Lumbermen's Mut. Cas. Co. v. Bissell

• Decision Date: 02 November 1922
• Docket Number: No. 20.,20.
• Citation: 220 Mich. 352,190 N.W. 283
• Parties: LUMBERMEN'S MUT. CASUALTY CO. v. BISSELL.
• Court: Michigan Supreme Court

220 Mich. 352

190 N.W. 283

LUMBERMEN'S MUT. CASUALTY CO.

v.BISSELL.

No. 20.

Supreme Court of Michigan.

Nov. 2, 1922.

Error to Circuit Court, Delta County; Flannigan, Judge.

Action by the Lumbermen's Mutual Casualty Company against Murray K. Bissell, doing business under the trade-name of Erickson & Bissell. Judgment for plaintiff, and defendant brings error. Affirmed.

Argued before FELLOWS, C. J., and WIEST, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ.

Fellows, C. J., and McDonald, J., dissenting.

Ryall & Frost, of Escanaba, for appellant.

Nichols & Locke, of Ionia (Geo. E. Nichols and Glenn D. Mathews, both of Ionia, of counsel), for appellee.

FELLOWS, C. J. (dissenting).

Defendant was an employer of labor operating under the Workmen's Compensation Law. Comp. Laws 1915, §§ 5423-5495. Plaintiff, an Illinois corporation authorized to do business in this state, was his insurer. One William Lemerand was in the employ of defendant. He claimed that on the 3d of July, 1918, he received an accidental, personal injury in such employment; on November 21st he served a written claim for compensation on defendant, who promptly notified plaintiff of such claim. The usual proceedings followed. The defense principally relied upon was that the employer did not have notice of the accident until he received the claim for compensation, and not within the three months fixed by the statute. The Industrial Accident Board awarded compensation, and in its findings of fact found that the employer had seasonable notice. This court refused to review the award on certiorari. Plaintiff with the approval of the board settled with the employé, paying him $1,489.08, and brought this suit against the defendant, counting on his breach of the contract with plaintiff under which the insurance was obtained, and in which contract he agreed to give ‘immediate notice’ of the happening of an accident to his employés. Upon the trial plaintiff introduced the proceedings before the Industrial Accident Board, and insisted that the award made by the board, including its finding of facts, was res adjudicata upon the question of notice to defendant of the accident to his employé. Defendant insisted that such finding and award was not res adjudicata as to the parties to this suit, and claimed the right to introduce testimony on that subject. The trial judge permitted the testimony, reserving the right to determine the question at the close of the proofs. Both parties asked a directed verdict, and the trial judge directed one for plaintiff on the grounds of res adjudicata of the decision of the board. It would seem that one or both of the parties to this case sought to have their rights inter se determined by the Industrial Accident Board. The board held, and very properly so, that it was without jurisdiction to determine that question. Having declined upon jurisdictional grounds to consider the question, it is manifest that such declination is not res adjudicata.

It is urged on behalf of the defendant that the doctrine of res adjudicata is applicable only to judgments and decrees in judicial proceedings, and that the award of the industrial Accident Board is not within its purview. It is true that the board is administrative in character, possessed of quasi judicial functions. But awards of arbitrators and decisions of administrative boards have a finality, and are not open to collateral attack. In 2 R. C. L. p. 386, it is said:

‘The award of arbitrators, acting within the scope of their authority, determines the rights of the parties as effectually as a judgment secured by regular legal procedure, and is as binding as a judgment, until it is regularly set aside or its validity questioned in a proper manner. Their decision on matters of fact and law is conclusive, and all matters in the award are thenceforth res adjudicata, on the theory that the matter has been adjudged by a tribunal which the parties have agreed to make final, a tribunal of last resort for that controversy.’

