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(45 S.Ct.)

civil war was not service within the meaning of the statute. Between the first and second of these suits, in another suit brought by a different claimant, the court construed the statute otherwise and denied that claimant a right of recovery (Jasper v. United States, 43 Ct. Cl. 368); the change of opinion being made to rest upon a later act, then for the first time called to the court's attention, which, in terms, excluded the period of service as a cadet, but with a proviso that it should not apply to an officer who had received an advance of grade at or since the date of his retirement (chapter 3590, 34 Stat. 553, 554).

In the second and third Moser Cases, however, the Court of Claims declined to follow the Jasper Case, holding that, by reason of its decision in the first Moser Case, the question was res judicata. The present suit was decided in Moser's favor upon the same ground; and, in addition, the court reverted to the position taken in the first Moser Case, abandoning, as unsound, its view as ex

*241

*pressed in the Jasper Case, upon the ground that the right of the officer was saved by the proviso.

We find it unnecessary to consider the latter ruling, since we are of opinion that the court was clearly right in its application of the doctrine of res judicata.

And in New Orleans v. Citizens' Bank, 167 U. S. 371, 396, 17 S. Ct. 905, 913 (42 L. Ed. 202) this court, speaking through Mr. Justice White, said:

"The estoppel resulting from the thing adjudged does not depend upon whether there is the same demand in both cases, but exists, even although there be different demands, when the question upon which the recovery of the second demand depends has under identical circumstances and conditions been previously concluded by a *judgment between the parties or their privies."

*242

And see Myers v. International Co., 263 U. S. 64, 44 S. Ct. 86, 68 L. Ed. 165.

[2] The suits here are upon different demands; and the point at issue is to be determined by applying the second branch of the rule. The question expressly and definitely presented in this suit is the same as that definitely and actually litigated and adjudged in favor of the claimant in the three preceding suits, viz. whether he occupied the status of an officer who had served during the Civil War.

[3, 4] The contention of the government seems to be that the doctrine of res judicata does not apply to questions of law; and, in a sense, that is true. It does not apply to unmixed questions of law. Where, for exam ple, a court in deciding a case has enunciat[1] The general principles are well settled, ed a rule of law, the parties in a subsequent and need not be discussed. The scope of action upon a different demand are not estheir application depends upon whether the topped from insisting that the law is otherquestion arises in a subsequent action be-wise, merely because the parties are the same tween the same parties upon the same claim in both cases. But a fact, question or right or demand or upon a different claim or de- distinctly adjudged in the original action cannot be disputed in a subsequent action, mand. In the former case a judgment upon the merits constitutes an absolute bar to the even though the determination was reached subsequent action. In the latter case the in- upon an erroneous view or by an erroneous quiry is whether the point or question pre-affirm the principle in respect of the thing application of the law. That would be to sented for determination in the subsequent action is the same as that litigated and de-adjudged but, at the same time, deny it all efficacy by sustaining a challenge to the termined in the original action. Cromwell v. County of Sac, 94 U. S. 351, 352, 353, 24 grounds upon which the judgment was based. L. Ed. 195. The rule is succinctly stated in 200 U. S. 273, 291, 26 S. Ct. 252, 50 L. Ed. See Gunter v. Atlantic Coast Line R. Co., Southern Pacific R. R. Co. v. United States, 477; United States v. California & Ore Land 168 U. S. 1, 48, 18 S. Ct. 18, 27 (42 L. Ed. Co., 192 U. S. 355, 358, 24 S. Ct. 266, 48 L

355):

"The general principle announced in numerous cases is that a right, question or fact distinctly put in issue and, directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action, the right, question or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified."

