Bernhard v. Bank of America National Trust & Savings Association

Facts

In June, 1933, Mrs. Clara Sather, an elderly woman in failing health, made her home with Mr. and Mrs. Charles O. Cook in San Dimas, California. She authorized Cook and Dr. Joseph Zeiler to draw jointly on her commercial account at a Los Angeles bank. Cook then opened an account at the First National Bank of San Dimas in her name, signed by him. She never authorized that account with the bank. On October 26, 1933, she signed by mark an authorization directing the Los Angeles bank to transfer her savings balance of $4,155.68 to the San Dimas bank. The San Dimas bank credited the money to the account Cook had opened. Cook withdrew the whole balance, opened a new account in the same bank in the names of himself and his wife, and later deposited the funds in a Los Angeles bank in their names. Mrs. Sather died in November, 1933. Cook qualified as executor of her estate. Several years later he filed an account with his resignation. The account did not mention the money. Beneficiaries under her will, including Helen Bernhard, objected for that reason. After a hearing, the probate court settled the account and declared that she had made a gift of the deposit to Cook during her lifetime.

Issues

1. Can a defendant plead res judicata based on an earlier judgment when it was not a party to that action, was not in privity with a party, and would not have been bound had the judgment gone the other way?
2. Was Bernhard, suing as administratrix of the estate, a party or in privity with a party to the earlier probate proceeding, so that the probate court's order could be asserted against her?

Holding

The bank could assert the probate order as res judicata even though it was not a party or privy to the probate proceeding and the estoppel was not mutual. Bernhard, as administratrix, represented the same persons and interests as in that proceeding, so the plea was available against her.