Hills v. Sherwood, Cal., Judgment, Law, casemine.com

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Attorney(S)

William Matthews, for Appellant. Thomas Bodley, for Respondents.

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Smart Summary

Factual and Procedural Background

The defendants, as executors of James Stokes, were sued to recover the purchase money for land conveyed by Stokes. The deed contained a covenant that the original Mexican title was valid and that if the title "should not be confirmed by the Courts of the United States, before which it was then pending, upon the final adjudication of the same," Stokes (and his representatives) would be liable for the consideration. The complaint alleged the District Court for the Northern District of California declared the original Mexican title invalid on November 9, 1859, that no appeal was taken within the time required by law, and that the decision became final on November 9, 1864, constituting a breach of the covenant. The answer admitted the covenant and the District Court's decision in November 1859 but denied that the decision did not become final until 1864, asserting instead that a cause of action accrued in November 1859. The cause was submitted on the pleadings, the District Court entered judgment for the defendants, the plaintiff appealed, and the appellate court (Sawyer, J.) reversed and directed the District Court to enter judgment for the plaintiff.

Legal Issues Presented

Whether the phrase "final adjudication" in Stokes's covenant meant a judgment that became final upon the District Court's decision or meant an adjudication final as to the property and the parties only after the time for appeal expired (i.e., when the decision could no longer be reversed on appeal).
Whether, under the statute of limitations and the relevant statutory and precedential authorities, the plaintiff's cause of action was barred because it was not brought within the applicable period measured from the date the District Court rendered its judgment or from the date the judgment became final as to the property.

Arguments of the Parties

Appellant's Arguments

Appellant contended that "final adjudication" meant a judgment beyond dispute, contestation, or appeal—an absolute and conclusive judgment that in no event could be disturbed.
Appellant's pleading alleged the District Court declared the title invalid on November 9, 1859, no appeal was taken in time, and the decision became final on November 9, 1864, producing a breach of the covenant.

Respondents' Arguments

Respondents (defendants) argued that the covenant only guaranteed that the title would be adjudged valid by the courts before which it was then pending (the District Court), and did not covenant to carry the case to the Supreme Court of the United States.
They asserted the District Court's judgment became final as to Stokes at the moment it was rendered (November 1859), that no appeal was taken, and that therefore a cause of action accrued then—making the plaintiff's later action barred by the statute of limitations.
They relied on statutory definitions and distinctions between final judgments as to a court's power and finality as to the subject matter.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Broome's L. M. 482, side page	Rule of construction of contracts (referenced authority).	Referenced as background authority on contract construction in counsel citation.
Goodtitle v. Bailey, 1 Cowp. 600	Rule of construction of contracts (referenced authority).	Referenced by counsel for rules on contract construction.
16 Johns. 179	Rule of construction of contracts (referenced authority).	Referenced by counsel on contract construction.
The United States v. The Schooner Peggy, 1 Cranch, 103; 1 Con. 257	That a decree of an inferior court may be final as to that court's power yet not final as to the property or subject matter; distinction between final as to court and final as to subject matter.	Applied to explain that a judgment final in the court that rendered it may not be a final adjudication of property rights for covenant purposes.
Snell v. Bridgewater Cotton Gin Manufacturing Company, 24 Pick. 296	Support for distinctions in finality of judgments.	Cited among authorities defining "final judgment" in different senses.
3 Bl. Com. 316	General authority on judgments/finality (Blackstone citation).	Cited for authority on finality concepts.
32 Cal. 131	Authority on finality/adjudication (state report citation).	Included among precedents supporting the court's explanation of finality.
1 Co. Litt. 168, Mr. Hargrave's note 2	Historical/authoritative note on finality of decrees.	Used as supporting authority on the nature of final decrees from inferior courts.
Davis v. Davis, 26 Cal. 46	That confirmation of land claims is not final until patent issues (in context of Mexican grant confirmations).	Applied to analogize that confirmation is not final for statute-of-limitations purposes until later official finality (patent); used to support non-finality until appeal period expired.
Richardson v. Williamson, 24 Cal. 290	Authority cited on judgments/finality in state reports.	Cited among cases defining finality.
20 Cal. 225	Precedent citation regarding final adjudication concepts.	Cited by the court in discussing finality.
24 Cal. 114	Precedent citation regarding final adjudication concepts.	Cited in the court's survey of authority on finality.
20 Howard, 263	Federal-report authority cited in discussion of finality and appeals.	Included among authorities supporting the court's analysis of final adjudication.
26 Cal. 457	State-report authority on finality/appeal-related doctrines.	Cited in discussion of final adjudication.
Thornton v. Mahoney, 24 Cal. 569	Support for the proposition that if an appeal is pending, an action cannot be maintained until final disposition of the appeal.	Applied to show that an appealed matter precludes a binding final adjudication as to property and the rights of parties.
United States v. Pacheco, 20 How. 261	That the time for appeal in the relevant context was five years (citation for appeal period).	Used to show the judgment was subject to reversal on appeal within five years and thus not final for covenant purposes until that period elapsed.
Johnson v. Van Dyke, 20 Cal. 228	Authority on confirmation not being final until patent issues (in the Mexican grant context).	Reinforced the point that confirmation and finality for land claims may await later official acts.

