HOUGH, Circuit Judge
(after stating the facts as above). To decide this cause it would be enough to cite authority both ruling and persuasive in the courts of the United States.
One who prosecutes or defends a suit in the name of another to establish and protect his own right, or who assists in the prosecution or defense of an action in aid of some interest of his own, and who does this openly to the knowledge of the opposing party, is as- much bound by the judgment as is a party to the record. Souffront v. La Compagnie, etc., 30 S. Ct. 608, 217 U. S. 475, 54 L. Ed. 846; citing Lovejoy v. Murray, 3 Wall. 1, 18 L. Ed. 129; Penfield v. Potts, 126 F. 475, 61 C. C. A. 371; Greenwich, etc., Co. v. Friedman, 142 F. 944, 74 C. C. A. 114; Walz v. Agricultural, etc., Co. (D. C.) 282 F. 646 (with very full citation of cases).
That plaintiffs in error joined in the defense of the Eastern District action, and did so openly and avowedly and for their own interest, is evident and not denied; and at this trial it was proved that what the nine insurers did in this instance has long been almost universally done, at least in the metropolitan district, if more than three insurers are concerned in a fire loss.
In Elliott v. Roto, 242 F. 941, 155 C. C. A. 529, we held that it was enough if the con-" duet of defense by a third party was open and avowed. It was not further necessary that the conduct must be known to the opposite party. But we agree with defendant in error that, at the trial in the Eastern District case, if not before, the insured was fully apprised of exactly how the defense in all the suits was being conducted. In short, no difference can be found between this litigation and the eases cited in principle, and several of them present substantially similar facts.
[218]*218We are told that, since jurisdiction herein rests upon diversity of citizenship, we are “administering the law of New York,” and that the decisions in Fish v. Vanderlip, 112 N. E. 425, 218 N. Y. 29, Ann. Cas. 1916E, 150, and Fish v. Iselin, 114 N. E. 1067, 219 N. Y. 632, are opposed to the rulings we have cited from the national courts. While we incline to think that these eases are not, when carefully examined, opposed to the doctrine first above set forth, the matter is one of general law, and is neither statutory nor local. On such a point it no longer needs citation to show that the eourts of the United States are not controlled by state decisions..
We are also told that Bigelow v. Old Dominion, etc., Co., 32 S. Ct. 641, 225 U. S. 111, 56 L. Ed. 1009, Ann. Cas. 1913E, 875, has either overruled the cases first above cited or is inconsistent with them and later in date. We look upon that decision as perfectly illustrating the difference between regarding another man’s ease as an important test of the law of one’s own litigation, and agreeing with other men to act together and pay together in respect of all the litigation of the agreeing parties. The first act may be likened to visiting and advising an ally; the second act amounts to joining that ally’s army. We therefore-decide the present case in conformity with the rule stated, but shall briefly examine the reason and implications of that rule.
Estoppel is too convenient a word; it has come to be used with such vagueness as at times to induce belief that it has passed beyond the legal vocabulary and become like “demur,” a word of the literary language. Even a lawyer may say that he demurs to something just said, when he means no more than that he hesitates to accept it as truthful or accurate; and so “estop” is used somewhat elliptieally, to signify that the person estopped is for any one of all assignable reasons prevented from doing or saying what he wishes to do or assert.
Estoppel cannot- be used in formulating legal documents with any such laxity, and a glance at the law lexicons, or such a collection of descriptions, rather than definitions, as may be found in 21 C. J., 1061, will show that if, e. g., in this case it be asserted, as it has been, that these six companies are estopped by what they have done, it is necessary to proceed and state what kind of estoppel affects them, and effects the prevention. Admittedly the defense of the Eastern District action in the manner and for the reasons set forth in the pooling agreement is the matter relied on; but the question remains: What kind of an estoppel is thus produced?
Undoubtedly it is an estoppel equitable or in pais, the identity and history of which terms are very well set forth in Horn v. Cole, 51 N. H. 287, 12 Am. Rep. 111. But an equitable estoppel is an equitable right, if not a remedy, and so it has been many times said — we said it in Elliott v. Roto, supra— that an estoppel must be mutual. If this phrase be taken, not as a short description of one, but not the only, test of a good estoppel, then a case can be stated from the history of this litigation which requires answer.
The Eastern District action was twice tried. On the first trial the jury returned a verdict for so small an amount, and that amount under the pleadings was so derogar tory to the character of the plaintiff’s officers or agents, that the trial judge set it aside as inadequate. Had that verdict stood, and judgment been entered, would the insured have been thereby prevented from pressing for a more favorable verdict in the Southern District?’ If estoppel is the only word describing the status produced by what happened in the Eastern District, and estoppels must be mutual, it is hard to assign any reason for an affirmative answer to the question last put; and if the affirmative answer be right, then the voluntary act of the nine defendants, done wholly for their own benefit and advantage, and without any view either to the harm or benefit of the insured, created a mutual right, no possible act or protest by the insured could have prevented the creation of such mutuality.
