struction of any state law or constitution, or of any local law, usage, or custom, but only questions of common or equity law, involved. The present question presented is, is the plea sufficient to bar the action? The theory of complainants seems to be that a trial and decision by a state court, though final, does not bar an action in the federal courts, unless the construction of a state law or constitution, or some local law, usage, or custom, is involved, but that in cases in which general commercial law, the general principles of equity, and the like, in which the courts of the United States follow their own interpretations and decisions of the law, and are not bound by the interpretations and decisions of the state courts, the decisions of the state courts do not bar actions in the federal courts for the same cause of action, but they become merely precedents, which may or may not be followed by the federal courts. Such a view of the law cannot be maintained successfully. The courts of the United States have no power to review, reverse, or revise or change the judgments of the state courts, no matter how erroneous they may be, except in such cases as may be appealed or taken by writ of error to the supreme court of the United States from the courts of last resort in the states. If the opinions, decrees, and judgments of one class of courts are not to be respected by another class, we should have endless turmoil and disorder, often resulting in violence and bloodshed. The sheriff and his posse would come in contact with the marshal and his posse, and our form of government would prove a curse, instead of a blessing. State-court judgments are as much entitled to respect from federal courts as federal courts from those of the state. A precedent is one thing; a judgment, another. The decision of one case may become a precedent in another case. This depends upon the analogies of the cases, but the cases are and must be different. The question of res adjudicata is not like a precedent, in fact or principle. A precedent may apply to it, and control it, but the plea of res adjudicata belongs to but one cause of action. There may be, and must be, two or more suits in the same forum, or in different forums, but it must, in each suit, be essentially the same cause of action. In Stout v. Lye, 103 U. S. 68, Chief Justice Waite said:

"Mr. Justice Grier, speaking for the court in Peck v. Jenness, said: 'It is a doctrine of law, too long established to require a citation of authorities, that, where a court has jurisdiction, it has a right to decide every question which occurs in the cause, and whether its decisions be correct or otherwise, its judgment, till reversed, is regarded as binding on every other court, and that where the court, and the right of the plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceeding in another court.' 7 How. 612–624.”

In the case we have, the complainants selected their forum, and that forum was the state court, and prosecuted their suit therein to a final decree, and now seek to repudiate the decision of their own tribunal, and have this cause tried anew by a different one. They are estopped from so doing. Justice Field says:

"It is undoubtedly settled law that a judgment of a court of competent jurisdiction upon a question directly involved in one suit is conclusive as to that question in another suit between the same parties. But, to this operation of the judgment, it must appear, either upon the face of the record, or be shown

by extrinsic evidence, that the precise question was raised and determined in the former suit." Russell v. Place, 94 U. S. 606-610.

The maxim applicable is, "Nemo debet bis vexari pro eadem causa."

Another position of complainants, in denying the sufficiency of the plea, is that there was no final hearing and decision of the cause in the state courts upon its merits; there was no issue upon the facts, but only upon the law. It is true that the cause was decided upon a demurrer to the bill, but the decree was final, and ended the life of the bill. It was dismissed. A demurrer admits the truth of every allegation in the bill which is properly pleaded. It is for hearing as though every material fact alleged were proven. The merits of the cases, as stated by complainants, must be considered and passed upon. The answer of the court to complainants' case was: "Take it for granted that every essential fact you state is true, the law can give you no relief." It is the failure of the facts to make out a case which bars the relief. They need more or better facts, not other and different law. But it is determined by authority as well as reason. Aurora City v. West, 7 Wall. 82, decides that—

"Where a judginent is rendered on the merits, whether on demurrer, agreed statement, or verdict, it extends to every material allegation or statement which, having been made on one side and denied on the other, was at issue in the cause, and was determined in the course of the proceedings."

If the averments of defendant's plea be sustained by proof, it is clear, so it seems, that complainants' suit is barred by the decree in the state court, and the plea must be held to be sufficient.

Defendant brings along with its plea a copy of the record of the cause in the state courts, as is admitted by the parties. An examination of this copy must convince the mind that the suit in the state court has not only the same parties and the same subject-matter as in the suit in this court, but that the relief sought is the same in each. The framework of the two bills is the same, but complainants have leave to join issue upon the plea, if they so desire.

RUGAN et al. v. SABIN et al.

(Circuit Court of Appeals, Eighth Circuit. December 6, 1892.)

No. 164.

1. EQUITY-RESCISSION OF SALE-Fraud-NOTICE.

An attorney misrepresented to his principal, who resided in another state, the amount of liens on certain property, and the value of the principal's interest therein, and thereby induced the principal to sell at a grossly inadequate price to a supposed third party, with whom the attorney was in fact jointly interested. Another attorney notified the principal of the true condition of affairs within 40 days thereafter, but the principal, to whom the first attorney had written to persuade him that the sale was for his interest, did not return the purchase money, nor announce his intention to repudiate the sale, but remained silent until his death, more than seven years thereafter, during which time the property had greatly increased in value. Held, that he had elected to ratify, and that the sale could not be rescinded by his heirs.

