The claim of plaintiff in error that proper and full credit as
not given to a judgment in the federal court, if reasonably made,
raises a federal question, and if the decision of the state court
is in effect against such claim, this Court has jurisdiction.
While the bar of a judgment in another action for the same claim
or demand between the same parties extends to not only what was,
but what might have been, pleaded or litigated in the first action,
if the second action is upon a different claim or demand, the bar
of the first judgment is limited to that which was actually
litigated.
Under § 914, Rev.Stat., requiring the practice in the federal
courts to conform as near as may be to the practice in the state
courts, the defendant in an action in the United States Circuit
Court in South Carolina is not required to plead all counterclaims
and offsets, as the state courts have not so construed the
provisions of §§ 170, 171 of the Code of Procedure of that
state.
When the question is the effect which should have been given by
the state court to a judgment of the United States circuit court,
this Court is not concerned with the extent to which the state
court may have subsequently modified its view if it has not
questioned the correctness of its decision in the case at bar.
77 S.C. 493 affirmed.
The facts are stated in the opinion.
Page 215 U. S. 255
MR. JUSTICE McKENNA delivered the opinion of the Court.
This case involves the question as to whether the state courts
gave due force and effect to a judgment of the Circuit Court of the
United States for the District of South Carolina in an action
brought by plaintiff in error against the defendant in error.
The action in the case at bar was brought by defendant in error,
whom we shall call Kirven, against plaintiff in error, whom we
shall call the Chemical Company, for damages resulting from the
defective manufacture of certain fertilizers bought by Kirven of
the Chemical Company, through one McCall, to whom he gave his note
for $2,228. The allegation of complainant is:
"That the said fertilizers, to-wit, acid phosphate and dissolved
bone, had been manufactured with such gross negligence and want of
skill that, instead of being of advantage 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, and by the injury which was inflicted on
his crop of cotton and corn by fertilizers which were manufactured
and sold for use upon them, he was damaged in the sum of
$1,995."
The Chemical Company, in its answer, set, up, among other
defenses, the judgment of the circuit court of the United States.
The plea was not sustained, and judgment was entered for Kirven for
the amount sued for, which was affirmed by the supreme court of the
state. 77 S.C. 493.
The facts, so far as necessary to be stated, are as follows: the
Chemical Company, being a New Jersey corporation, brought action
against Kirven in the Circuit Court of the United States for the
District of South Carolina on the note before mentioned. Kirven,
among other defenses, set up
Page 215 U. S. 256
that the note was given 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 a 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."
Kirven subsequently filed a supplementary answer in which he
omitted, the Chemical Company not objecting, the defense above set
out, but pleaded as a counterclaim certain proceedings instituted
by the Chemical Company in North Carolina, in which it attached
certain cotton belonging to Kirven, sold the same, and "applied and
appropriated the proceeds to its own use and benefit." The value of
the cotton and the amount "so seized and appropriated" were alleged
to be twenty-four hundred and fifty dollars ($2,450).
Kirven, when testifying as to the purchase of the fertilizers,
said: "I did not know anything until later on, there was a complete
destruction of my crop." Counsel for the company objected "to the
latter clause, on the ground that that whole question is taken out
of the complaint." The objection was sustained, and the answer
stricken out. The Chemical Company recovered judgment for nine
hundred eleven dollars and seven cents ($911.07).
A motion is made to dismiss the writ of error, on the grounds
(1) that the assignment of errors in the supreme court of the state
lacked certainty of specification, as it only stated that the
refusal by the trial court to give proper and full credit to the
judgment of the circuit court "thereby denied to the defendant [the
Chemical Company] a right arising under the authority of the United
States." This, it
Page 215 U. S. 257
is contended, is not sufficient to raise a federal right, and
the following cases are cited:
Chicago & N.W. Ry. Co. v.
Chicago, 164 U. S. 454;
Clarke v. McDade, 165 U. S. 168;
Miller v. Cornwall R. Co., 168 U.
S. 131;
Harding v. Illinois, 196 U. S.
78;
Thomas v. Iowa, 209 U.
S. 258.
The cases are not applicable. In neither of them was the
contention under the Constitution of the United States identified
or passed upon. In the case at bar, there is a definite right
arising under the authority of the United States, and the decision
of the court was in effect against it. The case falls within
Crescent City &c. Co. v. Butchers' Union &c. Co.,
120 U. S. 141;
Pittsburgh &c. Ry. Co. v. Long Island Loan & Trust
Co., 172 U. S. 494;
Deposit Bank v. Frankfort, 191 U.
S. 499.
The question on the merits is a narrow one. Its solution depends
upon the application of well known principles -- too well known to
need much more than statement. It is established that the bar of a
judgment in another action for the same claim or demand between the
same parties extends to not only what was pleaded or litigated in
the first action, but what might have been pleaded or litigated. If
the second action is upon a different claim or demand, the bar of
the judgment is limited to that which was actually litigated and
determined.
Cromwell v. Sac County, 94 U. S.
