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Brown v. Attala Drain. Dist. No. 2

Supreme Court of Mississippi, Division A
Apr 3, 1939
187 So. 529 (Miss. 1939)

Summary

In Brown v. Drain, 112 Fed. 582, the plaintiff sued the street superintendent and city treasurer of Los Angeles to obtain a decree declaring invalid the local assessment for a street improvement and to quiet his title to the land assessed.

Summary of this case from Duncan v. Ramish

Opinion

No. 33588.

April 3, 1939.

1. JUDGMENT.

The essentials which must be present in order that a judgment be "res judicata" of the issues raised in a subsequent suit are identity in thing sued for, identity in cause of action, identity of persons and parties to action, and identity of quality in persons for or against whom claim is made.

2. JUDGMENT.

Judgment in suit against drainage district by surety on contractor's performance bond to recover amount paid by surety to laborers and materialmen was not "res judicata" as to total amount due when such issue was raised in suit by contractor against district to recover balance allegedly due, since contractor not being a party in former action nor privy of the surety was not bound by the judgment.

APPEAL from the chancery court of Attala county; HON. T.P. GUYTON, Chancellor.

Thos. L. Haman, of Houston, for appellant.

The doctrine of subrogation is one of equity applied for the purpose of preventing injustice and for the purpose of enforcing complete and essential justice between the parties. The statute regarding the right of assignee of chose in action to sue in his own name is not applicable to suits in equity to enforce right of subrogation.

Box v. Early, 178 So. 793; Canton Exchange Bank v. Yazoo County, 144 Miss. 579, 109 So. 1.

The decree in the former suit is based solely and exclusively on the right of the surety to be subrogated to the rights of the district to the retainage under the contract, and the assignment clause of the exhibit was excluded from consideration as a ground of complaint. No judgment is conclusive of matter not required to support the judgment.

Thompson v. Hill, 119 So. 320, 152 Miss. 390.

Only essential terms of judgment should be treated as conclusively adjudicated.

American Cotton Oil Co. v. House, 118 So. 722, 153 Miss. 170.

Relief by enforcement of right to subrogation and relief in equity for enforcement of a partial assignment or assignment given as security may reach the same result but the right to the relief under the one proposition is established by proof inconsistent with the proof required to establish a right under the other. The issues arising under the one are different from those which could arise under the other.

The surety in the former suit based its claim on the estimates allowed by the district and the contracted retainage thereunder, which it alleged was sufficient to cover all amounts due it, therefore it could have no concern under the assignment with the matter involved in the present suit and such were not in the former suit involved even if its rights to a limited extent under the assignment were involved. The equitable owner of a chose in action should be made a party to a suit in equity thereon in order to conclusively bar him by the litigation.

Cottrell v. Smith, 146 Miss. 837, 112 So. 465; Kitchens v. Harroll, 54 Miss. 474; Griffith's Chancery Practice, sec. 128, note 73; Rembert v. Key, 58 Miss. 536; Box v. Early, 178 So. 793.

Appellant is not bound as a privy by the decree in the former suit by the surety company, Cause No. 7252, against the district, whether that suit was based on the assignment or right to be subrogated to the right of the district. The former suit by the surety was based on the estimates allowed by the district.

The present suit by the principal is based on the earned estimates under the contract, being for the balance due for work done under the contract in excess of the estimates as allowed. The things sued for in the two suits are different. The term privity denotes mutual or successive relationship to the same rights of property.

McLaughlin v. Green, 48 Miss. 175.

There was or is no mutual relationship between surety and principal, or between them as assignor and assignee, to any interest in funds held by the district, or to any indebtedness due by the district to contractor, above the amount of whatever indebtedness he owed to the surety resulting from loss to it on account of having become his surety, for which alone it sued the district.

The present suit is based on the same contract as between the district and appellant out of which grew the contract between the surety and appellant with the district, but is for funds not allocated to or ear-marked with mutual interest or relationship. The interest affected by the present suit was not acquired through or from the surety company by appellant.

