Datta v. Staab

In this action a jury returned a verdict in favor of plaintiff in the sum of $7,500. From a judgment in favor of defendants, notwithstanding said verdict, plaintiff has appealed. The appeal comes before us upon a clerk’s transcript.

The sole question involved is the applicability of section 439 of the Code of Civil Procedure to the circumstances disclosed by the record. This section reads as follows: “If the defendant omits to set up a counterclaim upon a cause arising out of the transaction set forth in the complaint as the

The rule is now well established that where separate causes of action, whether for personal injuries or for property damage, arise out of an automobile collision, the accident may be said to be the “transaction” out of which the causes arose Avithin the meaning of the provision of Code of Civil Pro

“[T]o avoid the forfeiture which the statute brings about it should be narrowly construed. (2 Witkin, California Procedure, § 585, p. 1597; see: Rialto Construction Co. v. Reed, 17 Cal.App. 29 [ 118 P. 473 ]; Gigliotti v. Nunes, 45 Cal.2d 85 [ 286 P.2d 809 ]; Todhunter v. Smith, 219 Cal. 690 [ 28 P.2d 916 ].) However, when the defense is seasonably and properly raised the provisions of Code of Civil Procedure, section 439, are mandatory. (2 Witkin, California Procedure, § 585, p. 1595; Kittle Mfg. Co. v. Davis, 8 Cal.App.2d 504 [ 47 P.2d 1089 ].) Under such circumstances every claim which tends to diminish or defeat plaintiff’s recovery and arises out of the “transaction” must be pleaded or it is barred, i.e., the judgment rendered in the first-action (seasonably pleaded) is a complete bar to any subsequent action on any such claim. (Brunswig Drug Co. v. Springer, 55 Cal.App.2d 444 [ 130 P.2d 758 ]; Baker v. Eilers Music Co., 175 Cal. 652 [ 166 P. 1006 ]; Swanson v. Tearney, 87 Cal.App.2d 191 [ 196 P.2d 49 ]; see 10 So.Cal.L.Rev. 454; 40 Cal.L.Rev. 423 .) This is true regardless of defendant’s or the trial court’s mistahen conclusion that it could not have been pleaded as such. (Kittle Mfg. Co. v. Davis, 8 Cal.App.2d 504 [ 47 P.2d 1089 ].) In Kittle the court said at page 513: “The policy of the law is so obvious as to require little comment. It is to require reciprocal rights flowing from a common source to be determined in a single action, thus avoiding not only unnecessary vexatious litigation but also the contingency of conflicting judgments. ...”

Gigliotti v. Nunes, 45 Cal.2d 85 [ 286 P.2d 809 ], does not hold, as appellant contends, that the application of the statute in question is discretionary. The case holds only that the refusal of the trial court to permit an amendment to the answer to a cross-complaint setting up the defense of res judicata was not an abuse of discretion, the request not having-been made until after all the testimony was in and both sides had rested. The case does, however, recognize the fact that had the defense been seasonably and properly pleaded it would have been an effective bar to the cross-complaint.

Appellant has raised but one point of law which appears not to have been heretofore clearly decided adversely to him. All of the cases which have come to our attention

“In its primary aspect the doctrine of res judicata operates as a bar to the maintenance of a second suit between the same parties on the same cause of action. . . . In its secondary aspect res judicata has a limited application to a second suit between the same parties, though based on a different cause of action. The prior judgment is not a complete bar, but it ‘operates as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action. [Citation.] This aspect of the doctrine of res judicata, now commonly referred to as the doctrine of collateral estoppel, is confined to issues actually litigated.” (Clark v. Lesher, 46 Cal.2d 874 , 880 [ 299 P.2d 865 ].) Section 439 of the Code of Civil Procedure represents a statutory extension of the doctrine of collateral estoppel. As the result of this statute the doctrine applies not only to claims which have been actually litigated but also to any claim which could have been asserted as a counterclaim arising out of the transaction on which the complaint in the prior action was founded.

