No. 4580.

9 F.2d 590 (1925)


Circuit Court of Appeals, Ninth Circuit.

November 23, 1925.

Attorney(s) appearing for the Case

Kibbey, Bennett, Gust, Smith & Lyman, of Phœnix, Ariz., for plaintiff in error.

Sloan, Holton & Scott, of Phœnix, Ariz., and Ford, Bodkin, Watt & Herlihy and Henry G. Bodkin, all of Los Angeles, Cal., for defendants in error.

Before GILBERT, RUDKIN, and McCAMANT, Circuit Judges.

McCAMANT, Circuit Judge (after stating the facts as above).

It is alleged in the complaint, with reference to the Gomez Case, "that the said McLean & Walsh, by their attorneys, assumed the control and direction of the trial of said cause; that the plaintiff herein advised the said McLean & Walsh and the court, before the trial of said cause, that the town of Flagstaff held an indemnity bond from the said McLean & Walsh as against any damages that might be recovered against said town in said cause, and that the town of Flagstaff desired only to protect the rights of the indemnitors; that said trial was conducted on behalf of the defendants in said cause by the attorneys for said McLean & Walsh."

The allegations fall short of a charge of negligence on the part of the contractors and their attorneys in failing to file a bond on appeal on behalf of the town. It is nowhere alleged that the town directed or authorized the contractors to appeal on behalf of the town or that the town arranged for a surety on an appeal bond and notified the contractors or their counsel to prepare and file the bond. This action is plainly brought on the contract of May 10, 1919, and the bond of United States Fidelity & Guaranty Company to assure its performance.

The agreement of the contractors was to "indemnify and keep harmless the said town of Flagstaff against all * * * judgments * * * which may in anywise come against the said town * * * from the carelessness or neglect" of the contractors, their "agents, employees, or workmen." If plaintiff has any right to require the contractors and their surety to pay the Gomez judgment, the right arises from this covenant. A showing of carelessness or neglect on the part of the contractors or their agents is a condition precedent to a recovery by plaintiff.

Defendants contend that the judgment rendered in favor of the contractors in the Gomez Case is an adjudication binding on plaintiff that there was no such actionable carelessness or neglect on their part. Plaintiff contends that this judgment is not binding on plaintiff, because it was rendered subsequent to the judgment against plaintiff, and also because there were no cross-pleadings in the Gomez Case between the several defendants therein.

In support of its first contention, plaintiff cites Holt Manufacturing Co. v. Collins, 154 Cal. 265, 97 P. 516, 519, and Mohawk Oil Co. v. Layne (D. C.) 270 F. 841, 848. In the first of these cases a defendant had been dismissed as a party during the pendency of the action, and in the second a plaintiff had dropped out on exceptions to his joinder filed by the defendant. It was held that these parties were not bound by the judgment and decree thereafter entered. The facts in these cases are not parallel to the facts in the instant case.

Plaintiff made a general appearance in the Gomez action. It knew the contentions advanced by all the parties thereto. It answered, participated in the trial, and undertook to appeal from the judgment against it. It is not relieved of the estoppel created by the final judgments by the circumstance that the judgment in favor of the contractors was entered subsequent to the judgment against the town.

The other contention of plaintiff is more plausible, but the clear weight of authority is with the defendants.

It sometimes happens that there are controversies between the several defendants to a litigation collateral to the principal controversy. If these collateral matters are not litigated and determined in the original suit, the judgment or decree therein does not conclude the defendants as to these collateral matters. But it is a fundamental precept of the law of res judicata that the questions raised by the issues, actually litigated and determined by the judgment or decree, are settled thereby, and the judgment or decree may be relied upon as an estoppel by any party as against any other party. These principles have been frequently applied to facts akin to those of the instant case.

