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ALLEGHENY CTY. v. MARYLAND CAS. CO.

October 28, 1941

ALLEGHENY COUNTY, PA.,
v.
MARYLAND CASUALTY CO.



The opinion of the court was delivered by: GIBSON

After verdict for plaintiff the defendant has moved for judgment upon its reserved point for binding instructions and, in event of refusal, for a new trial.

The action was brought by the County of Allegheny (hereafter called County) against the Maryland Casualty Company (called Maryland hereafter), which was surety for the Poole Engineering & Machine Company (called Poole hereafter) for the performance of its contract for the delivery of some 1100 voting machines to the County. The contract was dated March 26, 1931.

 The defendant has based its action for judgment chiefly upon two propositions. The first, in substance, is that the defendant is not liable because the plaintiff, having accepted the voting machines, failed to give notice to Poole (with whom defendant as surety was in privity) of any breach of any promise or warranty within a reasonable time after it knew, or ought to have known, of such breach, as required by Section 49 of the Uniform Sales Act, 69 P.S.Pa. ยง 259. Its second proposition is to the effect that the subject matter of the suit, so far as it relates to alleged breaches of Articles 1 to 10 of the specifications of the contract between the County and Poole, was res judicata, and that no evidence existed as to alleged breaches of Article 12.

 As to the first of these propositions it would seem that the matter was properly submitted to the jury. The plaintiff, it is true, gave its first notice to Poole, also to defendant, on June 16, 1932, and then only mentioned some six alleged unimportant imperfections. This notice was nine months after delivery of the machines and after they had been used in the election of 1931. However, it was asserted on behalf of plaintiff that the defects were latent and discoverable only with difficulty and after considerable investigation. On January 18, 1932, Poole had been adjudicated a bankrupt, and thereafter ceased all business activities. Notice was given defendant (although not required by the bond) of the defects which were called to Poole's attention on June 16, 1932, and to that notice defendant replied, denying any liability. Under these circumstances plaintiff claimed that any further notification of defects was useless and not required by Section 49 of the Uniform Sales Act. In the charge the court called the provisions of that section to the attention of the jury, but stated that notice was not required if the circumstances showed that it would be a vain act to give it. Whether or not notice in the instant case would have been useless was submitted to the jury.

 The claim of res judicata requires much more serious consideration.

 The voting machines delivered to Allegheny County were exactly the same in their mechanism as machines fuenished Schuylkill and Northumberland Counties. In each of the three counties named litigation followed the delivery. Except that the Allegheny County countract had a specification binding Poole to "alterations, repairs or replacements" for a period of five years after delivery, the specifications were identical and followed the Pennsylvania Act of 1929, P.L. 549, which authorized the use of voting machines and prescribed their requirements. In each suit the issue was whether the machines furnished complied with the specifications.

 In Schuylkill County a taxpayer filed a bill in quity against the County Commissioners wherein the court was asked to restrain the payment of the purchase price of the machines to Poole. The chancellor decided that the machines reasonably met the specifications. The Supreme Court of Pennsylvania affirmed his judgment. See Fleming v. Adamson et al., 321 Pa. 28, 182 A. 518.

 In Northumberland County a taxpayer filed a like bill against the County officers. This bill was later withdrawn and Poole (by Manley, its trustee in bankruptcy) brought suit in the District Court of the Middle District of Pennsylvania to recover the purchase price, and was successful before a jury.

 The County of Allegheny was not a party in the Schuylkill and Northumberland County suits, and we are interested in them only as they set forth the interpretation of the Pennsylvania courts of the Acts of 1929 and 1931, and the specifications prescribed therein. The Allegheny County case, Bassett et al. v. Armstrong et al., 309 Pa. 296, 163 A. 525, is more material, and is the foundation of the defendant's claim. That case was instituted by taxpayers against the then County Commissioners, the County Controller, the County Treasurer and Poole, to attempt to enjoin the payment to Poole of the unpaid part of the purchase price of the machines. The complaint charged generally that the machines furnished were ineffective and unfit for use by the electorate of the County and set forth a number of the specifications which, it was averred, had not been met by them. The case was tried before a judge of the Court of Common Pleas, who, after hearing the evidence offered by the taxpayers, dismissed their bill. Exceptions were filed to his action, and later heard before three judges, who affirmed the judgment. An appeal to the Pennsylvania Supreme Court was filed, and the judgment was later affirmed by it. Bassett v. Armstrong, supra. The main issue in the case was upon the taxpayers' assertion that the machines were defective and did not meet the specifications of the contract with Poole or of requirements of the Act of Assembly.

