Kapiolani Estate, Ltd. v. Atcherley, 238 U.S. 119 (1915)


U.S. Supreme Court

Kapiolani Estate, Ltd. v. Atcherley, 238 U.S. 119 (1915)

Kapiolani Estate, Limited v. Atcherley

No. 174

Argued April 30, 1915

Decided June 14, 1915

238 U.S. 119



U.S. Supreme Court

Kapiolani Estate, Ltd. v. Atcherley, 238 U.S. 119 (1915) Kapiolani Estate, Limited v. Atcherley

No. 174

Argued April 30, 1915

Decided June 14, 1915

238 U.S. 119




A decree was made in 1855, by the Hawaiian court having jurisdiction, to the effect that one who was guardian of a minor had wrongfully obtained from the Land Commission registration in his own name of property belonging to the minor, and that he, and his heirs claiming the property after his decease, held the property as trustee for the ward, and should convey the same to him; the decree was acquiesced insofar as possession was concerned, but no deed was ever executed, and subsequently those holding under the heirs of the guardian having commenced an ejectment suit relying on the legal title, the grantee of the ward brought this suit to enjoin prosecution of the ejectment suit; meanwhile, in a suit between a grantee of the ward and others claiming under the heirs of the guardian, it was held that a title registered by the Land Commission could not be attacked; the record in that suit, however, did not disclose the relations of the guardian and the ward; this Court having affirmed that judgment, the Hawaiian courts in this case, while admitting that they had fallen into error in the former decision by reason of not giving full effect to the guardianship relations, followed it because it had been affirmed by this Court. Held that:

In Lewers & Cooke v. Atcherle, 222 U. S. 285, the suggestion that the relation of guardian and ward existed had no substantial foundation on the record, and this Court followed the decision of the local court, the relationship of guardian and ward having now been cleared up and the record in this case showing that it did exist, the courts of Hawaii should have given full effect to that fact, notwithstanding the affirmance by this Court of the prior and contrary decision of the Hawaiian court when it did not appear, and so the judgment is reversed and the case sent back to the Hawaiian court.

Under the law of the Hawaiian Islands as far back as 1846, a guardian could not, through the instrumentality of an award of the Land Commission, obtain a title to the property of his ward which

Page 238 U. S. 120

would be so immune from subsequent attack that the wrong would be without redress.

There is nothing to hinder a court from changing its action on a different view of law after an interlocutory decree or to hinder a party to the action from availing itself of such change unless the decision has the finality of res judicata.

A corporation, grantee of a portion of the grantor's property, is not a privy to a grantee of another portion, and a judgment against the latter in a suit in which the corporation was not a party, although some of its officers as individuals had notice thereof and took some part in the defense, is not res judicata if the acts of such officers were, as in this case, merely individuals, and not authorized by the corporation.

In order to make a judgment against the grantor available to the grantee of the title, his covenantor must receive notice of the suit and have an opportunity to defend.

21 Haw. 441 reversed.

The facts, which involve the title to land in Hawaii, are stated in the opinion.

Page 238 U. S. 124

MR. JUSTICE McKENNA delivered the opinion of the Court.

Appeal to review a decree of the Supreme Court of Hawaii which reversed a decree of the Circuit Judge of the First Judicial Circuit enjoining the prosecution of an action of ejectment brought by Mary H. Atcherely, one of the appellees, against appellant for the recovery of certain described lands, decreeing that appellant had the equitable title to the lands and that appellees, including Dickey and Watson, who were made parties pending the suit, held the naked legal title thereto as tenants in common, one half thereof by Mary H. Atcherley and one quarter thereof by each of the other appellees, as trustees of appellant. The decree required that the appellees execute a conveyance of such title to appellant.

