The Coca Cola Co. v. Pepsi-Cola Co.

• Decision Date: 16 April 1934
• Citation: 172 A. 260,36 Del. 124
• Court: Delaware Superior Court
• Parties: THE COCA COLA COMPANY, a corporation of the State of Delaware, v. PEPSI-COLA COMPANY, a corporation of the State of Delaware

172 A. 260

36 Del. 124

THE COCA COLA COMPANY, a corporation of the State of Delaware, v. PEPSI-COLA COMPANY, a corporation of the State of Delaware

Superior Court of Delaware, New Castle County

April 16, 1934

Superior Court for New Castle County, Summons Case, No. 76 September Term, 1932.

The declaration in this case consists of nine counts, being divisible into three groups of three counts each.

In general the action is based upon an alleged printed offer by the defendant, as follows:

"$ 10,000 reward will be paid by the Pepsi-Cola Company for information leading to the detection of any dealer substituting Pepsi-Cola for any other five cent drink."

The plaintiff then avers that it discovered and made known to the defendant certain instances wherein Pepsi-Cola was substituted for Coca-Cola, a five cent drink. These substitutions are alleged to have been made by three dealers to-wit, Loft, Incorporated, and Happiness Candy Stores, Inc. both corporations of the State of Delaware, and by "The Mirror," a corporation of the State of New York.

The first three counts relate to alleged substitution by Loft, Incorporated; counts four, five and six relate to alleged substitutions by Happiness Candy Stores, Inc., and counts seven, eight and nine to alleged substitution by The Mirror.

To the declaration a number of pleas were filed, the seventh only being material, which is as follows:

"And for a further plea to the said amended declaration filed by the plaintiff, the defendant, by its said attorneys, says actio non, because the defendant says that the subject matter of the plaintiff's said suit is res judicata, in that on or about the twenty-ninth day of July, 1933, in two certain causes pending in the Court of Chancery of the State of Delaware, in and for New Castle County, between the plaintiff in the above entitled cause, as complainant, and two of the parties of whose conduct plaintiff herein complains, as defendants, entitled 'The Coca-Cola Company, a corporation of the State of Delaware, Complainant, v. Happiness Candy Stores, Inc., a corporation of the State of Delaware, Defendant,' and 'The Coca-Cola Company, a corporation of the State of Delaware, Complainant, v. Loft, Inc., a corporation of the State of Delaware, Defendant,' a decree was entered in said Court of Chancery, being a court having jurisdiction of the persons and subject matter therein, dismissing said Bills of Complaint after hearing on the merits; that the plaintiff in the above entitled cause is the same person as the complainant in said actions in the Court of Chancery and is acting in the same capacity; that the issues in the above entitled cause are identical with issues decided against said plaintiff in said actions in the Court of Chancery; and that said judgments rendered in the Court of Chancery of the State of Delaware, in and for New Castle County, are still in full force and effect, and this the defendant is ready to verify."

To this plea a demurrer has been filed, raising substantial questions of law, the numerical order being altered by us.

First. It is contended that the plea is bad, because it does not set out the decree in haec verba, or according to its legal effect and that no facts are set forth to enable the court to determine whether the issues in this case are identical with the issues in the suits in the Court of Chancery.

Second. It is contended that the defendant in this suit is not shown by said plea to be so related to Loft, Incorporated, or Happiness Stores, Inc., defendants in the Chancery suits, as to be identical or in privity with said corporations, or either of them.

Third. It is insisted that the plea is bad because it purports to answer the entire declaration, but in fact answers only a part. This is based upon the circumstance that substitutions by "The Mirror" are alleged in the declaration but these substitutions were not involved in the former proceedings in the Court of Chancery.

The demurrer to the seventh plea is sustained.

Hugh M. Morris and Alexander L. Nichols for plaintiff.

Aaron Finger (of Richards, Layton and Finger) for defendant.

LAYTON, C. J., HARRINGTON and RODNEY, J. J., sitting.

OPINION

RODNEY, J.

We shall consider the questions in the order as above adopted, assuming that the sufficiency of the plea must be determined upon its own averments.

First. We do not think it necessary to state in the plea the decree heretofore entered in the Court of Chancery in haec verba. The plea avers that on July 29, 1933, two cases were pending in the Court of Chancery between the plaintiff in this cause and two of the actors charged with substitution in the declaration, to-wit, Loft, Incorporated, and Happiness Candy Stores, Inc.; that the Court had jurisdiction of the persons and subject matter; that a decree was entered dismissing the bills of complaint after hearing on the merits; that the plaintiff is the same person as the complainant in the Court of Chancery and is acting in the same capacity; and that the issues in this case are identical with the issues decided against the plaintiff in the actions in the Court of Chancery.

