Albert Bigelow v. Old Dominion Copper Mining Smelting Company

• Decision Date: 27 May 1912
• Docket Number: Nos. 191 and 192,s. 191 and 192
• Citation: 56 L.Ed. 1009,32 S.Ct. 641,225 U.S. 111
• Parties: ALBERT S. BIGELOW, Plff. in Err., v. OLD DOMINION COPPER MINING & SMELTING COMPANY
• Court: U.S. Supreme Court

225 U.S. 111

32 S.Ct. 641

56 L.Ed. 1009

ALBERT S. BIGELOW, Plff. in Err.,

v OLD DOMINION COPPER MINING & SMELTING COMPANY.

Nos. 191 and 192.

Argued March 5 and 6, 1912.

Decided May 27, 1912.

[Syllabus from pages 111-113 intentionally omitted] Messrs. John C. Spooner, George Rublee, Joseph P. Cotton, Jr., Charles H. Tyler, Owen D. Young, Burton E. Eames, and William C. Rice for plaintiff in error.

[Argument of Counsel from pages 113-124 intentionally omitted]

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Messrs. Louis D. Brandeis and Edward F. McClennen for defendant in error.

Mr. Justice Lurton delivered the opinion of the court:

The question upon which these cases have been brought to this court is whether the Massachusetts court gave to a New York judgment pleaded as bar to a Massachusetts suit that full faith and credit required by the 1st section of article 4 of the Constitution of the United States, and § 905, Revised Statutes (U. S. Comp. Stat. 1901, p. 677), enacted in pursuance thereof.

The Old Dominion Copper & Smelting Company, hereafter designated the Copper Company, a corporation

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of New Jersey, filed two bills in an equity court of Massachusetts against the plaintiff in error, Albert S. Bigelow, to recover secret profits realized by him and an associate, one Lewisohn, as organizers or promoters of the Copper Company, in selling the mining property of another corporation, called the Baltimore Company, and certain neighboring properties, designated in the transcript, 'outside properties.'

The two sales were for distinct considerations. The bills alleged that when these sales were made the Copper Company was under the absolute control of the two promoters, Bigelow and Lewisohn, and that they divided the profits between them. The fundamental facts in each case were the same. The two cases were heard together in the state courts, and are now heard as if one case, though upon separate writs and distinct records.

Demurrers were interposed and overruled. The allegations of the bills are fully shown in 188 Mass. 315, 108 Am. St. Rep. 479, 74 N. E. 653, where one of the cases was considered on demurrer. Answers were then filed and a great mass of evidence taken. Upon a full hearing the allegations of the respective bills were held to be sustained by the proofs, and final decrees were rendered for the plaintiff in sums aggregating $2,178,673.33. The decrees were affirmed in the supreme judicial court.

The Federal question, upon which the judgment of this court is sought, arose in this wise: Bigelow, the plaintiff in error here, was a citizen of Massachusetts, and was therefore sued in the courts of that state. Lewisohn, who was Bigelow's associate promoter, was a citizen of New York. He was therefore sued separately in the circuit court of the United States for the southern district of New York. The bills filed there were identical in every essential with those filed in Massachusetts. In the two sets of bills it was alleged that Bigelow and Lewisohn were joint promoters of the Copper Company, and

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as such made the sales to it while under their entire control, and that they had realized fraudulent profits. Demurrers were interposed in the New York cases, which were sustained, and the bills dismissed. These judgments were affirmed in the circuit court of appeals for the second circuit. The judgment in one of these cases, that relating to the sale of 'outside properties,' was brought to this court by certiorari and affirmed, the opinion being by Mr. Justice Holmes (210 U. S. 206, 52 L. ed. 1025, 28 Sup. Ct. Rep. 634), where the facts of the case are stated.

The final decree in one of the New York cases was pleaded in a supplemental answer in the pending Massachusetts cases as a bar to the suits against Bigelow. The Massachusetts court adjudged that Bigelow was neither a party nor a privy to the New York suits, and was therefore not protected by the judgment therein.

To conclude Bigelow by the New York judgment, it must appear that he was either a party or a privy. That he was not a party to the record is conceded. He had no legal right to defend or control the proceedings, nor to appeal from the decree. He was therefore a stranger, and was not concluded by that judgment as a party thereto. That he was indirectly interested in the result because the question there litigated was one which might affect his own liability as a judicial precedent in a subsequent suit against him upon the same cause of action is true, but the effect of a judgment against Lewisohn as a precedent is not that of res judicata, and the Massachusetts court was under no obligation to follow the decision as a mere judicial precedent. Nor would assistance in the defense of the suit, because of interest in the decision as a judicial precedent which might influence the decision in his own case, create an estoppel as to Bigelow. Stryker v. Goodnow (Stryker v. Crane) 123 U. S. 527, 31 L. ed. 194, 8 Sup. Ct. Rep. 203. Also Rumford Chemical Works v. Hygienic Chemical Co. 215 U. S. 156, 54 L. ed. 137, 30 Sup. Ct. Rep. 45.

