This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A judgment rendered in an action based on a prior judgment merges such judgment for most purposes.1 A personal judgment rendered on a note merges the note and a former judgment rendered thereon, even if the second judgment is smaller than the first.2 However, it is held not to merge the judgment on which it is based so as to destroy its priority over other liens on the realty on which it has become a lien.3 So merger does not operate to destroy the security of a decree as a lien.4 A judgment,5 or other contract of record,6 merges the prior contract which is the subject-matter of such contract of record. Hence, assigning a note " without recourse" after judgment has been taken thereon, does not make the assignor a guarantor.7 This rule of course does not apply to a judgment void for want of jurisdiction.8 A judgment merges a cause of action so that the judgment may be barred by limitations and hence neither the judgment nor the cause of action can be enforced, even under circumstances which would have prevented limitations from running against the original cause of action.9 A judgment for a breach of contract merges the right of action on all items and claims growing out of such breach which could have been included in such action, even though not actually included.10 Hence, if several breaches of a contract exist a recovery on one breach merges the right of action for all the breaches.11 Thus if a receiver sues on stock liability for less than the full amount due and recovers judgment for such amount, he cannot thereafter recover the residue.12 A agreed to deliver lumber to B, and to perform such contract A purchased lumber from C. C made default and by reason thereof A made default in his contract. B recovered from A the difference between the contract price and the market price; and A recovered from C by a like measure of damages. Both judgments were paid. A then brought suit against C to recover the amount paid by A to B on such judgment. It was held that A could not recover.13 On the other hand, if the contract is a continuing one and is not discharged by the breach, a judgment for a prior breach does not merge a later one. Thus an award of damages by arbitration for breach of a contract not to engage in business is not a merger of such contract so as to prevent a subsequent action at law for a subsequent breach.14 Accordingly the effect of recovering judgment for a breach often turns on the question whether the contract is a continuing one or whether the breach has discharged it. By the weight of authority the discharge of an employe terminates the contract of employment and leaves only a right of action for the breach.15 Accordingly, the recovery of an installment of his salary prevents recovery of any further damages in a subsequent action.16 Where such contract is treated as continuing on the theory of constructive service, recovery of one installment of salary does not prevent subsequent recovery of installments thereafter due.17 Merger applies to decrees which are not personal judgments. A decree in foreclosure finding the amount due on the note secured by the mortgage merges the note.18 A foreclosure of a mortgage in which no attempt is sought to enforce the personal liability of the grantee who has assumed the mortgage debt, as a part of the purchase price of the property conveyed to him, does not, however, merge the contract of such mortgagee.19 The merger of a note in a judgment rendered thereon does not prevent the subsequent use of the note as evidence, as in an action in ejectment upon the trust deed securing it.20 In order to operate as merger the judgment must be rendered in an action between the parties to the contract or their legal representatives. An unsatisfied judgment against one of two or more joint and several obligors is no bar to an action against the other.21 Under statutes which under certain specified circumstances make joint contracts joint and several in legal effect, a judgment against one or two or more joint contractors does not, if unsatisfied, merge the contract as to the others.22 To operate as a merger the judgment must be based on the contract as the cause of action. A judgment on an official bond for one term does not merge a bond given by the same official for another term, the cause of action on the latter being a different and distinct breach.23 A judgment rendered in an action for wages earned does not merge a subsequent claim for damages for discharge.24 A judgment in a cause of action based on a trust relation does not merge the cause of action so as to destroy the trust relation.25 A judgment on a coupon for interest attached to a bond establishes the validity of the bond,26 but does not merge the bond.
