Davis and another against Tallcot and another

Davis and another against Tallcot and another. A recovery in a suit upon an agreement, wherein the right to recover depended by the pleadings upon the truth of the allegation made in the complaint, and denied by the answer, that the plaintiff- had fully performed the agreement, is a bar to an action brought subsequently by the defendant in the first suit against the plaintiff therein to recover damages for the alleged non-performance of the same agreement. The record of the recovery estops the defendant from controverting that the plaintiff therein fully performed the contract. The rule is not otherwise, although in the first suit the defendant, in addition to denying the allegation of performance, alleged breaches by the plaintiff and claimed to recoup damages, and at the trial expressly withdrew the claim for damages, gave no evidence touching the alleged breaches, and the second suit was to recover damages for such breaches. Action in the supreme court by Davis and Clarke to recover damages of Tallcot and Canfield. The complaint alleged that on the 27th of March, 1850, an agreement in writing was made between the parties, whereby the defendants agreed to manufacture and put up in the plaintiffs’ mill, machinery of a specified kind and quality for the price of $900, to be paid by the latter. The complaint averred a breach of the agreement on the part of the defendants and that the plaintiffs sustained damages thereby. The defendants in their answer denied the breach stated in the complaint and alleged that they fully performed the agreement on their part. For a further defence they alleged that, soon after the performance of the contract by them, they commenced an action in the supreme court against the plaintiffs, to recover the amount of the purchase price of the machinery due on the agreement; that the plaintiffs in this action appeared in the former one and set up by way of defence the same matters alleged in the complaint in this suit, and that after a trial of that action a judgment was rendered therein in favor of the defendants in this suit against the plaintiffs herein for $610.88, damages and costs. The plaintiffs replied, denying the allegation of performance contained in the answer, and alleging that on the trial of the former action the defendants therein withdrew from the consideration of the referee before whom it was tried the matters alleged in the complaint in the second suit, and that the same did not pass into or form' any part of the judgment rendered in that action. On the trial of this cause before Justice Taggart at the Niagara county circuit, in March, 1852, the record of the former suit was given in evidence. That suit was commenced in October, 1850. In the complaint therein the plaintiffs, who are defendants in this suit, set forth the agreement between the parties, being the same one on which this suit is brought, and alleged that they “faithfully performed said agreement on their part in every respect on or before the 7th day of June, 1850,” but that the defendants therein, being the plaintiffs in this suit, neglected and refused to pay the sum of $900, pursuant to said agreement. The defendants in that suit by their answer admitted the making of the agreement, but denied “ that the plaintiffs therein faithfully performed said agreement on or before the said 7th day of June, or at any time,” and alleged that they failed to perform it in any particular; and set up in substance the same facts alleged in the complaint in this suit, claiming to recoup the damages sustained by them. The record of the former suit contained a reply to this answer, taking issue upon the allegationr f new matter therein. The record also contained .an order referring the cause and the report of the referre. The latter stated that the parties appeared before the referee by their respective counsel, and that, the defendants in that suit “ admitted that they were indebted to the plaintiffs therein for the cause of action mentioned in the complaint (in that action) to the amount of five hundred and ninety-three dollars and sixty-two cents,” unless the referee should be of opinion on the evidence to be given that $27.78 should be deducted from the sum above mentioned; that thereupon evidence was given as to said claimed deduction, upon which'the referee was of opinion that the deduction should be made, and certified and reported that there was due from the defendants to the plaintiffs in that suit the sum of $ 564.84. For this amount with costs judgment was entered in the former suit. The counsel-for the plaintiffs offered to prove that on the trial of the former suit before the referee no evidence was offered or introduced on the part of the defendants in that action to prove or establish the claim for damages set up by way of recoupment in the answer therein, but that on the contrary the counsel for the defendants in that suit on the trial thereof expressly withdrew from the consideration of the referee the whole and every part of such claim; that the only matters which were before the referee to be passed upon by him were the claim of the plaintiffs in that suit for the contract price of the machinery, and the claim of the defendants for payments made' upon and set-offs against the same, which were adjusted by the parties without the giving of any evidence except as to the single item mentioned in the referee’s report. To this evidence the counsel for the defendants herein objected on the ground that the same or a part of it tended to impeach tlie record of the former suit, and also on the ground that the defendants in that suit had no right to withdraw the defence x interposed therein in the manner proposed to be shown- ■ The objections were overruled and the evidence admitted, and the counsel for the defendants excepted. Thereupon the plaintiffs proved the facts above stated to have been offered. Evidence was given tending to prove that the defendants had not performed the agreement and as to the damages sustained by the plaintiffs. The justice among other things charged the jury that the former action between the parties was not a bar to