Ed. 476; Scotland County v. Hill, 112 U. S. 183, 187, 5 S. Ct. 93, 28 L. Ed. 692; Southern Minnesota Ry. Ext. Co. v. St. Paul & S. C. R. Co., 55 F. 690, 695, 696, 5 C. C. A. 249; Pittsford v. Chittenden, 58 Vt. 49, 57, 3 A. 323; Bigelow on Estoppel (6th Ed.) p. 112. A determination in respect of the status of an individual upon which his right to recover depends is as conclusive as a decision upon any other matter. Clemens v. Clemens, 37 N. Y. 69, 72; Pittsford v. Chittenden, supra.

Affirmed.

(266 U. S. 131)

MACKENZIE v. A. ENGELHARD &
SONS CO.

A. ENGELHARD & SONS CO. v.
MACKENZIE.

*140 *Mr. Justice HOLMES delivered the opinion of the Court.

This is a bill brought by Mackenzie to compel the defendant corporation, A. Engelhard & Sons Co., to deliver to the plaintiff

*141

one hundred and thirty shares of *stock for

(Argued Oct. 9, 1924. Decided Nov. 17, 1924.) merly represented by certificate numbered 24,

Nos. 55, 59.

1. Corporations 123(10)-Under Kentucky law, pledgee acquired absolute title to stock by purchasing it at judicial sale, and was entitled to recover its full value in federal equity court.

to the defendant, or to pay to him the value of the same, and the amount of all dividends declared upon the shares since July 15, 1918. The grounds are these:

[1] The plaintiff, being holder of a note for $7,500 and of the above mentioned certificate then standing in the name of F. W. R. Eschmann and unendorsed but stated in the note to be security, brought a suit against Eschmann, and others, makers of the note, and the corporation, in the Jefferson Circuit Court of Kentucky, to recover upon the note, to have it declared a lien upon the said stock and to have the lien enforced. He filed the certificate as an exhibit. The corpo

Where pledgee sued in Kentucky court to foreclose lien on stock, and on decree for defendant, allowing him to withdraw stock certificate from files, plaintiff appealed, but neglected to obtain supersedeas, whereupon defendant withdrew certiucate and had corporation issue new certificates, and subsequently decree was reversed and lien sustained, and on sale to enforce lien pledgee purchased stock for nominal price, plaintiff's title was absoluteration was dismissed from the suit upon its against parties, Civ. Code Prac. Ky. § 747, as to necessity of supersedeas on appeal to stay proceedings not being applicable, and hence in subsequent suit in equity in federal court against corporation plaintiff was entitled to full value of stock and dividends.

2. Appeal and error -Appeal is proceed ing in original cause, and suit is "pending" until appeal is disposed of.

demurrer, but of course had notice thereafter that the suit was pending and that the plaintiff claimed an interest in the stock. Indeed the plaintiff had previously sought to have the certificate that he held transferred to

him as pledgee but had been refused. On November 7, 1914, judgment was rendered

for the defendants and it was further ad

Appeal is proceeding in original cause, and suit is "pending" until appeal is disposed of. [Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Pend-record. ing.]

3. Corporations 123(10)-Pledgee of stock entitled to recover from corporation, which transferred stock pending suit to enforce lien, without first pursuing assignees thereof. Where corporation, though knowing of pledgee's suit to enforce lien on stock, transferred and reissued stock without saving pledgee's lien, pledgee was not bound to pursue assignees of stock, who had knowledge of lien, before looking to corporation.

Mr. Justice McReynolds, Mr. Justice Sutherland, and Mr. Justice Sanford, dissenting.

On Writs of Certiorari to the United States Circuit Court of Appeals for the Sixth Circuit.

Suit in equity by Louis B. Mackenzie against the A. Engelhard & Sons Company. Decree of District Court, awarding less relief than prayed for, was set aside, and case remanded, by Circuit Court of Appeals (286 F. 813), and both parties bring certiorari.

Reversed.

132

judged that the defendant F. W. R. Eschmann be "permitted" to withdraw the certificate from the exhibits, leaving a copy in the The plaintiff prayed an appeal but did not obtain a supersedeas, as he might have by giving a bond.