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But it is said that if Bigelow was not in every sense a party, he was privy to Lewisohn, who was, and that the estoppel in the adverse judgment in the suit against Lewisohn protected Bigelow as well.

But would that judgment, if it had been for the plaintiff in that case, have bound Bigelow in a subsequent suit by the same plaintiff, upon the same facts? If not, upon what principle may he claim the advantage of it as a bar to the present suit? The cause of action was one arising ex delicto. It was several as well as joint. The right of action against both might have been extinguished by a settlement with one, or by a judgment against one, and satisfaction. But the claim has come in substance to this: that although the plaintiff had a remedy against Lewisohn and Bigelow severally or jointly, a failure to recover in an action against one is a bar to his action against the other, the facts being the same, although there has been no satisfaction for the injury done. The only basis upon which such a result can be asserted is that Bigelow would have been bound by the judgment if it had been adverse to Lewisohn, and may therefore shelter himself behind it, since it was favorable to his joint wrongdoer.

It is a principle of general elementary law that the estoppel of a judgment must be mutual. Brooklyn & N. R. Co. v. National Bank, 102 U. S. 14, 26 L. ed. 61; Keokuk & W. R. Co. v. Missouri, 152 U. S. 301, 38 L. ed. 450, 14 Sup. Ct. Rep. 592; Freeman, Judgm. § 159; 1 Greenl. Ev. 13th ed. § 524. The mutuality of estoppel by judgment is fully recognized in both the New York and Massachusetts decisions: Atlantic Dock Co. v. New York, 53 N. Y. 64; Brigham v. Fayerweather, 140 Mass. 411, 415, 5 N. E. 265; Nelson v. Brown, 144 N. Y. 384, 39 N. E. 355.

An apparent exception to this rule of mutuality had been held to exist where the liability of the defendant is altogether dependent upon the culpability of one exonerated in a prior suit, upon the same facts when sued by the

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same plaintiff. See Portland Gold Min. Co. v. Stratton's Independence, 16 L.R.A.(N.S.) 677, 85 C. C. A. 393, 158 Fed. 63, where the cases are collected. The unilateral character of the estoppel of an adjudication in such cases is justified by the injustice which would result in allowing a recovery against a defendant for conduct of another, when that other has been exonerated in a direct suit. The cases in which it has been enforced are cases where the relation between the defendants in the two suits has been that of principal and agent, master and servant, or indemnitor and indemnitee.

The principle upon which one may avail himself of the effect of a judgment adverse to the plaintiff in a former suit against the immediate actor, is thus stated in New Orleans & N. E. R. Co. v. Jopse, 142 U. S. 18, 24, 27, 35 L. ed. 919, 923, 925, 12 Sup. Ct. Rep. 109.

'It would seem on general principles that, if the party who actually causes the injury is free from all civil and criminal liability therefor, his employer must also be entitled to a like immunity. . . . If the immediate actor is free from responsibility, because his act was lawful, can his employer, one taking no direct part in the transaction, be held responsible? . . . The question carries its own answer, and it may be generally affirmed that if an act of an employee be lawful, and one which he is justified in doing, and which casts no personal responsibility upon him, no responsibility attaches to the employer therefor.'

It is too evident to need argument that the remedy of this plaintiff does not depend upon the culpable conduct of Lewisohn, but upon Bigelow's own wrong, whether alone or in co-operation with Lewisohn. The liability of each was several as well as joint, and a failure to recover against one is no bar to a suit against the other upon the same facts. But a judgment not only estops those who are actually parties, but also such persons as were represented by those who were or claim under or in privity with them.

What is privity? As used when dealing with the es-

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toppel of a judgment, privity denotes mutual or successive relationship to the same right of property. Litchfield v. Goodnow (Litchfield v. Crane) 123 U. S. 549, 31 L. ed. 199, 8 Sup. Ct. Rep. 210. The ground upon which privies are bound by a judgment, says Prof. Greenleaf, in his work upon Evidence, 13th ed. vol. 1, § 523, 'is, that they are identified with him in interest; and wherever this identity is found to exist, all are alike concluded. Hence, all privies, whether in estate, in blood, or in law, are estopped from litigating that which is conclusive upon him with whom they are in privity.'

But it is said that the relationship of joint tort feasors is such as to constitute privity, and that a judgment in a suit in favor of one upon the same identical cause of action is a bar to a suit by the same plaintiff against the...