LeBrun v. Marcey

• Decision Date: 08 February 1952
• Docket Number: No. 84,84
• Citation: 199 Md. 223,86 A.2d 512
• Parties: LE BRUN et al. v. MARCEY.
• Court: Maryland Court of Appeals

Page 223

199 Md. 223

86 A.2d 512

LE BRUN et al. v. MARCEY.

No. 84.

Court of Appeals of Maryland.

Feb. 8, 1952.

Rehearing Denied March 4, 1952.

M. P. Friedlander, Washington, D. C. (Carlin & Meatyard, Bethesda, on the brief), for appellants.

Edward L. Foster, Silver Spring (Wm. B. Wheeler, Silver Spring, Ralph J. Luttrell, Washington, D. C., on the brief), for appellee.

Before MARBURY, C. J. and DELAPLAINE, COLLINS, HENDERSON and MARKELL, JJ.

MARKELL, Judge.

This is an appeal from a summary judgment in an action on the promissory note that was involved in LeBrun v. Prosise, Md., 79 A.2d 543, 549. In that case plaintiff in the instant case was one of the defendants; defendants in the instant case were the plaintiffs. At the argument the principal question discussed was whether the doctrine of res judicata makes the decision in that case decisive of this case.

The Prosise case was a suit in equity to enjoin foreclosure of the deed of trust which purported to secure the note, and to procure cancellation of the deed of trust and surrender of the note for cancellation. Marcey asked that the deed of trust be established as an equitable lien. We held that the deed of trust was null and void for want of acknowledgment and effective recording, and also, having been 'fraudulently and illegally certified [to have been acknowledged] and recorded', was not effective as an equitable lien. We held that '* * * Marcey was a holder in due course', and 'The fact that the certification [by Sherwood that the note had been signed in his presence] was false * * * does not invalidate the note [because no such certification is essential]. There is consequently no ground for requiring Marcey to surrender the note for cancellation.' The only contention that Marcey was not a holder in due course was that he was privy to the frauds of the trust company on the part of Prosise and Sherwood. We held he was not privy to these frauds. Apparently everyone, including the plaintiffs, the lower court and this court, assumed, or inferred, that the note was endorsed, without recourse, by the trust company when it was sold to Marcey on March 27, 1947, more than eleven months before maturity.

In the instant case defendants say that the title of the trust company was 'defective' when it negotiated the note 'in breach of faith, or under such circumstances as amounts to a fraud', Code, Art. 13, sec. 74, and therefore Marcey has the burden 'to prove that he * * * acquired the title as a holder in due course', Art. 13, sec. 78, and he has failed to sustain the burden of proving 'that he became the holder of it before it was overdue'. Art. 13, sec. 71. '* * * for the purpose of determining whether the transferee [of an instrument transferred without indorsement and later indorsed] is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made.' Art. 13, sec. 68. Defendants say that early in the Prosise case, after Marcey's check had shown that he had paid $15,000 for the note, they felt they had no possibility of requiring the surrender of the note, whether he was a holder in due course or not, and thereafter they argued that he was not a holder in due course, only as against his claim to an equitable lien. They contend that our holding, or statement, that he was a holder in due course was not a basis of decision in the Prosise case and is not res judicata in the instant case; that on different evidence we should now find that he was not a holder in due course, and specifically that he has failed to show that he became the holder before maturity.

'The scope of the estoppel of a judgment depends upon whether the question arises in a subsequent action between the same parties upon the same claim or demand or upon a different claim or demand. In the former case a judgment upon the merits is an absolute bar to the subsequent action. In the latter the inquiry is whether the point or question to be determined in the later action is the same as that litigated and determined in the original action [Citing cases.]' Tait v. Western Maryland Ry. Co., 289 U.S. 620, 623, 53 S.Ct. 706, 707, 77 L.Ed. 1405. 'In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. * * * But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action.' Cromwell v. County of Sac, 94 U.S. 351, 352-353, 24 L.Ed. 195. See also Restatement, Judgments, Chapter 3, Introductory Statement. ' § 68. Questions of Fact. (1) Where a question of fact essential to the judgment is actually litigated and determined by a valid and final judgment, the determination is conclusive between the parties in a subsequent action on a different cause of action [with exceptions not now material]. * * * o. Facts not essential to the judgment.--The rules stated in this Section are applicable only where the facts determined are essential to the judgment. Where the jury or the court makes findings of fact but the judgment is not dependent upon these findings, they are not conclusive between the parties in a subsequent action based upon a different cause of action. Thus, if the defendant interposes two defenses, either of which is sufficient to bar the plaintiff's claim,...