Carpenter v. M. J. & M. & M., Consolidated

212 F. 868, 129 C.C.A. 388, 1914 U.S. App. LEXIS 2138

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 16, 1914
• Docket: No. 2277
• Status: Published

Opinion

MORROW, Circuit Judge

(after stating the facts as above). [1] The controversy in this case grows out of a certificate of purchase issued by the state of California on March 20> 1889, to one S. .Davis, a resident of Sacramento, in the state of California, for a section of school land located in Kern county in that state. On April 1, 1890, Davis assigned this certificate to one .Charles H. Gilman. Davis had paid 20 per cent, of the purchase price of the land, and interest in advance to the 1st day of January, 1890. On August 25, 1892, the annual installments of interest, which became due in advance on January 1st of 1890, 1891, and 1892, being unpaid and delinquent, the district attorney for Kern county commenced an action in the superior court of that county on behalf of the state to obtain a judgment foreclosing the interest of Davis in and to said certificate of purchase, and canceling and declaring the same null and void, and' adjudging that all persons claiming under said Davis, subsequent to the execution of said certificate of purchase, either as purchasers, in-cumbrancers, or otherwise, be barred and foreclosed of ’all right, claim, or equity of redemption in and to such certificate of purchase.

It appears that at the time of the commencement of this action and the entry of the judgment therein on December 27, 1892, and subsequently, the certificate of purchase issued to Davis stood of record in his name; the notice of the assignment to Gilman not having been filed with the Register of the State Land Office. Gilman was therefore not made a party defendant in that action, and no judgment was entered against him by name. But it is provided in section 3552 of the Political Code of California that a judgment against a purchaser binds the assignee unless the notice of assignment has been filed with the Register before the commencement of the action. The judgment entered in the case followed the prayer of the complaint and adjudged and decreed that all'the interest of said defendant in and to the certificate of purchase issued to Davis; and all the right, title, and interest in and to the land therein described, be foreclosed and forever canceled and thenceforth rendered null, void, and of no force, validity, or effect whatsoever, and that all persons claiming under the said defendant subsequent to the execution of said certificate of purchase, either as purchaser, incumbrancer, or otherwise, having liens upon said land, be forever barred and foreclosed of all right, claim, or equity of redemption in and to said certificate of purchase and every part thereof.

This judgment, as it stands of record and is continued in force, has foreclosed all the interest of Davis and his assignee Gilman in and to the certificate of purchase issued to Davis by the state, and has canceled the same and rendered it 'absolutely, null and void, and has foreclosed the rights of all persons claiming under them or either of them, or under the certificate of purchase. It follows as a legal consequence that no rights can be predicated upon that certificate until that judgment is set aside and vacated. The plaintiff in the present case bases his right to have the defendants adjudged and decreed to hold the title to an undivided one-sixth of the land in controversy for his use and benefit upon the ground that to the extent of such interest he has become the successor in interest of Charles H. Gilman in and to the certificate of purchase issued to Davis and assigned to Gilman. He makes this claim notwithstanding a valid and subsisting judgment, rendered by a court of competent jurisdiction, has adjudged that the rights of all parties claiming under the purchaser or his assigns have been foreclosed, and the certificate declared null and void and of no effect; but the plaintiff claims that the present action was commenced to vacate and set aside the judgment standing in his way. We find nothing in the bill of complaint to support this claim. The bill contains no prayer that the judgment be set aside and vacated. The only relief prayed for, other than for an injunction and an accounting, is that it be adjudged and decreed that the defendants hold the title to the land in controversy for the plaintiff, and that they be required to convey the legal title to him.- It is alleged in the bill of complaint that, in the action resulting in a judgment against Davis, the summons was not served upon the defendant Davis personally or otherwise ; that Davis ,had no notice or knowledge of the proceeding in the superiqr court, or of said action, until about the 1st day of October, 1900;' that said Gilman had no notice or knowledge of the proceedings in the superior court prior to the 1st day of October, 1900; that the court was without jurisdiction to render any judgment in said action against the defendant Davis; and that said judgment is null and void and of no effect whatever. But these allegations, without a prayer that the judgment be set aside and -vacated, set up a collateral and not a direct attack upon the judgment. That the judgment is not open to collateral attack has been held by the Supreme Court of the state of California in the various litigations in which this controversy has reached the court. People v. Davis, 143 Cal. 673, 77 Pac. 651; Moran v. Bonynge, 157 Cal. 296, 107 Pac. 312; Bake v. Bonynge, 161 Cal. 120, 118 Pac. 535. In the latter case the Supreme Court refers to the judgment of foreclosure in the preceding case of People v. Davis, and, after quoting from the decision of the court on appeal in that case, says:

