Opinion
Hearing Granted by Supreme Court July 2, 1928.
Appeal from Superior Court, Los Angeles County; John L. Fleming, Judge.
Action by the Calpetro Producers’ Syndicate, a partnership, and others, against the Chas. M. Woods Company. Judgment for defendant, and plaintiffs appeal. Affirmed.
COUNSEL
Athearn, Chandler & Farmer, Walter Hoffman, and Philip H. Angell, all of San Francisco, for appellants.
Hyams & Himrod, of Los Angeles, and Frank English, of San Francisco, for respondent.
OPINION
MURPHEY, Justice pro tem.
In this action the plaintiff is seeking to recover the value, because of an alleged breach of warranty of title, of certain personal property purchased from the defendant. It asks for approximately $15,000, being the value, as it contends, of the property either at the time of the alleged breach or at the time of the judgment.
A somewhat extended statement of the facts involved in this transaction is necessary in order to arrive at an intelligent understanding and determination of the questions of law involved. The Woods Company, defendant and respondent corporation, was engaged in the business of selling oil-drilling machinery. In January, 1923, it sold to one O’Hea, under a conditional sales contract, the property involved in this action. O’Hea was under contract with the plaintiff and appellant corporation to drill oil wells on two leases designated as well No. 1 on the Fleming lease, and well No. 2 on the Barnes lease; the drilling machinery in dispute being located on the last-named property. O’Hea became involved in difficulties in his drilling operations, and was in default in the payments to the Woods Company on the sales contract. In March, 1923, Smith, secretary and treasurer of the defendant corporation, went to the scene of operations, and, in the presence of representatives of the plaintiff, informed O’Hea that, unless he cleared up the default payments on the contract, he (Smith) would take possession of the drilling machinery, and remove it from the field of operation. In a discussion that ensued, O’Hea stated that he could not continue operations, and the representative of the plaintiff requested Smith not to disturb the machinery. A conference between plaintiff and defendant was arranged for the next day, and several such conferences thereafter were held, at which the entire subject-matter of O’Hea’s indebtedness was discussed, and the terms and conditions of the conditional sales contract were also considered and discussed. Pending these negotiations, and on the 20th day of March, O’Hea suspended operations, and on the following morning the plaintiff reemployed the men who had theretofore been working for O’Hea, and resumed operations on the well with the machinery and the equipment connected therewith. This possession then taken by plaintiff has never been disturbed, unless, as contended by respondent, the acts of the trustee in bankruptcy, hereinafter referred to, amount to a dispossession. In any event, it is a stipulated fact that the plaintiff or its representatives has been in the physical possession of all of the machinery at all times since its abandonment by O’Hea.
After lengthy discussions of O’Hea’s indebtedness both to plaintiff and defendant in March, 1923, the negotiations resulted in defendant assigning for cash certain contracts with O’Hea and other indebtedness against O’Hea to plaintiff. As to the property in question, a different procedure was agreed upon. Andrews, an attorney and coplaintiff, participated in these negotiations with several of his coplaintiffs. It was agreed that the Woods Company should send written notification to O’Hea terminating his contract for the purchase of the property; that it should place a keeper in charge to prevent the removal of any of the property by O’Hea; that plaintiff should continue in the operation of the property; and that, when these things were done, and they were done on or about the 27th day of March, 1923, Mr. Andrews for himself and his coplaintiff said they would take a conditional sales contract from the defendant, and would be satisfied with the title thereto so obtained. Under such conditions, the conditional sales contract involved in this action was consummated and executed. The defendant selected an employee of the plaintiff as its representative in charge of the property. In April, 1923, O’Hea, represented by Andrews, one of the coplaintiffs, filed a voluntary petition in bankruptcy, returning in his inventory the property here in question as one of his principal assets. Subsequently a person claiming to represent the trustee in bankruptcy nailed a sign on the derrick, the exact language is not disclosed, claiming the property as belonging to the estate of the bankrupt. No other acts were performed in this connection, and no change of possession or management of the property was attempted. Thereafter the plaintiff, while asserting dominion over the property and operating it, voluntarily brought a proceeding in the bankruptcy court entitled a "Petition for Order of Reclamation from Trustee." The matter was brought to issue, and the referee, after a hearing, decided on the evidence before him that the right of O’Hea had not been terminated; that the conditional sales contract was in effect an equitable assignment of the defendant’s claims; and that the trustee in bankruptcy was entitled to the possession of the property, subject, however, to his repayment to the plaintiff within five days, the amount remaining due and unpaid to defendant on account of money advanced by it for the purchase price of the machinery. This determination by the referee was affirmed on appeal by the federal District Court. Subsequently the plaintiff herein purchased at trustee’s sale the property involved in this action and all other property of the bankrupt’s estate. Judgment in the trial court went for the defendant, and plaintiffs appealed.