It is said that “[a] final judgment is res judicata only if it was rendered on the merits. This requirement is derived from the fundamental policy of the doctrine, which gives stability to judgments after the parties have had a fair opportunity to litigate their claims and defenses. ” (3 Witkin, California Procedure, § 51, p. 1936.) In action Number 458457, it would appear that the litigants have had such “opportunity” but have not availed themselves of it, instead, they have compromised and settled the claim upon which the action was based, and have entered a judgment of dismissal.

Appellant asserts that a voluntary dismissal has only the effect of a withdrawal of the plaintiff’s claim; that it leaves the defendant as though he had never been a party. This is undoubtedly true where plaintiff has received nothing in return for the dismissal. (Cook v. Stewart McKee & Co.,

Thus, so far as the instant action is concerned, the judgment of dismissal in action Number 458457, Staab v. Datta, is res judicata not only as to the claim asserted by Staab against Datta in said action, but as a result of the compensation paid by Datta to Staab in return for said dismissal, it is also a bar to the claim of Datta asserted against Staab and Abbot Hanks, Inc., his employer, in action Number 461881 (see 29 Cal.Jur.2d 252).

Appellant contends that the trial court’s construction of the statute (which we approve) renders it unconstitutional under the “due process” and “equal protection” clauses of the federal Constitution and similar provision of our state Constitution (Cal. Const., art. I, §§ 13, 2.) We do not agree. Due process does not guarantee either

The language of the statute gives no indication as to what deadline was intended by the Legislature on the filing of a counterclaim. As a statute which works a forfeiture it has been narrowly construed. The courts have, for example, approved the consolidation of cross-actions growing out of the same accident in lieu of the filing of a counterclaim. (See Hamm v. San Joaquin etc. Canal Co., 44 Cal.App.2d 47 [ 111 P.2d 940 ] ; and Daly v. White, 100 Cal.App.2d 22 [ 222 P.2d 950 ].) If appellant did not wish to dismiss his action and file a counterclaim as required by the plain language of the statute, the rule laid down by the court in the Hamm and Daly

Neither was he denied the “equal protection of the law” guaranteed by the state and federal Constitutions. The meaning of this term, generally speaking, is that all persons under like circumstances shall be given equal protection and security in the enjoyment of personal and civil rights, the acquisition and enjoyment of property, the enforcement of contracts and the prevention and redress of wrongs, and that they shall be subject to similar taxes and penalties. (In re Kotta, 187 Cal. 27 [ 200 P. 957 ].) There is no showing in the instant action that appellant has received any different treatment at the hands of the court than any other person would have received under like circumstances. In 22 American Law Reports 2d 621, 627, where a summary is made of the federal and state eases having similar compulsory counterclaim statutes as does California in section 439, Code of Civil Procedure, the editor in summarizing the holdings in the eases states: “ The failure to assert as a counterclaim a matter which should have been asserted under Federal Rule Number 13(a) or similar state rules or statutes precludes assertion thereof in a subsequent action.” (See also Rest., Judgments, § 58, p. 235-236.)

Appellant’s contention that the judgment notwithstanding the verdict should be reversed because it works a forfeiture of his property must also be rejected. It is true, as appellant asserts, that the law abhors forfeitures and statutes are construed strictly to prevent them. It is also true, however, that courts give to statutes that provide for forfeitures such a construction as will be consistent Avith justice and reason. (45 Cal.Jur.2d 684.) The Legislature, in adopting the various codes, has made provision for the enforcement and protection of private rights and the redress or prevention of private wrongs. In adopting section 439, Code of Civil Procedure, the Legislature provided the means or method by which parties could seek redress for claims between them arising out of the same transaction.

The judgment is affirmed.

Bray, P. J., and Tobriner, J., concurred.

A petition for a rehearing was denied October 13, 1959, and appellant’s petition for a hearing by the Supreme Court was denied November 10, 1959. Schauer, J., and Peters, J., were of the opinion that the petition should be granted.