Opinion ID: 2154995
Heading Depth: 1
Heading Rank: 3

Heading: armour's motion for summary judgment

Text: On November 25, 1947, Associated commenced an action in the United States district court for the Eastern district of Wisconsin against Armour for the recovery of damages for breach of implied warranty of fitness of the pork livers sold by Armour to Associated. Some of the livers had been fed by Associated to its own mink, and it was alleged that as the result of the diseased condition of the livers Associated had lost some of the animals. Judgment was rendered in favor of Associated on January 24, 1949, and was satisfied on February 21, 1949. The action was brought and recovery was had only for the damages sustained by Associated for the loss of its own mink caused by the feeding of the pork livers. On or about April 19, 1949, Cohan notified Associated by letter that he was claiming damages for loss to his mink by reason of the feeding of contaminated pork livers. On April 26, 1949, Associated forwarded to Armour a copy of the letter and notified the latter that a claim would be asserted against it by Associated on account of the claim of Cohan. Associated claims that the letter of April 19, 1949, provided the first notice it had that Cohan had sustained any loss to his mink for which he would make claim against it. Armour came into this action upon motion for interpleader made by Associated. Associated cross-complained against Armour for judgment over in case judgment was obtained by Cohan against it. The motion for summary judgment was based upon the contention that the judgment rendered in federal court is res adjudicata as to the cross complaint. The recovery of Associated in the federal court action was for breach of warranty. As we have pointed out, Cohan has no cause of action against Armour for breach of warranty. If he may recover from the latter it must be upon the theory of negligence. From this it follows that Associated's cross complaint may not be construed to allege a cause of action for indemnity; if it is required to pay Cohan for breach of warranty it will not have discharged any duty owing by Armour to Cohan. The judgment obtained by Associated in the federal court is res adjudicata. It might, in that action, have recovered all its loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty, sec. 121.69 (6), Stats., including any loss sustained on account of the resale of the livers to plaintiff. A case which has often raised the question of consequential damages is where a buyer who purchases goods with a warranty resells them with a similar warranty and, the goods proving defective, is held liable in damages. Within the rule making notice necessary for recovering consequential damages, where goods are sold with a warranty to a dealer, the seller must be assumed to know the dealer may resell them with a similar warranty to a subpurchaser. Accordingly if this is done and the subpurchaser recovers damages from the original buyer, the latter has a prima facie right to recover these damages against the seller who originally sold them to him. And even though the original buyer has not yet been held liable to the subvendee, the amount of his probable liability may be recovered from the original seller. . . . 3 Williston, Sales (rev. ed.), p. 377, sec. 614a. The fact that it might have been difficult in the action in the federal court to establish the extent of its liability to Cohan does not prevent the application of the doctrine. The difficulty may be conceded. But it would not have been impossible. Notice to Cohan of its intention to sue Armour or the offer of his testimony, obtained by means of subpoena, if necessary, would have afforded Associated the means of establishing its probable loss and the extent of its liability to the plaintiff. It appears from the record that Associated had notice that Cohan had suffered loss on account of the feeding of the pork livers. It seems, however, that even if he had not had such notice the judgment entered in the federal court would preclude recovery upon the cross complaint. That a single or entire demand cannot be split so as to constitute the basis of more than one suit, and that the recovery upon any part of such demand merges the whole and bars another action for the remainder, is not disputed, . . . 2 Freeman, Judgments (5th ed), p. 1255, sec. 596. In harmony with the general rule already stated, the fact that the damages sought to be recovered in the second action had not become apparent when the former judgment was obtained does not take the case out of the rule against splitting indivisible demands. Ibid., p. 1261, sec. 599. It is apparent, therefore, that the matter of Cohan's claim against Associated and Armour's liability to the latter on that account could have been litigated and determined in the federal court action. The final adjudication is conclusive, in a subsequent action between the same parties, as to all matters which were litigated or which might have been litigated in the former proceedings. Werner v. Riemer, 255 Wis. 386, 403, 39 N. W. (2d) 457, 39 N. W. (2d) 917. The judgment bars the claim of Associated now asserted in its cross complaint. A final valid judgment on the merits by a court of competent jurisdiction bars any future suit between the same parties or their privies on the same cause of action; identity of the thing sued for, of the causes of action, of the parties to the action, and of the quality or capacity in which the parties sue or are sued is essential to the application of the doctrine. 50 C. J. S., Judgments, p. 16, sec. 598. By the Court. The judgment dismissing the amended complaint of the plaintiff against the interpleaded defendant is reversed with the direction that the order sustaining the demurred be amended by granting plaintiff leave to plead over. The order denying defendant's motion for summary judgment against plaintiff is affirmed. The judgment dismissing defendant's cross complaint against the interpleaded defendant is affirmed. The cause is remanded for further proceedings according to law and this opinion.