Seidell v. Anglo-California Trust Co.

ADAMS, P. J.

I dissent. The question is whether a judgment in an unlawful detainer action is res judicata in an action in equity to set aside and cancel a sale under a trust deed and the trustees’ deed executed pursuant to such sale.

Section 1911 of the Code of Civil Procedure of California provides:

“That only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. ’ ’

A judgment is not res judicata nor an estoppel as to matters which could not properly be litigated in the proceedings in which it is rendered. (County of Sonoma v. De Winton, 105 Cal.App. 166, 174 [287 P. 121] ; Molen v. Bussi, 118 Cal.App. 482, 484 [5 P.2d 450]; Sanborn v. Sanborn, 3 Cal.App.2d 437, 442 [39 P.2d 830]; Estate of Clary, 203 Cal. 335, 340 [264 P. 242]; Nielsen v. Emerson, 121 Cal.App. 415, 417-18 [9 P.2d 260]; 15 Cal.Jur. 151.) It does not operate as an estoppel upon immaterial issues not essential thereto, even though findings have been made upon them. Findings which are not necessary to the judgment are not conclusive; and an issue or a finding is immaterial or collateral if the judgment is in no way dependent upon it. And where issues are made broader than is necessary for the determination of the matter really in litigation, such issues are not concluded if they are not actually embodied in the judgment, even though findings are made on them. (Mitchell v. Fleming, 77 Cal.App. 241, 247 [246 P. 152] ; Blau v. Blosser, 68 Cal.App. 189, 193 [228 P. 673] ; Agnifili v. Lagna, 204 Cal. 262, 266 [267 P. 705] ; Lowe v. Ozmun, 3 Cal.App. 387, 392-393 [86 P. 729]; 133 A.L.R. 840-854, note; 15 R.C.L. 980, § 453 and Permanent Supp. vol. 6, p. 4018; 15 Cal.Jur. 153, § 199.) A judgment is not an adjudication of those matters which were not and could not properly be relied upon and determined in the proceeding in which it was rendered. (Brazil v. Silva, 181 Cal. 490, 493 [185 P. 174]; Daniels v. Henderson, 49 Cal. 242, 247-248; Ferrea v. Chabot, 63 Cal. 564, 567; 15 Cal.Jur. 135, § 188.)

A fact which is fundamental to a judgment—without which it could not have been pronounced—is necessarily res judicata; but this is the extent to which a judgment goes as an estoppel unless it shows on its face some further adjudication. (Henck v. Lake Hemet Water Co., 9 Cal.2d 136, 142 [69 P.2d 849]; Title Guarantee & Trust Co. v. Monson, 11 Cal.2d 621, 631 [81 P.2d 944]; Emerson v. Yosemite etc. Co., 149 Cal. 50, 57-58 [85 P. 122]; 15 Cal.Jur. 139, § 190.)

In the present action in equity to set aside the sale and cancel the deeds, the judgment which it is contended is res judicata is one in an unlawful detainer action. If the matters pleaded by plaintiff in this action, even though pleaded in the former action, are not such as were necessary to the judgment in the unlawful detainer action nor proper to be litigated in that proceeding, such judgment is not res judicata here, nor an estoppel, even though findings were made thereon, if they were not actually necessary to or embodied in the judgment.

This raises the question as to what is necessary to a judgment in an unlawful detainer action — that is, what does such judgment actually determine ? If the issues in the present action were actually determined hy the judgment in the unlawful detainer action and were necessary or proper to be there determined, they are res judicata here. Otherwise they are not, even though they were pleaded and findings made thereon. In the unlawful detainer action here ruled upon defendants first filed an answer and a cross-complaint. The prayer therein was that plaintiff take nothing, that defendants’ title be quieted, and that plaintiff be enjoined from interfering with defendants’ possession. The cross-complaint was stricken out, but defendants were granted leave to incorporate into their answer, as a special defense, “the averments attacking the right of possession in plaintiff.” But that portion of defendants’ prayer that their title be quieted was stricken out.

The judgment in the action adjudged that the validity of the note and deed of trust and the assignment thereof had been theretofore adjudicated; “That the provisions in the deed of trust that the recitals in the trustees’ deed shall be effectual, conclusive and final especially as against the grantors, their heirs, representatives and assigns, and it was therefore unnecessary to prove the prerequisites of the trustees’ sale and the recitals are taken as conclusive”; that defendants had not offered to do equity by tendering payment of the debt, and have not shown injury to themselves from acts of plaintiff; and that the defendants were guilty of unlawful detainer of the premises and that plaintiff be restored to possession.

Regardless of the merits of plaintiffs’ case, I cannot agree that in this equity action, the judgment in the unlawful detainer suit is conclusive; and if it is not, it seems to follow that the judgment which the court entered is not sustained by the only finding made, that the judgment in the unlawful detainer action is res judicata and determinative that plaintiffs have not any right, title or interest in or to said real property, and that they are not entitled to have said sale or any of the deeds vacated, canceled or adjudged void, and that they are not entitled to have any relief herein whatsoever.

