United States Oil & Land Co. v. Bell

219 F. 785, 135 C.C.A. 455, 1915 U.S. App. LEXIS 1667

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 11, 1915
• Docket: No. 2415
• Status: Published

Opinion

GILBERT, Circuit Judge

(after stating the facts as above). The appellant bases its right to the relief sought in the bill primarily upon the decree rendered in favor of Bell on the second trial of the case of Bell v. Staacke in the superior court of Santa Barbara county, and upon the deed which Staacke deposited with the clerk of that court in order to effect a stay of the proceedings pending the appeal from the judgment in that case, and contends that, notwithstanding the fact that the decree so appealed from was vacated by the Supreme Court and that upon the new trial ordered by that court all the issues were found against the appellant’s predecessors in interest, the decree upon the third trial and the proceedings had thereunder were of no binding force for the reasons: First, that, after dismissing the appeal from the final judgment, the Supreme Court had no jurisdiction to award a new trial; second, that at that time the legal title to the land in controversy was vested in the trustees of the San Francisco Savings Union, and the equitable title was vested in that corporation, and therefore the superior court had no jurisdiction to deal with the subject-matter of the suit; and, third, that the decree in Bell v. San Francisco Savings Union was later in point of time than the decree in Bell v. Staacke, is inconsistent therewith, and protects the rights of the appellant.

[1] The contention that the Supreme Court had no jurisdiction to grant a new trial in the case of Bell v. Staacke is based upon the proposition that the notice of intention to move for a new trial'which was filed in the superior court was premature and ineffectual for any purpose. This question was definitely ruled and adjudged by the Supreme Court of California adversely to the appellant’s contention, in Bell v. Staacke, 137 Cal. 307, 70 Pac. 171. When that case was in the Supreme Court on a motion to dismiss the appeal from the order denying a new trial, that court said:

“The premature service of a notice of intention to move for a new trial, or a failure to serve such notice at all, might be a good reason for denying the motion, but does not deprive this court of jurisdiction to hear the appeal; nor does it constitute a reason for its dismissal upon the ground that the court has not jurisdiction to hear it. Hatters occurring prior to the order appealed from cannot be considered on the motion to dismiss an appeal.”

And the court sustained that doctrine by reference to a line of its own decisions. Again, in Bell v. Staacke, 141 Cal. 186, 74 Pac. 774, when the appeal from the order of the superior court denying the motion for a new trial came on to be heard on its merits in the Supreme Court, that court, in dealing with the express objection which is here urged, namely, that the notice of intention to move for a new trial was prematurely given, said:

“There is nothing in this point. The findings and conclusions of law were filed March 6, 1901, in due time, and on March 19, 1901, defendants gave their notice of intention to move for a new trial. Some two months after-wards the judge of thd lower court, on his own motion, and reciting that such findings had been inadvertently omitted, made and filed two additional findings upon two issues raised by the plaintiff’s answer to defendants’ cross-complaint. * * * These were in no way connected with the findings upon which the decree in favor of plaintiff was founded, and neither party attacks them, nor has either party appealed from, or questioned, this part of the decree.”

And,again, in Bell v. Staacke, 151 Cal. 544, 91 Pac. 322, when the appeal from the judgment of the superior court on the third trial of the action was heard, the same question was again, presented to the Supreme Court, and that court said:

“A claim that the superior court had no jurisdiction to retry this case, notwithstanding that it was remanded by this court for a new trial, is based on the fact that the appeal from the former judgment in favor of plaintiff was dismissed. This, it is said, constituted an affirmance, of the judgment, preventing the subsequent giving of any other judgment But a judgment, even although expressly affirmed on appeal, is vacated by an order granting a new trial. See Swett v. Gray, 141 Cal. 83 [74 Pac. 551].”

The judgments in those cases are res judicata and are conclusively binding upon the appellant in this collateral attack thereon. They leave no room for the application of the principles announced in Muhlker v. Harlem Railroad Co., 197 U. S. 544, 25 Sup. Ct. 522, 49 L. Ed. 872, and Kuhn v. Fairmont Coal Co., 215 U. S. 349, 30 Sup. Ct. 140, 54 L. Ed. 228, cited and relied upon by the appellant.

