Fish v. Vanderlip

Order affirmed, with ten dollars costs and disbursements, on the opinion of Page, J., at Special Term, with leave to the defendant to serve an amended answer on payment of costs in this court and in the court below. Present—Ingraham, P. J., McLaughlin, Laughlin, Scott and Dowling, JJ.; Laughlin, J., dissented. The following is the opinion of the court below: Page, J.: A party of 100 underwriters doing business as “At United States ‘Lloyds’ ” insured the plaintiff’s yacht in the total sum of $15,000 by a policy pursuant to the terms of which the Lability of each subscriber was several and not joint, and was limited to his proportionate share thereof, to wit, $150. The policy provided that the assurers ‘ ‘ do promise and bind themselves severally and not jointly,.nor any one for any other, * * * for the true performance of the premises, each one for his own part of the whole amount herein assured only.” The yacht was destroyed by fire and the plaintiff has instituted separate actions against a large number of the subscribers to recover $150 from each. One of the actions, which was against Douglas F. Cox, has been brought to trial in the Municipal Court of the City of New York, and a judgment on the merits has been rendered in favor of the defendant therein. The defendant herein has interposed as a defense the judgment against the plaintiff in the other action, alleging that it was upon the same policy, for the same loss .and the same issues were raised, and “ that the interest of this defendant in the said action against the said Cox was identical with that of the said Cox, and that he, the said Cox, defended the said suit in which he was defendant as aforesaid, under and by the direction of and at the expense and in the interest of each and all of the said subscribers, including this defendant, * * * which facts were known to the plaintiff at the time of the trial of the said action * * The plaintiff has demurred to this defense on the ground that it is [782] insufficient in law upon the face thereof, and has brought on the demurrer for argument as a litigated motion. It is claimed by the defendant that since the defense in the Oox action was to the knowledge of the plaintiff conducted under the direction of all the subscribers to the policy jointly and at their joint expense, the judgment in that action is res adjudicate, against the plaintiff in any action brought against any of the said subscribers based upon the same state of facts. The principal case relied upon by the defendant in support of his contention is Greenwich Ins. Co. v. N. & M. Friedman Co. (142 Fed. Rep. 944), decided by the Circuit Court of Appeals of the Sixth Circuit. In that case a number of insurance companies had insured a building under separate but identical policies, and subsequently, after a loss had occurred and actions had been brought against several of the said companies to recover upon the policies, they united in a common plan of defense and appointed a committee and attorneys at their joint expense to conduct the defense to each action. In two of the actions a trial was had and judgment rendered for the plaintiff. The judgments in these actions were held to be res adjudicata in subsequent actions against other insurance companies who had joined in the aforesaid common defense. This case, if it were a controlling authority, would determine the present question, for an estoppel by judgment is mutual, and if a decision for the plaintiff in an action upon the contract of one subscriber to the policy would bind the others, a decision against him would conclude him in all the other actions. I am of the opinion, however, that this precedent cannot be supported in the law of this State and is contrary to the general principles govering an estoppel by judgment. Ordinarily a judgment of a court of competent jurisdiction is binding only upon the parties to the litigation and their privies. There are a few exceptions to this rule in the law of principal and agent and master and servant, or cases where the right of indemnity exists between persons nominally hable for the same injury, but in these cases the person concluded by the judgment had the right to intervene in the action, control the defense and appeal from the judgment (Castle v. Noyes, 14 N. Y. 329), and it has been frequently held that where this [783] right of control and appeal does not exist, the judgment will not bind one who is neither a party to the action nor privy to such a party, even though the defense was in fact conducted or contributed to by the person sought to be estopped. (Jackson v. Griswold, 4 Hill, 522; Yorks v. Steele, 50 Barb. 397; Litchfield v. Goodnow, 123 U. S. 549; Merchants’ Coal Co. v. Fairmont Coal Co., 160 Fed. Rep. 769; Rumford Chemical Works v. Hygienic Chemical Co., 215 U. S. 156; Bigelow v. Old Dominion Copper Co., 225 id. 111.) In Litchfield v. Goodnow (supra) the court said: “ ‘ Under the term parties, in this connection, the law includes all who are directly interested in the subject-matter and had a right to make defense, or to control the proceedings and to appeal from the judgment. This right involves also the right to adduce testimony, and to cross-examine the witnesses adduced on the other side. Persons not having these rights are regarded as strangers to the cause. But to give full effect to the principle by which parties are held bound by a judgment, all persons who are represented by the parties and claim under them, or in privity with them, are equally concluded by the same proceedings. We have already seen that the term privity denotes mutual or successive relationship to the same rights of property. ’ ” In the case at bar the contracts of the various subscribers to the policy were absolutely separate and several and not joint. They not only could not have intervened in the actions brought against their cosubscribers, but the complaint would have been demurrable for misjoinder of parties if any two or more of the actions had been joined in one complaint. (Straus v. Hoadley, 23 App. Div. 360.) This defendant had a personal interest in the Cox action but no legal interest therein. He was in no manner in privity with Oox. He could not have assumed control of the suit in his own name and could not have appealed from the judgment had the plaintiff succeeded. Within the above authorities, therefore, it is clear that had the plaintiff succeeded in the Cox action no liability of this defendant or of any of his cosubscribers could have been predicated upon the judgment, and, since estoppel by judgment is always mutual, it must follow that the judgment in favor of Cox is not res adjudicata in this action. The plaintiff’s motion for judgment sustaining the [784] demurrer to the fifth separate defense contained in the defendant’s answer is granted, with ten dollars costs.