Virginia-Carolina Chemical Co. v. Kirven Case Analysis
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Scribd Government DocsVirginia-Carolina Chemical Co. v. Kirven Case Analysis
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Scribd Government Docs215 U.S.
252
30 S.Ct. 78
54 L.Ed. 179
VIRGINIA-CAROLINA CHEMICAL COMPANY, Plff. in
Err.,
v.
J. P. KIRVEN.
No. 18.
Argued November 2, 1909.
Decided December 6, 1909.
Messrs. P. A. Willcox, Frederic d. McKenney, F. L. Willcox, and Henry
E. Davis for plaintiff in error.
Messrs.
[Argument of Counsel from pages 252-254 intentionally omitted] Charles
A. Douglas, W. F. Stevenson, and E. O. Woods for defendant in error.
[Argument of Counsel from pages 254-255 intentionally omitted]
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.'
4
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, 58 S. E. 424.
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 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 unskilfully 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 omittted, 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 is contended, is not sufficient to raise a Federal right, and
the following cases are cited: Chicago & N. W. R. Co. v. Chicago, 164 U. S.
454, 41 L. ed. 511, 17 Sup. Ct. Rep. 129; Clarke v. McDade, 165 U. S. 168, 41
L. ed. 673, 17 Sup. Ct. Rep. 284; Miller v. Cornwall R. Co. 168 U. S. 131, 42
L. ed. 409, 18 Sup. Ct. Rep. 34; Harding v. Illinois, 196 U. S. 78, 49 L. ed. 394,
25 Sup. Ct. Rep. 176; Thomas v. Iowa, 209 U. S. 258, 52 L. ed. 782, 28 Sup.
Ct. Rep. 487.
9
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
L. S. L. & S. H. Co. v. Butchers' Union S. H. & L. S. L. Co. 120 U. S. 141, 30
L. ed. 614, 7 Sup. Ct. Rep. 472; Pittsburgh, C. C. & St. L. R. Co. v. Long
Island Loan & T. Co. 172 U. S. 494, 43 L. ed. 528, 19 Sup. Ct. Rep. 238;
Deposit Bank v. Frankfort, 191 U. S. 499, 48 L. ed. 276, 24 Sup. Ct. Rep. 154.
10
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, 24 L. ed. 195; Northern P. R. Co. v.
Slagth, 205 U. S. 122, 51 L. ed. 738, 27 Sup. Ct. Rep. 442. 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. J. B. Clow & Sons, 204 U. S. 286,
51 L. ed. 488, 27 Sup. Ct. Rep. 285, that the right to 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. J. B. Clow & Sons, supra, to conclude that the judgment recovered
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.
11
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 margin1 ), 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
Sec. 170. The answer of the defendant must contain:
12
'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.
13
'2. A statement of any new matter constituting a defense or counterclaim, in
ordinary and concise language, without repetition.'
14
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:
15
'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.
16
'2. In an action arising on contract, any other cause of action arising also on
contract, and existing at the commencement of the action.' provisions of 914
of the Revised Statutes of the United States (U. S. Comp. Stat. 1901, p. 684), 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.
17
Finally, it is urged that, in the case of Greenwood Drug Co. v. Bromonia Co. 81
S. C. 516, 62 S. E. 840, 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.
18
Judgment affirmed.
