Fulton v. Hanlow , 20 Cal. 450 ( 1862 )

Field, C. J. delivered the opinion of the Court—Norton, J. concurring.

This is an action of ejectment for the possession of certain real estate situated within the city of San Francisco. The plaintiff claims title by virtue of a conveyance from the Sheriff of the county of San Francisco, executed to Frank M. Pixley, upon a sale under a judgment and execution against the city, and of certain mesne conveyances from Pixley to himself. The judgment against the city was recovered by the San Francisco Gas Company, and was docketed on the fourteenth of May, 1856 ; the execution was issued on the tenth of February, 1858, and the sale was made on the twenty-third of the subsequent month. At such sale, Pixley became the purchaser; and no redemption having been made, the Sheriff executed to him a conveyance on the thirteenth of December following.

The right of the plaintiff to recover depends upon the efficacy of this sale and conveyance. Ho question is made as to the validity of the judgment of the San Francisco Gas Company, or the regularity of the proceedings of the Sheriff, or the sufficiency of the mesne conveyances to the plaintiff to pass whatever title Pixley acquired. The question then is: Did the city of San Francisco possess, at the time that judgment was docketed or the execution was levied, any title or interest in the premises in controversy, which was the subject of levy and sale under execution ? If she possessed no such title or interest, of course nothing passed by the sale and conveyance of the Sheriff. And that she possessed no such title or interest follows from the admission made by the parties on the trial of the present action, and the decision of this Court in the case of Hart v. Burnett. (15 Cal. 530.) The admission made was, that the premises described in the complaint constitute a portion of the pueblo lands of San Francisco, formerly known as the Yerba Buena, confirmed to the city by the decree of the United States Land Commission. Those lands, and the tenure by which they are held by the city of San Francisco as successor of the old Pueblo of Yerba Buena, were the subjects of extended considerar tion by this Court in Hart v. Burnett. That case, like the present, was an action of ejectment, in which the plaintiff relied for recovery upon a sale and conveyance by the Sheriff under an execution issued upon a judgment against the city. The premises claimed in that case also constituted a portion of the pueblo lands of San Francisco, and the plaintiff contended that the city had succeeded to the rights of the pueblo with reference to them, and that her title was absolute; and, consequently, the subject of levy and sale under execution. But the Court, after elaborate examination, though agreeing with the plaintiff that the city had succeeded to the rights of the pueblo in the lands, was of opinion, and .so adjudged, that the lands were held in trust for the public use of the city, and were not, either under the old Government or the new, the subject of seizure and sale under execution; and further, that the title of the city was unaffected by sales of the Sheriff under executions against her; and that a defendant in ejectment relying solely upon his possession could set up the invalidity of such sales and of the title derived therefrom. The decision thus rendered covers the present case, and necessitates a judgment for the defendant, unless its effect is obviated by the decree of the District Court rendered in proceedings taken by the City and County of San Francisco to enjoin the execution of a conveyance by the Sheriff upon the sale to Pixley. As already stated, the sale to Pixley was made on the twenty-third of March, 1858. On the twenty-third of September following, the day on Avhich the time for redemption under the statute would have expired, the City and County of San Francisco, which had succeeded to the rights and interests of the City in the premises, filed a complaint in the District Court of the Twelfth District against the Gas Company, the Sheriff of the county, and Pixley, praying for an injunction to restrain the Sheriff from executing, and Pixley from receiving, a conveyance of the premises sold. The complaint alleged as grounds for the equitable interposition of the Court, that the lands sold were exempt from execution by the Act of May 1st, 1854; that they constituted one of the sources of the revenue of the city; that provision for the payment of the judgment against the city had been made by the Consolidation Act of April 19th, 1856; that the lands were not held by the city in fee simple, but were derived from the Mexican Government in trust for those who might require the same for actual settlement; that the city was indebted to an amount equal to that allowed by the charter when the debt was contracted upon which the judgment of the Gas Company was obtained; and that a deed to Pixley would cloud the title of the city, and work irreparable injury. To this complaint the Gas Company answered, disclaiming all interest in the subject matter of the suit. This disclaimer was undoubtedly made from the fact stated in the complaint, that its judgment had been previously assigned to Pixley. The Sheriff answered, alleging that as he acted in his official capacity in executing process, he was not a necessary party, and had no interest in the litigation. The defendant Pixley answered, denying, in substance, the several matters aEeged as grounds for the equitable interposition of the Court by injunction. Ho proofs were offered in the case by either party, and the case was submitted to the Court for its decision upon the complaint and answer. On the tenth of September, 1859, the Court rendered its decision, to the effect that the sale under the judgment and execution of the Gas Company was valid and effectual to pass the title of the premises to the purchaser, and that there was no equity in the complaint ; and adjudging that the complaint be dismissed as to the Sheriff and Gas Company, and that Pixley was entitled to a conveyance.

