(dissenting). When this case was before the court of appeals, on appeal from the former judgment (155 N. Y. 581, 50 N. E. 342), a majority of the members of that court held that the trial court- properly directed a verdict in favor of the plaintiff because the defendant failed to establish his counterclaim by proving that the bonds were “held by the plaintiff as collateral for the payment of the notes and for no other purpose.” This is the law of the case, and there can be no doubt that the verdict upon which the judgment from which the present appeal is taken was properly directed, unless upon the trial evidence was introduced which would have justified the jury in finding that the bonds referred to were held as collateral security for the payment of the notes and for no other purpose. After a careful consideration of the record, I am entirely satisfied that the defendant not only failed to introduce evidence from which a finding to that effect could have been made, but, on the contrary, the evidence is uncontradicted that the bonds were held, not only as collateral security for the payment of the notes, but also for the faithful performance by Edward S. Stokes of all of the covenants specified in the sixth paragraph of the agreement of August 18th, one of which was against the foreclosure of the Hoffman House mortgage.
If I am right in this conclusion, then it necessarily follows that the verdict was properly directed, and that the exceptions should *900be overruled, and the motion for a new trial denied. It is contended, however, that this conclusion is erroneous, for the reason that it has been determined in another action between the same parties (148 N. Y. 708, 43 N. E. 211) that the contract of August 18, 1891, had been abrogated, because W. E. D. Stokes had not purchased from Bead all of the 1,963 shares of stock referred to in the contract. I do not think such determination was made in that action, and it seems to me to be a misapprehension of the issues involved therein to accord to the judgment such effect. The construction or effect of the August agreement was not involved in the issues there tried and determined. In that action the only issue between the parties which was actually tried and determined was (1) whether the agreement of August 18, 1891, had been abrogated or abandoned; and, (2) if it had not, then whether E. S. Stokes, in view of the fact that W. E. D. Stokes had not purchased all of the Bead stock, ought, in equity, to be required to specifically perform it by depositing $25,000 additional bonds. That this was the issue, and the only one, seems to me clear from a reference to the pleadings and what is conceded to have taken place upon the trial and the findings made by the trial court. It will be remembered that, after the actions brought in the superior court had been consolidated into the present action, Edward S. Stokes brought an independent action in which he sought to restrain the prosecution of this action until after the trial of the other action, substantially upon the ground that the contract of August 18, 1891, had been abandoned. The allegation of his complaint in that action, as to the contract of August 18th, was “that, subsequent to the execution and delivery of said contract, the defendant purchased from Bead 500 shares of common stock, part of the 1,963 shares of said stock referred to in paragraph seven of said agreement, and, after making such purchase, the defendant applied to the plaintiff to be relieved from the further performance of said contract. The said defendant, for the purpose of inducing the plaintiff to relieve him from further obligation under said contract, represented to the plaintiff that said Bead was not at that time disposed to sell his holdings of said stock, on terms that it would be advisable to accept, but that he was in immediate need of money, and would convey” to W. E. D. Stokes his interest in a large tract of land in Virginia, West Virginia, and Kentucky, as security for such money as William might thereafter loan1 to said Bead, and for Bead’s indebtedness arising out of the partnership transactions of C. H. Bead & Co., as well as to secure the debt owing by Bead to the Hoffman House. “It was thereupon agreed between the plaintiff and the defendant that the defendant should acquire the interest of Bead in said tracts of land, for the joint security of himself, this plaintiff, and the Hoffman House Company, and that be should hold the interest of this plaintiff and the Hoffman House Company in said land as such security, and that the said $125,000 of Hoffman House bonds * * should continue to be held as security for the aforesaid indebtedness of $34,300 and interest, represented by the promissory notes above set forth.” The complaint further