The bill alleges that one David Kalakaua, under and through whom the appellant company (designated hereinafter as complainant) claims, on or about December 29, 1856, litigated his title with the following parties, under whom defendant Atcherley claims title, to-wit: Kinimaka, Pai, his wife, and their children, in the Supreme Court of the Hawaiian Islands, in equity, alleging that Kinimaka held title to the lands in trust and as guardian

Page 238 U. S. 125

of Kalakaua, and not otherwise, and praying that he, Kinimaka, be declared trustee of the lands for Kalakaua, and be decreed to convey the same in fee to Kalakaua; that summons was duly issued and served on Kinimaka, who, before filing answer, died, leaving a will devising the lands to his children, whom he left surviving him, and his widow, Pai; that these facts were suggested to the court, and it was prayed that the widow and children be made parties to the suit, and a guardian ad litem be appointed for the children, it being alleged that they became trustees of the property in the same manner and under the same trust as Kinimaka.

That subsequently (March 8, 1858) Kalakaua filed a petition for administration upon the estate of one Kaniu, deceased, under whom he claimed title to the lands, and for the appointment of a guardian ad litem for the minor children of Kinimaka. That, upon the filing of such petition, George E. Beckwith, administrator of the estate of Kinimaka, was appointed guardian ad litem of the minor children of Kinimaka, and notice was served on him as such administrator and guardian, and upon Pai to show cause why letters of administration might not issue to Kalakaua upon the estate of Kaniu, deceased.

That, upon proceedings being had, a decree was rendered adjudging Kalakaua to be the devisee of Kaniu, and directing letters to be issued to him.

That, on June 19, 1858, Kalakaua filed a further petition alleging the same facts substantially which he had alleged in the petitions of December 29, 1856, and March 16, 1857, with the additional fact that one Richard Armstrong had been appointed guardian of the minor children of Kinimaka, and prayed that he might be ordered to convey the lands to Kalakaua, and that a summons was duly served upon Armstrong as guardian of the children and upon Pai; that Armstrong and Pai subsequently answered; that evidence was taken, the case heard upon

Page 238 U. S. 126

the merits, and on November 2, 1858, the court duly entered the following decree:

"David Kalakaua against Richard Armstrong, guardian of David Leleo, Kaniu, and Kinimaka, minor children of Kinimaka, deceased. The court did order, adjudge, and decree in this matter that Mr. Armstrong, the guardian of David Leleo, Kaniu, and Kinimaka, minor children of Kinimaka, deceased, do convey to David Kalakaua, the plaintiff in this case, the land named Onoulimaloo, on the Island of Molokai, and the first Apana of land set forth in Royal Patent 1602 filed in this cause."

That it did not appear either from the records of the court or from the registry of deeds in Honolulu that the decree of the court was in fact obeyed, but, it is alleged that, after the decree, Kalakaua

"ceased to be molested in any way by either the widow and heirs aforesaid of said Kinimaka or by the said Armstrong in their behalf, and retained open, notorious, and indisputable possession and dealt with the said land in all ways as his own, and continued to do so until he disposed of said property."

The bill here made "all the papers, pleadings, and exhibits of whatever kind in said equity proceedings" a part of it, and asked leave to refer to them as if actually incorporated therein. Then came the following:

"And in this connection, the plaintiff attaches hereto a copy of the original Land Commission award and royal patent [they were not previously referred to in the bill] and copies of the original record of evidence given before the Land Commission in support of said Land Commission award and royal patent, the same being referred to and made part of the evidence in said equity proceedings instituted in the years 1856 and 1857 above referred to, which said copies are made part of this bill."

That the successors in title of Kalakaua (the conveyances being set out) had retained and had been in the same kind of possession and exercised the same disposition

Page 238 U. S. 127

as he. That such possession in Kalakaua and his successors was known to the children of Kinimaka; that they attained their majority respectively in 1867, 1871, and 1877, and at no time did they or any of them assert any claim to the land or deny the rights of Kalakaua or his successors, but acquiesced in his and their possession.

