Northland Industries, Inc. v. Kennebec Mills Corp.

• Decision Date: 01 November 1965
• Citation: 214 A.2d 100,161 Me. 455
• Parties: NORTHLAND INDUSTRIES, INC. v. KENNEBEC MILLS CORPORATION (#6796, 6842) (two cases). Donald R. MICHAUD v. NORTHLAND INDUSTRIES, INC. and Kennebec Mills Corporation (#7739).
• Court: Maine Supreme Court

Page 100

214 A.2d 100

161 Me. 455

NORTHLAND INDUSTRIES, INC. v. KENNEBEC MILLS CORPORATION (#6796, 6842) (two cases).

Donald R. MICHAUD v. NORTHLAND INDUSTRIES, INC. and Kennebec Mills Corporation (#7739).

Supreme Judicial Court of Maine.

Nov. 1, 1965.

Richard J. Dubord, Waterville, for Northland Industries.

Jerome G. Daviau, Waterville, for Michaud.

Bradford H. Hutchins, Waterville, for defendants.

Before WILIAMSON, C. J., and WEBBER, TAPLEY, and DUFRESNE, JJ.

WEBBER, Justice.

On September 22, 1961 Northland Industries, Inc., brought an action (#6796) against its tenant, Kennebec Mills Corporation claiming damage from the leakage of oil alleged to have been caused by defendant's negligence.

On October 2, 1961 Northland again sued Kennebec claiming damage subsequent to September 22, 1961 and alleging that defendant willfully permitted the continuing flow and escape of oil from the premises controlled by it (#6842).

After answering both complaints Kennebec filed a motion dated April 2, 1962 setting forth that it had been notified by paintiff's counsel that the claim which was the subject matter of the complaint in #6796 had been assigned to one Donald R. Michaud at some subsequent to the commencement of that action. The motion prayed the determination of the court as to the validity of such assignment and, if required, the addition or substitution of Michaud as plaintiff either as the real party in interest or as a necessary party. A like motion was filed as to #6842. After notice and hearing in which Michaud participated by counsel, the justice below determined that 'the purported assignment from Northland * * * to Donald Michaud is * * * invalid and that Donald Michaud is not a party in interest.' No appeal was taken. On June 13, 1962 Northland filed a motion for relief from this order of the court. This motion was denied on September 30, 1964. On October 26, 1964 Michaud filed notice of appeal from the denial of the motion for relief from judgment.

We are satisfied that the defendant Kennebec was entitled to ascertain whether or not the purported assignee was or was not the real party in interest and in any event to have the real party in interest established as plaintiff. The motion employed for that purpose was an appropriate vehicle which tendered the issue for determination by the court. M.R.C.P. Rule 17; comment sec. 17.2; see Barron & Holtzoff, Federal Practice and Procedure, Vol. 2, Ch. 8, Sec. 482, page 15 et seq.

On September 25, 1962 Donald R. Michaud brought a new action (#7739) naming both Northland and Kennebec as defendants and alleging that the two prior actions brought by Northland against Kennebec had been assigned to him on January 12, 1962 and asserting claims of negligent and wilful conduct on the part of Kennebec with respect to oil leakage and a failure on the part of Kennebec to pay either Northland or the plaintiff therefor.

The defendants seasonably filed motion for summary judgment basing the same upon the undisputed fact that the assignment relied upon by the plaintiff Michaud was the same previously adjudicated invalid in the prior proceeding. On August 20, 1964 the justice below granted the defendants' motion for summary judgment. This order was appealed on August 28, 1964.

We turn first to the summary judgment ordered in #7739. The justice who made that order viewed the decision made in #6796 and #6842 adverse to Michaud on the issue of the validity of his assignment as binding upon him in subsequent actions involving the same issue and the same parties.

In this connection the justice below quoted the language of the court in Providential Development Co. v. United States Steel Co., (1956) 10th Cir., 236 F.2d 277, 280:

'It is the rule of long standing and frequent repetition that where a second suit between the same parties, or their privies, is on the same cause of action, the final judgment in the prior action is conclusive as to all matters which were actually litigated and as to every issue, claim, or defense which might have been presented; and that where the later suit is upon a different cause of action, the judgment in the former operates as an estoppel only in respect to the issues and questions which were actually litigated and determined.'

The doctrine of 'collateral estoppel by judgment' has been recognized and applied in numerous opinions in Maine, Cianchette v. Verrier et al. (1959) 155 Me. 74, 88, 151 A.2d 502; Bray v. Spencer (1951), 146 Me. 416, 419, 82 A.2d 794; Burns v. Baldwin-Doherty Co. (1934), 132 Me. 331, 333, 170 A. 511.

Michaud had been effectively drawn into the case by notice of the hearing in which he later participated. At the hearing his counsel present such evidence as was available tending to support the validity of the assignment. The issue at this hearing was clear and unmistakable. If he had been able to show himself to be the owner by assignment of these claim he would have been substituted as plaintiff in #6796 and #6842. The decision adverse to him on this issue effectively destroyed him claim as the real party in interest and prevented him from exercising control over the conduct of these cases. In this sense the order possessed the attributes of finality as to his claim of ownership and was immediately appealable as an...