Smith v. Francis
| Decision Date | 02 July 1924 |
| Citation | 264 S.W. 77,216 Mo.App. 293 |
| Parties | CHARLES A. SMITH, Appellant, v. JAMES C. FRANCIS, Respondent |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of St. Clair County.--Hon. C. A Calvird, Judge.
REVERSED AND REMANDED (with directions).
Judgment reversed and cause remanded.
Hargus & Johnson for appellant.
(1) There is no evidence on which to base the findings of the lower court. Downs v. Horton, 230 S.W. 103; Ensign v. Crandell, 231 S.W. 675; State ex rel Hadley v. Greenville Bank, 187 S.W. 597. (2) If the first endorsee in good faith and for value purchases a negotiable note before maturity and subsequently assigns the same then his endorsee acquires a good title, even though he at the time may have had notice of the fraud in the inception of the paper. The first National Bank of Cameron v Stanley, 46 Mo.App. 440; Craig v. Zimmerman, 87 Mo. 478; Francis v. Smith, 245 S.W. 1115. (3) Every issue that was raised, or could have been raised, in a former case between the same parties is res adjudicata. Melvin v. Hoffman, 235 S.W. 114; Moorehead v. Cummings, 230 S.W. 659; Berry v. Majestic Milling Co., 240 S.W. 831; Hill v. Dillon, 183 S.W. 1088; Nelson v. Nelson, 221 S.W. 1066; Spratt v. Hurley, 199 Mo. 491. (4) This is true even if the first case is in equity and the second at law. Parker v. Stroat, 39 Mo.App. 616. (5) This is true even though the former case ended by being reversed without being remanded. Strottman v. Railroad, 228 Mo. 154, 128 S.W. 187; Berry v. Majestic Milling Co., supra; Girochis v. Railroad, 264 Mo. 516, 175 S.W. 196; Harrison v. Jackson County, 187 S.W. 1185.
Lee E. Crook, Virgil E. Willis and Leslie J. Lyons for respondent.
(1) The proceedings and judgment in the former case are not res adjudicata. A simple reversal by the appellant court of a suit in equity without ordering a dismissal of the bill simply undoes what was decided in the trial court and leaves the parties where they were in the beginning. Strottman v. Railroad, 128 S.W. 187, l. c. 193; Windaw v. Kline, 77 Mo.App. 36, l. c. 46; Swing v. Furniture Co., 131 S.W. 153, l. c. 155; Berry v. Majestic Milling Co., 240 S.W. l. c. 831. (2) After a judgment has been reversed its effect as res adjudicata is at an end, and neithed party can be estopped by it. 2 R. C. L. page 270; 4 C. J. 1204; Camp v. Milling Co., 127 Mo.App. 287, l. c. 292, 105 S.W. 286; Womack v. St. Joseph, 201 Mo. 467.
This is a suit on a note made by the defendant, the plaintiff having purchased the note from one Robertson, Robertson having acquired it from Ayres, the payee. The note was properly endorsed and delivered to Smith and payment made by him to Robertson before maturity. Prior to this suit the defendant, Francis, filed a bill in equity against the plaintiff, Charles A. Smith, charging that an automobile which was delivered to Francis by Ayres was a stolen car, and that the note for $ 1000 given for the same was a fraudulent transaction on the part of Ayres; and that Smith knew, or by the exercise of ordinary care and diligence could have known, that the car was stolen and not the property of Ayres and had knowledge, or could have known by the exercise of ordinary diligence, of the fraudulent means used by Ayres to induce Francis to execute said note. The petition in the suit in equity asked that Smith be enjoined from negotiating, transferring or enforcing said note, and prayed that it be delivered up and canceled.
The case was tried in the circuit court of St. Clair County and the trial court granted the relief and an appeal was taken by Smith to this court (reported under the style of Francis v. Smith, 245 S.W. 1115). The facts of the case are there set forth and we now refer to said facts for the purpose of this opinion. In that case this court held that the evidence was insufficient to sustain the judgment of the trial court and it resulted in the judgment being reversed outright. The sole issue determined in that case was whether there was sufficient evidence upon which could be based a decree to cancel the note on the ground that Smith was not a holder in due course. In other words, he was charged with a knowledge of the fraudulent transaction which Ayres practiced on Francis, and the ground upon which the bill in equity asked relief was that Smith was not a holder in due course or an innocent purchaser.
Subsequently, and after the note became due, Smith filed the present suit on the note and the defense made in the trial court is that he had knowledge, or by the exercise of ordinary care could have had knowledge of the fraudulent means used by the said Ayres to get from the defendant the note, and that he knew that the note was not given for a valuable consideration but was wholly void and of no effect as between Ayres and the defendant Francis.
It is set up in the answer that Robertson, who purchased the note from Ayres, was acting on behalf of Smith, as Smith's agent. It is not pleaded in the petition but it was argued orally in this court that the evidence in this case showed further that Smith was in fact a party to the fraud with Ayres in procuring the notes.
The defense of res adjudicata was raised in the trial court, and as the note was admittedly made by Francis and delivered, the plaintiff, Smith, asked for an instruction directing a verdict. The court overruled the instruction and held that the question of Smith being a holder in due course was still open and for the jury to determine.
A number of errors are assigned, but the main contention made by appellant is that the former judgment of this court reversing the judgment in the suit in equity, which was in effect dismissing the bill in equity filed by Francis, after this court had considered the evidence, forever barred the question of Smith's good faith so far as any suit between the same parties to this note was concerned. We think there is no question but what the appellant is correct in this stand under the Missouri law. Respondents' attorneys admit that the only case which they can find bearing directly on the situation, as it exists here, is that of Cramer v. Moore, 36 Ohio St. 347, which holds flatly with respondent's contention in this suit. The other cases cited in respondent's brief are not cases where the question involved here has been directly passed on. In passing, we may say that we found a case from California, apparently cited with approval in Barnett v. Smart, 158 Mo. 167, 59 S.W. 235, the California case being Fulton v. Hanlow, 20 Cal. 450, in which case it was held that although a bill in equity had been filed to enjoin the execution and delivery of a sheriff's deed on the ground that the same was illegal, which bill had been dismissed, was not a bar to the same defense made in a subsequent suit brought in law in ejectment by the holder of the deed. The Ohio and California cases apparently follow the law as respondent contends.
On the other hand, we find this question has been determined in Missouri otherwise, in the case of Lynch...
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