Again, if estoppel be the only word, then the Waterman Company undoubtedly set up .an estoppel when it filed the supplemental complaint herein; yet one encounters the ruling so often made, as in Ketchum v. Duncan, 96 U. S. 659, 24 L. Ed. 868, that no one can set up an estoppel in pais but one who has been misled to his injury, and that either party to this litigation was ever misled by anything that the other did at any time cannot be asserted on this record. Considerations such as these, which might be multiplied, compel belief that, before the word “estoppel” should be applied to a state of facts, both the word and the facts should be studied with some care.
We think the best statement of the fundamental nature of a true estoppel of any kind (it is not that exclusive finality, a definition) is given by Mr. Herman in his work on Estoppel and Res Judicata. He asserts that any estoppel results from something which the law treats as an admission of so high and conclusive a nature that the party making it is not allowed to aver against it or [219]*219offer evidence to controvert it. We agreo ■with. Herman’s statement o£ the factum out of which estoppel grows; and how mutuality can necessarily be ascribed thereto, or how mutuality can be used as a certain test of an estoppel’s existence, it is impossible to perceive.
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HOUGH, Circuit Judge
(after stating the facts as above). To decide this cause it would be enough to cite authority both ruling and persuasive in the courts of the United States.
One who prosecutes or defends a suit in the name of another to establish and protect his own right, or who assists in the prosecution or defense of an action in aid of some interest of his own, and who does this openly to the knowledge of the opposing party, is as- much bound by the judgment as is a party to the record. Souffront v. La Compagnie, etc., 30 S. Ct. 608, 217 U. S. 475, 54 L. Ed. 846; citing Lovejoy v. Murray, 3 Wall. 1, 18 L. Ed. 129; Penfield v. Potts, 126 F. 475, 61 C. C. A. 371; Greenwich, etc., Co. v. Friedman, 142 F. 944, 74 C. C. A. 114; Walz v. Agricultural, etc., Co. (D. C.) 282 F. 646 (with very full citation of cases).
That plaintiffs in error joined in the defense of the Eastern District action, and did so openly and avowedly and for their own interest, is evident and not denied; and at this trial it was proved that what the nine insurers did in this instance has long been almost universally done, at least in the metropolitan district, if more than three insurers are concerned in a fire loss.
In Elliott v. Roto, 242 F. 941, 155 C. C. A. 529, we held that it was enough if the con-" duet of defense by a third party was open and avowed. It was not further necessary that the conduct must be known to the opposite party. But we agree with defendant in error that, at the trial in the Eastern District case, if not before, the insured was fully apprised of exactly how the defense in all the suits was being conducted. In short, no difference can be found between this litigation and the eases cited in principle, and several of them present substantially similar facts.
[218]*218We are told that, since jurisdiction herein rests upon diversity of citizenship, we are “administering the law of New York,” and that the decisions in Fish v. Vanderlip, 112 N. E. 425, 218 N. Y. 29, Ann. Cas. 1916E, 150, and Fish v. Iselin, 114 N. E. 1067, 219 N. Y. 632, are opposed to the rulings we have cited from the national courts. While we incline to think that these eases are not, when carefully examined, opposed to the doctrine first above set forth, the matter is one of general law, and is neither statutory nor local. On such a point it no longer needs citation to show that the eourts of the United States are not controlled by state decisions..
We are also told that Bigelow v. Old Dominion, etc., Co., 32 S. Ct. 641, 225 U. S. 111, 56 L. Ed. 1009, Ann. Cas. 1913E, 875, has either overruled the cases first above cited or is inconsistent with them and later in date. We look upon that decision as perfectly illustrating the difference between regarding another man’s ease as an important test of the law of one’s own litigation, and agreeing with other men to act together and pay together in respect of all the litigation of the agreeing parties. The first act may be likened to visiting and advising an ally; the second act amounts to joining that ally’s army. We therefore-decide the present case in conformity with the rule stated, but shall briefly examine the reason and implications of that rule.
Estoppel is too convenient a word; it has come to be used with such vagueness as at times to induce belief that it has passed beyond the legal vocabulary and become like “demur,” a word of the literary language. Even a lawyer may say that he demurs to something just said, when he means no more than that he hesitates to accept it as truthful or accurate; and so “estop” is used somewhat elliptieally, to signify that the person estopped is for any one of all assignable reasons prevented from doing or saying what he wishes to do or assert.
Estoppel cannot- be used in formulating legal documents with any such laxity, and a glance at the law lexicons, or such a collection of descriptions, rather than definitions, as may be found in 21 C. J., 1061, will show that if, e. g., in this case it be asserted, as it has been, that these six companies are estopped by what they have done, it is necessary to proceed and state what kind of estoppel affects them, and effects the prevention. Admittedly the defense of the Eastern District action in the manner and for the reasons set forth in the pooling agreement is the matter relied on; but the question remains: What kind of an estoppel is thus produced?
