American Bank & Trust Co. v. Frensley , 167 Okla. 533 ( 1934 )

On the 18th day of October, 1929, the district court of Carter county, Okla., rendered a judgment in favor of the defendant in error against the American National Bank of Ardmore, Okla., Frank Knappenberger, and C.F. Washburn, for the possession of certain described real estate, quieting the title thereto, and for the rental value of the use and occupation of the land. That judgment was based on the finding therein recited that the plea of res judicata relied on by the plaintiff in that action the defendant in error herein, was well taken; "that all matters involved herein as to the question of ownership and title to the lands described in plaintiff's petition and hereinafter described, have heretofore been finally and full judicially determined by a court of competent jurisdiction, to wit, by the judgment and decision of the Supreme Court of this state in cause No. 18256, in that court, wherein plaintiff's testator. B.F. Frensley, now deceased, was plaintiff in error and the American National Bank of Ardmore et al, were defendants in error, and the judgment of this court made and entered herein on the 28th day of March, 1928, in pursuance of the mandate and judgment of the Supreme Court aforesaid; and that said judgment and dcision is final and binding and constitutes and is res adjudicate of the issues involved herein, and that said judgment is a complete bar to the defendant's claim to the ownership of said lands." From that judgment the defendants in that action, the plaintiffs in error herein, appealed to this court.

Herein the plaintiffs in error contend that B.F. Frensley never had any title to the property in controversy; that no issue as to the title of the property was raised in the trial court in the former action, and that the judgment referred to in the findings of fact hereinbefore quoted was void for the reason that it was beyond the issues raised by the pleadings or proof in the former action.

The issue presented requires an examination of the record in the former proceeding. That record shows that the American National Bank commenced an action, numbered 10052, in the district court of Carter county, Okla., against Robert F. Scivally and others, including B.F. Frensley; that in its petition it alleged, among other things, the execution by Robert F. Scivally and wife, of certain notes and mortgages of real estate securing the payment thereof, and that B.F. Frensley had or claimed to have some right, title, or interest in and to the real estate, but that whatever claim of title B.F. Frensley had was inferior to the plaintiff's claim and subsequent to the plaintiff's mortgage; that an answer thereto was filed for B.F. Frensley, in which it was alleged that B.F. Frensley claimed title to the land which is involved in the present action, through a deed from Robert F. Scivally, which was dated prior to the execution of either of the mortgages held by the bank, and the prayer was that the title of B.F. Frensley be quieted; that a judgment was rendered therein for the foreclosure of the mortgage first in time, in which it was recited that B.F. Frensley was the owner of the land involved in the present action, subject only to that mortgage, and in which the order of sale provided for a sale so as to protect the title of B.F. Frensley against the claims of the bank, in so far as it could be protected under that finding of fact; that a judgment was rendered therein for the foreclosure of the mortgage second in time, in which it was recited that the defendant Hamilton Carhart Cotton Mills had a valid judgment lien on all land involved in that action, "except those lands above described found to be the property of B.F. Frensley", and that the defendant William Echols Dry Goods Company had a valid judgment lien upon all land therein described, "except those lands above found to be the property of the defendant B.F. Frensley," that judgment providing for a sale of the land in satisfaction of the mortgages of the plaintiff in that action by "offering first the lands other than those as above found to be the property of the defendant B.F. Frensley," and for a sale of the land in satisfaction of the first mortgage without regard to the ownership of B.F. Frensley; that the land was sold in conformity with the judgments and purchased by the bank; that thereafter B.F. Frensley filed therein a vertified petition, in which he petitioned the court

"* * * to vacate, set aside and hold for naught an order approving sheriff's sale made and entered herein on the 21st day of September, 1923, approving the sale of certain real estate described in said order, which order is hereby referred to and by reference made a part of this petition as fully as if copied herein in full; and further this defendant petitions the court to vacate, set aside, and hold for naught an order approving sheriff's sale made and entered herein on the 22nd day of November, 1923 * * *" — that thereafter he filed an amendment to his petition, in which he alleged that he had not been served with summons in the original action; that thereafter the bank answered the petition and amendment of B.F. Frensley and alleged, with reference to the judgment in the foreclosure proceedings, that "* * * judgment in said action was duly entered on the 13th day of February, 1923, adjudicating the rights of the parties and decreeing the foreclosure thereof"; that the foreclosure proceedings were regular in every respect, and that it vested the title to the land in the bank. It denied the other allegations of B.F. Frensley and it prayed that B.F. Frensley take nothing and "that its title to said property be quieted and for all such other and further relief as to the court may seem just and equitable"; that on the trial of the proceeding to vacate those orders, a witness called on behalf of B.F. Freensley was asked if he know whether or not B.F. Frensley was the owner of the land claimed by him, whereupon the attorney for the bank objected, as follows: "We object to any evidence touching that matter, as that is res judicata", and the court sustained that objection; that the deed under which B.F. Frensley claimed title was offered in evidence, and the attorney for the bank objected "* * * for the reason it is res judicata" as to the parties to this tract of land, "it is part of the proceedings in the original case"; that a judgment was rendered in which it was found that the bank had asked for affirmative relief and that the title to the property be quieted in it, and in which the issues were adjudged in favor of the bank and against B.F. Frensley, that B.F. Frensley take nothing by reason of the proceedings, and that the title to the land was quieted in the bank against B.F. Frensley; that from that judgment B.F. Frensley appealed to this court, and this court, in an opinion, reversed the judgment of the trial court (Frensley v. American Nat. Bank of Ardmore, 129 Okla. 164, 264 P. 188), "with directions to set aside all judgments, orders, and decrees pertaining to the Frensley 360 acres and to set aside the sheriff's deed thereto and to decree the title to said tract in plaintiff in error, B.F. Frensley"; that the trial court, upon receipt of the mandate, construed the direction of this court and rendered a judgment in accordance with its construction thereof; that no appeal was taken therefrom; that the attorneys in the case O. K.'d the journal entry of that judgment; that by that judgment the trial court set aside the judgments, orders, and decrees only in so far as they pertained to the Frensley 360 acres of land; that it did not set aside those judgments, orders, and decrees in so far as they pertained to the 6,000 acres of land other than the Frensley 360 acres; that the bank had taken possession of the land under a sheriff's deed and that it had conveyed the same to Frank Knappenberger and C.F. Washburn; that notwithstanding the judgment of this court and the judgment of the trial court, they remained in possession of the land, and that the present action was instituted for the possession of the land, for the value of the use and occupation thereof, and for the quieting of the title as against Frank Knappenberger and C.F. Washburn, who were not parties to the original action.

