Allegations of an essential character may be omitted in the first declaration and be supplied in the second, in which event the judgment on demurrer in the first suit is not a bar to the second, for the reason that the merits of the cause as disclosed in the second declaration were not heard and decided in the first action. Gilman v. Rives, 10 Pet., 298; Richardson v. Baston, 24 How., 188, 16 L. ed., 625; Aurora v. West, 7 Wall., 90, 19 L. ed., 45.

Where the parties and the cause of action are the same, the prima facie presumption is that the questions presented for decision were the same, unless it appears that the merits of the controversy were not involved in the issue; the rule in such a case being that where every objection urged in the second suit was open to the party within the legitimate scope of the pleadings in the first suit, and that the whole defense might have been presented in that trial, the matter must be considered as having passed in rem 365] judicatam, and the former judgment in such a case is conclusive between the parties. Outram v. Morewood, 3 East, 358; Greatheard v. Bromley, 7 T. R., 452.

Except in special cases the plea of res judicata applies not only to points upon which the court was actually required to form an opinion and pronounce judgment, but to every point which properly belonged to the subject of the issue, and which the parties, exercising reasonable diligence might have brought forward at the time. 2 Taylor, Ev., sec. 1513.

Other text writers of high authority substantially concur in that view; as, for example, Mr. Greenleaf says that "The rule should apply only to that which was directly in issue, and not to everything which was incidentally brought into controversy during the trial;" and the reason given for that limitation is worthy of notice, which is, that the evidence must correspond with the allegations, and be confined to the point in issue; and he remarks that it is only to the material allegations of one party that the other can be called to answer, for to such alone can testimony be regularly adduced, and upon such an issue only is judgment to be rendered. Pursuant to those suggestions, he states his conclusion as follows: "A record, therefore, is not held conclusive as to the truth of any allegations which were not material nor traversable, but as to things material and traversable it is conclusive and final."

Contrary to that rule, a party brought a second bill of complaint, *and the Vice-Chan- [366 cellor in disposing of the case, expressed himself as follows:

"Where a given matter becomes the subject of litigation in and of adjudication by a court of competent jurisdiction, the court requires the parties to bring forward their whole case, and will not, except under special circumstances, permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because the party has, from negligence, omitted part of his case."

And he added that the plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence might have brought forward at the time. Hendersou v. Henderson, 3 Hare, Ch., 115; Bagot v. Wil liams, 3 B. & C., 241; Roberts v. Hein, 27 Ala., 678; Stafford v. Clark, 2 Bing., 382; Miller v. Covert, 1 Wend., 487.

When a fact has been once determined in the course of a judicial proceeding, say the Supreme Court of Massachusetts, and final judgment has been rendered in accordance therewith, it cannot be again litigated between the same parties without virtually impeaching the correctness of the former decision, which, from motives of public policy, the law does not permit to be done; and they proceed to say that the estoppel is not confined to the judgment, but extends to all facts involved in it, as necessary steps, or the groundwork upon which it must have been founded. Burlen v. Shannon, 99 Mass., 203; Queen v. Hartington, 4 El. & Bl., 794; Gilbert v. Thompson, 9 Cush., 349.

in the declaration in the former suit is the other part. Both declarations contained special counts, and it seems that the special counts in the two declarations were similar; and the court remarked, that a decision in the one suit on those counts in favor of the plaintiffs necessarily included and virtually determined the sufficiency of the declaration to sustain the title of the plaintiffs, and showed that the record was admissible in evidence.

Different views were entertained by the defendants, and they submitted the proposition that a judgment was not admissible in evidence as an estoppel, unless the record showed that the very point it is sought to estop was distinctly presented by an issue, and that it was expressly found by the jury; but the court remarked that such a rule would be impracticable, as it would restrict the operation of res judicata within too narrow bounds, and the court decided that it was not necessary as between parties and privies that the record should show that matter of the

estoppel was directly in issue, "But only that the said matter in controversy might have been litigated, and that extrinsic evidence would be admitted to prove that the particular question was material and was in fact contested, and that it was referred to the decision of the jury." Attempt was made in that case to maintain the proposition that the judgment in the first suit could not be held to be an estoppel, unless it was shown by the record that the very point in controversy was distinctly presented by an issue, and that it was explicitly found by the jury; but the court held otherwise, and expressly overruled the proposition, although the defense of estoppel failed for other reasons.

