Frost v. Bankers Commercial Corp., 148

• Decision Date: 08 February 1952
• Docket Number: Docket 22212.,No. 148,148
• Citation: 194 F.2d 505
• Parties: FROST et al. v. BANKERS COMMERCIAL CORP.
• Court: U.S. Court of Appeals — Second Circuit

194 F.2d 505 (1952)

FROST et al. v. BANKERS COMMERCIAL CORP.

No. 148, Docket 22212.

United States Court of Appeals Second Circuit.

Submitted January 14, 1952.

Decided February 8, 1952.

Alfred S. Julien, New York City, for plaintiffs-appellants.

Robert I. Rogin, New York City, for defendant-appellee.

Before AUGUSTUS N. HAND and CLARK, Circuit Judges, and BRENNAN, District Judge.

CLARK, Circuit Judge.

This is an appeal from a summary judgment for defendant in an action to recover freight moneys advanced, granted by the District Court on the ground that the action was barred by a previous judgment for defendant in the New York Supreme Court on the same cause. The transactions giving rise to the dispute sued on here and in the state court are identical. In 1943, Republic Chemical Corporation, with whom the present plaintiffs admit privity, entered into an affreightment contract with Intercontinental Steamship Lines, in which the latter agreed to transport certain cargo to South Africa on its schooner, Constellation. Plaintiffs in South Africa were the purchasers from Republic. Republic delivered the cargo and prepaid the shipping charges — as well as the insurance which is not in issue here — and Intercontinental transferred the moneys over to defendant Bankers Commercial Corporation under a prior loan contract providing for the latter's immediate receipt of all such payments by shippers. Sometime thereafter the voyage was cancelled and Republic sued in the state court for an accounting. Justice Pecora dismissed the complaint following hearing on the merits on the ground that Bankers had refunded the crucial moneys to the shipping line. Republic Chemical Corp. v. Bankers Commercial Corp., Sup., 73 N.Y.S.2d 318, affirmed 269 App.Div. 736, 54 N.Y.S.2d 396.

Plaintiffs seek to escape the binding effect of this judgment by advancing fundamentally different theories of recovery than that sued on in the state court. These are primarily drawn from certain suggestions of Bankers' liability for tortious interference with the shipper's contract rights advanced in Silva v. Bankers Commercial Corp., 2 Cir., 163 F.2d 602, wherein we affirmed a judgment for another shipper in a similar action arising from the same voyage cancellation. The district judge held that the "wholesome principle of res judicata is not to be overcome so easily." 11 F.R.D. at page 196. We agree.

Bar of the plaintiffs here depends, in traditional phrase, upon whether the claim presented in this action is based upon the "same cause of action" as that previously litigated. A new ground for the same relief will not of itself work the magic transformation, Grant v. Greene Consol. Copper Co., 169 App.Div. 206, 216, 217, 154 N.Y.S. 596, affirmed 223 N.Y. 655, 119 N.E. 1046, nor will a shift from equitable to legal remedies. Young v. Farwell, 165 N.Y. 341, 345, 59 N.E. 143. A more fundamental distinction, one looking to the legally significant facts out of which the dispute arises, is required. Thus where, as here, the transaction is the same, plaintiff is barred from instituting suit on any claim founded on the same evidentiary elements as those on which the previous claim was based; where recovery in both requires proof of the same facts, the prior judgment is res judicata as to the subsequent action. Fox v. Employers' Liability Assur. Corp., Ltd., of London, England, 239 App. Div. 671, 674, 675, 268 N.Y.S. 536; Lipkind v. Ward, 256 App.Div. 74, 78, 79, 8 N.Y.S.2d 832; Buchanan v. General Motors Corp., 2 Cir., 158 F.2d 728, 730.

Plaintiffs' claim of a distinction in the requisite proof for the suit here and that in the state court grows out of the theories of recovery advanced. They allege, in substance, that the state suit was one for an accounting, while here the claim is founded on the defendant's tort in cancelling Intercontinental's scheduled voyage and using the moneys for a wrongful purpose. Allegedly the repayment of the moneys...