Goldberg v. Sisseton Loan & Title Co.

• Decision Date: 12 October 1909
• Citation: 24 S.D. 49,123 N.W. 266
• Parties: GILBERT GOLDBERG et al., Plaintiffs and respondents, v. SISSETON LOAN & TITLE COMPANY et al., Defendants and appellants.
• Court: South Dakota Supreme Court

24 S.D. 49, 123 NW 266 (1909)

GILBERT GOLDBERG et al., Plaintiffs and respondents v SISSETON LOAN & TITLE COMPANY et al.,

Defendants and appellants

South Dakota Supreme Court

Appeal from Circuit Court, Roberts County, SD

Hon. J. H. McCoy, Judge.

Reversed in part, and affirmed in part

Howard Babcock, Bolick & McCarthy

Attorneys for appellants.

Frank McNulty

Attorney for respondents.

Opinion filed Oct. 12, 1909

CORSON, J.

This case comes before us on an appeal by the defendants from a judgment in favor of the plaintiffs, and from the order denying a new trial. The pleadings, findings, and specifications of errors are very voluminous, and the material points involved in the case will sufficiently appear from a summary of the facts.

It is disclosed by the record that the defendant the Sisseton Loan & Title Company is a corporation, and the other three defendants were officers of the corporation and sureties on a bond executed by the corporation, as required by law. The plaintiffs, in July, 1904, were negotiating for the purchase of a quarter section of land in Roberts county, from Carl Lackness and Bardinas Lackness, and applied to the defendant corporation for an abstract of title to the said land. The abstract was furnished and delivered to the plaintiff, and the plaintiffs, relying thereon, concluded their negotiations and closed the deal for the land, making full payment therefor. It is further disclosed by the record: That, prior to the application of the plaintiffs for said abstract of title, one Theo. Starks had commenced an action against Carl and Bardinas Lackness to recover an indebtedness claimed to be due him from them; that a warrant of attachment was issued and the said land attached under said warrant; that on the 27th day of February, 1905, a judgment was duly rendered in favor of the plaintiff Starks, execution issued upon the same, and the real estate was advertised to be sold under and by virtue of said judgment; that on July 13, 1904, when said warrant of attachment was issued, the said Stark by his attorney duly filed a notice of lis pendens in the office of the register of deeds in and for said county, reciting that a warrant of attachment was issued against the property of the said Carl and Bardinas Lackness; that under said attachment a levy had been made upon the said real estate belonging to Bardinas Lackness; that plaintiffs had no notice or knowledge that said notice of lis pendens upon the above-described land had been filed, and relied upon said abstract of title in which the notice of lis pendens was omitted by the said defendant corporation; that the plaintiffs had been compelled, in order to protect their said property, to pay the amount of said judgment and costs, being $491.21. It is further disclosed by the record that, prior to the payment of said judgment by the plaintiffs, they notified the defendant corporation and two of the sureties upon its bond, the defendants herein, of the existence of said judgment, and were advised by the defendants, except Rickert, to institute a suit to vacate and cancel said notice of lis pendens, and enjoin the plaintiff Starks from enforcing his said judgment against the property so purchased by the plaintiffs; that a trial was held in said action resulting in a judgment in favor of the said Starks; that upon the request of the said defendants these plaintiffs moved for a new trial in that action, which was denied by the court, and thereupon these plaintiffs offered to appeal the same to the Supreme Court if the defendants deemed it advisable so to do but that defendants, except Rickert, declined to advise such an appeal, and therefor no appeal was taken. It is further disclosed by the record that the plaintiffs in the prosecution of said action, incurred an expense of $250, including costs and attorney's fees, and the plaintiffs pray for judgment in this action for the sum of $741.21, with the costs of suit.

The court in its eleventh finding of fact finds as follows:

"That the defendant Sisseton Loan and Title Company carelessly and negligently failed to include in said abstract of title a description of said notice of lis pendens, or any part thereof, or any reference to said notice of lis pendens or action or warrant of attachment levied upon, or about to be levied upon, the above-described premises."

The court in its fifteenth finding finds as follows:

"That thereupon plaintiffs did notify and tell said defendant Sisseton Loan & Title Company that said Starks and Minder had seized the above-described premises, and were threatening to and were about to sell said premises to satisfy said judgment against said Lackness, and plaintiffs thereupon requested and demanded that said defendant Sisseton Loan & Title Company protect plaintiffs against said threatened sale and any expense or damage resulting therefrom. The said defendant thereupon requested plaintiffs to bring action in the circuit court of Roberts county for an injunction to prevent said threatened sale, to test the validity of said alleged lien upon said land."

