Kirven v. Chemical Co.

August 5, 1907. The opinion of the Court was delivered by This is an action for damages, alleged to have been sustained by the plaintiff as the result of using certain fertilizers in the cultivation of his crops, manufactured and sold to him by the defendant.

As the main question herein is whether the issues raised by the pleadings had already been adjudicated in an action between the same parties, in the Circuit Court of the United States, it will be necessary to state briefly the proceedings in the two cases.

On the 15th of November, 1898, the Virginia-Carolina Chemical Co., as plaintiff, filed a complaint in the Court of Common Pleas for Darlington County, State of South Carolina, against J.P. Kirven, as defendant, in which it was alleged that on the 14th of March, 1898, the defendant made his certain note, whereby he promised to pay to the order of S.M. McCall $2,228.00 on the 25th of October thereafter; that the said note was indorsed for value to the plaintiff, and that no part thereof had been paid.

On the 30th November, 1898, his Honor Judge Watts, on motion of plaintiff's attorneys, granted an order that the cause be discontinued, without prejudice to the right of the plaintiff to commence another action at such time as it might be advised.

On the 11th of April, 1903, the Virginia-Carolina Chemical Co. filed a complaint, in the United States Circuit Court, setting forth the facts mentioned in the first complaint.

On the 30th of May, 1903, the defendant, J.P. Kirven served an answer to the complaint, in which he set up the following defenses:

First. That S.M. McCall was the owner of the fertilizers for which said note was given; that at the time the note was assigned to the plaintiff, and at the time of the commencement of said action, S.M. McCall and the defendant, J.P. Kirven, were residents and citizens of the State of South Carolina, and, therefore, that the Circuit Court of the United States was without jurisdiction.

Second. That the plaintiff was a foreign corporation, and could not maintain the action, for the reason that it had failed to comply with the requirements of the statute, relative to foreign corporations doing business in this State.

Third. "That the note sued upon in this action was given by the defendant to S.M. McCall for fertilizers, for which he agreed to pay a sound price, which is set forth in the note sued upon, and were purchased for the use of the defendant, himself and his tenants and customers in making a crop for the year in which the said note was given, but the said fertilizers were so unskillfully manipulated and manufactured and prepared, and were of such inferior quality, that instead of being of benefit to the crops of defendant and his tenants and customers, to whom he furnished the same, they were deleterious and destructive to the crops and destroyed the same in large part, and there was an entire failure of consideration to the defendant for said note."

On the 12th of April, 1904, his Honor W.H. Brawley, United States Judge, granted leave to the defendant, J.P. Kirven, to file such additional answer or counter-claim as he might be advised.

On the 6th of March, 1905, the defendant, J.P. Kirven, filed his answer, reciting that he "by leave of the Court first had and obtained files this his supplemental answer hereby, withdrawing any former answer heretofore filed by him herein."

The amended answer contained the first two defenses hereinbefore mentioned, and as a third defense by way of counter-claim alleged, that under attachment proceedings in North Carolina the plaintiff had in its possession the proceeds of 70 bales of cotton, amounting to $2,450.00, belonging to the defendant, J.P. Kirven, and for which he demanded judgment.

But the third defense, hereinbefore mentioned, was withdrawnby leave of the Court, and no reference was thereafter made in the pleadings to the defense of failure of consideration. Consequently, during the progress of the trial, when the defendant, J.P. Kirven commenced to testify about the crops, his Honor, the United States Judge, promptly ruled that such testimony was not admissible, andexcluded it.

In that action the jury rendered a verdict in favor of the plaintiff for $911.07, and on the 4th of April, 1905, judgment was duly entered thereon.

On the 11th of October, 1906, a certified record of the said judgment was filed in the office of the clerk of the Court of Common Pleas for Darlington County.

On the 8th of February, 1904 (before judgment wasentered in the Circuit Court of the United States), J.P. Kirven commenced the present action, in the Court of Common Pleas for Darlington County, against the Virginia-Carolina Chemical Co., alleging that said defendant caused damage to his crops in the sum of $1,995.00, by reason of selling to him acid phosphate and dissolved bone, which "had been manufactured with such gross negligence and want of skill, that, instead of being advantageous to the crops to which they were applied, they destroyed the same in large part, and were not only worthless to the plaintiff, but by destroying his crops damaged him very heavily."

