Summary
In Lovejoy v. Ashworth, 94 N.H. 8, 45 A.2d 218 (1946), in a suit on a foreign judgment on a note, the court held that a claim of equitable setoff based on deceit was not barred even though it arose out of the same transaction as the judgment sued on because it was a different cause of action and the issue had not in fact been determined in the former suit.
Summary of this case from Colebrook Water Co. v. Comm'r, Dep't Pub. WorksOpinion
No. 3560.
Decided January 2, 1946.
A foreign judgment on one cause of action does not conclusively bar a resident defendant from maintaining a plea of equitable set-off to a suit on the judgment as to questions of fact not actually litigated and determined in the foreign state.
DEBT, on a foreign judgment. March 31, 1939 the plaintiff, William R. Lovejoy, recovered judgment in the Supreme Court of New York against the defendant on a note for $25,000 given by the latter in 1930 to the Merrimack Mills, a corporation. The payee had assigned the note to Alfred C. Gaunt, who in turn assigned it to Lovejoy. This judgment was assigned to the said Alfred C. Gaunt, the present plaintiff in interest.
In the present action the defendant filed an answer and plea of recoupment alleging that the said note had been given because of deceit on the part of said Gaunt, who was the principal stockholder and the president and treasurer of Merrimack Mills, and also that there was fraud upon the court of the State of New York. He asked that the matter of the New York judgment be reopened and that he be allowed to recoup or set-off the damages caused him by the deceit of said Gaunt.
The plaintiff moved that the defendant's answer and plea of recoupment be rejected as frivolous, in effect demurring to the pleading. Subject to the defendant's exception the Court granted the plaintiff's motion on the ground that the New York judgment was conclusive.
An amendment to the defendant's answer and plea of recoupment alleging further facts concerning the granting of the foreign judgment was allowed subject to the plaintiff's exception.
The questions of law raised by the above exceptions of the parties were transferred by Wheeler, J.
Albert H. White (by brief and orally), for the plaintiff.
J. Morton Rosenblum (by brief and orally), for the defendant.
No facts are alleged by the defendant which show that the New York court did not have jurisdiction of the parties and the subject matter of the suit in that state. Any alleged facts of fraud in obtaining the judgment of that court could have been litigated in the original action. "The judgment upon which the action is brought, and upon which the plaintiff relies if the court where the judgment was rendered had jurisdiction, is conclusive between the parties, and cannot be reversed, set aside or impeached, for fraud in obtaining it, in this suit." McDonald v. Drew, 64 N.H. 547.
Accordingly it was correctly ruled that the judgment obtained cannot be impeached collaterally. Emery v. Hovey, 84 N.H. 499, and cases cited.
However, it appears from the judgment roll that the issue raised by the defendant's answer and plea of recoupment, namely, that he was induced to give said note by the deceit of the plaintiff in interest, was not raised by the pleadings. The action went by default, so that the issue was not tried. The judgment obtained then does not bar the defendant from raising this issue in a later suit upon a different cause of action. "There is a difference sometimes overlooked between the effect of a judgment as a bar to the prosecution of a second action for the same cause, and its effect as an estoppel in another suit between the same parties upon a different cause of action. In the former case, a judgment on the merits is an absolute bar to a subsequent action: it concludes the parties, not only as to every matter which was offered and received to sustain or to defeat the suit, but also as to any other matter which might have been offered for that purpose. But in the latter case, the judgment in the prior action operates as an estoppel only as to those matters which were then directly in issue, and either admitted by the pleadings or actually tried." Metcalf v. Gilmore, 63 N.H. 174, 189. See Copeland v. Reynolds, 86 N.H. 110; Webster c. Bank v. Fuller, 85 N.H. 186; Winnipiseogee c. Company v. Laconia, 74 N.H. 82; Bascom v. Manning, 52 N.H. 132; Restatement, Judgments, s. 68 (2). The subsequent action may, as in the present case, consist of recoupment or equitable set-off if it is the proper subject matter of such pleas in an action on the former judgment, where the party alleged to be guilty of the fraud has become the assignee of the judgment.
The defendant's claim founded upon Gaunt's deceit is correctly raised by his plea of recoupment. Whether the plea is one of recoupment or equitable set-off is immaterial. The plaintiff in interest is a non-resident seeking the aid of our courts. The alleged deceit arises out of the same transaction as the judgment sued on. Even a tort under the present circumstances can be made the basis for such a claim as the defendant makes in his so-called plea of recoupment. Moylan v. Lamothe, 92 N.H. 299. See also, Vernon c. Corp. v. Company, 93 N.H. 315; Arcadia c. Mills v. Company, 89 N.H. 188.
The amendment of the defendant's answer and plea was within the discretion of the Trial Judge.
Plaintiff's exception overruled; defendant's exception sustained.
All concurred.