Case ID: f_80/html/0200-01.html
Source: Caselaw Access Project
Author: {"author": "\n      WOODS, Circuit Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GRAPE CREEK COAL CO. v. FARMERS’ LOAN & TRUST CO. et al.
    (Circuit Court of Appeals, Seventh Circuit.
    May 3, 1897.)
    No. 365.
    Res Judicata—Foreclosure—Reversal after Sale.
    A foreclosure sale was had pending an appeal without supersedeas from the foreclosure decree. The decree was thereafter reversed, whereupon the court below in part reversed its decree, but confirmed the sale, and required the purchasers to pay an additional sum in cash upon their bid, which was done. The mortgagor did not apxieal from the latter decree, nor assign any errors questioning the confirmation of the sale upon an appeal taken by another party, to which it also was a party. Held, that the validity of the sale was res judicata, so that the mortgagor could not maintain a subsequent suit to set it aside.
    Appeal from tlie Circuit Court of the United States for the Southern District of Illinois.
    The bill in this ease was filed by the Grape Creek Coal Company for the purpose of setting aside the sale made under the decree of foreclosure which was reversed by this court in Grape Creek Coal Co. v. Farmers’ Loan & Trust Co., 24 U. S. App. 38,12 C. C. A. 350, and 63 Fed. 891. In that ease, this appellant, being the mortgagor, was the principal respondent. The appellees here, who were respondents below, besides the Farmers’ Loan & Trust Compiany, the trustee in the mortgage, are Joseph J. Asche, P. J. Cronan, and A. D. Irving, who, being themselves holders of bonds secured by the mortgage, and acting as a committee for other holders of the bonds, became the purchasers of the property at the decretal sale. The sale was made and reported to the court before the appeal was taken, which was done without the execution of a supersedeas bond. Pending the apxieal, on November 2, 1893, the circuit court entered a decree approving the sale, and granting a deficiency judgment, and, on December 18th ensuing, required the purchasers to pay to the master $15,000, in addition to the sum of $10,000, paid at the time of the sale. By a supplemental return, the fact of the sale was brought into the record, but this court, as its opinion shows, refused to consider what should be the effect of reversing the decree of foreclosure on the rights or title of the purchasers at the sale. The mandate having gone down, the parties filed a stipulation to the effect that Asche, Cronan, and Irving were, at the time the decree was entered and when the sale was made, holders in their own right of bonds secured by the foreclosed mortgage, and made the purchase for themselves and for a large number of holders of the bonds, whom, as a committee, they represented; that they paid upon the purchase, in cash, $25,000 ($10,000 at the time of sale, and $15,000 under a later order of the court), of which sum $13,650 had been paid to the bondholders, and the remainder disbursed by order of the court; and that the sale under the decree “was fairly conducted, and the purchase made by said purchasers was made in good faith, except as it may be influenced by the facts recited in this stipulation.” Thereupon, on September 12, 1894, the court entered an order or decree reversing its prior decrees and judgments in the particulars inconsistent with the opinion of this court, and in all other respects approved, ratified, and confirmed them. That decree, brought here upon the appeal of the Farmers’ Loan & Trust Company, this court, on January 26, 1895, affirmed. 13 C. C. A. 87, 65 Fed. 717. To the bill in this case, which was filed on December 20, 1894, a plea was interposed, reciting the facts stated above, and setting up the decree of September 12, 1894, as a prior and final adjudication that the sale was valid and should stand. That plea the court sustained, and, the appellant declining to amend, ordered the bill dismissed. Error is assigned upon the sustaining of the plea, and upon the dismissal of the bill.
    G. H. Remy and J. B. Mann, for appellant.
    Herbert B. Turner and William Burry, for appellees.
    Before WOODS, JENKINS, and SHOWALTER, Circuit Judges.
   WOODS, Circuit Judge,

after making the foregoing statement, delivered the opinion of the court.

The contention of the appellant is that the purchasers at the foreclosure sale, having purchased for themselves and other holders of bonds secured by the trust deed upon which the decree of foreclosure was predicated, were not innocent purchasers, but were in privity with the Farmers’ Loan & Trust Company, the trustee in the deed, upon whose complaint the decree was rendered; and, consequently, that the reversal of the decree ipso facto annulled the sale and the order of court by which it had been confirmed. Robinson v. Manufacturing Co., 67 Fed. 189; Kingsbury v. Stoltz, 23 Ill. App. 413; Freem. Judgm. § 482; Railroad Co. v. Fosdick, 106 U. S. 47, 1 Sup. Ct. 10; Ballard v. Searls, 130 U. S. 50, 9 Sup. Ct. 418. Whether that was the effect of the reversal of the decree was a question which, by a motion for restitution, or in any appropriate mode, the appellant had the right to submit, and, upon an agreed statement of the pertinent facts outside of the record, did join in submitting, to the circuit court for decision. That court, reversing the original decree only in part, reaffirmed the sale, and directed the master to execute a deed to the purchasers. If that action was not a full compliance with the mandate of this court, or was for any reason erroneous, the remedy was either by another appeal or by an application to this court to enforce compliance-with its mandate. The appellant sought relief in neither form, and in the appeal prosecuted by the Farmers’ Loan & Trust Company, to which it was a party, assigned no cross error. It is estopped by the record. The matter is res judicata.

It is no objection to the force of the estoppel that the purchasers at the sale were not formal parties to the record when the decree of September 12th, reconfirming the sale, was entered. It is essential' to the theory of the bill that the purchasers, being in privity with and represented in the suit by the complainant, the trustee in the deed by which their bonds were secured, acquired no better title than if they had been parties by name. Under the conditions and reservations of' the decree, by virtue of which the sale was made, they had been required to pay an additional cash sum upon their bid, and had complied with the order; and even if, prior to the sale, they were strangers to the suit, it would seem clear that, by purchasing at the sale, they came under the power of the court, for the purposes of all orders touching their rights in the property until the sale should be consummated by a deed executed by the order or with the approval of the-court. Kneeland v. Trust Co., 136 U. S. 89, 10 Sup. Ct. 950; Stuart v. Gay, 127 U. S. 518, 8 Sup. Ct. 1279.

The decree below is affirmed.