In our opinion, the plea is sufficiently descriptive and certain. The defendant could have been more prolix; it could have set out substantially all the matters covered by the bill and answers in the Court of Chancery, but the ultimate result would have been the same. The defendant affirmatively sets out that the "issues in the above entitled cause are identical with the issues decided against the plaintiff in said actions in the Court of Chancery." The plaintiff has demurred to this plea. The demurrer admits all well pleaded allegations so if the identity be well pleaded it will, for the purpose of the present discussion, be taken as admitted. The identity of the issues is a question of fact which must be proven at the trial. All details showing identity of issues are matters of evidence. We are of the opinion that the plea is not defective for the reason just discussed. Wythe v. Salem, 30 Fed. Cas., page 770, No. 18,121; Richardson v. Jones, 58 Ind. 240; Wilson v. Vance, 55 Ind. 584; Ellis v. Staples, 9 Humph. (Tenn.) 238; Rynearson v. Parkhurst, 88 Ind. 264.

Second. The plaintiff denies the validity of the plea of res judicata because of the lack of mutuality in the estoppel.

The defendant recognizes the general rule:

"That estoppels must be mutual and that one of the essentials of an estoppel by judgment or res judicata is that both the litigants must be concluded by the judgment or it binds neither."

The defendant, however, relies upon an established and clear exception to the rule to the effect that:

"If the defendant's responsibility is necessarily dependent upon the culpability of another, who was the immediate actor and who, in an action against him by the same plaintiff for the same act, has been adjudged not culpable, the defendant may have the benefit of that judgment as an estoppel even though he would not have been bound by it had it been the other way."

In support of this exception the defendant cites Portland Gold Mining Co. v. Stratton's Independence, Ltd. (C. C. A.), 158 F. 63, 16 L.R.A. (N. S.) 677; Bigelow v. Old Dominion Copper Co., 225 U.S. 111, 32 S.Ct. 641, 56 L.Ed. 1009, Ann. Cas. 1913E, 875; Brobston v. Darby, 290 Pa. 331, 138 A. 849, 54 A. L. R. 1285; Jenkins v. A. Coast Line, 89 S.C. 408, 71 S.E. 1010; Sawyer v. City of Norfolk, 136 Va. 66, 116 S.E. 245; McFaddin, etc., Land Co. v. Texas, etc., Land Co. (Tex. Civ. App.), 253 S.W. 916; Atkinson v. White, 60 Me. 396; Muntz v. Algiers, etc., Rwy. Co., 116 La. 236, 40 So. 688; Chicago, etc., R. Co. v. McManegal, 73 Neb. 580, 103 N.W. 305, 107 N.W. 243; Emma Silver Mining Co. v. Emma Silver Mining Co. of New York (C. C.), 7 F. 401.

The plaintiff tacitly admits the existence and force of the exception, but insists that in every case cited by the defendant there existed between the defendants in the two actions some privity, some liability over, some derivative connection or a relationship of some nature so as to come within the exception to the rule requiring mutuality and which is lacking in the present case. A careful examination of all the authorities cited to us, or disclosed by independent research, does not disclose any case supporting the claim of the defendant where no connection is shown between the successful party to the first proceeding and the party to the second proceeding seeking to rely upon the plea of res judicata.

Unanswered by the authorities cited, the question remains, however, as to the necessity of mutuality of estoppel under the facts here present.

This Court has given to the plea of res judicata its most careful consideration.

In determining the question as to whether a person not a party to a prior proceeding may take advantage of the disposition of such case in a subsequent action by a plea of res judicata directed against an adversary who had been a party to a first proceeding, we have attempted to discover the reason for the rule "that estoppels must be mutual or that both litigants must be alike concluded by a judgment or it binds neither."

Where a general rule is suggested as having application to a number of classes of cases the true reason for the rule must bear investigation so as to show its application to each individual class.

We have, of course, found the exception to the rule relied upon by the defendant "that where the liability of the defendant is altogether dependent upon the culpability of one exonerated in a prior suit upon the same facts when sued by the same plaintiff" the mutuality of the estoppel is not required. This, however, furnishes a mere exception to the rule and, so far as we have found, is evidenced only by ca...