Balcom v. Cain

81 S.W.2d 827, 1935 Tex. App. LEXIS 419

• Court: Court of Appeals of Texas
• Decided: March 6, 1935
• Docket: No. 9477.
• Status: Published

Opinions

BICKETT, Chief Justice.

George S. Balcom, the plaintiff in this action of trespass to try title, has appealed from a judgment of the district court, which denied any recovery to him" against any of the defendants, and which decreed that the title of the defendant A. K. Stratton be quieted. The correctness of the judgment depends upon the conclusive effect of the judgment in either one of two former cases.

The record title, so far as here material, will be stated. J. O. Brouse was the common source of title. Brouse and wife, Belle Brouse, executed and delivered to George R. Clark, trustee, a deed of trust, dated June 6, 1928, conveying the property in question, in order to secure the payment of a note executed by Brouse, for the principal sum of $1,000, dated June 6, 1928, payable one year after date thereof to Nellie Whalen, or order. Nellie Whalen transferred the note and lien to A. K. 'Stratton on June 5, 1931. Balcom sued Brouse upon a debt in the justice court, and caused a writ of attachment to be levied on the property on September 18, 1928; Bal-com recovered judgment against Brouse for the debt and for foreclosure of the attachment lien on December 11,1980; and Balcom became the purchaser under sheriff’s sale on April 7,1931, as shown by sheriff’s deed dated April 13, 1931. Brouse and wife conveyed to Reed Automobile Company, Inc., by general warranty deed, dated September 22, 1928. And Reed Automobile Company, Inc., conveyed to A. It Stratton by general warranty deed, dated November 12, 1932, reciting the consideration to be the cancellation of the note above described.

P. J. Cain, one of the defendants in this case, entered into possession of the land in January, 1931, as the tenant of Reed Automobile Company, Inc., and remained in possession until the time of the trial as the tenant of Stratton.

The first case, the judgment in which is here pleaded by Stratton in defense against Balcom, was No. 1196S-B, G. S. Balcom v. P. J. Cain and Reed Automobile Company, Inc., in the 117th district court. The petition in that case, filed May 26, 1931, was in the form of an action in trespass to try title. Stratton was not a party. The defendants, Cain and Reed Automobile Company, Inc., answered by a general demurrer, a plea of not guilty, and a cross-action in the form of an action in trespass to try title. Balcom filed a motion on August 18, 1931, alleging that the property had been sold on August 4, 1931, to Stratton under the power contained in the deed of trust from Brouse and wife to Clark, trustee, that the legal title to and sole right of possession of the property thereby became divested out of each and all of the parties to the suit and became vested in 'Stratton, that the question of the title to and possession of the land had become moot, that there was nothing for the court to adjudicate, and that, therefore, the case should be dismissed. On the same date the court entered judgment upon the motion, reciting the substance of its allegations and dismissing the cause of action asserted by the plaintiff, as well as that asserted by the defendants, at the cost of the plaintiff. There was no proceeding, by appeal or otherwise, to set aside or vacate that judgment.

The second case, the judgment in which is here pleaded by Stratton in defense against Balcom, was No. 12272-A, George Balcom v. A. K. Stratton, Reed Automobile Company, Inc., De Witt Reed, and P. J. Cain, in the Twenty-Eighth district court. The purpose of that case was to recover judgment for $2,034.43, the alleged excess, over and above Stratton’s lien debt, resulting from a bid of $3,100 made by Stratton at an alleged sale of the property by Clark, trustee, on August 4, 1931. The petition in that case, filed July 6, 1932, alleged: That Balcom instituted the suit in the justice court, caused the writ of attachment to be levied upon the land, recovered judgment for his debt and for foreclosure of the attachment lien, and became the purchaser of the property at sheriff’s sale under the judgment; that Clark, trustee, in pursuance of the terms of the deed of trust, offered the property for sale to satisfy Strat-ton’s lien debt on August 4,1931; that Strat-ton bid $3,100 at the sale; that the trustee struck off and sold the property to Stratton upon the bid; that Stratton, although obligated to pay $2,034.43, the excess of his bid over his debt, to the trustee, paid no part of his bid; that the trustee resigned, and failed to execute and deliver a deed to Stratton; that Balcom was the owner in fee simple of the property at the time of the trustee’s sale, and was entitled to recover the excess amount of the bid; that, if Stratton did not bid upon his own account, he did so for one of the other defendants; who became liable upon the bid. The prayer of the petition was for the recovery of a money judgment in the sum of $2,034.43, with interest thereon from August 4, 1931. The defendants’ answer consisted of a general demurrer, special exceptions, a plea of not guilty, and a general denial. The first special exception was to the effect that the allegations of the petition as to the attachment bond were conclusions; the second, that the allegations as to the justice court judgment showed laches so as to render it ineffective; the third, that the allegations as to the provisions of the justice court judgment were conclusions. The remaining special exceptions presented objections to features of the petition other than the assertion by Balcom' of title in himself; for example, the substantial objection was raised that no trustee’s sale was consummated. The court rendered judgment on October 27, 1932, that the general demurrer and all of the special exceptions be sustained, and the plaintiff having refused to amend, that the cause be dismissed at plaintiff's cost Balcom did not appeal from that judgment, nor did he attempt in any other way to have it set aside.

