Bank of Mead v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 27 February 1979
• Docket Number: 41883,Nos. 41803,s. 41803
• Court: Nebraska Supreme Court
• Parties: BANK OF MEAD, a Banking Corporation, Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellee.

Page 822

275 N.W.2d 822

202 Neb. 403

BANK OF MEAD, a Banking Corporation, Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Appellee.

Nos. 41803, 41883.

Supreme Court of Nebraska.

Feb. 27, 1979.

Syllabus by the Court

1. Any right, fact, or matter in issue, and directly adjudicated upon, or necessarily involved in, the determination of an action before a competent court in which a judgment or decree is rendered upon the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and privies whether the claim or demand, purpose, or subject matter of the two suits is the same or not.

2. Where a second action is on the same cause of action and between the same parties as the first action, the judgment in the former action ordinarily is conclusive in the second action as to every question which was or might have been presented in determining the former.

3. A judge or court may take judicial notice, whether requested or not.

4. Judicial notice may be taken at any stage of the proceeding.

Ginsburg, Rosenberg, Ginsburg & Krivosha, Lincoln, for appellant.

Ronald H. Stave, Omaha, for appellee.

Heard before SPENCER, McCOWN, CLINTON, and WHITE, JJ., and WARREN, District Judge.

WARREN, District Judge.

This is an action brought by the Bank of Mead, plaintiff and appellant, against the St. Paul Fire & Marine Insurance Company, defendant and appellee, to recover under certain employee fidelity bonds issued to plaintiff by St. Paul, alleging a loss by reason of a prior judgment obtained by the intervener Foxley Cattle Company against plaintiff.

The trial court found that there was no genuine issue as to any material fact and sustained St. Paul's motion for summary judgment, dismissing plaintiff's petition. The Bank of Mead appeals from the order overruling its motion for new trial. We affirm.

This is the third time this matter has been before this court. In the first action, the Foxley Cattle Company obtained a judgment for $323,659.14 including prejudgment interest against the Bank of Mead in a suit to recover damages for fraudulent misrepresentations made by a bank employee, Kenneth W. Schuette, to Foxley Cattle Company concerning the ownership, clear title, and location of 1,802 head of steers. These statements were relied upon by the Foxley Cattle Company in purchasing and making payment to Agri-Land & Beef, Inc. and the Bank of Mead for the nonexistent cattle. The jury verdict and judgment for Foxley were affirmed by this court on appeal. Foxley Cattle Co. v. Bank of Mead, 196 Neb. 1, 241 N.W.2d 495 (1976).

The second action involved an attempt by Foxley Cattle Company to collect its judgment by a garnishment action against the Bank of Mead, as defendant, and St. Paul Fire & Marine Insurance Company, as garnishee, on theground that St. Paul was liable to indemnify plaintiff under a Bankers Blanket Bond and an Excess Blanket Employee Dishonesty Bond which it had issued to the Bank of Mead. This court affirmed the judgment of the District Court finding that St. Paul "was not indebted or liable to the plaintiff Or the Bank of Mead." (Emphasis supplied.) Foxley Cattle Co. v. Bank of Mead and St. Paul Fire & Marine Insurance Company, 196 Neb. 587, 244 N.W.2d 205 (1976).

St. Paul relies upon the rule of res judicata as a complete defense. The Bank of Mead contends that the judgment in the garnishment action only adjudicated the question of the liability of St. Paul to the bank's judgment creditor Foxley Cattle Company as a third-party beneficiary, and not the question of the liability of St. Paul to its own insured on the fidelity bonds.

We do not agree with this contention. The basic and underlying issue involved in the garnishment action was whether the judgment obtained by the Foxley Cattle Company against the Bank of Mead constituted a loss of the nature insured against. This court expressly held that it did not, in the following language: "Since we hold that plaintiff's judgment was not a loss sustained by the Bank of Mead within the contemplation of these bonds, no indebtedness or liability existed on the part of St. Paul to the Bank of Mead which could be garnisheed by the plaintiff." Foxley Cattle Co. v. Bank of Mead, supra. Our specific holding that the Bank of Mead did not suffer a loss within the coverage of these bonds is res judicata, and may not again be litigated.

"The judgment in the garnishment action will be conclusive between the garnishee, plaintiff, defendant, and any intervener." S. 25-1031.01, R.R.S.1943.

Where a second action is on the same cause of action and between the same parties as the first action, the judgment in the former action ordinarily is conclusive in the second action as to every question which was or might have been presented and determined in the former." Omaha P. P. Dist. v. Natkin & Co., 193 Neb. 518, 227 N.W.2d 864 (1975).

The doctrine of res judicata operates on the principle that a final judgment on the merits by a court of competent jurisdiction is conclusive upon the parties in any later litigation involving the same cause of action. This court has stated the doctrine as follows: 'Any right, fact or matter in...