1 Gould v. Hayden, 63 Ind. 443; Bertram v. Waterman, 18 la. 529. 132
2 Price v. Bank. 62 Kan. 735; 84 Am. St. Rep. 419; 64 Pac. 637.
3 Springs v. Pharr, 131 N. C. 191; 92 Am. St. Rep. 775; 42 S. E. 590.
4 Turner v. Stewart, 51 W. Va. 493; 41 S. E. 924.
5 National Foundry and Pipe Works v. Water Supply Co., 183 U. S. 216; affirming 105 Wis. 48; 81 N. W. 125; Howell v. Goodrich, 69 111. 556; Remington Paper Co. v. Hudson, 64 Kan. 43; 67 Pac. 636; Aiken v. Robinson, 108 La. 267; 32 So. 415; Packham v. Ins. Co., 91 Md. 515; 80 Am. St. Rep. 461; 46 Atl. 1066; 50 L. R. A. 828; Thompson v. Ellsworth, 39 Mich. 719; Traflet v. Ins. Co., 64 N. J. L. 387; 46 Atl. 204; Young v. Farwell. 165 N. Y. 341; 59 N. E. 143; James v. Allen Co., 44 O. S. 226;
58 Am. Rep. 821; 6 N. E. 246.
6 Berry v. Ry., 89 Me. 552; 36 Atl. 904.
7 Redden v. Bank, 66 Kan. 747; 71 Pae. 578.
8 Kansas, etc., Ry. Co. v. Moon. 66 Ark. 409; 50 S. W. 996; Oil. etc., Co. v. Koen, 64 O. S. 422; 60 N. E. 603.
9 Smith v. Brown, 99 N. Y. 377; 52 Am. Rep. 34.
10 Willoughby v. Furnishing Co., 96 Me. 372; 52 Atl. 756.
11 L. Bucki, etc., Co. v. Lumber Co.. 109 Fed. 411; 48 C. C. A. 455; Cockley v. Brucker, 54 O. S. 214; 44 N. E. 590.
12 De Weese v. Smith, 97 Fed. 309.
13 Barr v. Henderson, 107 La. 323; 31 So. 762.
14 Nelson v. Hiatt. 38 Neb. 478; 56 N. W. 1029.
15 See Sec. 1442.
16 Beckham v. Drake, 2 H. L. 579; Archard v. Hornor, 3 Car. &P. 349; Alie v. Nadeau, 93 Me. 282; 74 Am. St. Rep. 346; 44 Atl. 891; Olmstead v. Baeh, 78 Md. 132; 44 Am. St. Rep. 273; 22 L. R. A. 74; 27 Atl. 501; Howard v. Daly, 61 N. Y. 362; 19 Am. Rep. 285; James v. Allen County. 44 O. S. 226; 58 Am. Rep. 821; 6 N. E. 246; Allen v. Text-
Book Co., 201 Pa. St. 579; 88 Am. St. Rep. 834; 51 Atl. 323; same case, but with controlling facts in doubt upon the record, Allen v. Engineers' Co., 196 Pa. St. 512; 46 Atl. 899; Willoughby v. Thomas, 24 Gratt. (Va.) 521.
17 Strauss v. Meertief, 64 Ala. 299; 38 Am. Rep. 8; McMullan v. Dickinson Co.. 60 Minn. 156; 51 Am. St. Rep. 511: 27 L. R. A. 409; 62 N. W. 120; Williams v. Luckett. 77 Miss. 394; 26 So. 967.
18 Brigel v. Creed, 65 O. S. 40; 60 N. E. 991.
19 Washington Life Ins. Co. v. Marshall. 56 Minn. 250; 57 N. W. 658; McRae v. Sullivan, 56 Minn. 266; 57 N. W. 659.
20 Brown v. Schintz, 203 111. 136;
67 N. E. 767.
21 Booth v. Huff, 116 Ga. 8; 94 Am. St. Rep. 98; 42 S. E. 381; Giles v. Canary, 99 Ind. 116; Cor-neille v. Pfeiffer. 26 Ind. App. 62; 59 N. E. 188; Hawkes v. Phillips, 7 Gray (Mass.) 284; Hix v. Davis,
68 N. C. 231; Clinton Bank v. Hart, 5 O. S. 33; Lowry v. Hardwick, 4
Humph. (Tenn.) 188; Sawyer v. White, 19 Vt. 40.
22 Finch v. Galigher, 181 111.625; 54 N. E. 611; Bute v. Brainerd, 93 Tex. 137; 53 S. W. 1017.
23 Brady v. Pinol County, - Ariz. -; 71 Pac. 910.
24 Chicago, etc., Ry. v. Yawger, 24 Ind. App. 460; 56 N. E. 50.
25 New Orleans v. Warner, 175 U. S. 120.
26 Garden City v. Bank, 65 Kan. 345; 93 Am. St. Rep. 284; 69 Pac. 325.