Sautbine v. Keller

SAUTBINE, Sautbine, Willis D. G. C. Assigns Successors, Unknown Trustees and Inc., G. Willis the Unknown Heirs, Executors, Devisees, Administrators, Legatees, Assigns Trustees L. J. Mil deceased, burn, Inc., and Willis G. corporation, Error, Plaintiffs in KELLER, Emery Keller,

Jesse M. Isie A. Oakes, Oakes, Oakes, Frankie R. M. Ethel Oakes, Compa and Federal Life Insurance corporation, ny, a Defendants in Error.

No. 40719.

Supreme Court of Oklahoma.

Oct.

Rehearing Denied Jan. City, Johnson,

ford & Oklahoma for de- error, Co., fendant Federal Ins. Life corporation.

BERRY, Justice. appeal This involves the correctness of the trial judgment quieting court’s plaintiffs’ title to an undivided one-half mineral interest under 1240 acres of land in Dewey County, Originally sep- Oklahoma.. arate actions were filed different three plaintiffs but, since involved the iden- each issues, tical facts and were consolidat- hearing, ed appeal. for and determination Prior culminating transactions appeal, this all the land owned involved was who, wife, joined one Ralls had Fidelity mortgaged land to Land & Company. mortgage Credit This was as- signed to the Com- Federal Life Insurance pany, “Federal”, herein called one appeal. error in On June 27, 1926, conveyed the the Ralls land to Sautbine, Lyn R. Federal’s mort- gage. By July mineral deed recorded conveyed Sautbine undivided one- half mineral interest to G. Willis Inc., which we shall to as the refer defend- ant. Thereafter Sautbine sold and con- veyed Merrill, subject the land to one mortgage excepting prior min- and grant. eral incorporated This defendant had been January Oklahoma and was organized purpose, among for the stated others, gas buying acquiring and oil and engaging development leases and production oil, gas other minerals. Milburn, incorporators The C. D. were L. J. Sautbine and Willis who own- G. corporate ed of the The in- stock. 98% corporators Crowe, became the directors Wil- City, Robert D. for Oklahoma president lis G. C. D. Saut- Sautbine error. secretary-treasurer. corpora- bine as The Ruble, Tom Taloga, Sparks, Boatman J. tion was until' active December Rizley, & Woodward, for defendants in when charter was canceled error, Keller, Keller, Emery M. Isie Jesse non-payment for of license fees. Oakes, Oakes, A. R. Frankie M. Oakes and Ethel Oakes. May 26, On 1927, Federal filed Case No. L. McDaniel, Ben R. Burdick and Paul 2218 in Dewey County seeking Crowe, Boxley, Dunlevy, Thweatt, mortgage. petition Swin- Ralls’ named petition was filed and Fed- in- An amended Sautbine and Willis G. Lyn R. Sautbine placed brought eral into the case defendant, but dividually as warranty of title any point at notice to defend not mentioned

corporation was plaintiffs. also for Plaintiffs benefit Summons issued proceeding's. in the damages for breach sued Federal against Willis G. and returned was served warranty are not involved publica- but such issues personally, and service admitting Federal then answered Lyn R. Sautbine. No herein. tion was pleaded its attempted petition, matters asserted process sought or service of Upon ownership one-fourth the miner- own corporate defendant. alleged any mineral interest claimed attorney in- als and the Sautbines advice of by corporate had been fore- any in the the defendant dividually disclaimed interest pro- closed and canceled in the foreclosure property under foreclosure. corporate ceeding (1) the defend- because: judgment fore- The culminated in a case ego as ant the alter Sautbine was of Willis purportedly con- closing mortgage and the a conduit for his business individual and firming Pursuant the fee Federal. title affairs; merely (2) defendant the was the decree an order of sale in transaction; agent (3) Sautbine’s had, July and on a sheriff’s sale was qualifying was held his benefit stock for order confirm- the trial court entered and was sole owner of Sautbine ing deed such a sheriff’s sale. Thereafter corporation agent filing and as an acted Federal, was executed to was record- which disclaimer; rendered August 13, conveyed Federal then ed against Sautbine the foreclosure suit warranty by deeds to Charles O. Oakes defendant; binding corporate was Keller, reconveyed then one- M. who Jesse corpo- (4) being the sole shareholder fourth of the mineral interest back Fed- president, upon rate was summons plaintiffs eral. The in each of men- had notice and he also tioned actions derived their interests from personal knowledge no- which constituted Oakes and Keller and issue was raised no corporate corporation; (5) tice to the de- concerning plaintiffs’ ownership, other any fendant’s failure to interest for assert than the Sautbine mineral interest. long estopped corporation period petition deraigned plaintiff’s The title claiming plaintiffs re- interest since noted, pro- alleged as the foreclosure thereon; (6) guilty lied defendant was ceedings canceled the mineral interest of the laches for failure to its interest after assert corporate defendant; sher- notice; defendant was barred claim- deed, foreclosure, upon plain- iff’s based ing any plaintiffs’ ad- interest because notorious, tiffs open, had held continuous possession. verse possession and exclusive of the land since reply Plaintiffs’ answer to defend- August and that title cross-petition ants’ asserted above men- against defendants, by valid as claim defendants, against tioned defenses and also judgment quieting and asked their title. Sautbine, individually, alleged real By alleged answer defendants Sautbine party in the foreclosure matters above recited which their per- rendered him claim based; to the mineral interest was sonally corporate likewise foreclosed affirmatively alleged W. B. Inc. replied denying defendant. Defendants action; was not a to the foreclosure the corporate defendant Saut- plaintiffs’ denied ownership claim of ego, alter bine’s or that statute of laches or by one-half the minerals reason mort- applied. limitations gage foreclosure, possession; adverse court, asked adjudged owners issues The were tried to the who and to have title to their mineral interest took matter under advisement quieted against plaintiffs. parties. briefs submitted Thereafter