And the court finds, in effect, in its sixteenth finding, that the plaintiffs did proceed as requested and instituted said action, which resulted in a decision adverse to the plaintiffs. The court in its twenty-first finding finds as follows:

"That thereafter plaintiffs duly demanded that defendants pay to plaintiffs the said sums so paid by plaintiffs to protect said lands from said lien and judgment, which demand was refused by, defendants."

And the court in its twenty-second finding finds as follows:

"That the allegations of plaintiff's complaint are true, and that the allegations of defendant's answer are not true."

And, based upon the foregoing findings of fact, the court makes the following conclusions of law:

"That the plaintiffs are entitled to judgment against the defendants and each of them for the sum of $691.20, with interest thereon at 7 per cent. from May 18, 1906, together with the costs and disbursements of this action."

On the trial the plaintiffs offered in evidence the judgment roll in the case of the present plaintiffs against Theo. Starks, instituted to vacate and set aside the lis pendens therein, and to enjoin the collection of the judgment in that case. The admission of this judgment roll was objected to on several grounds, and, among others, on the ground that the defendants in this action were not parties to that action, and did not occupy the position of privies, and were not therefore bound or concluded by the judgment. The objections were overruled, and the defendants excepted, and they now contend that, in admitting the judgment roll in evidence in this case, the court committed error, for which they are entitled to a reversal of the judgment. While it is a general rule that judgments and decrees are conclusive only as between the parties and privies to the litigation, the term "parties" has been held to include all who are directly interested in the subject-matter, and who have a right to make defense, control the proceedings, examine and cross-examine witnesses, and appeal from the judgment. In Robbins v. Chicago City, 4 Wall. 657, 18 L.Ed. 427, the Supreme Court of the United States held that: "Parties having notice of the pendency of a suit in which they are directly interested must exercise reasonable diligence in protecting their interests." And that "the term 'parties,' as thus used, includes all who are directly interested in the subject-matter, and who had a right to make defense, control the proceedings, examine and cross-examine witnesses, and appeal from the judgment." And this seems to be the view of the courts as appears in the following cases: Rowell v. Smith, 123 Wis. 510, 102 N.W. 1; Missouri Pacific R. R. Company v. Twiss, 35 Neb. 267, 53 N.W. 76, 37 Am.St.Rep. 437; Giblin v. N.W. Lumber Co., 131 Wis. 261, 111 N.W. 499; Patterson v. Cappon, 129 Wis. 439, 109 N.W. 103; Chicago v. Robbins, 67 U.S. [2 Black] 418, 17 L.Ed. 298; City of Lincoln v. First Nat. Bank, 67 Neb. 401, 93 N.W. 698, 60 L.R.A. 923; Faith v. Atlanta, 78 Ga. 779, 4 S.E. 3; Todd v. Chicago, 18 Ill. App. 565; McNaughton v. Elkhart, 85 Ind. 384; Milford v. Holbrook, 9 Allen (Mass.) 17, 85 Am.Dec. 735; Brooklyn v. Brooklyn C. R. Co., 47 N.Y. 475; Joy v. Elton, 9 N.D. 428, 83 N.W. 875.

In the case of Rowell v. Smith, supra, the learned Supreme Court of Wisconsin, in discussing an analogous case to the one at bar, in a well-considered and exhaustive opinion, holds:

"Where a person not a party to an action will be liable to another who is a party if the latter's claim or defense shall fail, and such person has notice of the action and opportunity to participate therein in defense or maintenance of his position, he will be bound by the result the same as if he were a party to such action."

And in its opinion the court says:

"The parties are not the same now as before; but the respondent is the personal representative of Smith, and as such a privy as regards the former suit, while the plaintiff now was, in the main, the party interested then, and is bound by the same as if he were a party to the record. The action was prosecuted in his interest. He had notice there0f, an opportunity to participate therein, and embrace it. As between him and his assignee of the note, in whose name the suit was brought, the result here was conclusive, the same as between such assignee and the defendant. In such circumstances, for all purposes of the doctrine of res adjudicata he was a party to the suit. Saveland v. Green, 36 Wis. 612; Daskam v. Ullman, 74 Wis 474-477, 43 N.W. 321; Carroll v. fethers, 82 Wis. 67-72, 51 N.W. 1128; Grafton v. Hinkley, 111 Wis. 46-54, 86 N.W. 859."

In Missouri Pac. R. R. Co. v. Twiss, supra., the learned Supreme Court of Nebraska held in an analogous case that:

"... Knowledge of the pendency of the suit and its object, and that if a recovery was...