Undoubtedly it is an estoppel equitable or in pais, the identity and history of which terms are very well set forth in Horn v. Cole, 51 N. H. 287, 12 Am. Rep. 111. But an equitable estoppel is an equitable right, if not a remedy, and so it has been many times said — we said it in Elliott v. Roto, supra— that an estoppel must be mutual. If this phrase be taken, not as a short description of one, but not the only, test of a good estoppel, then a case can be stated from the history of this litigation which requires answer.
The Eastern District action was twice tried. On the first trial the jury returned a verdict for so small an amount, and that amount under the pleadings was so derogar tory to the character of the plaintiff’s officers or agents, that the trial judge set it aside as inadequate. Had that verdict stood, and judgment been entered, would the insured have been thereby prevented from pressing for a more favorable verdict in the Southern District?’ If estoppel is the only word describing the status produced by what happened in the Eastern District, and estoppels must be mutual, it is hard to assign any reason for an affirmative answer to the question last put; and if the affirmative answer be right, then the voluntary act of the nine defendants, done wholly for their own benefit and advantage, and without any view either to the harm or benefit of the insured, created a mutual right, no possible act or protest by the insured could have prevented the creation of such mutuality.
Again, if estoppel be the only word, then the Waterman Company undoubtedly set up .an estoppel when it filed the supplemental complaint herein; yet one encounters the ruling so often made, as in Ketchum v. Duncan, 96 U. S. 659, 24 L. Ed. 868, that no one can set up an estoppel in pais but one who has been misled to his injury, and that either party to this litigation was ever misled by anything that the other did at any time cannot be asserted on this record. Considerations such as these, which might be multiplied, compel belief that, before the word “estoppel” should be applied to a state of facts, both the word and the facts should be studied with some care.
We think the best statement of the fundamental nature of a true estoppel of any kind (it is not that exclusive finality, a definition) is given by Mr. Herman in his work on Estoppel and Res Judicata. He asserts that any estoppel results from something which the law treats as an admission of so high and conclusive a nature that the party making it is not allowed to aver against it or [219]*219offer evidence to controvert it. We agreo ■with. Herman’s statement o£ the factum out of which estoppel grows; and how mutuality can necessarily be ascribed thereto, or how mutuality can be used as a certain test of an estoppel’s existence, it is impossible to perceive.
The foregoing has been written to explain our refusal, in deciding this case, to precisely cover the point of lack of mutuality pressed on us at bar. When Dean Pound and other leaders of legal teaching habitually speak of “the arbitrary doctrine of mutuality of remedy in equity” as an outworn precept, and when Cardozo, J., writes on the same subject for a most important court, as he did in Epstein v. Gluckin, 135 N. E. 861, 233 N. Y. 490, it is safe to say that, if the law is not changing on the subject treated, very able efforts are making to change it; wherefore, if • there exist grounds for decision other than a theory of estoppel predicated upon the necessity of mutuality, that ground should be chosen; for under our system nothing is gained by anticipating what is sure to come soon enough, and expressing opinion about legal questions not absolutely necessary for judgment.
We hold that the true line of decision here is this: By the pooling agreement and their conduct under it the nine insurers became privies to the Eastern District suit. One man becomes privy to another when he agrees to be bound by the act of a third person; and these six insurance companies at bar agreed to be bound by the acts of the other three insurers in defending the Eastern District suit. There was privity in contract. Woods v. Ayres, 39 Mich. 345, 33 Am. Rep. 396; Hartley v. Phillips, 47 A. 929, 198 Pa. 9.
It cannot be doubted that the six companies would be liable for their prorata shares of the Eastern District judgment, and liability could be enforced against them by the three companies who paid. The relation is in some respects that of suretyship, and privity of contract is enforceable even by a third person, as in eases of which Towle v. Towle, 46 N. H. 431, is a good example. Despite the occasional' use of the word “estoppel” in the ruling cases first above set forth, we feel assured and hold that the true ground of decision was that all the possible defendants united in the defense of one action under circumstances which made them privies to the judgment rendered in that action. That is enough for the purposes of this case.
If the matter be regarded as one of privity, the doctrine appealed to is that of res adjudicata, and it seems to us quite clear that a judgment must be equally binding, no matter who wins the ease. But it is enough for this litigation to hold that, because plaintiffs in error were privy to the suit and the judgment therein in the Eastern District, they are bound by it, and that means that they can never deny that the plaintiff below was not guilty of the breaches of contract charged in the answer, and that the goods injured were worth the amount found by that jury. The rest, of course, is mere matter of computation. This view of privity has grown; in 1789 the verdict in the Eastern District would have been evidence in the Southern, but not conclusive. Patton v. Caldwell, 1 Dall. (Pa.) 419,1 L. Ed. 204.
Judgment affirmed, with costs.