45i' court entered generally for 990, syllabus 197 P.2d 3 follows plaintiffs, quieting their to an entire principle: title simple land, fee estate in the except for rights “Where the are clear- the undivided one-fourth mineral ly defined and by law, established equity originally retained Federal. Motion for power change no or unsettle those new trial per- was overruled and defendants rights, but in all such instances the maxim appeal. fected this ‘Equity applicable.” follows the law’ is judgment, court’s present- trial here Although equity may be invoked review, ed for simply general was a find- protect right, an existing it is unavailable ing plaintiffs, quieting their title right to create a where none exists. Welch against defendants’ ownership claim of Montgomery, the undivided mineral interest. Being Equity A.L.R.2d 294. cannot be invoked general finding, does not dis- its necessary when aid through becomes theory upon close the which trial court party’s fault, own hence cannot assist predicated his conclusions. Examination of to escape from circumstances record, including trial re- court’s privies. created fault of their Thus* trial, during marks plaintiffs reflects that clearly rights parties where the of are de principally upon relied theory, the advanced equity power fined change law no to by Federal, first instance that rights. rights unsettle such of the Sautbine, individually, interests of and the parties in this action were fixed law. corporate closely defendant were so related Despite the judgment claim the is not that only ego. defendant was his alter against evidence, weight the clear of the Thus precluded defendant was from assert- rights fixed, parties of and ing any the land in- since his findings the trial court’s cannot stand dividual disclaimer filed in the foreclosure against equitable principles noted. action must considered that of the gen acknowledge Plaintiffs corporation. Upon this basis rule, Downing, expressed eral in Garrett v. argue equity this is an case wherein family 185 90 that even a Okl. P.2d cannot be disturbed unless legal corporation separate is a and distinct against evidence, weight clear of the entity Also see But from its shareholders. competent and that upon evidence Co., Molen, terick Inc. v. Okl. which to base the conclusion that defendant However, they P.2d assert 311. Parenthetically, ego. Sautbine’s alter types cases qualified in certain rule is we plaintiffs’ they note do declaration of an individual to extent that acts rely not theory may the act of become shareholder bar, aas so that this matter re- the distinction between corporation, and quires no consideration. corporation principal and the shareholder disregarded. Further, the doctrine will be Concededly, we adhere to the rule solely to in ego apply does not of alter that a court’s trial will be re not corporate existence where the stances weight versed unless the clear fraud, com wrong, perpetrate do used to however, rule, This evidence. neces has been doctrine mit a crime. Rather this sarily only apply can where does not run only for application not amplified to allow recognized equity. principles counter to wrong, in cases where but fraud or also sepa disregard to equity require the court It is axiomatic follows facts corporation and share law, potent existence of the and this maxim is as as the rate third rights protect in order to (cid:127)clean maxim is strict holders hands doctrine. The accomplish justice. Mid-Conti ly applied persons and rights of the are when the Goforth, 193 Okl. Ins. Co. v. (cid:127)clearly nent Life and law. 30 defined fixed C.J.S. Dillard, Okl. 154; Marshall, Buckner v. Equity P.2d 103. In Cantrell obligation premise plain apprise to a matter Upon this them 89 P.2d 326. record, duty to it was points, their own several derived tiffs enumerate evidence, Harris, in Bean v. ascertain. interpretation of the estoppel by P. To constitute silence the defend matters demonstrate such sist requires only opportunity speak, but sham and a conduit not corporation was a ant Sarkeys individually obligation speak. con also through which Sautbine Russell, Okl., properties. Both There is no in oil investments ducted filing supra, holding sound reason for Wallace Sautbine’s the Goforth etc., Co., disclaimer, Cab, attorney, advice of his Tulsa Yellow of, clearly distinguishable deemed to the act should be have been controlling. upon, binding corporation. present case and Neither any corporation af Sautbine nor the took evidentiary mat Brief review plaintiffs, firmative action misled any proper basis ters reflects absence particularly Federal, changing position into equitable application of the doctrine for to their detriment. support no evidence herein. There was the conclusion the defendant proposition The second advanced any at time acted organized “either by plaintiffs support anyone, to enable defraud states: obligation. The any honest evade or defeat “THERE EVI- WAS SUFFICIENT applying equitable presumed need THE DENCE FOR TRIAL COURT . persons “ac protect third doctrine TO THAT PLAINTIFFS CONCLUDE persuasive. Plain complish justice” BY IN ERROR WERE BARRED rights failed tiffs to show AN IN- LACHES FROM ASSERTING that it would fur in the mineral interest or IN TPIE IN- TEREST PROPERTY an in justice them with such ther to vest HEREIN.” VOLVED terest, they grantor nor when neither their presi- It urged title that muniment of is because (Federal) ever had corporation, dent the the served in the involved. of was to minerals an action foreclosure suit and had notice showing in no There was the interest owned which “affected” mineral illegal conduct on Sautbine’s equitable by defendant, this notice the constituted into came part. corporate The defendant defendants, in case: in view of facts the year before being in more than disclaimer; (1) filing no (2) assertion of Lyn by conveyance mineral interest (3) approximately years; claim for for which came R. consideration plaintiffs’ repeated gas leases. sale of oil and corporate The funds. mineral deed Upon plaintiffs say facts these public record a con had been a matter slept upon rights innocent and misled Federal fore before filed the siderable time value, purchasers thus assert The trial remarks closure action. court’s laches invoked doctrine of must be filing the dis indicated a belief bar of defendants’ claim. inequitable mo prompted was claimer pre argument Numerous are tive. Plaintiffs’ infers Sautbine authorities Federal, no plaintiff in sented to the effect an individual’s owed may imputed duty knowledge tice attention facts calling some are corporation. authorities fact that record title this mineral to the These theory support plaintiffs’ Federal insufficient interest was defendant. vested corporate and the suc was bound the facts disclosed that the defendant claiming thereo, precluded Savings Fed. & are record. Hillers v. Local cessors Ass’n, Loan interest P.2d mineral because Sautbine party cognizant did act to and of the foreclosure long So no affirmative Sautbine argument no fail because to mislead Federal action. This must or deceive’ he predicated upon assumption asserting that were barred from invalid their interest O.S.1961, the min- 93(3). Upon pre- the foreclosure affected mise of a owner made a that notice to eral record Sautbine was notice corporate party plain- No notice or knowl- to that action. defendant and because conduct, wrongful possession tiffs edge, fraud went into absent as- acquired sert prior involving prescriptive sufficient to cure cases corporate title to bring the failure to defendant severed mineral interests under tax defendant, proceedings proper analogous into the action as a or to deed and should jurisdiction to vest the trial court control. corporation’s interest to the fore- Among numerous cases cite judgment. closure Twyford, Okl., Fletcher v. 267 P.2d

