There is a difference between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered.
A bondholder sued the County of Sac, Iowa for four bonds issued by it. As a defense, the county raised estoppel of a judgment in a prior action brought by the same parties upon earlier maturing coupons on the same bond issue. The circuit court accepted this defines and did not allow the bondholder to provide evidence at trial. The case was elevated on appeal to the Supreme Court of the United States.
Is a court barred in all matters related to an action based on a prior judgment, even if it is based on a different claim or demand?
Where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict is rendered. The fact that a party may not have shown that he gave value for one bond or coupon at a previous incident is not evidence that he may not have given value for another and different bond or coupon. Thus, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined. Only upon such matters is the judgment conclusive in another action.