Bernhard v. Bank of America National Trust & Savings Association
Supreme Court of California
122 P.2d 892 (Cal. 1942)
An elderly woman, Sather, let Charles Cook — who cared for her — make withdrawals from her bank account. Cook opened a new account at First National Bank of San Dimas (SD Bank) and, with Sather present and signing off, transferred all her funds there; he then withdrew everything into an account for himself and his wife. After Sather died, Cook (now executor of her estate) never disclosed the transferred funds. Bernhard and other beneficiaries (plaintiffs) objected in probate court, which ruled Sather had made a valid lifetime gift of the funds to Cook. Bernhard, now acting as administratrix, then sued Bank of America (defendant), successor to SD Bank, to recover the same money. The trial court held that the probate ruling barred (via res judicata) Bernhard's claim, even though Bank of America hadn't been a party to the probate case.
Whether a party who was not bound by a prior action may nonetheless assert res judicata against a party who was bound by that prior action.