purportedly accomplished this was void Okl., Edwards, v. Gooding 290 P.2d 408. corporate This its face as to defendant. In the prescrip Edwards case we held that consistently recognized rule has been tive title to severed minerals could be ac Deruy applied by Noah, 199 this Court. v. quired by holding possession certifi under a Kahn, 189; Noble Okl. 185 P.2d v. adversely cate tax deed Both owner. 124; Okl. A.L.R.2d above cited cases tax sale certifi involved Boettcher, Okl., Viersen 387 P.2d 133. decided, cates. those Since we cases opinion We are the conclusion in have held that tax sale certificates neither Viersen, supra, therein resolved issues constitute title, a muniment of nor entitle contrary plaintiffs’ arguments. raised In possession holder thereof to land. questions determining involv- Mfg. Okl., George, Allis-Chalmers Co. situation, ing a similar fact we said: And, 369 P.2d 625. it should our be noted holding Edwards, supra, recently “It real is well settled that when a es- explained been expressly overruled in by action, mortgage

tate foreclosed Okl., Hoffman, Walker v. 405 P.2d 57. property the owner an interest defendant, not made a support Other decisions cited in of such owner is not Rives foreclosed. prescriptive claim that a be ac- title can Stanford, quired against an owner minerals of severed applicable The same rule is where possession involved cases where taken separate interest of a severed consists under resale tax deeds. In cases a these Deruy Noah, mineral 199 Okl. interest. v. appears. different situation In cases these P.2d 185 189. we held the resale tax deed vests an ab- solute, simple holder, fee title in even herein, “Since defendants un- claimants agaimt minerals, the owner severed sale, der the trustee’s possession pre- and thereunder subsequent mortgage pro- foreclosure prior period scribed bars claim the sale, ceedings and sheriff’s we hold that Fredericks, mineral owner. v. 208 Jenkins severed mineral interest was not P.2d 257 thereby, plaintiffs foreclosed that and herein, sale, claimants sheriff’s upon A claim of title based acquired no interest therein.” resale tax that deed notice the world possession Plaintiffs also contend there suffi- the owner thereunder claims in finding cient support simple evidence to that a new This and absolute fee title. acquired title to the is not true in the derived from severed minerals case of title upon mortgage possession. adverse Plaintiffs that sale admit execution based possession of the does A owner cannot ac surface not constitute foreclosure. surface possession quire against prescriptive adverse title severed minerals an owner of However, they solely upon occupancy severed mineral based of the surface. interests. Noah, argue Deruy purchaser unvarying supra. this is not an rule v. The and acquired by judicial court whose could conclude that defendants one title been 454 judicata held res on parties has been de- notice of all chargeable with decree is * * (Emphasis corporation. face of the record apparent fects added). such decree was proceedings wherein