To the same effect is 3 Cyc. 728, Numerous cases will be found where the finality of decisions of administrative boards and officers has been upheld. Illustrative of the cases see Crandall v. James, 6 R. I. 144 (school commissioner); Kelly v. Wimberly, 61 Miss. 548 (town council in auditing bills); Thomas v. Churchill, 84 Me. 446, 24 Atl. 899 (county commissioners); Queen v. City of Atlanta, 59 Ga. 318 (commissioners of police); Woolsey v. I. O. O. F. Lodge, 61 Iowa, 492, 16 N. W. 576 (Grand Lodge of fraternal society); Natoma Water & Mining Co. v. Clarkin, 14 Cal. 544 (land commission); Lloyd v. Barr, 11 Pa. 41 (board of arbitrators); Beall v. State, 9 Ga. 367 (commission appointed under authority of the Legislature to fix depreciations of property by reason of removal of the county seat). And this court in Estate of Beckwith v. Spooner, 183 Mich. 323, 149 N. W. 971, Ann. Cas. 1916E, 886, a case under the Workmen's Compensation Law, said:

‘On the hearing of such petition for review it can be stated as a general rule that the essentials leading up to the award, or its equivalent, are to be taken as res adjudicata, except the physical condition of the injured employé, which naturally and legally remains open to inquiry.’

We shall therefore in considerating the main question in the case proceed upon the theory that the doctrine of res adjudicata is as applicable to the award of the (then) Industrial Accident Board (now Department of Labor and Industry) as to a judgment at law.

We deem it proper to lay aside the minor objections made to the applicability of the doctrine of res adjudicata to the instant case, and take up at once the consideration of what we conceive to be the crucial question, the one which goes to the very heart of the controversy. This question is by no means free from difficulties; in fact, it bristles with them. It has caused this court much labor and anxiety. The present plaintiff and the present defendant were codefendants in the proceedings before the Industrial Accident Board; as such codefendants they were not adversary parties. The important question here presented is whether the award is res adjudicata in a proceeding to determine their rights inter se. Before taking up the consideration of this question we challenge attention to the fact that we are not here considering a case of cosureties, coindorsers, or copartners; nor have we before us an equity case where by proper pleadings codefendants may be made adversary parties. Such cases will be disposed of as they arise.

We think it may be fairly said that there is substantial unanimity among the text-writers to the effect that res adjudicata may not be successfully pleaded in an action brought to determine the rights of the parties inter se, where such parties were not adversary parties in the original suit. Mr. Freeman in his work on Judgments (1 Freeman on Judgments [4th Ed.] § 158) says:

‘Parties to a judgment are not bound by it, in a subsequent controversy between each other, unless they were adversary parties in the original action. If A. recovers judgment against B. and C. upon a contract, which judgment is paid by B., the liability of C. to B. in a subsequent action for contribution is still an open question, because as to it no issue was made or tried in the former suit. As between the several defendants therein, a joint judgment establishes nothing but their joint liability to the plaintiff.’

Mr. Black in his work on Judgments (Black on Judgments [2d Ed.] § 599) says:

‘As a general rule, parties to a judgment are not bound by it in a subsequent controversy between themselves, unless they were adversary parties in the original action. This is to say, a judgment for or against two or more joint parties ordinarily determines nothing as to their respective rights and liabilities, as against each other, in their own subsequent controversy.’

In Van Fleet's Former Adjudication (section 256) it is said:

‘Unless the defendants contest an issue with each other, either upon the pleadings between them and the plaintiffs, or upon cross-pleadings between themselves, it will not be res adjudicata in a litigation between them. Of course, a judgment determining the rights of the defendants between themselves, under proper pleadings, in conclusive upon them. But a judgment against them, if there are no issues between them, does not bind them as against each other.’

In Chand on Res Adjudicata, § 77, it is said:

‘It is held by the American courts also, that where in any suit an issue is joined between some of the parties only, the decision of the issue has no binding force against the others. It is on the same principle that parties to a suit are held not to be bound by a decision in it, in a subsequent suit between them, unless they were at arm's length and on opposite sides in the former suit; and a decision in favor of a person is held to be not res adjudicata against other persons ranged on the same side with him in the former suit. An issue in fact is, as a general rule, open to determination although a finding thereon has been arrived at between the parties in a former suit in which they both were defendants. This is on the broad ground that a judgment in a suit for or against two or more persons ordinarily determines nothing as to their respective rights and liabilities as against each other. Nor could any other course be ordinarily expedient, as generally the object of a suit is merely to dispose of the plaintiff's claim, and the defendants therefore are not allowed to appeal against each other; and to treat an expression of opinion in regard to their rights inter se as a decision would hardly be proper and equitable.’

In Bigelow on Estoppel, p. 113 (6th Ed.) will be found the following:

‘Judgment against several defendants cannot, however, determine the rights of the defendants inter sese. Thus, if judgment be given against several cocontractors, and satisfaction is obtained by one...