this suit, in case the claim for damages set up in the answer in that action was withdrawn from the consideration of the referee on the trial before him; to which the counsel for the defendants excepted. The counsel for the defendants requested the justice to charge the jury among other matters: (1) That the record of the 'former judgment was conclusive evidence that the same matters on which the plaintiffs sought a recovery herein had been litigated and adjudicated between the parties; (2) That such record was conclusive evidence that the defendants performed the agreement for a breach of which the plaintiffs seek to recover; (3) That the parol evidence received during the trial was not competent to contradict or explain the effect of the record and should be disregarded by the jury. The court refused so to charge, and the counsel for the defendants in due form excepted. The jury rendered a verdict in favor of the plaintiffs lor $910 damages, for which sum with costs judgment was entered against the defendants. On appeal this judgment was affirmed by the supreme court, sitting in the 8th district. (See 14 Barb., 611.) The cause was submitted on printed points. B. B. Burt, for the appellants. S. Caverno, for the respondents. [MAJORITY — Gardiner, C. J.] Gardiner, C. J. The learned judge who tried this cause erred in determining that the judgment in the first suit between these parties was not a bar to the present action ; and in permitting the legal effect of the record to be explained or qualified by parol evidence of what then occurred before the referee. The defendants in that action, the present plaintiffs, insisted upon the non-performance of the agreement upon the part of Tallcot and Canfield, the manufacturers of the machinery, for two purposes entirely distinct in their nature and object. First, as a complete defence to the action, by a denial of that which the makers of the machinery had averred and must prove before they could recover anything. Second, as a foundation for a claim in the nature of a cross action for damages to be deducted from the amount which the then plaintiffs might otherwise recover. It is obvious that, by withdrawing their claim to damages, the then defendants did not waive their right to insist upon their defence. The plaintiffs, notwithstanding, must have established their title to the price stipulated, by proof that the machinery was made within the time and in the manner called for by the agreement; and the vendees were at liberty to meet and combat these proofs by counter evidence on their part. Now, this is precisely what was done, or rather the necessity for introducing evidence to sustain the action was superseded by the admission of the then defendants in open court, “ that they were indebted to the manufacturers for the causes of action mentioned in their complaint.” As the cause of action and the indebtedness of the defendants were, by the complaint, made dependent on a full performance of the contract by the parties who instituted the suit, the concession of the defendants was equivalent to an admission on the record to that effect; and the report of the referee, followed by the judgment of the court, consequently estops, the parties to that suit from ever after questioning that fact in any controversy arising upon the same agreement. (2 Cow. & Hill N., 843; 10 Wend., 80; 3 Comst., 173.) In the suit now pending, however, the vendees bring their suit upon the same contract against the manufacturers, and aver a non-performanceE by the defendants as their sole cause of action. They have succeeded in the court below, notwithstanding the objection we have considered; and there are, consequently, two records in the same court between the same parties, each importing absolute verity, one of which affirms that the manufacturers “faithfully performed said agreement in every respect on or before the 7th of June, 1850;” the other, that “they did not perform it in any respect, at any time.” This flat contradiction is attempted to be reconciled by the assertion, that the record in the first suit only shows that this point might have been, not that it was litigated. The answer is, that the record in that case proves that the question of performance was directly in issue, and must have been litigated; that a recovery, without establishing the fact of performance, was a legal impossibility. Again, the parol evidence, if admissible, only proves that the vendees did not rely upon a breach of the contract upon the part of the makers of the machinery to support their claim to recoup. This is the course they would naturally adopt, if their damages in their opinion exceeded the sum to be paid for the machinery. Their only remedy for the excess would depend upon defeating the action then pending, and subsequently suing on the agreement. That this was really the object of their legal adviser, is evidenced by the fact that while the manufacturers recovered in their suit less than six hundred and fifty dollars, the present plaintiffs have obtained judgment in the ease under review for upwards of nine hundred dollars. The withdrawal of their claim to recoup was, therefore, not only consistent with the determination to insist upon a breach of the contract on the part of the manufacturers, in order to defeat the suit then pending, but this was indispensable to the ultimate recovery of their full damages in a subsequent action. If they have been badly advised, and in consequence were induced to admit what they should have contested, it is no reason why they should now be permitted to impeach the «record, or that a salutary rule of law should be bent to meet the supposed equity of their case. If the above view is correct, the judge erred in admitting the parol evidence which forms the subject of the second exception. It was inadmissible for the purpose of contradicting the record (Campbell v. Butts, 3 Comst., 173, and cases there cited); and in any other view, it was, as I have attempted to show, entirely immaterial. The judgment of the supreme court should be reversed. Johnson, Denio, Selden, Allen and Edwards, Js., concurred. Ruggles and Parker, Js., dissented. Judgment reversed.