in the Kahn, Noble rendered. page brief, the same and at 35 A.L.R.2d P.2d say: unnecessary this discus to elaborate It is judgment “The disclaimer and appeal sion. The sale involved to be should held action be foreclosure Walden-Page Me In an execution sale. In binding Inc. on Willis G. Okl., Bentsen, P.2d Hospital morial Rohrbough 101], 129 Young Neb. [88 real a sale of syllabus 1 declares 1910), held (Neb. the Court N.W. in a of sale issued an order estate under for di judgment is rendered that where sale, execution is an mortgage foreclosure majority the stock holding rectors O.S.1961, applies. 93(1) as to judicata corporation, it is res and be (3) considered Thus cannot section corporation cannot sued on applicable statute of limitation. rule was followed same facts. This same Cal.App.2d v. Russell Stafford [117 court of the trial cert. 319], (Cal.App.1953), is remanded and cause reversed 315, 98 denied U.S. 926 S.Ct. [74 to vacate with directions" district court held (1954), L.Ed. where it was rendered, enter 419] in the mineral quieting defendants’ title to present plaintiff was of which terest involved. principal binding shareholder was DAVISON, HALLEY; J., WIL- C. suit. plaintiff subsequent LAVENDER, JJ., LIAMS, present HODGES Analogously, judgment in the suit, concur. following dis case claimer individu Willis G. JACKSON, J., and V. C. BLACKBIRD ally, corporation.”' (Emphasis binds the IRWIN, JJ., dissent. added). quotations appear by the It would above BLACKBIRD, (dissenting): Justice that, they although plaintiffs’ brief Majority opinion. I cannot concur in the they estoppel by judgment, deny that assert opinion’s basis for said state- The obvious judi- they rely do on the doctrine of “res judg- theory ment that the or, as estoppel”, But cata.” “collateral consideration, requires ment no view “estoppel by judgment” otherwise termed: rely plaintiffs’ do declaration to, long con- is so related or has been so it, page brief of is found on 8 of the of, part “res sidered a doctrine of error, reads as follows: judicata” have the latter two terms quite commonly “Despite interchangeably. the straw man been used up Proposition Am.Jur., “Judg- in set II of in 30A error See discussions ments, 328, brief, E. their initial defendants in error do sections 327 and ánd Charles Sautbine, Inc., 417, Harding Harding, is not assert Willis G. Co. v. 352 Ill. 152, estoppel by Thus, of N.E. 88 A.L.R. 563. in Restate- barred doctrine 160, Law, “Judgments”, page judgment.” ment Of The it said: Despite quoted page on 11 of statement brief, plaintiffs quota- forth same set a judicata’ “The term 'res is used in O’Neal, Corporation, tion “I Close Restatement a broad of this in which, page 20”, part, in is as Sec. at merger, as including bar, sense collateral follows: estoppel. and direct it When “ ** *, proceeding judicata a to which all is stated ‘the rules of res applicable’, the shareholders close it is meant in a that the rules “ * * * merger a as a In Judgments, as to the effect A'm.Jur. 178, p. 920, or seq., or or as collateral direct et bar rule stated applicable.” (Emphasis in these ‘It estoppel are add- is a words: fundamental ed). principle jurisprudence that material questions or facts which were in issue rules, employed or This Court has various action, in a farmer and were ad- there aspects, judicata of the doctrine of in a res judicially or determined, mitted are con- cases, Aubrey, variety including Lewis v. clusively by a judgment settled rendered Okl., Okl., 1005; Miller, 404 P.2d Bruce v. therein, and questions that such facts or 508; Wilkey 360 P.2d Southwestern ’judicata become may res again Lines, Greyhound Okl., 322 P.2d litigated be subsequent in a action be- Co., Telephone Wilson-Harris v. Southwest tween the privies, same or their 986, 193 Okl. A.L.R. 1337. regardless may of the form the issue quoted apparent In view of the above take in subsequent action, wheth- inconsistency portions plaintiffs’ argu- subsequent er the action involved the ment, and the confusion of terms same or a form of proceeding, different long speaking existed the doctrine or upon whether the second action is judicata attempted res (some of which we same or a cause sub- different Wilkey case, put supra) at an end ject matter, claim, demand, as the duty with the (consistent and this court’s cases, earlier action. In such it is also presumptions which accom- of correctness immaterial that the two actions are based judgments appeal here) pany trial court’s grounds, on different or tried on dif- form, any judgment, general to affirm theories, ferent or instituted for different any theory which can be sustained on purposes, and (Cit- seek different relief.’ pleadings accords with evidence ing cases). (see Allen v. 121) the trial court’s Clawson, should ^{[*] [*] [*]} # ^[*] n just “The rule above affirmed. To do stated is founded been otherwise would have fair, just, litigants not be either to concepts privity basic and virtual court, regardless legal- or to the trial representation. The doctrine of virtual pitfalls attorneys istic or snares the have representation, recognized equity, well fabricated, encountered, course of necessity is based considerations of arguments to this court. paramount may convenience and be justice. prevent invoked failure of my opinion, In the trial court’s Bibb, Brown v. 356 Mo. 201 S.W.2d equitable estoppel is correct on both the applicable 374. The doctrine is if estoppel, estoppel by judgment, collateral (as here) represented the interest of theories. representative and the are so identical estop To defendants’ that the denial fore- protect that the and desire to inducement proceedings closure in Cause No. su- may be common interest assumed pra, effectively wiped disputed out the min- can be the same in each and if interest, though adversity eral even its record title no them. between holder, Inc., City Joplin, Willis G. The rule of Powell v. su formally proceedings, pra is not to said Mo. S.W.2d 408] [335 necessary only opposed principle to that show to the fundamental said identity stranger subject G. had such an a a to its Willis to cause and represented by of interest therein that the two matter is not bound a as to Thus, legal right. Drainage the in opportunity same which he had no to be heard. Reformed, County Dist. No. 1 of But the instant Stoddard 'circumstances 567, applicable principles v. 234 the broad (Mo.), Matthews it was and the S.W.2d policy bring litigation said: to law to ‘privity ap generally means judicata rule must be “It is held that the res an end relationship principles a the the of mutual or successive to plied. And under property, upon rights the re same of or such an iden- "privity” depends more rule subject person with mat in interest one parties the to the lation of tification of represent legal the parties another as to same as ter than their connection applied ‘privy’ litiga rights; and the term when any activity with or in the former decree one privies are to a refers to Generally speaking, tion. legally represent- has been represented at the trial. whose interest legally those C.J.S., Judgments, ed the are in law at trial.’ 50 Privity connotes who those p. judg 788, 324. party to the so connected with a represented where this ment added). terest by exist, the as to have such an judgment. all are alike concluded and identity the the party same ** of legal right; identity the (Emphasis bound of found in were James that Pickeral instituted an action of pass Bank, ^[******] “The and Esther facts possession under Va. a certain tract of in Pickeral v. Federal 743, Waller. S.E.2d a The Wallers land contract of against Land were tres- Bank, Federal Land but sale from the cited See also the discussion and authorities party action. 32, 79, latter not made a to the Carr, Harding R.I. 83 A.2d Judgment for defendants. Bain, was rendered including Hill 15 R.I. action, Thereafter, Pickeral instituted court, dis A. in which the after * * * boundary be- lines to settle the previous juris cussing cases several adjacent owners —Pickeral dictions, tween the said: a The Bank filed Federal Land Bank. were “In these cases the defendants plea judicata, upon the for- of res based permitted by way avail themselves trespass. It held mer action judgments to which were rely upon the the Bank was entitled to privies. parties ground nor neither plea, party although it was not a permitted on which this was seems to have point, trespass. Speaking for to the action defendants, though been that parties ‘The were it was said: Wallers parties judgments, con- so The latter defendant in the first trial. liability nected interest or with with of sale held the land under contract when parties judgments recov- Bank; therefore, Federal Land virtually re- regarded ered coivld be as rep- inferentially party bank was a them, purposes covered for for Its interest in the outcome resentation. estoppel, parties and for the as well were identical. and that Wallers * * (Emphasis added). of record. * * (Emphasis added.) There the court held: quotation Am.Jur., According person injured by collision “Where McGuire, Pac. R. Missouri Co. highway teams left on a sues 872, 874, “privity”, 658, 169 S.W.2d Ark. persons leaving so them and verdict is res meaning the doctrine of within the guilty for found defendants as “ * * * judicata has been declared to causing injuries render- privity it exists in relation pleaded bar ed on the can be verdict * * (Empha- litigation matter in an town action it for And, Will, in In re added.) sis Shea’s injuries, the same 864,868, : it was said N.Y. 132 N.E.2d being two actions so connected as to be considered the same judicata general “The doctrine res added.) purpose plea.” (Emphasis gives binding judgment of a effect to the pre- competent jurisdiction and Saunders, court of In Patterson v. 194 Va. 204, 208, 209, to an and those vents S.E.2d was said:

