National Foundry & Pipe Works v. Oconto Water Supply Co. , 22 S. Ct. 111 ( 1902 )

183 U.S. 216 (1902)

NATIONAL FOUNDRY AND PIPE WORKS
v.
OCONTO WATER SUPPLY CO.

No. 33.

Supreme Court of United States.

Argued and submitted March 22, 1901. Decided January 6, 1902. ERROR TO THE SUPREME COURT OF THE STATE OF WISCONSIN.

Mr. George H. Noyes for plaintiff in error.

Mr. George G. Greene, for defendant in error, submitted on his brief, on which was also Mr. Jerome R. North.

MR. JUSTICE WHITE, after making the foregoing statement, delivered the opinion of the court.

In order to clearly present the simple issue arising on this record for decision we have been obliged to make the foregoing lengthy statement of the facts which are involved in this unnecessarily protracted litigation.

When the allegations of the complaint by which this action was commenced are ultimately resolved, all the rights which they assert are embraced within the following propositions:

1. A contention that the Water Supply Company, by virtue of its acquisition from Andrews & Whitcomb, was a mere successor corporation of the original Water Company, and became bound for all its indebtedness, including, of course, the debt due the Pipe Works, and this irrespective of the existence of a mechanics' lien;

2. A claim that in virtue of the sale made in the mechanics' lien suit after the decision of the Circuit Court of Appeals in the creditors' suit and the final entry and execution of the mandate, the Pipe Works became the owner of the waterworks plant, entitled to the possession of the same, with a right, however, in the defendant as a junior lienholder to redeem by paying the indebtedness due the Pipe Works; and,

3. An assertion that if the Pipe Works had not become the owner of the waterworks plant in virtue of the sale made as just stated, that corporation, in any event, in virtue of its asserted mechanics' lien, had been vested with a paramount right as against the Water Supply Company, which it was the duty of a court of equity to enforce by compelling payment by the defendant.

In effect, these questions were all concluded adversely to the plaintiff in error by the court below, the rights embraced in the first proposition were decided to be without merit because the facts disclosed the Water Supply Company to be an independent corporation and not bound as a successor company for the indebtedness of the original Water Company. As this proposition does not involve a Federal question, we may not review it. Indeed, the finality of the decision below on the subject is recognized by the plaintiff in error, since the assignment of error made in this court seeks to raise no question on such subject.

All the rights asserted by the plaintiff in error which are embraced in the second and third propositions were decided adversely below, on the ground that they were not open to inquiry, because concluded by the presumption of the thing adjudged, arising from the final decree in the creditors' suit. And it is upon the asserted erroneous application by the court below of the plea of res judicata that all the Federal questions urged must, in effect, depend.

The proposition is that the court below denied due effect to a decree of the Federal court, by maintaining the plea of res judicata predicated on a decree of such court. This contention, apparently, is not that due effect was denied to the decrees of a Federal court, but that too great an effect was given. When, however, the proposition is stripped of the seeming confusion which arises from the form in which it is stated, it becomes clear that, ultimately considered, it really involves the assertion that the court below refused to give due effect to the decree of a Federal court. This is so, because the proposition substantially is that the state court, in maintaining the plea of res judicata resulting from the decree in the creditors' suit, denied the rights which were vested in the Pipe Works by virtue of the decree in the mechanics' lien suit. The argument in substance is therefore that as the rights under the mechanics' lien decree were not impaired or destroyed by the decree in the creditors' suit, the consequence of erroneously deciding that they were obliterated by the decree in the creditors' suit, was to refuse to give due effect to the rights vested in the Water Company as a result of the decree in its favor in the mechanics' lien suit.

As it is thus demonstrated that the determination whether the court below correctly applied the plea of res judicata necessitates our deciding whether due effect was given to the decree in the mechanics' lien suit, a Federal question is presented which it is our duty to determine. Jacobs v. Marks, 182 U.S. 583, 587; Hancock National Bank v. Farnum, 176 U.S. 640, 645; Pittsburg &c. Railway Co. v. Long Island Loan & Trust Co., 172 U.S. 493, 507, and cases cited.

In order to correctly decide what was concluded by the decision of the Circuit Court of Appeals in the creditors' suit and the final decree entered in such cause, it must be ascertained who were the parties to that cause, what were the issues therein presented for adjudication and what was decided thereon. It is elementary that if from the decree in a cause there be uncertainty as to what was really decided, resort may be had to the pleadings and to the opinion of the court in order to throw light upon the subject. Baker v. Cummings, 181 U.S. 117; Last Chance Mining Co. v. Tyler Mining Co., 157 U.S. 683, 688.

Conceding for the present that the face of the final decree in the creditors' suit leaves uncertain exactly what was concluded, we will resort to the means of elucidation just referred to, viz., the pleadings and opinions rendered, in order to ascertain who were the opposing parties, what were the issues joined between them and the matters finally determined in the cause. So doing, it appears that the parties to the cause were the Pipe Works on the one side and Andrews & Whitcomb and the Water Supply Company and others on the opposing side. It also appears that the following, among other controversies, were directly at issue in the cause:

1. Had the Pipe Works, as to Andrews & Whitcomb and their privies, a lien upon the plant and franchise of the waterworks, arising from the sale of the pipe, the recording of the claim for a lien and the recognition of such lien in the decree of the Circuit Court of the United States in the mechanics' lien suit, and this although the plant and franchise had come into the possession of Andrews & Whitcomb under the sale in their mortgage foreclosure suit?

