Chesapeake Lighterage & Towing Co. v. Western Assurance Co.

58 A. 16, 99 Md. 433, 1904 Md. LEXIS 73

Opinion

Boyd, J.,

delivered the opinion of the Court.

The appellant sued the appellee on an insurance policy which insured merchandise while on board certain scows, including one known as No. 154 on which the insurance was limited to two thousand dollars. The declaration alleges that while a cargo of corn was being carried from an elevator to a steamship, within the waters of the harbor of Baltimore, this 'scow was, by reason of the perils insured' against, overturned .and the corn laden thereon was thereby totally lost, and the plaintiff has been required to pay the owner the full value thereof, namely, $2,500. After the defendant had filed its pleas alleging, amongst other things, that the loss occurred by ■reason of the unseaworthiness of the scow, it made application to the Court under sec. 115 of Art. 75 of the Code to decide before further proceedings two questions, namely,

' 1. Is the unseaworthines of said scow or lighter at the time of the commencement of the alleged risk and during its continuance a defense to this action?

II.' Is the fihding of such unseaworthiness in the Admiralty suit mentioned conclusive upon the plaintiff in this action?

c In the application it is alleged that the cargo belonged to the firm of I. 'M. Parr & Son, and that after its loss the President and Directors of the Insurance Company of North America, as'assignee ’ of I. M. Parr & Son, filed its libel against the North German Lloyd Steamship Company in the District Court of the United States, in and for the District of Maryland, claiming damages for the loss of said grain, on the ground of respondent's negligence in the carriage of the same ; that Judge Morris of said Court rendered a decree in favor of libellant, based on his finding of the fact that said scow was unseaworthy at the commencement and during the continuance of its said voyage. It further alleges that the United States Circuit Court of Appeals for the Fourth Circuit affirmed said decree, and the appellee filed as an exhibit a notice from the appellant, informing it of the suit in Admiralty, that the North German Lloyd denied all liability, and notifying the appellee that should it suffer any da'mage from said suit it would hold it responsible. The notice-refers to the policy of insurance and calls upon the appellee to take action with the North German Lloyd to defend the ' suit, etc. The assistant secretary of the appellee replied that he could not see that his company had anything to do with the matter. The suit in Admiralty resulted in a decree against the respondent (North German Lloyd Company) in favor of the Insurance Company of North America, for $2,290 with interest and costs. The appellant admitted the facts set out in the application, which, in addition to what we have mentioned, states that the appellant was represented by counsel in the Circuit Court of Appeals.

The Court of Common Pleas entertainad the application, and decided both questions -submitted to it in the affirmative ; a verdict was rendered in favor of the defendant and this appeal was taken from the judgment on that verdict. The appellant admits the correctness of the Court’s answer to the first question, namely, that unseaworthiness at the corn-commencement of the risk and during the continuance thereof •was a defense to this action, but contends that there was error in its decision as to the second question.

I. A number of cases have been before this Court involving the question as to how far a judgment or decree of a Court of competent jurisdiction will operate as an estoppel. In McKinzie v. B. & O. R. R. Co., 28 Md. 161, it is thus announced: “A judgment, to operate as an estoppel, must be upon the same subject-matter and between the same parties. The term ‘parties,’ however, is not restricted to those who appear as plaintiff and defendant upon the record. It concludes those who are directly interested in the subject-matter of the suit, knew of its pendency and had the right to control, and direct, or defend, it.” That was an action of replevin. In the previous case of McKinzie v. Rnssell, the title to the iron in controversy had been decided to be in McKinzie. Russell was the agent of Mantz and Byrne and only claimed the iron as the property of his principals. Mantz and Byrne knew of the pendency of that suit and Mantz and their attorney took part in the trial. It having been determined in the first case to be the property of McKinzie, this Court had no hesitation in holding them estopped in the suit against the railroad company, which by agreement of all the parties they “were permitted to come in and defend the suit as fully and in the same manner as if they were defendants named in the writ.’ ” In

