Seaboard Terminals Corp. v. American Oil Co.

Shehan, J., delivered the opinion of the Court. There are two appeals in this record. Both are the result of rulings on demurrers filed by the American Oil Company to an amended replication in a suit of ejectment brought by the Seaboard Terminals Corporation against the American Oil Company in the Circuit Court for Anne Arundel County. These rulings and refusal to amend resulted in a judgment being entered on .April 5th, 1935, in favor of the defendant, the American Oil Company, for costs.

The court sustained the demurrer to the amended replication to the second plea, and this is the basis of the appeal by the Seaboard Terminals Corporation. The court overruled the demurrer to the amended replication to the third plea, this ruling being the basis of the appeal by the American Oil Company. The pleadings are involved, and bring into the suit parties other than those in the instant case. The Seaboard Terminals Corporation, plaintiff below and appellant in the first appeal, brought this suit in ejectment against the American Oil Company to recover possession of a parcel of land at Curtis Bay in Anne Arundel County, upon which was located a large ³⁷² oil tank, designated in these proceedings as tank No. 20, and for damages for the wrongful retention of the property by the American Oil Company.

The only question presented in this case is whether or not a judgment in the Superior Court of Baltimore City (May term, 1933) was res judicata of the respective claims of the parties to these two appeals. The court below ruled that the judgment against the American Oil Company for costs in that case was res judicata of the claim of the American Oil -Company for breach of contract, and also res judicata of the claim sued on in the instant case by the Seaboard Terminals Corporation. Such was the effect of the rulings on these demurrers. It is necessary to review the proceedings in the case of the American Oil Company versus Seaboard-Midland Petroleum Terminals Corporation and Seaboard Terminals Corporation and Baltimore Terminals Corporation in the Superior Court of Baltimore City, in order to fully understand the questions of law raised by the demurrers.

It should first be observed that the record of the proceedings in that case, by stipulation, became a part of the pleadings in this case, and were before the lower court in passing upon the defense of res judicata. On the 15th day of August, 1933, the American Oil Company sued the Séaboard-Midland Petroleum Terminals Corporation (for convenience hereinafter referred to as the Midland Corporation) in the Superior Court of Baltimore City for large damages alleged to have been caused by a breach of contract of the'Midland Corporation with the American Oil Company for the purchase of large qúantities of gasoline to be delivered by the American Oil Company to the Midland Corporation, and to' be received' and paid for by the Midland Corporation, in accordance with the terms of the contract, the details of which it is not necessary to recite at length. The Seaboard' Terminals Corporation and the Baltimore Terminals' Corporation in writing guaranteed the performance by the Midland Corporation of its contract to the same extent as' though these two guarantors were ³⁷³ parties to the contract. When the suit of the American Oil Company against the Midland Company was first instituted, the Seaboard Terminals Corporation and the Baltimore Terminals Corporation were not made parties to the suit.

Eight days after the suit was instituted in the Superior Court, the Seaboard Terminals Corporation filed this suit against the American Oil Company in the Circuit Court for Anne Arundel County, and two days after this suit was filed the American Oil Company, by leave of court, filed an amended declaration in the Superior Court, making the Seaboard Terminals Corporation and the Baltimore Terminals Corporation parties defendant with the Midland Corporation. To this suit in the Superior Court, the Séaboard Terminals Corporation, in addition to the general issue plea, set up in a special plea of set-off the claim for $50,000 damages, sought to be recovered in this ejectment case for the alleged wrongful retention and use and occupation of tank No. 20. So far as the claim for damages is concerned, this plea is substantially that asserted in this ejectment case in-Anne Arundel County. The Baltimore Terminals Corporation, in its pleading in the Superior Court, did not plead a set-off or counterclaim, but the Midland Corporation set up a counterclaim against the American Oil Company, alleging that it had sustained great losses because of an alleged breach of contract upon the part of the American Oil Company in its failure to deliver gasoline in conformity with the terms thereof.