alleged that “this plaintiff on his *901part agreed with the defendant, in consideration of the above-stated agreement by the defendant, to relieve the latter from his obligation to make further purchases of Hoffman House stock from Bead, under the agreement of August 18, 1891, and the parties to that contract thereupon abandoned the same.” The judgment demanded in that action was that W. E. D. Stokes be enjoined from prosecuting this action upon the notes; that he be adjudged to hold the $125,000 Hoffman House bonds as security only for the payment of the notes, and that, on payment of said notes, with interest, he surrender said securities; that he also be adjudged to hold the title to the Virginia, West Virginia, and Kentucky lands as security for the repayment to him of sums advanced by him to Bead, and to secure any and all indebtedness from Bead to the Hoffman House, from Bead to E. S. Stokes, arising out of the partnership accounts of C. H. Bead & Co., and that he account to E. S. Stokes for said lands, and convey to him the interest which he had agreed to' convey. The answer interposed in that action admitted the making of the contract of August 18th, but denied that it had ever been abandoned, or that a supplemental agreement had been made in reference to the subject-matter of it, and alleged affirmatively, and as a counterclaim, that that contract was still in force, and by its terms W. E. D. Stokes was entitled to have deposited with him $150,000 Hoffman House bonds, “as security, pursuant to the terms and provisions of said agreement dated August 18, 1891”; that E. S. Stokes had only deposited $125,000 of such bonds; and judgment was demanded that E. S. Stokes be directed to specifically perform the contract by depositing the $25,000 additional bonds. To this counterclaim E. S. Stokes served a reply, in which he alleged, in substance, that, after the contract of August 18th was made, W. E. D. Stokes had purchased 500 shares of the 1,963 shares of stock provided for in that agreement, and then had applied to E. S. Stokes to be relieved from the further performance of the contract, and that E. S. Stokes, in consideration of W. E. D. Stokes giving him an interest in certain lands in Virginia, West Virginia, and Kentucky, had agreed to relieve W. E. D. Stokes from the further performance of the contract of August 18, 1891, “and the parties to that contract thereupon abandoned the same.” He further alleged that, if the contract had not been abandoned, it would be “inequitable” to require him to specifically perform it. At the trial, E. S. Stokes offered no evidence to sustain the allegations of his complaint, and in open court consented that the same be dismissed. W. E. D. Stokes insisted upon trying the counterclaim set up in his answer, and this was the issue, and the only one, tried in that action. What was it? Whether the contract of August 18th had been abandoned, and, if it had not, whether, in view of the fact that W. E. D. Stokes had not purchased all of the stock from Bead, E. S. Stokes should be required to specifically perform by putting up the $25,-000 additional bonds. Edward S. Stokes in his reply thus gave two reasons why W. E. D. Stokes should not succeed upon his counterclaim. The first was that the contract under which he claimed had been abandoned, and the second was that if it had not been *902abandoned then it would be inequitable to require E. S. Stokes to specifically perform it, because William had not yet performed it on his part. Each of these propositions was put in issue, and all the evidence introduced was directed to those issues. It is apparent that, if E. S. Stokes had succeeded in showing that the contract had been abandoned, he would for that reason have procured a dismissal of the counterclaim; but if he had failed upon that issue, and established his second defense to the counterclaim, he would have succeeded in dismissing it all the same. It is evident by the findings that the trial court so understood the case.. It found that, “since the making, execution, and delivery of said contract or agreement, the parties have not agreed to abandon the same, or to modify it in any respect, and it has not been abandoned,” but that E. S. Stokes ought not to be compelled to specifically perform it.
It is apparent, therefore, that both of these questions were necessarily litigated on the trial of that counterclaim. It is so well settled as hardly to require the citation of authorities that an allegation in a reply upon which issue has once been taken and judgment rendered is conclusive, according to the finding thereof, so as to estop the parties, respectively, from again litigating the facts once so tried and found. Embury v. Conner, 3 N. Y. 511-522; Leavitt v. Wolcott, 95 N. Y. 212-219.
