Page:Federal Reporter, 1st Series, Volume 7.djvu/707

 OLIVEB V. CUNmifGaA.M. 695 �of these defendants must be held to be a fraud upon the rights of Oliver, and we find nothing in the f acts which estop him froiu asserting such fraud, and obtaining relief in this suit. As bas been already stated, the defendants Hunt & Eschelman, after the formation of the new co-partnership, proceeded to foreclose the $35,000 mortgage. Oliver, in that case, interposed a defence, setting up by way of answer, aa well as by cross-bill, the transactions, or a portion of them, detailed in the present bill, and it is insisted by the defenoe that the questions sought to be raised by complainant are res aajudicata as to Hunt & Eschelman. �Whether the judgment in the foreclosuie case is a bar to the present action, depends upon whether the subject-matter of the suit, pleaded as a defence to that, constituted a subject- matter which the defendant Oliver was entitled to interpose against a decree of foreclosure. If he was entitled to avail himself, as a defence to the foreclosure, of the matters which he brings forward in this suit, and did set up such a defence, and introduce evidence in support of it, nomatter upon what ground the court gave to the mortgagees a decree of foreclos- ure and sale, that judgment would be a bar against setting up the same transactions by ah original bill against the same parties. It would ruake no difference that the court held that the defenoe could not be allowed, and that Oliver must bring his original bill, if, as a matter of law, it was admissible to defeat a foreclosure of the mortgage. The pro- ceeding would be none the less a bar to this suit. For a correc- tion of the error of the court in thus deciding, the party would be remanded to his remedy by review. While, on the other hand, if the subject-matter of this suit was not admis- sible as a defence to the foreclosure, for the reason that it involved the rightff of other parties, etrangers to the mortgage, as well as property other than that covered by that of the mortgage, which must have been affected by any decree based upon the defence then urged, in that case, though it may have been set up in a prrtceeding, it :would be no bar to this bill.-' �The supreme court of Michigan, in Jaco6«on v. MUler, 41 ��� �