Freeman Appeal from Doings of Commissioners , 71 Conn. 708 ( 1899 )

Baldwin, J.

A claim against the estate of H. Drusilla Mitchell, an insolvent debtor, was presented by the American Exchange National Bank of Chicago, and allowed in full by the commissioners. A trust deed of land in Illinois had been given to secure the debt for which claim was made, and the commissioners inquired into the cash value of this security, and reported it to the Court of Probate, under General Statutes, § 590. The trustee in insolvency appealed from their doings in allowing the claim.

These doings were of a twofold character. They allowed the claim to a certain amount, and they determined the cash value of the security which was held for it. The latter act was a necessary incident of the former. The trustee might have appealed only from the doings of the commissioners in respect to the valuation. Nowell's Appeal, 51 Conn. 107; Coifs Appeal, 68 id. 184. He might have'appealed only from their doings allowing the claim. But his appeal from their doings in the allowance of the claim, taken in that general form, and without any other words to serve by way of limitation or exclusion, vacated all their doings and carried up whatever was naturally incidental to the act of allowance. The Superior Court, therefore, had before it the whole subject of controversy, and if it should allow the claim or any part of it, was required also to determine for itself the cash value of the security, and to determine it in view of all the facts which might be properly presented to its consideration at the trial.

The appellee filed in court a statement of claim, in which it was alleged that since the report of the commissioners the security valued by them had been foreclosed and sold under a judicial decree rendered in Illinois, and'the net proceeds paid over to it, whereby its claim had been reduced to $11,601.41.

It was error to strike out these averments. While it did not appear from them that the trustee had any notice of the Illinois suit, or was bound by the result, it did appear that the appellee relied upon them as the measure of its rights in reference to the amount of the debt for which it asked judgment in its favor. Independently also of any question of estoppel, the appellee was entitled to be heard upon the claim that what property brings under a judicial sale tends to show what it was worth.

The appellant could only urge, at most, that these matters were irrelevant, and such an objection should rather have been taken by tendering an issue of law. A motion to expunge cannot properly be used to perform the office of a demurrer.

The Practice Act provides for motions to expunge on the ground of scandal and impertinence. General Statutes, § 882. It makes no similar provision in terms to remedy the introduction of matter simply irrelevant, and it is rarely that objections on that score can justify the delay and expense incident to a proceeding for a correction of the pleading. Indeed, wherever it is not clear that there was no reasonable ground for inserting such allegations, they'should be allowed to stand, and the party permitted to put his case before the court in his own way, rather than in that which his antagonist might prefer.

In the reply filed by the bank the proceedings in the foreclosure suit are again set up, but for a different purpose.

The only party appealing from the doings of the commissioners is the trustee of the insolvent estate of H. Drusilla Mitcliell. The bank insists that it does not lie in his mouth to dispute the merits of its claim, because of an estoppel by record. The record which it has produced shows that the objections now taken in his answer had been previously taken, in an answer filed (or adopted) by him in the same capacity, to a bill in equity brought by it before a court of competent jurisdiction in Illinois, and also by way of exceptions to a master’s report made in that proceeding. The bill was one grounded upon the note and trust deed, which were the subject of the statement of claim presented by the bank to the Superior Court, and sought a foreclosure and a personal judgment against Mrs. Mitchell for whatever deficiency might remain after applying the proceeds of a sale by the trustee upon her indebtedness on this note.

The appellant might have refrained from entering an appearance in the Illinois suit. In that case the judgment would have had no force as to him, except as it might cut him off from any interest in the land foreclosed. Hoping, however, to prevent the loss of that, he pleaded to the action the very facts which he now urges as a defense to any claim upon the note. In the absence of any order of the Court of Probate or of the Superior Court to the contrary, he had a right to appear as the representative of the estate to defend its interests, in whatever forum they might be attacked.

By the Constitution of the United States, the decree against him upon the issues thus raised is entitled to the same faith and credit in our courts, as if it had been rendered by one of them.

Let it be supposed, then, that the security given to the bank had been a mortgage upon lands in Connecticut, instead of a trust deed of lands in Illinois; and that it had brought suit for a foreclosure, pending this appeal, in the Superior Court, and obtained a decree similar to that rendered in Illinois, and upon similar issues. The trustee in insolvency, after unsuccessfully contesting, in such a proceeding, the validity of the note on the ground of coverture, certainly could not now be heard to renew the claim. As to that point his mouth would be stopped.

