
    Case 49 — PETITION EQUITY
    May 3.
    Davis, &c. v. McCorkle.
    APPEAL FROM LOUISVILLE CHANCERY COURT.
    1. Res adjudicata — when a matter is once put in issue and is PASSED UPON BY A COURT OF COMPETENT JURISDICTION, it can not be again litigated between tbe same parties, so long as the former decision continues in force.
    2. The reversal of a judgment dismissing the plaintiff’s petition must be deemed as equivalent to an express decision that the petition was sufficient. (Kennedy, &e. v. Meredith, 4 Mon. 408; Meredith v. Clarke, Sneed, 189; Mason v. Mason, 5 Bush, 193.)
    3. Appellee and appellant must each present all available grounds by counsel in the Court of Appeals, the one for an affirmance, the other for reversal.
    4. If the appellee fails to present a question, or the court fails TO decide it, which, if presented and decided, would have secured an affirmance, and the court reverses because that question was not presented or decided, on a subsequent appeal that question must be treated as having been decided adversely to the appellee on the first appeal, whether he be appellant or appellee on the second appeal.
    This suit was commenced April 18, 1871, in the Louisville Chancery Court, by the Loretto Literary and Benevolent Institution and others, as’ stockholders, etc., in the Mechanics Bank, as plaintiffs, against the President and Directors and Henry L. Pope, cashier of said bank, and the sureties of said cashier.
    The petition alleged that the bank had closed in 1870 without causing its assets to be accounted for in full; that the President and Directors had failed to cause or make said cashier to account for and pay over the sum of $72,170.33, etc., and sought a judgment against him and his sureties for an alleged breach of the covenants of his bond as cashier. On the trial, after answer by all the defendants, and proof taken by plaintiffs and defendants, the chancellor rendered a judgment March 7, 1873, dismissing the petition “as against the defendants, Henry L. Pope,” and his sureties.
    From the judgment of dismissal an appeal was prosecuted, and that judgment was reversed November 17, 1873; and on petition for rehearing the opinion of the Court of Appeals reversing as aforesaid was extended April 16, 1874. The opinion and mandate of the Court of Appeals sent the case back.to the lower court, with directions that the action should he “ prosecuted in the name of the receiver, and that he be allowed to amend the prayer for relief,” etc., etc.
    On a final hearing, after the prayer had been amended as directed, and additional evidence had been taken by both parties, the lower court rendered a judgment on 3d of December, 1875, against the cashier for $72,170.33, and against his sureties for the amount of the penalty of his bond, $30,000, with interest from June 17, 1870.
    On the appeal of the sureties the foregoing judgment was affirmed September 26, 1877. On petition of counsel for appellants a rehearing was granted March 8, 1878. On the rehearing the former opinion was adhered to, and the following opinion was delivered, passing upon the questions discussed in the argument on the rehearing.
    A. DUVALL and I. & J. CALDWELL nor appellants.
    1. The appellees have failed to set out in their pleadings any valid cause of action against the sureties of H. L. Pope in his official bond, or to allege a breach thereof.
    2. If, as the petition alleges, the President and Directors unlawfully failed or refused to make the necessary order upon or requirement of the cashier with respect to the money which was unaccounted for, they (the President and Directors) and not the sureties must answer for the wrong if there was any wrong.
    “ The liability of a surety is always to be measured by his covenant.” (Warfield v. Brand’s adm’r, 13 Bush, 77, and authorities cited therein.)
    3. The sureties agreed to become bound for H. L. Pope, the cashier, on two conditions: First, if he should not faithfully perform his duties as prescribed in the charter and by-laws of the bank. Second, if he should not apply or pay over, the moneys of the bank as the President and Directors might order or require. A breach of neither of these conditions having been alleged, no liability of the sureties has been shown.
    In the argument on the former appeal the attention of this court was not called to this point, and it escaped the notice of this court, but it is not too late to urge the objection now.
    This court will never allow a judgment to stand that does not rest upon-a valid pleading. This is expressly provided in section 123, Code of 1854.
    The amendment of the prayer of the petition by the receiver was insufficient, in that it failed to set out the facts showing his appointment and qualification, and that he had executed bond as required by section 331 of the Code. (Gillet v. Fairchild, 4 Denio, 80, and cases cited under sec. 331, Myers’s Code.)