457 ” * * * subsequently them, (Most cal.” emphasis privity in with add ed.) any questions neces- relitigating that were \ (Citing cases). sarily decided therein. This applied Court principles above referred variety cases, to in a * * * * * * some already cited; of which I have therefore, only question presented, “The Bolon, 168, in Davis v. 74 903, Okl. P. 177 corporations appellant are is whether quoted excerpt we R.C.L., 485, from 15 privity heirs, all with the who own Shea which, among things, other states: stock, of their so that the decision “While in corporations. order that a binding upon judgment may the heirs is operate judicata judgment, proper- res In the lower courts our must be identity ly they parties proceed- held that are. in the two ings, yet it is generally not deemed es- “ ‘Privity’ usually is as ‘mutual defined sential parties that all the pro- to both relationships to the same successive ceedings identical, be and a rights property.’ Haverhill Inter conclusive of the issues involved in a Ry. Co., App.Div. 522, national controversy parties as between the 522, 523, affirmed N.Y. N.Y.S. those standing them, in privity with al- 905; 155 N.E. Litchfield v. Good though in the action in plead- which it is Adm’r, 549, 551, now’s U.S. S.Ct. only ed some litigants, are ground 31 L.Ed. 199. ‘The or because in subsequent action oth- * ** persons standing which joined ers are as defendants. party litigating to the are this relation n n n n n n by proceedings bound to which he was “The mere a joining in second suit party they a is that are with him identified a nominal who has no interest Goodnow’s interestLitchfield * * subject-matter * in the litigation does A Adm’r, supra, clearer case prevent prior adjudication application could hard- doctrine ** being (Emphasis a bar. add- ly involving imagined than succes- be one ed.) attempts litigate ques- sive the same by tion its owner Joines, p. In Arnold barred attempts have been owners. Such following “privity” definition of principles judicata collateral of res 24, Enc.Law, quoted p. from Vol. corporation’s estoppel where all of the applied: * * * person stock was owned one ‘privity’ “The term denotes mutual or * * * owner, ; (citing it has cases) relationship rights successive same said, permitted been 'will use therefore, ground, property. corporate cloak as a means to avoid persons standing this relation finality adjudication former pro- litigating party bound are party.’ he McNamara v. zvhich party, ceedings to which he is that Powell, supra, App.Div. interest; him identified Manifestly, the situ- N.Y.S.2d identity found to and whenever is not where all of the ation different (Emphasis exist all are alike concluded.” family corporation, stockholders of a added.) rather than an individual who owns analysis appear correct As will from a corporation, appeared and entire have quoted statements about the above participated prior action which re- judgment, it is not doctrine of adjudication. in an sulted unfavorable it, invoking necessary, purpose for the party against whom is as- heirs in Sur show that "The interests serted, same, ego” rogate’s proceeding appel is the or even the “alter Court and the corporations any party judgment. is suffi- lant identi It in this case are desire supra, that their mutual he, it, No. she, him privity is in with if or cient may be as- interest protect that common quoted definitions of the above They their interest both derived reason, sumed. the cases and author- term. -For subj ect matter indirectly) in the dealing (directly or piercing with cited in ities the briefs conveyance. through the corpo- same of that action disregarding corporate veil Sautbine, “an Inc., such acts, Willis G. entity obligations, or rate hold G. Saut- all, control, identity interest” with Willis own of the who or individuals foreclosure) judg- bine, (the party most, of, corporation, to “a a the stock participa- therein, that in the latter’s itself, ment” are not of the corporation be those case, deemed to he must be tion in that not be discussed. controlling and will right.” legal represented “the same have reason, I dcein harmless this same For Case, supra, concern- As in the Shea said in ad alleged the trial court fhe error of corporations heirs ing the Shea affairs, relating to the mitting evidence to, to lose or both “stood referred etc., taxes, income, property, of the business case, and had gain the outcome” of that previously incorporated as Saut- “Willis G. avoiding the effect an interest in identical Inc.”, bine, date after lien, and its mortgage Life’s Federal 2218, supra, in Cause No. proceedings. If this in those foreclosure retrospec (at least in a to show introduced by taking accomplished could avoidance corporation and way) that said tive sort of, way pleading a advantage in such as one and the same G. Sautbine Willis to, Life’s not attention Federal error to call named entity, that said individual naming parties in that defendant corporation. ego What of said the alter then it was to their mu- value, might lack have been ever paraphrase tual to do a benefit so. To it, affirmatively proving con Sautbine’s for Am.Jur., “Judgments”, in 30A statement in order estab corporation,

