Linton v. National Life Ins. Co. of Vermont, 1,409.

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Citation: 104 F. 584
• Docket Number: 1,409.
• Parties: LINTON et al. v. NATIONAL LIFE INS. CO. OF VERMONT.
• Decision Date: 22 October 1900

104 F. 584

LINTON et al.
v.
NATIONAL LIFE INS. CO. OF VERMONT.

No. 1,409.

United States Court of Appeals, Eighth Circuit.

October 22, 1900

(Syllabus by the Court.) [104 F. 585]

John T. Cathers, for appellants.

Frank H. Gaines (E. R. Duffie and J. E. Kelby, on the brief). for appellee. [104 F. 586]

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORN, Circuit Judge.

This is an appeal from a decree of foreclosure of a mortgage upon real estate situated in the city of Omaha, in the state of Nebraska. The appellant Phoebe R. E. E. Linton was the owner of a large amount of real estate in the United States which she had inherited, and John P. Finlay was her father. In June, 1892, Finlay, as the attorney in fact of Phoebe R. E. E. Linton and of Adolphus F. Linton, her husband, the appellants, borrowed of the National Life Insurance Company of Vermont, a corporation, the appellee, $25,000, and gave to it a promissory note for that amount dated June 1, 1892, due June 1, 1897, eight coupons for $750 each for interest, and a mortgage on improved real estate of Mrs. Linton situated in Omaha to secure the payment of these notes. The notes and the mortgage were signed with the names of the appellants, and executed on their behalf by Finley as their attorney in fact, and the proceeds of the loan were paid to him. The four coupon notes which fell due on December 1, 1895, June 1, 1896, December 1, 1896, and June 1, 1897, respectively, and the note for $25,000 principal, have not been paid, and this suit was brought to foreclose the mortgage which secured their payment. The authority of Finlay to borrow the money and to make the notes and mortgage was a letter of attorney signed by the appellants and delivered to Finlay in London, England, on June 24, 1891. This letter of attorney bore a certificate of acknowledgement of its execution by the appellants signed and sealed by the consul general of the United States at the consulate in London, and it had been recorded in the proper office in the state of Nebraska before the loan was made. The defense to the foreclosure was that for various reasons the letter of attorney did not authorize Finlay to borrow the money or to make the notes or mortgage on behalf of the appellants. Testimony was taken, and at the final hearing upon the merits the court below overruled this defense, and rendered a decree of foreclosure of the mortgage. This decree of foreclosure is challenged by counsel for the appellants on the grounds (1) that the letter of attorney did not by its terms empower Finlay to borrow money or to make promissory notes or other obligations on behalf of the appellants to repay borrowed money, or to mortgage lands to secure the payment of a new debt; (2) that the certificate of acknowledgement upon the letter of attorney was not in the form required by the law; (3) that the execution of the letter of attorney was not in fact acknowledged by the appellants; (4) that a married woman cannot lawfully convey or mortgage her real estate in Nebraska by an attorney in fact; (5) that the notes and mortgage did not bind Mrs. Linton or charge her real estate, because she never received any consideration for them; (6) that the letter of attorney is that of Mr. Linton alone, and does not empower Mr. Finlay to act for Mrs. Linton, or to convey, mortgage, or charge her property; and (7) that the letter of attorney was not stamped as required by the law of England, where it was executed. [104 F. 587]

