Opinion
No. 20717
Decided January 25, 1928.
Res adjudicata — Applies to material questions which were or might have been litigated — Parties to action and persons in privity bound by former judgment — Privity of contract exists, when — Parties to public contract bound by adjudication in taxpayer's suit — Defense of invalidity of contract not available in later mandamus proceeding.
1. Material facts or questions which were in issue in a former suit and were there judicially determined by a court of competent jurisdiction are conclusively settled by the judgment therein so far as concerns the parties to that action and persons in privity with them and cannot be again litigated in any future action between the same parties or privies, and this rule also applies not only to what was determined but also as to every other question which might properly have been litigated in the case. ( Hixon v. Ogg, 53 Ohio St. 361, 42 N.E. 32, and Strangward v. American Brass Bedstead Co., 82 Ohio St. 121, 91 N.E. 988, followed and approved.)
2. Privity of contract is the relationship that exists between two or more contracting parties, and where the legality of a contract is determined in a suit brought by a taxpayer, the parties to such contract with knowledge of such suit are in privity and bound thereby although only one of them is made party to such suit.
3. Where the legality of a public contract has once been determined in a proceeding in a court of competent jurisdiction, between a taxpayer and the public officials who were parties to such contract and other officials whose official action is necessary to the process of payment of money due under said contract, all parties and their privies to such record are bound by such judgment; in an action in mandamus to compel payment of the amount due under such contract afterwards brought by one in privity with one of the parties to the prior suit, such officials will not be allowed to avail themselves of the same defenses that were passed upon and determined in such prior suit, such judgment constituting res adjudicata.
ERROR to the Court of Appeals of Perry county.
The original action in this cause was one in mandamus, begun in the Court of Appeals of Perry county. The petition discloses that the relator, J.A. Leroy, in September, 1926, had a contract with the board of county commissioners of Perry county whereby he was to furnish all the equipment, labor, and material for installing a new heating plant in the courthouse, jail, and sheriff's residence of said county, at an agreed price of $5,450; that said Leroy went forward and completed said work, which was accepted, approved, and confirmed by the board of county commissioners, which drew a warrant on the respondent, J.W. Quinn, as county auditor of Perry county, directing him to draw a warrant on the county treasurer of said county in payment of the obligation of said contract; that before the same was paid one George D. Kildow, a taxpayer of Perry county, filed an action in the Court of Common Pleas of said county, praying for a restraining order against the issuance of said warrant and the payment of said amount, averring as his grounds for such injunction the failure of the county commissioners to comply with certain statutory requirements in the performance of a public contract of the character and kind entered into between said Leroy and such board of county commissioners.
In that action J.W. Quinn as county auditor, David J. Lewis as county treasurer, and the board of county commissioners of Perry county were all parties defendant.
An answer was filed by the prosecuting attorney, in which, as a first defense, it was averred that the prosecuting attorney had duly certified that the proceedings in the premises were in accordance with the statutes, and, as a second defense, that the taxpayer on whose relation the suit was begun had been an unsuccessful bidder, and that he stood by and allowed the successful bidder, Leroy, to go forward and furnish the material and perform the work before beginning his proceeding, and the defendants claimed by reason thereof that he was guilty of laches and bad faith and was estopped in equity from enjoining the completion of the contract or the paying for the same. For a third defense it was averred that the installing of the new heating plant was necessary for the furnishing of sufficient heat and properly protecting the public and those engaged in work in the courthouse and the inmates of the jail against inclemency of the weather, and that such work was of an imperative character.
A reply was filed by the taxpayer, Kildow, which denied the averments of the answer and averred the violation of statutory requirements for public work of the character in question.
J.W. Quinn, as auditor, and David J. Lewis, as treasurer, filed a motion, averring that they had no knowledge of the matters set up in the petition of the plaintiff or in the answer filed by the prosecuting attorney, and that they had no interest in the controversy and were not adverse parties; and they disclaimed in their motion the answer filed by the prosecuting attorney, averred that they desired to take no part in the controversy, and asked to have the answer stricken from the files in so far as it related to them.
The matter came on for hearing before the Court of Common Pleas, which found upon the issues joined in favor of the defendants, the county commissioners, that there was a substantial compliance with the law, and that all was done in good faith. The temporary restraining order theretofore granted in the case, and the petition, were dismissed, at the cost of the plaintiff, and the court ordered that in the interests of the general public the heat should be turned on at once in such system.
The matter was appealed to the Court of Appeals, which court made a like holding, found that the judgment of the Court of Common Pleas was correct, and affirmed the same in every particular. A motion for leave to file petition in error in this court was filed, which motion was overruled.
The claim of the relator for the sum of $5,450, having been allowed by the county commissioners, was again presented to the auditor of said county with a request to issue a warrant upon the county treasurer for the payment of said sum; but the respondent, J.W. Quinn, as county auditor, refuses to draw said warrant, and the respondent, David J. Lewis, as treasurer of said county, declares that he will not pay said warrant if so drawn upon the treasurer of said county; wherefore the relator prays that an alternative writ of mandamus be allowed, requiring the respondents, J.W. Quinn, as auditor, and David J. Lewis, as treasurer, of Perry county, to pay the same or show cause why they should not so do.