The trial court in this action denied successively motions of defendants for judgment on the pleadings, demurrers to plaintiffs’ complaint on the ground that it did not state facts sufficient to constitute a cause of action, and a motion to dismiss the action on the ground that the questions involved had become moot. In Anglo-California National Bank v. Superior Court, 15 Cal.App.2d 676 [59 P.2d 1053], this court denied a writ of mandamus which was sought to compel the trial court to dismiss on the ground that the judgment in the unlawful detainer suit was res judicata; also, after one judgment in favor of defendants was rendered the trial court granted a new trial. Subsequently it rendered the judgment appealed from, a different judge sitting in the case. Whether plaintiffs’ complaint states a cause of action in equity is not before this court. The trial court held that it does, and its holding is not under attack here. Res judicata alone is relied upon. In the unlawful detainer action there was no adjudication of the title to the premises nor mention thereof in the judgment.

It thus appears that the only thing that was adjudicated which is res judicata was the right to possession, and that such adjudication was based upon the recitals in the trustees’ deed.

As to the adjudication that defendants had not offered to do equity by tendering payment, and had not shown injury to themselves, these are equitable matters not necessary to the judgment in such an action nor proper to be litigated therein, and are therefore not res judicata.

What is involved in the summary proceeding in unlawful detainer under section 1161a of the Code of Civil Procedure has been but recently determined by the Supreme Court of this state in Cheney v. Trauzettel, 9 Cal.2d 158 [69 P.2d 832], The Supreme Court there held that “in the summary-proceeding in unlawful detainer the right to possession alone is involved, and the broad question of title could not be raised and litigated by cross-complaint or affirmative defense. ’ ’ Also, page 160:

“Irrespective of the merits of the defenses raised by the answer, the alleged equitable grounds of attack on plaintiff’s title have no place in the present summary proceeding, for if such issues are permissible, the proceeding entirely loses its summary character. In our opinion the plaintiff need only prove a sale in compliance with the statute and deed of trust, followed by purchase at such sale, and the defendant may raise objections only on that phase of the issue of title. Matters affecting the validity of the trust deed or primary obligation itself, or other basic defects in the plaintiff’s title, are neither properly raised in this summary proceeding for possession, nor are they concluded by the judgment. ’ ’

In that case compliance with the statutory requirements in respect to the conduct of the sale was admitted. The objections raised by defendants and appellants in their special defenses, were that the trustees’ sale was not for the purpose of foreclosing but was only colorable; that the sale was not made for the purpose of transferring title to Mrs. Cheney but was made on the understanding that the property was to be transferred by her to Mrs. Trauzettel, and that Mrs. Cheney had taken advantage of the situation by refusing to re-transfer, and had abused a confidential relationship between her and Mrs. Trauzettel; that the title in Mrs. Cheney amounted to no more than an equitable mortgage, she holding the bare legal title in trust for Mrs. Trauzettel to whom she should be compelled to convey. At the trial plaintiff showed paper title in herself, and the court refused to permit defendants to introduce evidence in support of their special defenses. Assuming that case to set forth correctly the law of the state, then any equitable issues raised by defendants in the unlawful detainer suit before us were not properly in the case, nor were they concluded by the judgment. If not so concluded they are not res judicata.

The trial court in the action on appeal bases its judgment solely on the judgment in the unlawful detainer suit, though the action is one to set aside and cancel sale and deeds on equitable grounds. It made findings of fact as follows :

“That on the 16th day of May, 1933, an action was commenced in the Superior Court of the County of Glenn, State of California, wherein Edward F. Harris, defendant herein, was plaintiff, and plaintiffs, C. V. Seidell and Carrie Seidell, were defendants. That the question therein litigated and necessarily and finally determined between the parties hereto and their predecessors in interest was the regularity and validity of the same Trustees’ sale concerning the same real property as is the subject matter of this action. That the judgment therein finally determined the regularity and validity of said Trustees’ sale and the same has become and now is final and is res judicata and is determinative of the rights of the parties in this action in favor of defendants and against plaintiffs.”

The conclusion of law was:

“That plaintiffs have not any right, title or interest in or to said real property; that said plaintiffs are not entitled to have said sale or any of the deeds in said complaint referred to, set aside, vacated, cancelled or adjudged void nor are plaintiffs entitled to any relief herein whatever.”

The judgment which followed was:

“That the trustees’ sale of real property referred to in the complaint herein and the trustees’ deeds executed pursuant thereto were in all respects valid and in conformance with the law and the provisions of the trust deed in said complaint referred to; that said plaintiffs have not any right, title or interest in or to said real property; that said plaintiffs are not entitled to have said sale or any of the deeds in said complaint referred to set aside, vacated, can-celled or adjudged void, nor are said plaintiffs entitled to any relief herein whatsoever.”

