#### J. CLARENCE LEARY and R. W. LEARY, JR., Trading as LEARY BROS. STORAGE COMPANY, v. VIRGINIA-CAROLINA JOINT STOCK LAND BANK and JUNIUS BESS.

(Filed 3 May, 1939.)

1. Pleadings § 20—

In determining the sufficiency of a pleading as against demurrer the facts alleged in the pleading will be taken and considered as true.

2. Pleadings § 17—

The sufficiency of the facts alleged in an answer to constitute a defense may he raised by demurrer ore tenus.

*5023. Judgments § 32—

Ordinarily, in order for a judgment to bar a subsequent action there must be identity of subject matter and of issues, and the parties to the subsequent action must be the same or in privity with those in the former action, and the estoppel must be mutual.

4. Same: Judgment in favor of employee held to bar subsequent action by third person against employer upon the doctrine of respondeat superior.

An action was instituted by an administrator to recover for the wrongful death of his intestate who was killed while riding in a car driven by a chauffeur when the car was struck by a truck. Judgment was entered for plaintiff upon the jury’s finding that the driver of the truck was negligent, that intestate was guilty of contributory negligence but the driver of the truck had the last clear chance of avoiding the injury. This action was instituted by the owners of the truck against the employer of intestate and against the chauffeur to recover damages resulting from the same collision upon allegations that defendant employer was liable for the alleged negligence of intestate and chauffeur, solely upon the doctrine of respondeat superior. Meld: The former judgment constitutes res judicata as to liability of the employer upon the doctrine of respondeat superior, since the employer’s liability under this doctrine is founded upon negligent default of its employee, and the very issue of such negligence was adjudicated in the prior action, and held further, although upon the allegations the chauffeur and intestate were joint tort-feasors so that the judgment in favor of intestate would not be res judi-cata in an action against the chauffeur, since the chauffeur was also a servant of intestate’s employer, the estoppel in favor of the employer will inure to the chauffeur’s benefit and the answer of the employer and chauffeur setting up the defense of res judicata is good as against demurrer.

5. Same—

The operation of a judgment as a bar is not affected by the fact that the action in which it was rendered was instituted subsequent to the action in which the estoppel is pleaded, priority of adjudication being the basis of an estoppel by judgment.

Appeal by plaintiff from Thompson, J., at December Term, 1938, of Chowan.

Civil action for recovery of property damage resulting from alleged actionable negligence.

The undisputed facts are substantially these: On the night of 18 March, 1938, a motor truck, owned by plaintiffs and operated by their employee, Elton Holley, traveling on the State Highway in Bertie County, North Carolina, from Windsor to Edenton, and a passenger automobile owned by the defendant bank, in the possession, and under the control and direction of its traveling agent and servant, W. B. New-bern, and operated by the defendant, Junius Bess, as chauffeur for the said Newbern, also agent and servant of the bank, in the course of their employment and in the scope of their authority as such agents, proceed*503ing in tbe same direction, but at tbe moment in tbe act of backing, came into collision, resulting in tbe death of Newbern.

On 26 April, 1938, plaintiffs instituted tbis action in tbe Superior Court of Cbowan County to recover for damage to tbeir said truck, allegedly proximately resulting from tbe negligence of tbe defendant bank, through its agents and servants, Newbern and Bess. Defendants deny plaintiffs’ allegations of negligence, plead contributory negligence and set up counterclaims to recover alleged damages to tbe automobile of tbe defendant bank, and for alleged damage resulting from injury to person of tbe defendant Bess, allegedly proximately resulting from tbe negligence of tbe plaintiffs.

When tbis action came on for bearing at tbe December Term, 1938, of Chowan County, tbe defendants herein by leave of tbe court filed tbe following amendments to tbeir answer:

