Spencer v. Johnston
| Decision Date | 23 February 1899 |
| Docket Number | 8745 |
| Citation | 78 N.W. 482,58 Neb. 44 |
| Parties | ELMER E. SPENCER ET AL. v. JOHN R. JOHNSTON |
| Court | Nebraska Supreme Court |
ERROR from the district court of Lancaster county. Tried below before HOLMES, J. Affirmed.
AFFIRMED.
F. I Foss and W. R. Matson, for plaintiffs in error:
The fact that E. E. Spencer had already obtained judgment should not interfere with his pleading that judgment in set-off. (Gaddis v. Leeson, 55 Ill. 522; King v Bradley, 44 Ill. 342; Baskerville v. Brown, Burr [Eng.] 1229; Clayes v. White, 65 Ill. 357; 1 Sutherland, Damages [ed. of 1882] 299; Miller v. Hyde, 37 N.E. 760 [Mass.].)
The supersedeas in the former case, and the suit pending in the supreme court, do not prevent the set-off.
Sawyer & Snell, contra:
There was another suit pending. (Brasch v. Brasch, 50 Neb. 75; Demond v. Crary, 1 F. 480; Frettretch v. McKay, 47 N.Y. 426; Ansorge v. Kaiser, 3 N.Y.S. 785; Naylor v. Schenck, 3 E. D. Smith [N. Y.] 137; Jennings v. Warnock, 37 Ia. 278.)
Former judgment cannot be used as a set-off. (Tessier v. Englehardt, 18 Neb. 172; Welton v. Beltezore, 17 Neb. 399.)
In September, 1886, John R. Johnston and George D. Stevens sold to Elmer E. Spencer eleven shares of the stock of the Crete Globe Publishing Company for the sum of $ 1,000. No part of the purchase price was paid in cash, but in lieu thereof the vendors accepted a note signed by Elmer E. Spencer as principal and his father, J. G. Spencer, as surety. In the following December, in order to obtain a controlling interest in the company, Mr. Spencer was induced to buy of one J. W. Craig seven more shares of stock, for which he gave $ 400 in cash and a promissory note for $ 200. Both of the Spencer notes were transferred to the State Bank of Crete, of which institution Johnston was president and Stevens cashier. These notes being past due were renewed on March 22, 1888, by the Spencers executing a new note for $ 1,200. Afterwards the bank failed, and its assets being offered for sale by the receiver under the direction of the court, Johnston bought the Spencer note and thereupon brought this action to enforce payment. The defenses presented by the answer are: (1) That the sale of the eleven shares of stock was effected by fraud and misrepresentation with respect to the affairs of the Globe Publishing Company, and the value of the stock; (2) that the defendant Elmer E. Spencer had recovered against the plaintiff and George D. Stevens a judgment which ought to be set off against the note in suit; and (3) that the Craig stock was really owned by the plaintiff and Stevens, and that by reason of the fraud and false representations made by them the $ 400 paid in the transaction should be allowed as a counter-claim, and that there should be no recovery for the $ 200 remaining unpaid. The reply alleges that the fraud and false representations mentioned in the answer were made the basis of an action brought by Elmer E. Spencer against Johnston and Stevens; that said action was tried in the district court of Lancaster county and resulted in the judgment referred to in the answer; that such judgment has been superseded and that the action is now pending and undetermined in the supreme court. To the counter-claim based upon the Craig transaction the plaintiff pleaded the statute of limitations. Upon these pleadings the cause was tried to a jury who, in obedience to a peremptory instruction of the court, returned a verdict in favor of the plaintiff for the amount due on the note according to its terms. To obtain a reversal of the judgment rendered on the verdict the defendants file in this court a petition in error containing many assignments. Some of these we now proceed to consider.
There is no dispute about the facts. Elmer E. Spencer sued Johnston and Stevens and recovered against them a judgment for fraud and misrepresentation in the sale of eleven shares of the stock of the Globe Publishing Company. The judgment was superseded and the cause was pending in this court at the time of the trial of this action in the district court. That judgment and the facts upon which it rests were offered in this case to defeat a recovery on the note. It will be convenient to inquire, first, whether the judgment was a proper matter of set-off. Of course the action was, as counsel contend, an action on contract; but the judgment pleaded was not enforceable either at the time the answer was filed or when the cause was tried. Its lawfulness was denied and its right to exist was being litigated in another court. An undertaking in conformity with the statute had been given to prevent its enforcement. The law gives a defeated litigant the right to prevent his adversary from executing the judgment until the cause can be heard in a reviewing court. By giving the statutory undertaking the judgment debtor obtains a respite until the lawfulness of the judgment against him is finally determined. The remedy would be a barren one if it were permissible to execute the judgment by pleading it as a set-off or making it the basis of a fresh action. The object of giving the bond is to supersede the judgment--to render it unenforceable by judicial process or otherwise. The owner of the judgment, having ample security, can afford to wait. He has no right to make a judgment which is possibly illegal the foundation of a judgment in another case which, on the face of the record therein, would be regular and valid. Except as provided in section 591 of the Code of Civil Procedure, there is no authority for collecting a judgment which is pending for review in an appellate court, and which has been superseded in the manner prescribed by the statute. In 1 Ency. Pl. & Pr. 756 the...
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