Gilmer v. Morris

• Decision Date: 01 January 1886
• Citation: 30 F. 476
• Parties: GILMER v. MORRIS and others.
• Court: U.S. District Court — Middle District of Alabama

30 F. 476

GILMER v. MORRIS and others.

United States Circuit Court, M.D. Alabama.

November Term, 1886

R. C Brickell, H. C. Semple, and W. A. Gunter, for complainant.

D. S Troy, H. C. Tompkins, and A. T. London, for defendants.

BRUCE J.

The bill was filed September 20, 1886, and sets out a pledge as collateral security, in the year 1871, of 120 shares of stock in the Elyton Land Company, by plaintiff, to Josiah Morris to secure to him the repayment of the sum of $6,000, which sum Morris had advanced for the purchase money of said stock that, in the year 1871, one-half of said stock was sold for the sum of $6,000, leaving a small amount of interest due to Morris, and that, in the year 1875, orator formed a partnership with one Donaldson; and desiring, as he charges in his bill, 'to continue his bank account with said Josiah Morris & Co., and to obtain from them, from time to time, some accommodations by way of loans and discounts, arranged and agreed, in the early part of the year 1875, with said Morris, that the said stock should be held by him, not only to secure such balance as was due him on the original purchase thereof, but also for all indebtedness which the said firm of Gilmer & Donaldson might incur to him, or to his banking firm, * * * and afterwards, and in pursuance of said agreement, and up to the death of said Donaldson, in 1876, the bank account of said Gilmer & Donaldson was opened and continued, * * * and loans and discounts were made to them from time to time. * * * ' Orator says that after the death of Donaldson he formed other business partnerships, and that during the course of said dealings, under the name of Gilmer & Clanton, and Gilmer & Merritt, the said Morris, through his said bank, as he had done for many years for all of orator's previous firms, extended credits and made loans of money to said firms, from time to time, upon the faith, and credit of said stock belonging to orator in his hands as a pledge as aforesaid; but orator's two firms last mentioned left no balances against them in closing their accounts with said Morris' bank.

The complainant states that large dividends have been paid to Josiah Morris on this stock; and, without stating in detail the further allegation of the bill, the averment is that 'Morris continuously, from the month of March, 1875, to the year 1884, did hold and acknowledged that he held said stock as a pledge on orator's account, and to secure the payment of the said balances due him and his said bank. ' The prayer of the bill is that the defendant Josiah Morris may be compelled by a decree of this court to account for and pay over to orator all such dividends as may have been paid upon said stock since the same has been in his hands as aforesaid, after deducting any and all indebtedness on the part of orator to Morris and his said firm for which the stock is liable, and for general relief.

To this bill the defendants plead in bar, and say that on the seventh day of July, 1884, the plaintiff, James N. Gilmer, exhibited his bill of complaint in the chancery court of the Sixth district of the Southern division of the state of Alabama against these defendants, alleging his ownership of the identical 60 shares of stock in the Elyton Land Company described in the present bill in this court, and praying in that court the same relief as is prayed in the bill in this court; that in that suit the defendants answered the bill, and also answered an amended bill which was filed by the plaintiff in that case in the state court; and that at the April term, 1885, of that court, the cause was submitted on the pleadings and testimony on the merits thereof; and that by the decree of the chancellor, a copy of which is made a part of the plea, 'it is ordered, adjudge, and decreed that complainant is not entitled to relief, and that his bill of complaint be dismissed out of this court. ' * * * And that afterwards, on appeal, at the December term, 1885, the decree of the court below was affirmed by the supreme court of the state of Alabama. They thereupon plead said proceedings in bar of this action, and say the matters set up in this bill have been heard and determined by a court of competent jurisdiction, and pray to be dismissed, with their costs.