It is said that by the law of this State, as declared in Freeman's Appeal, 68 Conn. 533, coverture is a perfect defense to the note in question. Be this as it may, the trustee in insolvency has had his day in court upon that question; and if he cannot raise it in the present action, no one can, for he is the sole appellant.

In Cothren's Appeal, 59 Conn. 545, it was held that a judgment against an insolvent debtor, rendered pending the proceedings in insolvency, was not conclusive upon the commissioners as to the validity or amount of the claim upon which it was recovered. That this is so cannot avail the appellant in this proceeding. The point of law on which onr decision must turn is not whether the Superior Court, whoever might he the appellant, would be in any case precluded from reexamining the bearing of coverture on the note; but whether, in this case, the trustee in insolvency being the sole appellant, he is precluded from asking it to make such a reexamination.

The appellee does not and could not contend that the Illinois judgment exactly measures the amount of its claim in this proceeding. In that are included taxes paid by the bank to protect its security, an attorney’s fee of $500, and interest accruing since the institution of the proceedings in insolvency in the Court of Probate. What it settles is that the note was obligatoryupon Mrs. Mitchell; and it is on the note that the bank is now seeking to recover. Under our statute, the judgment did not merge the cause of action. General Statutes, § 587. It simply, so far as these proceedings are concerned, established the validity of the indebtedness evidenced by the note against any attack by the trustee in insolvency, together with the foreclosure of the security, and the attending facts.

One of these facts was that on July 29th, 1897, the cash value of the real estate in Chicago covered by the trust deed was, as between these parties, $12,500, this being the amount which it brought upon that day, at a sale afterwards duly confirmed by the court. The value at which it should be applied in reduction of the claim upon which a dividend is to be made in the .settlement of the insolvent estate of Mrs. Mitchell, is to be determined as of a different date; but in inquiring as to its value then, its value on the day named is relevant evidence.

It follows that the demurrer to what was entitled the second reply should have been overruled.

There was no occasion for thus dividing the reply in two. The claim of the bank presented substantially but one cause of action. The answer set up coverture in defense, and also that by reason of certain credits, if anything were due, it was less than was demanded. What was styled the first reply admitted the coverture and took issue as to the credits claimed. The so-called second reply repeated the “ first reply,” and then set up the estoppel by record. This made the so-called “ first reply ” wholly superfluous. Whatever could be claimed under it could be claimed as well under the “ second reply.”

The great object of the Practice Act was to simplify and unify all pleadings. Unless distinct causes of action are joined, the use of more than one count in the complaint can rarely be justified; and save in exceptional cases, that can seldom occur, answers and replies should also be drawn with a view of stating all the grounds relied on by the pleader in the same paper, with no other distinction than that of separate paragraphs. General Statutes, § 880; Practice Book, p. 17, Rule IV, §§ 8, 9; Forms, 355,389, 451. Several issues of fact may be raised by a single defense; for such an issue is formed by the denial of any material allegation. Practice Book, p. 17, Rule IV, §12; Perkins v. Brazos, 66 Conn. 242, 249; Hatch v. Thompson, 67 id. 74, 76. In like manner, issues of fact may be raised as to some and issues of law as to other paragraphs of any pleading. Under the old system of common-law procedure a demurrer lay only to the whole of a pleading; under the Practice Act it may be directed to a single paragraph. Practice Book, p. 17, Rule IY, § 11; Russell v. Easterbrook, 71 Conn. 50, 57.

The demurrer filed in this case to the “ second reply,” being taken to all its allegations, raised two questions of law: first, whether coverture was a defense to the note, and second, whether that defense was not shut off by the Illinois judgment. As it was thus shut off, we have no occasion to inquire whether the facts admitted by the pleadings as to the mode of the execution and delivery of the note would or would not otherwise bring the case within the doctrine of Freeman's Appeal, 68 Conn. 533.

The effect of a judgment by way of estoppel is not limited by the precise facts that may have been found to support it, The adjudication covers the real transaction which was the subject of litigation. That different evidence might be produced, which would put the transaction in a new light and tend to a different result, may under certain circumstances be ground for a new trial, but can never lessen the conclusiveness of the judgment so long as it remains in force. Wildman v. Wildman, 70 Conn. 700 ; Brennan v. Berlin Iron Bridge Co., 71 id. 479.

As the “first reply” contained nothing which the “second reply” did not also contain, the sufficiency of the latter makes it unnecessary to consider the legal effect of the facts stated in the agreed finding, made upon the former.

There is error, the judgment is set aside, and the cause remanded, with directions to vacate the order to expunge, and reverse the judgment on the demurrer; and for such further proceedings as may be conformable to law.

In this opinion the other judges concurred.