Orr v. Mercer County Mutual Fire Insurance , 114 Pa. 387 ( 1886 )

Mr. Justice Trunkey

delivered the opinion of the court,

There was a former action between these parties to recover an assessment on the same policy, in which the defendant confessed judgment for $99.32. That action was instituted before a justice of the peace from whose judgment the defendant appealed. The transcript and the pleadings are not printed, ■and it is probable that they do not specifically show both claim and defence. What the claim was, or what was set up as defence, may be shown by oral testimony, provided it does not contradict, and is consistent with the record. The defendant himself testifies that after his surrender of the policy to Hoagland, he was sued before the justice for an assessment made in 1878; that he set up for defence his alleged settlement with Hoagland, and had no other defence to the suit; and that after his appeal, when the cause was on the list for trial, he confessed judgment. That involved the very defence in this suit. The assessment was for a loss before the surrender of the policy, and the defence was an alleged settlement relieving him from liability for such assessment.

The defendant, conceding that the judgment would be conclusive against him so far as such defence is concerned, had it been entered on a verdict after a trial on the merits, contends that at most the judgment by confession is only evidence to be considered with all the other evidence touching the question of settlement, in its determination. We think that proposition cannot be maintained. If the cause was at issue, and the only matter of defence was pleaded formally on the record, or so set up as to be known, and on the eve of the calling the case for trial the defendant confesses judgment in open court, the judgment isas conclusive as if entered on a verdict.

It has been often decided that a former recovery is not a bar, unless the former trial was upon the merits. If the former recovery was upon some technical ground, irrespective of the merits, generally, it will not bar the subsequent action, for the cause of controversy has not been passed upon by a competent tribunal. A person is concluded by a decree, sentence or judgment of a court having jurisdiction, in a suit in which he was a party, in all future trials of the same question, whether that question arises directly or collaterallj'-, provided there be no contract between the parties to the contrary: Boater v. Ins. Co., 6 Mass., 277. A verdict and judgment are conclusive by way of estoppel, only as to those facts which are necessarily involved in them. An estoppel is an admission or determination under circumstances of such solemnity that the law will not allow the fact so admitted or established, to be afterwards drawn in question between the same parties or their privies : Burlen v. Shannon, 99 Mass., 203.

Where an action, brought to recaver the first quarter's rent on an alleged parol lease, was defeated on the ground that no such lease had been made,- the judgment was a bar to a subsequent action for the second quarter’s rent on the same alleged lease: Danzinger v. Williams, 91 Pa. St., 234. The fact whether there was a lease between the parties, as alleged, was determined in the first action. Had the plaintiff' obtained judgment in that action, it would have been conclusive that the lease had been made, in the subsequent suit. But had there been no defence involving the existence of a lease, the judgment might not have been a bar to a future action for recovery of the second quarter’s rent. It is difficult to see why confession of judgment by either party in favor of the other, on the issue raised in the first action respecting the malting of a lease, would not have the same effect as if rendered after a trial.

In legal effect while it stands, a judgment by default, or confession is the same as upon a verdict. In a suit before a justice of the peace, by a physician to recover the value of his services, the defendant confessed judgment for the amount of the plaintiff’s claim, which the justice duly entered. That judgment was held conclusive against the plaintiff who sued for damages resulting from unskilled and negligent treatment by said physician in the services for which the judgment was confessed: Gates v. Preston, 41 N. Y., 113. If that be not the law upon such facts in Pennsylvania, it would be if it were settled here that the judgment for such services involved adjudication of due care and skill.

Suit was brought on two notes against the maker and indorser to recover a payment of interest; the defendant appeared by counsel, but made no answer, and judgment was taken by default. Subsequently, the same plaintiff brought suit against the indorser on three notes, two of them being the two in the former suit, all made in the same transaction, and the defendant set up usury which would have invalidated the notes, and it was ruled that the former judgment'was conclusive of the plaintiff’s right to recover: Newton v. Hood, 48 N. Y., 676.

The defendant cites Howlett v. Tarte, 10 C. B. R., N. S., 813, (10 J. Scott) to support his contention that a former recovery to operate as a bar or estoppel in a subsequent action between the same parties must have been a case tried on its merits. That case was an action for rent under a building agreement; the defendant pleaded that after the making of that agreement, in substitution therefor, the parties agreed that a tenancy from year to year should be created; that afterward notice to quit was given which expired at Michaelmas, 1858, and no rent became due from the defendant after that date. To the plea, the plaintiff replied that he had brought an action against the defendant for rent as having accrued under the said building agreement after September 29th, 1858, and that the defendant pleaded to that action pleas which were not issuable, and thereupon the plaintiff signed judgment. It was held that the replication was bad, and that the defence set up in the plea was consistent with every allegation in the former action. The judgment in the former action was as if by default, and the defence was set up for the first time in the second.

Had Orr made no defence in the first action, this case would come within the principle decided in Howlett v. Tarte. Suit in the latter was on the original agreement. In the first, no available plea was entered, and judgment was taken by default.- In the second, the subsequent agreement was pleaded, and that raised'a question not involved in the first; it was said that if the defendant attempted to put upon the record a plea which was inconsistent with any traversable allegation in the former declaration, there would be an estoppel. Had he put in the same plea in the first as he did in the second, the case would have been different. There the pleas were at length and of record.

In this action the defendant testifies that his defence is the same that lie set up in the former — the only defence he had then, or has now. That was involved in the trial before the justice; to maintain that, he appealed; and that raised the issue. In Howlett v. Tarte there was nothing in the first action that involved admission or adjudication respecting the defence pleaded in the subsequent action. Here, the very matter that was set up against the claim in the former suit and solemnly admitted by the confession -of judgment, is sought to be made again the subject of atrial, or adjudication.

The instructions of the court were based on the record of the former suit, and the defendant’s own testimony. At first view it would seem to be erroneous to instruct the jury that the plaintiff was entitled to recover, that the defendant was liable for assessment for losses which occurred during the time he held the policy prior to November 5th, 1873, and that the verdict should be for a certain sum, if the calculation was correct. But this is to be understood with reference to the conduct of the trial. There was no question about the assessment being correct. The defendant said he surrendered the policy on November 6fch, 1873 ; and the assessment first put in evidence was' corrected by deducting the proportion which had been included for some losses after that date. Had there been any question of the amount, it should have been submitted. The controverted points were of law, not of fact.

The losses were paid to the persons entitled, soon after they became due, with money borrowed for the purpose. That these payments ought to have been made is not denied. Notes were given for the borrowed money, and it is contended that the company had no power to borrow. If this power does not exist the company might be put to unnecessary costs and expense in suits by claimants, while its members are resisting at every step in the collection of assessments. “A corporation is impliedly authorized to borrow money, and has the incidental power to give security for its payment. As such security a corporation may give its note: ” Taylor on Corp., § 125. This doctrine is affirmed in Furness v. Gilchrist, 1 Sandford, 53.

The company still owes the money and the defendant has not paid his proportion. Did the borrowing of money and paying the losses- immediately, discharge the members of the company from liability to pay assessments according to their contract? This has not been contended. If liable at all after such borrowing and payment, that liability continues the same as if the moneys were still owing to the several persons who suffered the losses, instead of to those who loaned the money for their payment.

Judgment affirmed.