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Intertype Corp. v. Clark-Congress Corp.

January 24, 1957


Author: Lindley

Before DUFFY, Chief Judge, and LINDLEY and SWAIM, Circuit Judges.

LINDLEY, Circuit Judge.

The pertinent facts involved in this appeal have been discussed at length in two previous decisions of this court, United States v. Advertising Checking Bureau, Inc., 7 Cir., 204 F.2d 770, and Intertype Corporation v. Clark-Congress Corporation, No. 11018 of this court, reported in 219 F.2d 90. At the risk of a charge of undue repetition, however, we think it advisable to discuss the evidence briefly.

This is an appeal from a judgment entered in the district court in a suit by plaintiff against Clark-Congress Corporation, for damages claimed to have been incurred in plaintiff's forced removal from certain building space, leased by it from defendant, when the Government took possession of the area. The United States was originally joined as defendant, but, during the course of the proceeding, was dismissed, with prejudice.

The suit arose out of the following essential facts, which are the same as those presented in the counterclaim of Intertype against defendant in the former litigation, reported in 219 F.2d 90. Indeed, it is so stipulated. Defendant owns the Rand-McNally Building on South Clark Street in Chicago. In June, 1951, plaintiff was a tenant of part of the building, under lease running to December 31, 1958. Other tenants occupied other portions of the premises. The Government at that time desired space in the building for the use of its Bureau of Public Debt. Accordingly, on June 22, 1951, defendant leased to the United States the then available portions of the building, for the period ending December 31, 1952, and, thereafter, for five years demised the entire building, with an option to renew for an additional five years. Under the lease, the United States had the right to alter or remodel the building, provided its activities in so doing were not detrimental to or inconsistent with the rights of the tenants. The lease recited that it had been entered into in lieu of condemnation proceedings.

Following execution of the agreement, the Government began to negotiate with all tenants, requesting them to find quarters elsewhere and to surrender their leased premises. On October 31, 1951, the Government initiated active steps to remodel the building in order to meet its needs, continuing this work until completion in the middle of the year 1952. By December, 1951, all tenants had removed from the building, except plaintiff and two others, with the latter of which we are not now concerned. On December 12, 1951, the Government filed suit in the district court to condemn, inter alia, the premises of plaintiff and those of the two co-tenants. Plaintiff surrendered its premises approximately thirty days later.

When the time for pleading in the condemnation suit arrived, plaintiff filed a counter-claim against defendant herein, the Clark-Congress Corporation, discussed in our earlier opinion, the averments of which, as we have noted, it is stipulated, were substantially the same as those of the complaint in this proceeding. Upon this counter-claim judgment was entered against Clark-Congress. Upon appeal the judgment was reversed and the cause remanded with directions to the district court to grant the motions interposed to strike the counter-claim. We held that, under the acts of Congress and the applicable rules of procedure, the district court had the right to entertain and dispose of the counter-claim of Intertype against Clark-Congress in the condemnation case, but that, upon a consideration of the evidence, inasmuch as it appeared that the items for which plaintiff was endeavoring to recover from Clark-Congress represented elements sought to be recovered in addition to the just compensation allowable under the eminent domain laws, plaintiff might not thus increase its compensation and that the counter-claim against defendant must fall.

At that time the present suit was pending. It represented an attempt to recover exactly the same items that plaintiff had attempted to recover in the counter-claim in the condemnation suit. Following reversal of the judgment on the counter-claim, and remandment, the parties proceeded to trial in this cause. The district court, upon a stipulation of facts, entered substantially the same findings it had entered in the trial of the counter-claim, judgment upon which we had reversed. The specific items allowed on the counter-claim originally, were costs incurred in moving from the premises, compensation to officers and wages of employees engaged in effectuating removal, miscellaneous out-of-pocket expenses incurred in connection with moving, and loss of profits for two weeks when business was suspended, aggregating $41,498.98. In the instant trial, the same items were demanded and allowed as a part of the judgment entered, and, in addition, items bringing the total to $59,098.98 were included consisting of additional janitor service in the new space acquired, additional cost of janitor supplies in the same, additional cost of window washing in the new quarters, and painting and decorating offices therein three times. It is significant that, though plaintiff insists that it is seeking to recover damages incurred because of an actual or constructive eviction of plaintiff from its premises by Clark-Congress, each and all of the items for which judgment was entered consist only of costs incurred because of the necessitated removal, such as the actual cost of moving and other similar consequential results.

Upon appeal the defendant contends that the former judgment dismissing the counter-claim is res judicata of the rights of plaintiff to recover in the present suit, and, further, that, upon the merits, inasmuch as plaintiff sought and was allowed damages here for the acts of the United States performed in its attempt to obtain office space for its officials, since whatever was done was done by the Government, in pursuance of its right of eminent domain, which the defendant was powerless to prevent and which the Government as sovereign was entitled to pursue against any and all private parties, including both plaintiff and defendant, the proof does not sustain a claim upon which relief can be had.

We agree with plaintiff that the principle of res judicata precludes relitigation of the issue presented in this case. That doctrine, of course, prohibits the parties from relitigating causes of action previously adjudicated. Heiser v. Woodruff, 327 U.S. 726, 66 S. Ct. 853, 90 L. Ed. 970; Postal Telegraph Cable Co. v. City of Newport, Ky., 247 U.S. 464, 38 S. Ct. 566, 62 L. Ed. 1215, and, obviously, the bar extends not only to matters actually adjudicated but also to such matters as might have been there litigated, Jackson v. Irving Trust Co., 311 U.S. 494, 61 S. Ct. 326, 85 L. Ed. 297; Angel v. Bullington, 330 U.S. 183, 67 S. Ct. 657, 91 L. Ed. 832.

The parties here are the same as those to the counterclaim of which we previously disposed. The cause of action is the same. The items of damages sought to be recovered are the same, with the exception that in the present case some additional matters of the same character are included which might have been included then. Consequently, all the items are within the doctrine of res judicata. We held that none of these matters was compensable by the sovereign; that the counter-claim represented an unauthorized attempt to recover from the landlord something in addition to the just compensation permitted upon the exercise of eminent domain by the Government, and to hold the landlord for something which it could not have prevented against the Government's attempt to subject the property to its right of eminent domain. We adhere to that ruling.

In this connection plaintiff contends that the facts are different and refers to a letter, which is not a part of the record, representing the opinion of an officer of the United States to the effect that the original lease to the United States by the present defendant had not been made in compliance with the laws of the United States. For the reasons we shall hereafter show, even were this a part of the record, it would not, in the slightest degree, we think, bear upon the validity of our previous determination that the counter-claim was insufficient because it represented an attempt to engraft upon just compensation from the Government additional items against defendant based on the Government's actions. We think there is nothing in the record to prevent the full applicability of the doctrine of res judicata.

Plaintiff contends also that we did not in any way adjudicate the civil rights and civil liabilities between landlord and tenant, but, in our view, these rights have nothing whatever to do with a determination of the merits of the claim made against defendant.

Irrespective, however, of any question as to res judicata and stare decisis, we think there is no question as to the correctness of our decision that plaintiff did not in its cross-claim or in the ...

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