Court Opinion

ID: 8774587
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:56:34.501621+00
Date Added: 2024-06-11T17:02:27.131008
License: Public Domain

GILBERT, Circuit Judge
(after stating the facts as above). The appellant seeks to invalidate a judicial decree rendered in another forum, and to go. behind that decree to the extent of obtaining leave to redeem the property which was sold thereunder. The first ground of relief stated in the bill is that the complainant did not know until long after the foreclosure suit that the holder of the mortgage had exercised his option to declare the whole sum unpaid on the note and mortgage due and payable, and that she was led to believe that he had elected to waive the option, for the reason that he failed to exercise it upon the first default in the payment of the interest. But the bill does not show that the appellant had any information that he had failed to foreclose on the first default, and it exhibits no facts which would constitute a ground for her reliance on such a waiver. It is true that the option was not exercised until after the third default, but the holder of the mortgage had the right to foreclose at any default, and he rvould seem to have exercised forbearance in waiting until after the third default in the payment of the interest, and the total .default to insure the property, before he instituted the suit. The facts set forth in the bill indicate a total disregard on the part of the mortgagors of their obligation on the note and mortgage. The appellant was bound to take notice of the terms of the mortgage. The mortgagee was under no obligation to notify her before bringing suit. He properly exercised his election by instituting the suit.
In addition to the allegation that the appellant herein had no notice or knowledge of the pendency of the suit, there is in the bill an attempt to allege fraud in the procurement of the decree. The affidavit upon which the order of publication was obtained is set forth. It fully complies with all the requirements of the statutes, and was sufficient to justify the court in making the order of publication. Cohen v. Portland Lodge No. 142, B. P. O. E., 152 Fed. 357, 81 C. C. A. 483; McDonald v. Cooper (C. C.) 32 Fed. 751; Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565; Pike v. Kennedy, 15 Or. 422, 15 Pac. 637; Bank of Colfax v. Richardson, 34 Or. 519, 54 Pac. 359, 75 Am. St. Rep. 664. It -sets forth with unusual detail the efforts made by the plaintiff in the suit to ascertain the residence of the defendants therein, and upon its face it shows due diligence in that regard. The bill charges that the affidavit was fraudulent in falsely stating that the post-'office address of the appellant was at that time No. 215 West 125th street, New York. It does not state what her true address was, nor .does it allege that the address so given was not that of her husband, an attorney at law then residing in New York. It alleges that the plaintiff in the suit made no search or inquiry as to her post-office address, but it does not allege that he knew her address, although it states that he could easily have ascertained the same. Such allegations are insufficient to show the fraud which must be the basis of equitable relief in a case such as this. There is an entire absence of any allegation of motive upon the part of the plaintiff in the foreclosure suit to procure foreclosure without notice to the defendants therein. On the other hand, it is evident from the bill that he had nothing to gain thereby. All that he obtained bjr it was the money he had invested, the interest thereon, and the expenses of foreclosure. He parted with the *677properly for a consideration which left a loss instead of a profit to him. The fact that a mistake is made as to the residence of the defendant who is served by publication in a foreclosure suit is no ground for setting aside the decree. Connely et al. v. Rue et al., 148 Ill. 207, 35 N. E. 824. It is not necessary that the nonresident defendant shall have had actual notice. It is sufficient if the statute as to service by publication be complied with. The mere allegation that the plaintiff in such a suit might have ascertained the residence of the defendants is not sufficient to invoke the aid of equity on the ground of fraud, when the bill also shows that the plaintiff’s affidavit distinctly states the contrary, 'and upon its face exhibits diligence in making search and inquiry, and the bill further affirmatively discloses absence of motive for withholding from the defendants therein knowledge of the pendency of the suit. The allegations of fraud in such a case must be explicit, pointed, positive, and relevant, and must present distinct charges of acts or omissions f rom which the court can see that they were instrumental in procuring a decree that otherwise would not have been rendered. United States v. Atherton, 102 U. S. 372, 26 l. Ed. 213; Travelers’ Protective Ass’n v. Gilbert, 111 fed. 269, 49 C. C. A. 309, 55 L. R. A. 538; Brick v. Burr, 47 N. J. Eq. 189, 19 Atl. 812; Warner Glove Co. v. Jennings, 58 Conn. 74, 19 Atl. 239; Lyme v. Allen, 51 N. H. 242; Smith et al. v. Nelson et al., 62 N. Y. 286. To allege that the affiant was a member of an art association to which the appellant belonged, and that the latter was in correspondence with members of the association, from whom he might have easily ascertained her address, is not to present a tangible fact which, if proven, would sustain the charge o'f fraud. Doubtless there may have been many people in Oregon from whom the address of the appellant might have been ascertained, but that fact would not be sufficient to impeach the bona fides of the affidavit, nor is any fact charged in the bill from which the court may deduce the conclusion that there was fraud in the affidavit, or in obtaining the decree.
Another ground on which it should be held that there is no equity in the bill is the appellant failed to avail herself of the remedy afforded her by the statute of Oregon, which provides that the defendant against whom a judgment is taken on service by publication may upon good cause shown, and upon such terms as may be proper, be allowed to defend within one year after judgment. Under that statute, it has been held that an allegation that the plaintiff in the action did not try to find the defendant’s address may be considered upon a motion to open the decree. Smith v. Smith, 3 Or. 363. According to the allegations of the bill, the appellant had notice of the foreclosure suit in ample time to have availed herself of the remedy so afforded by the state statute. A party who thus neglects to avail himself of the remedies afforded in the state court is precluded from resorting to a federal court to obtain relief against the decree. Nougue v. Clapp, 101 U. S. 551, 25 L. Ed. 1026; Graham v. Boston, H. & E. R. Co. (C. C.) 14 Fed. 753, affirmed in 118 U. S. 162, 6 Sup. Ct. 1009, 30 L. Ed. 196.
