Ernsting v. United Stages, Inc.

The judgment in this case is affirmed. This results from our firm belief that the plea of res judi

This is a second appeal. On the former hearing the efficacy of the fourth amended complaint against general demurrer was under review and it was held that a cause of action against such an attack was stated (Ernsting et al. v. United Stages, Inc., 194 Cal. 171 [ 228 Pac. 4 ]). Litigation of various types has engaged the opposing parties hereto for several years. The present action was instituted on the third day of June, 1920. Rival claims to the ownership of and the right to operate under autostage franchises along certain public highways in Imperial and San Diego Counties constitute the subject of the litigation. To be more specific, the actual issue between the respective parties was originally this: Which set of them was in good faith on May 1, 1917, operating autostages over these routes to such an extent and in such a manner as to exempt them from the requirement of a certificate of public convenience and necessity under the “Auto Stage and Truck Transportation Act” (Stats. 1917, chap. 213, p. 330) ?

The claim of appellants here is that defendant Thomas Morgan, while acting as their agent, did in fact act in violation of his trust and in the interest of himself and the other defendants in securing from the Railroad Commission of the state of California operative rights for said franchises ; that what he did as such agent, instead of redounding to the benefit of defendants, should be held to have been done for the interest and benefit of appellants. An extended review of the facts set forth in the complaint is unnecessary as such review was had in the former action, to which reference is hereby made. The record shows that the claim of priority to these franchises was the subject of a special inquiry by the railroad commission of the state of California, which said body on the first day of June, 1923, made its findings and order enjoining and restraining appellants from further operating stages along and upon any of said highways and holding that any rights that the appellants might have had respecting said franchises had been abandoned prior to the said first day of May, 1917. The commission took occasion, however, to say that the claim of appellants to any portion of the value of the business should be administered in the civil courts.

To this complaint each of the appellants here, acting as individuals, filed a separate answer and cross-complaint in identical language, differing only as to the particular route or highway to which rights were claimed, each of which claims was to a part of the system claimed by the United Stages, Inc. Said answers and cross-complaints set forth the facts relating to the controversy in all respects substantially as in the complaint in the action before us. The ownership of said franchises was pleaded; their ownership by United Stages, Inc., was denied, and ownership of a certain part of the system was alleged to be in each of said cross-complainants; the right to use of the name “United Stages” was put in issue; the alleged perfidy and bad faith of the defendant Morgan and the facts charging him as a trustee were also set up and prayer was made for an injunction restraining said United Stages, Inc., from operating autostages on said public highways, together with damages •in large amounts for the use of said franchises and for costs and for “all proper relief.” .

The affirmative allegations of the said respective cross-complaints were put in issue . by appropriate denials „in answers thereto. The action came on for trial before the

Following this, by proper amendments to the answer in the present action, said proceedings and judgment were set up and pleaded as res judicata of the issues tendered by the appellants in their complaint herein. This cause came on for trial on the twenty-sixth day of January, 1925, before the Honorable Frank C. Collier, whereupon the judgment-roll in the action above set forth was introduced in evidence and held sufficient to constitute a plea of res judicata and ■judgment thereupon followed for the defendants.

From this brief narrative of the complicated facts in this case it is evident that the action of the court below was correct. The causes of action and the parties are the same. The case was heard on the merits. The sole foundation upon which cause No. 8597 rested was the ownership of these franchises. The same ownership is the sole issue tendered by the complaint herein. If appellants were the owners of said franchises when said first cause of action arose, they were entitled not only to the relief there sought, but also to the relief prayed for in the present action, and if dissatisfied with the pronouncements of the court in said first action, it was their duty to see that a review of that judgment was had upon appeal. Failing to do this, the judgment, even were it erroneous, is nevertheless final and effective as to all issues properly involved therein and thereby disposed of.

Appellants also insist that inasmuch as the prior judgment did not deal with the claims of defendants Moore, Updegraff and McClung, it is not res judicata as to them. However, said defendants filed their cross-complaints and tendered the issue, and while the court did not specifically dispose of their claims, by its silence it nevertheless decided said claims against them (Lamb v. Wahlenmaier, 144 Cal. 91 [ 103 Am. St. Rep. 66 , 77 Pac. 765 ]; Soule v. Soule, 4 Cal. App. 97 , 106 [ 87 Pac. 205 ]; Calegaris v. Calegaris, 4 Cal. App. 264 , 266 [ 87 Pac. 561 ]).

The claim that appellants have never had their day in court cannot be sustained for it was their duty at the previous hearing to tender each item of evidence tending to support their claims and if the decision was unfavorable to seek review by appeal. Having failed to do so, they are now foreclosed from such action. They have had their day in court. (Price v. Sixth District Agricultural Assn., supra.) It follows that the contention that the judgment in said prior action rested solely upon the order of the Eailroad Commission, and nothing else, cannot avail appellants at this time as the provisions of the judgment control and not the character of the evidence introduced to support it. Nor are the reasons assigined by the trial court for the making of its findings and the rendition of its judgment

The claim that these parties are acting in an association in bringing this suit, whereas they were acting individually in the prior action, is without merit, for in the former action they pleaded their right to do business as the “United Stages,” an association, and it was there in issue and determined adversely to them. Moreover, in reality the present suit is a suit by the individuals and not by the association.

Nothing in this opinion should be taken as. the expression of a view that said order of the Railroad Commission is or is not in and of itself res judicata of the issues tendered by this action.

Hence the judgment first above announced.

Richards, J., Langdon, J., Seawell, J., Curtis, J., and Waste, C. J., concurred.

Shenk, J., did not participate in the foregoing opinion.

Rehearing denied.

All the Justices concurred.