    4. The act of a cashier of a bank in pursuance of authority from the hoard of directors, although in violation of the law of its existence, binds the bank. (3 Grant (Pa.), 135.)
    5. On this second appeal- the appellants are not precluded from raising any objection to the sufficiency of the pleadings by the former decision of this court on the first appeal wherein appellants were appellees. Being appellees in the first appeal from a judgment in their favor, appellants were not then bound to make any objection to the sufficiency of the petition, and now for the first time being appellants, they have a right to make and are not precluded from raising any legal objection to the sufficiency of the petition on which the judgment appealed from was rendered against them.
    JAMES SPEED, A. BARNETT, and W. P. D. BUSH for appellee.
    1. In reversing the judgment of dismissal on the first appeal, this court was bound to decide and did decide, first, that the petition presented a cause of action, and second, that that cause of action was sustained by the evidence.
    2. Appellants have no right to raise or make any objection now for the first time in this court, or to ask this court to decide that the petition does not state facts sufficient to constitute a cause of action, because they are precluded from making such objection by the former decision of this court in this case.
    3. While section 123 of the old Code provides that the right to make the objection “ that the petition does not state facts sufficient to constitute a cause of action,” shall not be deemed to have been waived by failure to make such objection by demurrer or answer, it does not provide that such waiver shall not be made in some other way, as by going into trial on the merits, or by verdict or judgment; nor does it prescribe what question shall be raised by making the objection at any time after answer. Such a waiver is expressly provided for by the last paragraph of section 400 of the same Code, and such a waiver is expressly made by a plea of confession and avoidance. (1 Chitty’s PI. 671, 672.)
    That part of section 123 on which appellants rely is omitted entirely from the Code of 1877. (See Code of 1854, secs. 123, 400; Code of 1877, secs. 118, 371.)
    4. Defects in pleadings are aided, first, by pleading over as by plea of confession and avoidance (1 Chitty’s PI. 671-673); second, by verdict aided by the common-law intendment (1 Chitty’s PI. 337, 673-682); third, by the statute of jeofails (1 Chitty’s PI. 682-684).
    ^Defective pleadings have been held by this court to have been cured by answer, by pleading over, by verdict, and by judgment. (Barbour’s Digest, pp. 1163-1165.)
    5. When the objection to the sufficiency of the petition is made before answer, the question raised is, “ Does the petition state facts sufficient to constitute a cause of action in the plaintiff?”
    If made after answer and before trial on the merits, the question raised is, “Do the pleadings state facts sufficient?” etc.
    If made after trial on the merits and judgment in favor of the plaintiff, the question raised is, “ Do the pleadings state facts sufficient to sustain or support the judgment ?” or, “ Does the record state or exhibit facts sufficient to sustain or support the judgment?” (1 Chitty’s PI. 337, 528, 671, 672, 673; Riggs v. Maltby & Co., 2 Met. 88; Escott & Son v. White, &c., 10 Bush, 175; L. & P. Canal Co. v. Murphy, 9 Bush, 527; Francis v. Hazelrig, 1 Mar. 94; Keyes v. Powell, 2 Mar. 253; Barbour’s Digest, pp. 1163-1165.)
    6. On a second appeal “nothing is brought up but the proceedings subsequent to the mandate.” (Ex-parte Sibbald v. The United States, 12 Peters, 488, 491; Himely v. Rose, 5 Cranch, 314, 316; The Santa Maria, 10 Wheaton, 431, 439, 440; Wells on Res Adjudicata and Stare Decisis, secs. 613 to 623; Herman on Estoppel, pp. 95, 165; Bigelow on Estoppel, pp. 16, 17, 22; Aurora City v. West, 7 Wallace, 82, 102, 106.)
    The foregoing rule was adopted in this state at an early day, and has never been questioned or doubted by this court, but has been adhered to up to this day. (Meredith v. Clarke, Sneed, 189; Brown v. Crow’s heirs, Hardin, 443, 448; Morgan v. Dickerson, 1 Mons. 20; Kennedy’s heirs, &c. v. Meredith, 4 Mon. 408, 410; Legrand v. Baker, &c. 6 Mon. 244; . Bryan, &c. v. Beckley, Littell’s S. C. 91, 93; Nelson’s heirs v. Clay’s heirs, 7 J. J. Mar. 139; 5 Littell, 150,155 ; Ford v. Gregory’s heirs, 10 B. Mon. 175, 183; Mason v. Mason, 5 Bush, 193.)
    The same rule prevails in other states. (Resing, &c. v. Carr, 70 Ills. 596; Ogden v. Larrabee, 70 Ills. 510; Matthews v. Sands, 29 Ala. 136-140.) This list of cases might be extended almost without limit.
   JUDGE COFER