“The pivotal question upon which the validity of the order under review in the Davis appeal turned was whether the judgment roll showed that the trial court had acquired jurisdiction of the defendant. It was held that it had, and such decision is res judicata. Under this decision, the status of the judgment as a valid one was settled forever as against any collateral attack upon it- by the parties to the appeal or their privies. Gilman had succeeded by the agreement of December 7, 1900, to the rights Of Davis under his certificate of purchase, and on the same day conveyed to Snow an undivided one-fourth and to Lake an undivided one-half interest in said certificate and the lands described in it. An agreement was entered into at the same time by Snow and' Lake with Gilman which recited that ‘as the Davis certificate had been foreclosed, and a decree annulling the same entered in a suit brought for that purpose, it is necessary, in order to maintain the claim of present title under said certificate of purchase, to take proceedings to set aside and annul the judgment and decree of foreclosure in said suit entered,’ and that Snow and Lake agreed ‘at their own expense and cost to take all necessary proceedings * * * to claim, assert, and maintain the title to said land as it originally accrued, * * * by reason of said certificate of purchase, and to recover and take the same as if no judgment of foreclosure had been entered,’ a/id that the services to be performed by them towards that end was the true consideration for the conveyance from Gilman to them. Pursuant to that agreement, Lake moved the court to vacate the judgment, and took the appeal from the order annulling the previous order obtained by him vacating it. As successors of Davis through mesne conveyances, Lake, Gilman, and Snow, as their interests were injuriously affected by the judgment in People v. Davis, although not parties to the original action, had the right to make themselves parties to that action by moving to set aside the judgment, and on the denial of their motion had a right to appeal to have the proceedings of which they complained reviewed, not only for excess of jurisdiction, but for error. Elliott v. Superior Court, 144 Cal. 501, 77 Pac. 1109,103 Am. St. Rep. 102. In making himself a party by moving thereunder and taking that appeal pursuant to the agreement made by him and Snow with Gilman, Lake was acting in behalf of Gilman, Snow, and himself in attacking the validity of the judgment in favor of the people of the state, plaintiff in that action, and under and through whom the respondent here, Mary A. Bonynge, acquired her title. While the parties of record on appeal were the people, Davis, and Lake, still the parties to the present action, in which the conelusiveness of the judgment on appeal is involved, are the same, or are parties who were in privity with them as parties to that appeal, and so are bound by the judgment therein. As said in Koehler v. Holt Mfg. Co., 146 Cal. 335, 337, SO Pac. 73: ‘The ease comes clearly within the principle that a judgment operates as an estoppel to preclude the “parties and privies from contending to the contrary of that point or matter of fact which, having been once distinctly put in issue by them, has been, oil such issue joined, solemnly found against them.” ’ ”

It was further contended in- that case that the action then before the court was in equity, and that the trial court, in the exercise of its equity jurisdiction, upon the evidence before it, should have gone behind the judgment and declared it void for failure to obtain jurisdiction to render it, and that is precisely the contention of the plaintiff in this case. As it was decided adversely to the plaintiff in that case, it must be held in .this case that the whole question is res j.udicata and cannot be again litigated in the present case. If it be said that Gilman was not a party to that case, the answer is that Gilman, as well as Lake and Snow, was a successor of Davjs, and, as Gilman's interest was injuriously affected by the judgment in People v. Davis, he had the right to malee himself a party to that action by moving to set aside the judgment, and, on the denial of that motion, he had the right to appeal to have the proceedings reviewed, not only for excess of jurisdiction, but for error. This much is decided in Lake v. Bo-nynge; and, by an application of the same rule in the present case, we must hold that, if Gilman was not technically a party in Lake v. Bonynge, he was in privity with Lake and Snow, who were, and is barred by the judgment in that case and by the judgment in People v. Davis.

[2] But the bill of complaint discloses a still further objection to the plaintiff’s case. It is not shown that either the plaintiff or his predecessors in interest have shown such diligence in protecting their rights as entitles the plaintiff at this late day to invoke the power of a court of equity. Gilman became the assignee of Davis in the certificate of purchase on the 1st day of April, 1890: To protect his rights .as assignee, he should have notified the Register of the Land Office of the assignment before the commencement of the foreclosure suit. This he did not do. But it appears that between October 1 and December 31,, 1900, he discovered that he had lost the certificate of purchase, and he thereupon applied to the Register of the Land Office for a duplicate. In his application Gilman appears to have notified the Register of the Land Office for the first time that the certificate of purchase had been assigned to him. When Davis assigned the original certificate to Gilman on April 1, 1890, the interest for the year 1890 on the balance due on the certificate was unpaid and delinquent. Neither Davis nor Gilman paid this interest, nor did Gilman, after the assignment of the certificate to him, pay the interest in advance on January 1st for the years 1891 and 1892, which was delinquent when the judgment of foreclosure was entered. Nor did he pay the interest in advance for the years 1893, 1894, 1895, 1896, 1897, 1898, 1899, or 1900. It was not until December, 1900, as appears from the bill of complaint, that Gilman tendered to the county treasurer of Kern county these delinquent payments covering a period of 11 years. This failure of Gilman to promptly notify the Register of the Land Office of the assignment to him of the certificate of purchase, and his further failure to pay the annual interest in advance on the balance due on the certificate for the period of 11 years, was negligence far beyond the period of any statute .of limitations applicable to any feature of this case, if the action were at law.

