
    Mary Cummings et al., Respondents, v. Bernard Dresher et al., Appellants.
    Argued June 1, 1966;
    decided July 7, 1966.
    
      Norman L. Harvey and John L. Bell for appellants.
    
      
      Loren W. Lillis and Samuel M. Hesson for respondents.
   Chief Judge Desmond.

There was a collision between an automobile owned by Martin Cummings and driven by Mary Cummings and an automobile driven by Bernard Dresher. The car driven by Bernard Dresher was owned by Standard Electric Co., Inc., and in it Henry Dresher was a passenger. Driver Bernard Dresher and passenger Henry Dresher as coplaintiffs sued driver Mary Cummings and owner Martin Cummings in the Federal District Court for damages for personal injuries sustained by the two Dresher brothers. The issues up for determination in that Dresher v. Cummings suit included, therefore, questions as to the negligence of either or both the Dreshers and either or both of the defendants Cummings. Returning their verdict, the jury told the Federal Judge that it found in favor of the passenger Henry Dresher against defendants Cummings and found also that Mrs. Cummings was “ guilty of negligence ” and that “plaintiff” (apparently meaning driver Bernard Dresher) “was guilty” of contributory negligence to a very minor degree. The Judge, to “ complete ” the verdict, instructed the Clerk to ask the jury whether it intended a verdict of no cause of action in Bernard Dresher’s suit. The jurors replied that such was their intention. Judgment was thereupon entered in favor of Mr. and Mrs. Cummings dismissing the complaint of Bernard Dresher and the judgment was affirmed by the Federal Court of Appeals (325 F. 2d 156). At the close of these Federal court proceedings it was completely clear that the jury had found that driver Mary Cummings had been found guilty of negligence and that, therefore, she as driver and her husband as owner had to pay damages to passenger Henry Dresher. Equally clear was the Federal court jury’s finding that driver Bernard Dresher had been guilty of contributory negligence and so, notwithstanding the found negligence of driver Mary Cummings, Bernard Dresher could not recover against the defendants Cummings.

Despite this definite and unmistakable Federal court jury finding as to both drivers being at fault, driver Mary Cummings and her husband brought the present suit against driver Dresher and the corporate owner of the Dresher car. The courts below, for inscrutable reasons, held that the Federal court judgment was not determinative here. We do not understand why in a reasonable, prompt and nonrepetitibus judicial system the negligence or no of these two drivers must be decided all over again, after having once been settled after a jury trial in which all these same people were parties and all the same issues tried and decided. “ ‘ One who has had his day in court should not be permitted to litigate the question anew. * * * Under such circumstances the judgment is held to be conclusive upon those who were parties to the action in which the judgment was rendered. Where a full opportunity has been afforded to a party to the prior action and he has failed to prove his freedom from liability or to establish liability or culpability on the part of another, there is no reason for permitting him to retry these issues ’ ’ ’ (Israel v. Wood Dolson Co., 1 N Y 2d 116, 119; see, also, Commissioners of State Ins. Fund v. Low, 3 N Y 2d 590, 595).

It is unnecessary to deal with Federal Rule 13 (subd. [a]) which was not briefed by the parties or considered by either court below.

The order appealed from should be reversed, with costs in all courts, and the matter remitted to the Appellate Division for further proceedings in accordance with the opinion herein. The certified question should be answered in the negative.

Fuld, J.

(concurring). I reach the same decision the majority does but by a different route. Although I agree with Judge Bee GAN that there was no prior adjudication of the plaintiffs’ claims in the Federal court, I, nevertheless, believe that the defense of res judicata is available to the defendants because of the compulsory counterclaim rule prescribed by the Federal Rules of Civil Procedure. The cases are clear that, if a defendant in a Federal suit is required to file a counterclaim but does not, the resulting judgment of the District Court will be res judicata as to the merits of the counterclaim which should have been pleaded. Rule 13 (subd. [a]) of the Federal Rules, insofar as relevant, provides:

“A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if * * * at the time the action was commenced the claim was the subject of another pending action ”.

