Kearny County Bank v. Nunn

• Decision Date: 06 March 1943
• Docket Number: 35783.
• Parties: KEARNY COUNTY BANK v. NUNN et al.
• Court: Kansas Supreme Court

134 P.2d 635

156 Kan. 563

KEARNY COUNTY BANK v. NUNN et al.

No. 35783.

Supreme Court of Kansas

March 6, 1943

Syllabus by the Court.

The rule prohibiting splitting of a cause of action is well established, and its purpose is to protect a defendant against a multiplicity of suits on a single cause of action.

Where all parties are in court and the court has full jurisdiction of the subject matter and parties and could determine all issues properly involved, all such issues should be then determined and not only do the matters which are then expressly determined, but also all other matters which might and should have been determined become "res judicata" and are not available to the parties in a future action.

Where holder of note had sought and obtained a judgment in rem foreclosing mortgage securing note without seeking or obtaining a judgment on note although maker was a party to the action and had been personally served with summons and a judgment in personam could have been rendered against him holder could not thereafter maintain action on the note. Gen.St.1935, 60-3107.

1. In an action on a note, where defendant filed an answer alleging, in substance, that in a former action the owner of the note which was secured by a real estate mortgage had sought and obtained a judgment in rem foreclosing the mortgage, without seeking or obtaining a judgment on the note although the maker thereof was a party to the action, had been personally served with summons, and a judgment in personam could have been rendered against him, held, on examination of the answer, the allegations thereof stated a valid defense under the doctrine of res judicata, and the rule prohibiting the splitting of a cause of action, and were sufficient as against a demurrer attacking the answer on the ground it did not set forth facts sufficient to constitute a defense to the cause of action set forth in the petition.

2. The decision in the case of Rossiter v. Merriman, 80 Kan. 739, 104 P. 858, 24 L.R.A.,N.S., 1095, has been abrogated by later decisions of this court condemning the splitting of causes of action and applying the doctrine of res judicata.

Appeal from District Court, Kearny County; Fred J. Evans, Judge.

Action by the Kearny County Bank against Joe Nunn and Ilva Eckert nee Ilva Nunn, on promissory note. From a judgment for plaintiff the defendant Joe Nunn appeals.

Judgment reversed and cause remanded with instructions to set aside the ruling sustaining plaintiff's demurrer to second defense set forth in the answer.

Wm Easton Hutchison, C. E. Vance, and A. M. Fleming, all of Garden City, for appellant.

H. O Trinkle, Ray H. Calihan, and Roland H. Tate, all of Garden City, for appellee.

PARKER Justice.

This was an action on a promissory note dated April 3, 1931, due on or before two years from date. The petition contained allegations, not denied, precluding any defense under the statute of limitations.

The answer, which was verified, set up three defenses, only one of which--the second--is here involved. Summarizing this portion of the answer, after admitting the execution of the note, alleged: That as a part of the same transaction defendant, Joe Nunn gave plaintiff a mortgage on real estate owned by him, subject to first and second mortgages; that in 1934 the holder of the first mortgage instituted an action to foreclose its lien, including as defendants, and obtaining personal service on the second mortgagee, the plaintiff, and this defendant, all parties appearing and filing answer; that plaintiff here, as defendant in such action filed its answer and cross-petition, alleging execution of the note, the mortgage given to secure the same and the amount due thereon; that thereafter plaintiff obtained a judgment decreeing the mortgage to be a valid lien on the real estate and giving it the right to make redemption as a junior creditor and lien holder, and ordering the residue, if any, derived from the sale of the lands paid into court to await further orders. The answer and cross-petition and journal entry in that action were by reference made a part of defendant's pleading. The answer further alleged sale of the real property pursuant to order of sale, the application of the proceeds to payment of judgment as to various lien holders and the fact no residue remained to apply upon the judgment or debt due plaintiff in this action; that the debt evidenced by the note sued on and secured by the mortgage given to secure same was then past due and unpaid; that the court had fall jurisdiction of all parties in such action and plaintiff could and should have asked for and received therein all relief to which it was then or might now be entitled to on the note sued on; and that by having prayed for and received a part of the relief to which it was entitled on the note, plaintiff waived the right to proceed further thereon and is now estopped to prosecute this action.

Plaintiff demurred to this second defense as set forth in the answer on the ground the allegations therein contained did not set forth facts sufficient to constitute a defense to the cause of action set forth in plaintiff's petition. The demurrer was sustained and defendant appeals.