Upon the issue of the abandonment of the contract there was an express finding, and upon that issue W. E. D. Stokes succeeded, and, when the court held that that contract had not been abandoned, that question was finally determined between the parties. E. S. Stokes failed upon that issue, and he was remitted for his recovery to the second defense in his reply, and upon that he succeeded. If the court had found that 'the contract had been abandoned and was at an end, nobody would question but that the issue so found would have been conclusive between the parties. What is there to change the effect of this finding when it is the other way? It is said that that finding goes for naught, because the counterclaim was dismissed upon the merits. But what were the merits? The merits of the action involved the right to the specific performance of the contract then, upon the facts then appearing. As long as the contract was held to be in force, as it was, it cannot be said that the contract that was determined by the judgment still to be in existence was abrogated solely because at the time of the trial it had not been performed by the party seeking relief under it. The defendant’s position in this case in this regard requires him absolutely to ignore the finding of the court upon his first defense, and to insist that, although he was beaten upon that) it is nevertheless a determination in his favor in that regard, because he succeeded upon the second issue. Under the circumstances, whether specific performance should be decreed was a matter for the trial court. The right to have specific performance, by a decree of a court of equity, always rests in the sound discretion of the trial court. But it is said that because the court determined in that action, as a conclusion of law, that, W. E. D. Stokes not having purchased all of the Bead stock within a reasonable time, and for that reason, the contract could not be enforced against E. S. Stokes, — and *903the judgment so provides, — that this, in effect, was an adjudication that the contract had failed, and that it could not thereafter be enforced. But the judgment in this respect must be read in the light of the issues involved, as determined by the pleadings, and also in connection with the findings; and, when thus read, the only natural, legitimate, or logical conclusion or inference that can be drawn is that E. S. Stokes could not then be required to deposit the $25,000 additional bonds, inasmuch as William had not then purchased all the stock called for. It did not go to the extent of destroying the contract itself. It did not relieve W. E. D. Stokes from performing the covenants specified in the contract on his part to be performed. He then held 500 shares of stock which he had purchased from Read, one-half of which, under the seventh clause of the contract, he was obligated to sell to E. S. Stokes at the same price for which he had purchased. Could it be urged with any force that after that judgment was rendered E. S. Stokes could not have compelled W. E. D. Stokes to transfer one-half of that stock? It seems to me not. It also seems to me clear that, if W. E. D. Stokes had thereafter purchased the balance of the Read stock, E. S. Stokes could have acquired one-half of it by complying with the contract. If E. S. Stokes had not consented to the dismissal of the complaint, it is undoubtedly true that then the question of whether the bonds in suit were held as collateral security for the payment of the notes and for no other purpose might, and necessarily would, have been determined. He alleged that fact in Ms complaint. It was denied in the answer. But by offering no testimony in support of the allegations in the complaint, and consenting to its dismissal, he, in effect, so far as the issue was then involved, put the parties in precisely the same legal position in which they would have been had W. E. D. Stokes brought an action for specific performance of the contract, by requiring Edward to put up the $25,000 additional bonds, and Edward had interposed an answer denying Ms right to have specific performance, on the ground (1) that the contract of August 18th had been abandoned, and (2) that it would be inequitable, inasmuch as W. E. D. Stokes had not purchased all of the Read stock, to require him to do so. W. E. D. Stokes’ right to hold the $125,000 in bonds, which he then held, was not involved in the issue tried. It was an immaterial fact. It was not necessary to, and it in no way depended upon, the determination of the issue there raised, and the judgment rendered did not and could not, even though it purported to, determine or affect the rights of the parties on that subject. The rule is well settled t-hat a judgment is conclusive only in respect to the grounds covered by it and the facts necessary to uphold it, and, although it in express terms purports to determine a, particular fact, yet if such fact were immaterial to the issue, and the controversy did not turn upon it, the decree will not conclude the parties in reference to it. It is only the material, the relevant, and necessary facts decided in an action that are finally and conclusively determined by the judgment rendered. Campbell v. Consalus, 25 N. Y. 613; Woodgate v. Fleet, 44 N. Y. 1; People v. Johnson, 38 N. Y. 62; Stowell v. Chamberlain, 60 N. Y. 272; Stannard v. Hubbell, 123 N. Y. 520, 25 N. E. 1084; Springer v. Bien, 128 *904N. Y. 99, 27 N. E. 1076; House v. Lockwood, 137 N. Y. 259, 33 N. E. 595.
