Brief Fact Summary. The Plaintiff, Bernhard (Plaintiff), brought an action as new administratix of an estate to hold the Defendant, Bank of America Nat. Trust & Sav. Ass’n (Defendant), liable for recovery of bank withdrawals not approved by decedent.
Synopsis of Rule of Law. There is no requirement that the party asserting the plea of res judicata must have been a party, or in privity with a party, to an earlier litigation so long as the party against whom res judicata was asserted was a party in privity to a party in that litigation.
Mrs. Sather died in November 1933 and Cook was named executor. At the insistence of the probate court he was asked to resign. The account he filed made no mention of the money transferred by Sather to the San Dimas Bank. The Plaintiff filed objections to probate because of this. On the objections, the court ordered that Mrs. Sather had made a lifetime gift to Cook in the amount of the deposit in question.
The Plaintiff was named administratrix of the estate and brought suit against the Defendant, successor to the San Dimas Bank, seeking to recover the amount because Mrs. Sather never authorized the withdrawal. The Defendant pleaded two affirmative defenses: (i) that the money on deposit was paid to Cook with Mrs. Sather’s approval and (ii) this fact was res judicata by the finding of the probate court. The Plaintiff argued that res judicata did not apply because the Defendant was not a party to the previous action nor in privity with a party to that action and because there was no mutuality of estoppel.
Issue. Whether the Plaintiff in the present action was a party to or in privity to the earlier proceeding.
Held. In determining the validity of a plea of res judicata, three questions are pertinent: First, was the issue decided in the prior adjudication identical with the one presented in the action in question? Second, was there a final judgment on the merits? Third, was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? The issues as to identical action and final judgment were answered in the affirmative. The Plaintiff in this suit brought the present action in the capacity of administratrix of the estate. In this capacity she represents the very same persons and interests that were represented in the account hearing.
Res judicata is available only when there is privity and mutuality of estoppel. Privity is achieved when parties to the former action or their privies may take advantage of the decision or be bound by it. A party in connection is one who is directly interested in the subject matter and had a right to make a defense or control the proceeding and appeal from the decision. A privy is one who by rendition of the judgment by or through one of the parties has acquired an interest in the judgment, by inheritance, succession, purchase, etc. Estoppel is mutual if the one taking advantage of the earlier adjudication would have been bound by it, had it gone against him.
The criteria for determining who may assert a plea of res judicata differ fundamentally from the criteria for determining against whom a plea of res judicata may be asserted. The requirements of due process 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. However, there is no requirement that the party asserting res judicata had to be a party or in privity with a party to the earlier litigation.
The Plaintiff as administratrix represents the estate of the decedent, as she did in the earlier action where she objected to the executor’s account. She was not seeking personal recovery, but one to benefit the estate and its creditors – all of whom were bound by the order settling the account.