Rees v. Heyser

404 N.E.2d 1183, 14 A.L.R. 4th 1376, 76 Ind. Dec. 276, 1980 Ind. App. LEXIS 1481
CourtIndiana Court of Appeals
DecidedMay 29, 1980
Docket1-1079A285
StatusPublished
Cited by24 cases

This text of 404 N.E.2d 1183 (Rees v. Heyser) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rees v. Heyser, 404 N.E.2d 1183, 14 A.L.R. 4th 1376, 76 Ind. Dec. 276, 1980 Ind. App. LEXIS 1481 (Ind. Ct. App. 1980).

Opinions

ROBERTSON, Presiding Judge.

John H. Heyser (Heyser) brought an action against Joseph R. Rees (Rees), alleging that Rees was indebted to Heyser in the sum of fifteen thousand dollars ($15,000). The trial court entered judgment in favor of Heyser, and Rees has appealed. On appeal, Rees alleges that the action is barred by res judicata, that the check given by Heyser to Rees on December 26, 1968 was in reality a loan since there was no adequate consideration, and finally, that the action was not timely filed. We affirm.

The facts, as revealed by the record, show that Rees withdrew $15,000 from Heyser’s bank account, with his permission, from December 1, 1964 to June 3, 1965. The purpose of this was to permit Heyser to buy into part of a Burger Chef restaurant business in Cincinnati, Ohio, that was being formed by Rees. The venture, however, was eventually forced into bankruptcy. Although Heyser was to be a part owner, he never received any stock or other evidence of ownership. In order to secure this obligation, a promissory note was later executed between Heyser and his wife and Rees and his wife on February 8, 1968.

On December 26, 1968, Heyser and Rees exchanged checks for $15,000 at Rees’s request, because of certain tax consequences that might prove favorable to Rees.

[1185]*1185A complaint was filed on July 2, 1974, by Heyser and his wife seeking payment of the promissory note. Judgment was rendered in favor of Rees and his wife on that claim. The judge found that the check from Rees to Heyser on December 26, 1968 was given as payment in full upon the obligation represented by the note. The judgment made no mention of the $15,000 check from Heyser to Rees.

Less than one month following the judgment in the first case, Heyser brought this action based on the $15,000 check which Heyser executed to Rees on December 26, 1968. Judgment was entered in favor of Heyser on April 12, 1978. The trial court determined that Rees’s check of December 26, 1968 was payment for the promissory note, but that Rees was still obligated to Heyser on the check of $15,000. The court, in reaching its decision, declared that the consideration for the transaction existed by virtue of Heyser cancelling the promissory note.

Initially, it should be recognized that Indiana allows two or more separate causes of action to arise from the same occurrence, and that judgment on one does not prohibit a suit on the other. See State, Indiana State Highway Commission v. Speidel, (1979) Ind.App., 392 N.E.2d 1172; Illinois Central Gulf R. Co. v. Parks, (1979) Ind.App., 390 N.E.2d 1078.

Rees first argues on appeal that the action on the check of December 26, 1968, is barred by res judicata. In part, Rees contends that the trial court failed to rule on the merits of this defense because of its finding that the proper judgment was not placed into evidence. Since we determine that res judicata does not bar this action, we do not reach the procedural question of how a prior judgment is properly put into evidence. In relying on res judicata, Rees emphasizes that line of cases which hold that res judicata embraces not only what was actually determined, but also every matter which the parties could or might have litigated in the former cause. See, e. g., Crown Point Community School Corp. v. Richards, (1972) 154 Ind.App. 545, 290 N.E.2d 449; Evansville American Legion Home Ass. v. White, (1967) 141 Ind.App. 574, 230 N.E.2d 623. See also Matter of Estate of Apple, (1978) Ind.App., 376 N.E.2d 1172; Blake v. Blake, (1979) Ind. App., 391 N.E.2d 848.

While we recognize and are cognizant of this precedent, we find the reasoning used by Judge Remy in Jordan v. Sisson, (1924) 82 Ind.App. 128,141 N.E. 881 and quoted in Board of Commissioners of Adams County v. State ex rel. Gibson, (1948) 226 Ind. 633, 82 N.E.2d 891 as persuasive in applying the above concept:

The rule that every question which might have been decided or litigated in a cause will be presumed to have been decided means that every question which was within the issues, and which under the issues might have been proved, will be presumed to have been proved and adjudicated. [Emphasis added].

226 Ind. at 636, 82 N.E.2d at 892.

The basis of much of Indiana’s law on res judicata emanates from our supreme court’s opinion in Town of Flora v. Indiana Service Corporation, (1944) 222 Ind. 253, 53 N.E.2d 161, wherein the court recognized the two well defined branches of res judicata. Those branches were discussed and analyzed by Judge Buchanan in the recent case of State, Indiana State Highway Commission v. Speidel, (1979) Ind.App., 392 N.E.2d 1172. The first branch of res judicata is characterized by the term “claim preclusion”. This will be applicable when there is a final judgment on the merits in a prior case, which acts as a complete bar to a subsequent action on the same claim between the same parties or those in privity with them. The second branch or “issue preclusion” is applicable when a particular issue is adjudicated and put into issue in a subsequent suit on a different cause of action between the same parties or those in privity with them. In this instance, the former decision on the issue is binding on the parties in the subsequent suit. See State, Indiana State Highway Commission v. Speidel, supra (and cases cited therein).

[1186]*1186In applying these tests to the facts of the present case, it is clear that the action is not barred by res judicata. As to the claim preclusion branch, the first action was on the promissory note, while the second action was based on the check given to Rees on December 26, 1968. The judgment of the court in the first action clearly stated that the only issue decided was whether the promissory note was in fact paid by Rees’s check to Heyser. The court made no determination of the effect of Heyser’s check to Rees. Additionally, it is evident from reading the transcript of the first trial, that the only claim being adjudicated was Heyser’s right to payment on the note. In fact, Rees’s counsel objected to the introduction of the check from Heyser to Rees for the reason that it had no bearing on the case. Likewise, in his argument in support of a motion for judgment on the evidence, defense counsel again stated that the check from Heyser to Rees was not an issue before the court at that time, but “perhaps is another cause of action.”

In applying the claim preclusion branch in conjunction with the reasoning used by Judge Remy in Jordan v. Sisson, supra, it is evident that the question of Heyser’s check to Rees was not within the issues of the first action.

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Bluebook (online)
404 N.E.2d 1183, 14 A.L.R. 4th 1376, 76 Ind. Dec. 276, 1980 Ind. App. LEXIS 1481, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rees-v-heyser-indctapp-1980.