Kerrigan v. Maloof

• Decision Date: 26 July 1950
• Citation: 221 P.2d 153,98 Cal.App.2d 605
• Parties: KERRIGAN v. MALOOF. Civ. 14217.
• Court: California Court of Appeals Court of Appeals

Page 153

221 P.2d 153

98 Cal.App.2d 605

KERRIGAN v. MALOOF.

Civ. 14217.

District Court of Appeal, First District, Division 1, California.

July 26, 1950.

Rehearing Denied Aug. 25, 1950.

Hearing Denied Sept. 21, 1950.

Knight, Boland & Riordan, F. Eldred Boland, John H. Riordan, F. J. Kilmartin, Burton L. Walsh, Oswald A. Hunt, all of San Francisco, for appellant.

Leo R. Friedman, San Francisco, for respondent.

PETERS, Presiding Justice.

This is an action brought under section 785 of the Code of Civil Procedure by Kerrigan, referee in partition, against Zerefa Maloof, a defaulting bidder, to recover the difference between the sale price as bid by Maloof and confirmed by the court, and the price obtained on a second partition sale. Maloof cross-complained for $8,000, the amount of her deposit. At the close of the trial before a jury the trial court directed a verdict in favor of Kerrigan on all issues, and judgment was entered accordingly. Thereafter, on motion of Maloof, a new trial was granted 'on insufficiency of evidence and errors in law.' By the same minute order the court provided: 'Orders striking out certain defenses and portions of cross-complaint set aside.' From this minute order Kerrigan appeals.

The motion for a directed verdict and the motion to strike out certain defenses and a portion of the cross-complaint were granted on the theory that the basic issues involved were res judicata by reason of this court's decision in Hirschberg v. Oser, 82 Cal.App.2d 282, 186 P.2d 53. Maloof was the appellant in that action. The facts of that case, as set forth in the opinion, are as follows, 82 Cal.App.2d at page 283, 186 P.2d at page 54:

'Appellant was the successful bidder at the referee's sale of certain real property in the above entitled partition action. After the property had been sold to her, she refused to pay the purchase price, claiming misrepresentations to her by her own attorney. The validity of the sale is in nowise attacked. She contends that the proceedings for confirmation and subsequent proceedings are invalid.

'The sale took place July 3, 1946. On July 10 a 'Return and Account of Sale of Referee in Partition' was filed. After reciting the notices given of the sale, the proceedings at the time of sale the fact that the bid of appellant in the sum of $75,000 was the highest and best bid, that appellant deposited with the referee the sum of $8,000 of such bid, the fact that the property which is therein described was sold to appellant as the highest and best bidder, the return prays that after hearing the court, 'if it so determine, approve said sale and order said Referee to make a deed conveying said property upon the payment of the balance of the purchase price.''

The opinion then points out that, in the manner provided by law, on July 20, 1946, the sale to Maloof was confirmed; that 'Up to this point, the appellant was apparently satisfied with the sale and proceedings, and made no objections thereto. In fact, her attorney was present at the hearing, evidently for the purpose of making certain that the sale was confirmed to her.' 82 Cal.App.2d at page 284, 186 P.2d at page 54. The opinion continues 82 Cal.App.2d at page 284, 186 P.2d at page 54: 'On August 29 appellant filed a 'Petition to Vacate Sale and Relieve Bidder and Return Money' in which she asked that the sale be vacated because of alleged misrepresentations by her own attorney. The hearing of this petition was had on September 11 and denied by the court. The same day appellant filed a 'Dismissal Without Prejudice' of that petition.'

On October 8, 1946, there was filed by the trial court a combination order confirming sale and a final decree in partition. The order recites that the property was sold to Maloof for $75,000, that the sale was legally made and conducted, and then confirmed the sale and ordered the referee to convey the property to Maloof upon receiving the balance of the purchase price.

The opinion continues, 82 Cal.App.2d at page 285, 186 P.2d at page 55:

'On October 25 there was filed a 'Supplemental Report of Referee and Petition for Instructions.' Notice of its filing and the date set for hearing was given to all parties, including appellant. This report set forth the fact that the referee on October 11 had tendered to appellant a properly executed deed of the property purchased by her at the sale and that she had refused to accept it and had notified him that she did not intend to complete the sale. It asked the court to order a resale, and to authorize the referee to recover from appellant any loss that might be occasioned by the resale, and asked for further instructions.