Upon this decree the plaintiff relies to take the present case out of the operation of the decision in Hart v. Burnett. He asserts, with reference to it, two propositions: first, that the decree is an adjudication that the lands sold were not held by the city under any trusts, as determined in Hart v. Burnett, but that the title of the city to those lands was subject to levy and sale under execution, and that by the sale and conveyance in question, the title passed to Pixley and became vested absolutely in him; and second, that the decree is admissible in connection with the conveyance as a muniment of title constituting a link in the deraignment to the plaintiff.

The construction which we give to the decree will render it unnecessary to consider the second proposition. As we read the decree, it is not an adjudication upon the character of the title of the city which the purchaser acquired from the sale and conveyance of the Sheriff. There was, in fact, nothing before the Court from which it could pass upon the character of the title. The Sheriff had advertised and sold whatever right, title and interest the city possessed in the premises which was the subject of levy and sale. He could sell no other title or greater interest. The City and County filed á complaint to restrain the execution of a conveyance to the purchaser; and the Court adjudged that the sale was effectual to pass the title—that is, such title as the Sheriff had sold, whatever it might be. It is that title, and no other, to which the decree refers. If there were any doubt as to this construction, it is removed by that part of the decree which adjudged that there was no equity in the complaint. In thus adjudging, the Court determined that the matters set forth as grounds for restraining the execution of the conveyance were insufficient to justify any interference with the action of the Sheriff, without passing upon the truth or falsity of those matters. The Court may very well have considered that if the premises were held in trust by the city, as alleged in the complaint, or if for any other reason there alleged were exempt from seizure and execution, the conveyance of the Sheriff could do no harm, as nothing would pass by it; and hence, that there was no occasion for the injunction. Indeed, we do not perceive that the Court could with propriety have passed upon any question respecting the character of the title acquired, after it had arrived at the conclusion that there was no equity in the complaint, even if there had been, as there were not, any proofs before it on the subject. Nor does it matter whether its conclusion in this particular was correct or otherwise. When once reached, it only remained for the Court to deny the injunction and dismiss the suit. The consideration of the character of the title was, then, foreign to the case, and entirely unnecessary for its disposition; and, as a consequence, any declaration in the decree as to that title was without any binding force as an adjudication either upon parties, privies, or anybody else. (Hotckiss v. Michaels, 3 Day, 138; Coit v. Tracy, 8 Conn. 268.) The legal operation, therefore, of the decree as an adjudication between the parties, is precisely the same which would have followed had it simply denied the injunction and dismissed the suit for want of equity in the complaint. It establishes the fact that the matters alleged were not sufficient for the exercise of the jurisdiction of a Court of Equity; it determines nothing as to the truth or falsity of those matters, or as to the rights of the parties upon them, when they are presented in a Court of Law. (Lessee of Wright v. Deklyne, 1 Pet. C. C. 198.)

As already stated, it does not matter whether the conclusion which the Court reached as to the want of equity in the complaint was correct or otherwise. The conclusion stood as the determinar tion of the Court upon the effect, as entitling the complainant to the injunction, of the matters he alleged, assuming them to be true. But there is no doubt, in our judgment, of the correctness of the conclusion in this particular. The equity asserted, and upon which alone the suit proceeded, was that the premises were not the subject of levy and sale on execution, and that the deed of the Sheriff would cast a cloud upon the title. It was to prevent the casting of a cloud upon the title that the equitable jurisdiction Avas invoked, and averments respecting the character of the property, or the condition upon which the same was held by the city, were immaterial except as they showed that this result Avould follow from the execution of the deed. As was said in the case of Pixley v. Huggins (15 Cal. 132) : “ The jurisdiction of the Court to enjoin a sale of real estate is coextensive with its jurisdiction to set aside and order to be canceled a deed of such property. It is not necessary for its assertion in the latter case that the deed should be operative, if suffered to remain uncanceled, to pass the title, or that the defense to the deed should rest in extrinsic evidence, liable to loss, or be available only in equity. It is sufficient to call into exercise the jurisdiction of the Court, that the deed casts a cloud over the title of the plaintiff. As in such case the Court Avill remove the cloud, by directing the cancelation of the deed, so it Avill interfere to prevent a sale, from which a conveyance creating such cloud must result.” And the test laid doAvn by the Court in that case, by Avhich the question whether a deed would cast a cloud upon the title of the plaintiff may be determined, is this: “ Would the owner of the property, in an action of ejectment brought by the adverse party, founded upon the deed, be required to offer evidence to defeat a recovery ? If such proof would be necessary, the cloud Avould exist; if the proof would be unnecessary, no shade Avould be cast by the presence of the deed. If the action would fall of its oavh weight, Avithout proof in rebuttal, no occasion could arise for the equitable interposition of the Court; as in the case of a deed void upon its face, or which was the result of proceedings void upon their face, requiring no extiinsic evidence to disclose their illegality. All actions resting upon instruments of that character must necessarily fail.”

