United States v. Bower, Civ. No. 1199.

• Decision Date: 08 January 1951
• Docket Number: Civ. No. 1199.
• Citation: 95 F. Supp. 19
• Parties: UNITED STATES v. BOWER et al.
• Court: U.S. District Court — Eastern District of Tennessee

95 F. Supp. 19

UNITED STATES v. BOWER et al.

Civ. No. 1199.

United States District Court E. D. Tennessee, N. D.

January 8, 1951.

Otto T. Ault, U. S. Dist. Atty., Chattanooga, Tenn., for the United States.

Joe C. Thomason, Wm. P. O'Neil, Jennings, O'Neil & Jarvis, and H. F. Atkins, all of Knoxville, Tenn., for defendants.

ROBERT L. TAYLOR, District Judge.

At a pre-trial proceeding had on June 13, 1950, the Government's attorney produced a transcript of the original record in Criminal Action No. 14,672, wherein the defendant Benjamin A. Bower had pleaded guilty of the offenses charged in a two-count indictment under the False Claims Act, 18 U.S.C., § 80 1948 Revised Criminal Code, 18 U.S.C.A. §§ 287, 1001, respecting a false claim under the Contract Settlement Act, 41 U.S.C.A. § 101 et seq, particularly sections 117 and 119. The Government contended that the plea of guilty by the defendant Bower in the criminal prosecution is res judicata as to the same violations alleged in this action to recover the civil penalties provided in the Contract Settlement Act and that there should be a directed verdict as to the violations. Defendant Bower contended that he was not guilty as to all of the specifications of falsity contained in the indictment and that the Government is not entitled to the directed verdict under the theory of res judicata. It was agreed by the parties that further proceedings would be held in abeyance until the Court had ruled on the question of res judicata.

In this Court the question is novel, and no case has been cited or found that is directly in point. The Court believes the Government's position is sound, although it calls for an application of the res judicata principle that is somewhat surprising. Ordinarily res judicata means that a point has been judicially settled and put to rest. In such condition it becomes a defense to the party for or against whom the matter was decided and may not be used to his further harassment on account of the transaction out of which it arose. It has not had the general character of a two-edged sword, cutting in both directions, in offense as in defense. Yet there is reason for insisting that, if a point is settled, it should be settled for all related purposes and that it should operate as an estoppel as well as a defense. A plea of guilty, pursuant to which a fine has been imposed and paid, is a matter of judgment record and imports that absolute and incontrovertible verity which ought to preclude the person against whom it is later produced from then denying it.

Since no principle of law stands alone, as an isolated thing, it is necessary to inquire whether this view of res judicata is in conflict with some greater principle. None suggests itself except that of former jeopardy, where res judicata is a defense against a second punishment or prosecution for the same offense. The leading case on the point is Coffey v. United States, 116 U.S. 436, 6 S.Ct. 437, 29 L.Ed. 684. In that case there had been an acquittal in the prior criminal prosecution, and the acquittal relied on as a defense, was held to be res judicata as to the subsequent civil action where the relief sought was in the nature of a criminal penalty. See, as reasserting the same principle, Sealfon v. United States, 332 U.S. 575, 578, 68 S.Ct. 237, 92 L.Ed. 180, and cases there cited. A variation of the rule of the Coffey case is found in decisions where the relief sought in the subsequent civil suit was remedial in character and the defense of res judicata was rejected. United States v. National Ass'n of Real Estate Boards, 339 U. S. 485, 70 S.Ct. 711; Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917.

A statement of the res judicata principle is thus stated in United States v. Glidden Co., 6 Cir., 119 F.2d 235, 244: "The rule prevails that where the former adjudication is relied on as an absolute bar to a subsequent action, it must be shown that the cause of action, the thing to be recovered and the parties are the same in both proceedings. However, the above rule is modified to the extent that where, although the cause of action is not the same and some fact or question has been determined and adjudicated in a former suit and the same fact or question is again put in issue in a subsequent suit between the same parties, the determination in the former suit of the fact or question, if properly presented and relied on, will be held conclusive on the parties in the latter suits, regardless of the identity of the cause of action or the lack of it in the two suits." And on the same page the Court further said: "It is well settled that the judgment rendered upon sustaining a demurrer is equally conclusive by way of estoppel of the facts confessed by the demurrer as a verdict finding the same facts would have been and accordingly that where a demurrer goes to the merits, a judgment sustaining it is a bar to a subsequent suit on the same cause of action." In Frank v. Mangum, 237 U.S. 309, 333, 35 S.Ct. 582, 590, 59 L.Ed. 969, the court said:...