It is obvious from the foregoing that the decision of the trial court was based solely upon the judgment in the unlawful detainer action, and that the court was of the opinion ■that such judgment was res judicata as to the equitable as well as the legal title to the premises. Such holding is contrary to the decision in Cheney v. Trauzettel, and other cases hereinbefore cited.

There is a further reason why the judgment in the unlawful detainer action should not be held to be res judicata here. The recitals in the trustees’ deed were the foundation of that judgment. And if the judgment is held to be res judicata in this action then it must follow that such recitals are conclusive not only in an action at law, but also in an equity suit. But such is not the law of this state. (Harker v. Rickershauser, 94 Cal.App. 755 [271 P. 912]; Jose Realty Co. v. Pavlicevich, 164 Cal. 613, 617 [130 P. 15]; Mersfelder v. Spring, 139 Cal. 593 [73 P. 452] ; Sorensen v. Hall, 219 Cal. 680 [28 P.2d 667]; Central National Bank v. Bell, 5 Cal.2d 324 [54 P.2d 1107]; Pacific States etc. Co. v. O’Neill, 7 Cal.2d 596, 599 [61 P.2d 1160]; Southern Title etc. Co. v. Freer, 120 Cal.App. 423, 425 [7 P.2d 1113].) Harker v. Bicker shauser, supra, was decided by this court. It was an action to recover possession of land which had been sold under a deed of trust, upon which deed defendants relied. Said trust deed' contained a provision that if a certain judgment upon which execution had been levied upon the property were paid or the execution released, the trust deed and the note secured thereby would be of no effect. Evidence was introduced showing that the execution had been released prior to the sale under the trust deed; but defendants relied upon recitals in the trust deed that there had been a default, and contended that such recitals could not be “attacked, qualified or disproved” by plaintiff. But this court held that such recitals were not conclusive in an action between the parties to the trust deed; that a trustee is the common agent between both parties; that recitals are conclusive where an innocent third party is the grantee in the trustee’s deed (Jose Realty Co. v. Pavlicevich, 164 Cal. 613 [130 P. 15], supra), but they are not conclusive as between the parties to the trust deed; that if with knowledge that the execution had been released the beneficiary had the property sold, this was a fraud upon the trustor, and the latter was entitled to go behind the recitals of the deed and prove the facts, even though they might be inconsistent with or contradictory to such recitals.

The court also pointed out that in Seccombe v. Roe, 22 Cal.App. 139 [133 P. 507], the court had quoted from Mersfelder v. Spring, and had declared that recitals in a trustee’s deed do not preclude an inquiry, in an equitable proceeding, into the fairness of a sale, or other matters which on equity principles might entitle the injured party to relief.

And in Seidell v. Tuxedo Land Co., 1 Cal.App.2d 406, 408 [36 P.2d 1102], this court said that recitals in trustees’ deeds “have been held to furnish prima facie evidence of the facts so set forth” (citing Sorensen v. Hall, supra), apparently assuming that such recitals are not conclusive in every ease but may be controverted. That such recitals may be controverted is also inferable from the language in Stevens v. Plumas Eureka etc. Co., 2 Cal.2d 493 [41 P.2d 927].

The majority opinion in this case states that a careful examination of the pleadings and findings in the unlawful detainer action convinces that every essential issue of this case was determined by the judgment in that action; that the regularity of the foreclosure proceedings and the validity of the trustees' deed were there upheld; that those alleged irregularities and the invalidity of the deed are specifically included in defendants’ answer, as necessary issues to be determined; and that in that action every essential issue presented by the pleadings in this case affecting the regularity of the foreclosure proceedings and the validity of the trustees ’ deed was involved in, and determined adversely to appellants herein, and that that judgment is therefore res judicata of the issues in this suit. I cannot agree that the pleadings and findings in that action show that the essential issues of this case were determined by the judgment therein. As hereinbefore pointed out it is the judgment and not the pleadings or findings that must be looked to in arriving at a conclusion as to what was adjudged. It may be conceded that the regularity of the foreclosure proceedings and the validity of the trustees’ deed were there upheld, but they were upheld on the ground that in such an action at law defendants were concluded by the recitals in the trustees’ deed; also defendants were limited to an attack upon plaintiffs’ right to possession. They are not so concluded in an equitable action. The recitals in the deed being sufficient to sustain a judgment for possession of the property, a decision upon the equitable issues raised by defendants was not necessary to the judgment, and the judgment does not purport to decide them. Under the decision in Cheney v. Trauzettel, supra, such issues were neither properly raised there, nor concluded by the judgment. However lacking in merit appellants ’ claims may be, it is my opinion that they were not determined by the judgment in the unlawful detainer action, that the trial court erred in holding that the judgment in that action is res judicata in the instant equitable action.

A petition for a rehearing was denied January 5, 1943. Adams, P. J., voted for a rehearing.

Appellants’ petition for a hearing by the Supreme Court was denied February 4, 1943. Carter, J., voted for a hearing.