I am of opinion that the defense of res adjudicata was a perfect answer to the action. Coleman, the plaintiff's assignor, having been appointed a receiver in respect to the moneys due from Burge, by the Supreme Court, in the action there pending to establish a will of John Darg, deceased, was liable to account according to the directions of the court, though the principal suit was ended. The account taken before Mr. Hobart embraced the moneys which Coleman had received on the note of Burge. Those moneys belonged to the defendant as administratrix, and she and Coleman were the only parties who were required to be known or recognized on the accounting. The court, however, determined to recognize the parties entitled to distributary interests as proper parties, and treated the referee *Page 291 as the proper person to administer this remnant of the assets. This was, perhaps, right enough, but it was at all events done without objection, and what is more important, it was so done by the judgment of a court of competent jurisdiction. But Mrs. Darg, the defendant, was one of these distributees, and in that character was entitled to one-half of whatever sum might be due from Coleman, if she was not precluded from claiming it by the receipt and covenant of indemnity which she had given to Coleman. The receipt and agreement to indemnify were parts of the same transaction and depended upon the same consideration. The defense against the covenant of indemnity was precisely the same with that which was set up against the part of the instrument which was intended to operate as a release. Indeed, the covenant was entered into in consideration of the alleged payment. If that payment was inoperative on account of the fraud or concealment of Coleman respecting the character of the coal company bonds, the covenant made in consideration of that payment was equally inoperative and void. Now, the report of the referee upon that accounting established that the payment or the delivery of the bonds as payment could not be availed of on account of the circumstances alleged against it. It was a payment which did not bind the parties interested in it, and there was no objection to it which I can discover except the alleged fraud and imposition.
It may be said that the defendant was competent to bind herself by taking a collateral thing as payment, and thereupon to release her own share as a distributee, and to covenant to indemnify against the claims of the other distributees. This is true, and if the others had alone been parties in the proceeding against Coleman, and had only claimed their own shares, an adjudication compelling them to pay their shares would not necessarily have determined anything against the validity of the arrangement between Coleman and the defendant. She might take such payment as was satisfactory to herself, and a valid consideration for her agreement to indemnify against the claims of the others. But this argument *Page 292 will not aid Coleman, or the plaintiff as his assignee, because the defendant was a party to the accounting, claiming her rights in the money collected of Burge's representatives, and repudiating as fraudulent and inoperative the whole arrangement. That issue was decided in her favor. She was awarded her portion of the money, and it was thus necessarily adjudged that the arrangement could not be supported in any of its parts. It was, therefore, a judgment of a tribunal having competent jurisdiction upon the very point in issue in the present case; and it necessarily estops the plaintiff from setting up the validity of the transaction upon which the covenant sued on arose.
The order made upon the attachment proceedings, by which the defendant's share of the money was to be withheld from her to await the event of a suit to be commenced on the indemnity bond, is of no legal consequence in this suit. The order itself disclaims any effect upon the rights of the present parties. The estoppel resulted from the order already made, and it was not intended to qualify the effect of that determination. It amounted to no more than the compelling the defendant to furnish security for any recovery which might be had against her. The parties probably differed as to the effect of the adjudication, and the court gave the plaintiff the advantage of retaining the money until that question should be determined.
The minutes of testimony which were admitted against the plaintiff's objection were immaterial, as the petitions, orders and other papers which constituted the record, were all which was required to constitute the estoppel. But they could do no possible harm, and did not prejudice the plaintiff in any way.
I am in favor of affirming the judgment appealed from.
Judgment affirmed. *Page 293