On the statement of facts above set out the appellants contend: (1) That the written contract of sale between plaintiff and defendant gave rise to an express warranty of title; (2) that it gave rise to an implied warranty of title; (3) the court admitted in evidence the oral negotiations between the parties prior to the execution of the bill of sale, which action it is claimed is erroneous; (4) that the findings, even admiting parol evidence, failed to show that the warranty of title was waived by appellant; (5) that, in case of breach of warranty of title, a judgment recovered against the would-be buyer by the paramount owner is conclusive upon the warrantor where he was notified of the suit or where he had an opportunity to defend it or where he appeared as a witness in the litigation; (6) that, even where the warrantor had no notice of suit or opportunity to appear as a witness, the judgment is prima facie evidence aganst the warrantor, and he has the burden to show that the judgment was incorrect; (7) that the judgment of the referee as affirmed by the United States District Court was correct, together with other matters set out by appellant which will be considered in the course of the discussion where applicable.
The conditional sales contract between plaintiff and defendant contained the following language with reference to title:
"(2) This proposal is made upon the following conditions: Title-That the title and ownership of the property herein specified shall remain in this company until final payment therefor has been made in full, *** the title to said property shall not pass until such notes so given or extensions thereof, or such judgments taken, are fully paid in money and satisfied. This company shall have the right to discount or transfer any of said notes, and the title or right of possession in and to said property shall pass thereby to the legal holder of said notes.
"(3) You shall at all times take such legal steps as may be required by the laws of the state in which said equipment, or any part thereof, may be situate for the preservation of this company’s title as herein provided.
"(5) It is expressly understood that this proposal made in duplicate contains all agreements pertaining to the property herein specified, there being no verbal understanding whatsoever."
It will be observed that the writing contains no express words of warranty of title and no direct statement of ownership. In support of his contention, appellant quotes from 2 Mechem on Sales, § 1300, p. 1120:
"It is also everywhere agreed that, in a sale of a specific and ascertained chattel, any affirmation by the seller that the chattel is his is equivalent to an express warranty of title; and that this affirmation may be implied from his conduct as well as from his words, and may also result from the nature and circumstances of the sale."
From the same author, volume 2, § 1236, p. 1070:
"Direct assertions or positive representations as to title, quality or condition, express stipulations concerning the description of the goods, explicit declarations that the negotiations are conditioned upon the existence of given attributes, capacities or characteristics, and the like, are a few of the many illustrations furnished by the cases of affirmations constituting express warranties within the foregoing rule."
Section 1763, Civil Code of the state of California, is as follows:
"A warranty is an engagement by which a seller assures to a buyer the existence of some fact affecting the transaction, whether past, present, or future."
Section 1765 of the same Code provides:
"One who sells or agrees to sell personal property, as his own, thereby warrants that he has a good and unincumbered title thereto."
Counsel quotes from Polhemus v. Heiman, 45 Cal. 573:
"We think the court erred in instructing the jury that the contract contained no warranty, and in taking from them the question whether there had been a breach of the warranty. It is certain that no particular words are necessary to create a warranty. Any affirmation made at the time of sale as to the quality or condition of the thing sold will be treated as a warranty if it was so intended. ***
"‘To create an express warranty the word warrant need not be used, nor is any precise form of expression necessary, but every affirmation, at the time of the sale of personal chattels, amounts to a warranty. *** No expression of an opinion, however strong, would import a warranty. But if the vendor at the time of the sale affirms a fact as to the essential qualities of his goods in clear and definite language, and the purchaser buys on the faith of such affirmation, that we think is an express warranty. ***"’
Other citations are made from Firth v. Richter, 49 Cal.App. 545, 196 P. 277, and Brock v. Newmark Grain Co., Inc., 64 Cal.App. 577, 222 P. 195.
