fact, irrespective of whether or not it was relied upon or passed upon in the former case, and it makes no difference whether the law or fact of which the parties may have availed themselves was actually discussed, considered, or adjudicated by the court. The cause of action is destroyed in its entirety. It is ended and terminated, irrespective of the facts or legal propositions considered by the court rendering the judgment.

9. Same--"Parties Privy to Judgment."

But a right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction cannot be disputed in a subsequent suit between the same parties or their privies, although the subsequent suit is on a different cause of action, and a plea setting up the former adjudication of a fact, right, or question distinctly put in issue between the same parties or their privies is not a plea in bar, but a plea of estoppel by judgment. Identity of causes of action is not a necessary element in the plea of estoppel by judgment, but it is necessary that the point upon which the plea of estoppel by judgment is based be in issue in the latter case and was in issue and decided in the former.

10. Same.

Where a right, question, or fact is distinctly put in issue and directly determined by a court of competent jurisdiction in a former suit between the same parties or their privies, the former adjudication of that fact, right, or question is binding on the parties and their privies in a subsequent suit, irrespective of whether or not the causes of action are the same.

11. Same.

While a party cannot by varying the form of action, or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated between the same parties and their privies, the judgment operating as a merger or destruction of the action, and while every ground of recovery or defense germane to the cause of action is concluded by the judgment, whether or not actually presented to the court rendering the judgment, the plea that the parties and their privies are estopped to relitigate an adjudicated fact, right or question, settled by the former decision, involves an inquiry into the question as to whether that exact fact, right or question was presented to the court and adjudicated--not whether it might have been presented.

12. Same.

Where the second action between the same parties or their privies is upon a different claim or demand, the judgment in the former action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding, verdict, or judgment was rendered, and where it is sought to apply the estoppel of a former judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry always is this: Is the point, question, or fact put in issue in the latter case, the point, question, or fact actually litigated and determined in the former or other action, and not what might have been litigated and determined in the original action.

13. Same.

The inquiry of res judicata is not limited to the mere formal judgment. It extends to the pleadings, the verdict, or the findings, and the scope and meaning of the judgment is often determined by the pleadings, verdict, or findings.

14. Same.

The general rule is that estoppel by judgment must be mutual.

15. Judgment--Parties Concluded.

The general rule is that no one, except the parties and their privies, is bound by a judgment.

16. Same--"Parties Privy to Judgment."

The general rule is that a party is not privy to a judgment involving property or a right, unless he acquires his interest either after the suit is brought in which the title or right is involved, or after the judgment was rendered.

17. Same--Bills and Notes--Action by Maker of Note Against Indorser--Conclusiveness of Judgment as to Indorsee Without Recourse.

The assignee of a promissory note, acquiring title from the payee under an indorsement without recourse, is neither concluded nor estopped by a judgment rendered in a suit commenced by the maker of the note against the payee after the assignee acquired title to the note. The indorser without recourse of a negotiable promissory note, being a warrantor that the instrument is genuine, in all respects what it purports to be, that he has a good title to it, that all prior parties had capacity to contract, and that he has no knowledge of any fact which would impair the validity of the instrument or render it valueless, and therefore responsible over to his indorsee for breach of such warranty, has capacity to litigate with the maker of the note the issue as to whether or not he, as payee, obtained the execution of said note without consideration or by means of fraud.

18. Same--Res Judicata- -Estoppel of Maker of Note by Judgment.

The maker of a negotiable promissory note, indorsed without recourse by the payee, is estopped by the judgment rendered in a former action commenced by him against the indorser, to litigate with the indorsee the same questions decided in the former suit, and this is true although the indorsee acquired title to the note before the former suit was commenced and was not a party thereto.

19. Same.

Mutuality in a plea of estoppel by former judgment of a court of competent jurisdiction is not essential where the party against whom the plea is filed has litigated the same right, fact, or question in a former suit with another party responsible over to the party filing the plea of estoppel by former judgment; and this is true, although the party filing the plea was not a party to the former suit, acquired his interest in or title to the property before the commencement of the former suit, and is not estopped by the former judgment.

20. Quieting Title--Parties Plaintiff--Warrantor.

A warrantor has sufficient interest upon which to base a suit in his own name to quiet the title of his grantee.

21. Bills and Notes--Action by Indorsee Against Maker--Defenses.

The maker of a promissory note cannot, in an action brought against him by the indorsee or assignee thereof, litigate questions that can properly arise only between the holder and his immediate indorser. And this being true, the maker cannot defeat a recovery of judgment in favor of the indorsee on the ground that the indorsee paid the indorser no consideration for the note.

22. Judgment--Parties Concluded--Assignor and Grantor.

Where a party assigns or conveys a contract, mortgage, or property, to another party for...