Eschmann withdrew the certificate and on February 20, 1915, obtained in place of it new certificates to his wife and his attorney. On April 26, 1915, the plaintiff perfected his appeal to the Court of Appeals of Kentucky. On March 6, 1917, the Court of Appeals reversed the judgment below (174 Ky. 450, 192 S. W. 521), and on October 31, 1917, final judgment was entered in the Jefferson Circuit Court that the plaintiff should recover the sum demanded and that he had a lien upon certificate No. 24, and the shares represented by it and upon any certificates that might have been issued by the corporation

*142

to the defendants, then the executors of F. W. R. Eschmann, deceased, in lieu of No. 24, to secure the plaintiff in the payment of the debt and costs. It was adjudged further that the shares should be sold and that the defendants should return the certificate to the court. On July 15, 1918, a sale was had, but the attorney for the defendants who also is attorney for the corpo

*Mr. Wm. Marshall Bullitt, of Louisville, ration attended and gave notice that the Ky., for Mackenzie.

136

certificate had been sold by Eschmann and had been cancelled. The plaintiff bought for *Mr. J. Verser Conner, of Louisville, Ky., one hundred dollars and on October 30, 1918, for A. Engelhard & Sons.

the sale was confirmed by the court. Sub

(45 S.Ct.)

sequently he demanded a certificate from ing between its position and that of the asthe corporation but was refused. All its signees. stock has been issued.

In the present case the District Court decreed that the plaintiff recover his original debt and interest with a dividend declared after the purchase by the plaintiff, in all $13,354.75, with interest from the date of the decree until paid. Both parties appealed to the Circuit Court of Appeals. That court, while agreeing that the plaintiff was entitled to relief against the corporation, held that as the plaintiff had not obtained a supersedeas to the first judgment in the former suit and had taken no proceedings before the sale to establish what title would pass by it, his relief in equity should be limited to the amount of the debt, interest and costs in the other suit up to the time of sale, although the plaintiff's right was absolute at

law. 286 F. 813. Writs of certiorari were

issued on the petitions of both sides. 262 U.

S. 739, 43 S. Ct. 701, 67 L. Ed. 1208.

[2] It does not seem to us to need argument to establish that the sale to the plaintiff was effectual as against the parties to the suit. The decree confirming the sale was final and not appealed from. We believe the rule in Kentucky to be that purchasers pendente lite would stand in the defendant's shoes. An appeal is a proceeding in the original cause and the suit is pending

*143

*144

[3] We come then to the question whether equity requires any diminution of the rights acquired by the plaintiff under the judicial sale to him. It is adjudged that his rights are absolute. It is a strong thing to cut down his rights under the judgment of the state court. The parties stood upon equal ground. Without going further into the facts each seems to have been trying to get the better of the other and neither can get much help from atmospheric considerations. The plaintiff did not care *to assume the liabilities of a supersedeas bond, but if the defendant took no steps to protect itself it might have done so. The plaintiff was not bound to pursue the assignees of the stock before looking to the corporation. St. Romes v. Levee Steam Cotton Press Co., 127 U. S. 614, 620, 8 S. Ct. 1335, 32 L. Ed. 289. It is immaterial what were the limits of the plaincourt as absolutely entitled to the stock and tiff's original interest; he comes before this the preliminaries to his acquiring the title have no bearing on the case. He got it at

a better bargain than he would have done had his adversaries taken a different course, but he got it and his right is not to be impugned. See Miller v. Doran, 245 Ill. 200, 91 N. E. 1039.

Decree reversed.

Mr. Justice McREYNOLDS, Mr. Justice dissent.