trol of 328, supra: person A sec. who forestalls finding ego, its alter -that he was lish judgment against by pleading his interest judgment that inhering in trial court’s precluded has no he “will be privity” (under the fore “in he was (that giving pleading) a different and held clear definitions) cannot be to be going subsequent character inconsistent in a suit evidence, weight even ly against the subject.” the same testimony himself— though the of Sautbine is it an unquestionably (as “interested Nor obstacle witness”— ar- gue) application (see estoppel by directly judg- Alexan contradicted was not Gee, ment doctrine that cited in nor 352 P.2d neither der v. Sautbine Okl., corporation Wells, guilty Sautbine 350 P.2d have been Lincoln v. Okl., actual McClung Knapp, wrongful cit fraud or conduct Okl., Thompson Giddings, present toward ing action. It is fact immaterial that 237); and I convinced that the Sautbine am owed Federal duty only 98%, Life no to call instead of its attention to the Sautbine owned fact correctly it had 100%, Incorporated’s of Willis-G. named as a prevent defendant in that application stock insufficient record owner of the mineral judgment-estoppel here, here of the doctrine involved perfectly efficaciously he applied re legal rights it was in In within Will, supra, all of the where stock filing Shea’s disclaimer supra. Cause No. connection, involved was owned In this Quirk Bedal, notice estate, or heirs. Shea Idaho 248 P. paraphrase expressions argue, substance, To some Plaintiffs that actual cases, (as foregoing distinguished the interest of

