Opinion ID: 2215298
Heading Depth: 1
Heading Rank: 2

Heading: were the issues raised by the suit commenced by golden on may 20, 1974, res judicata?

Text: Respondents successfully contended at the trial court level that the issues Golden sought to raise had been adjudicated in Oahe Enterprises, Incorporated v. Golden and were therefore res judicata by virtue of judgment entered therein on December 23, 1970. The doctrine of res judicata as applied in this jurisdiction involves the following principles: First, a final judgment or decree of a court of competent jurisdiction upon the merits is a bar to any future action between the same parties or their privies upon the same cause of action so long as it remains unreversed; and, second, a point which was actually and directly in issue in a former action and was there judicially passed upon and determined by a domestic court of competent jurisdiction cannot be drawn in question in any future action between the same parties or their privies whether the cause of action in the two actions be identical or different.    Under the first rule the res which is judicata is the cause of action. Under the second, the res which may be judicata is the particular issue or fact common to both actions. Keith v. Willers Truck Service, 1936, 64 S.D. 274 at 276, 266 N.W. 256 at 257-258. See also Carr v. Preslar, 1951, 73 S.D. 610 at 614-615, 47 N.W.2d 497 at 500; Raschke v. DeGraff, 1965, 81 S.D. 291 at 295, 134 N.W.2d 294 at 296. For purposes of res judicata, a cause of action is comprised of the facts which establish the right a party seeks to enforce through litigation. Carr v. Preslar, supra. A test employed by the Eighth Circuit Court of Appeals for the determination of whether a cause of action is the same for purposes of applying the res judicata doctrine is `whether the wrong for which redress is sought is the same for both actions.' Hanson v. Hunt Oil Company , 1974, 8 Cir., 505 F.2d 1237, 1240. A judgment which bars a second action upon the same claim extends not only to every matter offered and received to sustain or defeat the claim or demand, but also to all other admissible matters which might have been offered for the same purpose. Cromwell v. County of Sac, 1877, 94 U.S. 351, 24 L.Ed. 195; Hanson v. Hunt Oil Company, 505 F.2d at 1239; Ramsey Tp; McCook County v. Lake, 1941, 68 S.D. 67, 298 N.W. 356; Chicago and Northwestern Railway Co. v. Gillis, 1964, 80 S.D. 617, 129 N.W.2d 532. If, however, the second action is based upon a different claim or demand, the prior judgment precludes further consideration only of those issues which were actually litigated and determined. Cromwell v. County of Sac, supra. A determination of whether the trial court erroneously relied on res judicata in dismissing the actions below necessitates a comparison of the cause of action, the issues and the facts in Oahe Enterprises, Incorporated v. Golden and Golden v. Oahe Enterprises, Inc., Donald Emmick, Robert Emmick and Charles Cannon, III. The parties to the original suit were the corporation and Golden. The last action has three additional parties: Donald Emmick, Robert Emmick and Charles Cannon, III. In addition, Golden brought suit on behalf of all others similarly situated and as a derivative suit. The first action was commenced by the corporation and was based on the contract with Golden. The last action was commenced by Golden and is based on the sale of corporate assets to Cannon and the alleged waste and misconduct of Robert and Donald Emmick as officers of the corporation. The first action involved questions of whether the contract should be rescinded because of fraud or connivance on the part of Golden, mistake in giving consent, or failure of consideration. The counterclaim raised the issue of whether Golden was entitled to delivery of stock in the amount of $16,922.32. The last action raises the following issues: whether the Emmicks participated in, approved and benefited from wrongful conduct as officers and directors of the corporation, including waste and misapplication of corporate assets and whether the sale of corporate assets was effected in a manner contrary to state law. The facts determined by the court in the first action were: (a) the corporation's consent to the agreement was not obtained by mistake, fraud or connivance, (b) the corporation had received and used the property promised by Golden, (c) Golden had at all times been ready and willing to perform, and (d) Golden was entitled to stock in the amount of $16,922.32. The above comparison of causes of action, parties, issues and factual determinations involved in these suits demonstrates a degree of dissimilarity that is far too great to support a conclusion that Golden's action is barred as res judicata. The trial court erroneously applied this doctrine in dismissing the action below.