under such circumstances, the loan is not thereby. rendered usurious. In Call v. Palmer, this used:
"It is settled that when an &.gent, who is authorized by his principal to .lend money for lawful interest, exacts for: .his own benefit more than the lawful rate, without authority or.knowledge of his principal, the loan is not thereby rendered usmious."
Again, said case declares:
"An authority to l.)an money at a legal rate of Interest docs not Include by implication the authority to loan at all illegal rate. An authority to violate tha law will never be presumed.",
From the proof in the case, and the law applicable thereto, it becomes manifest that the plea of usury has not been sustained. That leaves the case without any defense, and the decree mllilt therefore go for plaintiff, and it is so adjudged
FULLER et al. v. HAMILTON COUNTY. (Circuit Court, E. D. Tennessee, S. D. December 14, 1892.)
REB JUDICATA-FEDERAL AND STATE COURTS.
A final decision by a state court bars a subsequent suit in a federal court on the same cause of lwtlon as effectually when the issues Involve questions of general commercial law and the general principles of equity, and the like, as when they involve the construction of a state la,v or constitution, or some local law, usage, or custom; and it is immaterial whether the cause was decIded as a question of law, on a demurrer to the p.etition, or after a full hearing on issues of fact
In Equity. Bill by John P. Fuller and others against the county of Hamilton, Tenn., to establish t,itle to a half interest in certain lands, and to have a partition thereof. Heard on a. plea of res judicata. Plea sustained. Wells & Body, for complainant&. W. H. De Witt, for defendant.
KEY, District Judge. Complainants allege in their bill of complaint that they are the tenants in common with defendant in lots 42 and 44, Walnut street, Chattanooga; that they are the only children and heirs at law of Simeon Fuller, who died intestate in 1846, seised of one half fee-simple interest in said lots; that commissioners of Chattanooga, in 1839, conveyed said lots to Simeon Fuller and Moses Pressley, jointly, (brothers-in-law,) and the deed was duly re. corded in the register's office of Hamilton county, in Book I, p. 399. It is averred that said half interest has never been conveyed by said Fuller, his heirs or representatives, but that Fuller held it as tenant in common with Pressley until his death, and that it is now held by complainants, nor have they been ousted therefrom, or notified of any repudiation or adverse claim or holding,-and deny that any adverse possession can be charged against them. It is alleged that the register's office of Hamilton county gives notice to the world that Fuller's interest has never passed from or been divested out of him or his heirs. It is further alleged that soon after this purchase Fuller was
absent, in ',. a distant state, and 'intrusted to Pressley the care and oversight of the property; that Pressley for some time faithfully discharged the duties of his trust, and Fuller confided in him during his llfe,but that two years before the death of Fuller, which occurred in 1844, 'Pressley sold his interest in said lots to M. Whitley, of Georgia, a,nd, in betrayal of his trust, he executed a deed to said Whitley in such way as to purport to convey the entire title to the lots, and, to conceal the fact, withheld the, deed from registration until 1851, a period of seven years, so that the statute of limitations might bar an action for the recovery of the interest of Fuller. It is alleged that complainants' ancestor never knew, or had meahs of knowledge, of this fra.udulent title; that he had no suspicion of the unfaithfulness of his agent and relative, nor did complainants ; that the conveyance was fraudulent, and fraudulently concealed. It is averred that ing occurred to suggest any idea or suspicion of the fraud until 1887, when complainant John P. Fuller,in examining some old papers of Pressley, discovered original,deed to Fuller and Pressley, and, finding no deed from Fuller to Pressley, his suspicions were aroused, and led to investigation and discovery of the fraud. Defendant, it is averred, derived title under the deed to Wllitley, by a series of mesnlll, conveyances, 'and had record notice of Fuller's interest, and h8fd i,Mtual' notice as well. The bill asks tq have complainants' insaid lots seta,part and, partitioned to them separate from dfifendant's interest therein. This bill was filed in this court on November'1, 1892. ' ' On the 25th March, 1891, complainants filed a bill, and on 1st MaJ;ch, 1,892, ,a supplexqeiQ.talbill,. :againstdefendant, in the chancery cmll'tof the state, in which it is alleged that are defendant in lots 42 and 44, Wal" nut street, in Chattanooga, in said county; that they are the only children and heirs at law of Simeon Fuller, who died in 1846, seised of an undivided one-half interest in said lots; that in 1839 the commissioners of Chattanooga conveyed said lots to said Simeon Fuller and Moses Pressley, jbintly, who were brothers-in-law; that the deed was registered in theragister's office in said cottnt,y, in Book I, p. 399 ; that the title to FuUer'sinterest said lots was never conveyedbj him or his heirs, and has never been divested out of them in any way, but reniained in Fuller until his death, and in complainants since. It is averred that Fuller, soon after said purchase, was absent, in the state of Texas, and, having full faith in the integrity of his brother-in.law, gave him, by an express trust, which was accepted, the oversight, care, management, and preservation of the common interest. After the death of Fuller, complainants, having full faith in their uncle, and in his fidelity as trustee, were deceived and prevented from investigating their rights, and they so continued until 1887,when, examining some old papers belonging to their uncle's estate, the deed to their father and uncle, jointly, was discovered. This le.dto an investigation, when the following facts appeared, 1. e.: In the year 1844, two years before the death of Fuller,Pressley had sold his interest in said Iota to M. Whitley, of Walton county, Ga., and, in betrayal of his trllst, accepted and acted upon, had fraudulently
FULLER 'V. HAMILTON COUNTY.