The facts as to the alleged trustee’s sale were: That the trustee advertised and offered the property for sale on August 4, 1931, to satisfy Stratton’s lien debt; that Stratton bid $3,100; that the trustee struck off the property and declared it sold to Stratton for that bid; that Stratton did not pay nor offer to pay any part of his bid; that the trustee resigned, and did not at any time execute a deed to Stratton.

In this case Balcom’s petition, filed June 13, 1933, is in the ordinary form of an action of trespass to try title. Stratton’s answer, in addition to a general demurrer, a general denial, and a plea of not guilty, specially pleads that each of the judgments in the causes No. 11968-B and No. 12272-A is res judicata as to the want of title in Balcom as against Stratton, and that there is an estoppel against Balcom by virtue of each of those judgments. Stratton’s cross-action, seeking to quiet the title, is upon the same basis as his special answer. The jury, in response to a peremptory instruction, returned a verdict that Balcom take nothing by his suit. And judgment was, accordingly, entered December 6, 1933, denying a recovery to Balcom and quieting the title of Stratton.

For an issue to be considered as res judicata by reason of a judgment in a former action it is necessary that in the two actions there be an identity of subject-matter, of cause of action, of persons and of parties, and of capacity of parties. 15 Ruling Case Law, § 429, p. 952; Jackson v. Cable (Tex. Civ. App.) 27 S. W. 201.

Applying the general rule to the contention that the issue of title is res judicata by reason of the judgment in the first case, No. 11968-B, it is apparent that there was no identity of parties in the two cases. In the first one Stratton was not a party; in this one he is a defendant. He did not have Bis day in court in the first case, and is not bound upon the theory of res judicata by the judgment rendered in it.

Similarly, the contention that the question of title is res judicata on account of the judgment in the second case, No. 12272-A, is untenable, for there is no identity of subject-matter or of cause of action in that case and. in this one. The subject-matter in that case was the alleged bid of Stratton at the trustee’s sale; here it is the title to the property. The cause of action in the former case was the alleged right to recover upon Strat-ton’s bid; here it is the alleged right to recover the title and possession, as well as damages. The substantial grievance in each case was not the same.

Aside from the theory of res judicata, which operates as a bar in a subsequent action upon the same claim or demand, a so-called estoppel by judgment arises in a later action upon a different claim or demand as to the facts or matters which were conclusively established by the former adjudication and which were essential to or necessarily involved in the judgment or decree rendered. It is only upon such matters actually litigated and determined, not as to other matters which might have been litigated and determined, that the former judgment is conclusive as an estoppel in another action. 15 Ruling Case Law, § 450, pp. 973-976; 2 Black on Judgments, § 609; 2 Freeman on Judgments, § 676, p. 1425; Cromwell v. Sac County, 94 U. S. 351, 24 L. Ed. 195; Southern Pacific R. Co. v. U. S., 168 U. S. 1, 18 S. Ct. 18, 42 L. Ed. 355; Bates v. Bodie, 245 U. S. 520, 38 S. Ct. 182, 62 L. Ed. 444, L. R. A. 1918C, 355; Tait v. Western Maryland R. Co., 289 U. S. 620, 53 S. Ct. 706, 77 L. Ed. 1405; Horton v. Hamilton, 20 Tex. 606; Philipowski v. Spencer, 63 Tex. 604; Willis v. Fiveash (Tex. Civ. App.) 297 S. W. 509; Id. (Tex. Com. App.) 1 S.W.(2d) 585.

Balcom was not estopped from asserting title in this case by reason of the judg ment in the first case, No. 11968-B. In that case Baleom filed a motion to dismiss upon the. allegations, which he evidently believed at the time to be true, that Stratton had become the successful bidder and purchaser at a sale under a deed, of trust having priority over his own title, that the issue of title had become moot, and that there was nothing before the court to adjudicate. Upon the basis of that motion, the court dismissed the ease and did not adjudicate any issue of fact or law whatsoever. Jackson v. Guaranty State Bank (Tex. Civ. App.) 266 S. W. 831.