The manner by which defendants obtained the title they assert was set out, and it was alleged that, owing to the failure of Armstrong to obey the decree of the court and convey the interest of the children of Kinamaka, as ordered by the court, complainant's required chain of title was incomplete, and that the action in ejectment of Mary H. Atcherley, one of the defendants, sought "to take unconscionable advantage of the above-mentioned technical error in the chain of title." A cloud upon the title of complainant was asserted hence to follow, and that it would be inequitable to permit her to prosecute her action of ejectment, and that, as naked trustee of the title, she should be required to convey it to appellant.

An injunction, temporary and permanent, was prayed, and that Mary H. Atcherley, the defendant, be declared trustee and be required to convey the property to complainant.

Copies of the proceedings referred to in the bill were annexed to it as exhibits. Among these, we have seen, were the award of the Land Commission and the royal title. The latter recites that --

"Whereas the Board of Commissioners to Quiet Land Titles has awarded to Kinimaka by award No. 129 a freehold estate less than allodial in the premises mentioned below, and,"

"Whereas, Kinimaka has paid into the government treasury eighty-two and 50/100 dollars for the government's rights in said land,"

"Therefore, by this Royal Patent, Kamehameha III . . . shows . . . that he has conveyed and

Page 238 U. S. 128

granted in fee simple to Kinimaka that land at Honolulu on the Island of Oahu with these boundaries. . . . It is granted in fee simple to him, his heirs and devisees. . . ."

The lands in suit were part of the lands conveyed.

Mary H. Atcherley, then being sole defendant, demurred to the bill on the ground that it did not set out a cause of action.

By stipulation of the parties, in order to determine the question whether the decree of 1858 was res judicata, the circuit judge made a pro forma ruling sustaining the demurrer to the bill and dismissing it.

The complainant appealed to the supreme court of the territory, it being stipulated that complainant should do so.

The supreme court reversed the decree. 14 Haw. 651. In its opinion, it recited the facts with great fullness, completed the allegations of the bill by the exhibits attached, and then disposed of the contentions as follows:

1. The decree adjudging Kalakaua to be the owner of the land, and requiring conveyance of it to be made to him by Armstrong as guardian of the children of Kinimaka, was not ambiguous, but it took certainty from the averments of the bill and the record, and there could "be no doubt that it was the intention of the court to order the conveyance of the interests of the minors."

2. The minors were bound by the decree notwithstanding "they were not named as parties defendant in the suit." This was decided on the authority of Hawaiian cases and the power of guardians over the estates of their wards established by them, and upon the general principle of collateral attacks upon judgments. And, specifically replying to the contention that the decree was not binding because of "the lack of service and upon the merits," and that the court should refuse to enforce the decree, it was said:

Page 238 U. S. 129

"It is not contended that the court must in all such cases reexamine the former proceedings, but merely that it may, in its discretion, do so. Assuming that to be so, we decline to retry the old case. The guardian appeared and contested the complainant's claim, presenting in opposition substantially the same views now sought to be urged by the respondent. The ward's interests were not permitted to go by default, but were fully defended by counsel. The decree, while not carried out by the execution of a conveyance, was in fact acquiesced in, as appears by the bill, by all concerned, and complainant and his successors in interest from that time continuously until about January, 1900, held open, notorious, and undisturbed possession of the land. Under the circumstances, and after a lapse of more than forty years, we do not think that the court should examine into the merits of the former proceedings, or refuse to enforce the decree for the reasons suggested."

Upon the filing of the mandate of the supreme court in the court below, Mary H. Atcherley filed an answer in which she admitted many of the allegations of the bill, denied some -- among others, the undisturbed possession of the land in Kalakaua and his successors, as alleged, and the inferences from it -- asserted the validity of her title, and the staleness of complainant's demand, it having been

"brought forty-three years, or more than four times the term of the statute of limitations, since the alleged date of the alleged decree ordering Richard Armstrong to give a conveyance."

That to enforce a conveyance from her without giving her an opportunity to be heard upon the matters set forth in the bill would deprive her of property without due process of law, contrary to the Fourteenth Amendment to the Constitution of the United States.