When B.F. Frensley instituted the proceedings to vacate the orders that had been made in the foreclosure proceedings, he based his claim of a right to have the same vacated upon a claim of ownership of that portion of the land herein claimed by him. Under the provisions of section 560, O. S. 1931:

"A judgment shall not be vacated on motion or petition, until it is adjudged that there is a valid defense to the action on which the judgment is rendered. * * *" Holt v. Spicer,67 Okla. 60, 166 P. 149; Myers v. Chamness. 102 Okla. 131, 228 P. 988; Stevens v. Bruner, 125 Okla. 101, 256 P. 722.

Under that rule of law no court was authorized to vacate the orders in the foreclosure proceedings on the application of B.F. Frensley if B.F. Frensley had no interest in the property, for if he had no interest in the property, he was in no wise concerned with whether or not a mortgage on the property had been foreclosed. One of the issues presented to the trial court in the proceedings to vacate the orders was whether or not B.F. Frensley owned any interest in the land claimed by him. He had alleged that he was the owner thereof. The trial court denied the prayer of B.F. Frensley to vacate the orders, and when the cause came to this court on appeal, one of the issues presented to this court was whether or not B.F. Frensley owned any interest in the land claimed by him. The trial court in the foreclosure proceedings had held that he owned that land subject to one of the mortgages. On the appeal to this court in the proceedings to vacate the orders, the bank, in its brief, said:

"In the first place, they do not attack the judgment rendered in the case whereby their relative rights were determined, but merely attack the sale held pursuant to the judgment."

In the petition for rehearing that case, it contended that Mr. Potter had protected the interests of Mr. Frensley, and in support of that contention it said:

"The answer as filed by Mr. Potter for Mr. Frensley * * * sets up Mr. Frensley's interest and the judgment in the case * * * decrees that Frensley's land is subject to the first mortgage but free from the lien of the second mortgage."

Nowhere in the proceedings to vacate the orders did the bank contend that B.F. Frensley did not own the land claimed by him, but, during the proceedings to foreclose the mortgages and during the proceedings to vacate the orders in foreclosure, B.F. Frensley claimed title to the land and asked that his title thereto be quieted. Upon the record before this court, this court decreed that B.F. Frensley was the owner of the land in question and directed the trial court to quiet his title thereto.

When the mandate of this court was received by the district court of Carter county, that court proceeded to enter judgment on the mandate, vacating, setting aside, and holding for naught the orders made in the foreclosure proceedings. We quote therefrom as follows.

"It is further ordered, adjudged, and decreed that the judgment entered by the court on the 11th day of December, 1925, refusing to vacate the orders and judgments above set out, be and the same is hereby reversed, vacated, and held for naught, and that the title of the said B.F. Frensley be declared free, clear, and discharged of all incumbrances by reason of a certain mortgage executed by Robert F. Scivally and Mattie Scivally, to the Dickerson-Reed-Randerson Company, and any and all judgments, orders decrees, and deeds entered and executed in the foreclosure of said real estate under said mortgage, and be declared free, clear, and discharged from all right, title or interest or claims of the said American National Bank, a corporation, or its successors and assigns, and that all costs of this action be taxed against the plaintiff, the American National Bank."