'At the hearing of this petition the court instructed the referee to resell and to retain appellant's deposit, and institute suit to collect from her any loss from the resale. On November 18, after notice given, appellant moved the court to 'Vacate and/or Modify Order of Resale.' This motion was denied by minute order on November 27.

'After reselling there was filed a 'Report and Return of Referee in Partition on Resale of Premises,' in which the referee set forth the proceedings by which he resold the property for $55,000. Notice of motion to confirm this report was given to appellant and all the parties. On December 18 appellant filed 'Objections to Confirmation of Resale of Real Estate.' On December 20 the court made and entered its order overruling appellant's objections and confirming the resale of the real estate. On December 27 the court signed and on December 28 filed on 'Order Denying Objections to Confirmation of Resale of Real Estate.'

'Appellant has appealed from (1) the final decree in partition; (2) the order denying the motion to vacate and/or modify the order of sale; (3) the order denying the objections to confirmation of the resale; and (4) the order confirming the resale.'

This court affirmed all the orders appealed from. Among other things, it was held that the sale to Maloof had been validly confirmed, and that she was in default when she failed to pay the purchase price and to carry out the terms of the contract.

As pointed out above, Maloof's bid was $75,000, while on the resale the referee was able to secure but $55,000. Maloof had made an $8,000 deposit. Thus, the loss, occasioned by Maloof's default, was $12,000, plus $43 costs. The present action was commenced by the referee on April 22, 1948. The complaint sets forth the history of the case substantially as set forth above and asks for judgment for $12,043, with interest from the date of default. Maloof answered, denying the material allegations of the complaint, set forth some affirmative defenses, and cross-complained for the $8,000 deposit. On motion of the referee the trial court struck from Maloof's answer certain paragraphs which denied that the terms of the second sale were the same as those of the original sale, and further denied that the referee had suffered any damage by the failure of Maloof to pay the price bid by her. Certain paragraphs of the cross-complaint were also stricken on motion. These paragraphs alleged that Maloof's attorney was unauthorized to make a bid of $75,000 at the original sale, that no loss was incurred by the owners of the property by reason of the default because those who bid at the resale were part owners of the property sought to be partitioned, and becaue at the time of resale the property was reasonably worth $75,000 and should not have been sold for $55,000, and because the conditions and terms of the resale differed from those of the original sale. These motions to strike were granted on the theory that all such defenses already had been determined adversely to Maloof in the prior actions.

What issues are res judicata?

There can be no doubt but that, by the prior decision of this court, most of the issues sought to be raised by Maloof, and stricken by the trial court, have already been decided adversely to Maloof. The prior decision adjudicated the validity of the first sale, determined that that sale had been legally made and conducted, determined that Maloof had been the highest bidder at that sale and had bid $75,000, and deposited $8,000 on the purchase price, and that this bid had been validly confirmed by the court. It also finally determined that a proper tender of a deed had been made by the referee, but that Maloof had refused to accept it and defaulted in the purchase. It also finally determined that upon petition of the referee the court instructed the referee to resell, to retain the $8,000, and to institute suit to collect from Maloof any loss from the resale. The validity of the resale has also been adjudicated.

The point need not be labored that defenses and causes of action between the same parties once presented and considered cannot be again asserted in another action without a violation of the principles of res judicata. This includes not only all matters directly decided in the first action, but also all matters in issue that could have been or might have been decided. 2 Freeman on Judgments (5th Ed.), p. 1646, § 774; Servente v. Murray, 10 Cal.App.2d 355, 365, 52 P.2d 270; In re Estate of Clark, 190 Cal. 354, 360, 212 P. 622; Sutphin v. Speik, 15 Cal.2d 195, 202, 99 P.2d 652, 101 P.2d 497; Borland v. Borland, 56 Cal.App. 638, 641, 206 P. 478; Crew v. Pratt, 119 Cal. 139, 149, 51 P. 38.

It follows, of course, that all matters heretofore litigated are res judicata. They have been enumerated above. The only serious question is whether the issues as to whether the terms of the second sale were the same as those of the first sale was decided in the prior proceedings.

In the instant case, in her answer, Maloof alleged that the sale was not made upon the same terms and conditions as the original sale 'in that said sale was made subject to whatever rights the said defendant [Maloof] may or might have had by virtue of an appeal filed prior to the date of said sale.' In her...