The answer of the defendant to this complaint was practically a denial.

Subsequently, however, leave was granted for it to file a supplemental answer, whereupon it set up as a defense that the issues in this action were adjudicated, or could have been determined, in the action in the Circuit Court of the United States.

The jury rendered a verdict in favor of the plaintiff for $1,995.00.

In their argument the appellant's attorneys state that the main issue in the case, is whether the judgment rendered in the Circuit Court of the United States, on the note given for the fertilizers, and here alleged to have destroyed plaintiff's crop, did not adjudicate all issues between the same parties in this cause.

As a preliminary question, it will be necessary to determine what force and effect is to be accorded the judgment rendered in the Circuit Court of the United States.

When the Court derives its jurisdiction from the citizenship of the parties, and no question is raised in the case involving a right under the Constitution or Laws of the United States, then the judgment of the Court of the United States is only entitled in a State Court to the force and effect it would have had if it had been rendered in the State Court. But in all other cases, the Court of the United States will determine the question of res judicata upon principles settled by the Supreme Court of the United States.Hancock Nat. Bank v. Farnum, 176 U.S. 640; DepositBank v. Frankfort, 191 U.S. 499; Gunter v. R.R.,200 U.S. 273.

In the case heard by the Circuit Court of the United States the question was presented under a statute of the United States, whether the assignee of the note had the right to maintain the action.

When the judgment was urged as a bar to the action in the State Court, a Federal question was presented, and must be determined in accordance with the decisions of the United States Supreme Court.

The appellant's attorneys in their argument say: "Speaking generally, it may be said that the decisions of these Courts establish that when the second suit involves the same claim as the first, the judgment in the first case is an absolute bar not only to the matters actually litigated, but as to every matter that might have been litigated; that if the second suit is upon an entirely different claim, the estoppel only extends to the matter decided," and cite the leading case of Cromwell v. Sac County, 94 U.S. 351, in which Mr. Justice Field, in behalf of the Court, thus states the principle:

"In considering the operation of this judgment, it should be borne in mind, as stated by counsel, that there is a difference between the effect of a judgment as a bar or estoppel, against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. Thus, for example, a judgment rendered upon a promissory note is conclusive as to the validity of the instrument and the amount due upon it, although it be subsequently alleged that perfect defenses actually existed, of which no proof was offered, such as forgery, want of consideration, or payment. If such defenses were not presented in the action, and established by competent evidence, the subsequent allegations is as conclusive, so far as future proceedings at law are concerned, as though the defenses never existed. The language, therefore, which is so often used, that a judgment estops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented, is strictly accurate when applied to the demand or claim in controversy. Such demand or claim, having passed into judgment, cannot again be brought into litigation between the parties in proceedings at law, upon any ground whatever.

"But where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel, only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. In all cases, therefore, where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined, in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action."

The present action and that in the Circuit Court of the United States, it is true, were between the same parties, but upon a different claim or demand — one being upon a promissory note, and the other for unliquidated damages — arising from the destruction of plaintiff's crops, through the alleged gross negligence on the part of the defendant, in the manufacture of the fertilizers used upon said crops.

Therefore, plaintiff is not estopped from raising this question unless it was actually litigated and determined in that action. The record, however, shows that the claim upon which this action is based, was withdrawn and notabandoned, and that when J.P. Kirven offered to introduce testimony as to the crops his Honor, the presiding Judge, ruled that it was incompetent.

The first and second exceptions are overruled.

The third exception cannot be sustained, for the reason that when the charge is considered in its entirety it will be seen that it is not susceptible of the inferences which the appellant has drawn from it.

The fourth exception must be overruled, as the fact that in a number of instances in which the fertilizers were used, the crops were destroyed, afforded some evidence tending to show that the fertilizers were worthless and deleterious to the crops.

It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.