Dobbins v. Economic Gas Co. , 182 Cal. 616 ( 1920 )

In denying the petition of the defendant for a rehearing we deem it well to discuss two points which are raised by the petition. The first is that the trial court found that the Peoples Gas and Coke Company never had any title to the mortgaged property, and from this it is argued that the defendant by its purchase through Hayes from the Gas and Coke Company acquired no title, and was therefore not a purchaserpendente lite and not subject to the rule that the statute of limitations will not run in favor of such a purchaser in possession during the pendency of the litigation. It is true that the trial court found that the Peoples Gas and Coke Company never had any title to the property, the finding being based upon the supposed invalidity of the deed whereby the Gas and Coke Company purported to acquire the interest of the Peoples Gas Company. The right of the defendant to question the validity of this deed is open to serious question, but the point need not be determined, for the finding is wholly immaterial in any case. It makes no difference how invalid the title of the Peoples Gas and Coke Company was. The facts are, and the trial court so finds, that that company was in possession of the property at the time of the filing in the foreclosure suit of the cross-complaint of Mrs. Dobbins upon which the decree of foreclosure was subsequently based, that the Gas and Coke Company was made a party defendant by the cross-complaint and a lis pendens was recorded naming it as such, that the foreclosure decree adjudged that its interest, whatever it might be, was subject to the mortgage so that it was foreclosed upon, that pending the foreclosure suit instruments of conveyance purporting to convey the property from the Gas and Coke Company to Hayes were executed, that Hayes, in turn, executed a deed purporting to convey the property to the defendant, and that the defendant "entered into the actual possession of said property, and each and every part thereof, under said deed executed by said Hayes, as aforesaid, claiming and asserting title to said property by reason of said deed to it from said Hayes and under no other written instrument."

In other words, as found by the court, the title or claim of title of the Gas and Coke Company, however invalid it might be, was the only right or title which the defendant had when it took possession, and it took possession as the holder of such title and not otherwise. [15] Such title was plainly acquired by the defendant as a purchaser pendente lite subject to the determination of the foreclosure suit, and of necessity the possession which accompanied such title and which was taken and held only by virtue of it was likewise held by the defendant as a purchaser pendente lite and was subject to the determination of the foreclosure suit, and could not ripen as against the result in that suit into a title by adverse possession.

Defendant's counsel in support of their position quote fromIrving v. Cunningham, 77 Cal. 52, [18 P. 878], as follows, the italics, however, being ours: "Persons not parties to an action of ejectment cannot be put out of possession of the premises involved, unless they entered under the defendant, either in good faith or collusively," and from Graham's Heirs v. Kitchen, 118 Ky. 18, [80 S.W. 464], as follows, the italics again being ours: "It is thought, though, that there is something in the doctrine that an entry by a stranger to the suit, pendente lite, affects him by the judgment as if he were a party to the record, as controlling the case before us. This doctrine can have no application here. It applies only when thestranger enters under some person who is a party to the suit.In that event he is bound by the record and decree by privityof his relation to him from whom he took title. He is bound in law to take notice of the records affecting his vendor's title, but he is not bound to take notice of, nor is he bound by, a suit over the property between strangers to his chain of titleand right of entry."

We do not question the correctness of these statements, but the present case comes directly within the rule implied in the first quotation and expressly stated in the second that, "when the stranger enters under some person who is a party to the suit . . . he is bound by the record and decree by privity of his relation to him from whom he took title." The Peoples Gas and Coke Company was a party defendant to the foreclosure suit. The defendant here entered under that company while it was such a party and not otherwise. That company was not a stranger either to the defendant's chain of title or to its right of entry. The defendant's possession was acquired and held solely by virtue of the privity of relation between it and the Peoples Company, and such possession cannot be considered as any more adverse to the plaintiff in the foreclosure suit than could the possession of the Peoples Company, if it had remained in possession. The privity of relation between the defendant and its grantor, the Peoples Gas and Coke Company, does not depend in any way upon the grantor having a valid title and is not affected in the slightest by the fact that it had no valid title.

Defendant's counsel also urge that upon the point under discussion the case is governed by Robinson v. Thornton,102 Cal. 675, [34 P. 120]. But the facts there, while in some aspects resembling those here, really presented a very different situation. The facts were that the owner of certain land mortgaged it. Suit to foreclose the mortgage was brought and after decree of foreclosure and sale the interest of the mortgagor was attached in an action against him by a third person. The period of redemption from the foreclosure sale then expired without redemption, as a result of which the foreclosure purchaser became the absolute owner of the property free and clear of the attachment lien which was, in effect, destroyed. In this situation the mortgagor deeded the property to one Thornton, who took possession and thereafter maintained it. Thornton's possession so taken after the expiration of the period of redemption was, of course, hostile and adverse to the foreclosure purchaser, the real owner of the property, and if allowed by the latter to continue would ripen into a title by prescription against him. It was allowed so to continue, and thereby Thornton became the real owner of the property. Years later judgment was obtained in the attachment action against the original mortgagor, execution was issued upon it, and the property sold thereunder. The execution purchaser then brought ejectment against Thornton and upon the foregoing facts the court held that he could not recover. This decision was plainly correct. The plaintiff, the execution purchaser, had no right in the property whatever. In order to have any right he had to depend upon the attachment lien. But the attachment lien had been wiped out by the foreclosure sale. On the other hand, the defendant Thornton was the real owner of the property. He had acquired a complete title by prescription against the true owner, the foreclosure purchaser. Such title was a wholly independent title so far as the execution purchaser was concerned, and was not acquired by possession hostile to him, but hostile to the foreclosure purchaser, whose right was superior to the attachment lien and therefore to the execution purchaser. The case, in reality, is but one coming within the general rule that a person entering into possession under a party to pending litigation may yet assert an independent title against the result of that litigation. It does not contravene the very necessary rule, applicable in the present case, that the possession of such a person pending the litigation may not be considered as hostile so as to defeat the litigation.

[16] The second point we desire to discuss is the plea that, instead of directing judgment for the plaintiff, the cause, at most, should be sent back for a new trial. This plea is made on the ground that the defendant has added very substantial improvements to the property while it has been in possession under a claim of right, that the property, the value of whose use and occupation is found by the court, includes these improvements, that the defendant has the right to remove such of the improvements made by it as can be removed without injury to the realty and should not be held liable for the value of the use and occupation of what may be so removed, and that a new trial is necessary to determine what may be so removed and the value of the use and occupation of the property after such removal. The answer to this is that the plaintiff is entitled to recover the value of the use and occupation of whatever was sold by the foreclosure decree, and that the property, the value of whose use and occupation is found by the court, is the same as that which is found to have been sold by the foreclosure decree. That the property was improved by the defendant is now immaterial. If such improvements were included in the foreclosure decree and should not have been, the defendant's remedy was in the foreclosure proceedings. If they were not included in the foreclosure decree, the findings show that they were not included in the property, the value of whose use and occupation is found, and for the value of whose use and occupation, as found, we have directed judgment for the plaintiff.

There are other points discussed in the petition, but they are all determined by what has been said in the original opinion, and we see no reason for departing from the conclusions there stated.

Rehearing denied.

All the Justices concurred.