Court's Reasoning and Analysis

The court construed Stokes's covenant to mean he guaranteed that the Government of the United States, by the courts before which the title was then pending, would adjudge the title good at the last appearance before those courts; he did not covenant to carry the case beyond the forum where it was pending (i.e., he did not covenant to appeal to the Supreme Court). The court recognized that "final adjudication" can mean (a) final in relation to the court rendering it or (b) final as to the subject matter and the rights of the parties. The relevant meaning in this covenant was the latter—final as to the land and the parties—because an adjudication subject to appeal and reversible is not final as to property interests.

The court examined the statutory framework (including the Law of Appeals and provisions affecting Mexican land grants) and precedent establishing that confirmations or decrees affecting land are not necessarily final for substantive purposes until avenues of review are exhausted or later official acts occur (e.g., issuance of a patent). The judgment rejecting the claim was subject to appeal within five years; during that period the judgment could be reversed and thus the plaintiff would not have an absolute, vested right of action. Moreover, had the plaintiff brought suit immediately after the District Court decision, Stokes could have taken an appeal and used that fact to defeat the action. There was no record evidence of waiver or acquiescence by Stokes. Therefore, the court concluded the covenant was not breached, within the meaning intended, until the time for appeal expired, and the plaintiff's action (filed December 12, 1865) was timely under that construct.

Holding and Implications

Judgment reversed and the District Court was directed to enter judgment in accordance with the plaintiff's complaint.

Consequences: The court held that "final adjudication" in the covenant meant finality as to the land and the parties (i.e., after the time for appeal expired), so the plaintiff's action was not barred by the statute of limitations. The direct effect is reversal of the District Court's judgment and entry of judgment for the plaintiff. The opinion applies existing authorities to the statutory scheme; it does not announce that a new, broader precedent beyond the case facts was established.

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MILES HILLS v. FREDERICK SHERWOOD and GEO. WINTERBURN, Executors of the Last Will and Testament of James Stokes, Deceased

The covenant of Stokes, properly construed, means simply that he guaranteed that the Government of the United States, by its Courts, would adjudge the title to the rancho good at the last appearance of the case before them.

He made no covenant to appeal the case to the Supreme Court of the United States. He did not covenant to take it beyond where it was then pending. He only said by his covenant: " I, being plaintiff in this suit, will warrant title so longas I choose to prosecute it." It will be observed that at the date of the covenant, the title to the rancho was pending in the District Court of the United States for the Northern District of California, and in no other; and that the language of the contract is: " by the Courts of the United States before which it was then pending upon the final adjudication of the same." We submit, then, that the broadest and most favorable construction of the contract for the appellant cannot carry the covenant into the Supreme Court.

The judgment of the District Court became final as to Stokes the moment the decision was rendered, subject only to his personal right to appeal, and if he preferred to pay the penalty of his broken covenant, rather than incur the trouble and expense of an appeal, he had a perfect right so to do, and the appellant only is at fault for not bringing his action before limitation became a bar.

But the question of when the breach took place is not left open for construction or argument; our statute has settled definitely what a final judgment is. Under the Law of Appeals, (Title IX Sec. 336,) the distinction between final judgments and other orders is drawnwith the greatest distinctness and clearness, and we refer to that section with the confident opinion that it will be found to settle this case. We also refer to Chapter XI of the same Title.

JUDGES: Sawyer, J.

