Hewitt v. Great Western Beet Sugar Co.

230 F. 394 | 9th Cir. | 1916

GILBERT, Circuit Judge

(after stating the facts as above). [1] The appellant contends that the decree rendered by the state court of Idaho upon his suit to foreclose his mortgage is void, for the reason that the trial court went outside the issues in the case and determined that the receiver’s certificates constituted a lien prior to that of the appellant. It does not appear in the present bill, which is brought to' set aside the decree of the state court and the proceedings had thereunder, that the certificate holders were not made parties to the suit in the state court. They were proper parties, and we may assume that they were parties from the fact that the state court decreed them a first lien on the mortgaged property. Taking the allegation of the bill in the case which is now before us to be true, that those certificates had been made a first lien in a prior suit to which the appellant herein was not a party, and of which he had no notice, it would follow that his rights were not concluded thereby, and that he still had the right thereafter to contest that question. He had full opportunity to do so in his foreclosure suit. Instead of doing so, he seems to have proceeded upon the theory that those certificates were absolutely void and might be ignored. But they were not void. If the lien thereof was not prior to the appellant’s mortgage, it was at least second thereto'. From the decree of the state court, wherein the certificates were adjudged to constitute a first lien, the appellant took his appeal to the Supreme Court, and there, according to the allegations of the bill herein, he presented to that court all the objections to the validity of the decree appealed from which are now presented to this court. In deciding the case on appeal (Hewitt v. Great Western &c. Sugar Co., 20 Idaho, 235, 118 Pac. 296) the court said of the action of the court below:

“That the court had power and authority to appoint a receiver of the property of the Great Western Beet Sugar Company, and for its care, preservation, and protection, when proper facts authorizing the same were presented to the court, there can be no question, and such appointment is not contested in this case. * * * The appellant, however, claims that the priority given to the certificates issued by the receiver should not have been allowed in this case, as a prior lien against the piortgaged property, and that appellant had had no opportunity to contest such allowance. Whether the appellant was a party to the suit in which such receiver was appointed does not clearly appear from the finding, but there can be no question but that in the present suit the appellant had full opportunity, if he saw fit, to contest such receiver’s certificates, and have litigated and determined by the trial court in the present suit the question as to whether such certificates should have been allowed. And there is nothing in the record to show that the appellant, at any time during the trial, made any contest or presented any matter to the trial court, or gave any reason why the court should not allow such certificates and make them a prior lien upon the mortgaged property. Certainly, when the question came before the trial court in the present case the appellant had his day in court, and could have contested these certificates and their priority, and fully litigated and offered such proof as he had, and given such reasons as existed in the law why the court should not allow the same; but the record does not disclose that the appellant took any steps to contest these liens or in any way put in issue their priority.”

The judgment in that case is a bar to the present suit, and it cannot be set aside or vacated on the allegations contained in the bill. In Black on Judgments, § 367, it is said:

“Nor can a court of equity set aside a judgment, rendered by a court which had jurisdiction, on the ground that it was not warranted by the pleadings.”

The same is said in 23 Cyc. 1004, citing Allen v. Allen, 97 Fed. 525, 38 C. C. A. 336, Preston v. Kindrick, 94 Va. 760, 27 S. E. 588, 64 Am. St. Rep. 777, and other cases.

The question of the relative rank of all liens on the incumbered property not only might have been litigated, but, according to the settled rules of procedure, should have been litigated, in the foreclosure suit upon issues tendered by the plaintiff therein. The judgment which was rendered in the state court was a judgment of a court of competent jurisdiction. The question of the lien of the receiver’s certificates properly belonged to the subject-matter of the controversy. The judgment was delivered upon the merits of the cause, and it is final and conclusive in any subsequent action upon the same cause of action and between the same parties and those in privity with them, not only as to all matters actually litigated and determined in the former action, but also as to every ground of recovery or defense which might have been presented and determined therein. 24 Am. & Eng. Enc. of Law, 781; 23 Cyc. 1295; Cromwell v. County of Sac, 94 U. S. 351, 24 L. Ed. 195; Nesbit v. Riverside Independent District, 144 U. S. 610, 12 Sup. Ct. 746, 36 L. Ed. 562.

[2] The appellant contends that the question whether his bill presents ground for equitable relief must be determined from the facts alleged in the body of the bill, and that recourse may not be had to the proceedings in the state courts of Idaho to determine what was at issue and what was decided therein. But it seems too clear to require discussion that when the appellant comes into a federal court of equity seeking to set aside a judgment of a state court, and in his bill he describes the suit in the state court, the parties thereto, and the issues involved, and sets forth the date of the judgment and the volume and page of the Reports wherein it is reported, he authorizes the court to advert to the reported decision and to read the same in connection with the allegations of his bill, with the same effect as if a copy thereof had been appended as an exhibit to his bill. The court in doing so does not, as suggested by the appellant, take judicial notice of a proceeding of a state court, but takes notice of that which is brought to its attention by proper pleading.

[3] The appellant contends that the defense of estoppel and .res adjudicafa is not available to the appellee herein for the reason that that defense has not been pleaded. But where upon the allegations of the bill it clearly appears that that defense exists, it has always been held that it might be presented on a demurrer to the complaint. 23 Cyc. 1525; Davis v. Hall, 57 N. C. 403; Keen v. Brown, 46 Fla. 489, 35 South., 401; Williams v. Cheatham, 99 Ga. 301, 25 S. E. 698; Ferriman v. Gillespie, 250 Ill. 369, 95 N. E. 495; Van Etten v. Leavitt, 90 Neb. 461, 133 N. W. 649; Shook v. Shook (Tex. Civ. App.) 145 S. W. 699.

The appellant presents as ground for setting aside the judgment pf the state court that the receiver’s certificates issued by the first receiver were false and fraudulent, and padded, and issued for illegal claims, and as the result of an illegal conspiracy, and that the debts represented thereby were incurred by reckless and indifferent management on the part of the receiver. All these grounds for attacking the receiver’s certificates were available to the appellant in his foreclosure suit, and should have been therein presented. There is no allegation that the appellant was not then fully aware of the alleged infirmities of the certificates. He then had his day in court, and the present attack on that ground comes too late.

[4] The appellant alleges as further ground of equitable relief' that the purchaser on the foreclosure sale conspired with the receiver of the property to deprive appellant of his right to bid in the property for the amount of the receiver’s certificates and the liens prior to his mortgage, that they stifled competition, and that the minimum bid was excessively low, and wholly disproportionate to the true value. We may pass the question whether those facts as pleaded constitute any ground for equitable relief. The appellant presented a portion of these objections to the state district court, and to the Supreme Court of Idaho, and they were considered and adjudicated by those courts. He had then the opportunity to present all of said objections. He does not allege that he had not discovered the conspiracy at the time o'f making his objections to the confirmation of sale. It was his duty to present all other grounds of objection of which he had knowledge, and he is deemed to have waived any which he knew and did not present. 24 Cyc. 36, and cases there cited.

We find no error. The decree is affirmed.