If under the peculiar circumstances of this case parol evidence was not admissible as to the knowledge and understanding of the parties as disclosed by the negotiations between the parties which resulted in the conditional sales contract, the position of the appellant would no doubt be impregnable. However, in view of the absence of any express words of warranty or direct statement of ownership, we are of the opinion that the ruling of the trial court in admitting this testimony over the objection of the plaintiff must be sustained. The court specifically found:
"That defendant at no time, either expressly or impliedly, warranted the title to said personal property or to any part or portion thereof, but that the plaintiffs, well knowing the facts as above found, agreed to accept, and did accept, whatever title defendant had in and to said personal property, without any express or implied warranty of title, and plaintiffs expressly waived any express or implied warranty of title as to said personal property and the whole thereof."
This finding is amply supported by evidence admitted over appellant’s objection on the trial of the action.
With respect to the value of opinions and recitals as constituting warranty, we find in 35 Cyc. 375, the following:
"The rule is broadly stated in most decisions that a mere affirmation does not constitute a warranty unless shown to be so intended and understood by the parties, and not as a mere matter of opinion; that in the contract of warranty there must be an agreement of the minds of the contracting parties as in all other contracts. *** The true aim in construing every agreement, that of warranty included, is of course to reach the real intention of the parties to it. *** It has been said that the decisive test in determining whether the affirmation was intended as a warranty is whether the seller assumes to assert a fact of which the buyer is ignorant, or merely states an opinion or judgment upon a matter of which the seller has no special knowledge and on which the buyer may also be expected to have an opinion and to exercise his judgment. In the former case there is a warranty, in the latter, not."
24 Ruling Case Law, par. 455, p. 184, reads as follows:
"A warranty of title is annexed by law to a sale of personalty only where there is nothing in the circumstances of the case to rebut that presumption. This implication is rebutted where it is shown that the seller expressly refused to warrant, and that the purchaser agreed to take the risk of the goodness of the title, and oral evidence is admissible, though the contract of sale is in writing, to show that an implied warranty of title was expressly excluded. So where the seller expressly sells only such right as he may have no warranty of title will be implied, and the same has been held true where one sells simply his ‘right, title and interest,’ and generally where the facts are equally known to both parties, and the sale is made under circumstances indicating that the seller intends only to transfer his interest."
With respect to this last citation in the instant case, there can be no doubt that, at the time of the purchase of the property by the plaintiffs, they, as purchasers, were fully advised as to the exact condition of the defendant’s title.
In 62 Am. Dec. 465, is the following language:
"The presumption of warranty of title is annexed by law to a sale of personalty only where there is nothing in the circumstances of the case to rebut that presumption. The warranty is implied only where good faith requires that it should be."
Williston on Sales (2d Ed.) § 219, provides:
"Whether the seller is in or out of possession there can be no doubt that by appropriate words he may sell simply such interest as he may have in the property. The intent to limit the seller’s undertaking to a mere quitclaim may be expressed not only by an agreement in terms to sell such interest as the seller has, but otherwise, as by a refusal to warrant title. The nature of the seller’s right may also be known to the buyer and may be of such doubtful character that it must be assumed the parties intended to buy and sell, only such title as the seller had."
In Croly v. Pollard, 71 Mich. 612, at page 615, 39 N.W. 853, 854, the court said:
"There is no doubt, I apprehend, but that a sale of personal property implies an affirmation by the vendor that the property is his, and he therefore warrants the title, unless it is shown by the facts and circumstances accompanying the sale that the vendor did not intend to assert ownership, but only to transfer such interest as he might have in the property."
2 Mechem on Sales, p. 1127, § 1309, states:
"The implied warranty of title being one which the law imputes to the seller by reason of the circumstances under which the sale was made, and in furtherance of good faith, it follows necessarily that if those circumstances are absent, or if, though certain of them are present, there are others which show more clearly that the implied warranty was excluded, or that good faith does not require it, it will not arise. If, therefore, the seller expressly refuses to warrant the title, and the buyer agrees to take his chances; or if the seller expressly sells simply such interest as he has; or if the origin and character of the seller’s title are fully known to the buyer, and the seller simply parts with whatever title he himself acquired-in these and like cases, for obvious reasons, no warranty will be implied."