The journal entry of judgment received the O. K. of the attorneys for the parties to the action, and that judgment became final. The decree of this court and the judgment of the trial court quieting the title of B.F. Frensley in the land claimed by him were not beyond the issues in that case, and that judgment is not void, as contended by the plaintiffs in error. It was final and conclusive upon the parties thereto and those in privity with them. In the trial of a cause by a court of competent jurisdiction, its decree upon the merits is conclusive between the parties, upon all the facts adjudicated, together with all the material facts which might have been presented as constituting the claim or defense; and such issues of fact so adjudicated, or which might have been presented for consideration, cannot thereafter become the subject-matter for litigation between the parties, or those in privity in a collateral proceeding. Baker v. Vadder, 83 Okla. 140,200 P. 994; Freeland v. Dolen, 84 Okla. 286, 203 P. 182; Stutsman v. Williams, 87 Okla. 64, 209 P. 406; Colby v. Eason,91 Okla. 214, 217 P. 202; Tidal Refining Co. v. Tivis, 91 Okla. 189,217 P. 163; United States Fidelity Guaranty Co. v. Harmon,92 Okla. 167, 218 P. 682; Board of Education v. First Nat. Bank,95 Okla. 275, 219 P. 98; Dugan v. Wilms, 193 Okla. 89,219 P. 651; Dickson v. Mackey, 108 Okla. 11, 233 P. 423; Fooshee v. Craig, 110 Okla. 189, 237 P. 78, and Sapulpa Petroleum Co. v. McCray, 4 F.2d 645.

A defense sought to be interposed in the present action was that B.F. Frensley did not own the land. The time and the place to have made that contention was in the original petition to foreclose and in the answer to the petition of B.F. Frensley to vacate the orders. No such contention was made. It is a general rule that a valid judgment for a plaintiff is conclusive, not only as to defenses which were set up and adjudicated, but also as to those which might have been raised. 34 Corpus Juris, p. 856. That text cites decisions to that effect from almost all of the states, including the following Oklahoma decisions: U.S. Fidelity, etc., v. Harmon, supra; Good v. Bank, 88 Okla. 110,211 P. 1051; Gressler v. Brown, 79 Okla. 170, 192 P. 417; Ely Walker Dry Goods Co. v. Smith, 69 Okla. 261, 160 P. 898; Engle v. Legg, 39 Okla. 475, 135 P. 1058. While there are certain exceptions to that general rule, none of them is applicable to the facts shown by the record in this case, for this record shows that the plea of the plaintiffs in error in this case would have been a sufficient defense to the petition of B.F. Frensley to vacate the orders made in the foreclosure proceedings. The plea of want of title in B.F. Frensley was based on a decree of the district court of Johnston county, Okla., in an heirship proceeding. It was contended that that adjudication was final and conclusive. There can be no question but that if the decree of the district court of Johnston county was an adjudication, final and conclusive, it could have been pleaded as a defense to the petition of B.F. Frensley to vacate the orders in the foreclosure proceedings. The failure to plead the decree at a time when the pleading thereof would have been a defense to the action to vacate the orders in the foreclosure proceedings amounted to a waiver of that claim. Mundell v. Colony Merc. Co., 153 Okla. 79, 4 P.2d 1059; St. Louis, S. F. Ry. Co. v. Stuckwish, Adm'x, 137 Okla. 251, 279 P. 683; Brockman v. Roberts, 89 Okla. 57, 213 P. 545; Wade v. Hope and Killingsworth, 89 Okla. 64, 213 P. 549, and Hall v. Morris,96 Okla. 39, 219 P. 903.

When a fact has been determined in the course of a judicial proceeding, and a final judgment has been rendered in accordance therewith, it cannot be again litigated between the same parties without virtually impeaching the correctness of the former decision, which, from motives of public policy, the law does not permit to be done. The estoppel is not confined to the judgment, but extends to all facts involved in it as necessary steps, or the groundwork upon which it must have been founded. It is allowable to reason back from a judgment to the basis on which it stands, upon the obvious principle that, where a conclusion is indisputable and could have been drawn only from certain premises, the premises are equally in disputable with the conclusion. Johnson v. Gillett,66 Okla. 308, 168 P. 1031; Adams v. State ex rel. Mothersead, Bank Com'r, 133 Okla. 194, 271 P. 946.

The defenses sought to be interposed by the attorneys in this case were not interposed by those who were the attorneys in the former case. Herein it is asserted for the first time that the bank held a deed from Robert F. Scivally. Had the title to the property been in the bank by reason of such a deed, a plea thereof would have constituted a defense to the petition to vacate the orders in the foreclosure proceedings. No such plea was made.

We are not unmindful of the decision of this court in Nero v. Brooks, 116 Okla. 279, 244 P. 588, and the other cases cited by the plaintiffs in error. They are in accordance with the statement quoted from 34 Corpus Juris, p. 945. They are not applicable, however, to the facts shown by the record in this case. Herein, under the statute and under the decisions of this court, it was necessary for Mr. Frensley to show that he had some interest in the land before he could have the sale of the land vacated. He alleged ownership. This court and the trial court adjudged that he was the owner. After permitting that judgment to become final, the plaintiffs in error cannot contend that they are not bound by it.

We find no error in the judgment of the trial court, and it is in all things affirmed.

RILEY, C. J., and OSBORN, BAYLESS, BUSBY, and WELCH, JJ., concur. CULLISON, V. C. J., and SWINDALL, J., dissent