There can, of course, be no doubt that the claims which the plaintiffs now assert arose, to cull from the rule, out of the same “ occurrence [as was] the subject matter of the opposing party’s claim (See, e.g., Sinkbeil v. Handler, 7 F. R. D. 92, 97; Keller v. Keklikian, 362 Mo. 919.) And, since — to quote again from Rule 13 (subd. [a]) —“ the presence of third parties ” was not required for the adjudication of the Cummings’ claims, nor were those claims “ the subject of another pending action ” when the Federal suit was commenced, it is indisputably clear that the plaintiffs now before us should have interposed as counterclaims in the earlier litigation the very causes of action now sued upon. Having failed to do so, it necessarily follows that the judgment entered (by the District Court) is res judicata as to the merits of the counterclaims which should have been pleaded. (See United States v. Eastport S. S. Corp., 255 F. 2d 795, 805; Pesce v. Linaido, 123 So. 2d 747 [Fla. Dist. Ct. App.]; Mensing v. Sturgeon, 250 Iowa 918, 925; Keller v. Keklikian, 362 Mo. 919, supra; Horne v. Woolever, 170 Ohio St. 178; Beach v. Runnels, 379 S. W. 2d 684 [Tex. Civ. App.].) A.s the Federal Court of Appeals for this circuit said in the Eastport S. S. Corp. case (255 F. 2d, at p. 805), “whenever a compulsory counterclaim is not pleaded in an action where it should have been pleaded the judgment entered in that action is clearly res judicata as to the merits of the unpleaded counterclaim.” This sound result has also obtained, as indicated, in every State court which has had occasion to pass on the matter. In Horne v. Woolever (170 Ohio St. 178, supra), a case virtually identical with the one before us, the high court of Ohio, expressly holding that the second suit, instituted in the State court, was barred by operation, of the Federal Rule, declared: “It is apparent * * * that the cause of action set forth in plaintiff’s petition is one that Rule 13 would have required plaintiff to assert as a counterclaim in defendant’s federal court action * * *. To the extent to which a judgment of a federal court operates as res adjudicata in that court, it operates as res adjudicata in the courts of this state ” (p. 183). And, in my view, it likewise operates as res judicata in New York.

Bergan, J.

(dissenting). While plaintiff Mary Cummings was driving a car southerly in Route 9 near Schroon Lake, a front tire blew out and the car went across the highway to the left side where, as it was coming to a .stop, it collided on the shoulder with a car driven in a northerly direction by defendant Bernard Dresher and owned by defendant Standard Electric Co., Inc. Plaintiff Martin Cummings owned the southbound car.

Defendant Bernard Dresher and his brother Henry Dresher, who was a passenger in the northbound car, sued the present plaintiffs, Mary and Martin Cummings, in the United States District Court for personal injuries. After a trial, and based on verdicts of the jury, a judgment was entered in the District Court in favor of the passenger Henry Dresher against Mr. and Mrs. Cummings; and in the cause of action by Bernard Dresher against Mr. and Mrs. Cummings, judgment was entered for defendants.

In returning the verdict for the defendants Martin T. and Mary E. Cummings, the jury said “ we find the defendant [sic] guilty of negligence and the plaintiff guilty of contributory negligence to a very minor degree ”. In response to this the court directed the Clerk to receive the verdict in proper form by saying “ You have to now complete that. You should ask whether the verdict is no cause of action”. Juror No. 12 interposed: “ Yes, Your Honor.”

. The court continued, addressing the Clerk: “ You should ask the jurors.” Whereupon the Clerk said: “Ladies and gentlemen, your verdict in the case of Bernard Dresher against Cummings is one of no cause of action in favor of the defendant [sic] and so say you all ? ” The jurors said “Yes. Yes. ” Upon this, the judgment for the defendants, the present plaintiffs, was entered in the action of Bernard Dresher.

The main problem is whether there has resulted from that former action a binding adjudication in favor of defendant Dresher against plaintiffs Cummings which would preclude a recovery in this present action, based on negligence, between the same parties for damages arising from the same accident. The court at Special Term denied defendants’ motion for summary judgment and the Appellate Division affirmed but granted permission to appeal here,

The question has two separable aspects: (a) the effect of the judgment for the passenger Henry Dresher against the present plaintiffs Cummings; (b) tile effect of the judgment for the present plaintiffs in the defendant Bernard Dresher’s action against them and legal influence, if any, upon that judgment, of the jurors’ “ findings

The judgment in favor of the passenger Henry Dresher against Mr. and Mrs. Cummings must he regarded as deciding, between those .specific parties, that Mrs. Cummings was negligent and the passenger Dresher free from negligence.

But those parties are not these parties; and there is tío suggestion of relationship, identity; or privity between Henry Dresher as passenger in the defendant Standard Electric’s car and his brother Bernard as its driver, which would pass on to either driver or owner any legal benefit from Henryks adjudication against plaintiffs.

Indeed, Henry was free to sue either Ms brother or Standard Electric and his success in litigation with the Cummings carries no benefit to the others. This is an occasional result in litigation where parties not in a relationship of privity with others, and acting without a nexus of derived responsibility to others, are able freshly to litigate with different and legally unrelated parties issues which have been decided between themselves.

The rule is not easy to state simply, but it is well recognized. There is continuous need to distinguish and separate off different identities. “ [I]t creates no privity between two parties that, as litigants in two different suits, they happen to be interested in proving or disproving the same facts ” (Sturbridge v. Franklin, 160 Mass. 149, 151; see, also, St. John v. Fowler, 229 N. Y. 270; Old Dominion Copper Co. v. Bigelow, 203 Mass. 159).