executed the deed so as to purport to convey the entire title to the lots, and that Pressley and Whitley, to conceal their fraud, and in· tending to cheat Fuller, and conceal the fraudulent conveyance until after his death. and until after his estate should be settled, and to allow the statute of seven years to perfect the fraudulent title, with· held the deed from registration until 1851,-seven years after its ex· ecution, and five years after the death of Fuller; that it is recorded in Book H, vol. 1, p. 310; that the defendant, in 1875, became the owner of Pressley's interest, having record notice of complainants' title and of Pressley's fraud. It is alleged that complainants have not slept upon their rights, nor have they been guilty of laches or neg· ligence;- the discovery of their rights not having been made until 1887. They pray that they may have decreed to them their undi· vided one-half interest in said lots, in severalty, from the interest of defendant. To these bills, the original and supplemental, the de· fendant demurred upon various grounds, including laches, the statute of limitations, want of specific reasons for the delay in asserting their claims, and other causes, less important, perhaps. April 15, 1892, the cause came on to be· heard upon this demurrer before the chan· celIoI', who decreed that "the causes of demurrer are well taken and sustained,and the bill of complainants dismissed." ,From this decree, complainants appealed to the supreme court of the state, and on the 30th day of September, 1892, the supreme court decided that"There is no error in the record, but that the decreeo! the chancellor, in sustaining the demurrer and dismiasing the bill, was correct, and the court hereby adjUdges that said decree be, and. it is, in all things, affirm 1 d."
This of the supreme court of the state before the bill in this court was filed. The defendant has filed what it styles "a plea of 'adjudicata" iu.bar of the suit in this court, averring that a was brought by the same plaintiffs against the same defendarit,for the same subject-matter, and for the like purpose, in the smte chancery court, which was finally decreed in that court., and affirmed in the supreme court of the state, the plaintiffs, and in favor of the defendant. It is averred"That the decree of the supreme court was a final adjudication of the cause, by the court of last resort, upon the merits and matters of fi'aid suit, between the same complainants and the same defendant, and for the same matter and cause of action, as exhibited by the bill in the pr"sent suit; and said decree of said supreme court was final .and conclUsive of the merits and matters of litigation in favor of this defendant."
The complainants insist that this plea is insufficient to bar are· covery, and preclude them from maintaining their action in this court, because: (1) The said plea purports to be a plea of res adjudicata, whereas it shows that there was no issue of fact in the cause, as heard in the state court, but only an issue of law; so that it is only under the maxim "stare decisis," or law of precedent. (2) The said pIa shows that there has been no decision rendered in the state courts which can preclude this court from its independent action throughout, in the determination of this cause; there being no COD,
No opinion filed.
"ft»I!:RAL REPORTER,' Vtl1.53.
