41 Mich. 90, 1 N.W. 1013 (1879)
COOLEY, J.
Sometime in the year 1877, but the precise time does not appear from this record, Miller brought suit against Gunzburg & Jacobson in the circuit court for the county of Kent to recover the amount of certain rents alleged to have accrued between October 15, 1875, and April 9, 1877, on a lease from himself to defendants, by which he demised to them certain premises in Grand Rapids for the term of three years from the day first above named, at the annual rent of fourteen hundred dollars, payable monthly in advance.
The general issue was pleaded to the declaration, but there was no denial under oath of the execution of the lease. The failure thus to deny it precluded the defendant, under circuit court rule 79, from disputing the execution on the trial, and the defendants could make such defense only as assumed that they had made the lease. On this point we refer to Fisher v. Hale, 4 Mich. 506, where a statute similar to the rule in legal effect was passed upon.
Jacobson seems to have contested the case on the trial, and he put in evidence to show that Gunzburg alone occupied the demised premises, and not the two defendants. There is, perhaps, some disagreement between the parties regarding what he claimed from this evidence, and we pass it by with no further remarks at this time. The trial resulted in a judgment for the plaintiff.
Miller afterwards brought another suit on the same lease, in which he sought to recover for rents claimed to have accrued between July, 1877, and April, 1878. This is the suit now before us on writ of error. Jacobson alone appeared and pleaded, and he accompanied his plea with an affidavit in which he denied that he ever signed, executed, or delivered the lease sued upon, or ever authorized any other person to do so for him. This affidavit, under the rules, made it necessary that the plaintiff should prove the execution of the lease.
By way of making this proof the plaintiff offered in evidence the files, the verdict, and the judgment in the former case. Defendant objected to them, but they were received; the judge being of opinion, as he subsequently instructed the jury, that notwithstanding the lease was received in evidence in the former case without any evidence for or against it, by reason of its execution not having been denied under oath, yet that the judgment is certainly just as much a bar and a conclusive disposition of the question of the execution of the lease as if the witnesses had then and there been sworn on both sides as to its execution, because the execution of the lease, if the recovery was had upon it, was a matter necessary to be disposed of in order to reach the conclusion.
The defendant, Jacobson, then offered to show a new arrangement by himself, as agent for Gunzburg, with Miller, made in December, 1875, by which the latter accepted Gunzburg as his tenant; but the court overruled the offer as being inconsistent with the judgment in the former case, which must have assumed the existence of the lease as a valid one up to the time when the rents accrued for which the judgment was given. An attempt was then made to show a surrender of the lease subsequent to the bringing of the former suit, but this failed, under the rulings of the judge, and the plaintiff again had judgment.
I.
The principal question presented by this record is whether the circuit judge was right in holding that, by the former suit, the execution of the lease was conclusively established for the purposes of any subsequent suit for the recovery of rent claimed to have accrued under it. If he was, that is an end of the main controversy, for legal controversies are not to be permitted to be tried over and over to the annoyance of parties, the disturbance of the community, the unnecessary absorption of the time of the court, and at an expense not less to the litigants than to the public.
The general principles which must govern the case are familiar. There are two matters in respect to which an adjudication once made may be conclusive: first, the subject-matter involved in the litigation; second, the point of fact or of law, or of both, which was necessarily adjudicated in determining the issue upon the subject-matter in litigation.
The subject-matter involved in a litigation is the right which one party claims as against the other, and demands the judgment of the court upon; as, for example, the right in ejectment to have possession of the lands, in assumpsit to recover a demand, in equity to have a mortgage foreclosed for an amount claimed to be due upon it, or to have specific performance of a contract, and so on. As respects this, if an adjudication is once had, and any question respecting it arises afterwards in a collateral suit, the adjudication will be held conclusive. It will also be conclusive in any new suit in which either party, by his pleadings, endeavors to put in issue and enter the subject-matter of the former adjudication, or any portion thereof. Illustrations of the application of the principle are to be seen in Barker v. Cleveland, 19 Mich. 230, and Hazen v. Reed, 30 Mich. 331.