An examination of the record discloses the fact that the first two objections of counsel to this decree are not open to consideration in this suit. On July 8, 1895, the appellee brought an action against the appellants in the county court of Douglas county, Neb., upon one of the coupon notes secured by this mortgage which became due on June 1, 1895. The complaint upon which that action went to trial set forth the letter of attorney here in question, and alleged that the note sued on in that action was executed by Finlay on behalf of the appellants by virtue of the authority granted to him by this letter of attorney, and for the purpose of enabling him to borrow for the appellants the $25,000 which he obtained from the appellee. Mr. and Mrs. linton answered this complaint that Finlay was not authorized, by this letter of attorney or otherwise, to borrow any money, or to make any note or mortgage, on their behalf, and that the letter of attorney had not been executed according to law, and was not binding upon them. The issues thus made were tried upon their merits, and a judgment was rendered by the county court of Douglas county in favor of the insurance company for the full amount claimed in its complaint. That judgment was never reversed or modified, but was paid. At the trial which resulted in that judgment the question whether or not the terms of the letter of attorney were sufficient to authorize Finlay to borrow money for the appellants, and to execute notes therefor in their names, and the question whether or not the certificate of acknowledgement was in accordance with the statutes, were raised, litigated, argued, and decided by the court against the appellants. The court of Douglas county held that the power vested by the terms of the letter of attorney was ample to enable Finlay to borrow the money and to make the notes, and that the certificate of the acknowledgement of the execution of the letter of attorney was in due and legal form. The judgment in that action conclusively estops the appellants from again litigating those questions. The rule of estoppel by judgment is that, when the second suit is upon the same cause of action and between the same parties as the first, the judgment in the former is conclusive in the latter as to every question which was or might have been presented and determined in the former. When the second suit is upon a different cause of action, but between the same parties as the first, the judgment in the former action operates as an estoppel in the latter as to every point and question which was not actually litigated and determined in the first action; but it is not conclusive as to other matters which might have been, but were not, litigated or decided. Cromwell v. Sac Co., 94 U.S. 351, 24 L.Ed. 195; Nesbitt v. District, 144 U.S. 610, 618, 12 Sup.Ct. 746, 36 L.Ed. 562; Commissioners v. Platt, 79 F. 567, 571, 25 C.C.A. 87, 91, 49 U.S.App. 216, 223; Commissioners v. Sutliff, 38 C.C.A. 167, 97 F. 270, 274. This is a suit between the same parties who were involved in the action upon the coupon note due on June 1, 1895, but upon a cause of action different from that there in controversy, and every point in question which was actually and necessarily litigated and decided in that action is res adjudicata in this. The question whether or not the terms of the letter of attorney were [104 F. 588] broad enough to empower Finlay to borrow money for the appellants and to execute their notes to secure a new debt, and the question whether or not the certificate of acknowledgement was in accordance with the law, were raised, litigated, and decided in that action, and the appellants are conclusively estopped by the judgment therein from again presenting or litigating them here. In this suit the letter of attorney and the form of the certificate of acknowledgement must be conclusively presumed to have authorized Finlay to borrow the money and to execute the notes and mortgages in controversy on behalf of the appellants.

The third reason why the decree should be reversed which is urged upon our consideration is that the execution of the letter of attorney never was in fact acknowledged by the appellants. The forces of this contention must be determined by the statutes of the state of Nebraska,-- by the law of the situs of the real estate mortgaged,-- and there are several fatal objections to it.

In the first place, an acknowledgement of the execution of an instrument affecting the title to real estate is not essential to the validity of the instrument between the parties to it and their privies under the the statutes of that state. The execution of a deed, mortgage, or letter of attorney may be proved by competent testimony, and full force and effect may be given to it without any acknowledgement. The acknowledgement prescribed by the statutes of Nebraska is not a part of the conveyance or instrument, and its purpose and effect is not to condition the validity of the mortgage or power of attorney, but to entitle it to record, and to authorize its admission in evidence without other proof. Comp. St. 1899, c. 73, Sec. 1; Burbank v. Ellis, 7 Neb. 156, 163; Horbach v. Tyrrell, 48 Neb. 514, 516, 67 N.W. 485, 489, 37 L.R.A. 434.

Nor is a married woman exempt from these rules in any case except where the instrument in question involved her dower (Comp. St. 1899, c. 23, Sec. 12), or her homestead (Comp. St. 1899, c. 36, Sec. 4). In all other cases an acknowledgement by a married woman of the execution of an instrument...