used constructive) fraud corporation, prerequisite and Mr. piercing corpo- individual, rate holding so identical in Cause veil and proceedings that the

459 supra, 2218, dinarily G. when the bound Willis owner of an interest in a No. Cause parcel Inc., Willis Saut- real is Sautbine, as well as G. estate not made a Citing bine, it, to an action to mortgage defendant therein. foreclose a a named McCleary foreclosed; cited in Frank is not gen of the cases some but Sewell, 279, may obtain, where, here, 73 317 P.2d eral rule Co. v. Nev. as Cattle 957, 959, (in noil-litigant this connection see of the and others that of Co., Brewing action, v. Aztec one of the Gordon to is so in also 522, 514, separable indistinguishable P.2d and Great Oak Cal.2d in all re Rosenheim, spects Building estoppel by judgment Ass’n v. material to & Loan one, 95) plaintiffs doctrine, may regarded contend that Pa. A.2d that it be as same, sepa treating they as two enough, rep it is if them and the both be to said injustice, result in an rate entities would resent same interest. -This was not inequitable again, produce results. Here to be or shown the situation in the last cited to failing it think results from and was not I confusion there claimed that Cal- scope distinguish Company privity between cases where the Cul Oil was in with its involved, judgment president, previous who of a was served as a defendant sought, it an those as initial un in the proceeding wherein foreclosure there in judgment against parties, dertaking, spoken a cor volved. Nor to obtain Walsh, poration, subject obligation, or or to Dierks v. execution, defendants, ego “newly-made” of an as alter individ as shown exemplified (or versa), “virtually as represented” ual vice to have been Case, McCleary Company Co., Cattle and Pru Lumber Dierlcs & Coal action dential v. A. judgment Ins. Co. America Enkema whose urged was there as es- Co., Holding Here, Minn. topping judgment N.W. 576. them. in Cause estoppel by ap judgment supra, doctrine is mortgage No. lien decreed the plied against litigants superior all kinds of whether of Federal Life to inter be not, they corporations, are (all) if ests (in defendants to action parties, privity parties, or in cluding Sautbine) Willis the court G. previous relied their ad ordered the entire fee of the 1240 acres general versaries. (which Often referred to included the mineral inter judicata”, principal term: est) satisfy “res reason sold to the lien of mort said applying public pol- gage. identity doctrine is In view of the Saut- licy, litigants, Corporation’s as well of the as the interest bine interest with that of Mr. requires litigation, himself, be an end the court’s action said which, it, might endless. necessarily implied without be See cause Carr, Harding supra, p. against interest, 83 A.2d 83 and that mineral regardless of Am.Jur., “Judgments”, (As 30A sec. 326. the fact its record title inwas Reformed, Drainage (Willis said Dist. No. 1 G. Inc.). Matthews, County supra, (This Stoddard necessarily conclusion follows from litiga “There must be a end sometime the hereinbefore announced determination it, tion.”). Under in a former implied finding that the trial court’s of the may sameness, relitigation action used identity, to forestall of their interests can any clearly against issue whose determination was “nec be held to be weight essarily implied” judgment, in the as evidence). well actually determined It is trite and to recognize irrelevant Cram, (Gollner v. 258 Minn. 102 N.W.2d desired, he, if Sautbine had G. Willis 521, 83 971) regard A.L.R.2d without Inc., have, legally could within the fraud, deception, any variety wrong permissible entry time after fore- doing. supra, closure in Cause No. I recognize, as (which mentioned in Viersen v. had purported said io Boettcher, Okl., that or mortgage foreclose Federal Life’s modified, 345, Ann.Cas.1912D, acres) the entire of the 1240 Iowa N.W. fee aside,

