Kamm v. Rees

177 F. 14, 100 C.C.A. 432, 1910 U.S. App. LEXIS 4330
Court of Appeals for the Ninth Circuit·Decided February 14, 1910·No. No. 1,762·Published·Cited by 5 cases

Opinion

GIRBERT, Circuit Judge

(after stating the facts as above). The defendant assigns error to the refusal of the court to instruct the jury that if they found from the evidence that the plaintiffs at any time elected to treat the contracts as the contracts of the Snake River Transportation Company, the defendant could not be held liable thereon in the present action, and he invokes the doctrine that where a plaintiff has a right to proceed either against the principal for whom a contract was made, or the agent by whom it was made, and he elects to hold either of those liable, he thereby releases the other. We are unable to see liow that doctrine was applicable to the present case. According to the testimony of the plaintiffs, they never at any time had the right to make an election and never did make an election, but they contracted ■ with and gave credit to the defendant in his individual capacity, and not as the agent of another. According to the theory of the defendant, as set forth in his answer and in his testimony, the plaintiffs had no right of election, but, contracted with, and gave credit to, the Snake River Transportation Company only. Not only did the plaintiffs testify that the defendant was the principal in the transaction and that they dealt with him individually, but it is shown that at the time when the contract was made the Snake River Transportation Company was not yet in existence. The corporation was not referred to in the communication in which inquiry was made as to the time within which the engines and boiler could be constructed, nor in the final communication by which the defendant closed the contract, and, although the plaintiffs subsequently credited the payments which were made thereon to the Snake River Transportation Company, they testified that they did so at the request of the defendant for reasons which he gave, and that they never, at any time, looked to the corporation for payment, or gave credit in fact to any one save the defendant in his individual capacity. The [20] question with whom was the contract made, and to whom was the credit extended, was the leading question in the case, and the court, under proper instructions, submitted it to the decision of the jury.

Several assignments of error present the question whether or not the judgment rendered against the Snake River Transportation Company at the suit of Shindler is a bar to the present action. It is contended that a stockholder of a corporation is in privity with the corporation, and that, since the defendant was a stockholder of the corporation defendant in that action, the judgment therein was binding upon him, and he may plead it in bar of the present action. To this contention there are two answers: First, a stockholder is not in all relations in privity with his corporation, and it is generally held that he is in privity only as to rights arising out of his contracts for subscription for stock. Clausen v. Head, 110 Wis. 405, 85 N. W. 1028, 84 Am. St. Rep. 933; Andrews v. National Foundry & Pipe Works, 76 Fed. 172, 22 C. C. A. 110, 36 L. R. A. 139; State Bank v. Bobo, 11 Rich. Law (S. C.) 597. In the second place, in order that a defendant may plead in bar a judgment in a prior action, he must have been a party to oiq represented in the former action as an actual defendant, and in the same attitude as an adversary party toward the subject of the litigation as that in which he appears in the second. There is evidence in this case which tends to show that the defendant not only did not appear, and was not represented in the capacity of a defendant in the Shindler case, but that he was in a sense the real party in interest therein as plaintiff, that the action was brought at his instance and for the protection of his own interests, and that he was the actual manager of the conduct of the case for the plaintiff, and bore the expense thereof. If it be true that the plaintiffs in this case assigned their claim to Shindler at the instance of the defendant, and on the agreement and understanding that it was for his benefit and that the assignment was not to affect their right of recourse against him as their debtor, the defendant is in no position to advance the plea of estoppel by the former judgment. He is himself estopped to allege estoppel.

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Kamm v. Rees, 177 F. 14, 100 C.C.A. 432, 1910 U.S. App. LEXIS 4330 (9th Cir. 1910).

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