Two notes, in another case, were given by the purchaser of a vessel to the vendor of the same, and payment of the first note being refused, the payee sued the maker; and the maker, at the trial, set up as a defense that the vessel was rotten and unseaworthy at the time of sale, and that those facts were known to the plaintiff. They went to trial, and the verdict and judgment were for the defendant. Subsequently the 368] plaintiff sued the other note, and the defendant set up the judgment in the other case as a bar to the suit; and the Supreme Court of New York sustained the defense, holding that the former judgment, whether pleaded as an estoppel or given in evidence under the general issue, was conclusive that the sale was fraudulent, and that the plaintiff could not recover in the second action. Gardner v. Buckbee, 3 Cow.,

127.

Certain sums of money, in a later case, were paid by a surety on two bonds given by an importer, in which the plaintiff and defendant were sureties. They were jointly liable; but the plaintiff paid the whole amount, and brought suit against the other surety for contribution. Service was made; and the defendant appeared and set up the defense that he had been released, with the consent of the plaintiff, before the payment was made; and the court sustained the defense upon demurrer, and gave judgment for the defendant.

Moneys were also paid by the same surety to discharge the liability under the second bond. Contribution being refused, the plaintiff brought a second suit, and the defendant set up the former judgment as a bar; and the court sustained

the defense, it appearing that both bonds were given at the same time upon the same consideration, and as part of one and the same transaction. Bouchaud v. Dias, 3 Den., 243.

Neither of the second suits in the two preceding cases were for the same cause of action as the first, but the defense was sustained at, in Outram v. Morewood, 3 East, 358, because the suit was founded upon the same title.

Cases of that kind are quite numerous, and they show to a demonstration that a judgment may be a bar if the same title is involved, even though the cause of action may be founded on a different instrument, or for a different trespass upon the same premises.

Conclusive support to that proposition is found in repeated decisions, of which the following are striking examples: Burt v. Sternburgh, 4 Cow., 563; Whittaker v. Jackson, 2 Hurls. & C., 931; Strutt v. Bovingdon, 5 Esp., 59.

In order to make a judgment conclusive, it is not necessary, said Mr. Justice Bigelow, that the cause of action should be the same in the first suit as that in which the judgment is pleaded *or given in evidence, but it is es- [369 sential that the issue should be the same. The judgment is then co-extensive with the issue on which it is founded, and is conclusive only so far as the same fact or title is again in dispute. Merriam v. Whittemore, 5 Gray, 317.

Decided cases in that State to the same effect are numerous, the highest court of the State holding that it is well settled that a judgment bar to a subsequent action only when the point in a former suit between the same parties is a or question in issue is the same in both; that matters in the suit which were put in issue, but the judgment is conclusive in relation to all has no effect upon questions not involved in the issue, and which were neither open to inquiry or the subjects of litigation. Norton v. Huxley, 13 Gray, 290.

Damages were claimed by the plaintiff for the loss of his shop by fire communicated to it by the defendants' locomotive-engine, and he recovered judgment for the injury. He subsequently brought a second suit, for the loss of his dwelling-house and shed by fire, it appearing that the house and shed took fire from the shop. Process being served, the defendants appeared and set up the former judgment as a bar. The court sustained the defense. holding that the plaintiff did not show any right to maintain another action merely by proving his omission to produce upon the trial all the evidence which was admissible in his behalf, and that having chosen to submit his case upon the evidence introduced, he is bound to abide by the verdict and judgment in the first suit. Trask v. R. R. Co., 2 Allen, 332.

Where a party took a bill of sale of property from the owner, and the same was subsequently attached by an officer, at the suit of the creditors of the former owner, and the purchaser under the bill of sale, having converted part of the property to his own use, was sued by the officer, and the latter recovered judgment upon the ground that the bill of sale was fraudulent and void as to the creditors, it was held that the judgment was a bar to a subsequent suit of replevin commenced by the grantee in the hill of sale for the residue of the property in the hands of the officer. Doty v. Brown, 4 N. Y.. 75.

pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

*

In Beloit v. Morgan, 7 Wall., 619, 19 L. ed., 205, this court says: "A party can no more split differences than indivisible demands, and present them by piecemeal in successive suits growing out of the same transaction. * But the principle reaches further. It extends not only to the questions of fact and of law, which were decided in the former suit, but also to the grounds of recovery or defense which might have been, but which were not, presented." The point is again distinctly decided in the 91 U. S., 526, 533, 23 L. ed., 416, 418, see, also, same way by this court in Gould v. R. R. Co., Embury v. Conner, 3 N. Y., 522; Castle v. Noyes, 14 N. Y., 329; Doty v. Brown, 4 N. Y., 71; Hamilton v. Quimby, 46 Ill., 90; Babcock ▼. Camp, 12 Ohio St., 11.

It is immaterial whether the estoppel is strictly pleaded, or (when introduced by the defendant) it is proven under the general issue. prior judgment is equally conclusive in either

case.

The

Young v. Runnell, 2 Hill, 478; Miller v. Manice, 6 Hill, 115.