delivered the opinion oe the court.

This suit was instituted by certain stockholders of the Mechanics Bank against the late cashier of that institution and the sureties on his bond as such, to recover an alleged balance unaccounted for by him of more than $70,000, which it was alleged the president and directors failed and refused to require him to account for.

The plaintiffs prayed for the appointment of a receiver, and that he be required to investigate the condition of the bank and to collect its assets; that the cashier and his sureties be compelled to account for the balance unaccounted for, that the affairs of the bank be closed, and the surplus assets distributed among the shareholders.

Answers were filed, the cause heard on the merits, and the petition dismissed. From that judgment the plaintiffs appealed to this court. The judgment was reversed, and the cause remanded with “ instructions to cause the action to be prosecuted in the name of the receiver, and that he be allowed to amend the prayer for relief” so as to authorize a judgment in his name.

Upon the return of the cause the court below ordered that it “ be prosecuted in the name of R C. McCorkle, the receiver, for the benefit of all interested,” and thereupon the receiver filed an amendment to the prayer of the petition and asked for judgment against the cashier and his sureties.

After some further preparation the cause was again heard, and judgment rendered against the cashier for the sum of $72,170.33, and against his sureties for the sum of $30,000, the penalty named in the bond. From that judgment the sureties prosecute this appeal.

The cause was heard at a former term, and the judgment affirmed, but a rehearing was granted and the cause reargued.

The bond is in the usual form of penal bonds, and contains the following conditions, viz: “ Now if the said cashier shall faithfully, and to the best of his ability, perform the duties of said office in such manner as the charter and by-laws of said bank shall provide, and pay over and apply all moneys of the bank which shall come to his hands or possession, or be intrusted to his care, in such manner as the president and directors shall order or require, then the above obligation to be void and of no effect; otherwise, to be in full force and effect.”

The bond was set forth in the petition in hceo verba, and it was alleged that the president and directors had failed and refused to order or require the cashier to account for, apply, or pay over the balance alleged to be unaccounted for.

The appellants contend that they, as sureties, are only liable upon the very terms of their undertaking, and that as it appears from the petition that the president and directors not only have not ordered and required their principal to account for his alleged delinquency, but have refused to do so, they are not liable therefor.

The appellees contend, and we intimated in 'the former opinion on this appeal that the phrase “as the president and directors shall order or require” does not restrict, but rather enlarges, the liabilities of the sureties; and the appellees also contend that this question is not now open for consideration, that by the reversal on the former appeal that question became res judieata.

In this latter position we think they are correct, and it is therefore unnecessary to consider the former.

With a view to the convenient dispatch of business, the speedy settlement of disputes, and the repose of society, courts long since established the rule that when a matter is once put in issue and is passed upon by a court of competent jurisdiction, it can not be again litigated between the same parties so long as the former decision continues in force.

The appellants contend, however, that the question as to the proper construction of the bond and the sufficiency of the petition was not put in issue on the former appeal and was not decided.

That it was not discussed in the opinion then delivered, or in terms decided, is true, but in our opinion it was directly in issue and was actually, though not expressly, decided.’

If the appellants’ counsel be correct in their construction of the bond, and the sureties can only be made liable after their principal has been “ ordered or required ” by the president and directors to account, and has refused or failed to do so, the petition not only failed to show a cause of action against them, but it showed affirmatively that no cause of action existed.

If such was the fact it is not necessary to say that the judgment dismissing the petition was correct, and shóuld have been affirmed on the former appeal.