In two cases the Supreme Court of this state has expressly upheld the introduction of oral testimony to determine the existence or nonexistence of express or implied warranties. In the case of Miller v. Van Tassel, 24 Cal. 459, which case is cited by appellant, the court says:
"The plaintiff urges that there being a bill of sale of the property, the warranty of title arising by implication attaches itself to the writing, and becomes a part of the written instrument, and thus is subject to the rule of law forbidding an instrument of writing to be contradicted by parol testimony. There is much force in the point, but in our opinion it is untenable. No case is cited by the respondent directly to the point, and it is doubtful if any well adjudged case can be found sustaining that doctrine."
In the case of Johnson v. Powers, 65 Cal. 179, 3 P. 625, the Supreme Court, in discussing the case of Miller v. Van Tassel, supra, said:
"The vendor of personal property in his possession warrants his title to the same by implication. And whether such sale be by written bill of sale, or oral, the implied warranty of title may be rebutted by parol, that is to say, the vendor may overcome the legal presumption by proof that he did not warrant the title. Miller v. Van Tassel, 24 Cal. 459. In such case the vendor does not add to the terms expressed in the writing, but he only rebuts a legal presumption, not itself expressed in writing, but arising from that which is expressed."
In 22 California Jurisprudence, § 11, p. 916, the two cases last above cited are given as authority in support of the following proposition:
"In defense of the action the seller may show that he refused to warrant title to the property, and that the transfer was made pursuant to an understanding that the buyer took the property at his own risk. Nor is evidence to this effect objectionable by reason of the fact that the seller executed a bill of sale-the case not being within the rule which forbids the introduction of extrinsic evidence to contradict the parties’ written contract. The proof of oral agreement is held not to affect the terms of the writing, but only to rebut the legal presumption of warranty which arises from the fact of the sale."
To the same effect is 22 Corpus Juris, p. 1097, § 1454, and 22 Corpus Juris, p. 1261, § 1681. It is said in section 1681:
"Parol evidence which does not contradict the express terms of a record or instrument in writing is usually held to be admissible to rebut a presumption or implication which would or might otherwise arise therefrom, or to oppose a conclusion of fact which it tends, as circumstantial evidence, to establish."
Counsel for appellant attempts to distinguish the determination of this subject-matter as outlined in the cases of Miller v. Van Tassel and Johnson v. Powers, but in our opinion, in cases of this character, until such time as the Supreme Court shall expressly overrule the doctrine contained in those cases, we see no reason for departing therefrom. This determination is, in the absence of an express warranty, logical, just, and fair. It seems to us that it would be a strange distortion of the law of implied warranty to hold that a purchaser who is fully cognizant of the exact status of the seller’s title, fully aware, as a result of a prolonged discussion participated in and dominated by its attorney, of any defects and infirmities in the seller’s title, should be permitted, when complications arise with reference to the title to the purchased property, to assert that he was induced to purchase the property by reason of his reliance on such implied warranties. It seems to us that, if there ever was a case in which the trial court would be justified in permitting parol evidence to determine the existence of any kind of a warranty title, this case, in view of all the circumstances, falls clearly within that category.
If this conclusion is correct, the evidence introduced at the trial of the action fully warrants and supports the finding of the trial court that no warranty, either expressed or implied, was given by the defendant to the plaintiff upon the sale of the personal property involved in this controversy. In this connection the court found:
"That it was understood and agreed by and between plaintiffs and defendant that the defendant should take possession of said personal property and place a man in charge thereof, and that notice should be given to the said O’Hea declaring a termination of the rights of said O’Hea under said contract because of the failure of said O’Hea to comply with the terms of said contract. That, in pursuance of said agreement and understanding, defendant did take possession of said personal property, and did place one Thomas Eckman in charge thereof, and did notify the said O’Hea in writing that defendant had elected, and did elect, to terminate all his rights under said contract because of the failure of said O’Hea to comply therewith.