By a supplemental answer, she alleged the following, which we state narratively:

Since the filing of the answer, the complainant Kapiolani

Page 238 U. S. 130

Estate, Limited, has parted with all of its estate in the land by a deed of a small portion to certain named parties and the balance, with covenants of warranty, to Lewers and Cooke, Limited, a Hawaiian corporation.

June 29, 1906, that corporation brought suit in the Court of Land Registration to register its title to the land conveyed. September 16, 1907, it was decreed that the corporation had a good title which was entitled to registration. The decree was reversed by the supreme court of the territory March 5, 1908, that court holding that the corporation had no title, legal or equitable, to the land. 18 Haw. 625. The case was remitted to the Court of Land Registration for further proceedings, and that court dismissed the petition of the corporation. The latter appealed from the decision to the supreme court of the territory, which court modified the decree, and, on March 24, 1909, entered a final decree that the corporation had no title, legal or equitable, to the land. 19 Haw. 334. Upon appeal to this Court, the decision was affirmed. [Lewers & Cooke, Ltd v. Atcherley, 222 U. S. 285.]

The decree of the Supreme Court of Hawaii is in full force and effect, and it is alleged that

"the proceedings in the Court of Land Registration, the Supreme Court of Hawaii, and the Supreme Court of the United States were upon the merits of the case, and the cause of action so finally adjudicated was the same right and cause of action as that on which complainant in this case has founded its bill."

There was a replication to the answer and an amendment to the amended bill, and it appears that Mary H. Atcherley conveyed an undivided half of the property to Lyle A. Dickey and Edward M. Watson, two of the defendants. They were made parties by consent and answered in the case, in effect repeating the answers of their grantor.

It was decreed that (1) the allegations of the bill and replication of complainant were true. (2) The defendants

Page 238 U. S. 131

and each of them were estopped from litigating against or in opposition to the claim of complainant. (3) The defendants held the legal title to the land as tenants in common, one-half by Mary Atcherley and one-fourth by each of the other defendants. (4) Such title and titles were held by the defendants respectively as trustees for complainant, and that each of them should be decreed to execute conveyance thereof to complainant, all and singular, the matters appertaining to the title having theretofore been litigated between the predecessors in title of the complainant and defendants respectively, and that the same were res judicata. (5) Defendants should be permanently enjoined from further prosecuting that certain action in ejectment then pending on the law side of the court, wherein Mary H. Atcherley was plaintiff and complainant was defendant.

A conveyance was decreed to be made accordingly, and in case of default after thirty days, the clerk of the court as its commissioner should make such deed. Further prosecution of the action in ejectment was enjoined.

The decree was reversed by the supreme court of the territory.

The opinion is somewhat difficult of condensation. It rapidly reviews the steps in the litigation exhibited in 14 Haw. 651, 18 Haw. 625, 19 Haw. 47 and 334, and 222 U. S. 222 U.S. 285. Then this comment was made:

"Notwithstanding the statement made in the Lewers & Cooke case (19 Haw. 48) that there had been no reversal of the facts found by the Court of Land Registration, the fact found by that court that Kinimaka 'was the natural guardian of the minor' was not included in the findings of fact certified up by this court on the appeal to the United States Supreme Court. And the fact that the guardianship relation existed, vitally important though it was, seems to have received scant consideration in that case. That Kinimaka was the testamentary guardian of

Page 238 U. S. 132

Kalakaua's property seems to be beyond the range of dispute at this time. If the relation existed in fact, a question as to the regularity of the appointment would not prevent the assertion of any rights the ward would otherwise have against the guardian. 'It is not essential that a legal guardianship should exist; the doctrine (constructive fraud) applies wherever the relation subsists in fact.' 2 Pom.Eq.Jur. § 961."

"We are satisfied that this court fell into error in the Lewers & Cooke case in taking the view that the equity suit before Chief Justice Allen constituted an attack on the award of the Land Commission, and that the decree in that suit amounted to a setting aside of the award. None of the prior decisions in this jurisdiction which were cited in support of the view taken are authority for the conclusion reached, as an examination of them will show."