In Westfield Co. v. Noblesville Co., 13 Ind.App. 481, 483, 41 N. E. 955, 956, 55 Am. St. Rep. 244, plaintiff sued to compel defendant to pay a judgment which Abernathy had recovered against both of them. Plaintiff established that, as between plaintiff and defendant, the defendant was ultimately responsible. The defendant sought to relitigate the question determined in the Abernathy litigation. The court said:

"We are of the opinion that while, in the absence of cross-pleadings, the rights of the defendants as between themselves are not adjudicated, yet the fact of the liability of each to the plaintiff is adjudicated and determined, both as between themselves and him, and between each other. If two parties are sued upon a note, and judgment taken without cross-pleadings, the question of who should pay the debt as between themselves is left open; but that both are liable to the creditor is adjudicated, and can no longer be disputed, even as between themselves. * * *

"According to the position taken by appellant that `nothing was adjudicated between the defendants,' it was open for appellant to dispute appellee's liability, as well as its own; thus leaving the entire lawsuit to be again fought over. Such a position does not seem to us tenable. The question of both appellee's and appellant's liability was directly in issue in the former cause, and must be regarded as settled, but this does not by any means prevent the appellant from asserting that, although both it and the appellee were in the wrong, yet, as between themselves, there was no good reason why appellant should indemnify the appellee."

Seattle v. Erickson, 99 Wn. 543, 547, 169 P. 985, 986, grew out of an injury sustained by Mary Jones on University street, Seattle, while Erickson was performing a contract for its repair. She sued Erickson and the city. She secured a judgment against the city, but Erickson prevailed as against her, and a judgment was entered in his favor. This judgment was held to constitute a defense to the city's action against Erickson to compel him to reimburse the city. The court said:

"It clearly appears from the record that, in the prior action against the appellant and the respondent jointly for the negligent injury to Mary Jones, the respondent was affirmatively exonerated from liability, and the appellant was held for the negligence. Consequently there is now an estoppel by judgment against the right of the appellant to assert that the respondent is liable over to it for the amount of the recovery in favor of Mary Jones. * * * This judgment in evidence is sufficient in itself to overthrow any inference arising from the judgment and contract as to the possible liability of the respondent."

The above principles are also recognized by United States Fidelity Co. v. Haggart, 163 F. 801, 804, 91 C. C. A. 289; Wiggin v. St. Louis, 135 Mo. 558, 37 S. W. 528, 531; Kansas City v. Mitchener, 85 Mo. App. 36, 38-40; Kansas City v. Mullins, 200 Mo. App. 639, 209 S. W. 558, 559, 560; Osage Bank v. Jones, 51 Kan. 379, 32 P. 1096; Lawrence v. Milwaukee, 45 Wis. 306; Giblin v. North Wisconsin Lumber Co., 131 Wis. 261, 111 N. W. 499, 502, 120 Am. St. Rep. 1040; Boston & Maine Co. v. Sargent, 72 N.H. 455, 57 A. 688; Seattle v. Northern Pacific, 47 Wn. 552, 92 P. 411.

The questions raised and actually litigated in the Gomez Case were whether the several defendants therein were responsible for the death of Victoria Gomez. All parties were heard thereon, and the final judgments exonerated the contractors and charged the town. To the extent that the contractors were exonerated and the town was held, the judgments concluded the defendants for all purposes.

Plaintiff cites Owensboro v. Westinghouse, 165 F. 385, 91 C. C. A. 335. The conclusions reached in this case are predicated in part on an agreement executed by the parties during the pendency of the primary litigation. This contract is construed as obligating the contractor to pay any judgment ultimately recovered against the city in consideration of the city permitting the contractor to control the litigation on its behalf. In so far as the case supports plaintiff's contentions, it is out of harmony with the weight of authority.

Because of the previous adjudication, plaintiff cannot be heard to say that the death of Victoria Gomez was due to the carelessness or neglect of the contractors. Plaintiff sues on the contract and bond. As above pointed out, the contract requires proof of such carelessness or neglect as a condition precedent to a recovery.

It follows that the District Court did not err, and the judgment is affirmed.


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