With these defenses, the case in the Superior Court went to trial before a jury. The jury was instructed by the court that there was no evidence in the case sufficient to entitle the Midland Corporation to any claim of set-off under its plea. We therefore have the case before the jury on general issue pleas by the defendants and a special plea of set-off by the Seaboard Terminals Corporation for wrongful use and occupation of its property, including tank No. 20, against the American Oil Company. We have not set forth at length all of the sundry plead ³⁷⁴ ings, motions, and procedure in this case, but the above statement substantially covers the situation.

It will be observed that under the pleadings and the instructions of the court the only counterclaim left for the., consideration of the jury was. that of the Seaboard Terminals Corporation; nevertheless, the jury returned a verdict in form, as follows: “The Clerk: How do you find, for the plaintiff or the defendants?” “The Foreman: We find for the defendants.” “The Clerk: In what amount do you assess damages against the plaintiff?” “The Foreman: Fifteen Thousand Dollars ($15,000.00).” This verdict did not follow the issues as presented by the pleadings or the instructions of the court, or the evidence offered in the case, because there was no counterclaim upon the part of the Baltimore Terminals Corporation, and the counterclaim of the Midland Corporation was disallowed, and the only evidence to be considered as to a counterclaim under the plea of set-off was that of the Seaboard Terminals Corporation. The evidence as to this counterclaim was such in amount that the jury in its discretion could have assessed $15,000 damages against the American Oil Company in favor of the Seaboard Terminals, but not in favor of the other two defendants. As a result of this verdict, the American Oil Company moved the court: (a) For a judgment non obstante veredicto, (b) For an arrest of judgment, (c) To amend the docket entries and give judgment in accordance with the provisions of section 14 of article 26 of the Code, (d) For a new trial. The first three of these motions were overruled, and the court stated that the motion for a new trial would be granted, unless the three defendants and each of them enter a remittitur of $15,000, this being for the entire amount of the verdict returned.

The remittitur was entered and thereupon the motion by the plaintiff for a new trial was overruled, and on the 19th day of May, 1934, a judgment on the verdict made absolute in favor of the defendants for costs The principal questions presented on these appeals are: ³⁷⁵ First. Whether this judgment is res judicata, of the suit of the Seaboard Terminals Corporation against the American Oil Company in Anne Arundel County. Second. Whether this judgment is res judicata of the claim of the American Oil Company against the Seaboard Terminals Corporation on its claim for breach of contract against the Seaboard Terminals Corporation as a guarantor of the contract between the American Oil Company and the Midland Corporation.

It should be observed that it is stated in the pleadings that on November 1st, 1933, the oil tank on the property sued for in ejectment was not refused to be surrendered after that date to the Seaboard Terminals Corporation, leaving the claim of the Seaboard Terminals Corporation for wrongful use and occupation by the American Oil Company prior to that date. Restating what has already been said, the rulings on the demurrers in the Anne Arundel County Court held that the suit in the Superior Court is res judicata as to both the claim of the Seaboard Terminals Corporation and the American Oil Company against each other, and that the suit in the Superior Court concluded and ended, these claims, and judgment was entered accordingly, from which judgment these appeals are taken. For reasons to be subsequently stated, which are independent of the question of res judicata, the court is of the opinion that the state of the pleadings did not admit of the judgment rendered by the Circuit Court for Anne Arundel County, and its judgment must be reversed, but the court will not confine the opinion to these reasons, and will discuss the problems raised by the plea of res judicata, because of its importance in this case. In these appeals it is contended by the American Oil Company that the mere entry of the judgment for costs against it in favor of the defendants in the Superior Court case is conclusive as to all the rights of the Seaboard Terminals Corporation, and amounts to a full and complete adjudication of its claim.

In the appeal of the ³⁷⁶ American Oil Company it is not seriously contended that the said judgment is conclusive of its rights under the claim for damages for alleged breach of contract by the three defendants in the Superior Court case, but the appeal is taken so that its rights may be preserved in the event that the decision of this court may be adverse to the American Oil Company. The rules governing the plea of res judicata have been clearly defined by this court. In the case of Wiley v. McComas, 137, Md. 637, 640, 113 A. 98, 99 , Judge Urner stated that in order to constitute a plea of res judicata a prior judicial proceeding must have resulted in a final judgment on the merits, rendered in the exercise, and within the scope of, a competent jurisdiction, and the subject and parties in both cases must be identical. Christopher v. Sisk,