Meyer v. Vance

• Citation: 406 P.2d 996
• Decision Date: 14 September 1965
• Docket Number: No. 40427,40427
• Parties: Joe M. MEYER and Wilma B. Meyer, Plaintiffs in Error, v. S. S. VANCE and Inez W. Vance, Defendants in error.
• Court: Supreme Court of Oklahoma

Page 996

406 P.2d 996

1965 OK 135

Joe M. MEYER and Wilma B. Meyer, Plaintiffs in Error, v. S. S. VANCE and Inez W. Vance, Defendants in error.

No. 40427.

Supreme Court of Oklahoma.

Sept. 14, 1965.

Syllabus by the Court

1. In absence of compulsory counterclaim statute, defendant's failure to set up counterclaim does not preclude a separate action against plaintiff on a separate cause of action which had been available as a counterclaim, but party cannot recover on a cause of action which he had failed to plead in prior action but which was necessarily adjudicated by former judgment.

2. Defendant may plead and prove, as a counterclaim, any cause of action he may have against the plaintiff, whatever its nature, arising out of the cause of action alleged in the petition or connected therewith.

2. The purpose of statutes relating to counterclaims is to make possible the determination of all controversies growing out of a transaction in one proceeding thus avoiding a multiplicity of lawsuits, and such statutes will be liberally construed in order to carry out said purpose.

4. Where an estoppel by judgment rendered upon one cause of action is sought to be applied to a matter arising in a suit on a different cause of action, the inquiry is whether the matter arising in the latter case is a question of fact actually determined in the former action and not what might have been litigated and determined.

Appeal from the District Court of Tulsa County; Raymond W. Graham, judge.

Appeal upon the original record by Joe M. Meyer and Wilma B. Meyer (plaintiffs below) from an order and judgment of the District Court of Tulsa County sustaining the demurrer of S. S. Vance and Inez W. Vance (defendants below) to plaintiff's amended petition, and dismissing the action. Remanded with instructions.

R. M. Cowen, Tulsa, Tillman & Tillman, Pawhuska, for plaintiffs in error.

Chas. R. Gary, W. N. Palmer, Bert Lawton, Pawhuska, A. J. Kriete and Philip J. Kramer, Kriete & Kramer, by Philip J. Kramer, Philip Lewis Kramer, Sidney D. Wise, Tulsa, for defendants in error.

DAVISON, Justice.

This is an appeal upon the original record by Joc M. Meyer and Wilma B. Meyer (plaintiffs below) from an otder and judgment of the District Court of Tulsa County sustaining the demurrer of S. S. Vance and Inez W. Vance (defendants below) to plaintiff's amended petition, and dismissing the action. The parties will be referred to by their trial court designations. Plaintiffs sued for $125,000 actual and exemplary damages, allegedly sustained as the result of defendants wrongfully securing the appointment of a receiver for real estate in a prior mortgage foreclosure action, instituted by defendants against plaintiffs in the District Court of Osage County, Oklahoma.

Plaintiffs' suit for damages was based upon the following circumstances, that in August, 1960, plaintiffs purchased from defendants a business building, located in the City of Pawhuska, Osage County, Oklahoma; that there was an existing first mortgage on the property and, as a part of the purchase price, the plaintiffs gave defendants a $40,000 note, payable $350 per month, secured by a second mortgage on the property; and that on December 29, 1961, the defendants filed suit in the District Court of Osage County for judgment and foreclosure alleging default in the terms of the note and mortgage and insufficiency of the security and asking for appointment of S. S. Vance as receiver to take immediate possession of the property and the rents and profits thereof. Plaintiffs' petition herein further alleged that in the foreclosure action S. S. Vance (plaintiff there and defendant here) was appointed receiver, without bond being filed with the application and without notice to or consent of present plaintiffs (defendants there), and such appointment was neither necessary or justified and was void and in contravention of 12 O.S. 1961, § 1552, which provides no party, or attorney, or person interested in an action, shall be appointed receiver therein except by consent of all parties thereto; that on January 18, 1962, plaintiffs (defendants there) filed a motion to vacate the receivership and discharge the receiver and the motion was sustained; and that by reason of the appointment of such receiver the present plaintiffs suffered loss by being deprived of the possession and control and rents from the property, and further that the receivership had damaged the plaintiffs' established business of trading and management of properties, and their reputation in financial and business circles as being dependable and reliable persons in such business, all to their damage in the sum of $100,000. In a second cause of action plaintiffs ask for $25,000 exemplary damages.

