Laughlin v. Leigh

• Decision Date: 15 March 1910
• Citation: 126 S.W. 743,226 Mo. 620
• Parties: HENRY D. LAUGHLIN v. EDWARD B. LEIGH, Appellant
• Court: Missouri Supreme Court

126 S.W. 743

226 Mo. 620

HENRY D. LAUGHLIN
v.
EDWARD B. LEIGH, Appellant

Supreme Court of Missouri, Second Division

March 15, 1910

Appeal from St. Louis City Circuit Court. -- Hon. Warwick Hough, Judge.

Affirmed.

Judson & Green and Johnson, Rule & Allen for appellant.

(1) This case was essentially one of equitable cognizance, being a petition for discovery and accounting of certain bonds alleged to have been received by defendant in trust for plaintiff which plaintiff claimed the right to retain by reason of participation under agreement with plaintiff in the ventures wherein said bonds were received by defendant. In such an equitable cause the whole matter is open to review and revision in this court both as to the law and fact. 1 Pomeroy on Eq. Jur., secs. 2223-30; 3 Ib., secs. 1420-21; 1 Ency. Pl. and Pr., pp. 94-96; King v. Moon, 42 Mo. 553; Widdicombe v. Childers, 84 Mo. 382; Biddle v. Ramsey, 52 Mo. 153; Felton v. Greary, 104 Mo. 488; Likins v. Likins, 122 Mo. 279; Lins v. Lenhart, 127 Mo. 271; Blount v. Spratt, 113 Mo. 48; McElvoy v. Maxwell, 101 Mo. 294; Benne v. Schnecko, 100 Mo. 250; Swon v. Stevens, 143 Mo. 392. (2) As the case was one of equitable cognizance and heard by the court as such, it follows that the issue must be determined in this case de novo. The deference to be paid to the findings of the court below, which is allowed in causes where the witnesses are heard orally by the court, is inapplicable here; as the testimony was heard by a referee who died before rendering his report, so that the case was submitted to the trial judge upon the transcript of the testimony as taken before the referee. Lins v. Lenhart, 127 Mo. 271; Bank v. Newkirk, 144 Mo. 473; Robertson v. Shepard, 165 Mo. 360; Dalwrymple v. Craig, 149 Mo. 351; Allen v. Logan, 96 Mo. 598. (3) The agreement set out in the answer, as also in the amended answer, that defendant by the agreement with plaintiff made prior to the adjustment deal was to share equally with plaintiff in the profits thereof in consideration of his services therein, in his waiver of his right to redeem his stock thereunder, was clearly established by the evidence in the case. This agreement and this action thereunder were confirmed by plaintiff in the settlement made between the parties in April, 1900. This agreement was incidental and collateral to the agreement between the equipment company and the beam company, and in no wise infringed upon the rule concerning contradicting, changing or varying a written contract by parol evidence. The trust created by such agreement can always be proved by parol. 2 Wharton on Ev., secs. 903, 1031, 8, 42; Adams, Eq., p. 35; Paugh v. Davis, 96 U.S. 332; 2 Pomeroy. Eq., 1055. (4) The refusal of the lower court to allow the defendant to file an amended answer, so as to conform to the evidence taken before the referee was an abuse of the discretion of the court, and was duly excepted to in the motion for new trial. The filing of this answer could not have been in any wise prejudicial to the plaintiff and it merely conformed to the evidence introduced by both parties and to the facts which had transpired in litigation instituted by the plaintiff in another jurisdiction. The allowance of such an amendment in furtherance of justice is always favored in courts of equity. See 1 Ency. Pl. and Pr., 495-498; Chase v. Jennings, 159 Mo. 553; Pratt v. Matthew, 42 Mo.App. 495; Irwin v. Childs, 28 Mo. 578; Carr v. Moss, 87 Mo. 449. (5) There is no warrant for the imputation that the agreement between plaintiff and defendant was on the latter's part in fraud of the rights of the stockholders of either company. A contract made by an officer of a company whereby he is to make a personal profit for services rendered the company is not void but only voidable at the instance of the company. In this case there was no concealment. The position of defendant was avowed and known to his associates, so that there is no basis for the imputation whatever. Barr v. Railroad, 125 N.Y. 263; Jesup v. Railroad, 43 F. 483; Ready v. Smith, 170 Mo. 163; Foster v. Mullanphy Co., 16 Mo.App. 150. (6) If it should be held that the agreement between plaintiff and defendant, that defendant should share the profits of the rent readjustment deal, was, because of defendant's relations to the company and to the equipment company, contrary to public policy and, therefore, voidable, and that nevertheless the bonds in controversy were, with plaintiff's knowledge of all the facts relative to the transaction and with plaintiff's consent, retained by defendant as part of the latter's share in said profits; then plaintiff was a party to the fraud, and is not entitled to recover from defendant the said bonds. Under such circumstances, the court will leave the parties where their illegal act left them. Jackson v. Executors, 100 Mo. 130; Adams Express Co. v. Reno, 48 Mo. 267; Davis v. Luster, 64 Mo. 46; Scudder v. Bailey, 66 Mo.App. 46; Turley v. Edwards, 18 Mo.App. 682; Continental Co. v. Voight, advanced sheets U.S. S.Ct. No. 7, Oct. Term, 1908, 292. (7) Whether the judgment in the Chicago case is res adjucata of this case or not, the plaintiff, by instituting the two separate suits in the separate jurisdictions -- one for the brake beam company shares, and the other for the equipment company bonds -- and in prosecuting the case brought in Chicago to final judgment, split up his cause of action and thereby estopped himself from recovery in this case. Donnell v. Wright, 147 Mo. 646; Spratt v. Early, 199 Mo. 500; Womach v. St. Joseph, 201 Mo. 476; Bircher v. Boemler, 204 Mo. 562; Railroad v. Levy, 17 Mo.App. 507.

