Pilgrim Food Products Co. v. Filler Products, Inc.

• Citation: 393 Pa. 418,143 A.2d 47
• Parties: PILGRIM FOOD PRODUCTS COMPANY, Inc., Appellant, v. FILLER PRODUCTS, Inc., Appellee.
• Decision Date: 30 June 1958
• Court: United States State Supreme Court of Pennsylvania

Page 47

143 A.2d 47

393 Pa. 418

PILGRIM FOOD PRODUCTS COMPANY, Inc., Appellant, v. FILLER PRODUCTS, Inc., Appellee.

Supreme Court of Pennsylvania.

June 30, 1958.

Jacob Raub, Jr., Easton, for appellant.

J. Douglas Fackenthal, Fackenthal, Teel, McGiffert & Danser S. Maxwell Flitter, for appellee.

Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO, ARNOLD, BENJAMIN R. JONES and COHEN, JJ.

COHEN, Justice.

Plaintiff, Pilgrim Food Products Company, a Pennsylvania corporation, instituted an action in trespass by writ of foreign attachment and complaint to recover damages for fraud allegedly practiced upon it by defendant, Filler Products, Inc., a non-resident corporation.

Plaintiff alleged that on January 25, 1950, defendant fraudulently induced it to enter into a contract for the lease of a machine under which agreement the defendant obtained $5,000, and a judgment for a like sum. This judgment was attached by the writ of foreign attachment. Filler's alleged fraud consisted of certain statements made by its president and its treasurer to plaintiff that Filler had authority to deliver and license the operation of the machine, when, in fact, as these officers well knew, it had no such authority. Filler filed an answer and thereafter moved for judgment on the pleadings asserting, inter alia, that the plaintiff's claim, having been litigated in a prior action between the parties, was barred by the final judgment therein. The lower court granted defendant's motion holding that plaintiff's action was barred under the doctrines of res judicata and collateral estoppel. This appeal followed.

The litigation out of which Filler claims the estoppel arose is based on a contract entered into between Pilgrim and Filler which provided, insofar as here relevant, for a final payment on February 15, 1950, of $5,000 by Pilgrim to Filler for the delivery and use of a Korn Kurl machine, a patented device for the manufacture of corn products for human consumption. Pilgrim failed, however, to make the payment. Filler thereupon brought suit to recover the due and unpaid sum. Pilgrim's defense was based in part upon the contention that it was advised by a representative of the Korn Kurl patent owner that Filler had no legal right to forward a machine to Pilgrim or to license the operation thereof, and that Filler had admitted that it had no such authority. The trial court directed a verdict for Filler. ¹

Subsequently, Pilgrim learned that on March 8, 1955, a judgment had been rendered by the Supreme Court of Wisconsin in the case of Flakall Corporation v. Krause, 1955, 269 Wis. 310, 70 N.W.2d 8, which terminated litigation begun in that state in 1951. This judgment Pilgrim now claims is, in effect, a determination that Filler was without right to use or to license the use of the Korn Kurl machines, and therefore had no authority to enter into the 1950 contract with Pilgrim. On this theory Pilgrim instituted the present action.

We agree with the court below that the question of whether Filler had the right to forward to Pilgrim a Korn Kurl machine and to license the operation thereof as provided for in the contract of 1950 has previously been adjudicated as between the parties, and (under the doctrine of collateral estoppel) Pilgrim is now precluded from relitigating the issue.

In the first litigation between the parties ² we held:

'[Pilgrim's] third contention, that it was advised by representatives of Flake Food Corporation that plaintiff had no legal right to forward the machine to the defendant, is based on an offer of testimony which the learned trial judge excluded. The ruling was correct. A self-serving interpretation of the Flake licensing agreement by...