There is no identity in the things sued for, no identity in the cause of action, no identity of persons and parties to the action, or their privies, and, if the former suit was based on assignment, no identity in the quality of the person for whom the claim is made, since, if the former suit was on the assignment, the surety must have sued as trustee for any interest of appellant over the amount due the surety, which could have been litigated in the former suit had appellant have been a party thereto.

Creegan v. Hyman, 93 Miss. 493, 46 So. 954; Jones v. George, 126 Miss. 576, 89 So. 231.

W.J. Evans, of Calhoun City, for appellant.

As we understand the holding in the case of Jones v. George, 89 So. 231, there are four essential things to be shown in order to constitute a valid plea of res judicata, to-wit: 1. Identity in the things sued for. 2. Identity in the cause of action. 3. Identity of persons and parties to the action. 4. Identity of quality in the persons for or against whom the claim is made.

Creegan v. Hyman, 93 Miss. 493, 46 So. 954; Coleman v. Smith, 87 So. 7.

When the cause of action in two suits is different, only those things are concluded by the first judgment which were actually in issue in the suit in which they were rendered.

Hardy v. O'Pry, 59 So. 73.

If, after an assignment, there remains any interest, right, or liability, even a scintilla jurist, in the assignor which can be affected by the decree, then he is a proper, and in most instances a necessary party; and this is true both where the assignor retains an interest in the chose, and where there remains a liability on his part.

5 C.J. 1005, sec. 216.

Irrespective of statutory provisions affecting proceedings in equity, usually, where suit is brought in equity by an assignee, the assignor should be made a party where a complete determination of the controversy requires his presence, and where it is necessary in order to conclude him, or to protect his rights or those of defendant, and in such case, if he is omitted, the court will order that he be brought in, under the general rules of equity practice.

5 C.J. 1003, sec. 214; Selleck v. Macon Compress Warehouse Co., 17 So. 603; Boswell v. Thigpen, 22 So. 823.

We respectfully submit that the judgment of the lower court sustaining the plea of res adjudicata and dismissing the bill of appellant should be reversed and the cause remanded to the lower court for trial on the merits of the case.

C.E. Morgan, of Kosciusko, for appellee.

A plea of res adjudicata is good where the four essential things are present to constitute it, namely: 1. Identity in the thing sued for; 2. Identity in the cause of action; 3. Identity of persons or parties to the action; 4. Identity of quality in the persons for or against whom the claim is made.

Jones v. George, 89 So. 231; Creegan v. Hyman, 43 So. 954; Sec. 505, Code of 1930; 15 R.C.L. 1027, sec. 502.

If the assignee had a right to sue the appellee in Cause No. 7252 in its own name, and to recover the balance due the contractor and brought such a suit, then the four essentials especially laid down by this court in cases Jones v. George and Creegan v. Hyman, supra, are fully met.

In Cause No. 7252 the Guaranty Company as assignee, exercising its rights to subrogation, brought suit to recover $8715.56 and in addition any and all other amounts that the surety might be called upon to pay as such and based its claim primarily on the theory that the retained percentage was an arbitrary amount that must be set aside for the exclusive use of the surety, and it is fair argument to say that it did so with knowledge of the approximate amount that was due the contractor at completion of the contract, which was an amount considerably less than that expended by the surety on the contract, with the remote hope of establishing as a fact that the estimates of Engineer Stewart were not correct.

The bill prayed for general relief and the question of the balance due the contractor was heard and considered, the case was finally determined and this court passed on it.

U.S.F. G. Co. v. Attala County Dr. Dist., No. 2, 146 So. 460.

And if the court had a right to hear any part of the subject matter, it had a right to hear it all and it would have been the duty of the court, if it had been found that there was an amount due Brown over and above the amount due the surety, to have stopped the proceedings until Brown was brought in, so that the matter could be adjudicated fully should anything be due him, but no such amount was found to be due and he did not become a necessary party.

Griffith's Chancery Practice, sec. 110.

Assignee obtained no greater right in thing assigned than was possessed by assignor.

Canton v. Yazoo County, 109 So. 1; Box v. Early, 178 So. 793.