“A. That after tbe institution of tbis action one Dora G. Newbern, administratrix of W. B. Newbern, deceased, to wit, on tbe . day of ., 1938, instituted an action against tbe said J. Clarence Leary and R. W. Leary, Jr., trading as Leary Brothers Storage Company, tbe plaintiffs herein, in the Superior Court of Pasquotank County, North Carolina, having for its purpose tbe recovery of damage for tbe wrongful death of tbe said W. B. Newbern, occasioned, as it was alleged in tbe complaint, by tbe negligence of tbe plaintiffs herein in tbe operation of tbeir truck; that upon tbe trial of said action so instituted by tbe said Dora G. Newbern, administratrix of W. B. Newbern, deceased, it was caused to appear and admitted by all tbe parties that tbe car in which tbe said W. B. Newbern was riding was being operated by tbe defendant herein, Junius Bess, it being admitted that tbe said Junius Bess was tbe agent and employee of tbe Yirginia-Carolina Joint Stock Land Bank, a defendant herein, and that tbe negligence of tbe said Junius Bess, if any, was by reason of tbe rule of respondeat superior tbe negligence of tbe said W. B. Newbern; that upon tbe trial of said action a judgment was entered against tbe plaintiffs herein, tbe defendants in that action, awarding unto tbe said Dora G. Newbern, admin-istratrix of W. B. Newbern, tbe sum of $12,500 for tbe wrongful death of her intestate; that tbe said Superior Court of Pasquotank County, North Carolina, bad jurisdiction of tbe parties to said action and of tbe subject matter thereof; that tbe issues determined by tbe court and jury in that action in favor of tbe plaintiff therein and against tbe plaintiff in tbis action as to tbe negligence of tbe plaintiffs herein, tbe defendants in that action, are determinative of tbe issues of negligence in tbis action, and that said judgment is still standing, subsisting and unre-versed, and that tbe evidence in tbis case will be tbe same, as they are informed and believe. A certified copy of tbe judgment roll in said cause is hereto attached.

*504“B. That the said Yirginia-Carolina Joint Stock Land Bank and the said Junius Bess were and are in privity with the said Dora Gr. New-bern, administratrix of W. B. Newbern, deceased, and the said judgment réndered by the Superior Court of Pasquotank County, North Carolina, is binding upon them and upon the plaintiffs herein and that the matters alleged in the complaint herein, by reason of said judgment, have become and now are res judicata, and said judgment is specially pleaded in bar of the plaintiffs’ right to recover against' these defendants and in support of their counterclaim heretofore set up herein.”

From the judgment roll in the Newbern case attached to said amendment to answer here, it appears that the defendants there, plaintiffs here, in answer to allegations of complaint make these pertinent aver-ments : That “plaintiff’s intestate, W. B. Newbern, was riding in a Plymouth automobile then in his possession and under his control, which was then and there being driven for him by a chauffeur or driver who was subject to his control and direction”; that “the said ~W. B. Newbern, or his driver of said Plymouth automobile, or both of them, negligently, carelessly and unlawfully caused said automobile to be stopped and immediately backed rapidly . . and “that the negligence of plaintiff’s intestate and that of the driver of the Plymouth car in which he was riding were the sole proximate cause of the collision.”

Then, in setting up plea of contributory negligence, defendants there averred that “the said plaintiff’s intestate and his said chauffeur and driver, negligently, carelessly and unlawfully, without keeping a sufficient and proper lookout, and without giving any warning or signal whatsoever, and without any tail light on said Plymouth car, suddenly stopped said Plymouth car on said highway and backed it . . . into the truck of these defendants”; “that as a result of this collision and the aforesaid negligence of W. B. Newbern and Junius Bess, the plaintiff’s intestate sustained the injuries of which plaintiff now complains, and both the Plymouth car and the defendants’ truck were badly damaged,” and “that if the death of plaintiff’s intestate was due to any negligence whatever on the part of the defendant, . . . the plaintiff’s said intestate by his own negligence contributed to and proximately caused such injury and death sustained by him by the negligent and careless acts, doings and omission on the part of said plaintiff’s intestate or of his said chauffeur and driver, Junius Bess, or both of them, acting singly or in conjunction in the particulars set forth in this answer; and the negligence and contributory negligence on the part of plaintiff’s intestate or of his said chauffeur and driver, Junius Bess, are hereby expressly pleaded in bar of any recovery of these defendants.”

It further appears from said judgment roll in the Newbern case, that upon issues joined and submitted, the jury found that plaintiff’s intestate *505was injured and killed by tbe negligence of tbe defendants as alleged in tbe complaint; and that plaintiff’s intestate, by bis own negligence, contributed to bis injury and death as alleged in tbe answer; but tbat, notwithstanding, plaintiff’s own contributory negligence, tbe defendants could, through tbe exercise of due care, have avoided tbe injury and death of plaintiff’s intestate as alleged in tbe reply; tbat damages were assessed; tbat judgment was thereupon rendered in favor of plaintiff; and tbat defendants appealed to tbe Supreme Court. (It is pertinent here to interpolate and state tbat on such appeal tbe judgment was affirmed. See opinion, Newbern v. Leary, ante, 134.)