Hawaiian cases were reviewed, and the court said:

"The question now presented is whether a minor, on coming of age, could obtain relief in equity against a guardian who had, in fraud of his ward, presented a claim and obtained in his own name an award from the Land Commission of title to the minor's land. This question was neither involved nor discussed in any of those cases."

"The case of the guardian of a minor obtaining an award in his own name of land belonging to his ward is analogous to the case of a guardian who purchases land with money belonging to the ward, and, in violation of his fiduciary duty, intentional or otherwise, takes the title in his own name. In such a case, it is well settled, equity, regarding the land as being the property of the ward, will declare and enforce a constructive trust in favor of the ward, and order the conveyance of the legal title. 3 Pom.Eq.Jur. §§ 1052, 1058."

After further review of the case and consideration of the rights of Kalakaua, the action and duty of Kinimaka, the character and effect of the proceedings which he had instituted

Page 238 U. S. 133

and which were instituted against him by Kalakaua, and, after his death, against his devisees, the court declared that certain principles resulted therefrom, and that "within these principles, then, the decree of 1858 was not erroneous, but right."

The character of the awards of the Land Commission was considered and described and their proper relation to the questions and rights of the parties in the case, and this was said:

"If the decree in Kalakaua v. Pai and Armstrong was right it, ought to be enforced. I f the decision in the Lewers & Cooke case was correct, the present bill should be dismissed, but if it was wrong, in justice to the appellee, it ought not to be followed if it can be avoided."

"Being of the opinion that this court was wrong in the conclusion reached in the Lewers & Cooke case, and that the decree of 1858 was not 'erroneous in a fundamental principle,' and, for the reasons stated in the former opinion in the case at bar, should not be reopened, we should feel inclined to depart from the ruling made in the Lewers & Cooke case were we not bound by it because of its having been affirmed by the United States Supreme Court."

"* * * *"

"It makes no difference that, in making that decision, the Supreme Court followed the opinion of this court upon a matter of local law (222 U.S. 222 U. S. 294), and that we now believe that that opinion was not well founded. If the former ruling is to be reversed, the reversal is to be made by that Court, and not this. The most that we can do now is to respectfully point out wherein, in our judgment, the former opinion was wrong. This we have done, believing it was our duty to do it, and with this our duty in the premises ends."

We have been at pains to recite the pleadings in the case, the steps in the litigation they detail, and the ruling and comments of the supreme court in order to bring the factors of judgment under review in proper connection

Page 238 U. S. 134

and to estimate the constraint the court deemed that it was under to follow the decision of this Court in the Lewers & Cooke case, and whether the court was justified in its view of that case.

The case at bar easily resolves itself into a few simple facts and principles which may be summarized from the pleadings and findings of fact. Kaniu, whose adopted son Kalakaua was, on the day of her death, by oral will and according to the custom of the country, appointed him her heir and left him all of her property. Kinimaka was Kalakaua's guardian, and at a session of the Board of Land Commissioners, procured the land to be awarded to himself. Then followed litigation -- commenced by Kalakaua, to declare Kinimaka his trustee of the title -- which continued after the latter's death against his children, properly represented, and his widow, which resulted in the decree (November 2, 1858) establishing Kalakaua's title to the land.

The decree was not complied with as directed, but was in effect obeyed, and Kalakaua retained possession of the land, and he and his successors have ever since continued in the open possession of it, of which possession the children of Kinimaka were aware and at no time asserted any claim to the lands or denied the rights of Kalakaua and his successors thereto, but at all times acquiesced in the possession of Kalakaua and his successors in title.

Then came the action of ejectment by defendant Atcherley and this suit to enjoin its prosecution.

The bill was dismissed upon demurrer and the case carried to the Supreme Court of Hawaii, which reversed the decree.

Pending the suit, the complainant transferred its interest by warranty deed to Lewers & Cooke, Limited. The latter instituted suit in the Court of Land Registration to register its title, and it was decreed by that court that it had a good title which was entitled to be registered. The

Page 238 U. S. 135

decree was reversed by the Supreme Court of Hawaii, and subsequently this Court affirmed the judgment of the supreme court.