Brown and the surety were both interested in the balance due; the surety as assignee brought suit to recover same. The court found that the district owed Brown less than the amount due the surety on the subrogated claims; now how could it have been more conclusive or proof broader had Brown brought the suit in the first instance. Certainly if Brown's name had been substituted in Cause No. 7252 for that of the surety and the court had found that he was entitled to $5007, Brown would have met the plea of res adjudicata just as he has met it in the present suit; then if that is true would the plea have been sustained?

He is suing in that suit for his assignee for a balance due and realizing that the balance due was less than the surety's demand, attempted to establish a rule of law that would penalize the district to the tune of $3008.56 for not holding up a certain retained percentage regardless. In this suit Brown brings it and should he recover, the security would be shut off by the Statute of Limitations. Brown waited until one day before he was shut off and he now says that the surety was all wrong about the retained percentage and the court did not mean it when he said that the balance due was $5007 and if he did mean it, that this is suing the Drainage District from another angle for the balance due, therefore the court did not consider it from this angle and should the court decide against him, he would bring another suit from another angle.

We submit to the court that the identical subject matter coextensive with the parties was considered fully and completely and the decree rendered therein holding that the sum of $5007 was due, was binding on assignee and is binding on Brown, that therefore said cause should be affirmed.


Appellant Brown filed his bill in the chancery court against appellee. The court below sustained the plea of res adjudicata as a bar or estoppel to the suit, the cause being heard separately on that plea, and from the decree dismissing the bill appeal is prosecuted here.

The substance of the bill was that Brown was the contractor with the officials of the drainage district for the construction of certain ditches and laterals, which contract he alleged had been fully performed by him.

He alleged that as the work progressed its engineer made estimates of the value of such work; that these estimates were practically correct, but that on the completion of the contract by him the district caused an estimate to be made by a new engineer, who discarded the estimates of the former engineer, and resurveyed the work. He left out of his calculation the actual construction which had been performed by him in the discharge of his contract. He alleged that the estimate made by the last engineer reduced the amount of yardage by 120,723.5 cubic yards. He was to be paid for the yardage moved in the construction, and he alleged that new work had been done by him, permissible under the contract, for which the district was liable, and, in effect, alleged that there was $14,000 more due him than had been accounted for by the district to him; that the estimate was not a final estimate within the meaning of the contract.

He further charged that the district was entitled to a credit of $5007 which it had paid to the United States Fidelity Guaranty Company, the surety on his performance bond, in satisfaction of a judgment obtained against the drainage district by the surety company in a suit to which he was not party. The nature of that suit will be referred to later.

The plea of res adjudicata set up in brief that by a former suit instituted by the United States Fidelity Guaranty Company against the drainage district, all matters and things were litigated, settled, and concluded by the decree of the court in that case. The United States Fidelity Guaranty Company, in that suit, alleged that it had paid in excess of $8000 to laborers and materialmen in the performance of Brown's contract on its obligation as surety on the bond, and sought the recovery of that amount from the drainage district. It accepted the final estimate of the drainage district of approximately $62,000 as being the total amount due under the contract, but alleged that $5007, the amount of retainage, was not the proper amount, for the reason that it had overpaid Brown in the progress of the work on monthly estimates in the aggregate more than was due to have been paid Brown, and it alleged that under the law and the contract and the executed agreement of subrogation between it and Brown this overpayment was a breach of the contract on the part of the drainage district.

As we view the suit, it was a suit for the amount of retainage, although in his application for the bond executed by Brown and the United States Fidelity Guaranty Company, as his surety in favor of the drainage district, he assigned to it all moneys due him by the drainage district.

The surety company alleged in effect that the $62,000 estimate was correct, and that it was a final estimate, and they did not seek to disturb that estimate nor to contend that it was in any manner erroneous. The answer of the defendant admitted the estimate, as stated, but denied that it was liable for having failed to retain fifteen percent of the estimates paid during the progress of the work. There was no pretense of a suit upon the assignment for the ascertainment of the true amount due. The effect of the allegation of the bill was that the district, by virtue of its breach of the contract with it, was liable to it for a larger retainage than the sum it had in hand, it being its precise contention that its right to sue was based upon its right of subrogation to the rights of the laborers and materialmen who had been paid by the surety company. The issue of the amount actually due Brown on the contract was not litigated nor raised by the pleadings. Brown was not a party to that litigation.

