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District Court of Appeal, Second District, Division 2, California.


Civ. 13023.

Decided: June 25, 1941

Joseph Brenner, of Los Angeles, for appellant. Louis Ferrari, of San Francisco, and Edmund Nelson and G. L. Berrey, both of Los Angeles, for respondent.

This appeal is from a judgment denying recovery of a bank deposit to the administratrix of an estate. The money had been deposited with defendant by decedent through the agency of one Charles O. Cook who subsequently qualified as executor of decedent's estate. Because he did not include the amount of the bank deposit in his account, plaintiff in her individual capacity objected thereto and upon a trial of her objection, the account was confirmed and Cook was decreed to be the owner of the money.

In June, 1933, the decedent, then in failing health, made her home with Mr. and Mrs. Cook who resided in San Dimas. From that date until October 26th, Mr. Cook and one Dr. Zeiler were authorized jointly to make drafts against the commercial account of decedent in the Security First National Bank of Los Angeles, hereinafter referred to as the Los Angeles bank.

On the 24th day of August, 1933, Cook opened a checking account at the San Dimas bank as follows: “Clara Sather by Charles O. Cook.” No authorization was forwarded to the San Dimas bank by the decedent and no communication was had between her and the bank prior to her demise. But after opening the account a number of checks, drawn by Cook and Zeiler on decedent's commercial account in Los Angeles, were deposited with the San Dimas bank and drafts were made upon that account by checks signed “Clara Sather by Charles O. Cook” to meet various expenses of Mrs. Sather.

On the 26th day of October, 1933, at the request of Mrs. Sather, Mr. Rappold, teller of the Los Angeles bank, called at the Cook home in San Dimas for the purpose of assisting decedent to transfer her money from her special account in Los Angeles to the San Dimas bank. A check was drawn upon the Security First National Bank for $4,155.68, payable to the First National Bank of San Dimas “for credit to the account of Mrs. Clara Sather” which Mrs. Sather signed by affixing her mark. Contemporaneously with the execution of that check, she signed a typewritten declaration addressed to the Los Angeles bank, directing it to transfer the balance of her savings account in the amount of $4,155.68 to the First National Bank of San Dimas.

At the time of her signing the check and order, there were present besides Mr. Cook, Mr. Marchant, manager of the San Dimas bank, Mr. Rappold, a teller of the Los Angeles bank, and Dr. Thomason, decedent's physician. Both of the instruments mentioned were witnessed by Mr. Cook and Dr. Thomason.

On the following day decedent's check was deposited in the San Dimas bank to the same account of “Clara Sather by Charles O. Cook” opened by Cook on August 24th. On that day, Cook withdrew the entire balance of $4,187.71 by check signed “Clara Sather by Charles O. Cook”. With that check Cook opened a new account in the same bank in the names of himself and his wife. On the following day, he withdrew $2,500 from the last–mentioned account and deposited it in the Los Angeles bank, likewise in the name of himself and his wife. Subsequently he withdrew the balance from the San Dimas account and made a deposit thereof in the Los Angeles bank in the name of his wife alone. Mrs. Sather deceased the following November. Thereafter Cook qualified as executor of the estate of decedent and proceeded with its administration.

Some years passed during which he neglected to report the status of the estate or the items of its assets. Upon being cited to file an account, he did so but accompanied it with his resignation. His account made no mention of the money which had been transferred by decedent to the San Dimas bank. Helen Bernhard and her sister, as legal heirs of decedent, filed their objections to the account based upon his neglect to account for the moneys transferred by decedent to the San Dimas bank. Upon trial of the objections, the court settled the account and, as a part of its order, declared that the decedent during her lifetime had made a gift to Charles O. Cook of the sum of $4,187.71. Cook's account having been approved and he having been discharged, Helen Bernhard qualified as administratrix with the will annexed and instituted the present action against the defendant as successor to the San Dimas bank.

