Harris & Cole Bros. v. Columbia Water & Light Co.

• Decision Date: 20 March 1905
• Citation: 85 S.W. 897,114 Tenn. 328
• Parties: HARRIS & COLE BROS. v. COLUMBIA WATER & LIGHT CO.
• Court: Tennessee Supreme Court

85 S.W. 897

114 Tenn. 328

HARRIS & COLE BROS. v. COLUMBIA WATER & LIGHT CO.

Supreme Court of Tennessee.

March 20, 1905

Appeal from Chancery Court, Maury County; Walter Bearden Chancellor.

Suit by N.H. Harris and others against the Columbia Water & Light Company. From a decree for defendant, complainants appeal. Reversed.

H. P Figuers, J. B. McLemore, and G. T. Hughes, for appellants.

T. M Steger and W. S. Fleming, for appellee.

BEARD C.J.

The bill in this case was dismissed upon the ground that the issues presented by it had been determined against the complainants by a court having jurisdiction of the subject-matter and of the parties. The facts upon which this decree of dismissal rests are as follows: In 1903 N.H. Harris, R. Harris, and Cole Bros., styling themselves as the firm of Harris & Cole Bros., brought a suit in the circuit court of Maury county, for the use of themselves and certain fire insurance companies named therein, against the Columbia Water & Light Company. In their declaration the plaintiffs alleged that Cole Bros., a member of the firm, was a corporation organized under the laws of the state of Iowa, and that the firm so constituted was engaged in the lumber business in the city of Columbia, in this state, and that on their yards in that city they had stored large quantities of lumber, and had erected for the use of their business costly buildings, in which they were operating much valuable machinery. The declaration further alleged that the firm of Harris & Cole Bros. had entered into a contract with the defendant company whereby, for a consideration, that company agreed and obligated itself to furnish, at the fire plugs located on the premises of the firm, an ample supply of water at all times adequate in force, volume, and quantity to produce a stream of water flowing through hose and fire nozzles to throw upon the buildings, lumber, material, and machinery sufficient to extinguish any and all fires that might originate or be upon the premises. The declaration further alleged that, after the making of this contract, fire originated on the premises of this firm, and that by reason of neglect and failure of the defendant company to have and keep a sufficient supply of water for use in the extinguishment of fire, as it was bound to do by the contract referred to, the lumber, material, buildings, and machinery of this firm were consumed, so that the loss accruing to the firm therefrom was $50,000. The plaintiffs also averred that at the time of this fire they had in force policies of insurance on the property in certain fire insurance companies named in the declaration, and that these companies had paid to the plaintiffs the amounts set out therein, and that by the terms of the policies these companies were entitled, to the extent of the payments made by them severally, to be substituted to any right of action which the plaintiffs might have, and that, to the extent of their payments, a share and interest in the right of action set up in this declaration had been assigned to these companies. It was alleged that the payments made by these companies in the aggregate was greatly less than the loss sustained by the firm, and the suit therefore was instituted not only for the use of the insurance companies, but of the firm as well. To this declaration certain pleas were filed, in which it was alleged that Cole Bros. was a foreign corporation, and that it had not complied with the laws of Tennessee in the matter of registration of its charter, and that the firm of which it was a constituent member had no right, under the laws of Tennessee admitting foreign corporations to do business in this state, to enter into the contract for the breach of which recovery was sought.

To these pleas the plaintiffs filed a replication in which it was admitted that Cole Bros. was a foreign corporation, and that it had failed to comply with the statutory requirements with regard to such corporations entering the state to do business, but denied that the firm of Harris & Cole Bros. were unlawfully doing business in Tennessee. On these special pleas and this replication the circuit court dismissed the suit, and on appeal to this court the judgment of the lower court was affirmed upon the ground that an action by a firm could not be maintained unless all the partners in the firm were competent to sue, and that a firm composed of individuals and a foreign corporation could not maintain an action upon a contract made in this state, where it appeared that the corporation had not complied with the statutes requiring it to register its charter. Harris v. Water & Light Co., 108 Tenn. 245, 67 S.W. 811.

The bill in the present case is brought by N.H. Harris, Rutledge Harris, J. W. Cole, W. R. Cole, and John J. Cole, trading under the firm name and style of Harris & Cole Bros., against the Columbia Water & Light Company, for the same breach of the same contract, and under the same conditions alleged in the former suit, and a recovery is sought for this breach for the use of the firm of Harris & Cole Bros. and the same insurance companies named in the declaration in that suit. The bill alleges that at the time of the institution of the former suit N.H. and Rutledge Harris, the members of the firm resident in this state, and who had the management thereof, supposed that Cole Bros. was a corporation, and so informed the attorneys representing the firm, and the allegation in the declaration and the admission in the replication that it was such was made in good faith, but subsequent to the rendition of the judgment in the circuit court, and pending the appeal of the case to this court, it was discovered that this averment was a mistake of fact; that, while Cole Bros. had been a corporation existing under the laws of Iowa, its existence as such had been terminated before the making of the contract in question and the institution of the suit, and the three parties named, to wit, J. N., W. R., and John J. Cole, at both periods were in fact doing business as partners under that name, and as individuals were members of the firm of Harris & Cole Bros.

The chancellor held, on a demurrer raising the question, that the adjudication in the former suit was conclusive upon the complainants in the present case, and dismissed their bill.

Was the chancellor correct in this ruling, and is the matter now sought to be litigated res adjudicata? Two of the essentials to the successful defense of former adjudication are that there must be identity of parties in the transactions, and the judgment in the prior action must have been upon the merits. As to the first of these essentials, we think that the complainants in the present action are not identical with the plaintiffs in the first suit. In the present action the three Cole brothers, as individuals, join in this suit with the two Harrises, alleging that they constitute the firm of Harris & Cole Bros., while in the former Cole Bros. was treated as a corporation. It is manifest that there is no identity between a corporation styled Cole Bros. and a firm of that name composed of individuals. The contract, for the breach of which recovery is sought, was, according to the averment of this bill, made with the firm of Harris & Cole Bros. composed of the two Harrises and of the three Coles. It is clear that where the contract was made with these individuals, constituting the firm, it was necessary that all the obligees should unite as plaintiffs in an action for the breach thereof, as the cause of action was joint only. If the former suit had been instituted by any one or more of the members of the firm, seeking a recovery for a breach, and it had appeared upon the face of the declaration that there were other members of that firm who had not joined as plaintiffs the declaration would have been demurrable, or if it had not been so averred, but the fact had developed in proof, the variance between the pleading and proof would have been fatal to the plaintiffs' action. In the former suit, which is relied upon as a bar to the present, it was held that, in suits upon partnership contracts, all the members of the firm must unite in the suit. It was there said that there was no such thing recognized in the jurisprudence of this state as the legal entity of a partnership, but that the suit by a firm was nothing more than the suit of the individual members of the firm; the court adding, "It is apparent that, in the face of this rule, neither one of the members, nor any number less than...