If this test be applied to the Sheriff’s deed to Pixley, it will be seen at once that no cloud could possibly be cast by it upon the title of the City and County of San Francisco. The judgment of the Gas Company, and the execution issued thereon, constituted the authority to the Sheriff to sell whatever interest in the premises the judgment debtor possessed at the time the judgment was docketed, or the execution levied, which was subject to levy and sale on execution. The Sheriff could sell no otSer or greater interest, and his deed, of course, could pass none. In deraigning title through this deed, in ejectment founded upon it, the plaintiff would first have to trace the property to the defendant—the city of San Francisco— and then produce his judgment, execution and Sheriff’s deed. But the very evidence by which the property would be traced 'to this city, consisting chiefly of the public laws of Spain and Mexico, would show that it passed under her control subject to specific trusts for certain public purposes, which necessarily exempted it from forced seizure and sale. As a consequence, the action would necessarily fall of its own weight; for the judgment and execution conferred no authority to sell property thus held to satisfy a debt of the city. When, therefore, the City and County of San Francisco, in the suit for an injunction, alleged that the lands were derived from the former Mexican Government, in trust for certain specific purposes, it showed that it had no claim whatever to the equitable relief prayed; that no cloud could be cast by the deed, if executed, upon the title, inasmuch as any action brought upon such deed must necessarily fail, from the impossibility of the plaintiff’s tracing any leviable interest to the city.

The judgment of the Court below must be reversed, and that Court directed to enter judgment for the defendant upon the facts found by the referee.

Ordered accordingly.

ÍTobtost, J. delivered the following concurring opinion :

The plaintiff, although showing no title other than one derived through a sale under a judgment and execution against the city of San Francisco, and admitting that the demanded premises were a portion of the pueblo lands of Yerba Buena, does not question the authority or effect of the decision in the case of Hart v. Burnett, (15 Cal. 530) but claims that his title derived in this way has become a good and valid title by virtue of a judgment pronounced in a case between the City and County of San Francisco, plaintiffs, and the San Francisco Gas Company, Frank M. Pixley and Charles Doane, Sheriff, defendants. By this judgment it is claimed that the question of the plaintiff’s title has become res judicata, and that the judgment is binding upon and conclusive against the parties to that judgment and all other persons.

In order that a judgment should be a defense in another action on the ground of res judicata, the same point must have been directly in issue and determined by the judgment. There is frequently much difficulty in deciding what is to be considered the point which was directly in issue, and which is to be treated as having been so settled by the judgment, as to be held forever res judicata; and from the number of decisions to which this difficulty has given rise, cases may be cited favoring the most extreme views in either direction: on the one hand, holding that any matter that was litigated in the case, or even that might have been litigated, is to be deemed to have been directly in issue; and on the other hand, holding that only the ultimate matter, as to which the judgment gives or denies relief, is to he deemed to have been the point directly in issue. An instance of the latter class is to be found in the case of King v. Chase (15 N. H. 9). In that case the question was as to the title to a quantity of oats. One party claimed title by virtue of a certain mortgage; the other party claimed that the mortgage was a forgery, and insisted that the question was res judicata, because in a former action between the same parties in regard to another quantity of oats held by virtue of the same mortgage, the question of the genuineness of the mortgage was litigated between the parties, and it was decided that the mortgage was a forgery. The claim of res judicata was not allowed, because the question of the validity of the mortgage was not the direct point in issue in the former trial, that point being the title to the oats. The following cases are to the same effect: Noel v. Willis, (1 Lev. 235); Hotchkiss v. Nichols, (3 Day, 138); Colt v. Tracy, (8 Conn. 268); Aslin v. Parker, (2 Burrows, 666); Gilbert v. Thompson, (9 Cush. 348). In the case of Bennett v. Holmes, (1 Dev. & Battles, 486) Judge Gaston gives the rule in these words: “ A judgment, therefore, in any action is conclusive only as to what it directly decides. As the judgment is the fruit of the action, it must follow the nature of the right claimed and the injury complained of, and can conclude nothing beyond them.”