The answer of the respondents for a first defense avers that the petition does not state facts sufficient to constitute a cause of action, and for a second defense avers a failure to comply with the statutes of Ohio relative to public contracts, that is, such as relate to contracts of the character and kind here under consideration, being in substance the same matter that was averred in the reply filed in the taxpayer's suit.
The reply of the relator puts in issue the matters averred in the answer not admitted to be true, and avers that the matters and things set out in the answer in the several defenses are res adjudicata, having all heretofore been settled and judicially determined and ended and judgment entered thereon in the taxpayer's suit, wherein one George D. Kildow was plaintiff and the said county auditor, county treasurer, and the county commissioners were defendants, and the relator denies that the facts contained in the answer constitute a defense.
The matter came on for hearing before the Court of Appeals of Perry county and was submitted upon an agreed statement of facts in which the entire pleadings and the proceedings in the taxpayer's suit were set forth, together with the contract, bond, and transcript of the record of the board of county commissioners relative to the contract in question.
On consideration whereof the Court of Appeals found on the issues joined for the relator, J.A. Leroy, and that he is entitled to the relief prayed for in his petition, and a peremptory writ of mandamus was issued against the respondents as prayed for in the petition, commanding the payment of the sum of $5,450 to the relator. A motion for new trial was filed by the respondents, which was overruled, and error is now prosecuted to this court to reverse such decree.
Messrs. Pyle McGonagle, for plaintiffs in error. Messrs. George Leasure, for defendant in error.
The paramount issue in this case is whether or not the proceedings in the case of George D. Kildow, taxpayer, against the county commissioners, the county auditor, and the county treasurer, and the findings made and conclusion therein reached, amount to such an adjudication of the matters in issue in the instant case as to bind the parties in the present action.
The rule applicable to the situation is well stated in 15 Ruling Case Law, 1009, Section 483:
"In the strict sense of the term parties to a judgment or decree, in the eye of the law, are those only who are named as such in the record, and are properly served with process, or enter their appearance, but the term 'parties,' within the meaning of the rule making prior judgments conclusive on such, has been held to include all who are directly interested in the subject-matter of a suit and who have a right to make defense, control the proceedings, examine and cross-examine witnesses and appeal from the judgment, and a person though not technically a party to a prior judgment may nevertheless have been so connected with it by his interest in the result of the litigation, and by his active participation therein, as to be bound by such judgment. The courts look beyond the nominal parties, and treat all those whose interests are involved in the litigation and who conduct and control the action or defense as real parties, and hold them concluded by any judgment which may be rendered. * * * In other words, by participating in the proceedings one is estopped by the judgment as to any questions actually litigated and decided therein."
An examination of the record in the taxpayer's suit discloses that the respondents, even though unwilling to make the affirmative defense set up by their codefendants, the county commissioners, nevertheless are as public officials bound by the results of such action. The very subject-matter of the present controversy, to wit, the legality of the contract for furnishing the material and performing the labor for this heating system, was the matter in issue in the so-called taxpayer's suit. All the substantive defenses that are offered in the present case were before the court considering that case, and the conclusions reached therein are such as bind the parties in the present instance.
The relator, J.A. Leroy, by reason of his interest in the legality of the contract between himself and the county commissioners, should be regarded as in privity with the parties to the taxpayer's suit. The respondents were parties to the record in that case and are bound by its outcome.
The rule in Hixson v. Ogg, 53 Ohio St. 361, 42 N.E. 32, is applicable.
"Where issue has been joined on a material fact in an action, and the issue judicially determined and carried into judgment by a court having jurisdiction of the action, the parties to such action are concluded by such finding until the judgment is reversed or set aside. And the fact thus established cannot be retried by the same parties in any subsequent action, whether the second action is upon the same or a different subject-matter from the first. In this respect it is immaterial that one of the actions may have been ex contractu and the other ex delicto."
See Strangward v. American Brass Bedstead Co., 82 Ohio St. 121, 91 N.E. 988.
"2. When a matter has been finally determined in an action between the same parties by a competent tribunal, the judgment is conclusive, not only as to what was determined, but also as to every other question which might properly have been litigated in the case."
See, also, People, ex rel. Carey Const. Co. of Rome, v. Smith, 149 App. Div. 382,134 N.Y. S., 319.
The reasons for the foregoing rule are well stated by Justice Harlan in So. Pac. Rd. Co. v. United States, 168 U.S. 1, at page 48, 18 S.Ct., 18, 27 ( 42 L.Ed., 355):
"The general principle announced in numerous cases is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and even if the second suit is for a different cause of action, the right, question or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified. This general rule is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for, the aid of judicial tribunals would not be invoked for the vindication of rights of person and property, if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue and actually determined by them."
Finding that the plea of res adjudicata of the relator is well taken, it is unnecessary to discuss the other defenses tendered by the respondents, and the decree of the Court of Appeals is therefore affirmed.
Judgment affirmed.
MARSHALL, C.J., ALLEN, KINKADE, ROBINSON, JONES and MATTHIAS, JJ., concur.