In addition to its general denial, the defendant plead two affirmative defenses, namely (1) that the money referred to in the complaint was Cook's property; and (2) res judicata, by virtue of the determination made by the superior court sitting in probate at the time of the trial of the objection to the account filed by Cook. Plaintiff interposed a general demurrer to both of the last–mentioned special defenses and objected to the introduction in evidence of the record which was offered on behalf of the plea of res judicata. She also contended that the previous determination of ownership of the money by Cook was void for lack of jurisdiction for the reason that the executor had resigned before the filing of the objections.

The contention last mentioned was disposed of, before the judgment appealed from was entered, by the action of the Supreme Court in the case of Waterland v. Superior Court in and for Sacramento County, 15 Cal.2d 34, 98 P.2d 211. This left for consideration only two questions, namely, whether or not there was a valid gift of the money by decedent to Cook and (2) whether the rule of res judicata may be applied. In view of our conclusion, it will be necessary to consider only the second proposition.

It is contended by appellant that the parties to the present action are not the same as the parties to the probate proceedings; that in the former proceeding she and her sister objected for themselves and that she then had no power to bind the estate; that she was not authorized to expend the moneys of the estate in the prosecution of an appeal and the estate was not responsibly represented. On the contrary, she contends that in the present action she is the administratrix of the estate and upon the trial of the present action she was in a position to carry on the prosecution of this action as such administratrix; that there is no privity between the defendant and Cook who was victorious in the probate proceedings in having himself declared to be the owner of the moneys mentioned in the pleadings. While plaintiff does appear in the present action in an official capacity, the benefits which she hoped to achieve were identical with the benefits which she expected in making her objections to the account of Mr. Cook. Should she succeed in the present action the moneys recovered would become an asset of the estate and would inure to the benefit of its creditors and legatees who also would have benefited and to the same extent had she succeeded in the probate proceeding in compelling Cook to restore the moneys to the estate. Having attempted in the present action to litigate the same right which she asserted in the probate proceedings, the prior adverse judgment estops her in the present action. 15 Cal.Jur. 189; Williams v. Southern Pac. Co., 54 Cal.App. 571, 202 P. 356; Stevens v. Superior Court, 155 Cal. 148, 99 P. 512; In re Estate of Bell, 153 Cal. 331, 95 P. 372. Although not bearing the appellation of administratrix in the probate proceeding, in view of the fact that her purpose was identical with that which motivates her in the present proceeding, it is clear to us that there is no substantial difference between the capacities then and now. In re Estate of Bell, supra. As to the privity of defendant with Cook, this appears to be established. By the judgment of the probate court, it was determined that Cook was the owner of the money. Since the defendant held it for Cook, it was Cook's agent. Without Cook's authorization, defendant would not have been authorized to pay the money to any one. Since Cook, the owner, called upon his own agent to deliver to him the money which had become his by virtue of the gift of decedent, to declare now that the defendant is a tort–feasor against the estate of decedent because it has returned to Cook what belonged to him would indeed be a strange anomaly. Privity can be no more successfully created between two parties than by the establishment of an agency of one for the other. While a bank is ordinarily considered the debtor of a depositor, there is no doubt that the relationship is dual in character. Although the bank becomes debtor promptly upon receipt of the deposit, at the same time it becomes his agent to care for and repay upon demand the moneys deposited. 9 C.J.S., Banks and Banking § 267, p. 546; Willis v. Barrow, 218 Ala. 549, 119 So. 678, 680; Wall v. Franklin Trust Co. of Phil., 84 Pa.Super. 392, 394. This is especially true in the case of a commercial deposit which according to law, contract and usage is payable promptly upon the depositor's order. Therefore, since Cook, the rightful owner, has withdrawn his money from the custody of his agent, that agent could not be obligated to pay that same money to a third party. Code Civ.Proc., sec. 1908.