[2] As to the deed made by Staacke on July 8, 1901, and delivered tp the clerk of the court, it is sufficient to point to the fact that the deed was so-made and deposited solely for the purpose of procuring a stay on Staacke’s appeal, as required by the provisions of section 944 of the Code of Civil Procedure, and that the deed was never delivered, but remained in the possession of the clerk until the judgment appealed from was vacated. When that was done, the deed became a uullity. Di Nola v. Allison, 143 Cal. 106, 76 Pac. 976, 65 L. R. A. 419, 101 Am. St. Rep. 84.

[3] We find no merit in the contention that in all the phases of the litigation in Bell v. Staacke, both in the superior and the Supreme Courts, there was no jurisdiction of the res, and no subject-matter of the suit, for the reason that the legal title to the land stood in the trustees and the equitable title in the San Francisco Savings Union. This proposition is advanced, notwithstanding that John S. Bell began the action in Bell v. Staacke against Staacke and the executors of Thomas Bell, for the purpose of establishing his right and interest in the 10,000-acre tract in controversy, and omitted to bring into the controversy the San Francisco Savings Union or the trustees of the deed of trust. If this contention were sustained, the appellant would thereby be deprived of the title which it claims by virtue of the judgment of June 29, 1901, in Bell v. Staacke, and upon which it bases its right to the relief sought by the bill, and would also be deprived of its claim to title by virtue of the deed made by Staacke and deposited with the clerk of the court, for the appellant, to obtain the relief sought, must allege and prove a superior right and title in itself. In Williams v. City of San Pedro, 153 Cal. 44, 49, 94 Pac. 234, 236, it was said:

“If he has no title, he cannot complain that some one else, also without title, asserts an interest in the land.”

But the contention involves a misconception of the effect of the trust deed. The conveyance by Staacke to the trustees, although in form a trust deed, was in law a conveyance given to secure an indebtedness. The grantor was still the beneficial owner, and could maintain any necessary action dealing with the title. That such is the effect of such an instrument is settled by the decisions of the state of California. Kennedy v. Nunan, 52 Cal. 326; King v. Gotz, 70 Cal. 236, 11 Pac. 656; Brown v. Campbell, 100 Cal. 635, 35 Pac. 433, 38 Am. St. Rep. 314.

In Sacramento Bank v. Alcorn, 121 Cal. 379, 53 Pac. 813, the court said:

“Under these decisions and statutes, it would seem that, while we must say that the title passes, nono of the incidents of ownership attach, except that the trustees are deemed to have such estate as will enable them to convey.”

In Herbert Craft Co. v. Bryan (Cal.) 68 Pac. 1020, the court said:

“The passing of the legal title in such case is mostly ideal. It is deemed to have passed only for the purpose of enabling the trustee to convey a title. In all other respects the title remains in the trustor.”

In Tyler v. Currier, 147 Cal. 31, 81 Pac. 319, the court said:

“While the deed of trust in one sense passed the title, yet it did so only for tho purpose of security, and was, except as to the form and the procedure by which the loan could be enforced, substantially a mortgage."

Again, in MacLeod v. Moran, 153 Cal. 97, 94 Pac. 604, the court said:

“These decisions are based upon the fact that such a deed, though in form a grant, is really only a mortgage, and does not convey the fee. A trust deed of the kind here involved differs from such a deed only in that it conveys the legal title to the trustees so far as may be necessary to the execution of the trust. It carriers none of the incidents of ownership of the property, other than the right to convey upon default on the part of the debtor in the payment of his debt. The nature of such an instrument has been extensively discussed by this court, and the sum and substance of such discussion is that while the legal title passes thereunder, and the trustees cannot be held to-hold a mere ‘lien’ on the property, it is practically and substantially only a mortgage with power of sale. ? * * The legal estate thus left in the trustor or his successors entitles them to the possession of the property until their rights have been' fully divested by a conveyance made by the trustees in the lawful execution of their trust, and entitles them to exercise all the ordinary incidents of ownership in regard to the property, subject always, of course, to the execution of the trust. This estate is a sufficient basis for a valid claim of homestead.”

See, also, C. A. Warren Co. v. All Persons, etc., 153 Cal. 771, 96 Pac. 807.