The question now before the Court is the title to the demanded premises. Was that the point directly in issue in the former action? In order to determine this question, we must consider what was the direct or ultimate object of that action; what was the injury complained of, and what was the relief asked or which could be obtained by the judgment of the Court. It was not an action to quiet title. The complaint did not ask for a judgment that the title was in the plaintiff, or not in the defendant; it did not ask a judgment that the title had not passed by the sale, or that a title would not pass by the deed threatened to be executed in pursuance of the sale. The injury complained of was that the threatened deed would be a cloud upon the plaintiff’s title; and the only relief sought was an injunction to prevent the doing of the act by which the cloud would be created. It was directly alleged in the complaint, and denied by the answer, that the deed would create a cloud upon the title. And this allegation and denial formed the precise issue that was to be decided, and upon the decision of which the judgment was to turn, and the relief asked was to be granted or refused. In such an action, the only point that could be directly in issue, and be the exact matter settled by the judgment of the Court, was whether the threatened deed would be a cloud upon the title. Various reasons were given, or facts stated in the complaint, to show that the deed ought not to be executed; but whatever may appear to have been the views of the Court upon these facts, they did not either of them constitute the direct point in issue. The only judgment that could be given was merely a granting or denial of an injunction; and the only direct point upon which that judgment could be based was, that the deed would or would not be a cloud upon the plaintiff’s title. Although the judgment of a Court of Equity is equally effectual as res judicata as that of a Court of law, the nature of their different jurisdictions must be considered in order to determine what was the exact matter decided. It is suggested, that whether or not the deed in question would constitute a cloud upon the title is a conclusion of law, and that the decision of this point would not determine any fact litigated by the parties. Without inquiring whether this should be considered a conclusion of law, or a resulting fact, it is sufficient to say that it is a point put in issue by the pleadings, and upon which the judgment proceeds and rests. Whether the preceding facts alleged are true or not is immaterial, if, being true, they do not make a case for the exercise of equity jurisdiction. If in order to determine the case as one of equity jurisdiction it was only necessary to decide whether or not the deed would be a cloud upon the ’ title—that is the direct point in issue, and the only one that becomes res judicata by force of the judgment. .As an illustration: suppose a complaint is filed to enjoin a Sheriff from executing a deed, and as a ground it is charged that there was no valid judgment to sustain the sale, and hence, as a resulting fact, that no title passed by the sale, and that the deed world be a cloud upon the title. If the answer should deny the allegation that there was no judgment, and should further insist that, if there was a judgment, the deed would constitute no cloud upon the title, and the Court should thereupon deny the injunction and dismiss the complaint, would it be held in a future litigation that it was res judicata that the title had passed ? Or, suppose a complaint filed to enjoin a Tax Collector from executing a deed under a tax sale. Various irregularities in the proceedings of the Assessor and Collector might be stated, in order to show that the deed ought not to be executed ; in other words, to show that the title had not passed by the sale. But the simple statement of these facts would not give a Court of Equity jurisdiction of the case. It would be further alleged as the direct point of the case, and upon which the judgment of the Court must be based, that the deed to be executed would be a cloud upon the plaintiff’s title. If the Court should refuse the injunction, dismiss the bill, and the purchaser at the tax sale should take his deed, and upon it bring an action of ejectment agaist the plaintiff in the former action, would the judgment be held as having conclusively decided that there were no irregularities in the tax-proceeding, and that the title had passed ? I think not. The cases might be decided upon the views of the Court, whether right or wrong, as to whether the deed would or would not create a cloud, and without reference to the truth of the facts alleged to show that the deed ought not to be executed.

So obvious does it appear to me that a simple judgment denying the relief asked and dismissing the bill could not be considered as deciding the question whether the title had passed that, I presume, if nothing more had been stated, the idea would not have been suggested. But in addition to the judgment, which decided the case, there was inserted in that judgment a direct adjudication that the title had passed, and that the purchaser was entitled to a deed. This was done some six months after the deed had been actually executed, and was plainly done for the express purpose of making the case res judicata upon this point. I think, however, this makes no difference. As we have seen, it is the point as to which relief was sought, and upon which the judgment rests, and not any incidental or secondary matter that may have been controverted by the parties, that becomes res judicata. That these subsidiary judgments should not be treated as being res judicata is the more apparent in this case, as no judgment upon those points was asked in the complaint, and no direct issue was made upon them by the pleadings, although they maybe said to be put in issue inferentially.

My views upon this point make it unnecessary to consider the other points raised in the case, and I concur with the Chief Justice that the judgment should be reversed, and the Court below (Erected to render a judgment for the defendant.