(266 U. S. 221)

SILBERSCHEIN v. UNITED STATES.

until the *appeal is disposed of. Therefore, apart from more special considerations ap- SUTHERLAND, and Mr. Justice SANFORD plicable here but not needing mention, the assignees of the stock stood no better than Eschmann unless they were helped by the provision that "an appeal shall not stay proceedings on a judgment unless a supersedeas be issued" in the Kentucky Civil Code, § 747. But there was no question here of (Argued Oct. 13, 1924. Decided Nov. 17, 1924.) any proceedings on the judgment. When the final judgment was reached it determined the rights of Eschmann ab initio, and it seems to us impossible to believe that it did not also determine the rights of the assignees. We understand that this would be the view of the Kentucky Court of Appeals. Golden v. Riverside Coal & Timber Co., 184 Ky. 200, 205, 211 S. W. 761.

The liability of the corporation rightly was found to exist by both courts below. The company might be liable even without fault, and if for any reason it were unable to restore the stock it might be answerable for its value. Telegraph Co. v. Davenport, 97 U. S. 369, 372, 24 L. Ed. 1047; Moores v. Citizens' National Bank, 111 U. S. 156, 166, 4 S. Ct. 345, 28 L. Ed. 385. But here, as we have said, it had notice of the suit. It knew that the first judgment might be reversed, as it was, upon appeal, and was entitled to protect itself, as it might have and for all that appears may have done, when it issued the new certificates. We perceive no reason in the Kentucky Civil Code for distinguish- |

No. 66.

1. Army and navy 512, New, vol. 12A Key-No. Series-Director of Veterans' Bureau authorized to discontinue compensation though claimant's physical condition not improved.

An allegation that Director of Veterans' Bureau acted arbitrarily in discontinuing disability compensation, because petitioner's physical condition had not improved, but had become worse, being the same and resulting from the same causes for which compensation was originally allowed, sets forth no ground for relief, since such action by the Director is expressly authorized by War Risk Insurance Act, § 13, as amended (Comp. St. Ann. Supp. 1919, § 514kk), and section 305, as added (Comp. St. Ann. Supp. 1923, § 514rrrr).

2. Army and navy 512, New, vol. 12A KeyNo. Series-Allegation undisputed evidence showed total disability insufficient.

In petition for disability compensation, an allegation that undisputed evidence showed petitioner temporarily totally disabled, but not alleging that such evidence showed disability resulted from disease caused or aggravated in

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

the line of duty, was insufficient to authorize, Stat. 609, 611 (Comp. St. Ann. Supp. 1919, relief. § 514qqq), and subsequent acts, and, if so, un3. Army and navy 511⁄2, New, vol. 12A Key- der what circumstances such suit may be No. Series-Allegations held not to show Vet-maintained. That section, so far as neceserans' Bureau Director acted arbitrarily. sary to be stated, provides that compensation shall be paid to any enlisted man for a disability resulting from personal injury suffered or disease contracted in the line of duty The statute fixes a scale of monthly paywhen employed in active military service. ments, dependent upon the extent of the disability. See section 11, c. 16, 41 Stat. 371, 373 (Comp. St. Ann. Supp. 1923, § 514r). The administration of the original act was committed to the Director of the War Insurance Bureau (section 13, c. 105, 40 Stat. 399, [Comp. Stat. Ann. Supp. 1919, § 514kk]) and so remained until the creation of the Veterans' Bureau by the Act of August 9, 1921, · c. 57, 42 Stat. 147 (Comp. St. Ann. Supp. 1923, § 967 et seq.), when the authority

Allegations that petitioner was suffering from disability shown by entries in Adjutant General's office not to exist on entrance into service, that petitioner's military service was sole cause thereof, that Veterans' Bureau admitted that since his discharge petitioner suffered from disabilities incurred in military service, as evidenced by correspondence attached to petition, held not to establish that Director of Veterans' Bureau acted arbitrarily in reducing and discontinuing compensation. 4. Pleading

*223

8(13)-Allegation that decision of Director of Veterans' Bureau was arbitraary, unjust, and unlawful is legal conclusion. Allegations that decision of Director of Veterans' Bureau denying further compensation for disability contracted in military service was arbitrary, unjust, and unlawful, and a usurpation of power, are merely legal conclusions. was developed upon *the Director of that 5. United States 125-Army and navy Bureau. The official, in each instance, was 512, New, vol. 12A Key-No. Series-Deci- directed to administer, execute and enforce sion of Director of Veterans' Bureau not re- the provisions of the act, with authority to viewable, unless arbitrary or wholly unsup- makes rules and regulations not inconsistent ported by evidence or erroneous in law; therewith necessary or appropriate to carry United States not to be sued for compensa-out its purposes and "decide all questions tion under War Risk Insurance Act.