The determining proposition in the case (Lewers & Cooke case) was that the award of the Land Commission was "conclusive against every form of attack" except by appeal by a party who had presented his claims to the board. The court considered it immaterial from whom Kinimaka received the lands, or whether he was guilty of actual fraud or had an honest belief in his title. And it was said:

"The objection to the decree of 1858 appears to go to the jurisdiction of the court over the subject matter, for the Land Commission's award was the final decision of a court of record which was the only court of competent jurisdiction to decide claims to land accruing prior to its establishment, and its decision could not be attacked except by appeal provided by law."

But the court further said that, even if the objection did not go to the jurisdiction of the court, the result would be the same because of the finality of the Land Commission's award. 18 Haw. 625, 638-639. See also 19 Haw. 47, 334.

The suit in the Court of Land Registration and the action of the courts thereunder were set up in the present suit as res judicata. The trial court decided against the defense and other defenses, and decreed the relief prayed by complainant. The decree was reversed by the supreme court.

We have given excerpts from the opinion of the court showing the grounds of its action. It will be observed that the court frankly declared that it had fallen into error in the Lewers & Cooke case by deciding that the equity suit in which the decree of 1858 in favor of Kalakaua was rendered was an attack on the award of the Land Commission, and that the decree amounted to a setting aside of the award, but felt that it was its duty to adhere to the decision as it had been affirmed by this Court, and, explaining

Page 238 U. S. 136

our affirmance, said that the "vitally important" fact that Kinimaka "was the natural guardian of the minor [Kalakaua] was not included in the findings of fact certified up." And the court (Supreme Court of Hawaii) declared: "That Kinimaka was the testamentary guardian of Kalakaua's property seems to be beyond the range of dispute at this time." This relationship necessarily was the important fact. Without it, Kalakaua had no claim of title; with it, his right and the right of complainant as his successor are established and the decree of 1858, establishing his title, was correct, and the decree in the Lewers & Cooke case erroneous.

But defendants say, granting the latter decree was erroneous, the decree of 1858 was also erroneous, and that the case then presents the opposition of one erroneous judgment to another, and the last should prevail. And to establish that the decree of 1858 was erroneous, they enter into a discussion of the laws of Hawaii, the consideration of the principles upon which the Hawaiian Monarchy was established in 1845-47, the abolition of the old feudal tenures of land, the creation of a court (the Board of Land Commissioners) to quiet land titles, the awards of which were to be final, and the foundation of fee-simple titles to the Kingdom. But the contentions thus presented have intricate character, and can only have clear comprehension in local experience and understanding, and are best determined by local interpretation and the decisions of the courts "on the spot;" and this we recognized when we affirmed the decree in the Lewers & Cooke case. The powers of the Land Commission, we said,

"involved obscure local history concerning a time when the forms of our law were just beginning to superimpose themselves upon the customs of the islanders. Such customs are likely to be distorted when transmitted into English legal speech."

And such consideration and defense moved or tended to move to the decision in the case. A reference, it is true,

Page 238 U. S. 137

was made to the contention that Kinimake was guardian of Kalakaua, but the fact was dismissed as being a suggestion having no substantial foundation, and also, again deferring to the local judgments, it was said of the suggestion that

"it would be going very far to apply the refined rules of the English Chancery concerning fiduciary duties to the relations between two Sandwich islanders in 1846 on the strength of such a fact."

This relationship has since been cleared up and given definite obligations and duties, and even in 1846, under the law of the islands, a guardian could not, through the instrumentality of an award of the Land Commission, obtain a title to the property of his ward which was immune from subsequent attack, and the wrong of it be without redress. The fact of guardianship being established, and such being its legal consequences under the law of Hawaii, according to the latest decision of the Supreme Court of Hawaii, it would be going far to say that a decision was intended to be made against it by the comment which we have mentioned or by the other comments in the opinion.

