Mallory v. Patterson
Mallory v. Patterson
Opinion of the Court
Plaintiff sued the defendant upon, a judgment obtained by the former against the latter in the district court of Douglass county, Nebraska, November 7, 1902. The answer denied the allegations of the petition, alleged a payment of the judgment sued on, and also set up certain things as matters of equitable defense. As there was no evidence on the part of defendant to controvert the allegations of the petition or to show that the judgment sued on was paid, the only question is as to the availability or nonavailability at this time of the things alleged in the answer as matters of equitable defense. The trial court held that these matters, having been once adjudicated in a suit between the same parties in Nebraska, are no longer available as defense to this suit on the Mallory judgment, but are res adjudicata. A proper understanding of such ruling requires a statement of the facts underlying the judgment sued on and the defense sought to be interposed.
Sometime in 1887 Mallory was induced by Patterson to buy certain property in Omaha and to give a mortgage thereon for the unpaid purchase money. He did so thinking he was signing notes and giving a mortgage for $2800, but through the fraud and deceit of Patterson the notes were for $3500 and $350 and secured by mortgage aggregating $3850, which fraud was not discovered by Mallory until some time afterward. By reason of which fraud Mallory not only lost the property he had bought but also all that he had paid thereon. Upon discovery of the fraud,, he brought suit in the district court of Douglass county, Nebraska, against Patterson, who by this time had indorsed the $3500 note before maturity to an innocent purchaser for value without notice. Patterson appeared and answered, and a trial was had- resulting in a judgment in favor of Mallory and against Patterson for $3300; rendered October 29, 1892.
On April 27, 1896, Mallory brought a suit in the district court of Douglass county, Nebraska, in the nature of a creditor’s bill, seeking to have certain deeds which Patterson had made to his wife set aside as being in fraud of creditors, and asking that the property be sold and the proceeds applied toward the payment of the judgment held by Mallory. To this Patterson appeared and filed an answer in which he set up the deficiency judgment in foreclosure heretofore referred to, and ashed that it he offset against Mallory’s judgment. At this time he was still the holder of the $350 ■ note above mentioned and could have pleaded that Mallory had not paid it, and could have asked to have the amount due Mallory credited with the amount of said note. Upon the issues raised a trial was had, and the court found that the deficiency judgment rendered against Mallory and Patterson had been paid by Patterson, that the same was discharged and did not constitute a set-off and was not a claim against Mallory. The court also found that the deed from Patterson to his wife was- without consideration and was made to hinder and defraud his creditors,
Patterson’s defense is that, as the original judgment obtained by Mallory included the sum of $700 (by which amount the $3500 note he was fraudulently induced to sign exceeded the $2800 he really owed), which sum of $700 Mallory has never paid and never will have to pay, therefore, said sum of $700 with interest from August 10, 1888, should be credited on said judgment now held by Mallory; that said original judgment in Mallory favor also included the $350 note he was fraudulently induced to sign, and that as he has never paid, and will not now have to pay, said •note, therefore, it, with interest from September ■ 19, 1892, should be credited on said judgment now held by Mallory; and that the deficiency judgment rendered against Mallory and Patterson in the foreclosure of the mortgage given by Mallory, which deficiency judgment was assigned to Patterson’s wife, should be enforced against Mallory and offset against any judgment held by him.
To this defense Mallory replied setting up the fact that in the suit in the nature of a creditor’s bill brought by Mallory against Patterson and his wife, herein above referred to, the identical matters as to the deficiency judgment were set up by them and litigated and were decided adversely to them, the court
It will be observed that the issues sought to be raised now by Patterson as to the $700 and the deficiency judgment (which are really one and the same, since the deficiency judgment includes the $700), are the same issues raised and litigated by him in defending the creditor’s bill brought by Mallory in Nebraska; and that all the issues now sought to be .raised-.by him, as to fraud in obtaining the original judgment, were raised by him and litigated in the suit in Nebraska to revive the former judgment. And that- while Patterson did not say anything then about the $350 note, yet, as it was in his possession and he knew all the alleged facts in reference thereto, it was within the issues„involved between the parties, and he could have pleaded it as a defense. And having failed to do so, the judgment rendered against him is conclusive not only as to the matters of defense pleaded but also as to every matter properly belonging to the subject in litigation, and which he might, by exercising reasonable diligence, have brought forward at the time. [Donnell v. Wright, 147 Mo. 639; Spratt v. Early, 199 Mo. 491, l. c. 501.]
As to the $350 note, defendant could have returned or offered to cancel it when he was first sued by Mallory. He had it then and has always had it, and so
The creditor’s bill brought by Mallory resulted in a decree in equity in his favor, and was conclusive of all defenses available to defendant whether they were presented and litigated or not. [23 Cyc. 1200.] When one fails to make all the defenses he is called upon by the nature of the proceedings to make, such failure is as effective in a subsequent suit to prevent him from insisting upon them as if they had in the former suit been pleaded and been adjudged adversely to him. [O’Day v. Meadows, 194 Mo. 588, l. c. 628.] A defendant having pleaded a demand as a set-off or counterclaim to an action brought against him is prevented by the judgment from afterward using the same mat
An adjudication of revivor is res adjudicata as to all matters which were or might have been set up in the proceedings to revive. [Witherspoon v. Twitty, 43 S. Car. 348; Babb v. Sullivan, 43 S. Car. 436; Greer v. Major, 114 Mo. 145.] If a defense exists at the time judgment was rendered and could with reasonable diligence have been set up at that time, then even equity will not interfere to stay or destroy the judgment. [Carolus v. Koch, 72 Mo. 645.]
Defendant cites us to Loy v. Alston, 172 Fed. 90, but the case is not in point. There, a judgment obtained by one was set off against a judgment obtained by another where the one seeking to enforce his judgment was insolvent. But in that case both judgments were alive and subsisting. There was no question of res adjudicata in the case. In the case before us there is a prior adjudication of the matters between the parties in which the deficiency judgment set up by defendant was not set aside by the Nebraska court, but was found to be no longer a valid claim against Mallory, having been paid and discharged.
The case of Lashmet v. Prall, 83 Neb. 732, is cited in support of the view that defendant’s deficiency judgment was not available as a defense in Mallory’s Nebraska suit to revive, and the claim is made that for this reason the judgment in that revivor suit is not res adjudicata now. We do not think this case is in point because the defendant therein did not plead
The case of Quick v. Lemon, 105 Ill. 578, is also cited in defendant’s behalf. It is not deemed applicable to the facts in this case. There it was decided that a set-off to a judgment which might have been pleaded as a'defense in the proceeding resulting, in the judgment, but which was not. set up or pleáded, was not adjudicated, but could be raised in a subsequent suit brought by the judgment creditor against stockholders of the debtor corporation to enforce the judgment against them on their unpaid stock subscriptions. The court held that, in the original suit, the defendant corporation was not bound to plead its set-off, and as it did not, it could do so when the judgment creditor, by a suit in equity, attempfed to enforce the collection of his judgment against its stockholders, and at that time, the corporation’s claim'became a proper subject of set-off if there, was equitable ground for relief. But, in the case át bar, the defendant not only pleaded his alleged set-off and defense in the creditor’s bill, but also again raised practically the same issue in a different form, namely, by pleading fraud in the procurement of the original judgment when sued in the revivor suit.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.