A careful discussion of the rule and its inherent perplexities appears in the opinion of Davis, J. in Haverhill v. International Ry. Co. (217 App. Div. 521, affd. 244 N. Y. 582). There a collision occurred between plaintiff’s truck and defendant’s street car. The truck driver, who also was plaintiff’s employee, sued the railway for personal injuries and recovered a judgment. The truck owner then sued the railway company for damage to the truck. The record of the prior judgment was received over defendant’s objection. It was held that there was no mutuality of estoppel and since “ The doctrine of res judicata is based primarily on the principle of estoppel’’ (p. 522), the proof of the prior judgment was held to be inadmissible.

As a matter of defense the situation of the owner of a motor vehicle whose driver has recovered against another owner and driver for personal injuries has been treated somewhat differently and the owner has been allowed to plead the prior adjudication (Good Health Dairy Prods. Corp. v. Emery, 275 N. Y. 14). But the relationship between owner and driver of the car from which a derivative liability was inferred was treated as “ akin to that imposed on a master for the negligent acts of his servant ” (p. 17), and there was a relationship of responsibility between the prior and present parties entirely lacking here.

The absence of such a relationship and hence a refusal to apply the doctrine of res judicata is to be seen in Elder v. New York & Pennsylvania Motor Express (284 N. Y. 350) which clarified somewhat the apparent conflict between International Ry. and Good Health. There had been a collision between two trucks and one owner recovered against the other. When, in a later action by the driver-employee of the successful party against the other, the driver moved for a directed verdict on the basis of the prior adjudication, the refusal to grant the motion was sustained. Decision turned in part on International Ry. Co., regarded as stating one of the “fundamental conceptions” (p. 353); and Good Health was distinguished. There is no basis for treating the prior judgment for Henry Dresher as an adjudication which would impair plaintiffs’ present cause of action against these defendants.

'When we turn to the prior action brought by present defendant Bernard Dresher against Mr. and Mrs. Cummings, we notice full identity of parties and of subject matter. Had Bernard Dresher recovered it would be well to suppose the litigation between these parties ended. But he did not recover; the judgment went against him, and since he was under the necessity of proving both that he was free from negligence and Mrs. Cummings was negligent, the effect of such a defendant’s judgment would normally be that Mr. and Mrs. Cummings would be entitled to show in a new action that Bernard Dresher was negligent- and Mrs. Cummings free from negligence and so recover against him and, derivatively, against Standard Electric.

This part of the problem turns on what was covered in by the adjudication in the prior action between identical parties. The classic test is that the two causes — the one adjudicated earlier and the present one — must “ have such a measure of identity that a different judgment in the second would destroy or ..impair rights or interests established by the first” (Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 N. Y. 304, 307) and, of course, there is nothing like that possible here. There are marked similarities between the situation in Daly v. Terpening (261 App. Div. 423, affd. 287 N. Y. 611) and that disclosed by the record in the present case; and United Mut. Fire Ins. Co. v. Saeli (272 App. Div. 951, affd. 297 N. Y. 611) is adequately distinguished in the Appellate.Division opinion.

The jurors’ rationalization of their verdict for defendant expressing their conception that Mrs. Cummings was negligent and Bernard Dresher also negligent, does not alter the legal consequences of the judgment for the Cummings. Uncertainties about what is decided arising from the expressions of jurors must necessarily be deemed settled by the certainties of formal judgments solemnly entered and to yield to those certainties.

"What the court is now deciding is that if the jury renders a general verdict, the judgment will have one consequence; but if ■the jury volunteers to tell the court why it reaches the verdict, the judgment will have a different consequence, i.e., if there had been a general verdict plaintiffs would not now be foreclosed in this action. The consequence of judgments must not- be left to hang on this kind of fortuity.

It is better that the vagaries of jurors’ thinking on legal theories be safely enclosed in the-cocoon of the judgment. A judicial direction for special findings, in turn reflected in a judgment, might put the case in a different light. But it is clear from the record that the Judge was requiring the jury to return a general verdict and the judgment for defendants, Cummings reflected this. This is the effect of the decision in Purpora v. Coney Is. Dairy Prods. Corp. (262 App. Div. 908).

That the procedural effect under the Federal practice of a failure to assert the plaintiffs’ present cause of action by way of counterclaim works as a bar to this action was not pleaded as a defense; nor was it raised or considered at the Special Term, or at the Appellate Division; and no party raised it here. ■

The order should be affirmed 'and the certified question answered in the affirmative.

Judges Burke, Scileppi and Keating concur with. Chief Judge DesmoNd; Judge Fuld concurs in a separate opinion in which Judge YaN Yoorhis concurs; Judge BergaN dissents and votes to affirm in a separate opinion.

Order reversed, etc. 
      
      . The defendants, it is true, did not allege or refer to Rule 13 but, having asserted the Federal judgment as a bar to the plaintiffs’ present cause of action, they were not required to go further and plead the legal effect or construction to he accorded that judgment in the light of the Federal Rule.
     