It is provided in section 338 of the Code of Civil Procedure of California that an action for relief on the ground of fraud on the part of the state must be brought within three years after the discovery by the aggrieved party of the facts constituting the fraud; and in .section 343 of the same Code it is provided that all actions for relief, not elsewhere provided for in the Code, must be commenced within four years after the cause of action accrued (that is to say, after the discovery of the facts constituting the legal bar to the adjudication of the right). The plaintiff’s predecessor in interest, Gilman, was advised of the judgnjent of foreclosure on October 1, 1900. This suit was commenced on December 31, 1911, a little more than 11 years after he was advised of that judgment, and 21 years after it was entered. It is not charged in the bill of complaint that Gilman was kept in ignorance of that judgment by any officer of the state, or by any one claiming or holding adversely to his interests; nor is it charged that Gilman was lulled into inaction by the promise, stipula-' tion, or representation of any one, whether claiming or holding adversely or not. With respect to the delay in bringing the present suit, the excuse is- that Gilman was pursuing other and fruitless remedies; but this excuse is not sufficient to constitute diligence in seeking relief in a court of equity, assuming that the present suit is such a p>i o~ ceeding. What is required is diligence commensurate with the situation; and, while a court of equity is not bound by the statute of limitations in determining whether laches are chargeable .to a plaintiff in a suit of this character, nevertheless it furnishes a reasonable standard for measuring conduct', where that question alone is involved; and, under the circumstances of this case, we must hold that neither the plaintiff nor his predecessors in interest have shown such reasonable diligence in protecting their rights as entitle the plaintiff at this late date to invoke the power of a court of equity. This view of plaintiff’s conduct, and that of his predecessors in interest, is supported by an overwhelming weight of authorities.

The case of Burgess v. Hillman, 200 Fed. 929, 119 C. C. A. 225, was a suit in equity brought to avoid the forfeiture of certain lands by the state of Kansas and to have the defendants declared to hold the land in trust for the plaintiff. The facts of that case ate very similar to those in the present case, except that the statutes of Kansas do not provide for a judicial foreclosure, as in California. The Kansas statutes authorize certain officers, upon the default of a purchaser of its lands, to publish certain notices and malee certain entries in the public records, whereupon a forfeiture takes place, so that, instead of the court there having under consideration the question of the effect of a judgment of a court of the state, the forfeiture was one that had arisen under a statute without judicial action. The court, commenting upon the facts in that case, said:

“The case of Burgess y. Hixon,'75 Kan. 201, 88 Pac. 1076, was a case wherein this same appellant was seeking to eject Hixon from .certain school lands which had been purchased from the state by one Walton in the same manner as the lands in controversy herein had been purchased by Adair. Burgess was the assignee of Walton. The language of the court in the case cited is very appropriate as characterizing the position of Burgess in the present case, and we repeat it here, as follows: ‘Of course Walton knew from the instant of his first default that his rights were subject to forfeiture. He knew that, upon his failure to pay, it was the imperative duty of the county clerk to put into operation, and of the sheriff to carry out, forfeiture proceedings. He was bound to anticipate and to expect that the law would be followed, and the record which was in fact made was ample to give him information that the state had undertaken to terminate his rights, and that the officials, having authority in the matter, construed what was done to amount to a restoration of the land to the public domain.’ It sufficiently appears from the record that the lands in question were of a speculative value, and appellant does not seem' to have had sufficient interest in the same for three years to pay any of the installments of interest, or to ascertain, from the many sources of information open to him, the condition' of the title. After having had actual notice of the forfeiture, he delayed more than a year before commencing his action in the state court, and then, after that action had been pending for two years, he dismissed it and commenced the present action. In the meantime appellees had gone into possession of the land and made lasting and valuable improvements. It is true appellant in his bill offers to allow appel-lees to receive credit by deducting the value of the improvements from the rents and profits claimed by appellant, but we do not think appellees in equity owe appellant any rents and profits.”

The decree of the lower court, dismissing the bill on demurrer for want of equity, was accordingly affirmed by the appellate court.

The facts alleged by the bill of complaint in the present case, invoking the equitable powers of the court, are not nearly so strong as they were in the case cited. We conclude that in no aspect does the complaint state a case for the interposition of a court of equity.

The decree of the court below is affirmed.