Clay v. Deskins , 11 C.C.A. 229 ( 1894 )

SIMONTON. Circuit Judge

(after stating the facts). It will be noted that; the complainants in the bill in the circuit court of Logan county, W. Va., are the same persons wlio are complainants in the circuit court of the United States for the district of West Virginia, and the defendants to both suits are the persons who have, or claim to have, an interest in the land the subject-matter of both suits. In the proceeding instituted and completed in the state courts of West Virginia to set aside the sale to W. H. Deskins, the only ground upon which the complainants could sustain their right to complain was that they had a valid contract of sale, which clothed them with the equitable interest in the property; and this was recognized by the supreme court of West Virginia. Before that court would discuss the question of fraud in the sale, it inquired into the right of the complainants to raise the question; in other words, had they locus standi in court? So, also, the case in the circuit court of the United States depends upon the decision of the same question. The complainants demand the net proceeds,—the profit made upon the sale of these lands to Stuart Wood. They cannot be entitled to these net proceeds unless they are or were the equitable owners of these lands. They could only become the equitable owners by virtue of a valid contract of sale of the lands to them. The supreme court of West Virginia, in a cause between the same parties, relating to the same subject-matter as the suit in the circuit court, has determined that these complainants have lost all rights they may have had under the contract of sale, and that they did not have such an interest in these lands at the date of the sale by the commissioner, Shumate, to W. H. Deskins, as would authorize them to question in a court of equity the validity of the sale. This question is therefore res judicata. If they could not question the validity of the sale to W. H. Deskins, a fortiori they can have no right or title to any profit he may have made in the resale of these lands. The case in the state courts of West Virginia¹ and that in the circuit court of the United States for the district of West Virginia² were between the same parties, each dependent upon the same question; that is, did complainants have an equitable interest in these lands under the contract of sale?

The appellants, with much earnestness, insist that this decision of the supreme court of West Virginia was obiter dictum; that the only issue presented to that court was the fraud in the sale to W. H.'Deskins; and that the exceptions brought up this issue only. The record disclosed that the complainants in that case (the appellants here) set out and relied upon their right to a specific performance of the contract as ground for locus standi in court, giving them a right to complain of the fraud, and that right was first discussed and denied by the court. The supreme court of West Virginia then take up and discuss the question of fraud, and announce their conclusion that the charge was unfounded. This being so, W. H. Deskins held under a valid sale, and obtained a valid title in fee simple; and the claim of the appellants that he purchased for them, or that they have an equitable interest in the proceeds of a sale made by him, and a consequent interest in the profit made by him in such sale, falls to the ground. The decision of the case in the state courts of West Virginia made the matter res judicata. Aurora City v. West, 7 Wall., at page 96. Where the parties are the same, the legal effect of the former judgment is not impaired because the subject of the second suit is different, provided the second suit involves the same title and depends on the same question. Steam Packet Co. v. Sickles, 24 How. 333, 341; Stockton v. Ford, 18 How. 418; Franklin Co. v. German Sav. Bank, 142 U. S. 93, 12 Sup. Ct. 147. The decree of the circuit court is affirmed, with costs.

1 Clay v. Deskins, 15 S. E. 85.

2 No opinion.