The appellant asserts that rights in its favor were adjudged in the decree in Bell v. San Francisco Savings Union, and that the decree therein finally and conclusively determined the rights of all parties who were involved in the litigation in Bell v. Staacke, and determined the status of the savings union and its trustees as purchasers for value and without notice. The action in that case was commenced for the purpose of obtaining a decree that the deed of trust was void as against John S. Bell and his successors in interest. That relief was denied, the deed was held valid, and the Mercantile Trust Company, as trustee, was directed to sell the 10,000-acre tract, to pay to the savings union $158,000 out of the proceeds, and to pay the balance, if any, to Staacke, his heirs or assigns, and the decree adjudged that the plaintiffs therein “take nothing by this action.” On the plaintiff’s appeal, the judgment was affirmed. The appellant, however, claims an advantage to itself in the fact that the judgment in the Savings Union Case was later than that in Bell v. Staacke, and therefore controlling. But the relative priority in time of the judgments is wholly unimportant. Judgment was entered in Bell v. Staacke on October 17, 1904, and judgment was entered in the Savings Union Case on March 14, 1905; but both cases were pending at the same time in the same court, and before the same judge, and the judgment in the latter case expressly referred to the pendency of the litigation in the former case, and left for adjudication the questions therein involved. It is impossible to see that the appellant’s predecessors in interest obtained anything by either decree. In the San Francisco Savings Union Case, the rights of Thomas Bell in the land held by Staacke were expressly recognized. In the opinion on the appeal in that case (153 Cal. 74, 94 Pac. 225) the court said:

“In tbe foregoing discussion we have said nothing as to the contention of the appellants Crittenden and United States Oil & Land Company that the court erred in denying them any priority as against the estate of Thomas Bell. It Is found, however, that the action of Bell v. Staacke, the pendency of which was set up in the pleadings, was still ponding at the time of the decision, and that the question of the relations between John S. Bell and his grantees on the one hand, with Staaeke and the estate of Thomas Bell on the other, in respect of the indebtedness of John S. to Thomas Bell and of the 10-000-acre tract, are involved in said action and ‘are in course of judicial determination and settlement therein.’ But judgment, accordingly, made no adjudication of the rights of John S. Bell and Thomas Bell (or their successors) as between each other, leaving the question of those rights to be determined in Bell v. Staacke. If it could he said that Staacke had no interest in this controversy as to priorities between John S. Bell and Thomas Bell, the finding as to the pending action (which is not attacked) clearly made it the duty of the court to reserve for adjudication in that action the matters therein involved.”

But the appellant urges that, in any view of the facts of the case, Teresa Bell as administratrix is an involuntary trustee for the appellant of an undivided one-half interest in the land in controversy under the terms of the trust created in Staaeke by the deed from Grover, and that this trust was revived in her whether she obtained the legal and equitable title which Staaeke had when lie conveyed to the trustees, or whether that conveyance be. considered void and her payment of the debt due the savings union be deemed the voluntary act of one who was jointly liable to pay the same; that in either case she occupies toward the land in question the position of one who, with notice of the trust, has again received the title thereto after it once passed into the hands of a bona fide purchaser. This contention ignores the important and salient facts of the litigation.

[4] In February, 1906, an order of sale on the judgment in Bell v. Staacke was issued out of the superior court of Santa Barbara county. A month later the commissioner sold the 10,000-acre tract in controversy under that judgment to Teresa Bell, as administratrix, and thereafter be executed a deed to her. That judgment and sale disposed of the question of the title as between Teresa Bell, administratrix, and the grantees of John S. Bell. The latter, having thereafter no interest in the land, were not concerned in the method of the payment and discharge of the lien of the savings union. Teresa Bell, being the owner of the land, had the right to pay, as she did, the amount due the savings union, and discharge the property of the lien and prevent a sale thereof to satisfy the judgment rendered irx favor of the savings union. By that act the grantees of John S. Bell acquired no equities in the property. They could have obtained no advantage from a sale of the land. The appellant’s bill can he sustained only on the untenable theory that the final judgment in Bell v. Staacke is a nullity. In brief, the appellant comes into a court of another jurisdiction and asks it, in a collateral attack upon the judgment of the Supreme Court of the state of California, to decide that that court either misconstrued or erred in applying its own laws and rules of practice. As was said in Michigan Trust Co. v. Ferry, 228 U. S. 346, 354, 33 Sup. Ct. 550, 552 (57 L. Ed. 867):

“It is a strong thing for another tribunal to say that the local court did not know its own business under its own laws.”

The grantors of the appellant have had their day in court. The propositions on which the appellant bases its claim to relief have been adjudged against it, and its bill is without equity.

The decree is affirmed.