#### American Express Company, v. Des Moines National Bank, Appellant.

1 Express companies: action for loss .of property: res judicata. Upon delivery of property to an express company for transportation a presumption arises that title passes to the consignee which will support an action for its loss; but a judgment based thereon in favor of the consignee does not amount to an adjudication of the consignor’s agency for the consignee, thus creating a privity which will bar a subsequent suit by the express company against the- consignor for the loss.

2 Same. A judgment is only binding upon parties or privies to the action.

*Appeal from, Polk District*Court.— Hon. Hugh Brennan, Judge.

Wednesday, March 13, 1907.

Rehearing Denied, Monday, December 16, 1907.

The petition alleges .the corporate' capacity of each party, the circumstances disclosed in *Bank of Irwin v. American Bxpress Co.,*127 Iowa, 1, wherein the former recovered judgment for $2,000 alleged to have been delivered to the latter by the defendant herein for transmission to said Bank of Irwin and failure so to do, and the subsequent discovery that the money had never be'en delivered to plaintiff herein by the defendant, and its ignorance of the fraud practiced by an employe of defendant in in*598serting pieces of paper, instead of money, in tbe package delivered to plaintiff as money by defendant for transmission to tbe Bank of Irwin, tbe payment of said judgment, and prayed for tbe recovery of tbe amount so paid.' Tbe defendant’s answer was in three divisions, tbe third of which only is involved in this appeal. In that division defendant set up tbe proceedings and judgment in *Bank of Irwin v. American Express Go.*as an adjudication conclusive on tbe parties to this action. . Tbe plaintiff’s demurrer thereto was sustained, and from this ruling tbe defendant appeals.

*Affirmed.*

*Ilager & Powell,*for appellant.

*Lyon & Lyon*and *W. 0. Guensay,*for appellee.

Ladd, J.

Tbe ruling on tbe demurrer to tbe third division of tbe answer, pleading tbe proceedings and, judgment in *Bank of Irwin v. American Express Co, 121*Iowa, 1, in bar, is assailed on three grounds. It is contended: (1) That, owing to the relation of defendant to tbe Bank of Irwin in tbe transaction, tbe judgment therein is *res adjudí-cala*of tbe issues in this case; (2) that, as tbe plaintiff was a party.to that action, tbe judgment therein is a verity as to it, and mistake or error therein cannot be made tbe basis of recovery in this action; and (3) tbe judgment therein cannot be impeached by either party thereto, owing to tbe perjury of witnesses on whose evidence the judgment was founded. These propositions will be disposed of in tbe order mentioned.

1. Express com-íotÍoIs 0fCtion *?esPjtidicata***I. Tbe petition in *Bank of Irwin v. American Express Gwmpany*alleged that the Bes Moines National Bank, acting as agent of tbe Bank of Irwin, delivered *<~j*, a Pac^ag’e containing $2,000 to tbe American Express Company for transmission to tbe Bank of Irwin, its failure to deliver to the latter, and refusal to pay tbe same over on' demand. The an*599swer put in issue all these averments. A package purporting to contain such an amount of money was delivered to the company by the Des Moines Bank for transmission as alleged, but, when it reached the Irwin Bank, contained no money, and the only issue submitted to the jury in that action was whether any money was. in the package when it passed from the Des Moines Bank to the express company. The verdict was against the company on this issue, and, on appeal from judgment rendered thereon, the appellant contended that, as it did not appear that the Des Moines Bank, acted as the agent of the Irwin Bank, title to the money was not shown to he in the latter. The point thus raised was disposed of in this court by saying that: “It is admitted that it [the Irwin Bank] was the consignee of the package, and the presumption is that title thereto passed to it upon delivery thereof to the appellant, and such presumption is sufficient to sustain an action by the consignee as owner, either in tort or for a breach of contract; and there is nothing in the record which tended to rebut the presumption.” This is a conclusive answer to the extended argument of appellant that the judgment was based on a finding that the Des Moines Bank had acted as agent of the Irwin bank in delivering the package to the company, and therefore as privy must be treated the- same as though a party to the litigation. While such agency was alleged, only enough was necessarily proven to entitle the Bank of Irwin to judgment, and, the affirmance of the judgment having been based on the presumption arising from being consignee, it follows that there was no final adjudication as to whether' or not the Des Moines Bank acted as agent of the Irwin Bank in that transaction. ■

a Same II. It is urged further that the judgment of the Bank of Irwin against the plaintiff herein is a verity, and that its validity cannot be questioned. That is true as between the parties thereto, but it is not binding on plaintiff in any litigation against any one not a *600party or privy. The decisions cited do not indicate otherwise. But one need be-noticed. In *Dunlap v.*Glidden, 31 Me. 435 (52 Am. Dec. 625), the defendant had obtained judgment ousting plaintiff from the possession of certain land, and the latter thereafter instituted suit for damages resulting from the loss of the land, alleging that Glidden and others had .conspired together to cheat him out of it; that is, Dunlap, without assailing the judgment, sought to recover damages resulting to him by its rendition, and, though others not parties nor privies to the original litigation were made defendants, his claim against them was for damages flowing from this judgment, which, unassailed, must be assumed to • have been just. Had the original action against Dunlap been dismissed, an entirely different question would, have been presented, for in that event an action might lie for maliciously prosecuting a civil action.' But the adjudication was that Glidden was entitled to the land, and therefore the motive in suing for it was immaterial, and those who aided him in procuring a result conclusively presumed to have been just could not be mulcted in damages. No claim ■ is made in this case that any improper methods were resorted to by either the Bank of Irwin or the defendant in procuring judgment against the plaintiff in the former action. On the contrary, it is averred that, subsequent to the rendition of that judgment, the defendant first discovered that the $2,000 supposed to have been delivered to plaintiff was in fact not placed in the package at all, but taken by one of its clerks and appropriated to his own use. Indeed the action, of plaintiff is not based on the judgment at all, but upon the payment of money induced by fraud practiced on it by the defendant through an employe. Had the express company ■ voluntarily paid the Bank of Irwin the $2,000 upon its demand without suit, could this hate been taken advantage ■ of by the defendant in defense of an action against it based on the facts alleged, i. e., that' it had delivered a package purporting to contain that amount of money for transmission *601to the Bank of Irwin, and bad been credited by tbe latter bank therewith, when it had not parted with a cent ? Certainly not, for these facts, if true, would indicate that a fraud had been practiced on the carrier, and it would be entitled to be recouped for its loss. The fact that payment to the Bank of Irwin was made as a result of a judgment can make no difference. The liability of the defendant is in no way affected by the procedure through which the express company lost its money, so long as it was not a party or privy to that action, and such loss was the proximate result of fraud practiced by the defendant through its agents.

What has been said disposes of the third point. The former judgment is not assailed in this action, and defendant’s attempt to avail itself of an adjudication between the Bank of Irwin and plaintiff cannot be upheld. It is not based on any principle to be found in the books, nor is it within any exception to the general rule that an adjudication is conclusive in a subsequent suit between the parties to the former action and their privies only.

The ruling of the court in sustaining the demurrer is approved.— *Affirmed.*