Nor was Baleom estopped from asserting title in this case by reason of the judgment in the second case, No. 12272-A. The judgment in that case was one of dismissal on account of the sustaining of a general demurrer and special exceptions to Bal-com’s petition and his refusal to amend. A judgment upon demurrer, if it goes to the merits of an issue, may be as conclusive as a judgment upon the facts. Bomar v. Parker, 68 Tex. 435, 4 S. W. 599. The general demurrer having been sustained, the rulings sustaining the special exceptions are superfluous, except in so far as they throw light upon the grounds upon which the general demurrer was sustained. Baleom, in that case, in which he was seeking to recover the excess of Stratton’s bid at the alleged trustee’s sale, pleaded fully his title, including the proceedings in the justice court suit and the sheriff’s deed. The special exceptions relating to those allegations of title went only to purely formal matters, and not the merits, of Balcom’s title as alleged. The rulings on those special exceptions, therefore, are not indicative of the grounds upon which the general demurrer was sustained, and cannot be considered as having decided anything as to the validity or invalidity of Balcom’s title. Other special exceptions, however, presented the substantial and meritorious defense that the allegations of Balcom’s petition affirmatively showed that the alleged trustee’s sale was never consummated, and that, therefore, there could be no cause of action to recover the excess of the bid sued for. Such special exceptions, which were, in effect, reasons or grounds of the general demurrer, show what was decided by the sustaining of the general demurrer. It is clear that there was no adjudication as to title. .2 Freeman on Judgments, 1566-1578.

The insufficiency of Stratton’s pleas of res judicata and estoppel in this case does not warrant a court of law and equity in decreeing that the record title of Baleom, obtained under the sheriff’s deed, is superior as against the lien of Stratton, fixed long prior to that deed. The undisputed facts show that Stratton’s deed of trust lien was a valid first lien upon the' property when Bal-com purchased at sheriff’s sale. Baleom has not pleaded that he has tendered payment of the debt to Stratton; and, in- fact, he has not made any payment or tender of payment. Yet, he seeks to stand upon a formal trespass to try title petition and to claim the title free of the lien debt. In this he cannot succeed.

No less untenable is the position of Stratton, a mortgagee, who entered into possession without any foreclosure of his deed of trust lien and who now seeks by cross-action to quiet the title as against Baleom, the owner of the record title and of the equity of redemption. The deed from Reed Automobile Company, Inc., to Stratton does not avail him anything,, because the conveyance to that grantor from Brouse was apparently inferior to the attachment lien previously levied and subsequently foreclosed. Stratton’s position is regarded, therefore, solely as that of a mortgagee in possession. As such, he is not invested with the superior title, but simply has a superior lien. That does not entitle him to appropriate the property and defeat the equity of redemption. But, as the matter stood in the trial court, without Stratton having pleaded his affirmative equitable rights and remedies, the trial court would have been obliged to render judgment in favor of Baleom, who had the record title.

The rights and remedies of these parties are illustrated in Elliott v. C. C. Slaughter Co. (Tex. Civ. App.) 236 S. W. 1114, a parallel case. Elliott and others sued C. C. Slaughter Company in trespass to try title. The company pleaded and proved the following facts: Alley, the common source of title, executed deeds of trust on the land involved to secure the payment of notes to O. C. Slaughter; an execution on a money judgment against Alley was levied on the land, which was sold under the execution and bid in by Elliott and others; after-wards, Alley conveyed the land to Slaughter in consideration of the cancellation of the indebtedness; Slaughter had only constructive notice of the sheriff’s deed to the purchasers ; Slaughter conveyed to C. C. Slaughter Company. The court held, in effect, that, to prevent injustice, equity will not decree a merger, but will keep alive a debt and lien as against the inferior claim of title by the purchaser at the execution sale. The court specifically stated: “Under the state of facts existing in this case and the law as thus declared, Slaughter should he regarded as a mortgagee in possession and the mortgagor and those holding under him would not be permitted to recover the land without payment of the indebtedness. (Citing cases). The conveyance from Slaughter to the Slaughter Company operated as an assignment of Slaughter’s rights under the mortgage, though the mortgage and debt were not mentioned in the deed. (Citing cases). * * * No good reason, we think, can be assigned for refusing to extend to the Slaughter Company the same protection that equity would have extended to the grantor, C. C. Slaughter. We hold, therefore, that the mortgagee should be regarded as a mortgagee in possession with all the rights incident to such position. Even if it were true that the mortgage indebtedness had become barred by limitations, yet the defendant’s right to hold possession until the debt was paid ‘was wholly unaffected by the lapse of time or limitation.’ ”

The state of the pleadings prevents this court from here rendering the judgment in accordance with the rights and equities of the parties, and requires this court to remand the cause for amendment of the pleadings and for trial in a manner not inconsistent with this opinion.

The judgment of the district court is reversed, and the cause is remanded.