It is apparent the trial court sustained the demurrer on the theory it is no defense to an action on a note to be able to show that in a former action the owner of the note, which was secured by a real estate mortgage, had sought and obtained a judgment in rem foreclosing the mortgage, without seeking to or obtaining a judgment on the note, notwithstanding the maker thereof was a party to the action, had been personally served with summons, and a judgment in personam could have been rendered against him. The plaintiff makes that argument to this court in support of its position that the trial court was correct in sustaining a demurrer to an answer containing allegations clearly describing the existence of such a factual situation.

The question of whether or not the pleading of and judgment for the holder of a junior mortgage in an action to foreclose prior mortgages is res judicata in a subsequent action on the note secured by such inferior mortgage is not devoid of difficulty.

Our statute expressly deals with the requisites of judgments in actions brought to enforce mortgages or other liens. G.S. 1935, 60-3107 provides: "In actions to enforce a mortgage, deed of trust, or other lien or charge, a personal judgment or judgments shall be rendered for the amount or amounts due, as well to the plaintiff as other parties to the action having liens upon the mortgaged premises by mortgage or otherwise, with interest thereon, and for the sale of the property charged and the application of the proceeds, or such application may be reserved for the further order of the court; ***."

The rule prohibiting the splitting of a cause of action has always had the approval of this court and is well established in Kansas. Todd v. Central Petroleum Co., 155 Kan. 249, 124 P.2d 704; Anspaugh v. Dougherty, 153 Kan. 257, 109 P.2d 101; Krueger v. Schlemeyer, 145 Kan. 469, 66 P.2d 395; First Nat'l Bank v. Schruben, 125 Kan. 417, 265 P. 53; Thisler v. Miller 53 Kan. 515, 36 P. 1060, 42 Am.St.Rep. 302; Bolen Coal Co. v. Brick Co., 52 Kan. 747, 35 P. 810; Wichita & W. R. Co. v. Beebe, 39 Kan. 465, 18 P. 502.

The purpose of the rule is to protect a defendant against a multiplicity of suits on a single cause of action. The rule and the reason for its existence are well illustrated in the instant situation where the creditor, having a single cause of action on his note and mortgage, and the opportunity to take judgment on both, elected to disregard the note and merely foreclose the mortgage, with the expectation that at some later date, in another action, he would obtain a judgment in personam upon the primary obligation, without which the mortgage would never have been executed.

That the defense of res judicata, as set forth in appellant's answer is available to him would seem to be established by the decisions of this court. It has been repeatedly held that when all parties are in court, and the court has full jurisdiction of the subject matter and parties and could determine all issues properly involved, all such issues should be then determined, and that not only do the matters which are then expressly determined but also all other matters which might and should have been then determined become res judicata and are not available to the parties in a future action. Mydland v. Mydland, 153 Kan. 497, 499, 112 P.2d 104; Stimec v. Verderber, 152 Kan. 582, 585, 106 P.2d 708; Gray v. Johnson, 150 Kan. 276, 92 P.2d 46; Phoenix Mutual Life Ins. Co. v. Nevitt, 147 Kan. 772, 78 P.2d 913; Levi v. Levi, 149 Kan. 234, 237, 86 P.2d 473; Lins v. Eads, 145 Kan. 493, 66 P.2d 390; Dreier v. Ramsel, 141 Kan. 502, 41 P.2d 997; First Nat'l Bank v. Schruben, 125 Kan. 417, 265 P. 53; Fletcher v. Kellogg, 125 Kan. 330, 263 P. 1048; Kaw Valley State Bank v. Thompson, 140 Kan. 726, 37 P.2d 985; Clemons v. Kansas Gas & Electric Co., 131 Kan. 93, 97, 289 P. 461, 69 A.L.R. 999; Lux v. Columbian Fruit Canning Co., 120 Kan. 115, 118, 242 P. 656; Snehoda v. Nat'l Bank, 115 Kan. 836, 840, 224 P. 914.

Appellee recognizes the existence of these doctrines as herein stated but insists that the facts in the case at bar are such that they have no application and do not preclude it from maintaining this action and in support of its position cite a number of our decisions. Those decisions merit our attention and we will now discuss them with as much brevity as the importance of appellee's contention will permit.

Hunt v. Bowman, 62 Kan. 448, 63 P. 747, is cited. All it holds is that the holder of a note secured by a mortgage may bring an action on...