Under War Risk Insurance Act, § 13, as

amended (Comp. St. Ann. Supp. 1919, § 514kk), and section 305, as added (Comp. St. Ann. Supp. 1923, § 514rrrr), decision of Director of Veterans' Bureau in awarding, increasing, reducing, or discontinuing compensation to disabled veterans is final and conclusive, and not subject to judicial review, and the United States cannot be sued for such compensation, at least unless the decision is unsupported by evidence, or wholly dependent on a question of law, or is seen to be clearly arbitrary or capricious.

In Error to the District Court of the United States for the Eastern District of Michigan.

Suit by Sam Silberschein for veterans' disability compensation against the United States. Petition was dismissed by the District Court (285 F. 397), and complainant prosecutes writ of error. Affirmed.

See, also, 280 F. 917.

*222

arising under this act," except as otherwise provided therein. See section 2 of the 1921 Act, 42 Stat. 148 (Comp. Stat. Ann. Supp. 1923, § 9674aa).

An examination of the original act and the various amendatory acts fails to disclose, so far as this question is concerned, any exception to or limitation upon the authority of the Director. There is no provision therein expressly granting the right to maintain any suit against the United States in respect of claims for such compensation.

The original act of 1917 (Comp. St. Ann. Supp. 1919, § 514a et seq.) and subsequent amendatory acts conferred upon the Bureau the authority to revise an award at any time, in accordance with the facts found, and to end, diminish or increase compensation Stat. 398, 407; section 19, c. 57, 42 Stat. Section 305, c. 105, 40 previously awarded. 154 (Comp. St. Ann. Supp. 1923, § 514rrrr). The court below, after a very full review, dismissed the petition, holding that it was

*Mr. Rowland W. Fixel, of Detroit, Mich., the evident intention of Congress to confer for plaintiff in error.

upon the Director full and exclusive authorMr. Assistant Attorney General Donovan, ity to decide all questions arising under the

for the United States.

act, in so far as they involved the exercise of executive duties and required the deter

Mr. Justice SUTHERLAND delivered the mination of disputed questions of fact, and to opinion of the Court.

This writ of error brings here for determination the question whether the United States may be sued under subdivision 20, § 24, of the Judicial Code (Comp. St. § 991), upon a claim for compensation arising under section 300 of the War Risk Insurance Act, as amended by section 10, c. 104, 40

the extent indicated, to make his decision final and not reviewable by the courts. 285 F. 397; 280 F. 917.

Plaintiff in error was in the military service as an enlisted man from December 9, 1917, until February 8, 1918, when he was discharged on account of physical disability. He was, at first, awarded compensation as

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(45 S.Ct.)

for a total temporary disability, which was subsequently reduced to 20 per cent. as for a temporary partial disability (section 11, c. 16, 41 Stat. 371, 373), and finally taken away altogether on and after March 18, 1921, on the ground that the disability had ceased to be compensable.

*224

*The petition alleged that the decision of the Director was arbitrary, unjust and unlawful, constituted a usurpation of power, was "contrary to the proofs, if any," and "contrary to the weight of evidence on file in petitioner's case." The action of the Director was alleged to be arbitrary:

[1] (1) Because after allowing compensation he discontinued it, although petitioner's physical condition had not improved but had become worse, being the same and resulting from the same causes for which compensation was originally allowed. But this is to say only that the Director had changed his mind, and, for aught that appears, that may have been based upon another and better view of the facts. Ample authority for his action is found in the provision already referred to, conferring power upon the Bureau to revise an award at any time and to end, diminish or increase the compensation.