 Against this apparent judgment that the voting machines furnished by Poole were in compliance with the contract counsel for the County has advanced three propositions. He declares, first, that the judgment in Bassett v. Armstrong, supra, was not a final judgment, but only the equivalent of a non-suit at law; second, that the County is not bound by the judgment because the action did not involve the County as a legal entity, but only its officers; and third, by reason of the latent nature of the defects in the machines, many of them were not discovered when the suit was entered, and therefore not included in the complaint setting forth non-compliance with the specifications.

 The first proposition of counsel does not seem to be sound. Had the case ended with the dismissal of the action by the trial judge, the dismissal would have had the effect of a non-suit under the Pennsylvania Equity Rules; but the suit did not end with the dismissal. Exceptions were filed, and later adopted by the County Commissioners of the County; and heard before the court en banc, which overruled the exceptions and affirmed "the order made on November 29, 1931, dismissing the bill, on the opinion filed by the Chancellor". The opinion contained a finding of fact to the effect that the machines were efficient and conformed to the requirements of the contract. One of the exceptions to the action of the court in dismissing the bill was directed to such finding of fact. In the opinion of the Supreme Court this finding was recognized as such. Under these circumstances, counsel's contention that the judgment had only the effect of a non-suit is not sound. His position partly ignores the facts, as detailed, as to exceptions and judgment and places undue stress upon certain declarations in the opinion of the Supreme Court to the effect that the matter had become moot, as the purchase price of the machines had been then paid to Poole pursuant to the order in mandamus proceeding brought by Poole's trustee in bankruptcy against the treasurer of the County and its controller. The judgment of the lower court, not having been reversed, still exists. Altsman v. Kelly, 336 Pa. 481, 488, 9 A.2d 423. By that judgment the voting machines were declared to have no inherent defect and were efficient for their intended purpose.

 We come then to plaintiff's second proposition, that the County of Allegheny was not a party to Bassett v. Armstrong, supra, and not affected by the judgment in it. Its counsel contends that the County, being a legal entity, may be bound only by an action brought by or against it as such, and not by any suit against its Commissioners as such.

 In this connection we quote from Hochman v. Mortgage Finance Corporation, 289 Pa. 260, 137 A. 252, 253: "It is a general principle of public policy, making for the general welfare, for the certainty of individual rights, and for the dignity and respect of judicial proceedings, that the doctrine of res adjudicata should be supported, maintained, and applied in proper cases. Nor should its application be restricted by technical requirements, but a broad view should be taken of the subject, having always in mind the actual purpose to be attained. The rule should not be defeated by minor differences of form, parties, or allegations, when these are contrived only to obscure the real purpose -- a second trial on the same cause between the same parties. The thing which the court will consider is whether the ultimate and controlling issues have been decided in a prior proceeding in which the present parties actually had an opportunity to appear and assert their rights. If this be the fact, then the matter ought not to be litigated again, nor should the parties, by a shuffling of plaintiffs on the record, or by change in the character of the relief sought, be permitted to nullify the rule. This is a universal rule, and is well stated by our present Chief Justice in State Hospital v. Consolidated Water Co., 267 Pa. 29, 37, 110 A. 281. The requirements for the application of the rule are that there be an identity of parties and of subject-matter in the two actions. The first of these requirements being present, all issues that were actually adjudicated in the former action are concluded ( Bowers' Estate, 240 Pa. 388, 87 A. 711; First National Bank of Wrightsville v. Dissinger, 266 Pa. 349, 109 A. 626); and, if the whole cause of action in the second case is the same as in the first, not only the ...


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