Randolph Laughlin and Lee Mudd for respondent.

(1) The pretended contract between plaintiff and defendant, set up in defendant's answer, is no longer an open question, but has passed into rem judicam against the defendant, and the defendant is estopped by final decree in the Chicago case to assert to the contrary of any fact actually determined or which might have been determined in the Chicago litigation. Railroad v. United States, 168 U.S. 48; Cromwell v. County of Sac, 94 U.S. 351; Mason v. Summers, 24 Mo.App. 174; Case v. Gorton, 33 Mo.App. 174; State ex rel. v. Branch, 134 Mo. 592; Young v. Byrd, 124 Mo. 590; Edgell v. Sigerson, 26 Mo. 583; Dickey v. Heim, 48 Mo.App. 118. (2) Whether or not there was such an agreement between plaintiff and defendant as is pleaded in defendant's answer in this case, was, as appears from the opinion of the Illinois Appellate Court, and as was stated by Leigh's counsel in that case, "substantially the sole controversy" to be there determined, and the Illinois court determined it. Laughlin v. Leigh, 112 Ill.App. 119, 211 Ill. 192. (3) The fact that the findings and decrees of the Illinois courts have been received in evidence in this case without being pleaded, does not at all affect their operation as estoppels. They are as conclusive against appellant as if they had been anticipated and pleaded in the beginning. Railroad v. United States, 168 U.S. 55; Garton v. Botts, 73 Mo. 274; 1 Freeman on Judgments (4 Ed.), sec. 284. (4) Independent of the doctrine of estoppel by judgment, and considering the question on its merits, the pretended contract or agreement on which appellant relies, was not only unproved, but disproved. Laughlin v. Leigh, 112 Ill.App. 119, 211 Ill. 192; Brake Beam Co. v. Leigh, 224 Ill. 132. (5) The defense of splitting the cause of action can avail the appellant nothing, for the following reasons: (a) Because the demands made by the plaintiff in this and in the Chicago case respectively are separate and distinct, and result from separate and distinct transactions. The only pretense of unity between them was, and is, bottomed on the appellant's pretended contract, claimed by him to include both, and the decisions of the Illinois courts not only estop him from pleading unity through any such contract, but they are also conclusive of the fact that the transactions are distinct and separate. Flaherty v. Taylor, 35 Mo. 451; Transportation Co. v. Traube, 59 Mo. 362; Hoffman v. Hoffman, 126 Mo. 497; Brown v. King, 10 Mo. 42; Boyce v. Christy, 46 Mo. 72; Jacobs v. Lewis, 47 Mo. 344; West v. Moser, 49 Mo.App. 201; Grocer Co. v. Taggart, 60 Mo.App. 389. (b) Because this suit for the bonds was brought and was pending before the institution of the Chicago suit for the stock, and the jurisdiction of this court was insufficient to afford the respondent the relief which he sought in the Chicago court. State ex rel. v. Daugherty, 45 Mo. 97; Wanborg v. Karst, 4 Mo.App. 563; Mitchell Co. v. Payton, 4 Mo.App. 564; Smith v. Warden, 86 Mo. 382; Carroll v. Campbell, 110 Mo. 557; Johnson v. Johnson, 72 Mo.App. 386; Linville v. Rhoades, 73 Mo.App. 217; Thompson v. Holden, 117 Mo. 130; Warder v. Henry, 117 Mo. 541; Drey v. Doyle, 28 Mo.App. 249. The situs of stock is the home office of the corporation issuing it, and the Missouri court had no jurisdiction whatever over the Illinois stock involved in the Illinois suit. Armour v. Bank, 113 Mo. 20; 2 Cook on Corp. (4 Ed.), sec. 485; Christmas v. Biddle, 13 Pa. St. 223. (c) Because the suit which is claimed to have split the demand made in this suit was brought in another State. Now, the ground on which courts proceed to bar or to abate one action because of another one pending for the same or a part of the same cause, is found in the maxim "Nemo debet bis vexari pro una et eadem causa." Moran v. Plankington, 64 Mo. 338; State v. Daugherty, 45 Mo. 294; Cady v. Kyle, 47 Mo. 346; Bank v. Tracey, 141 Mo. 258; Donnell v. Wright, 147 Mo. 646; Skeen v. Thresher Co., 42 Mo.App. 164; Robbins v. Conley, 47 Mo.App. 506; West v. Moser, 49 Mo.App. 211; Buffum v. Tilton, 17 Pick. 511. But the maxim "Nemo debet bis vexari pro una et eadem causa" only applies where both suits are within the same sovereign jurisdiction. Lorillard v. Meshural, 7 Rob. 308; Davis v. Morton, 4 Bush (67 Ky.) 443...