Kingsland v. Spalding

Thé Chancellor.

The proceedings on the part of the complainants to close the proofs, and the reference of the cause to the vice chancellor for decision, were perfectly regular; and I have great doubts whether this court ought to let the defendant in tó sét up thé technical defence of á discharge under the voluntary provisions of the late bankrupt act, even if there was a reasonable probability that the debt was discharged by the proceedings in bankruptcy. It is not necessary, however, tó put my decisión of this application upon that ground; for I am satisfied that this judgment was not discharged by the pro ceedings in bankruptcy. >

The moneys and other property received by the defendant, under and through the assignment of Cronkhite, and the judgment confessed by him to Spalding, constituted, in equity, a trust fund, in the hands of the latter, for the payment of the complainant’s debt. And the judgment under which this creditor’s bill has been filed having, as the afiidavits show, been recovered upon the ground that Spalding had, received moneys to the use of the complainants, to the amount of the recovery in that case, under the assignment and the judgment against Cronkhite, the defendant is estopped from litigating the matter again, in this suit, either as to the fact of its being a fiduciary debt, or as to the amount which the defendant had received in his fiduciary character, for the use of the complainants as the equitable owners of the trust fund.

The rule on this subject is, that a decree, sentence, or judgment, of a court of competent jurisdiction, is conclusive upon the parties, in any future litigation of the same question between the parties to such decree, sentence, or judgment, or those claiming •under them; whether the question arises directly or collaterally in such subsequent litigation: provided the question of estoppel is brought before the court in the proper form. Where the former decision of the same matter can be set up in pleading, as an estoppel, the party who wishes to avail himself of it must plead it in bar of the future litigation of the same matter. But in those cases where the forms of proceeding do not allow of special pleading, it may be given in evidence ; and is conclusive upon the parties, the court and jury. (Wright v. Butler, 6 Wend. Rep. 284. Young v. Beach, 7 Cranch’s Rep. 565. Estell v. Taul, 2 Yerg. 467.) And it makes no difference, in this respect, that the object of the first suit was entirely different from that of the second. Thus, in the case of Betts v. Starr, (5 Conn. Rep. 550,) where a mortgage was given to secure the amount due upon a promissory note; an ejectment suit was afterwards brought, upon the mortgage, to recover the possession of the mortgaged premises, and the defendant attempted to go into proof to show that the mortgage was usurious, as a defence to the suit. The plaintiff, however, produced the record of a judgment in his favor upon the note, given with the mortgage, and proved that under the plea of the general issue the defendant in the former suit attempted to set up the defence of usury, but failed. And the court thereupon decided that the verdict and judgment in the suit upon the note were conclusive of the fact that the mortgage, which was given at the same time with the note, and to secure the same debt, was not usurious. The cases of Preston v. Harvey, (2 Hen. & Munf. Rep. 55,) in the court of appeals in Virginia, and of Rice v. King, (7 John. Rep. 20,) in the supreme court of this state, are to the same effect.

The motion must therefore be denied, with costs.