Opinion ID: 2199033
Heading Depth: 1
Heading Rank: 8

Heading: The New York Judgment.

Text: On May 27, 1947 Marie and Tom filed in the New York Supreme Court a suit to recover from the Chase Safe Deposit Company the certificates for the 826 shares of Leader stock that were found in Muska's safe deposit box after his death. Jan and others were interpleaded. Marie and Tom asserted ownership, as above stated, as universal heirs of Thomas Bata. Jan's claims, though not specifically set forth in his answer, were these: (1) That he was the owner of the shares by an oral contract of sale made during the lifetime of Thomas Bata; (2) that the deed of delivery of June, 1933, effected a constructive transfer to him of all the assets of Thomas; and (3) that Marie and Tom had with full knowledge participated in the carrying out of the transfer to him of certain assets of the estate and were estopped to question his title. The trial court resolved all these issues against Jan. In particular the trial judge found, as to defense (3) that Marie and Tom had been deceived by Jan and did not understand the nature of the estate and tax proceedings. See Bata v. Chase Safe Deposit Co., Sup., 99 N.Y.S.2d 535. On appeal the first two findings were affirmed; but the finding of Jan's fraud prior to 1939 and of Marie's and Tom's ignorance of the matter was reversed. As to the estoppel, the Appellate Division, carefully confining its holding to the shares in suit, held that the conduct of the parties did not alter the devolution of those shares. Two of the five justices dissented. Bata v. Bata, 279 App.Div. 182, 108 N.Y.S.2d 659. We can find nothing in the opinions of the trial Court and Appellate Division to support Tom's claim that the issue of sales legacy was raised or considered, much less decided. In fact the trial Court expressly stated that Jan's claim was not founded either on the sale memorandum or on the will. The case in the Appellate Division was decided on December 4, 1951. Jan appealed to the Court of Appeals. It was argued on May 21, 1953. Shortly before that, on April 28, 1953, the Dutch District Court decided in Jan's favor the suit filed in Holland by Marie and Tom. It held among other things that the memorandum and the will evidenced a sales legacy to Jan. This Dutch opinion was submitted to the New York Court of Appeals. Apparently the legal theory of sales legacy was advanced by Jan for the first time in his reply brief. A reading of the opinion of the Court of Appeals shows, as the Chancellor said, that the case was finally and basically decided on the ground that no contract of sale was proved and that the plaintiffs were not estopped to claim the shares. Thus the Court said: Both lower courts have found that neither the May 10th writing nor the will constituted a valid, enforceable contract under Czech law. Whether the two documents together created a sales legacy under Czech law was certainly not explicitly decided. Indeed, Tom and Marie argued that the issue was not properly raised for the first time on appeal, and, as the Chancellor said, it is not clear that this contention was rejected. Tom makes the additional argument founded upon the rule of strict res judicata. He says that even if the issue of sales legacy was not litigated and decided in the New York action, yet the New York judgment is binding here as to all claims, litigated or not, because a contrary judgment here would impair rights or interests established in the first action. Schuykill Fuel Corp. v. B. & C. Nieberg Realty Corp., 250 N.Y. 304, 165 N.E. 456, 457. Justice Cardozo's opinion in the cited case shows that the rule invoked is inapplicable here. He says: A judgment in one action is conclusive in a later one, not only as to any matters actually litigated therein, but also as to any that might have been so litigated, when the two causes of action have such a measure of identity that a different judgment in the second would destroy or impair rights or interests established by the first. Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195, Reich v. Cochran, supra. It is not conclusive, however, to the same extent when the two causes of action are different, not in form only (Baltimore S.S. Co. v. Phillips, supra, page 321 of 274 U.S., [47 S.Ct. 600]), but in the rights and interests affected. The Chancellor held that in the Delaware suit we are not only dealing with different property, but we are dealing with a legacy claim, whereas the New York judgment decided a contract claim. See Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195. In view of our ultimate conclusion on the merits, further discussion of the New York suit is not required. It is enough to say that we are in complete accord with the Chancellor's statement of the applicable law and his conclusion that the New York judgment does not preclude consideration of the sales legacy question on the merits.