For instance, the present case was referred to as pending, and it was said that, as it had not passed to a final decree, there was nothing in the form of action of the court to hinder the court from adopting the principle laid down, even though it thereby should overrule an interlocutory decision previously reached. And we may add that there was nothing to hinder the court from changing its action, which it did, we have seen, on a different view of the law, or the complainant from availing itself of such change, unless, indeed, the first decision had the finality of res judicata.

This is contended, it being urged that the decision of the Land Commission had such binding effect as well on complainant as on Lewers & Cooke, Limited. The contention is based on the following findings of fact:

"In the suit of Lewers & Cooke, Limited, referred to in

Page 238 U. S. 138

these findings, C. W. Ashford, then vice-president of Kapiolani Estate, Limited, and now its counsel in this case, appeared at the trial in the Court of Land Registration and assisted counsel for Lewers & Cooke, Limited, in the conduct of the case by examining three witnesses, and did this at the request of John F. Colburn, who was the treasurer of Kapiolani Estate, Limited, and the officer of Kapiolani Estate, Limited, who, in the regular course of business, employed attorneys for it. Said John F. Colburn was a witness on behalf of Lewers & Cooke, Limited at that trial."

"Messrs. Kinney, Marx, Prosser, & Anderson, while attorneys for Kapiolani Estate, Limited, in this case, were retained by Kapiolani Estate, Limited, through John F. Colburn, its treasurer, to appear as counsel for Lewers & Cooke, Limited at two hearings before the Supreme Court of Hawaii subsequent to the final decision, and so appeared, and also, on such retainer, signed the assignment of errors upon appeal from the Supreme Court of Hawaii by Lewers & Cooke, Limited, to the Supreme Court of the United States. The Kapiolani Estate, Limited, was not, however, named as a party to said suit of Lewers & Cooke, Limited, and its counsel took no further part by its direction in the proceedings."

In passing on the contention, the Supreme Court of Hawaii said:

"Counsel for appellants [appellees here] contend that, under the decree in the Lewers & Cooke case, the whole matter is res judicata. But, as the appellee [appellant here] was not a party to that case and is not a privy of Lewers & Cooke, Limited, the ground is untenable."

As to the last proposition -- that is, that complainant was not a privy of Lewers & Cooke, Limited -- the view of the court seems to be sustained by Wood v. Davis, 7 Cranch. 271, and Cadwallader v. Harris, 76 Ill. 370. The first proposition is one of fact. There was a distinct issue upon the fact, and the conclusion of the court was

Page 238 U. S. 139

virtually a decision upon the issue that the acts described were not authorized by the complainant corporation, but were individual. And we may say it is disputable besides if they constituted an appearance of the complainant. Schroeder v. Lahrman, 26 Minn. 87.

The principle invoked by defendants is that one who warrants a title is concluded by a judgment against the title in a suit brought against his grantee, even when the title is aggressively used. Andrews v. Denison, 16 N.H. 469. But in favor of whom and under what conditions? In favor of the grantee undoubtedly when he brings suit on his covenant against his vendor. But will it be available in favor of the successful assailant of the title? Wood v. Davis and Cadwallader v. Harris, supra, are authority against the proposition.

But, granting this is disputable, and cases may be cited the other way, it is well established that in order to make the judgment available even to the grantee of the title, his covenantor must receive notice of the suit and an opportunity to defend it. Such notice was not proven in this case. We certainly cannot assume that notice was given against the decision of the supreme court virtually to the contrary, accepting, indeed, the finding of the trial court. The trial court, as we have seen, found that the allegations of fact contained in complainant's bill of complaint, as finally amended herein, and in its said replication, were true. The replication contained a denial of the averment of the supplemental answer that complainant had notice of the proceedings in the Court of Land Registration, the Supreme Court of Hawaii, or the Supreme Court of the United States, though it admitted

"that certain of its officers and directors in their capacity as individuals (but not in their capacity as such officers or directors of said complainant corporation) were aware of the pendency of said proceedings."

Decree reversed and cause remanded for further proceedings in accordance with this opinion.