351;
Northern Pacific Ry. Co. v. Slagth,
205 U. S. 122. Of
course, as contended by the Chemical Company, there are some
defenses which are necessarily negatived by the judgment, are
presumed never to have existed. These are such as go to the
validity of the plaintiff's demand in its inception or show its
performance, such as is said in
Cromwell v. Sac County,
supra, as forgery, want of consideration, or payment. But this
Court has pointed out a distinction between such defenses and those
which, though arising out of the transaction constituting
plaintiff's claim, may cut it down or give rise to an antagonistic
demand. Of such defenses we said, speaking through MR. JUSTICE
HOLMES in
Merchants' Heat & Light Co. v. Clow &
Sons, 204 U. S. 286,
that the right to
Page 215 U. S. 258
plead them as a defense "is of modern growth and is merely a
convenience that saves bringing another suit, not a necessity of
the defense." And showing how essentially they were independent of
the plaintiff's demand, although they might be of a defense to it,
it was said that, when the defendant set them up, he became a
plaintiff in his turn, and subject to a jurisdiction that he
otherwise might have denied and resisted. The principle was applied
to recoupment as well as to set-off proper. Even at common law, it
was said,
"since the doctrine has been developed, a demand in recoupment
is recognized as a cross demand, as distinguished from a defense.
Therefore, although there has been a difference of opinion as to
whether a defendant, by pleading it, is concluded by the judgment
from bringing a subsequent suit for the residue of his claim, a
judgment in his favor being impossible at common law, the
authorities agree that he is not concluded by the judgment if he
does not plead his cross-demand, and that whether he shall do so or
not is left wholly to his choice."
This doctrine is attempted to be avoided by insisting that
Kirven's plea in the circuit court and his cause of action in the
case at bar is an assertion of a want of consideration for the
note, and, it is urged, brings the case under one of the defenses
mentioned in
Cromwell v. Sac County, supra, which would
have defeated recovery on the note, and that the judgment obtained
necessarily negatives the facts upon which Kirven now bases his
cause of action. "Call it what he may please," the Chemical Company
says,
"the basis of Kirven's claim in this suit is an alleged failure
of consideration of such great degree that it amounted to positive
viciousness, which would have been a perfect defense to the suit in
the United States court."
It may be, indeed, that such "viciousness" could have been set
up in the action in the circuit court, but it would be to confound
distinctions that have always been recognized, and the effect of
which are pointed out in
Merchants' Heat & Light Co. v.
Clow & Sons, supra, to conclude that the judgment
recovered
Page 215 U. S. 259
negatives the existence of that "viciousness," or the damages
which were consequent to it. This was the view taken by the supreme
court of the state, that court deciding that the cause of action in
the circuit court and that in the case at bar were upon different
claims or demands -- "one being upon a promissory note, and the
other for unliquidated damages" arising from the destruction of
Kirven's crops. And the supreme court also decided that Kirven
withdrew the defense based on the damages to him. It was omitted,
as we have seen, from the supplementary answer. Testimony in regard
to it was excluded upon the objection of the Chemical Company, and
there is support for the contention that the company is estopped to
urge that a defense which was excluded upon its objection was
involved in the action and concluded by the judgment.
It is, however, contended by the Chemical Company that whether
new matter constitutes a defense or counterclaim under §§ 170 and
171 of the Code of Procedure of South Carolina (inserted in the
margin
*), it must be set
up by a defendant in his answer, and cannot be, if not set up, used
as an independent cause of action. It is also contended that, this
being the practice in the state courts, by virtue of the
Page 215 U. S. 260
provisions of § 914 of the Revised Statutes of the United
States, it becomes the practice in causes in the courts of the
United States held in South Carolina. That section requires "the
practice, pleadings, forms, and modes of proceedings" in the
federal courts to "conform as near as may be" to the practice in
the state courts. An answer to this contention is that the supreme
court of the state did not so construe the Code of Procedure. On
the effect of the judgment of the circuit court of the United
States as
res judicata the court divided, but three
members of the court must have entertained opinions adverse to the
contention of the Chemical Company. Mr. Justice Gary discussed the
effect of the judgment, and was of opinion that it was not
res
judicata -- a conclusion at which he could not have arrived if
the code of the state required Kirven to set up his demand for
damages in the answer. Mr. Justice Woods, in his concurring
opinion, expressed the view that, under the code, the demand could
have been, but was not required to be, pleaded in defense. Mr.
Justice Pope dissented from that construction, and also from the
effect of the judgment as
res judicata. Mr. Justice Jones
concurred with the chief justice only as to the effect of the
judgment.
Finally, it is urged that, in the case of
Greenwood Drug
Company v. Bromonia Co., 81 S.C. 516, decided since the case
at bar, the Supreme Court of the State of South Carolina is in
accord with the contention of the Chemical Company as to the effect
of judgments as
res judicata, and has modified the views
expressed by that court in the case at bar. It may well be
contended that we are not concerned to consider to what extent that
learned court has modified its views, as we have taken jurisdiction
of this case because of our right to decide the weight and effect
to be given to the judgment of the circuit court. It is enough,
however, to say that the Supreme Court of South Carolina did not
question the correctness of its decision in the case at bar.
Judgment affirmed.
*
"SEC. 170. The answer of the defendant must contain:"
"1. A general or specific denial of each material allegation of
the complaint controverted by the defendant, or of any knowledge or
information thereof sufficient to form a belief."
"2. A statement of any new matter constituting a defense or
counterclaim, in ordinary and concise language, without
repetition."
"SEC. 171. The counterclaim mentioned in the last section must
be one existing in favor of a defendant and against a plaintiff,
between whom a several judgment might be had in the action, and
arising out of one of the following causes of action:"
"1. A cause of action arising out of the contract or transaction
set forth in the complaint as the foundation of the plaintiff's
claim, or connected with the subject of the action."
"2. In an action arising on contract, any other cause of action
arising also on contract, and existing at the commencement of the
action."