Nor, as regards the subject-matter of the suit, is it of the least importance, when the question comes up again collaterally, whether the suit was contested or was suffered to go by default; whether, if it was contested, all the questions were raised by the pleadings or upon the trial that might have been raised; or whether the court was right or wrong in its conclusions upon the fact or upon the law. It is sufficient that the case proceeded to judgment according to the forms of law, and that the court rendered judgment that, by its terms or legal effect, covered the controversy. In Hazen v. Reed there was no direct adjudication that defendant had, or had not, made the payment he afterwards brought forward, for the reason that he assumed the complainant would allow it, and therefore made no defense. But as the sum paid was a part of the subject-matter in controversy, and was necessarily involved in the question of the amount owing on the mortgage, he could not, by his neglect to make defense in the first suit, entitle himself to separate from the first controversy something that was necessarily involved in it, and make it the subject of a new litigation.
The subject-matter of the first suit between these parties was the right to recover certain rents alleged to have accrued upon the lease prior to April, 1877. Of course, there could have been no rents if there was no lease, and, therefore, it is said that the right to rents in the first suit necessarily involved the existence of the lease, and its execution by the parties sued. Assuming this to be correct, it may still be necessary to distinguish between the subject-matter of the former suit, namely, the rents claimed, and the point involved in the right to them, namely, the execution and delivery of the lease. The plaintiff insists that the prior adjudication is conclusive as respects both; the defendant, Jacobson, insists that it is conclusive only as respects the sums for which judgment was recovered.
It is not denied by the defendant that if the execution and delivery of the lease had been disputed in the first suit, the determination of the issue would have been conclusive upon the parties in any subsequent litigation involving the right to rents under the same lease. The case would then have been within the principle of Gardner v. Buchbee, 3 Cow. 120.
But the execution of the lease was not denied in the former suit. No issue was made upon it, and the defendant, by not denying it, suffered a default in respect to it which left it wholly outside the issue made and actually passed upon. Consequently it was not and could not have been considered by the court as a point which in that suit was open to controversy. The defendants, by their pleadings, made the actual existence of the lease an immaterial fact, and had the lease counted upon been a known forgery, the case must nevertheless have proceeded with its existence and genuineness admitted.
It is said, however, that the defendants in the first suit were at liberty to put the execution of the lease in issue, and that it was their duty to do so then if they proposed to contest it at all. This is upon the ground that public policy will not suffer the withholding of a defense with a view to further litigation, when a single suit might determine the whole controversy. This is no doubt true where the defense is sought to be made use of in the re-trial of a dispute respecting the same subject-matter of the former litigation. Pierce v. Kneeland, 9 Wis. 23, 31. The question now is whether the proposition is applicable to a case where the subject-matter of the second suit is different. In other words, where one is sued in respect to one subject-matter, must he bring forward all his defenses, at the peril, if he fails to do so, of being debarred of them in any subsequent litigation which may involve the same questions, though relating to a different subject-matter? We think not.
The precise point was before the supreme court of the United States in Cromwell v. County of Sac, 94 U.S. 351, in which Mr. Justice Field, delivering the opinion of the court, said that various considerations, other than the actual merits, may govern a party in bringing forward grounds of recovery or defense in one action which may not exist in another action upon a different demand, such as the smallness of the amount, the difficulty of obtaining the necessary evidence, the expense of the litigation, and his own situation at the time; and that a party acting upon considerations like these ought not to be precluded from contesting in a subsequent action other demands arising out of the same transaction. A judgment by default admits, for the purpose of the action, the legality of the demand or claim in suit; it does not make the allegations of the declaration or complaint evidence in an action upon a different claim.
There is an able dissenting opinion by Mr. Justice Clifford in that case, but it does not controvert the conclusion of the court on the point now under discussion. The dissenting judge was of opinion that the point on which the second suit was made to turn was, in fact, within the issue in the first suit, and that the unsuccessful party failed because he neglected to bring forward his evidence. If right in this, he was of course right in dissenting from the opinion of the court.
The case of Howett v. Sarle, 10 C.B.N.S. 813, which was an action for rent under a written agreement where the defendant pleaded a subsequent arrangement creating a tenancy from year to year and notice to quit, is similar in its facts to the present case. There the plaintiff relied upon a recovery of rent in a former suit in which the new defense was not set up, but the court held the first suit did not constitute an estoppel. As MILES, J. observed, the defense is good if true and quite consistent with the allegations on the record in the former action. It is an entirely novel proposition that a defendant should be precluded from setting up a defense in a second action because he did not avail himself of the opportunity of setting it up in the first action.
