In such a case, the party bound to indemnify is in privity with the party to be idemnified, and the indemnifying party therefore has a direct interest in defending any suit whereby there may be a recovery against the party indemnified as to the subject matter of the indemnity. Sanitary District of Chicago v. United States Fidelity Guaranty Co., 392 Ill. 602, 612 (1946); Drennan v. Bunn, 124 Ill. 175, 188 (1888). "The party to be indemnified, moreover, is, manifestly, directly interested in having him defeat all recovery in such suit, and so their respective interests and duties in respect of such suit must be the same."

The analytical difficulties posed by efforts to use a judgment as evidence are, however, the only good reasons offered for the rule (others are canvassed in McCormick on Evidence, supra, § 318, at p. 894), and as they are of less or no force where, as in this case, the trial is not to a jury, we are not sure the rule should apply in such cases. A further point is that a judgment, insofar as it fixes property rights, should be admissible as the official record of such rights, just like other documents of title, on which see Fed.R.Evid. 803(14); Sanitary District v. U.S. Fidelity Guaranty Co., 392 Ill. 602, 611-12, 65 N.E.2d 364, 368 (1946). That was the use made of it by Greycas and the district judge: the state court judgment fixed Greycas's rights, equivalent to title, in Crawford's farm machinery.

It has been held that an indemnitor is in privity with his indemnitee against whom the former action was brought. Jones v. Zurich General Accident Liability Ins. Co., 121 F.2d 761, 763 (2nd Cir 1941); Maryland Casualty Co. of Baltimore v. Sturgis, 198 Ark. 574, 129 S.W.2d 599, 600, 123 ALR 704 (1939); Sanitary Dist. v. U.S.F. G. Co., 392 Ill. 602, 612, 65 N.E.2d 364 (1946). But cf., Farm Bureau Mut. Automobile Ins. Co. v. Hammer, 177 F.2d 793 (4th Cir 1949), commented upon in note, Res Judicata: Judgment Against Insured as Conclusive Against Insurer, 4 Okla L Rev 125 (1951); Lowery v. Zorn, 184 La 1054, 168 So 297 (1936).

" (Emphasis supplied.) We believe that Sanitary District of Chicago v. United States Fidelity and Guaranty Co. 392 Ill. 602, relied upon by Karas and Snell, is in accord with this statement of the rule. A judgment in a prior action is not conclusive on matters which were withdrawn from litigation and were not required to be presented as a part of the case.

Bassick and Cunningham are no longer independent co-defendants against whom judgment has been entered. They now stand in privity ( Sanitary District v. United States Fidelity Guaranty Co. (1946), 392 Ill. 602, 65 N.E.2d 364) and their identity of interests is presumed. ( Cowan v. Insurance Co. of North America (1974), 22 Ill. App.3d 883, 318 N.E.2d 315.) By agreement Cunningham has assumed primary liability for the satisfaction of the judgment Bassick has paid, and has thus acquired a direct interest in Bassick's suit against Mississippi. ( Sanitary District.)

However, in certain instances, exception is made where liability rests upon derivative responsibility, such as indemnitor and indemnitee. ( Sanitary District v. United States Fidelity Guaranty Co., 392 Ill. 602, 65 N.E.2d 364; Palmer v. Mitchell, 57 Ill. App.2d 160, 206 N.E.2d 776.) This rule is based upon the desirability of judicial expediency and the presumed identity of interests between the indemnitor and indemnitee.

Defendant is thus correct that plaintiff is bound by our finding that its delay estopped it from disclaiming liability to Mato. Defendant is not bound by the previous decision since it was neither a party nor privy to the earlier action ( Smith v. Bishop (1962), 26 Ill.2d 434, 438), and it had no notice nor opportunity to defend the suit ( Sanitary Dist. v. U.S.F. G. Co. (1946), 392 Ill. 602, 612; Palmer v. Mitchell (1965), 57 Ill. App.2d 160, 167-8). • 8 However, the prior suit did not determine the rights of the parties against each other.

This determination of the issue bound O'Neil and it could not be raised again to question the legal effect of the indemnity contract and bond. ( Sanitary District of Chicago v. United States Fidelity Guaranty Co., 392 Ill. 602, 612, 65 N.E.2d 364; Palmer House Co. v. Otto, 347 Ill. App. 198, 106 N.E.2d 753.) Thus, the trial court was completely correct in directing a verdict for indemnity in favor of the City and against O'Neil.

Gould v. Country Mut. Cas. Co., 37 Ill. App.2d 265, 185 N.E.2d 603; Potter v. Great American Indemnity Co., 316 Mass. 155, 55 N.E.2d 198; see Restatement of Judgments, § 107. Abstention presents a hazard, however, since the insurer will be "collaterally estopped" in the subsequent suit as to all issues which had been decided in the prior action. Sanitary Dist. of Chicago v. United States Fidelity Guaranty Co., 392 Ill. 602, 65 N.E.2d 364; Palmer v. Mitchell, 57 Ill. App.2d 160, 206 N.E.2d 776. Further, the danger of collateral estoppel is substantially increased if the insured and injured parties are inclined to conspire for the purpose of establishing such facts as they may select to place themselves under the policy's coverage provisions.

It is the rule that an indemnitor, upon notice from the indemnitee of a pending suit against the indemnitee, is bound by his obligation to indemnify to defend and that he is bound by the judgment entered against the indemnitee just as if he (the indemnitor) were a party to the cause. Sanitary District of Chicago v. United States Fidelity Guaranty Co., 392 Ill. 602, 65 N.E.2d 364; Palmer House Co. v. Otto, 347 Ill. App. 198, 106 N.E.2d 753. However, we believe that this rule should not operate to bar a determination on the merits by the indemnitor where the indemnitor was not a party to the principal suit against the indemnitee, because the trial court erroneously severed the third-party suit from the principal suit.