McMahan v. Whelan

Mr. Justice Wolverton,

after stating the facts in the foregoing terms, delivered the opinion of the court.

By stipulation of the parties it is to be deemed that plaintiff has introduced evidence tending to support every allegation of the complaint. This leaves for bur determination simply a question of law, which is whether the judgment against plaintiff herein in the circuit court, in the action for forcible entry and detainer, is a bar to the prosecution of the present suit. The plaintiff relies upon the case of Wallace v. Scoggins, 17 Or. 476 ( 21 Pac. 558 ), as decisive of this in his favor. There is this difference between the two cases. There the action of forcible entry and detainer had not gone to judgment, the justice being enjoined from proceeding further in the case, while here judgment has been rendered against the plaintiff herein. This is the only difference. Does it control the case differently, so as to deprive plaintiff of his remedy in equity? The defendant’s theory is that plaintiff was a tenant at will or sufferance, from four months to four months, the *405 rental being payable in advance, and that, having alleged appropriate facts in the justice’s court showing this relation between the parties, and plaintiff having allowed them to go uncontroverted, the latter is estopped by the judgment, as having determined the fact in issue against him. Upon the other hand, plaintiff insists that his defense to that action was purely equitable, one that he could not have availed himself of in a justice’s court, and that the judgment therein does not operate to deprive him of his equitable remedy to enforce the specific performance of the verbal lease entered into between him and the defendant. This court has decided in Hill v. Cooper, 6 Or. 181 , which has been subsequently followed in Spaur v. McBee, 19 Or. 76 ( 23 Pac. 818 ), and South Portland Land Co. v. Munger, 36 Or. 457 ( 54 Pac. 815 , 60 Pac. 5 ), that under the statute, which allows the interposition of equitable defenses by cross-bill in actions at law, a party may insist upon a legal defense in an action without being thereby precluded from afterward asserting his equitable title by an original suit. The law action there was in ejectment, and the defendant, who appeared and answered, failed because he was claiming under an imperfect deed; but he afterward began an independent suit, basing his right of recovery upon the imperfect deed as a contract to convey, praying specific performance, and it was held that the judgment in the law action was not a bar thereto, the court saying: “It is true, when the appellant asserted a fee-simple title in his answer in the ejectment, he claimed a title which, if he possessed, included all inferior titles, and he had no need to assert this equity claimed in the suit. But the determination in that action was that he had not a fee-simple title; that such title was in respondent Cooper. This determination in that action showed that appellant was mistaken in supposing he possessed a fee-simple title in that action. He could not assert his equity under the *406 pleadings on which it was tried, and consequently his equity asserted in this suit was not adjudicated in that action.”

The rule obtains in California under a statute similar to ours, relating to the interposition of equitable defenses in actions at law. In Hough v. Waters, 30 Cal. 309 , it was held that a judgment recovered in ejectment, where the equitable defense was pleaded and withdrawn, was not a bar to a recovery in equity upon a contract for specific pei’formance. See, also, Lorraine v. Long, 6 Cal. 452 ; Hills v. Sherwood, 48 Cal. 386 . Now, if a party is not estopped to pursue his equitable remedy by an independent suit when he has had an opportunity to set it up as a defense in a law action previously instituted against him, and did not, by a much stronger reason he should not be estopped when he has not had the opportunity and could not under the statute and rules of law have set it up in the law action if he had desired so to do. A justice’s court has no equitable jurisdiction, and it would have been idle pretense for the plaintiff to have attempted to set up his equitable defense to the action of forcible entry and detainer in that court. Where the equitable defense could not be pleaded in the law action, the defendant will not be concluded by the judgment therein (Radcliffe v. Varner, 56 Ga. 222 ; Waters v. Perkins, 65 Ga. 32 ), and he may invoke his remedy by independent suit in equity, and may thereby interfere with and, if necessary, enjoin the operation or enforcement of the judgment at law: Marine Ins. Co. v. Hodgson, 11 U. S. (7 Cranch), 332; Crim v. Handley, 94 U. S. 652 ; Phillips v. Negley, 117 U. S. 665 (6 Sup. Ct. 901); Knox County v. Harshman, 133 U. S. 152 (10 Sup. Ct. 257), Plaintiff could no more set up his equitable defense in the circuit court after the forcible entry and detainer cause had gone there on appeal than he could in the justice’s court, as it would have raised a new issue not presented in the *407 latter court: Monroe v. Northern Pac. Coal Min. Co. 5 Or. 509 ; Dixon v. Johnson, 44 Or. 43 ( 74 Pac. 394 ). We conclude, therefore, that the adjudication in the justice’s and circuit courts in the forcible entry and detainer cause does not estop the plaintiff to prosecute his equitable remedy to enforce the specific performance of his verbal contract for a lease, having entered into possession and made expenditures in reliance thereon, and fully performed upon his part all the conditions thereof to the time of the institution of this suit. The decree herein of the circuit court will be affirmed. Affirmed.