"That prior to said 3d day of April, 1923, plaintiffs expressly agreed with the defendant that, if said defendant would take the action above set forth in regard to the termination and foreclosure of the rights of said O’Hea under said contract, that the said plaintiffs would purchase the said personal property and would be satisfied with the title thereto so obtained."
The plaintiffs question sufficiency of the evidence to support these findings and quote elaborately from the record, but in our opinion the most that can be said of this contention is that it is an attempt to resolve a conflict in the evidence against the finding and judgment of the trial court.
The next contention of the appellant is that, where one is liable over to another as in case of warranty of title, a judgment recovered against the would-be buyer of the paramount title owner is conclusive upon the warrantor where he was notified of the suit or where he had an opportunity to defend it or where he appeared as a witness in the litigation. With respect to this issue the trial court specifically found:
"That the only knowledge which defendant had of said bankruptcy proceedings or of any of the proceedings or actions taken therein was the general information that a bankruptcy proceeding was pending in the federal court and before the referee in bankruptcy, and that a hearing was had before the referee in bankruptcy on or about April 28, 1923, at which hearing J. A. Smith, secretary and treasurer of the Charles M. Woods Company, was called as a witness and was asked questions regarding steps taken by him on behalf of his company in retaking possession of said personal property, but was not allowed to answer questions so propounded.
"That the plaintiffs did not at any time prior to the commencement of this action notify the defendant that the trustee in bankruptcy was asserting title and right to possession of said property, nor of the nature of the proceedings in bankruptcy court with relation to the title to said property, and did not at any time request or demand that defendant appear in said proceeding, and did not request or demand that the defendant defend said proceeding, and did not at any time give or offer to give the defendant an opportunity to so defend, or notify it that if it did not defend it would be held responsible for any damage or detriment suffered by plaintiffs."
It may be stated further that the record discloses in this contention that defendant Smith was notified of the proceeding or requested to be present as a witness in the bankruptcy proceedings not more than three or four days prior to the time he appeared as such witness.
In view of these findings, concerning which, however, there is sharp conflict in the evidence, we think that the law is clear that the defendant had no such notice of the trial or proceeding or hearing of the petition to reclaim or of the issues involved therein before the referee in the bankruptcy (which proceeding was voluntarily instituted and initiated by the plaintiff herein) as would warrant the introduction of the judgment roll in that proceeding in the present case to bind the defendant. The leading case in California, and a case relied upon by appellant, is that of Pezel v. Yerex, 56 Cal.App. 304, 205 P. 475. In that case the record discloses that the party against whom the judgment roll was introduced was informed by letter as follows:
"You are therefore notified that in the event the said E. S. Faxon is successful in his suit against me, that I shall institute suit against you to recover the amount recovered against me. Of course, these two trials mean additional court costs and attorneys’ fees, while I believe that a good settlement could be made at this time. I would advise that you secure the services of an attorney and take such action as seems appropriate in the action against me."
The letter further stated:
"I would therefore suggest that you consult your attorney with a view of negotiating a settlement and obviate the additional costs as well as to take such action as he deems advisable in the pending suit. Will you kindly advise me of your decision in the matter."
The defendant paid no attention whatever to either of the above-mentioned letters, and the question arose of the admissibility of the judgment roll in the Faxon case. The court said:
"The decisions upon the question as to the sufficiency of such notices are varied, extending from those which hold that mere notice of the pendency of the action will suffice (of which Drennan v. Bunn [ 124 Ill. 175, 16 N.E. 100, 7 Am. St. Rep. 354], supra, is an example), to those holding that the defendant in the action must give unequivocal, express, and certain notice to the person who is responsible over, requiring the latter to defend the suit, or giving him an opportunity to do so. Consolidated, etc., Co. v. Bradley, 171 Mass. 127 (68 Am. St. Rep. 409, 50 N.E. 464), a case involving a warranty of title to land, is a fair example of those cases which hold that the warrantor must be requested to come in and defend the action, or be given an opportunity to do so. Our attention has not been called to any decision in this state that is directly in point. We shall assume, however, that in this state the rule is every whit as strict as that announced by the Massachusetts court in Consolidated, etc., Co. v. Bradley, supra. There the court employed the following language in announcing the rule: ‘Whatever may be the form of such a notice, we think that, under the circumstances in which it is given, it should call upon the person notified to come in and defend the suit, or should offer him an opportunity of doing so. *** The decisions of different courts in this country are not uniform upon the requirements of such a notice, but the weight of authority in this commonwealth is that the notice must be such in substance as to give the person notified information that he is called upon to come in and defend the suit, or that he is given an opportunity to do so, and that if he does not defend it he will be held responsible for the result.’ *** We think that the notices given in the instant case meet the most exacting requirements. *** In one letter he is urged to take such action in the suit brought by Faxon as seems ‘appropriate’; in the other he is advised to take such action ‘in the pending suit’ as his attorney ‘deems advisable.’ By these letters the defendant was unequivocally invited to take any action in the pending suit that he or his counsel might deem appropriate or advisable. By this broad invitation defendant clearly was given an opportunity to come in and defend. More than that was not necessary. See Boston v. Worthington, 10 Gray [Mass.] 496, [71 Am. Dec. 678]."