But it is unnecessary to dwell upon the ¿want of equity in the bill, for the demurrer was also clearly sustainable on the ground of laches. *678Where the bill' distinctly and without the aid of inference discloses laches, and no valid excuse for delay is pleaded, a demurrer will be sustained on that ground. The suit to foreclose the mortgage was begun on April 30, 1898. The decree was rendered on September 9, 1898, and the sale was made on the 18th day of the following October. The present suit was begun on June 6, 1907.' The bill alleges that the appellant had no knowledge of the foreclosure suit “until after said decree was rendered,” and that she had no “actual” notice of the sale of said property ón foreclosure until “subsequent to June, 1902.” Construing these allegations as they must be construed, most strongly against the pleader, we have to infer that the appellant knew of the foreclosure suit immediately after October, 1898, and that on July 1, 1902, she had actual notice of the sale. The' date when such actual notice was received is not important, for knowledge of the foreclosure suit imported notice to her that a sale would follow in d^e course.. It is a well-established principal of equity practice that diligence must be .exercised in asserting the, right to set aside a decree in cases of this nature. Unnecessary delay is deemed a waiver of the right. It is no excuse for such delay that the plaintiff is without means or resides in a distant state. Case of Broderick’s Will, 21 Wall. 503, 519, 22 L. Ed. 599; McQuiddy v. Ware, 20 Wall. 14, 22 L. Ed. 311; Hayward v. National Bank, 96 U. S. 611, 618, 24 L. Ed. 855; Washington v. Opie, 145 U. S. 214, 12 Sup. Ct. 822, 36 L. Ed. 680; De Estrada v. San Felipe Land & Water Co. (C. C.) 46 Fed. 280; Naddo v. Bardon, 51 Fed. 493, 2 C. C. A. 335. It is proper to observe also in this connection that according to the bill the.property of the complainant was worth at the time of the foreclosure sale $8,000 over and above the incumbrance thereon.
In cases of this nature the delay that will bar relief is not necessarily measured by the statute of limitations. It may be a delay for a much shorter period, depending upon the particular circumstances in each case. Thus it is proper to consider whether one of the parties thereto or an important witness therein has died since the trial thereof, so that thereby important testimony has been lost to the adverse party (Foster v. Mansfield Coldwater, etc., Railroad, 146 U. S. 88, 100, 13 Sup. Ct. 28, 36 L. Ed. 899), or whether the property has largely increased in value since the sale thereof on the judgment or decree (Conriely et al. v. Rue et al., 148 Ill. 207, 35 N. E. 824), or whether it has ,-b^en sold to a third person, so, that the rights of a purchaser inrtervene (Graham v. Boston, Hartford & Erie R. R. Co., 118 U. S. 161, 179, 6 Sup. Ct. 10.09, 30 L. Ed. 196; Harwood v. Railroad Company, 17 Wall. 79, 21 L. Ed. 558; Hayward v. National Bank, 96 U. S. 611, 24 L. Ed. 855). In this case it appears affirmatively from the bill that the complainant had no defense to the suit of foreclosure. It ,is not denied that the money for which the decree was taken was- due .and owing to the plaintiff-therein. It also appears from the bill that the. prope.rty in controversy was at the time of the commencement of this suit of the value of $20,000, whereas, at the time o/ the foreclosure sale, it is alleged,to have been of the value of $10,000. It .is- alleged in the .bill that the, appellee, purchased the property from the *679purchaser at the sheriff's sale, and paid therefor the sum of $2,050, and while the appellee cannot claim to stand in the attitude of an innocent purchaser, since he took by quitclaim deed (Low v. Schaffer, 24 Or. 239, 33 Pac. 678), he is nevertheless a purchaser upon a record which upon its face was free from defects, and one whose rights would be affected by the relief which is sought, and that fact is to be taken into account in determining the question of laches. Evers v. Watson, 156 U. S. 527, 536, 15 Sup. Ct. 430, 39 L. Ed. 520. The appellant herein had notice of the foreclosure suit as early as October, 1898. The records were public, and at all times accessible to her. Everything which she now complains of was discoverable upon examination thereof. She could then have ascertained all of the facts in regard to the sale in ample time to have redeemed therefrom. The possession of the means of knowledge was equivalent to knowledge itself. Having had the opportunity of knowing, she cannot now avail herself of her failure to acquire actual knowledge of the facts. A much shorter period of inaction than here has in similar cases been held ground for the denial of relief. Evers v. Watson, 156 U. S. 527, 15 Sup. Ct. 430, 39 L. Ed. 520; Parker v. Dacres, 130 U. S. 43, 9 Sup. Ct. 433, 32 L. Ed. 848; Boone County v. Burlington, etc., Railroad, 139 U. S. 684, 11 Sup. Ct. 687, 35 L. Ed. 319; Brown v. County of Buena Vista, 95 U. S. 157. 24 L. Ed. 422; Quinn v. Jenks, 88 Hun, 428, 34 N. Y. Supp. 962; Connely et al. v. Rue et al., 148 Ill. 207, 35 N. E. 824.
The decree is affirmed.