Bernhard v. Bank of America Nat'l Trust & Sav. Asso.

122 P.2d 892

 

RULE:

The requirements of due process of law forbid the assertion of a plea of res judicata against a party unless he was bound by the earlier litigation in which the matter was decided. He is bound by that litigation only if he has been a party thereto or in privity with a party thereto. There is no compelling reason, however, for requiring that the party asserting the plea of res judicata must have been a party, or in privity with a party, to the earlier litigation.

FACTS:

Clara Sather opened a bank account and authorized Mr. Cook to write checks to take care of her affairs. Mr. Cook took out a large sum of money from the account and deposited it into his own. When Mrs. Sather passed away, Mr. Cook was the executor of her estate. Mrs. Sather’s beneficiaries sued Mr. Cook to give the money back that he had deposited in his account, but he claimed it was an authorized gift from Mrs. Sather. The court ruled in favor of Mr. Cook. One of Mrs. Sather’s daughters took over as executor of the estate and sued the bank for allowing the transfer of the money from Mrs. Sather’s account to Mr. Cook’s. The court permitted the bank to assert nonmutual issue preclusion.

ISSUE:

Can a plea of res judicata be asserted by someone that was not a party or in privity to the previous litigation?

ANSWER:

Yes.

CONCLUSION:

Where a party though appearing in two suits in different capacities is in fact litigating the same right, the judgment in one estops him in the other. Therefore, the plea of res judicata was available against Mrs. Sather’s daughter as a party to the former proceeding, despite her formal change of capacity. Mrs. Sather’s daughter represented the same persons and interests that were represented in the earlier hearing on Mr. Cook’s account.

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