THIS case was brought up by writ of error from the Circuit Court of the United States for the district of Maryland.
In consequence of some negotiations relative to coal lands, and their eventual purchase by Pickell and Thompson, they executed to Mr. Smith the following notes:
BALTIMORE, June 2, 1853.
On the 31st of December, 1856, we promise to pay William H. Smith, or order, two thousand dollars, with interest from July 20, 1853. Value received.
$2,000.00.
JOHN PICKELL.
WM. THOMPSON.
(Endorsed:) WM. H. SMITH.
BALTIMORE, June 2, 1853.
On the first day of July, in the year 1856, we promise to pay William H. Smith, or order, two thousand dollars, with interest from July 20, 1853. Value received.
$2,000.00.
JOHN PICKELL.
WM. THOMPSON.
(Endorsed:) WM. H. SMITH.
The time for the payment of these notes was afterwards, by agreement, extended to 15th January, 1857.
On the 12th of July, 1853, Thompson and Pickell executed a mortgage of the property purchased to Smith, for the purpose of securing the payment of the purchase money, of which the notes were only a part.
On the 2d of October, 1856, Smith assigned the mortgage, as also the two notes in question, to Lewis Roberts, Gidson R. Burbank, and Addison Roberts.
The next step in the proceedings was the filing of a bill in the Circuit Court of the United States for the district of Maryland for the foreclosure of the mortgage. To this bill the following were the parties:
William H. Smith, of the city of Richmond, and State of Virginia, and a citizen of the said State of Virginia, and Lewis Roberts, Gideon R. Burbank, and Addison F. Roberts, of the city of New York, and State of New York, and citizens of said State of New York, bring this their bill of complaint against William Thompson, a citizen of the State of Maryland, and residing in the city of Baltimore, in the said State, and John Pickell, a citizen of the said State of Maryland, and residing in Alleghany county, in said State, and the Pickell Mining Company, incorporated by the laws of the said State of Maryland, mining and transacting business in Alleghany county, in said State, and having an office for the dispatch of business in the city of Baltimore, in said State.
The Pickell Mining Company were made a party because, as the bill alleged, Thompson and Pickell had, since the date of the mortgage, assigned their equity of redemption to that company.
This gave rise to a protracted and warmly-contested litigation, the defendants alleging that Smith had represented the land to contain at least three hundred acres of the big vein of coal, whereas it did not contain more than one hundred and fifty.
It is not necessary to state the evidence taken on both sides.
On the 31st of October, 1857, whilst this controversy was pending in chancery, the defendants in error brought a suit on the common-law side of the court upon the two notes above mentioned, which is the present case.
In April, 1858, the court on the equity side decreed a sale of a part of the mortgaged property, but the most valuable part of it was excepted, so that the residue was not worth the debt. The suit at law therefore went on.
In November, 1858, the case came up for trial. The defendants offered a part of the chancery record for the purpose of showing that the plaintiffs were not holders of the notes for value, when the plaintiffs offered the entire record, and insisted that the decree was conclusive, and estopped the defendants from again alleging the same matter as a defence to the suit at law on the notes.
Four long prayers were made to the court on each side, which were all rejected, and the following instructions given to the jury:
If the jury shall find from the evidence that the promissory notes offered in evidence in this case were duly executed and delivered by the said defendants to William H. Smith, and by him endorsed over to the said plaintiff for value; and that in the cause on the equity side of this court, in which the said plaintiffs, with the said Smith, were complainants, and the said Thompson and Pickell, with the Pickell Mining Company, were defendants, (the record of which has been offered in evidence,) the same defence was made and set up in said cause to prevent the passage of a decree for the sale of the said lands to pay the said notes as is now made to prevent a recovery in this case, then the decree passed in that case is conclusive upon the point of this defence, and the plaintiffs are entitled to recover in this action.