of any court of law, be arbitrated with final effect by a board of arbitration consisting of three persons.'
The submission to arbitration was based on the aforesaid contract. The award states that 'having duly heard the proofs and allegations of the parties, award(s) as follows:
'The claim of Henry Behrens against Gertrude Feuerring and Alfred Schwabacher for damages for breach of contract is not sustained, and is disallowed.'
The award and the judgment are as broad as the submission which is as broad as the terms of the contract relating to submission to arbitration.
The subject matter of the present action is the same as the New York action.
Can the defendants in the present action who were not parties in the New York action, invoke the rule of res judicata against the plaintiff? The proceedings in arbitration were begun December 10, 1942. Defendants acquired their interest January 14, 1943.
The rule of the Restatement is that a successor in interest must have become such after the institution of the prior action: A.L.R. Restatement of the Law, Judgments, Sec. 89. This appears to be the view taken in Pennsylvania: Guzzi v. Delaware & Hudson Co., 61 Pa.Super. 48. The rule may be different in New York. See Masten v. Olcott, 1886, 101 N.Y. 152, 4 N.E. 274 (opinion by Judge Andrews); Kahn v. Richard L. Walsh Co., App. Term, 1911, 72 Misc. 20, 129 N.Y.S. 137 (opinion by Gerard, J.).
The rule of privity is subject to exceptions which are recognized in New York. Liberty Mut. Ins. Co. v. Colon & Co., Iic., 1932, 260 N.Y. 305, 310, 183 N.E. 506 (opinion by Judge Lehman); Good Health Dairy Products Corporation v. Emery, 1937, 275 N.Y. 14, 17, 9 N.E.2d 758, 759, 112 A.L.R. 401 (opinion by Judge Finch); Portland Gold Mining Co. v. Stratton's Independence, Ltd., 8 Cir., 1907, 158 F. 63, 16 L.R.A.,N.S., 677 (opinion by Judge VanDevanter). An exception to the rule of privity, exists when judgment on the merits against the plaintiff in an action against a person charged with a breach of contract bars a subsequent action by the plaintiff against another person in an action based upon the existence of that breach of contract.
In A.L.I. Restatement of the law, Judgments, Sec. 99, it is stated:
'Where Liability Of A Person Is Based Solely Upon The Act Of Another.
'A valid judgment on the merits and not based on a personal defense, in favor of a person charged with the commission of a tort or a breach of contract, bars a subsequent action by the plaintiff against another responsible for the conduct of such person if the action is based solely upon the existence of a tort or breach of contract by such person, whether or not the other person has a right of indemnity.'
See the following cases: Portland Gold Mining Co. v. Stratton's Independence, Ltd., 1907, 8 Cir., 158 F. 63, 16 L.R.A.,N.S., 677 (opinion by Judge VanDevanter); Liberty Mut. Ins. Co. v. Colon & Co., 260 N.Y. 305, 183 N.E. 506; Good Health Dairy Products Corporation v. Emery, supra, 275 N.Y. 14, 9 N.E.2d 758, 112 A.L.R. 401; Marsh v. Pier, 1833, 4 Rawle 273, 26 Am.Dec. 131 (opinion by Mr. Justice Kennedy); Eissing Chemical Co. v. People's Nat. Bank of Brooklyn, App. Div.2d Dept., 1923, 205 App.Div. 89, 199 N.Y.S. 342 (Jaycox, J.,); American Button Co. v. Warsaw Button Co., supr., Monroe County, 1941, 31 N.Y.S.2d 395 (Wheeler, J.).
I am of the opinion, under the facts of this case and the law applicable thereto, the defendants have the right to invoke the rule of res judicata.
All other reasons argued by plaintiff's attorneys against the application of the rule res judicata have been considered and are found to be without merit.
Let an order for judgment in favor of the defendants be prepared and submitted.
© 1992-2004 VersusLaw Inc.