205 A.D. 89 | N.Y. App. Div. | 1923
The substance of the complaint in this action is that the president of the plaintiff, one William F. Eissing, opened a deposit account in his name as trustee with this defendant and thereafter wrongfully and fraudulently deposited therein checks drawn to the order of and the property of the plaintiff corporation and thereafter withdrew the amounts represented by such deposits and converted the same to his own use. The charge against this defendant is that it permitted him so to do. This action was commenced on
The trial resulted in a dismissal of the complaint. The court made findings of fact and conclusions of law which are printed in the record. He found that all of the persons interested in the plaintiff were parties to that action; that the plaintiff in this action was a mere shell the control of which was in the real plaintiff, Frank F. Jones, and that he was using the plaintiff in this action as an instrument to further his purposes; that the business done by the plaintiff corporation was usually done with money furnished by and for the individual account of persons interested in said chemical business and said corporation was used as a vehicle by which to conduct said business; that its business was made a part of and confused with the individual transactions of the alleged members thereof and their representatives but with the consent or acquiescence of the so-called members of the plaintiff corporation. The funds of the plaintiff corporation were confused with the funds of the individual alleged members thereof by and with the consent or acquiescence of all the alleged members of plaintiff corporation. All the parties in interest in plaintiff corporation had knowledge of or participated in or acquiesced in or consented to the manner in which the business of plaintiff corporation was conducted and the method of handling its funds. And as conclusions of law the court found that plaintiff is estopped to complain of acts in which all its members acquiesced, participated or consented to, in' the conduct of its business. Plaintiff was not entitled to an accounting from the defendants William F. Eissing, Emma K. Eissing, William F. Eissing Company, Inc., and William F. Eissing Manufacturing Company, Inc., and none of the par
The court, in denying the defendant’s motion, wrote the following brief memorandum: “ It seems useless to grant leave to serve an amended answer to set up another judgment when that judgment will not be a bar to this action. It was not rendered in an action between the same parties or between parties to whom the parties to this action are privies. The subject matter may be the same. That is not sufficient.”
As will be seen by this memorandum, the claim of the defendant here is that the matters which are to be litigated in this action are res judicata. Under the complaint in the former action the plaintiff sought to recover from the defendants in that action the same sum of money which it now seeks to recover from this defendant. The basis of its claim in that action was that the defendant William F. Eissing had converted those funds to his own use. The basis of the recovery sought in this action is the claim that this defendant permitted said Eissing to make such conversion. It, therefore, seems apparent that the principal subject of controversy in this action is the question as to whether Eissing was guilty of converting funds belonging to the plaintiff, for if he made no such conversion then the defendant could not have permitted such conduct upon his part. Therefore, it will be necessary for the plaintiff in this action to establish what it has failed to prove in the other action, to wit, that Eissing converted to his own use funds belonging to it. “ The rule of res judicata does not rest wholly on the narrow ground of a technical estoppel, nor on the presumption that the former judgment was right and just; but on the broad ground of public policy, that requires a limit to litigation, a curb to the litigiousness of the obstinate litigant. Like the Statute of Limitations, it is a rule of rest.” (Sargent & Co. v. New Haven Steamboat Co., 65 Conn. 116, 126.) It seems, therefore, that if these facts have been litigated in such a manner that it may be said as to them that the plaintiff has had its day in court and has failed to establish them, then litigation should end as to parties whose liability depends upon those facts, and plaintiff should not have another opportunity of establishing them; or in other words, to have another day in court in the same litigation. The question, therefore, is, was the prior litigation a binding determination so that plaintiff may not again attempt to litigate that
In Emma Silver Mining Co., Ltd., v. Emma Silver Mining Co. of N. Y. (7 Fed. Rep. 401, 408) Judge Choate had before him the question as to whether in an equitable action to rescind the sale for alleged fraud a judgment of law in favor of the agent who negotiated the sale was available as a bar to the suit and he held that it was and in the course of his opinion said: “ He has had his day in court, and it is immaterial whether he has chosen to test his right as against the principal or the agent in the transaction, provided the issue to be tried was identical as against both.” The same comment may be made upon this case. Although the defendant in this action was not a party to the other action, it is privy to the alleged conversion
In Spencer v. Dearth (43 Vt. 98, 117) the court stated that a judgment against the plaintiff on the ground of payment in an action against one of several makers of a joint and several note was a bar to actions against the others. In the course of its opinion it said: “ In such trial and adjudication upon matter of defense to the whole merits of the plaintiff’s claim, such as payment of the note in full, and final judgment is against the plaintiff, such judgment is not on grounds personal to the maker of the note the plaintiff had elected to sue, but it is also in effect on the ground that he has no cause of action against the other makers of the note or either of them. And if such judgment be not held as conclusive evidence against the plaintiff, in a subsequent suit against the other maker or makers of the note where the identical matter adjudicated in the former suit is involved in the latter, it would follow that the payee or indorsee of such note could have as many opportunities to litigate such matter as there were makers of the note.” (See, also, Bigelow v. Old Dominion Copper Co., 225 U. S. 111, 127; 23 Cyc. 1213; Black Judg. [2d ed.] § 781; Featherston v. N. & C. Turnpike, 71 Hun, 109.)
The question of William F. Eissing’s conversion of the plaintiff's money has been litigated and has been decided adversely to the plaintiff. The defendant’s liability here is predicated upon a claim that it permitted Eissing to make such conversion. The plaintiff, therefore, having had its day in court and having failed upon that issue against a party who was a necessary fink in its claim against the defendant, the judgment in that action should be conclusive upon that issue. The question is similar in character to that involved in Pangburn v. Buick Motor Co. (211 N. Y. 228). That was an action against a principal and his servant for personal injuries received in a motor car accident. The jury rendered a verdict exonerating the chauffeur who was driving the car but held the owner of the car, the principal, hable. The court pointed out that in that case there was actually a verdict in favor of both of the defendants and that judgment to that effect might have been entered. That course not having been pursued, the Court of Appeals reversed the judgment in favor of the plaintiff and against the principal and directed a new trial. The same principle applies to this case. The court having found that William F. Eissing was not guilty of wrongdoing so as to create a liability in' favor of the plaintiff against him, this defendant cannot be held for acquiescing or assisting in such wrongdoing. The motion should have been granted.
Kelly, P. J., Young and Kapper, J'J., concur.
Order reversed on the law, with ten dollars costs and disbursements, and motion granted, without costs.