stfuotiOD. Ofatiy ,state lQ;w' or ,constitution,' or 0f" any Ideal law,usage, or! euatom,b'llti on1ylquestioD.$ otcoimhon or equity la,w; involved. lfherpJ'Qsent qnestion: if1resentedilil,is'the pl'easllflidellttQ btl' the tioliil' I: 'Jlli.etheorY of::oomplainantslseems to .be that a: trial and deoision 'bia state"colilrt; ithoughfin:tl; does Mt baram.8iCtion in the fed.eml'co'urts, unless:tihe construction'of a state law orcoilstitution, ol':somedocallaw,i lUlage, arcustom, is'in:volved,bl1t that in cases in wmch!'g6neral eOIDII1eooial law, the general principlesbf equity, and the like,' in which the courts of the United States follow their own interpretatiOllS and decisions of the law, a,nd are not bound by the inter; pretatioDS anddectsiO'D.£! of the state courts, the decisions of the state courts,do·notbar actionS in the fedet"al courts for tltesame cause of action,Jbut they become merely precedents, whIch mayor may not be fo1l:Olwed by Such a view of the law cannot be maiDtaJined .8uccessfnlly. 'The coUl'tsof the United States have no pOWel' to :review,reverse, or revise or change the judgments of the no matoor' how erooneous they may be, '''except in such cases a.lilcniay be appealed or taken by writ of error to the supreme oourt oltha United StaOOs from the courts of last resort in the states. If the opinions, decrees;' and jUdgmenm of one class of courts are not to be respected· by another class, we snould have'endless' tutmoil and disorder,r often resulting in violence and bloodshed. The sheriff and his posse 'Would come in contact with,the marshal and his posse, and our; fo.J;'m Qf government would prove a curse, instead of 81 blessing; State,court judgmenttl are as much entitled to respect from federal courts as federal courts from thoSe of the state. A precedent is one thing; a .. of one may.become a pase. ThIS upon the analogIes of the precedent, w., cases; but the cases ar.e must be different. The question of res like a precedent,. in fact or principle. A precedent xp.ay apply to it. and it, but the plea of res adjudicata belongs tl) but of a,ction. There may be, and muSt be, two or more I!lllits ,in foruW,. or in differeJIt, forums, but it must, in each stiit, be essentially the same ca,use of action. In Stout v. Lye, 103 U. S. 68, Chief Justice Waite said: ' ·'Yr. JU$tice Grier, speaJ.tlngfor the COlt+t in Peck v. JelUJ,ess, said: 'It is a of 1l1-w,. too lqng to require a citation authorities, that,
where a court has jutl.sdiction, it has a right to decide evel'Y questiou which occurs. in the cause, and whether, its decisions be correct or otherwise, its judgment, till reversed, is regarded as bindtp'g .)n every other C,ourt, and that where the court, and the right of the plaintiff to prosecute his suit in it. have (;mce attaeb,ed,tb,atrightllannot be an;ested or takGll by proceeding in another court.' 7 How. 612-624."
In the case we have, the complainants selected their forum, and tha,tforutn. was the state court, and prosecuted their suit therein to a final decree, and noW seek to repudiate the decision of their own tribunal, and have this Cause tried anew by a different one. They 8.re estopped from sodc:dng. J ustice i Field says:
"It is undoubtedly law that a3udgment of It court of competent jurisdiction upon a qUe!!tiondirectly invohted in one suit is conclusive as to that question in another suit between the BQme parties. But, to this operation of the judgment, it must appear, either upon the face of the record, or be shown
by extrinsic evidence, th9.t the precise question was raised and determined in the tormer, sUlt."'!RllllSell v.Place, 94 U. So 606-610.
The, Js, "Nemo debet vexari pro eadem causa." '" " ' Another position of complainants, in denying the sufficiency of the plea, i$ that there. was n(f iln.al hearing', and decision of the cause in the upon its there was no issue,npQ11 the facts, but only upon the law. It is true that the cause was decided upon a demurrer to the bill, but the decree was:final, and ended the life of the bill. It was dismissed. A' demurrer admits thetl'l)'th of every al,the bill whichi$ ;prbperly plOOded. It, is for bearing as though e'YWY material fact alleged were proven. The merits of the cases, as stated by complainants, must be conl!lidered and passed upon. The answer of the court to complainants' ,case W!ls: "Take it for granted that every essentiaJ fact you state is trUe" the law can give, you no relief." It is the failure of the facts to make out a case which bars the, relief. , They needmore or betterfaots, not other 3nd different law. But iUs determined by authority as well as reason. Aurora Oity v. West, 7 .WaJI.82, decides that,', , ,
"Where a judgment is rendel'ed on the, merits, whether on demurrer, agreed statement, or verdict, it extends to every material allegation or statement wWch, ha$g b made on one side and denied on the other, was at issue en and In the course of the proceedings." , In tlle
If the 'averments of defendant's plea be sustained by, proof, it is clear, so it seems, that cOlllpiainants' suit is barred by the decree in the state court, and the plea must be held to be sufficient. Defendant brings along with its plea a copy of the record' of. the cause in the state courts, as is admitted by the parties. An examination of this copy must cOlllvince the mind that the suit in the state court has not onIythe same parties and the'same subject-matter as in the suit in this court, but that the relief sought is the same in each. The framework of the two bills is the same, but complamants have leave to join iSsue upon the plea, if they so desire.
RUGAN et at v. SABIN et aI. (Circuit Court of Appeals, Eighth Circuit. December 6, 1892.)
EQUITY-RESCISSION OF SALE...:.FRAUD-NOTICE.
An attorney misrepresented to his principal, who resided in another state, the amount of liens on certain propert:r, and the value of the principal'i' interest tl1el'ein, and thereby induced the principal to sell I1t a grossly inadequate price to a supposed third party, with whom the attorney was In fact jointly interested. Another attorney notified the principal of the true condition of affairs within 40 days thereafter, but the principal, to Whom the first attorney had written to persuade him th'lt the sale was for his interest, did not return the purchase money, nor announce his intention torepudiate the sale, but remainl'd silent until his death, more than seven years thereafter, during whioh time the had greatly Increased in value. Held,. that he had eleoted to ratify, and that the sale ('.QuId 'not be rescinded by his heirs.