This rule is well illustrated in Campbell v. Consalus, supra. There the action was brought to procure the cancellation of a mortgage upon the ground that it had been paid, and the pleadings put in issue that fact. The trial court found that the mortgage had not been paid, and that the sum of $2,754 remained unpaid. In a subsequent action to foreclose the mortgage, the court held that the prior judgment was conclusive upon the parties only as to the fact that something was due, but not the amount.
In Woodgate v. Fleet, supra, Judge Earl, referring to this rule, said:
“A judgment is conclusive upon the parties thereto, only in respect to the grounds covered by it, and the law and facts necessary to uphold it; and, although a decree in express terms purports to affirm a particular fact or rule of law, yet if such fact or rule of law was immaterial to the issue, and the controversy did not turn upon it, the decree will not conclude the parties in reference thereto.”
In Stowell v. Chamberlain, supra, Judge Allen said:
“Stated in another form, the rule is that the judgment of a court of competent jurisdiction, directly upon the point, is as a plea a bar, and as evidence conclusive between the same parties upon the same matter directly in question in another action or court. Barrs v. Jackson, 1 Younge & O. Oh. 5S5. A matter or cause of action is res judicata when it is actually merged in a judgment, or the same point has already been decided between the same parties; and, if by law a judgment could have been given for the plaintiff in a former suit for precisely the same cause of action as that for which the present suit, is brought, it has, within the rule, passed into judgment, and is res judicata; but, in order to bar the second action, the circumstances must be such that the plaintiff might have recovered in the first for the same cause of action alleged in the second.”
And in Stannard v. Hubbell, supra, the headnote, which seems fairly to state the ground of the decision, is that:
“Only material, relevant, and necessary facts decided in an action are conclusively determined thereby; and judgment does not operate as an estoppel in a subsequent action between the parties, as to immaterial or unessential facts, even though put in issue by the pleadings and directly decided.”
The question whether W. E. D. Stokes held the $125,000 in bonds, —which he then held as collateral security for the payment of the notes in suit, and for no other purpose, — as I have already said, was not considered in that action. It was not passed upon by the court, and under the condition of the pleadings, after E. S. Stokes had consented to the dismissal of the complaint, it could not have been there determined. It was not a relevant or necessary fact to be determined in that case, and therefore the learned trial justice, at the conclusion of the trial, which resulted in the judgment from which the present appeal is taken, correctly held that that question was an open one; that it was not controlled or affected in any way by the former judgment, except so- far as that judgment necessarily established that the contract was still in force; and that it must be passed upon and determined de nova. He then construed the contract of August 18th, and held “that at the time of the tender of November 15, 1892, the plaintiff had the right to continue *905to hold the bonds in suit as collateral security against the obligation of the defendant not to foreclose the mortgage” on the Hoffman House. This construction was substantially the same as that given by Judge Martin (155 N. Y. 581, 50 N. E. 342), in which at least two of his associates agreed. Judge Martin said:
“As the judgment in the former action between the parties was not conclusive against the right of William to hold the bonds remaining in his hands as security for all the claims provided for in the agreement of August 18th, I think they may' be held for all the guaranties contained in that agreement, * * * as well as against any foreclosure of the mortgage mentioned therein. That contract was not so far entire that the purchase of all of Read’s 1,963 shares of stock by William was a condition precedent to the enforcement of the rights conferred upon him by the provisions of that agreement. Indeed, it is manifest from the contract itself that the parties contemplated the situation which actually arose as to the inability of William to purchase all the shares owned by Read. This is shown by the portion which states that he is about to purchase of Read the remainder of his stock, or a portion thereof, with the intent that the parties may be the owners of the whole, and by the further provision that William was to sell and transfer to Edward, at the price paid, one-half of the whole, or of such portion