The present suit was filed March 7, 1962, in Tulsa County, while the Osage County foreclosure action was still pending. The only pleading from the Osage County suit that appears in the present record is a copy of the petition in such foreclosure action. Attorneys for the parties, in oral argument, inform us the foreclosure suit has been completed by judgment and foreclosure sale of the property. Just what issues were made up by the pleadings therein and the disposition made of them is not shown by the record.

Plaintiffs contend the court erred in sustaining the demurrer to the amended petition. It appears from the briefs that the court concluded the plaintiffs could not maintain an independent action for their alleged damages, but were required to prosecute such action by way of counterclaim in the Osage County suit. Plaintiffs argue the circumstances were such that their alleged damages could not be made the basis of a counterclaim. Defendants argue to the contrary and that failure on the part of plaintiffs to present their claim of damages by counterclaim would make them subject to the bar of res judicata.

The first proposition to be determined is whether, assuming plaintiffs could have used the remedy of counterclaim, they were required to present their action as a counterclaim in the Osage County foreclosure action.

The pertinent portions of our statutes are as follows:

12 O.S. 1961, § 272.

'The answer shall contain:

* * *

* * *

'Second. A statement of any new matter constituting a defense, counterclaim or set-off, or a right to relief concerning the subject of the action, in ordinary and concise language, and without repetition.

'Third. When relief is sought, the nature of the relief to which the defendant supposes himself entitled. The defendant may set forth, in his answer, as many grounds of defense, counterclaim, set-off, and for relief, as he may have, whether they be such as have been heretofore denominated legal, or equitable, or both. * * *'

12 O.S. 1961, § 275.

'If the defendant omit to set up a counterclaim or setoff, he cannot recover costs against the plaintiff in any subsequent action thereon; but this section shall not apply to causes of action which are stricken out of or withdrawn from the answer, as in Sections 4749 and 4771. R.L.1910, § 4748.'

12 O.S.1961, § 298.

'The court, at any time before the final submission of the cause, on motion of the defendant, may allow a counterclaim or setoff set up in the answer, to be withdrawn, and the same may become the subject of another action; * * *.'

These statutes do not require or compel a defendant to file a counterclaim where one may properly be filed. They are not 'compulsory counterclaim' statutes. In fact they provide for permissive counterclaims.

The State of Nebraska has statutes practically identical to those above cited. In Rogers v. Buettgenback, 114 Neb. 834, 211 N.W. 168, the court construed the provisions of the statutes and held it was clear that it was not the intention of the legislature that a defendant should be required to plead any counterclaim which he might have against the plaintiff in the action, and whether the defendant did so was optional with him.

In such a situation the plaintiffs as defendants in the Osage County action were subject to the rule set forth in 50 C.J.S. Judgments § 684 b(3), p. 136, as follows:

'As a general rule, where a defendant has an independent claim against plaintiff, such as might be either the basis of a separate action or might he pleaded as a set-off or counterclaim, he is not obliged to plead it in plaintiff's action, although he is at liberty to do so, and if he omits to set it up in that action he is not concluded from subsequently asserting such demand, as by afterward bringing a separate action thereon, * * *.'

See also 30 A, Am.Jur. Judgments, Sec. 386, p. 434.

Under these circumstances the plaintiffs could have, but were not required to file a counterclaim in the other action.

The next proposition is whether the present action of the plaintiffs was a proper subject for a counterclaim in the other action.

In connection with the statutes cited above, our state 12 O.S. 1961, § 273, provides:

'The counterclaim mentioned in the last section must be one existing in favor of a defendant and against a plaintiff, between whom a several judgment might be had in the action, and arising out of the contract or transaction set forth in the petition as the foundation of the plaintiff's claim or connected with the subject of the action or on account of a wrongful attachment or garnishment issued and levied in said action, after the same has been set aside. The right to relief concerning the subject of the action mentioned in the same section must be a right to relief necessarily or properly involved in the action for a complete determination thereof, or settlement of the question involved therein. Provided, that either party can plead and prove a setoff or counterclaim of the proper nature, in defense of the liability sought to be enforced by the other party, and it shall not be necessary that such setoff shall exist as between all parties plaintiff and defendant in such suit, but any party may enforce his...