The general rule, as gleaned from the textbooks, may fairly be expressed by what is said in 1 Freeman on Judgments (5th Ed.) § 449:
"It seems, however, upon the principle that no one shall be condemned or made answerable without an opportunity to defend, that in order to bind one by a judgment to which he is not a party, he should be allowed all the means of defense open to him had he been made a party; and that a nominal party wishing to bind by a judgment one not a party to the action must not only notify him of its pendency, but give him to understand that he is desired to defend it, and will be allowed such control as may be essential to his defense. A notice which merely indicates that the person liable over is expected ‘to assist’ in the conduct of the defense, is insufficient since it implies that the indemnitee intends to retain control."
The nearest approach to a definite and specific determination of the rule in this state is found in the case of Pezel v. Yerex, 56 Cal.App. 304, 205 P. 475, above cited. This case, as above stated, is cited by appellant, but, in view of the findings of the court as to the notice the defendant had of the proceedings in the federal court, it would seem that one must indulge in an abundance of optimism to find support for its contention in the reasoning of that case. The court by the strongest implication adopts the rule announced by the Massachusetts case, as between which and the instant case, with respect to the sufficiency of notice, there is no reasonable ground for comparison. The notice in the Massachusetts case, 171 Mass. 127, 50 N.E. 464, 68 Am. St. Rep. 409, which was deemed insufficient by that court, was in the following words:
"The suit of Tierney v. Consolidated Hand-Method Lasting Machine Company for the death of John Tierney, January 1, 1891, when he was killed, the result of touching or holding the electric light apparatus in the room occupied by the machine company, where the electricity was furnished by you, will come on for trial on Monday next, in the second session of the superior court. We hope and expect to be able to win the case and thus relieve the parties from liability. In case, however, we should be beaten, we shall look to you to recompense the machine company; and we shall expect you to assist in the conduct of the defense of the case."
In holding this notice insufficient, that court stated:
"Whatever may be the form of such a notice, we think that, under the circumstances, in which it is given, it should call upon the person notified to come in and defend the suit, or should offer him an opportunity of doing so. The party notifying cannot insist upon retaining control of the defense, and yet hold the party notified bound by the result of the suit."
It seems to be the contention of the plaintiffs that the mere fact that an officer of the defendant was called as a witness in the hearing before the referee in bankruptcy is all that is required to make any judgment obtained in that action binding upon the defendant. In this connection 2 Black on Judgments, § 569, states:
"We have said that the warrantor must have notice of the action against his grantee, in order to be bound by the result. By this is meant a notification proceeding from the latter. Merely that he knew of the action and talked about it, and intimated that he had evidence which would defeat it, is not enough. And the mere fact that a person testifies as a witness on the trial of a suit is not sufficient evidence that he had such legal notice as the law intends him to receive, in order to be bound by the judgment."
Section 449a of Freeman on Judgments is as follows:
"The necessity of proof of such a notice cannot be avoided by showing that the warrantor sought to be bound, was a witness, or knew and talked of the action, said he had an agreement which would defeat it, and was informed of the time and place of the trial."