Since defendant was thus in privity with Cook, it follows that the judicial decision of the ownership of the money which is the subject of this action, by the probate decree, is conclusive so far as it might affect the defendant. No good reason appears why the adjudication of the ownership of Cook should not estop the plaintiff from contending for the contrary. A judgment which determines the absolute existence of a fact is binding not only upon the parties to the decree but also it “may be relied upon as an estoppel in any subsequent collateral suit * * * when either party, or the privies of either party, allege anything inconsistent with it, and this too whether the subsequent suit is upon the same or a different cause of action”. In re Estate of Clark, 190 Cal. 354, 360, 212 P. 622, 625.

It is true as contended by appellant that before the doctrine of res judicata is available, each party to the action must have been bound by the prior determination. 34 Cor.Jur. 988; 15 R.C.L. 956; Freeman on Judgments, vol. 1, 5th Ed., p. 529, sec. 428. But the exception to the rule of mutuality exists “where the liability of defendant is altogether dependent upon the culpability of one exonerated in a prior suit upon the same facts, when sued by the same plaintiff; in such cases the unilateral character of the estoppel is justified by the injustice which would result in allowing a recovery against a defendant for conduct of another, when that other has been exonerated in a direct action”. 34 Cor.Jur. 988, p. 1407; Bigelow v. Old Dominion Copper Mining & Smelting Co., 225 U.S. 111, 32 S.Ct. 641, 56 L.Ed. 1009, Ann.Cas.1913E, 875; McFaddin, etc., v. Texas Rice Land Co., Tex.Civ.App., 253 S.W. 916. If the immediate actor is free from responsibility because his act was lawful, one in privity with him, who took no direct part in the transaction, cannot be held responsible. New Orleans & N. E. R. Co. v. Jopes, 142 U.S. 18, 12 S.Ct. 109, 35 L.Ed. 919. Where the privies are identified with him in interest, they are bound by a judgment affecting him and where the identity is found to exist all are alike concluded. Greenleaf on Evidence, 13th Ed., vol. 1, sec. 523; Bigelow v. Old Dominion, etc., supra. Inasmuch as plaintiff has once litigated the ownership of the money here in question with Cook, plaintiff cannot invoke the principle of mutuality of estoppel. That doctrine is not essential to the right of defendant to plead the former judgment in bar, notwithstanding the fact that defendant was not a party to the probate proceeding and held the money prior to the filing by Cook of his account as executor of decedent's estate. McFaddin, etc., v. Texas Rice Land Co., supra. Neither would that doctrine be applicable had the objector in the probate proceeding charged that defendant and Cook by a joint endeavor had succeeded in depriving the estate of its money. Whatever wrong defendant might have done by paying the money to Cook, the judgment in probate was such that by no fair reasoning can defendant be held liable. Its interest was so interwoven with that of Cook that the judgment for him must be regarded virtually for the bank. Wilson v. Erickson, 152 Minn. 364, 188 N.W. 994; 34 C.J. 982, § 140. The supreme court of Maine has declared that when a party tries a question in one suit he shall not, without regard to mutuality, try the same question involving the same testimony in another suit, notwithstanding the doctrine of mutuality. Freeman on judgments, 5th Ed., sec. 429.

At the time of making her objection to the account of Cook, because he failed to include the moneys claimed as a part of the estate of decedent, she thereby elected her remedy for the purpose of recovering on behalf of the estate the moneys which she now claims the bank held for the benefit of decedent and tortiously paid out to Cook. It is a practice without justification for a person claiming to be aggrieved to select one remedy after the other for the purpose of establishing his claim. Having elected to oppose Cook's account in probate and having there failed, though arrayed in the livery of an administratrix, plaintiff cannot now recover from Cook's agent what was once determined to be Cook's very own. Crook v. First National Bank, 83 Wis. 31, 52 N.W. 1131, 35 Am.St.Rep. 17.

The judgment is affirmed.

MOORE, Presiding Judge.

We concur: McCOMB, J.; WOOD, J.

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