Paulson v. Oregon Surety Co.

Mr. Justice Bean delivered the opinion of the court. 1. The several deeds from plaintiff to defendant Union Guarantee Association, while absolute in form, were given as security and were in effect mortgages. They were at all times recognized and treated by both defendants as such. When the deeds were executed, certificates were issued to plaintiff to the effect that the title to the real estate was held by the company to indemnify it from all loss on account of the bond issued, and for the money advanced and to be advanced. The proceedings in the foreclosure suit are set forth in defendants’ answer. The conditions upon which the money was advanced to plaintiff, the mortgages assigned to defendant, the deeds executed as mortgages (except the deed of the Burlington property), and the amount due plaintiff, were all directly involved in that suit, and were judicially passed upon and determined upon the merits after proper hearing. It was incumbent upon Paulson to set up in an answer in the foreclosure suit any claim that he might have to the effect that the agreement in regard to the deeds was in any manner different from that set forth in the foreclosure suit, and any and all matters relating to the deeds and mortgages up to that time, if he desired to have the same litigated. The rule is well settled that a party cannot relitigate matters which he might have interposed, but failed to do, in a former action between the same parties or their privies in reference to the same subject matter: [180] Hovenden v. Knott, 12 Or. 267, 269 (7 Pac. 30); Neil v. Tolman, 12 Or. 289, 293, 294 (7 Pac. 103); Morrill v. Morrill, 20 Or. 96 (25 Pac. 362, 23 Am. St. Rep. 95, 11 L. R. A. 155); Finley v. Houser, 22 Or. 562 (30 Pac. 494); Hackworth v. Zollars, 30 Iowa, 433; 2 Black, Judgments (2 ed.), § 504 et seq. A judgment is final and conclusive upon the parties, not only as to the matter actually determined, but as to every other matter which the parties might have litigated and had decided as incident to or essentially connected with the subject matter of the litigation, within the purview of the original action: Jordan v. Van Epps, 85 N. Y. 427; Barrett v. Failing, 8 Or. 152. All the matters which the plaintiff seeks to have adjudicated which occurred up to the time of the determination of the foreclosure suit might have been litigated in the former suit. The title to this real estate was involved in the foreclosure suit, and if the defendants held it in trust for plaintiff,' that defense should have been made by Paulson at that time. Not having made such defense, he is estopped from making it now. The trial court found that these matters had been litigated in the former suit. This conclusion disposes of the main question in this case. 2. It is further contended, however, by plaintiff that the defendant Oregon Surety & Casualty Company had no right to purchase the real estate involved at the foreclosure sale. Where a sale is made by judicial process, there is usually no restraint upon the purchase of the property by the mortgage creditor. The sale in such case is made by the sheriff or other officer appointed by the court or designated by law, and the creditor is not himself the seller. The case is just the same as that upon the sale on an ordinary execution at which the judgment creditor has full liberty to buy: 2 Jones, Mortgages (6 ed.), §§ 1635, 1882. [181] It is plaintiff’s contention that the defendant had the power to sell according to the arrangement relating to the deeds given as mortgages. However that may he, it is clear that the sale was not made by virtue of such authority, but in a regular foreclosure sale by an officer of the court. Plaintiff’s remedy was to redeem the property from the sale. 3. He also complains that the Burlington acreage was lost through failure of the defendants to redeem the mortgage of $4,000 thereon. It appears from the evidence that the representative of the defendant Oregon Surety & Casualty Company, after making an investigation as to the value of this property, informed the plaintiff that it was not worth the amount of the first mortgage, and that the company would have nothing to do with it; that the plaintiff could do anything he saw fit in regard to it. The company by taking the deed of the Burlington property, which was in effect a second mortgage, did not assume the payment of the first mortgage, and under the circumstances disclosed by the evidence plaintiff has no reason to complain. The decree of the lower court will therefore be affirmed. Affirmed. Mr. Justice Eakin, Mr. Justice Moore and Mr. Justice McNary concur.