It is further contended by the appellant that the judgment of the federal court, if not conclusive, is prima facie evidence against the defendant as to paramount title, and that the burden is placed upon the respondent to show that it is incorrect. In support of this contention the appellant does not cite any California cases. It may be stated that the authorities are not harmonious as to the correctness of their disposition. There are no California cases in point, but we are satisfied that the weight of authority is adverse to the appellants’ contentions. In the case of Council Improvement Co. v. Pacific & Idaho Co., 29 Idaho, 113, 157 P. 258, a suit for damages for breach of warranty of title of real estate, the question arose as to whether a judgment in a case in which the defendant was not a party, and of which the defendant had no notice, was prima facie evidence of a paramount title in the party prevailing in such suit. The court decided that such judgment was prima facie evidence, and the Supreme Court of Idaho reversed that judgment. It stated:
"While considerable diversity of opinion may be found in the adjudicated cases upon this question, the weight of authority supports the rule stated in Devlin on Deeds, vol. 2, § 937, as follows:
"‘Of course, such a judgment cannot bind the covenantor. The only question that can arise is one of evidence. It has been asserted that, although the defendant might inquire into the merits of the judgment, yet it was prima facie evidence of the existence of a paramount title. But the most reasonable rule, and the one sustained by authorities, is that the judgment, where no notice has been given, and the covenantor is not a party to the suit, is not even prima facie evidence that the eviction was founded upon an adverse and paramount title."’
The same rule was announced in Black on Judgments in volume 2, § 571.
In Peabody v. Phelps, 9 Cal. 213, the court said:
"Of the action the defendant received no legal notice, and the judgment cannot, therefore, be evidence against him of a paramount title in Larkin. Mere cognizance of the existence of the action is not notice in the legal sense. To be available, the notice must apprise the party whose rights are to be affected, of what is required of him and the consequences which may follow if he neglect to defend the action."
This case was cited with approval in the case of Sampson et al. v. Ohleyer, 22 Cal. 200.
Furthermore, in this connection the trial court found:
"That prior to said April 3, 1923, said defendant took possession of said personal property, and foreclosed all rights of said O’Hea under said contract, and on said April 3, 1923, said J. E. O’Hea had no right, title, or interest in or to said personal property.
"That plaintiffs were on said April 3, 1923, and for a long time prior thereto had been, the owners of a certain oil lease of certain real property in the county of Los Angeles, state of California, and prior to said April 3, 1923, had entered into a contract with the said J. E. O’Hea for the drilling of an oil well on the property covered by said lease. That said personal property described in said contract so attached to the complaint herein was used by said O’Hea prior and up to March 21, 1923, in the drilling of said oil well. That on said March 21, 1923, said plaintiffs took possession of said personal property and evicted said O’Hea from said premises.
"That *** plaintiffs knew that the said defendant had retaken possession of said personal property and had foreclosed and terminated all the rights of the said O’Hea thereunder, and in and to the personal property described therein, and at all said times plaintiffs had full and complete knowledge of all the facts concerning and connected with the retaking of possession of said personal property by defendant herein and of the termination and foreclosure of all the rights of the said O’Hea under said contract and in and to the property described therein, and plaintiffs were at all times familiar with, and knew, each and every action and proceeding taken by the defendant in the retaking of the possession of said personal property and in the termination and foreclosure of the rights of said O’Hea under said contract."
And the court further found that with a full knowledge of all these facts the plaintiffs agreed to purchase the said personal property, and that they would be satisfied with the title thereto so obtained.
There is evidence in the record to support all of these findings, contradictory though it may be. It may be further stated in this respect that O’Hea abandoned the property and machinery on the 20th day of March, 1923, which was prior to the time when the defendant took possession by placing an employee of plaintiff in charge; that subsequently thereto O’Hea told the representative of the defendant Smith that he realized that he was in default, and that he was willing to give up the property; this was prior to the petition in the bankruptcy proceedings.
There is an elaborate discussion in the record as to whether the federal court had jurisdiction to try and determine, in the action between the plaintiff herein and the bankrupt estate, the question involving the title to the property described in the complaint. In view of the conclusions hereinbefore reached, however, it would seem to be unnecessary to determine the question.
It follows from the foregoing that the judgment of the trial court was correct, and it is therefore affirmed.
We concur: KOFORD, P. J.; STURTEVANT, J.