Schuler v. Ford

AILSHIE, J. (After Making Foregoing Statement). — The only question necessary for our determination in this case is whether or not the defendant Ford was bound by the judgment of the Washington court of February 16, 1900, in case of Toklas et al. v. Wirtz et al. Before considering that question it should be observed that the contract under which Ford acquired his interest in the property was entered into prior to the commencement of the action in the Washington court, and his entry into possession of the property was also prior to that date. It is also a conceded fact in this case that the plaintiffs in the action commenced in the Washington court had actual notice of the interest claimed in the property by Ford, as well as the constructive notice which was imparted by his posses [746] sion of the property at that time. It is admitted, on the other hand, by Ford’s co.nnsel, that he is not a "bona fide purchaser within the meaning of the law of the interest claimed by him, for the reason that he had not made full payment of the purchase price prior to the commencement of that action. The general rule of law applicable to a case of this kind is stated by Black on Judgments, volume 2, section 549, as follows : “It is well settled that a judgment is conclusive, not only upon those who were actual parties to the litigation, but also upon all persons who are in privity with them.” This we understand to be the correct rule-of law upon the subject. There is no question in this case but that the appellant, Ford, was not a party to the action wherein the judgment and decree was obtained in the Washington court. The only question, therefore, remaining to be determined is: Was he 'a privy to the judgment or in privity with the defendant Wirtz in that action ? Freeman on Judgments, volume 1, section 162, fourth edition, in discussing the question as to who are parties privy, says: “It is well understood, though not usually stated in express terms in works upon the subject, that no one is privy to a judgment whose succession to the rights of property thereby affected occurred previously to the institution of the suit/'-' In 24 American and English Encyclopedia of Law, second edition, page 746, it is said: “Every person is privy to a judgment or decree who has succeeded to an estate or interest held by one who was a party to such judgment or decree, if the succession occurred after the bringing of the action. But in order that privity shall exist, the succession must have occurred after the institution of the suit. One who succeeded to the right of property of a party prior to that time, is not in privity with him and is not concluded by the judgment.” (Dull v. Blackman, 169 U. S. 243, 18 Sup. Ct. Rep. 333, 42 L. ed. 733.) In Shay v. McNamara, 54 Cal. 174, the court, in determining whether certain parties were privy to a judgment which had been introduced against them, said: “This was the origin of whatever interest the Johnsons acquired under the Kellys; .and having originated before the commencement of the suit of [747] Morgans v. Kelly, it follows that they are unaffected by the judgment in that case; for only those are privies whose interest in the subject matter of the suit originated subsequent to its commencement.” Weed Sewing Machine Company v. Baker, 40 Fed. 56, was an action in some respects similar to the one under consideration, and it was there held that: “A party in possession of land, claiming an interest as purchaser, or under a contract to purchase, is not in privity with his grantor. On the contrary, his claim is adverse to h'is grantor, and it must follow that he is not bound by a decree against the latter in a case to which he is not a party and rendered in a suit commenced after he purchased and took possession.” In Seymour v. Wallace, 121 Mich. 402, 80 N. W. 242, the supreme court of Michigan, in determining to what extent a party was bound by a judgment to which he was not made a party, quoted with approval from Coles v. Allen, 64 Ala. 105, the following language: “No alienee, grantee, or assignee is bound or affected by a judgment or decree rendered in a suit commenced against the alienor, grantor, or assignor, subsequent to the alienation, grant, or assignment; for the plain reason that otherwise his rights of property could be devested without his consent, and the fraud or laches of the grantor could work a forfeiture of estates he had created by the most solemn conveyances. Whatever may be the force and effect of the judgment or decree against the grantor, if it is sought to be used to the prejudice of the grantee, there must be independent, distinct evidence of the facts which authorized its rendition.” (Stone v. Stone, 179 Mass. 555, 61 N. E. 268; Hart v. Moulton, 104 Wis. 349, 76 Am. St. Rep. 881, 80 N. W. 600; Cypreanson v. Berge, 112 Wis. 260, 87 N. W. 1081; Coles v. Allen, 64 Ala. 105; Sorenson v. Sorenson (Neb.), 98 N. W. 337.) The judgment in Toklas et al. v. Wirtz et al., having been Tendered by a court which had no jurisdiction over thé property situated in this state, became merely a judgment in personam, and was only binding upon those reached by personal service. (Freeman v. Alderson, 119 U. S. 185, 7 Sup. Ct. Rep. 165, 30 L. ed. 372; Bull v. Blackman, 169 U. S. 243, 18 Sup. Ct. Rep. 333, 42 L. ed. 733; Pennoyer v. Neff, 95 U. S. 723, 24 L. ed. [748] 565.) The plaintiff in the Washington court, appreciating this fact, dismissed his action as to Ford and all other defendants on whom he failed to get personal service. The “full faith and credit” commanded by section 1 of article IY of the federal constitution to be given by each state to the judicial proceedings of every other state does not mean that such proceedings shall be given any greater “faith and credit” in a sister state than they would be accorded in the state where taken. If the judgment of Toldas et al. v. Wirtz et at. had been rendered in this state and the interest claimed by Ford had been acquired subsequent to the entry of that judgment, or subsequent to the filing of a lis pendens in the proper office, then Ford would be a party privy to Wirtz, his grantor, and bound by the judgment. The judgment, we apprehend, would have had the same effect in Washington had the property been situated in that state. But when Ford secured his contract and entered into the possession of the premises no action was pending. After Wirtz had contracted to part with his title, he might have lost interest in defending a title which he had agreed to part with, and especially would this be true where but little remained due on the contract price and the grantor was thriftless and execution proof against any possible judgment for damages. In the latter case the law will not leave open so wide a door for fraud and injustice, but will allow the party acquiring such a property right his day in court to contest the claim on which a recovery is sought. The right acquired by Ford under his contract of July 27, 1897, became a property right; but under the contract for purchase, Ford did not become a party privy to an action subsequently instituted against his grantor and to which he was not made a party. There was no error in the conclusion reached by the trial judge, and the judgment will therefore be affirmed. Costs awarded to respondent. Stockslager, C. J., and Sullivan, J., concur.