Gill v. Johnson

This is an action, as against the defendant C. G. Johnson, State Treasurer, to recover from the Torrens title assurance fund the value of certain land, upon a claim that plaintiffs purchased it in reliance upon a certificate of title issued by the registrar of titles of Imperial County. The case has been before this court on two former appeals. The decisions will be found in 103 Cal. App. 234 [ 284 Pac. 510 ] and 125 Cal. App. 296 [ 13 Pac. (2d) 857 , 14 Pac. (2d) 1017 ]. In the latter decision is a recitation of facts forming the basis of the action.

After the decision on the last appeal, the complaint was amended by making Austin a party. Upon regular proceedings, and for failure to appear, judgment was taken against Austin by default on December 9, 1932, for $31,400. The action then proceeded to trial' against the State Treasurer. At the close of plaintiff’s ease a demurrer to the evidence was interposed and a motion for nonsuit made upon the grounds: (a) that the evidence showed that plaintiffs were negligent, and therefore not entitled to recover under the Torrens Act; and (b) that the action was barred by the statute of limitations. At the close of defendant’s case the court granted said motions upon the ground, as stated in a written decision incorporated into a minute entry, that the statute of limitations operated to bar the action.

The demurrer to the evidence is seldom interposed under our practice. A motion for nonsuit raises the same questions. (Ringgold v. Haven, 1 Cal. 108 , 113; In re Daly’s Estate, 15 Cal. App. 329 [ 114 Pac. 787 ].)

Subdivision 3, section 105, of the Torrens Act (Act 8589, Deering’s Gen. Laws 1931) provides in part that "Actions for compensation out of the assurance fund under the

The action as against Austin is not an action for compensation out of the assurance fund. Said provision of subdivision 3, section 105, has reference only to the action as against the State Treasurer. It is therefore unnecessary to determine whether that statute is a true statute of limitations, or is that kind of statute which makes the institution of an action within a specified time a condition to the maintenance thereof. The Torrens Act does not create the right of action against Austin. In fact, it expressly provides that a complainant may sue for damages for tort independently of the provisions of that act. We think the statute of limitations applicable to the action as against Austin is section 338 of the Code of Civil Procedure. Austin had the right to waive the defense that the action against him was barred by the statute of limitations.

Respondent attempts to sustain the ruling upon the ground that defendant and the assurance fund occupy the position of surety toward Austin, and contends that a surety may successfully defend in a suit upon his contract of surety-ship upon the ground that the cause of action has become barred by the statute of limitations, though the defense was not interposed by the principal. Such was the opinion of the trial court. Since the judgment was rendered the law on the subject has been clarified by the decision of Gaffigan v. Lawton, 1 Cal. (2d) 722 [ 37 Pac. (2d) 79 ], wherein it was held that the obligation of a surety remained notwithstanding the fact that the statute of limitations had run against the principal.

The action is not barred by the statute of limitations.

Notwithstanding the decision of the trial court turned upon an erroneous holding that the action was barred by the statute of limitations, if the judgment can be sustained upon any ground stated in the motion it is our duty to affirm it. This fact necessitates an examination of the decision of the federal court in the case of Gill et al. v. Frances Investment Co., 19 Fed. (2d) 880. In that action the Frances Investment Company sued to establish the validity of the trust

The last paragraph of this court’s decision upon the last appeal was “The other points raised by appellant do not appear to us to be sustained. Owing to the decision reached, it is not necessary to consider them here in detail.” Appellants contend that said quoted portion of the decision is a determination of the issue of Gill’s negligence against respondent whereas respondent asserts said language was obiter dictum. Said former appeal actually turned on a holding that Austin was a necessary party to the proceeding. We have already shown that the decision of the federal court is not effective to bar plaintiffs from pressing the instant case by reason of the holding of that court that Gill was not a bona fide purchaser. The only other aspect of the question presented on the former appeal to which said quoted language could apply was the sufficiency of the evidence to justify the holding of the trial court that plaintiffs did not have “knowledge of facts sufficient to require them to make any inquiry or investigation concerning the title other, than such investigation as they made” (in effect that they were not negligent). A reversal of the judgment for nonjoinder of Austin as a party left the parties in the same position as they were prior to its rendition in the superior court. (Garthwaite v. Bank of Tulare, 134 Cal. 237 , 243 [ 66 Pac. 326 ]; Estate of Pusey, 177 Cal. 367 [ 170 Pac. 846 ].) The question of plaintiffs’ negligence is still open for the decision of the trial court.

The judgment is reversed.

Barnard, P. J., and Marks, J., concurred.

A petition by respondent to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on September 5, 1935.