Plaintiffs demurred ore tenus to the amendment to tbe answer of defendants for tbat tbe facts alleged do not constitute a defense.

Thereupon, tbe court, after reciting in part-“tbat it appearing to tbe court tbat tbe demurrer ought to be overruled, and tbat upon tbe pleadings in this action and proper proof of tbe matters and things contained in said amendment to tbe answer tbat such plea is good and acts as a bar to all matters and things in tbe above entitled action, except tbe amount of damages due defendants on their counterclaim,” adjudged “tbat plaintiffs’ demurrer be and tbe same is hereby overruled, and that tbe matters and things asserted in tbe amendment to tbe answer be and tbe same hereby are in bar of all matters and things asserted in this action, other than defendants’ right to submit issues to tbe jury for its determination upon their counterclaims.”

From this judgment plaintiffs appeal to tbe Supreme Court, and assign error.

W. D. Pruden for plaintiffs, appellants.

R. M. Gann, McMullan •& McMullan, M. B. Simpson, and R. Clarence Dozier for defendants, appellees.

'WiNBOBNE, J.

Admitting tbe truth of tbe facts alleged and contained in tbe amendment to tbe answer of defendants, as we must do in testing a demurrer, this question arises: Is tbe judgment in tbe Newbern case res judicata of tbe matters alleged in tbe complaint, in and a bar against tbe plaintiffs’ prosecution of this action? We are of opinion and bold tbat tbe question is properly answered in tbe affirmative.

“As to matter set up as defense tbe usual ground of demurrer is its insufficiency, and this may be taken by a formal demurrer or demurrer ore tenus." McIntosh, North Carolina Prac. & Proc., 501, sec. 475; Toler v. French, 213 N. C., 360, 196 S. E., 312; Ins. Co. v. McCraw, ante, 105, 1 S. E. (2d), 369.

Generally, to constitute a judgment an estoppel there must be. identity of parties, of subject matter and of issues. Hardison v. Everett, 192 *506 N. C., 371, 135 S. E., 288. It is a principle of elementary law tbat tbe estoppel of a judgment must be mutual, and “ordinarily tbe rule is tbat only parties and privies are bound by a judgment.” Rabil v. Farris, 213 N. C., 414, 196 S. E., 321; 116 A. L. R., 1083. When used witb respect to estoppel by judgment, “tbe term ‘privity’ denotes mutual or successive relationship to tbe same rights of property.” Greenleaf on Evidence, Redfield Ed., Vol. 1, sec. 189, p. 216.

Tbat tbe rule tbat only parties and privities are bound by a judgment is subject to certain exceptions is recognized in tbe decisions of this Court. Bank v. McCaskill, 174 N. C., 362, 93 S. E., 905.

In tbe case of Whitehurst v. Elks and Dunbar, 212 N. C., 97, 192 S. E., 850, this Court said: “Where tbe relation between two parties is analogous to tbat of principal and agent, or master and servant, or employer and employee, tbe rule is tbat a judgment in favor of either in an action brought by a third party, rendered upon a ground equally applicable to both, should be accepted as conclusive against tbe plaintiff’s right of action against tbe other.” 15 R. C. L., 1027.

In tbat case tbe liability of tbe defendant Elks depended solely on imputing to him tbe negligence of tbe defendant Dunbar on tbe principle of respondeat superior. From judgment as of nonsuit as to both defendants tbe plaintiff appealed only as to Elks. Tbe judgment was affirmed.

See, also, the cases of Smith v. R. R., 151 N. C., 479, 66 S. E., 435; Morrow v. R. R., 213 N. C., 127, 195 S. E., 383; and Hudson v. Oil Co., ante, 422, 2 S. E. (2d), 26.

“Tbe application of tbe principle of res judicata to persons standing in tbe relation of principal and agent or master and servant has, by some authorities, been supported on tbe ground tbat privity exists between persons standing in these relations. But other authorities deny tbe existence of such privity, and hold tbat in such cases tbe technical rule is, upon grounds of public policy, expanded so as to embrace within tbe estoppel of a judgment persons who are not, strictly speaking, either parties or privies,” 24 A. & E. Enc. of Law (2 Ed.), 752, quoted in Gadsden v. Crafts, 175 N. C., 358, 95 S. E., 610.