of the 1,963 shares as he might purchase from Read. * * * The consideration for the contract of August 18th was the mutual covenants and agreements of the parties. The provisions to be kept or performed by William have been performed by him, except so far as he has been unable to purchase all of the 1,963 shares of stock then owned by Read. He purchased all Read would sell. He could do no more. Ah we have already seen, the probable impossibility of purchasing all this stock was understood by the parties when the agreement was made, but there was no provision that in that event the contract should become invalid or inoperative, or that it should not bind the parties as to its other provisions, which could be enforced. To say that there was a failure of the consideration for this contract is not, I think, correct, nor do I understand that this court intended to hold that there was such a failure of the consideration as to render the contract inoperative. I think the condition which ultimately existed was not only contemplated by the parties, but that they intended that, in case of the liability of William to purchase the Read stock, the remainder of the contract should continue in force. This seems manifest from the provisions and purposes of the agreement, which was to carry on the business of managing the hotel, restaurant, and café connected with the Hoffman House, and for the management of the business of the corporation, as well as from the provisions showing that the possibility of his being unable to purchase the whole of the Read stock was contemplated when the agreement was made.”
The learned trial justice also held that, inasmuch as the plaintiff had the right to hold the bonds to indemnify him against any damage he might sustain by reason of the foreclosure of the Hoffman House mortgage, the defendant had failed to establish his counterclaim, under the decision of the court of appeals (155 N. Y. 581, 50 N. E. 342), by proving that the bonds were “held by the plaintiff as collateral for the payment of the notes and for no other purpose.” The construction thus put upon the contract by the learned trial justice seems to me to be the correct one, and I am also of the opinion that he was right in holding that the defendant had failed to establish his counterclaim within the rule laid down by the court of appeals.
But it is suggested in the prevailing opinion that, when the learned trial justice held that the judgment in the other action was not conclusive upon the plaintiff’s right to hold the bonds in suit as security against a foreclosure of the Hoffman House mortgage, *906that necessitated the submissipn to the jury of certain questions of fact, among others (1) whether the failure to purchase all of the Read stock constituted a breach on plaintiff’s part; (2) whether plaintiff had notified defendant that he would not purchase all the stock; and (3) whether the contract had been abrogated. These questions, and the others suggested, were necessarily disposed of by the judgment in the other action. The construction of the contract was for the court, and whether the contract had been abrogated or abandoned prior to the tender of the amount due upon the notes and the demand for the return of the bonds was finally and conclusively settled by the judgment' in the other action. In the other action, as has already been indicated in this opinion, the principal issue was whether the contract of August 18th had been by act of the parties, or either of them, terminated. The court found, when the defendant made the tender of the amount due upon the notes and demanded the return of the bonds referred to in the complaint in this action, that it had not; that it was still in force; and that settled and determined for all time that question. The parties could not thereafter question that fact or relitigate it in a subsequent action between them. The general rule is that the judgment of a court of competent jurisdiction is final and conclusive upon the parties, not only as to the matters actually determined, but as to every other matter which the parties might have litigated in the cause, and might have had determined. Embury v. Conner, 3 N. Y. 511; White v. Coatsworth, 6 N. Y. 137; Pray v. Hegeman, 98 N. Y. 351; Jordan v. Van Epps, 85 N. Y. 436; Smith v. Smith, 79 N. Y. 634; Clemens v. Clemens, 37 N. Y. 74.
Every fact which is suggested should have been submitted to the jury, bearing upon an abandonment or an abrogation of the contract, came within the issue in the other action and necessarily was there determined.
For the foregoing reasons, I am of the opinion that the verdict was properly directed for the plaintiff, and that the exceptions should be overruled, and the motion for a new trial denied.
RUMSEY, J., concurs.