The fact that a party has been wrongfully advised with reference to his mode of defense, cannot be urged against the conclusiveness of the record of that suit when introduced into a suit subsequently brought.

Davis v. Tallcot, 12 N. Y., 189. Messrs. U. P. Smith and Stephen Sibley, for defendants in error:

In Steam Packet Co. v. Sickles, 24 How., 333, 16 L. ed., 650, this court says: "The judgment rendered in that suit * is conclusive of all the facts properly pleaded by the plaintiff; but when it is presented as testimony in another suit, the inquiry is competent, whether the same issue has been tried and settled by it." And the court cites approvingly, Hughes v. Alexander, 5 Duer, 488, where a prior judgment by default between the same parties on one of two notes, parts of the same transaction, was held not to be a bar; and after a review of cases, Judge Hoffman says, p. 493: "We do not find a case which makes a former suit a bar, when it has been expressly limited to one or two distinct contracts, like promissory notes, although such notes have arisen from the same transaction, and where the claim upon the note subsequently sued upon, was not the subject of litigation."

And again, in the Packet Co. v. Sickles, in 5 Wall., 580, 18 L. ed., 550, this court allowed the defense of the Statute of Frauds to be made, and therefore ruled that evidence to show the contract was in parol, was competent, notwithstanding plaintiff had recovered on a suit for a prior installment, and that recovery was offered as an estoppel to the defense.

This court did not intend Beloit v. Morgan, 7 Wall., 622, 19 L. ed., 206, to be construed as changing this rule; for in that case, in support of its decision, it cites Gardner v. Buckbee, 3 Cow., 120, where the pleading was general, and parol proof was given to show what was the question litigated, Judge Woodworth saying:

"The record (of the former trial) shows that it was competent on the trial to establish the fraud of the plaintiff. Whether fraud was made out, and whether that was the point upon which the decision was founded, must necessarily be proved by evidence, extrinsic of the record." See, also, Doty v. Brown, 4 N. Y., p. 75; Babcock v. Camp, 12 Ohio St., p. 36.

Mr. Justice Field delivered the opinion of the

court:

This was an action against the defendants, as second indorsers upon ten promissory notes of one McOmber, made at Saratoga Springs, in the State of New York, in June, 1870, each for $500, and payable to his order in from thirtythat the notes in suit were transferred in June, two to forty-one months after date. The defense set up to defeat the action was, 1871, with other notes of the same party, of Bank by the defendants, in part satisfaction of like amount and date, to the Ocean National being paid in cash, and were indorsed by the dea note of their own then past due, the balance fendants as a mere matter of form, upon an should not be held liable on their indorsements, agreement in writing of the Bank that they

or be sued thereon.

On the trial, Harvey Brown, one of the defendants, was called as a witness to prove the matters thus set up as a defense, and was permitted, against the objection of the plaintiff, to testify to the settlement of the note of the defendants, the transfer for that purpose to the Ocean National Bank of the McOmber notes, and their indorsement by the defendants under the agreement of the Bank not to hold them liable as indorsers; and that this agreement was in writing, and was destroyed in the great fire at Chicago, in October, 1871.

To meet and repel the defense founded upon this agreement, the plaintiff produced and gave in evidence a record of a judgment, recovered by him against the same defendants upon two other notes of the same party, of like amount and date as those in suit, except that they became due at an earlier day, which were part of the series of notes transferred by the defendants to the bank, and indorsed by them, in settlement of their own note, as already mentioned, and were included in the agreement as part of the same transaction.

The questions presented for our determination relate to the competency of the witness [425 Brown, and the admissibility of the evidence of the alleged agreement of the Bank, and to the operation of the judgment mentioned as an estoppel against the defendants setting up any defense founded upon the agreement.

The objection to the witness arose from his being a party to the notes, and, as such, it is contended that he was incompetent to impeach or discredit the same, or to show that his liability was not such as his indorsement imported. The case of Bk. v. Dunn, reported in the 6th of Peters, 51, is cited in support of this position. There, the indorser of a note had been permitted by the court below to testify, against the objection of the plaintiff in the action, to a verbal understanding with the cashier and president of the bank which took the note, that he was not to incur any responsibility, or, at least, would not be held liable on the note, until the

security pledged for its payment had been exhausted. The admission of the witness this court considered erroneous, holding that no one who was a party to a negotiable note could be permitted by his own testimony to invalidate it, which, in that case, meant that no one could be permitted to show that a note indorsed by him was void in its inception, or that his indorsement did not impose the liability which the law attached to it. The opinion which announces the decision proceeds upon two grounds: 1, That the evidence would contradict the terms of the instrument, or change their legal import; and, 2, that it would be against public policy, as tending to destroy the credit of commercial paper, to allow one who had given it the sanction of his name, and thus added value and currency to the instrument, to testify that it was executed or indorsed by him under such circumstances as to impair his obligation upon it.