set or voided vacated the min- here, ground eral interest involved on the paragraph syllabus also the first See jurisdiction of court’s lade of over said Funk, 659, Skelly Co. v. Oil by its record reason of owner not 241, County, Angeles and Axe v. Los being party to the action. Under the 783, Cal.App.2d 784. view I take of this as said in Luther Community In La Luz Ditch Co. Town v. Clay, Ga. S.E. 39 L.R.A. Alamogordo, 34 N.M. 279 P. 95: it was said: “ * * * “Questions relative not to necessary it is not for these rules, general by controlled technical questions to be considered. Whether usually upon princi- but are determined not, would be well taken or if taken ad- ples equity good In conscience. time, vantage proper of at this claim- King Stroup, 22 N.M. P. ant cannot now heard to attack the be * * * quoting general after a definition of the regularity (that) validity estoppel, quoted doctrine of we further foreclosure.” p. ‘Equi- from 10 as R.C.L. follows: however, remains, fact The that this was estoppels operate effectually table as as done, and either because Sautbine did They estoppels. technical cannot in the wish to to call attention the error things subjected nature of be fixed to defendant, regarded or because he and settled rules of application, universal having been said interest as foreclosed and ** * hampered by nor narrow he, judgment, corpora- or the lost confines of a technical formula. So him, through during silent tion remained attempted while the definitions such plaintiffs years all these while have sold numerous, estoppel are few of can them gas purporting oil and leases to successive be satisfactory, considered reason interest, Because of such con- cover equitable estoppel that an largely rests duct, having believe, allowed to par- facts and circumstances of the act, they acquired least to as if at * * * ticular case. them- cases proceed- through the foreclosure selves must be looked applied to and ings, estopped deny both are now to way rule,’ analogy, rather than the foreclosure did not cover that interest. author then “The ventures the follow- Sautbine filed his disclaimer in When Cause ing summary person of the rule: ‘That a 2218, supra, No. he knew the record title representation is held to a made or a property to that mineral was in Willis G. assumed, position inequi- where otherwise Sautbine, Inc., and that he had an interest consequences table would result anoth- through controlling in it his interest in said who, er having right do so corporation. Notwithstanding his disclaim- case, has, all the circumstances of the might reasonably been er have taken as a good faith, relied thereon.’ interest, indirect, any disavowal of direct or “It is .per- well settled that: ‘Where a avoid, deny, any he now seeks to such son stands and sees another about through disclaimer and claim it Willis G. committing or is commit course of Sautbine, Inc. of the tenets of One an act infringing rights, and judicata that: doctrine is res fails to right, assert his title or will he estopped afterwards to assert it.’ has, knowledge “A who Estoppel, C.J. facts, particular position assumed n judicial proceedings, estopped is general to ass “It is also a rule that: ‘One therewith, who, position ume a inconsistent his renunciation or disclaimer prejudice party.” title, right the adverse has induced another to City Tipton, thereon, Snouffer & Ford v. believe and estopped act after- right to assert or title.’ 21 C. It will be Maj ority ward such noted opinion that the Estoppel, court, directs the trial there, remand J. “ * * * quiet defendants’ title sub- ‘And it is in the same text: “And said ject rights plaintiffs to whatever may have representation as to construction under the mortgage.” This will be small and effect of an instrument of obscure plaintiffs because, comfort to doubtless, the equally good character is and doubtful statute of limitations will supple- bar estoppel, upon, if believed and acted mental itof the Saut- person a disclaimer title to a about bine interest. See First Nat. Bank & Trust ” purchase.’ Stark, Co. of City Oklahoma court, By judgment, the honorable trial 183, 249 P.2d It 117. will be exceedingly attempted rectify inequitable situ- unjust for Federal Life to now have to good fair ation here. In all conscience and good make on warranty gave of title it upheld. dealing, I think he should be the Kellers years more than 37 ago, when land in most western Oklahoma Counties appealed recognize judgment I little, no, (Consid- mineral value. one, general from herein is a and does not erations such as these have also been fac- basis, theory, specify upon which tors applying equitable doctrine of plaintiffs the trial court held to be the “laches”. See Alexander Phillips Pe- owners of an undivided interest in J^ths Co., Cir., troleum 10th 130 F.2d 605). involved; land but it minerals under the On the basis of the foregoing, respect- I appears a careful examination of the fully majority opinion. dissent to the record, including Judge’s remarks at trial, theory that the on which reliance, placed the most and on which the based, probably judgment

trial court’s allegations paragraph 4

related answer, allegations Life’s Federal appropriate and sufficient for assert- PIERCE, Geneva Error, Plaintiff in estoppel by theory ing herein Since, my opinion, discussed. trial PRODUCTS, INC., AVON a New York theory, court’s is correct on Corporation, Defendant in Error. unnecessary the- to discuss additional 40984. No. ories, plaintiff’s arguments, advanced in Supreme Court of Oklahoma. Here, affirming brief for it. mineral Nov. was not severed con- involved Rehearing veyance Denied Jan. the rest of the land’s fee simple year estate until almost a after the executed,

mortgage was and its lien had at-

tached to the whole fee. If effectively supra, No.

Cause fore- interest, mortgage against

closed this

as well as the rest of the interests same,

in the land that were as it

purported to do—and as cannot denied Corporation,

the Sautbine above theory

described —then question prescriptive need be no title in said being effective ostensibly legal link in valid chain of

title.

Case Details

Case Name: Sautbine v. Keller

Court Name: Supreme Court of Oklahoma

Date Published: Oct 25, 1966

Citation: 423 P.2d 447

Docket Number: 40719

Court Abbreviation: Okla.