Vukelic v. Upper Third St. Sav. & Loan Ass'n

• Citation: 222 Wis. 568,269 N.W. 273
• Parties: VUKELIC et al. v. UPPER THIRD ST. SAVINGS & LOAN ASS'N et al.
• Decision Date: 13 October 1936
• Court: Wisconsin Supreme Court

222 Wis. 568

269 N.W. 273

VUKELIC et al.

v.UPPER THIRD ST. SAVINGS & LOAN ASS'N et al.

Supreme Court of Wisconsin.

Oct. 13, 1936.

Appeal from a judgment of the Circuit Court for Milwaukee County; Otto H. Breidenbach, Judge.

Affirmed.

Action by James Vukelic against Upper Third Street Savings & Loan Association and another. From a judgment dismissing the complaint, made upon overruling a demurrer to a defense set up by answer, the plaintiff appeals. The facts material to the decision are stated in the opinion.

Jos. F. Studnicka, of Milwaukee, for appellants.

Julius O. Roehl, of Milwaukee, for respondents.

FOWLER, Justice.

The case was decided upon a demurrer to defendants' answer which set up a previous judgment in foreclosure as res judicata. The plaintiff demurred to the portion of the answer setting up such defense. The court overruled the demurrer and entered judgment dismissing the complaint.

The appellant's claim is that the matters set up in his complaint were pleadable in the foreclosure action only by counterclaim or set-off; that they were not so set up and may now be pleaded as an independent cause of action. If the matters were pleadable only as a counterclaim, the appellant's position is correct. But if they were admissibleupon the issue of the amount due under the mortgage foreclosed, the judgment is res judicata, and the judgment must be affirmed.

The complaint alleges in effect that the plaintiff borrowed $15,000 from the defendant corporation to be by the corporation placed to his credit and paid out only upon the orders of the plaintiff to pay for the construction of a house; that the plaintiff gave a bond for the payment of the loan to the corporation and a mortgage to secure its payment; and that the defendants paid out $11,261.04 of the moneys so borrowed and placed to his credit without the order of the plaintiff therefor.

Paragraph 5 of the defendants' answer, specifically demurred to as not constituting a defense, alleges that an action foreclosing the mortgage referred to in the complaint was prosecuted to judgment by the defendant corporation and $15,622.24 plus costs and solicitor's fees was adjudged due under the mortgage; that the plaintiffs were made defendants in said action, were personally served and appeared by attorney; and “that the issues raised by the complaint in this action were fully determined” in the foreclosure action.

[1] The allegation that the issues raised by the complaint in this action were fully determined in the other is a conclusion of law not admitted by demurrer. So the precise question for determination is: Did the determination of the amount due under the mortgage determine that the fund placed to the credit of plaintiff was not paid out without his order?

[2] It appears from the allegations of the complaint herein that the plaintiff's bond covered such sums only as were paid out upon the order of the plaintiff herein. To prove the amount due upon the bond the plaintiff in the foreclosure suit had to prove that the money claimed by the plaintiff herein was paid out on his order. Thus the plaintiff herein could have met the claim of the amount due on the bond by showing that all or some part of the money claimed to be due by the plaintiff in the foreclosure suit was paid out without his order. It is thus plain that the former case adjudged that no money recovered therein was paid out by the plaintiff in that suit, the defendant herein, without the order of the plaintiff herein. That a judgment is conclusive upon the parties thereto as to all matters at issue in the case is elementary. Driscoll v. Damp, 17 Wis. 419, 432;Heath v. Frackleton, 20 Wis. 320, 91 Am.Dec. 405;Lawrence v. Milwaukee, 45 Wis. 306;Arnold v. Randall, 124 Wis. 1, 102 N.W. 340;Zohrlaut v. Mengelberg, 158 Wis. 392, 148 N.W. 314, 149 N.W. 280. It is conclusive upon “every proposition within the issues in the first or former action, which was presented for adjudication and decided.” Moehlenpah v. Mayhew, 138 Wis. 561, 119 N.W. 826, 832.

[3][4] The defendant corporation was the only plaintiff in the foreclosure action. The secretary-treasurer of the corporation is alleged in the complaint herein to have paid out the money sued for as the agent of the corporation, and is claimed to be liable for his tortious conduct in so doing. The appellant contends that because both the corporation and its secretary-treasurer are parties herein the former judgment cannot be pleaded in bar because the secretary-treasurer was not a party to the former action, and a judgment in one action is not a bar to another unless the parties are the same in both actions.

While it is true, generally speaking, that parties to the two actions must be identical to permit the doctrine of res judicata to apply, it is stated in an L.R.A. note that “Where the relations of two paries are analogous to that of principal and agent, (or are such) *** the rule is, that a judgment in favor of either, in an action brought by a third party, rendered upon a ground equally applicable to both, should be accepted as conclusive against the plaintiff's right of action against the other.” 54 L.R.A. 649 (I). No reason is observed why this rule should not operate in reverse. When the agent's act has been adjudged not tortious in a suit by the principal, the adjudication should bar a suit against the agent for alleged tortious doing of the same act, as well when the adjudication was made in a suit wherein the principal was a plaintiff as when he was a defendant. Where the relation of principal and agent exists, it is immaterial whether the principal or agent be the plaintiff or defendant in the suit wherein the judgment asserted as a bar was rendered, and it is immaterial which was a party to that suit. If the principal's liability is claimed to rest on the tortious act of his agent, and in a former suit the agent's act has been determined not to have been tortious, the judgment is pleadable as a bar by either in a suit against him, although in the suit in which the judgment was rendered only the other was a party. The following cases support this rule: Faust v. Baumgartner, 113 Ind. 139, 15 N.E. 337;Anderson v. West Chicago St. R. Co., 200 Ill. 329, 339, 65 N.E. 717;City of Anderson v. Fleming, 160 Ind. 597, 67 N.E. 443, 66 L.R.A. 119;Hayes v. Chicago Tel. Co., 218 Ill. 414, 75 N.E. 1003, 2 L.R.A.(N.S.) 764;Featherston v. Newburgh & C....