Case Name: David R. Greene, Respondent, v. W. R. Rothschild et al., Appellants, Yellow Cab Service, Inc., et al., Defendants
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1965-05-20
Citations: 68 Wash. 2d 1
Docket Number: No. 37296
Parties: David R. Greene, Respondent, v. W. R. Rothschild et al., Appellants, Yellow Cab Service, Inc., et al., Defendants.
Judges: 
Reporter: Washington Reports
Volume: 68
Pages: 1–11

Head Matter:
[No. 37296.
En Banc.
May 20, 1965.]
David R. Greene, Respondent, v. W. R. Rothschild et al., Appellants, Yellow Cab Service, Inc., et al., Defendants.
Little, Gandy, Stephan, Palmer & Slemmons, for appellants.
Vaughn E. Evans, for respondent.
Reported in 402 P.2d 356.

Opinion:
Rosellini, C. J.,
This case has been before this court before. Greene v. Rothschild, 60 Wn.2d 508, 374 P.2d 566. With regret we have concluded that it was erroneously remanded for a new trial, and it is our uncomfortable duty to reverse that determination and dismiss the action.
The plaintiff was a paying passenger in a taxicab and was injured in an intersection collision. He brought suit against the driver of the other vehicle involved in the collision and against Jay Scott Yellow Cab Co., Inc. (the corporation owning the taxicab), Yellow Cab Service, Inc. (the corporation which services the over-all operations of Yellow Cab taxicabs in Seattle), and a group of individuals in partnership doing business under the assumed name of Yellow Cab Company. The partnership had formerly owned the taxicab but had sold it to Jay Scott Yellow Cab Co., Inc. on a conditional sale contract.
Jay Scott Yellow Cab Co., Inc. and Yellow Cab Service, Inc. admitted that the driver of the taxicab was acting as their agent at the time of the collision. The driver of the other vehicle defaulted, thus admitting liability. The jury was instructed that it should find against the defendants Jay Scott Yellow Cab Co., Inc. and Yellow Cab Service, Inc. only if it found that the driver of the taxicab was guilty of contributory negligence. It returned a verdict in favor of the defendants.
The trial court had held, after the evidence was presented that the plaintiff had failed to show that Yellow Cab Company was a principal or master of the driver and had dismissed that company from the action. The plaintiff appealed, contending that the táxicab driver was negligent as a matter of law, that the court erroneously submitted the emergency issue to the jury, and that the court erroneously refused to instruct the jury concerning the alleged impaired driving ability of the operator of the taxicab.
We held that none of these contentions had merit and upheld the verdict exonerating the driver; but we sustained the plaintiff's contention that the court was in error in dismissing Yellow Cab Company as a defendant. On remand for a new trial, the jury found that the accident was caused by the negligence of the taxicab driver and that he was the ostensible agent of the appellant Yellow Cab Company. (The driver of the other vehicle, who did not testify at the first trial, took the stand and stated that he entered the intersection with the green light. This testimony was evidently believed by the second jury).
This court made an improper disposition of the case on the first appeal, when it failed to recognize that any error in dismissing the alleged "apparent" principal was harmless, inasmuch as we had sustained the jury's verdict in favor of the admitted principals. The cause should not have been remanded for a new trial.
In Restatement, Judgments § 99, p. 493, we find the following rule:
A valid judgment on the merits and not based on a personal defense, in favor of a person charged with the commission of a tort or a breach of contract, bars a subsequent action by the plaintiff against another responsible for the conduct of such person if the action is based solely upon the existence of a tort or breach of contract by such person, whether or not the other person has a right of indemnity.
In a comment to this section, it is said:
The rule stated in this Section . . . involves a situation in which a judgment for the defendant has the effect of barring a claim against a third person although a judgment for the plaintiff would not have prevented a defense by the third person in an action against him for the tort or breach of contract charged in the first action. In the situations within the rule stated in this Section, the person against whom the rule works adversely has had his day in court and it is not unfair that if he is unsuccessful in his action against the alleged tortfeasor or contract breaker, he should be deprived of an action against another, even though the other would have no right of indemnity against the defendant in the first action were judgment rendered against him.
It is true that the alleged servant or agent was not a defendant in either the first or second trial of this action, but his negligence was as much at issue as if he had been a party, and was in fact the sole issue on which the alleged liability of the principals was predicated. By allowing this case to be retried, the following anomalous result has been achieved: the parties who admitted that the driver was their agent or servant have been exonerated, while the former owners of the cab, who can only be held through some theory of estoppel, have been saddled with liability. This does not accord with reason and justice. And indeed the courts have applied the rule where the agent's freedom from culpability has been found in a former trial, whether or not he was the defendant in that action. See for example, Silva v. Brown, 319 Mass. 466, 66 N. E.2d 349; Canin v. Kesse, 20 N. J. Misc. 371, 28 A.2d 68; Jones v. Valisi, 111 Vt. 481, 18 A.2d 179; Templeton v. Scudder, 16 N. J. Super. 576, 85 A.2d 292. See also annotation in 23 A.L.R.2d 710, entitled
Judgment in action growing out of accident as res judicata, as to negligence or contributory negligence, in later action growing out of same accident by or against one not a party to earlier action.
The rule has been acknowledged and followed in this jurisdiction. An early case is Gerritsen v. Seattle, 164 Wash. 459, 2 P.2d 1092. In that case a city and a school district were jointly sued for the negligence of the school district in maintaining a barrier across a street by permission of the city. We held that a verdict exonerating the school district exonerated the city, having the effect of res judicata, notwithstanding a verdict was rendered by the same jury against the city. We said:
If there was any negligence in the doing or failing to do any of those physical acts incident to the safe closing of the street, it was primarily the negligence of the district. The city's negligence, if any, was necessarily only derived or imputed from the negligence of the district, if any. If the district was not negligent, as the jury, of course, found by its verdict exonerating the district, then it seems plain to us to necessarily follow that the city cannot be held liable to the plaintiff upon the ground of his being injured as the result of the city's negligence.
In accord are Holmquist v. Queen City Constr. Co., 175 Wash. 681, 27 P.2d 1066, and Johns v. Hake, 15 Wn.2d 651, 131 P.2d 933. In the latter case we said that a master cannot be held liable to a third party for injuries inflicted by a servant when the servant, by judgment or contract, has been released from responsibility, the liability of the master being derivative.
We regret that our failure to take cognizance of this fundamental rule resulted in the expense and inconvenience of a second trial; however, we can only reach a just result and avoid further error by overruling our decision on the first appeal and directing the dismissal of the action.
Inasmuch as this conclusion determines the disposition of the case, we do not reach the further contention of the appellants that the evidence showed conclusively that sufficient notice had been given of the termination of the partnership's ownership of the business and that the respondent had no right to rely upon its responsibility for the acts of the driver.
The judgment entered on the verdict in the second trial is reversed and the action dismissed.
Hill, Donworth, Finley, Weaver, Hunter, Hamilton, and Hale, JJ., and Soule, J. Pro Tern., concur.
[En Banc. May 23, 1966]
Reported in 414 F.2d 1013.