Interstate Elec. Co. v. Fidelity & Deposit Co. of Maryland

• Decision Date: 08 March 1934
• Docket Number: 6 Div. 417.
• Citation: 228 Ala. 210,153 So. 427
• Parties: INTERSTATE ELECTRIC CO. v. FIDELITY & DEPOSIT CO. OF MARYLAND.
• Court: Alabama Supreme Court

153 So. 427

228 Ala. 210

INTERSTATE ELECTRIC CO. v. FIDELITY & DEPOSIT CO. OF MARYLAND.

6 Div. 417.

Supreme Court of Alabama

March 8, 1934

Appeal from Circuit Court, Jefferson County; John Denson, Judge.

Action by the Interstate Electric Company against the Fidelity &amp Deposit Company of Maryland. From a judgment of nonsuit plaintiff appeals.

Reversed and remanded.

Wm. S Pritchard and Jas. W. Aird, both of Birmingham, for appellant.

London, Yancey, Smith & Windham, of Birmingham, for appellee.

GARDNER Justice.

The suit is on a fidelity bond (Louis Pizitz Dry Goods Co. v. Fidelity & Deposit Co., 223 Ala. 385, 136 So. 800; 25 Corpus Juris 1088), wherein plaintiff seeks to recover for loss alleged to have been suffered arising from the want of honesty or fidelity of one Daniel, plaintiff's "secretary-treasurer."

The question here for determination is presented by the ruling on defendant's pleas 7 and 8. These pleas, setting up an estoppel by judgment, are in bar of plaintiff's right of action, and, being sustained, plaintiff took a nonsuit to review the ruling thereon. They disclose the following facts: The employer, Interstate Electric Company, made out its proof of loss as specified in the fidelity bond as a first step in the collection from the defendant of the amount it insists was lost by reason of the want of honesty or fidelity of its secretary-treasurer, Daniel.

Based upon the statements contained in this proof of loss, Daniel instituted a libel suit against his said employer, and recovered a judgment. Among other defenses, the Interstate Electric Company interposed a plea of justification-the truth of the published matter as in bar of the action. Ferdon v. Dickens, 161 Ala. 181, 49 So. 888; Kirkpatrick v. Journal Publishing Co., 210 Ala. 10, 97 So. 58. No assignment of demurrer appears to have been interposed as to the eventual disposition of the judgment so recovered in the libel suit, and the present record is silent concerning it. It may be here noted, however, in passing, that an appeal was subsequently prosecuted therefrom, and a reversal of the judgment here entered. Interstate Electric Co. v. Daniel (Ala. Sup.) 151 So. 463.

In support of these pleas, it is insisted that in the libel suit the truthfulness of the published matter was litigated upon the plea of justification, and necessarily determined the employee's innocence adversely to the defendant in that action, the plaintiff here, and the judgment is of consequence binding and conclusive.

Broadly stated, the general rule is that to sustain a plea of this character, res adjudicata or estoppel by judgment, the parties must be the same, the subject-matter the same, the point must be directly in question, and the judgment must be rendered on that point. Hall & Farley v. Ala. Terminal Co., 173 Ala. 398, 56 So. 235. And, as said in Clark v. Whitfield, 213 Ala. 441, 105 So. 200, 203, "A judgment, to conclude either party as to the subject-matter, must be such as to work a mutual estoppel; hence a plea of res judicata, to be good, must show the parties litigant in the two suits are the same * * * or else they must be in privity of estate or blood or in law with the parties in such former action. * * * That is, a person who can claim the benefit of a judgment as an estoppel upon his adversary is one who would have been prejudiced by a contrary decision in the case."

The parties to the two suits were not the same, nor, indeed, is the subject-matter. The present action seeks recovery of the indemnitor on the bond; the former, a tort action by the employee against the employer, seeks damages for publication of the proof of loss, and in which action the guilt or innocence of the employee plaintiff was only incidentally involved by the interposition of the plea of justification. 2 Black on Judgments, § 611. But more fatal still is the want of mutuality, for it is quite clear the fidelity company would not have been prejudiced by a contrary decision, as it was not a party to, and in no manner concerned with, the libel action, and a judgment against the plaintiff in that suit could not be held to fix a liability against the bond in this action. Firemen's Ins. Co. v. McMillan, 29 Ala. 147; Fidelity Co. v. Robertson, 136 Ala. 379, 34 So. 933; Dixie Fire Ins. Co. v. Bonding Co., 162 N.C. 384, 78 S.E. 430; 2 Black on Judgments (2d Ed.) 586 and 600; 25 Corpus Juris 1114.

It is of course well settled also that a judgment is conclusive, not only upon those who were actual parties to the litigation, but also upon all persons who are in privity with them, defined by some of the authorities as "a mutual or successive relationship to the same rights of property." Bigelow v. Old Dominion Copper Co., 225 U.S. 111, 32 S.Ct. 641, 56 L.Ed. 1009, Ann. Cas. 1913E, 875. And a discussion of the question of privity in 2 Black on Judgments, § 549, demonstrates the correctness of the observation of this court in Winston v. Westfeldt, 22 Ala. 760, 58 Am. Dec. 278, that, "technically speaking, there can be no privity, where there is not an identity of interest," meaning, as we understand it, identity of interest in the subject-matter of the litigation.

There is clearly no conclusiveness to the libel judgment by virtue of a consideration of any matter of privity, and this, we think, sufficiently appears from a consideration of the authorities cited, without further discussion thereof. Measured by the general rule, therefore, it seems clear the pleas were insufficient.

But appellee insists the pleas are to be sustained upon a consideration of an exception to the general rule of mutuality as to estoppel, that is, where the liability of defendant is altogether dependent upon the culpability of one exonerated in a prior suit, upon the same facts, when sued by the same plaintiff; citing (among other authorities), 35 Corpus Juris 988; State v. Parker, 72 Ala. 181; Cressler v. Brown, 79 Okl. 170, 192 P....