But, be tbat as it may, tbe principle is applied and prevails in decisions of courts of tbe several states and of tbe United States, notably among which are these: Doremus v. Root, 23 Wash., 710, 63 Pac., 592, 54 L. R. A., 649; Childress v. Lake Erie and W. R. Co. (Ind. case), 101 N. E., 332; McGinnis v. Chicago, etc., Ry. Co., 200 Mo., 347, 98 S. W., 590; Williford v. Kansas, 154 Fed. Rep., 514; Wolf v. Kenyon, 273 N. Y. S., 170, Sup. Ct., 242, App. Div., 116; Portland Gold Mining Co. v. Strattons, Independence, 16 L. R. A. (N. S.); N. C. and N. R. Co. v. Jopes, 142 U. S., 18, 35 L. Ed., 919; Bigelow v. Old Dominion Copper and Smelting Co., 225 U. S., 111, 56 L. Ed., 1009; Anderson *507 v. West Chicago Street Ry. Co., 65 N. E., 717; Antrim v. Legg, 203 Ill., A. 483; Bradley v. Rosenthal, 154 Cal., 420.

In. Doremus v. Root, supra, Fullerton, J., delivering opinion of tbe Supreme Court of tbe State of Washington, said: “From tbe principle tbat there can be no liability on tbe part of tbe employer for tbe act of bis employee in which be took no part, if tbe employer is free from liability, it follows tbat a judgment in favor of tbe employee in an action brought against him for an injury caused by such an act is a bar to a recovery against tbe employer in an action brought against him for tbe same cause of action.”

In Childress v. Lake Erie & W. R. Co., supra, Adams, J., for tbe appellate Court of Indiana, said: “Where it is not claimed tbat tbe master actually participated in or directed tbe commission of tbe wrong, and is only sought to be held under tbe doctrine of respondeat superior, a judgment rendered as in this case, in favor of tbe servant, would bar a judgment against tbe master.”

In McGinnis v. Chicago, etc., Ry. Co., supra, Graves, J., speaking for tbe Supreme Court of Missouri, said: “We are firmly of tbe opinion tbat in cases where tbe right to recover is dependent solely upon tbe doctrine of respondeat superior, and there is a finding tbat tbe servant, through whose negligence tbe master is attempted to be held liable, has not been negligent, as was true in tbe case in band, there should be no judgment against tbe master.”

In Williford v. Kansas, supra, McColl, District J. of Circuit Court, Western District of Tennessee, said: “My conclusion is tbat, tbe plaintiff having tested bis right to recover against tbe servants or agents of tbe master or principal, and having bad bis day in court, be is precluded from testing it again on tbe same issue or issues against tbe master or principal.”

In Wolf v. Kenyon, supra, a New York case, it is said: “Strictly speaking, master and servant are not in privity, but where tbe relationship is undisputed and the action is purely derivative and dependent entirely upon tbe doctrine of respondeat superior, it constitutes an exception to tbe general rule, nor does this lack of mutuality affect tbe exception,” citing Bigelow v. Old Dominion Copper Mining and Smelting Co., supra.

In Portland Gold Mining Co. v. Strattons, Independence, supra, Van Devanter, Circuit J., U. S. C. A., after reviewing pertinent authorities, concludes: “It is settled by repeated decisions tbat tbe general rule tbat one may not have tbe benefit of a judgment as an estoppel unless be would have been bound by it bad it been tbe other way is subject to recognized exceptions, one of which is tbat, in actions of tort, such as trespass, if tbe defendant’s responsibility is necessarily dependent upon *508the culpability of another, who was the immediate actor, and who, in an action against him by the same plaintiff for the same act, has been adjudged not culpable, the defendant may have the benefit of that judgment as an estoppel, even though he would not have been bound by it had it been the other way. And we think it could not well be otherwise, for, when the plaintiff has litigated directly with the immediate actor the claim that he was culpable, and, upon the full opportunity thus afforded for its legal investigation, the claim has been adjudged against the plaintiff, there is manifest propriety, and no injustice, in holding that he is thereby concluded from making it the basis of a right of recovery from another who is not otherwise responsible.”

In Bigelow v. Old Dominion Copper & Smelling Co., supra, the Supreme Court of the United States, speaking through Justice Burton, on the subject of estoppel by judgment, said: “An apparent exception to this rule of mutuality has been held to exist where the liability of the defendant is altogether dependent upon the culpability of one exonerated in a prior suit upon the same facts when sued by the same principal. . . . The unilateral character of the estoppel of an adjudication in such cases is justified by the injustice which would result in allowing a recovery against a defendant for the conduct of another, when that other has been exonerated in a direct suit. The cases in which it has been enforced are cases where the relation between the defendants in the two suits has been that of principal and agent, master and servant, - or indemnitor and indemnitee.”