OPINION

SAWYER, Judge

The defendants are sued as executors of one James Stokes, to recover the purchase money paid for a tract of land conveyed by Stokes to plaintiff. The conveyance of Stokes as alleged in the complaint and not denied in the answer, contained a covenant, " that the original Mexican title of said land was valid, and in the event that the said original title of the said land should not be confirmed by the Courts of the United States, before which it was then pending, upon the final adjudication of the same, the said Stokes, his heirs, executors and administrators should and would be liable to the plaintiff for the sum named and mentioned in the said deed as the consideration thereof." It is averred in the complaint " that the said original Mexican title to the said land was thereafter--viz: on the 9th day of November, A. D. 1859, by the District Court of the United States for the Northern District of California, the Court having jurisdiction to hear and determine the same--declared and adjudged to be invalid, and that no appeal was taken from the said decision of the District Court of the United States, within the time required by law, and that the said decision thereafter--viz: on the 9th day of November, 1864--became final, and thereby the said covenant of the said Stokes became broken," etc.

The answer in express terms admits the making of the covenant as set forth; that the title to the land was on or about the 9th day of November, 1859, as they are informed and believe, on the 12th of November, 1859, declared and adjudged by the said District Court to be invalid; that no appeal was ever taken, and that thereby the said covenant of the said Stokes became broken. They then " deny that on the 9th of November, A. D. 1864, or at any other time in the year 1864, the said decision of the District Court for the Northern District of California became final, or that any cause of action accrued to the plaintiff within the year 1864; but aver the fact to be, that said decision of said District Court became final and operative on the 12th day of November, 1859, and that a cause of action then accrued to plaintiff against said James Stokes."

The cause was submitted on the pleadings, and defendant had judgment.

The only averment of the complaint denied--that the judgment of the District Court became final on the 9th day of November, 1859--is the statement of a conclusion of law drawn from the facts averred in the complaint, and admitted in the answer. If the judgment was a " final adjudication" upon the title from the time it was rendered by the District Court, within the meaning of the covenant, then this action, which was not commenced till December 12th, 1865, was barred by the Statute of Limitations; upon that hypothesis the right of action accrued either November 9th or 12th, 1859, as admitted by the answer. But if the adjudication did not become final, within the meaning of the covenant, till the time for appeal expired, which was five years after the rendition of the judgment of the District Court rejecting the claim, (United States v. Pacheco, 20 How. 261,) the action was brought in time. A judgment may be a " final adjudication" in different senses. It may be final as to the Court which renders it, without being final as to the subject matter. " The last decree of an inferior Court is final in relation to the power of that Court, but not in relation to the property itself, unless it be acquiesced in." (United States v. Schooner Peggy, 1 Cranch, 193.) Although a judgment may be final with reference to the Court which pronounced it, and, as such, be the subject of an appeal, yet it is not necessarily final with reference to the property, or rights affected, so long as it is subject to appeal and liable to be reversed. The " final adjudication" intended by the parties to the covenant in question was, doubtless, an adjudication final as to the land and the rights of the parties. Had an appeal been taken before this action was brought, unquestionably, the action could not have been maintained until after a final disposition of the appeal. (United States v. Schooner Peggy, 1 Cranch, 103; Thornton v. Mahoney , 24 Cal. 569.) The provisions of the sixth section of the Statute of Limitations except from the operation of the section lands claimed under grants from the Mexican Government, " if such action be commenced within five years from the time of the final confirmation of such title by the Government of the United States, or its legally constituted authorities." Under this provision and the Act of Congress of 1851 establishing the Board of Land Commissioners, etc., it has been held that the confirmation is not final, and the time does not begin to run till the patent issues; for, till then, the location is subject to be changed. (Davis v. Davis , 26 Cal. 46; Johnson v. Van Dyke , 20 Cal. 228.) In this case the judgment was subject to appeal, and to be reversed, at any time within the five years. The reasons for the rule adopted in the cases cited apply with equal force to this. Besides, had plaintiff commenced his action on the 13th of November, 1859, or at any time within five years after the rendition of the judgment of the District Court, Stokes could immediately have taken his appeal, set up the facts in his answer, and defeated the action. There is nothing to show any waiver of an appeal upon the record--any acquiescence in the finality of the judgment upon the subject matter. No absolute right of action against Stokes had vested in the plaintiff till the time for appeal expired; for while it was in the power of Stokes, at his own option, by an appeal and further litigation in the higher Court to defeat any action that might be brought against him on the covenant by plaintiff, a cause of action could not be said to have accrued. We think there was not a final adjudication, within the meaning of the term as used in the covenant, till the time for appeal expired, and that the plaintiff was entitled to judgment on the case as presented by the pleadings. Judgment reversed and the District Court directed to enter judgment in pursuance of the prayer of the complaint.

Hills v. Sherwood