This court, however, without adverting to the question of the sufficiency of the petition, reversed the judgment and remanded the cause with certain specific directions to the court below, and for further proceedings consistent with the opinion.”

The defense relied upon was, that the bank had been forcibly robbed of the sum for which it was sought to hold the cashier responsible. The opinion of this court shows that the evidence conduced to prove that if there was such a robbery it resulted from the negligence of the cashier, and the question of the liability of the sureties in the event that such was the fact was discussed, and a rule for the guidance of the court below on that branch of the case was laid down, thus showing that the court regarded the questions in the case as questions of fact, and contemplated a judgment against the cashier and his sureties in the event it should turn out that there was in fact no robbery, or if there was, that it was rendered possible by the negligence or incapacity of the cashier.

If the plaintiffs’ petition was defective, as now contended, it was not only unnecessary but improper to consider these questions of fact or to reverse the judgment.

Kennedy & Hynes v. Meredith, 4 Mon. 408, was three times in this court. The first appeal was by Kennedy & Hynes, 3 Bibb, 465; the second by Meredith, Litt. Sel. Cas. 516. On the third appeal it was insisted upon as ground for reversal that the court had erred in refusing to allow two persons named in the bill as defendants, to file answers and set up an additional defense. The ground upon which they based their applications was that they had not before been parties, or if they had, they had been made parties only by an irregular publication. The record showed that the points relied upon were made on the trial of the case before the second appeal, and were overruled on the ground that the record showed that these persons had appeared before, and were well known as proper parties, and that decision was excepted to.

In disposing of that question the court said: “.On the reversal of the cause, on the appeal of Meredith, the same questions directly presented themselves in his road in this court, as reasons why he should not have a decision on the merits. And although each of these points was not discussed and settled expressly in that opinion, yet each must be considered as conclusively settled as if they had been made the subject of express adjudication.”

This seems conclusive of the case under consideration.

If the petition showed on its face that no cause of action existed,' that was an objection which presented itself directly in the way as a reason why the plaintiffs were not entitled to a reversal of the judgment dismissing the petition, and must be deemed equal to an express decision that the petition was sufficient. See also to the same effect Meredith v. Clarke, Sneed, 189; Mason v. Mason, 5 Bush, 193.

That the present appellants were appellees on the former appeal, and failed to present to the court the grounds now urged, does not affect the question. It was as much their interest and duty to present grounds and reasons upon which that judgment could be affirmed as it is now to present grounds and reasons upon which the present judgment may be reversed; they were as much bound to present then all available grounds for an affirmance as they are to present now all available grounds for a reversal. The question as to the sufficiency of the petition was presented in the record then, and if the ground assumed by counsel be -tenable, an affirmance might have been secured on the identical ground upon which a reversal is asked now.

The duty of parties in courts of original jurisdiction is thus correctly stated in Henderson v. Henderson, 3 Hare, 115: .“’Where a given matter becomes the subject of litigation in and 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 a matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted a part of their case. The plea of res judicata applies not only to the point upon which the court was required by the parties * to form an opinion and pronounce 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.”

The learned court speak of the parties, both plaintiff and defendant, and add, “A party can no more split up defenses than indivisible demands, and present them by piecemeal in successive suits growing out of the same transaction.”

This duty of the parties in presenting their complaint and defense in the courts of original jurisdiction is in appellate courts devolved on counsel, and no reason is perceived which will allow an appellee to omit to present an available defect in his adversary’s ease as ground for affirmance, and afterward to urge that same defect as ground for reversing a judgment against him, which would not equally allow an appellant who had on a first appeal overlooked some fatal error to prosecute a second appeal. This would render litigation in appellate courts practically interminable.

Season and authority alike demand that if on a first appeal there is a question in the record which, if decided in favor of the appellee, would entitle him to an affirmance of the judgment in his favor, it is his duty to present it to the court, when it will become the duty of the court to decide it, and if the appellee fails to present the question, or the court fails to decide it, and reverses the judgment, on a subsequent appeal that question must be treated as having been decided adversely to the appellee in the first case, whether he be appellant or appellee on the subsequent appeal.

On other points in the case the opinion heretofore delivered is deemed sufficient and the judgment must be affirmed.  