■ C. & O. Canal Co. v. Comity Commissioners, 57 Md. 201, a recovery by the County Commissioners against the Canal Company was sustained. The Canal Company was under obligation to keep a bridge over the canal in repair and having failed to do so, an injured party sued the Commissioners and recovered against them, the bridge being part of a public highway. The Canal Company had been notified of the pend-ency of the suit and had taken part in the management of the case. It was held liable for the amount of the judgment recovered against the county, and for counsel fees paid by the latter. Chicago v. Robbins, 2 Black, 418; Robbins v. Chicago, 4 Wall. 657, and other well-known cases were relied on. In Pcirr & Cockey v. State, use of Cockey, 71 Md. 220, it was held that a decree directing the payment of a certain sum of money by a guardian to a ward was prima facie binding on the sureties, although they were not parties to the suit, and it was also decided that when a party interested in a subject-matter of a suit, as those sureties' were, does in fact appear and exerercise the right of participating in the defense, as if he were a technical party of record, “he cannot afterwards be heard to contend that he is not bound and concluded by the judgment or decree, to the same extent that he would have been if made a technical party to the proceeding,” and “where a party has had a full and fair opportunity presented of making all the defenses at his command to an asserted right or claim it is quite immaterial that he >has elected to appear and defend in the name of another who is a party of record, rather than cause himself to be made a co-defendant.” Again it was there said “At any rate, having had a legal opportunity to make their defenses, they cannot be heard to say that 'they ^id not avail themselves of it.” In Albert v. Hamilton, 76 Md. 304, some of a number of mortgagors had filed a bill to have a mortgage set aside, alleged to have been procured by fraudulent representations, which case was decided against them. It was held that other mortgagors, knowing of the pendency of that suit, who had neglected or wilfully refused to take part in those proceedings, were concluded by the decree therein. It was on the ground “that persons who are directly interested in the suit and have knowledge of its pendency, and who refuse or ■neglect to appear and avail themselves of their rights, are concluded by the proceedings as effectually as if they were parties named on the record.” In Fetterhoff v. Sheridan, 94 Md. 445, we applied the doctrine to a claimant of property sought to be condemned in an attachment proceeding, and held that if the claimant having notice of the proceeding, failed to appear and defend, and judgment of condemnation was rendered against the garnishee, the claimant would be bound by the result. Other cases might be cited, but these suffice to point out some of the circumstances under which one not a technical party may be concluded by the result of a proceeding in which he is interested and of which he has notice. It is for the purpose of avoiding useless litigation and to put an end to controversies that can properly be disposed of in one proceeding.

2. But giving this salutary doctrine its full effect, and without being willing to depart one iota from it, is it conclusive of this case? This appellant actually did defend the case in Admiralty, but in doing so what was to its interest to establish? Bear in mind that it was a suit of the assignee of the owner of the cargo against a common carrier and that the appellant’s responsibility was due to the fact that it was a common carrier, acting for the respondent. Judge Morris’ opinion, made part of the record, shows that the respondent averred for defense in its answer that the corn was not received on board the “H. H. Meier,” its ship which was to carry it, and was lost by the upsetting of the lighter, but the Judge said that since the case of Bulkley v. Ihe Cotton Company, 24 Howard, 384, it has been conceded, under such circumstances as were presented in the Admiralty case, that “the lighter is the substitute of the ship and that the goods are in fact, therefore, delivered into the custody and care of the ship and her owners from the time that they are placed on the lighter.” And he went on to say, “for the purposes of this case 1 shall take it that the bill of lading which was intended to be the contract for the carriage was applicable to these goods and to the rights of the parties from the time that the corn was put upon the lighter,” and he held that “The rule in Admiralty is that when goods are placed aboard a vessel, and the vessel starts on her voyage, and within a short time, without any unusual occurrence of any sort arising, the goods are injured by the leakage of the vessel or its capsizing, the presumption is that there was some unseaworthiness in the vessel at the inception of the voyage." After discussing the testimony he added “There is, therefore, a failure on the part of the respondent to show that this disaster occurred through any unusual occurrence or anything that could in any sense whatever be called ‘a danger of the sea,' " and hence it followed that the accident must have happened either because the lighter was unfit for the duty undertaken, or was leaking while at the wharf, or had such a defect in her that the slight roll caused by the swell of the waters brought some defective portion of her under the water which leaked in through the defect.'