[2] (2) Because he allowed for temporary partial disability when the undisputed evidence as found showed that petitioner was temporarily totally disabled. But, as the court below pointed out, it is not alleged that such evidence showed that such disability resulted from injury or disease caused or aggravated "in the line of duty," as provided by the statute.

raised by the contention of the government that the claim is in fact for a pension and, hence, expressly excluded from judicial review by the terms of subdivision 20, § 24, of the Judicial Code, and that, in any event, it is for a mere gratuity for which no suit can be maintained, even if the United States were otherwise suable, since, in any view of the matter, we conclude that no case is made for judicial intervention.

[5] The statute which creates the asserted right, commits to the Director of the Bureau the duty and authority of administering its provisions and deciding all questions arising under it; and in the light of the prior decisions of this court, we must hold that his decision of such questions is final and conclusive and not subject to judicial review, at least unless the decision is wholly unsupported by the evidence, or is wholly dependent upon a question of law or is seen to be clearly arbitrary or capricious. Bates & Guild Co. v. Payne, 194 U. S. 106, 108-110, 24 S. Ct. 595, 48 L. Ed. 894; Medbury v. United States, 173 U. S. 492, 497, 498, 19 S. Ct. 503, 43 L. Ed. 779; Ness v. Fisher, 223 U. S. 683, 691, 692, 32 S. Ct. 356, 56 L. Ed. 610; Degge v. Hitchcock, 229 U. S. 162, 171, 33 S. Ct. 639, 57 L. Ed. 1135; Int. Com. Comm. v. Union Pacific R. R. Co., 222 U. S. 541, 547, 32 S. Ct. 108, 56 L. Ed. 308; Int. Com. Comm. v. Louis. & Nash. R. R. Co., 227 U. S. 88, 91, 33 S. Ct. 185, 57 L. Ed. 431.

Since it is not made to appear from the allegations of the petition that any of these exceptional conditions exist, the judgment of the District Court must be and it is Affirmed.

(266 U. S. 180)

CROUCH v. UNITED STATES. (Argued Oct. 10, 1924. Decided Nov. 17, 1924.)

[3] (3) Because petitioner was suffering from disabilities shown by entries in the Adjutant General's office not to exist at the time of his entering into the service, and there was no cause therefor other than petitioner's military service; that it was admitted by the Veterans' Bureau hospital authorities that since his discharge petitioner. had been suffering from disabilities incurred in the military service, as evidenced by communications and letters attached to petition. These are all matters bearing, at most, upon the soundness of the Director's determination upon a matter properly submitted to his judgment, and fall far short of establishing its arbitrary character.

$225

[4] *The general allegations of the petition that the Director's decision was arbitrary, unjust and unlawful, and a usurpation of power, are merely legal conclusions. Clearly, the petition does not present a case where the facts are undisputed and the only conclusion properly to be drawn is one favorable to petitioner, or where the law was misconstrued, or where the action of the executive officer was arbitrary or capricious. We pass, without deciding, the question

United States

No. 61.

125—No authority granted to sue government, where Director of Veterans' Bureau has terminated compensation.

No authority is granted by Act Oct. 6, 1917 (Comp. St. Ann. Supp. 1919, § 514k et seq.), to sue the United States for compensation, where the Director of the Veterans' Bureau has terminated an allowance of same, unless his action is wholly unsupported by the evidence, or wholly dependent on the question of law, or seen to be clearly arbitrary or capricious. 2. Courts 385(1)-Direct writ of error from Supreme Court not authorized to review judgment of District Court on insurance claims.

Act May 20, 1918 (Comp. St. Ann. Supp. 1919, § 514kk), conferred on District Courts original jurisdiction over controversies arising out of claims against the United States under contracts of insurance, and did not authorize direct writ of error from Supreme Court to review decision; jurisdiction on review being in Circuit Court of Appeals.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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