Linderman Mach. Co. v. Hillenbrand Co.

75 Ind. App. 111, 127 N.E. 813 (1921)

 

RULE:

It is true that a party when sued must interpose all defenses which he has, and as to them, whether pleaded or not, the judgment is conclusive; but it is not conclusive as to an affirmative right or cause of action which he may have against the plaintiff and of which he could have taken advantage by way of cross-complaint. He is not compelled to file his cross-complaint, and, on his failure to do so, his rights with reference thereto will not be adjudged.

FACTS:

The buyer purchased a machine from the seller on a trial basis. The seller filed an action in federal court to recover the purchase price. The federal court found in favor of the buyer. The machine had not performed successfully for the buyer. The buyer filed the fraud action to recover the damages incurred by installing the machine, paying its freight, and paying for its refusal. The trial court entered judgment in favor of the buyer. 

ISSUE:

Is the appellee, having filed an answer in the Federal Court wherein it set up the alleged fraud as a defense and having failed in that action to ask affirmative relief by way of cross-complaint, now barred from prosecuting the present action?

ANSWER:

No.

CONCLUSION:

It is true that a party when sued must interpose all defenses which he has, and as to them, whether pleaded or not, the judgment is conclusive, but it is not conclusive as to an affirmative right or cause of action which he may have against the plaintiff and of which he could have taken advantage by way of cross-complaint. He is not compelled to file his cross-complaint. On his failure to do so, his rights with reference thereto will not be adjudged.

There was no issue in the action brought by appellant in the federal court to recover the purchase price tendered by the appellee herein as to the right of appellee to recover the expenses which it had been put to in installing the machinery, and without such issue therein appellant is not in position now to invoke against appellee the doctrine of res adjudicata. 

Appellee successfully pleaded fraud as a defense in the action brought by appellant in the federal court for the purchase price of the machine. The allegations of fraud in that answer and in appellee's complaint herein are the same. The court was not advised and does not know whether the sufficiency of that answer was tested by a demurrer. It would seem that the court and the parties treated the facts alleged in the answer as stating a good defense. The court was satisfied that the facts alleged in the complaint are sufficient to show fraud. There was no error in overruling the demurrer to the complaint or in sustaining the demurrer to the second and third paragraphs of answer.

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