It is manifest then that it was to the interest of the Lighterage Company to prove that the scow was seaworthy and that the disaster occurred through what is called “a danger of the sea.” And it is equally clear that it would have been to the advantage of the appellee to show that it" was not occasioned by a peril of the sea, as its policy of insurance was against “perils, lqsses and misfortunes occasioned by perils of the sea’’ and it has the right to require the appellant to prove that the loss was so occasioned before it can recover. If the appellee had complied with the request of the Lighterage Company and defended the suit, would the latter company have permitted it to offer evidence that the scow was not seaworthy, and thereby not only relieve itself of responsibility but help to fix the liability on the Lighterage Company? Surely it would not. Is then this such a case as calls for an application of the principle relied on to estop the appellant? It does not seem to us to be such. The appellee would not under the circumstances, to use the language of Judge Alvey in Parr & Cockey v. State, supra, have' “had a full and fair opportunity presented of making all the defenses as its command to an asserted right or claim.” We do not overlook the fact that the appellant invited and requested the appellee to defend the Admiralty suit, and stated that the North German Lloyd Company authorized them to say that they would be pleased to have its co-operation in the defense, but it was requested to defend— not to aid the libellant, which it would have done if it had assumed the position which it would have been interested in establishing. It would be useless to contend that the Lighterage Company or the North German Lloyd Company would, or might, have permitted it to adopt its own line of defense, if that was contrary to the interests of those companies, for at most the appellee could only be held liable for two thousand dollars, while the libellant was claiming and actually did recover more than that sum. It is clear that if the appellee had complied with the request of the appellant, and taken part in the defense of the Admiralty case, it would have'been compelled, on this question, to choose between proving that the vessel was unseaworthy, and thereby make the respondent liable, or that it was seaworthy, and thereby make itself liable. In short, the interests, of the appellant and the appellee radically differed in the line of defense to be adopted, and therefore it was not such a case as required or authorized the appellee to defend. As the North German Lloyd Company was sued as a common carrier, any defense that would benefit the appellant would likewise benefit it, but that was not so with the appellee. We are therefore of the opinion that the appellee was not only under no obligation to take part in that case, but could not properly have done so, if it intended, as it had a right to do, to rely on the terms of its policy in determining its responsibility to the appellant. It was neither a party nor a privy in the sense those terms are used in the authorities, nor did it have an interest in the subject-matter similar to that of the appellant, but on the contrary, as we have seen, its interest was just the opposite in the material issue in that case, namely, whether the scow was seaworthy. It would have been impossible for it, therefore, to have made such defenses in that case as it has the right to make against the appellant.

Wc have been referred to no case that goes to the extent we are' asked to go in this, under such circumstances as we have stated. • The appellant’s liability to the owner of the corn was that of a common carrier, governed by principles applicable to that relation as applied in an Admiralty proceeding, while any responsibility on the part of the appellee to the appellant, was by virtue of the contract of insurance, which' was to be determined by the terms and conditions of the .policy. Any recovery from the appellee by the appellant would not be on the theory of reimbursing the latter for what it would . have to pay as the result of the decree in the Admiralty proceeding — there was no remedy over against the appellee by reason of that suit, but if liable at all it was on the contract of insurance. It is evident, therefore, that the appellee was not estopped by that proceeding, or by reason of the notice of its pendency.

3. Having found that the appellee was not estopped, is the appellant precluded from suing in this case? That estoppels must be mutual and reciprocal is a principle frequently announced by this Court. It was said in Cheveront v. Textor, 53 Md. 308, that “Estoppels are always mutual and reciprocal. Herman on Estoppel; Alexander v. Walter, 8 Gill, 239. When the parties are not the same in an action at law, the judgment or finding of the jury in another cause, where only one of the litigants (as is the case here) was a party, cannot be admissible as evidence, or by way of estoppel, because the parties not being the same there is no mutuality. It is res inter alios acta. Strangers are not bound by, nor can they take advantage of an estoppel growing out of proceedings to which they were strangers, and had no opportunity of being heard. Herman on Estoppel, 120. Estoppels by judicial determination can only be relied on by parties or privies.” In Groshon v. Thomas, 20 Md. 234, the doctrine was thus announced : “Estoppels áre mutual and cannot be insisted -on by any one who is not himself bound thereby. See 1 Greenl. Ev., secs. 524, 528. Here the appellee was not a party to the record offered in evidence, and not being concluded by it himself, cannot rely upon it as a technical estoppel upon the appellant.” And in Bolton Mines Co. v. Stokes, 82 Md. 62, it was thus stated : "Estoppels must be reciprocal, and bind both parties. They operate only on privies in blood or estate, and can be used neither by nor against strangers. He that shall not be concluded by the record, or other matter of estoppel, shall not conclude another by it.”

(Decided June 9th, 1904.)

See also Cecil v. Cecil, 19 Md. 72, and Alexander v. Walter, 8 Gill, 239, and note of Mr. Brantly in the annotated edition where many cases are cited.

As there is nothing in the record to suggest an estoppel in pais, it is not necessary to discuss that. It is not pretended that the appellee was in any wise misled to its injury by any act of the appellant, done or omitted to be done, which calls for the application of that valuable doctrine.

We are therefore of the opinion that the finding in the Admiralty case that the scow was unseaworthy is not conclusive upon the appellant, and hence the judgment must be reversed.

Judgment reversed, and new' trial awarded, appellee to pay the costs.