In applying these principles to the question involved in the present action, it is well to bear in mind the alleged facts with respect to the relationship of the parties to the accident, and to each other. Neither plaintiffs nor the defendant bank were present at the time of, or actively participated in the acts which caused the collision. Defendant bank’s automobile was in the possession and under the control and direction of its servants and agents, W. B. Newbern and Junius Bess, in the line of duty and in the course of their employment. The plaintiffs’ truck was in charge of their servant and employee, Elton Holley, in the line of duty and in the course of his employment. The relationship of master and servant or employer and employee existed between the defendant bank and the intestate Newbern and defendant Bess. The same relationship existed between plaintiffs and Elton Holley. The liability of the defendant bank to plaintiffs, if any, is grounded solely, and is dependent wholly, upon the negligence of its servants and employees, Newbern and Bess, individually or jointly, under the doctrine of respondeat superior.

In the case of Newbern v. Leary, supra, judgment in which is here pleaded by defendants as bar to plaintiffs’ right to prosecute this action,, *509the question of liability for the injury and death of Newbern, resulting from the same collision, has been adjudicated between Leary Brothers, the plaintiffs here, who were defendants there, and Newbern, the agent and servant of the bank. The verdict of the jury is to the effect that the intestate Newbern was injured and killed by the negligence of the agent of Leary Brothers, who was operating their truck, and that although the said intestate by his own negligence contributed to his injury and death, the agent of Leary Brothers, by the exercise of due care, could have avoided the injury and death of the intestate. That being true, can the plaintiffs Leary Brothers now by this separate action charge the defendant bank, the master or employer of Newbern, with liability for acts of its servant or employee, Newbern, for the damage to their truck? The bank’s liability, if any, is not as joint tort-feasor with Newbern or with defendant Bess. It rests solely upon the principle of respondeat superior. The jury having determined, and judgment having adjudicated that the negligence of agent of plaintiffs as alleged in the complaint was the proximate cause of the injury and death of Newbern, servant and agent of the bank, that judgment operates as an estoppel against the right of Leary Brothers to relitigate that question in an independent action against Newbern’s master, the bank.

On the other hand, as between Newbern and Bess, while there is allegation that they both were servants of the bank and that Newbern was the superior of Bess and the alter ego of the bank, the verdict finds that Newbern by his own negligence contributed to his injury and death as alleged in the answer. In pleading contributory negligence it is averred in the answer that “the negligence and careless acts, doings and omission on the part of said plaintiff’s intestate or of his said chauffeur and driver, Junius Bess, or both of them, acting singly or in conjunction in the particulars set forth in this answer” contributed to or proximately caused the injury and death of the intestate.

If, then, Newbern were actively negligent, and Bess were also negligent as charged in the answer, he and Newbern would be joint tort-feasors. “To make joint tort-feasors they must actively participate in the act which causes the injury,” Brown v. Louisburg, 126 N. C., 701, 36 S. E., 166; Smith v. R. R., supra. As between them as joint tort-feasors, their relationship would not be within the exception to the general rule of estoppel, and the judgment in the Newbern case, supra, would not be res judicata of the matters and things here alleged in the complaint in so far as the defendant Bess is concerned. However, the relationship between the bank and Bess, being that of master and servant, and the plaintiff being estopped by the Newbern judgment to prosecute the action against the bank, that estoppel will inure to the benefit of Bess.

*510Tbe fact that this action was instituted before the Newbern action does not change the legal situation. “A prior judgment upon the same cause of action sustains the plea of former recovery, although the judgment is in action commenced subsequently to the one in which it is pleaded. The date is of no consequence; it is the fact of an adjudication between the same parties upon the same subject matter, which gives effect to the former recovery.” Herman on Estoppel and Res Adjudi-cata, Estoppel by Record, p. 126, sec. 120.

The cases of Meacham v. Larus & Bros. Co., 212 N. C., 646, 194 S. E., 99; Rabil v. Farris, supra, and other cases relied upon by plaintiffs are distinguishable in factual situations from the present case. The decision here is not in conflict with the general principles there applied.

On this record the only question considered is whether the plea of res judicata is sufficient to meet the test of demurrer. For the reason hereinbefore stated, we hold that it is sufficient, and to that extent the judgment below is

Affirmed.