This last position was supported by reference to the celebrated case of Walton v. Shelley, 1 T. R., 296, decided in 1786, where the indorser of a promissory note was held by the King's Bench to be inadmissible as a witness, on grounds of public policy, to prove the note void for usury in its inception; Lord Mansfield observing, that it was "Of consequence to mankind that no person should hang out false colors to deceive them, by first affixing his signature to a paper, and then afterwards giving testimony 426] to invalidate it." Aside from the assumed estoppel of the parties from their position on the paper, the maxim of the Roman law, that no one alleging his own turpitude shall be heard, Nemo allegans suam turpitudinem est audiendus, was cited to justify the decision. That maxim was plainly misapplied here by the great Chief Justice; for it is not a rule of evidence but a rule applicable to parties seeking to enforce rights founded upon illegal or criminal considerations. The meaning of the maxim is, that no one shall be heard in a court of justice to allege his own turpitude as a foundation of a claim or right; it does not import that a man shall not be heard who testifies to his own turpitude or criminality, however much his testimony may be discredited by his character.

The doctrine of Walton v. Shelley maintained its position in the courts of England only for a few years. In 1798, it was by the same court overruled in the case of Jordaine v. Lashbrooke 7 T. R., 601, Lord Kenyon having succeeded Mansfield as Chief Justice. Since then, the rule has prevailed in the courts of that country, that a party to any instrument, whether negotiable or not, if otherwise qualified, is competent to prove any fact affecting its validity; the objection to the witness, from his connection with the making or circulation of the instrument, only going to his credibility and not to his competency. In this country, there has been much diversity of opinion upon the point, some of the state courts following the rule of Walton v. Shelley, while others have adopted the later English rule. The general tendency of decisions here is to disregard all objections to the competency of witnesses, and to allow their position and character to affect only their credibility. This diversity of opinion could not have existed unless there were grave reasons for doubting the soundness of the original decision. Be that as it may, it has led those courts which, on considerations of commercial policy, adopted the

rule of Walton v. Shelley to qualify the rule, so as to limit its application strictly to cases arising on negotiable bills and notes, and to cases where the transaction affecting the validity of the paper was not between the parties in suit. The holders of commercial paper, who enter into agreements or transactions with the makers or indorsers, affecting its validity or negotiability, cannot invoke protection against the [427 infirmity which they have aided to create. There are no considerations of commercial policy which can exclude the parties in such cases from testifying to the facts. Thus, in Fox v. Whitney, 16 Mass., 118, the Supreme Court of Massachusetts, which had previously recognized the rule in Walton v. Shelley, held that the rule applied only to a case where a man, by putting his name to a negotiable security, had given currency and credit to it, and did not apply to a case between original parties, where the paper had not been put into circulation, and each of the parties was cognizant of all the facts. This decision meets our concurrence, and, if it qualifies the decision in the case of Bk. v. Dunn, we think the qualification a just and proper one.

These considerations dispose of the objection to the competency of the witness Brown. The notes of McOmber were never put into circulation by the Ocean National Bank. No one, therefore, has been misled by the indorsement of the defendants; no false colors have been held out by them. No credit or currency has been given by their name. The receiver has, with reference to the notes, no greater right than the Bank has; he stands in its shoes. If the Bank could not have enforced a liability upon the defendants against its agreement that they should not be held liable, the receiver cannot enforce it. The agreement itself is not immoral nor illegal. The defendants by their act ran the risk of being charged upon the notes; they would have been liable had the notes been put into circulation. But beyond this risk they were protected by the agreement; upon that they could rely, so long as the Bank held the notes.

The objection that the agreement was inadmissible because it tended to vary and destroy the legal effect of the indorsement is not tenable. The agreement, being in writing, is to be taken and considered in connection with the indorsement, and the two are to be construed together. So far as the Bank was concerned, the agreement made the indorsement equivalent to one without recourse to the indorsers.

The next question for determination relates to the operation of the judgment recovered by the plaintiff against the defendants, as an estoppel against their setting up the defense founded *upon the agreement. The action in [428 which that judgment was recovered was brought in the same court as the present action, against the defendants as second indorsers upon two notes, which were part of the series of McOmber notes, transferred to the Bank of the defendants in settlement of their own note; and their indorsement was embraced in its agreement. The defendants pleaded the general issue; but the court finds that, by the advice of counsel learned in the law, they defended the action in good faith solely upon the ground that their liability had not been fixed as indorsers by due prosecution of the makers of the notes, as required by the laws of Illinois; and that this