The case of Kelsey v. Ward, 38 N.Y. 83, contrasts with these in the point now under discussion, while in its other facts it resembles them. There it appeared that the questions of law and fact on which the defendants were relying were involved and determined in favor of the plaintiff in an action brought by the present plaintiff against these defendants for the recovery of a previous quarter's rent for the same premises; this clearly brought the case within the general rule of conclusiveness.
It is said by SANFORD, J., in Dickinson v. Hayes, 31 Conn. 417, that verdicts and judgments are conclusive evidence of the facts which they profess to find, and which are necessary to uphold them, because the facts were properly in issue, were the subject of inquiry, and were, upon such inquiry, judicially determined. But in regard to facts about which the court could have made no inquiry, no inference can be drawn from its determination. Under the rule in the former suit the plaintiff was not to be put to the proof of the execution of a written instrument declared upon unless its execution was denied by the defendant under oath. Pleading the general issue without such denial, the defendant could contest only those matters which were consistent with the execution of the lease. The narrow issue excluded that fact and for the purpose of the suit conceded it. Had the jury returned a special verdict finding among other things that the lease had been executed, that portion of the finding would have been surplusage, and had they negatived its execution the negation would have been stricken out as being outside the issue. If the fact was one with which neither court nor jury could concern itself in the former case, it must be one that the judgment does not conclude except so far as is necessary to uphold the judgment. It was admitted for the purposes of that controversy, but not for the purposes of any other.
Cases may be found which appear inconsistent with these views. Collins v. Bennett, 43 N.Y. 491, applied the rule of conclusiveness under somewhat singular circumstances. There Collins was sued by Bennett to recover compensation for keeping a horse, and Collins set up that Bennett had converted the horse to his own use. On demurrer the defense was held insufficient and Bennett had judgment. Collins then sued for conversion and it was held he could not recover because the prior judgment had judicially established that Bennett had properly cared for the horse. But the demurrer admitted the conversion and only denied that it constituted a defense; accordingly the judgment sustaining the demurrer could not judicially have determined that the fact it conceded was unfounded. We cannot import into a judgment an adjudication the court never made merely because it ought to have made it.
II.
If on a new trial, which must now be ordered, the plaintiff shall fail to establish the execution of the lease, no question can arise of subsequent surrender; but if the lease shall be proved, the question of surrender may become important. It is claimed on the one side, and denied on the other, that this question was fully gone into on the former trial. Whether it was or was not is not made very clear by this record, and the facts will probably be further developed on a new trial. Some of the evidence bearing on this question related to transactions which took place after the first suit was brought, and which, therefore, could not be affected by the judgment in that suit.
Among other things, the defendant claimed to have shown that plaintiff received the key of a store from Gunzburg and then offered it for rent, and he asked upon this two instructions: first, that the facts showed a surrender and acceptance of the store; and second, that the facts tended to show such a surrender and acceptance. Error is assigned upon the refusal of the judge to give these instructions. Upon this part of the case we need only say that the facts relied upon to establish a surrender are not conclusive in their nature but are liable to be qualified by other facts which might limit their significance or take it away entirely. The conclusion to be drawn from them must be one of fact, and as we cannot anticipate what circumstances will appear on a second trial, we cannot in advance determine what instructions will be proper and suitable upon them.
The judgment must be reversed, with costs, and a new trial ordered.
MARSTON, J., and CAMPBELL, C.J., concurred.
This record raises an important feature of our practice which concerns denial on oath of instruments put in suit, and it is whether, in case of judgment for the plaintiff on an instrument within the rule, where the defendant has not made such denial, and no inquiry has been had concerning the genuineness of the instrument, the defendant, in case of another action against him on it by the plaintiff, is to be deprived of the benefit of the rule allowing the denial, and to be held estopped by the first judgment from questioning the execution of the instrument.
I am inclined to think no such effect can be given to the prior case. It appears to me that, as to this question, the effect is the same as though it was affirmed by the record that the parties proceeded to trial in the first cause under a rule, by consent, that such cause should be decided upon grounds entirely independent of the question of due execution of the instrument.
I concur with the other members of the court.