2. SAME-LIMITATIONS.

Consol. St. Neb. p. 971, § 4548, limits actions for relief on the ground of fraud to four years after its discovery. In that state the distinction between the forms of actions at law and suits in equity has been abolished. Held, that the statute should control a federal court sitting in equity, and that the four years begin to run from the discovery of any facts sufficient to put a person of ordinary intelligence on an inquiry, which, if pursued, would lead to discovery of the fraud. Parker v. Kuhn, 32 N. W. Rep. 74, 21 Neb. 413; Wright v. Davis, 44 N. W. Rep. 490, 28 Neb. 479,-approved. 3. SAME DISABILITIES AND EXCEPTIONS.

Where a vendor has been induced to sell by fraud, and has failed to rescind the sale after discovery, the facts that he was at the time credulous, and so feeble in mind and body that he was unfit to transact business, are not sufficient to prevent the running of the statute, since such disability is not included among those to which the statute expressly gives this effect.

Appeal from the Circuit Court of the United States for the District of Nebraska.

In Equity. Bill by Eunice Rugan, Louvira Hart, and Martha E. Edwards against Robert W. Sabin, Gabriel Beachley, and Mary L. Sabin, to set aside a sale of land, and for further relief.

Demurrers

to the bill were sustained. Complainants appeal. Affirmed. Statement by SANBORN, Circuit Judge:

The appellants brought suit in the court below to set aside a sale of 80 acres of land made by their father to the appellees Robert W. Sabin and Gabriel Beachley, and to recover of them and Mary L. Sabin, the wife of Robert, a portion of the land which they still hold, and the proceeds of a portion that has been sold. The appcllees interposed demurrers to the bill. The court below sustained the demurrers, and dismissed the bill, and this is the supposed error of which appellants complain. The following is the state of facts disclosed by the bill:

The appellants are the only heirs at law of Charles B. Holt, who died intestate March 4, 1889. Holt resided in Illinois, and owned 160 acres of land near Beatrice, Neb., upon which there were certain tax liens, and in the fall of 1880 he went to Nebraska, and conveyed an undivided half of this land to the appellee Robert W. Sabin, for the benefit of himself and his parther, J. A. Smith, who agreed to institute and carry through the courts of Nebraska an action against the holder of the tax liens for the recovery of the laud. They commenced the action, and on December 24, 1883, obtained a final decree for its recovery upon the payment of $403.55 on account of the tax liens, which was then paid. On April 13, 1882, after this action for the recovery of the lands had been decided in their favor in the trial court, and while it was pending on a writ of error in the supreme court of the state, Sabin, with the knowledge of appellee Beachley, and for the purpose of ob taining a conveyance of Holt's undivided half interest in said land, represented to him that it was doubtful which side would be successful in said action; that, if they succeeded, they would be compelled to pay $1,000 for taxes and $300 for improvements; that he had tried to find, and had finally obtained, a purchaser for Holt's interest in the land, who would give $800 for his quitclaim deed, and relieve him from all further cost, liability, or trouble in the matter; that this purchaser was Beachley, and that he thought the offer a good one, and advised him to accept it,-while the facts, which Sabin well knew, were that the title of Holt and Sabin to the land was perfect; the issue of the action was not doubtful; the aggregate amount of the liens they would have to pay if successful did not exceed $335.87, as the jury on the trial had found that they were entitled to recover of the defendant $515.16 as rents and profits; that the $800 was not a good offer, but a grossly inadequate price for Holt's interest in the land, which was worth $4,000; and that Sabin had not tried to find a purchaser, and was not acting for Holt in selling his land, but was jointly interested with Beachley in its purchase from him, but concealed this fact from Holt, and pretended to be acting in

his behalf. At this time Holt was about 70 years old, and the bill alleges that for 10 years prior to March 4, 1889, he was so feeble in mind and body that he was entirely unfit and unable to transact any business whatever, and from age and weakness possessed such a disposition that he was easily imposed upon, and implicitly trusted those he thought his friends, and that he relied upon Sabin as his attorney, friend, and adviser; but it also alleges that he walked all the way from Illinois to Beatrice, Neb., and made the contract for the commencement of his suit in the fall of 1880. Holt, who was ignorant of the value of his land, and of all the facts misrepresented by Sabin, was induced by his false representations to convey his interest in the land to Beachley for the $800, and under this conveyance the appellees hold a portion of the land and the proceeds of that not held by them.