By its decree the court below found that the amount of retainage, $5007, was the correct amount, and that the drainage district had not breached its contract and was not liable to the surety company for any amount in excess of the sum it had in hand, $5007. The decree was a money decree for $5007 which the drainage district admitted it had retained and was in hand. The surety company appealed from that decree and the case is reported as United States Fidelity Guaranty Co. v. Attala County Drainage Dist. No. 2, 166 Miss. 817, 146 So. 460, wherein the decree of the lower court was affirmed.

There are four essentials which must be present to constitute res adjudicata: (1) Identity in the thing sued for; (2) identity in the cause of action; (3) identity of persons and parties to the action; and (4) identity of quality in the persons for or against whom the claim is made. See Jones v. George, 126 Miss. 576, 89 So. 231.

All the pleadings and the decree in that suit were introduced in evidence in support of the plea.

It is clear from a reading of the entire pleadings and decree that the question of the amount due Brown on the contract was not raised, was not litigated, and was not involved in the prior litigation between the surety and the drainage district. The suit was not, in fact, based upon the assignment of the amount due by the district to Brown. That question was not raised nor involved in that litigation. The suit against the drainage district by the surety company was for a breach of an alleged contract and a breach of duty by the drainage district, which the latter owed to the former by virtue of its payment, as Brown's surety, of the claims of the laborers and materialmen.

Brown was not a party to the former litigation, was not the privy of the surety company, as to all the matters presented by the pleadings and the decree. Being neither a party nor a privy, his rights have never been adjudicated. The fact is the gravamen of the complaint of the surety company in the first suit was that the drainage district breached its duty by paying to Brown more money than should have been paid under the alleged existing law and contract. That which Brown will be called on to establish by a preponderance of the evidence in the case at bar was not involved in the former case.

A different question would be presented here if the former suit plead as res adjudicata in the case at bar had been upon the assignment or could have been litigated in the suit under the pleadings presented to the court. Brown, not being a privy of the surety company in the former suit, was not bound by the decree rendered therein. The cause of action now alleged by Brown is entirely different from that which was alleged by the surety company in the former suit. The plea of res adjudicata therefore lacks all the essential elements required by the rule. The thing sued for was essentially different and independent of the thing now in suit for the first time.

If the former suit had in any manner known to the law challenged the correctness of the final estimate and raised that issue predicated upon its written assignment made before the beginning of the suit, a more serious question would arise as to whether or not the assignee by its suit and the judgment therein could estop or conclude on a plea of res adjudicata the assignor. We do not stop to consider this question, as in our view it is not in the case.

The court below should have overruled or denied the plea of res adjudicata herein.

Reversed and remanded.


Summaries of

Brown v. Attala Drain. Dist. No. 2

Supreme Court of Mississippi, Division A
Apr 3, 1939
187 So. 529 (Miss. 1939)

In Brown v. Drain, 112 Fed. 582, the plaintiff sued the street superintendent and city treasurer of Los Angeles to obtain a decree declaring invalid the local assessment for a street improvement and to quiet his title to the land assessed.

Summary of this case from Duncan v. Ramish

In Brown v. Drain, 112 Fed. 582, the plaintiff sued the street superintendent and city treasurer of Los Angeles to obtain a decree declaring invalid the local assessment for a street improvement and to quiet his title to the land assessed.

Summary of this case from Swall v. County of Los Angeles
Case details for

Brown v. Attala Drain. Dist. No. 2

Case Details

Full title:BROWN v. ATTALA DRAINAGE DISTRICT NO. 2

Court:Supreme Court of Mississippi, Division A

Date published: Apr 3, 1939

Citations

187 So. 529 (Miss. 1939)
187 So. 529

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