It is admitted that the state chancery court which rendered the decree pleaded in bar of the present suit is a court of competent jurisdiction, and that it had jurisdiction of the parties and the subject-matter of the suit; that the parties in this suit are the same as in the former suit; that the thing sought to be recovered in this suit, to-wit, 60 shares of stock in the Elyton Land Company, is the same thing which was sought to be recovered in the former suit; but the contention of the plaintiff is that the cause of action in this suit was not the cause of action in the former suit, and that it could not have been so, because the cause of action in this was not within the issues made and determined in the former suit.

Plaintiff contends that the allegations of the present bill are not the allegations of the bill in the state court; that the cause of action is neither in substance nor in fact the same cause of action, and that upon the present bill he has not had the one hearing and trial on the merits of his case which the law gives to every litigant. In the discussion of this question, what are we to understand by the words 'cause of action?' They seem, in some cases, to be used as synonymous with the thing or demand in suit, or the subject-matter of the suit. We speak of a suit on a promissory note or contract, and in some sense the demand in suit is the cause of action; but, strictly speaking, is a promissory note the cause of the suit upon it, or is it not rather the mere evidence of a right which right is the real cause of the action? A cause of action springs out of facts which show a breach of some duty or obligation, to enforce which is the purpose of a suit, either at law or in equity; the cause of the action is the right which the party has to the thing which is the subject-matter of the suit, and not merely the thing itself. The distinction between the subject-matter of a suit and the cause of action is maintained in Freeman on Judgments, Secs. 252-256, and seems to be well founded. The bill in the state court was filed on the seventh day of July, 1884, which was subsequent to all the alleged acknowledgments of the pledge by Morris, as charged in the present bill, which was filed on the twentieth day of September, 1886; and the proposition of the plea is that, as to the stock in suit, the complainant is concluded by the judgment of the state court, not only as to the questions which were actually passed upon by the court in that suit, but equally as to those questions which might have been passed upon and decided in that court.

It is to be observed that, with the answer filed by Morris to the bill in the state court, there was also, under the practice in equity in this state, a demurrer to the bill on the grounds (1) that the facts alleged show that the demand is stale, and barred by the statute of limitations; (2) the complainant has an adequate remedy at law.

In the opinion of the chancellor of the state court, filed as an exhibit to the plea, he says: 'The statute of limitation, therefore, is a bar to the rights of the complainant in this cause;' and the decree is 'that complainant is not entitled to relief, and that his bill of complaint be, and the same is hereby, dismissed out of this court. ' The ruling and judgment of the state court on the former suit is thus shown to have been, upon demurrer to the bill, that the averments thereof did not make a case for relief. The proposition of the plea is that under the law as it has been settled, the statute of limitations of the state furnishes the rule of property in the United States courts sitting in such states, and, the state court having passed upon the question of the right of property of the stock sued for, that the rule of res judicata applies, and the bar is complete. But did the state court in this case, when it held that the complainant had not in his bill stated a case for relief, and dismissed the bill out of court, pass upon the question of the right of property to the stock other than as it was shown by the averments of the bill in that case? The state court said, in effect, by its decree, that complainant has not in his bill stated a cause of equity; and when it said that, could it say more, and determine a cause of action which was not set up or stated in the bill? What is the rule of res judicata? It is thus stated in Russell v. Place, 94 U.S. 608:

'It is settled law that a judgment of a court of competent jurisdiction, upon a question directly involved in one suit, is conclusive as to that question in another suit between the same parties.'

In McCall v. Jones, 72 Ala. 371, the court says:

'The rule of res adjudicata, or former recovery, is confined to those cases where the parties to the two suits are the same, the identical point is directly in issue, and the judgment has been rendered in the first suit on that point.'

And again, in the same case, the court says it is not only essential that the issue or point in question must either have been actually decided or necessarily involved in the first case; but the first judgment, sought to be pleaded in bar in the second suit, will not be available as a defense unless it was a judgment on the merits of the case; citing authorities.

An indefinite list of authorities might be cited to the same effect, but I will only add here Bigelow on Estoppel, at page 75, where he says:

'The peculiarity of the plea of former judgment consists, therefore, in the fact that it shows that a certain

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