After Holt made this conveyance, J. A. Smith, who was also one of his attorneys in prosecuting the action for the recovery of the land, wrote him three letters, the last of which was dated May 18, 1882, in which he stated to him that Beachley had purchased the land for the joint use of himself and Sabin; that the consideration paid by Beachley was inadequate; that it. appeared from the records that Sabin had sold his own 24 acres of said. tract for $500; that Smith himself had paid L. W. Billingsley $700 for the 40 acres of said tract owned by the latter; that Smith bimself would have paid Holt $1,400 for the interest in said tract which was conveyed to Beachley, expecting to have doubled his money by such purchase; that Smith did not believe that Holt ever parted with his interest in the land for $800 with a knowledge of all the facts in the case, and inquired of Holt whether or not Sabin had ever notified him that, besides winning the land in the lower court, Sabin and Holt had been awarded $515 by the jury for the rents and profits of the premises in question.

On the 15th day of May, 1832, Sabin wrote and mailed Holt a letter, of which the following is a copy:

"Beatrice, Neb., May 15, 1882. "Charles B. Holt, Esq., Flora, Ill.-Dear Sir: Since writing, I heard that there were some parties here that intend to try and get you into some kind of litigation, and get the money you have away from you. I don't know that it is so, but I fear it; and I write to put you on your guard as a friend, and be watchful and careful. I would not have anything to do with any other parties here, because I think they want to find out where you are, and may get you into trouble. If I know anything certain I will write you. I would keep out of their way. I don't like to mention names at present, but if I think it necessary will write you more particular. If you get any letters you might send them to me, and I will write you what is best to do.

"Your friend, as ever,

R. W. Sabin."

The appellants knew nothing about these transactions until these letters of Smith and Sabin were discovered, after the death of Holt, in 1889. They offer to return to the appellees the $800 paid to Holt in 1882, with interest, and all taxes paid by them upon the land since that date, with interest, and ask to recover of them that portion of the land they still own, and the proceeds of the portion sold.

Nathan K. Griggs, Samuel Rinaker, Robert S. Bibb, and Julius A. Smith, for appellants.

Leander M. Pemberton, for appellees.

Before CALDWELL and SANBORN, Circuit Judges, and SHIRAS, District Judge.

SANBORN, Circuit Judge, (after stating the facts.) The basis of this suit is the fraudulent misrepresentation which induced the sale and conveyance of May 15, 1882. The relief sought, so far as these appellees are concerned, is the rescission of the conveyance and contract of sale, and the restoration of the parties to the condition in v.53F.no.4-27

which they would have been if the contract had never been made. An attorney or agent cannot hold property in which he becomes interested as a purchaser, while he pretends to negotiate the sale as the agent and friend of the vendor; and the glaring fraud the bill discloses entitled Mr. Holt to return the purchase price he had received, and to recover back the land he had conveyed, immediately upon the discovery of the fraud. This discovery, however, while it gave him the privilege, also imposed upon him the duty of electing then whether he would rescind or ratify his contract. When a vendor discovers that his purchaser has induced him to part with his property by fraud, he has the option to return the purchase price, and recover back his property, or retain the price and ratify the sale. To him the law justly gives the choice of the course he will pursue, but it demands of him that he make his election with diligence, promptly; and declares that such election, when once made, cannot be revoked or modified. He cannot speculate upon his option. He cannot hold his election in abeyance, so that he may subsequently rescind if the property rises, and ratify if it depreciates, in value. Indeed, he cannot, under the law, if he would, avoid an immediate election. If he would avoid his conveyance and repudiate his contract, he must promptly announce this intention, and return the consideration he received, to the end that the parties may be put in statu quo before subsequent transactions render such action impossible. If he does nothing; if he remains silent and takes no action,-his very silence and his retention and use of the purchase money for any considerable length of time after the disvovery of the fraud constitute a complete, irrevocable ratification of his contract, and make it as binding and effectual as though he had deliberately entered into it after full knowledge of all the facts, uninfluenced by any fraudulent practices. Thus, in Grymes v. Sanders, 93 U. S. 55, 62, Mr. Justice Swayne said: "Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his purpose, and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to have waived the objection, and will be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsisted. These remarks are peculiarly applicable to speculative property like that here in question, which is liable to large and constant fluctuations in value. Thomas v. Bartow, 48 N. Y. 200; Flint v. Woodin, 9 Hare, 622; Jennings v. Broughton, 5 De Gex, M. & G. 139; Lloyd v. Brewster, 4 Paige, 537; Railroad Co. v. Row, 24 Wend. 74; Minturn v. Main, 7 N. Y. 220; 7 Rob. Pr. p. 432, c. 25, § 2: Campbell v. Fleming, 1 Adol. & E. 41; Sugd. Vend. (14th Ed.) 335; Diman v. Railroad Co., 5 R. I. 130."

Nor can a vendor industriously close his eyes, stop his ears, or refuse to believe the evidence of his senses, when notice of the fraudulent practices of a purchaser is placed before him, and thus escape from the application and effect of this principle of law. Notice of facts and circumstances which would put a man of ordinary intelligence and prudence on inquiry is, in the eye of the law, equivalent to knowledge of all the facts a reasonably diligent inquiry would disclose. "Whatever is notice enough to excite attention, and put the party on his guard, and call for inquiry, is notice of everything to which such inquiry might have led. Where a person has suf