2. Was the mortgage referred to a valid instrument? and,

3. Was title vested in Andrews & Whitcomb to the waterworks plant and franchise by reason of the sale to them under the decree in the mortgage foreclosure suit?

Between the parties we have named and upon the issues just stated it is free from doubt that it was decided that Andrews & Whitcomb were lawfully in possession in virtue of the sale made in the mortgage foreclosure, and that under the law of Wisconsin there was no lien in favor of the Pipe Works as against Andrews & Whitcomb or their assigns upon the franchise and plant in question arising either from the law of that State, the recording of the alleged lien or the decree rendered in the mechanics' lien suit. It hence results that every claim of a Federal right here asserted is without merit and that the court below, in enforcing the principle of the thing adjudged, did not err, and of course did not refuse to give due effect to the mechanics' lien suit decree.

It is insisted, however, that although these conclusions may be inevitable from a consideration together of the pleadings, the opinions and the final decree in the creditors' suit, the contrary result is impelled if merely the final decree entered by the Circuit Court upon the mandate of the Circuit Court of Appeals is taken in view. The argument is that as the decree is unambiguous it is the law of the case, and resort cannot be had to other sources of information. In effect, the contention comes to this, that although it may be patent that the issues between the parties, as above stated, were determined, yet as the decree entered by the Circuit Court failed to express such conclusion, the parties are bound by the decree as entered, as they did not avail themselves of a proper remedy, by mandamus or otherwise, to correct the frustration of the results of the decisions of the Circuit Court of Appeals, which the argument necessarily assumes must have been brought about by the decree made by the Circuit Court.

But the decree of the Circuit Court does not support the contention based upon it. That decree, in express terms, dismissed the creditors' bill as to Andrews & Whitcomb and the Water Supply Company, for want of equity, without any qualification or reservation whatever. It in express terms passed the legal title to the real estate upon which was located the pumping station and wells of the Water Company to the Water Supply Company, as the assignees of Andrews & Whitcomb, such transfer of title being declared to be made by virtue of the mortgage to Andrews & Whitcomb and the sale to them in their mortgage forclosure suit. It is true that in the clause making this transfer it was declared that it was "without prejudice to any right which said plaintiff . . . may have under their mechanics' lien decree or otherwise to redeem from said instruments of mortgage or either of them or from the sale under the proceedings to foreclose the same." But this was a mere reservation of the right to redeem, if any existed. It left the Pipe Works in the position where, if its right had not been foreclosed as the necessary consequence of the dismissal of the bill for want of equity, it would not be so foreclosed in consequence of the specific direction for the transfer of the legal title to the property. In other words, the Circuit Court, in complying with the positive directions of the Circuit Court of Appeals, but refused to interpret specifically the scope and effect of the mandate of the appellate court, and left that mandate to operate in its own language. At best, the reservation, when considered in connection with the other portions of the decree, can only have the effect of creating an uncertainty as to what was intended, and this being the case, resort to the proper sources of information, to which we have already alluded, dispels the doubt and leaves the matter free from difficulty. And this conclusion is equally made imperative by a consideration of the memorandum opinion of the Circuit Court — set out in our statement of the case — relating to the drawing of the proposed final decree. From that document it is made clear that the Circuit Court simply declined, in drawing the decree, to construe the opinions of the Circuit Court of Appeals, and therefore deemed that it discharged its duty by obeying the mandate to dismiss the bill for want of equity, without adding any provision which might be construed as adding to or taking away from either of the parties to the record any right which had been established in virtue of the judgment of the Circuit Court of Appeals.

Another contention remaining to be considered is that even though the court below correctly applied the principle of res judicata, it yet, in granting affirmative relief, declined to give due effect to the decree in the mechanics' lien suit. On this subject the argument is that although as regards Andrews & Whitcomb and the Water Supply Company, it be recognized that it had been conclusively determined that the Pipe Works had no mechanics' lien whatever, yet as such lien was finally decreed in the creditors' suit as against the water company, because of the thing adjudged arising from the decree in the mechanics' lien suit, therefore a right to redeem from the sale to Andrews & Whitcomb existed, and such right was nullified by the broad grant of affirmative relief made in this cause by the court below. Whether the pleadings in the cause justified a grant of affirmative relief, considered as a mere question of practice, presents no Federal question. The claim that because by the thing adjudged it is indisputable that the Pipe Works had a lien against the water company, it therefore follows that there is still a right to redeem as against Andrews & Whitcomb and the Water Supply Company, even although it was established by the effect of res judicata arising from the creditors' suit, that the lien as to the parties named was inoperative and a nullity, is but another form of asserting that the decree in the creditors' suit was not res judicata between the Pipe Works and Andrews & Whitcomb and the Water Supply Company.

In conclusion, we need only remark that the observations just made are equally applicable to the elaborate contention, in the brief of counsel, that as the mechanics' lien suit was pending in a Federal court when Andrews & Whitcomb instituted their foreclosure proceedings in the state court, the Federal court had exclusive jurisdiction of the res, and the state court was without power in the premises. The validity of the title claimed by Andrews & Whitcomb to have resulted from the sale to them in the mortgage foreclosure suit having been an issue and decided in the creditors' suit, the contention now being noticed and all other grounds supposed to establish the invalidity of such title should have been presented in the creditors' suit, and such as were not must be deemed to have been waived, and were concluded and foreclosed by the judgment rendered in such issue. Dowell v. Applegate, 152 U.S. 327, 343.

Affirmed.