211 P. 453 | Cal. | 1922
After decision in this action a petition for rehearing was filed in which it was claimed that the parties had not presented the question of the bar of the statute of limitations satisfactorily because the case was transferred to this court on petition of the defendants who were not involved in that question, and consequently it was believed that the matter would not be considered by this court, but that the conclusion of the district court of appeal on that branch of the case would be adopted without question. [1] On the contrary, the transfer of the case here by the court of its own motion or on the petition of any of the parties, set the case at large for the decision of this court upon the entire record. The liability of the defendants who did not appear in the petition for a transfer to this court turned upon the question of whether or not the liability of the corporation was created more than three years prior to the filing of the amended complaint in which they were joined as defendants for the first time in the action. This amended complaint was filed March 17, 1914. The note sued upon was dated April 22, 1911. This note was given to replace an earlier note of March 7, 1911, executed on behalf of the corporation by the president and secretary, and the question involved is as to whether or not this note was duly authorized and the original indebtedness thereby created. From an examination of the record we are satisfied that the finding of the trial court that the indebtedness accrued before the 17th of March, 1911, is sustained by the evidence, as it appears that this note was given at a meeting of the board of directors and then and there duly authorized, although no minutes of that meeting or of that authorization were entered upon the records of the corporation.
Upon other branches of the case we adopt the opinion heretofore prepared by Mr. Justice Lawlor as follows:
"This action was brought by the plaintiff, J.D. Martin, to recover from the defendants, as stockholders in the Lindsay Incorporated Oil Company, forty-four per cent of the amount due on a promissory note given to plaintiff and defendants B.B. Dudley and E.R. Dudley by that company, dated April 22, 1911, and secured by a mortgage. The cause was tried by the court sitting without a jury. Findings of fact and conclusions of law were made and filed and *189 judgment rendered thereon in favor of the defendants. From that judgment this appeal is taken.
"At the time the note was executed, appellant and respondents E.R. Dudley and B.B. Dudley were partners. The Lindsay Incorporated Oil Company, in which respondents were stockholders, purchased from the partnership a tract of oil land in Kern county for $32,000. On March 7, 1911, a promissory note for $4,000 was executed by three stockholders in favor of the partnership. For the balance of $28,000 a note was given, payable to the partnership, made under the corporate name, signed by the president and secretary of the company and endorsed by several of the stockholders, but not bearing the corporate seal. Some time between March 7, 1911, and March 11, 1911, a deed was given by the partnership to a committee appointed by the corporation, in return for these notes.
"On March 18, 1911, a note secured by a mortgage on the land purchased was regularly issued by the company and the note of March 7 was taken up by the company. Because of some defect in the execution of the note of March 18, 1911, the note and mortgage of April 22, 1911, were executed and delivered to take their place.
"The partnership between appellant and respondents B.B. Dudley and E.R. Dudley was dissolved by agreement of the partners on June 27, 1911, and by the agreement of dissolution appellant became the owner of forty-four per cent of the promissory note of April 22, 1911, and each of the Dudleys of twenty-eight per cent. In March, 1914, respondent B.B. Dudley transferred his interest in the note to respondent E.R. Dudley.
"Appellant commenced this action on October 23, 1913, against respondents E.H. Howe, Ernest Howe, W.A. Morley, H.E. Redmond, L.A. Sturgeon, L.G. Stallings, M.W. Grace and W.K. Flynn. On March 17, 1914, an amended complaint was filed in which respondents C.B. Jackson, J.M. Birkhead, T.E. Winters, O.L. Flynn, H. Roth, A.P. Haliburton and P.M. Northern were named as defendants for the first time. A second amended complaint was filed on May 16, 1914, in which E.R. Dudley and B.B. Dudley were made defendants. It was alleged that they had 'refused to join the plaintiff in the commencement of this action,' and the prayer as to them was that they 'be *190 required to answer herein, stating their rights in the premises, if any such they shall claim.' Respondents E.R. Dudley and B.B. Dudley in their answer alleged the transfer of B.B. Dudley's interest in the note and mortgage to respondent E.R. Dudley; denied that either of them had refused to join as plaintiffs; prayed that appellant have judgment against the other respondents and that respondent E.R. Dudley have fifty-six per cent of such judgment, or such other or further relief as is meet in the premises.
"The other respondents in their answer alleged the indebtedness was incurred on or about February 2, 1911; that on or about August 3, 1911, by a settlement had between the oil company, appellant and respondents E.R. Dudley and B.B. Dudley, it was agreed the amount then unpaid on the note was $20,000 and interest; and that the action was barred by subdivision
"The only findings of the court which we need refer to were that the indebtedness of the oil company was incurred on March 7, 1911; that the note of April 22, 1911, was given as evidence of the debt previously incurred; that since the debt was incurred on March 7, 1911, the action was barred by sudivision
"The conclusions of law were to the effect that appellant take nothing against respondents, and that respondents have judgment against appellant for their costs.
"From the opinion of the trial judge it appears that the judgment was rendered upon two grounds. The first was that the indebtedness was incurred by the oil company before March 11, 1911, and, therefore, in any event, was barred by the statute of limitations as to the respondents joined for the first time on March 17, 1914. Second, that appellant could not recover against any of respondents because he was suing for forty-four per cent of an entire demand and had split his cause of action; that, although the Dudleys were joined as defendants, they had not asked for anything more than a portion of such an amount as might be recovered by appellant; and that an action for a portion of a single demand cannot be maintained when the debtor has not consented to a division of the debt, which was not done in this case.
"Appellant contends that under the facts of this case he is entitled to recover forty-four per cent of the amount of the note; that the evidence does not support the finding that the indebtedness was created before March 11, 1911; and that the statute of limitations has not been properly pleaded. Respondents 'submit that with this state of facts where it clearly appears that an effort is being made in this suit to recover only a portion of a promissory note, . . . that this action cannot be maintained and a judgment cannot be rendered under the complaint on file herein.'
"We are of the opinion appellant's contention is correct. In 1 Corpus Juris, 1110, it is said: 'As a general rule, a single cause of action or claim arising out of an entire contract cannot without the debtor's consent be split up by means of partial assignments, so as to become the subject of different actions; but as in other cases this may be done *192 with the debtor's consent, and even without his consent a partial assignment may be enforced in equity if the other persons interested are brought in as parties to the suit.'
"Fourth Street Bank v. Yardley,
"In Chambers v. Lancaster,
"National Exchange Bank v. McLoon,
" 'The debtor is not the only party whose interests should be considered. There is as much natural equity, in many cases, in protecting an assignment of a part of a claim as an assignment of the whole of it. Equitable assignments are the outgrowth of the requirements and refinements of the present business era. In many ways, directly and indirectly, do circumstances create assignments of parts of funds, in dealings through servants, tenants, consignees, bankers and other agencies.'
"In Grain v. Aldrich,
[2] "From these eases it follows that appellant was not required to ask for a recovery of the whole amount of the note. It was sufficient for him to join respondents E.R. Dudley and B.B. Dudley, the owners of the remainder of the obligation, as parties defendant. Once joined, it devolved upon them, as prayed in the complaint, to set up any claim they bad in the subject matter, the execution of the note and appellant's claim having already been set forth. The rights of all the parties could then be settled in the one action. It would have been necessary for appellant to have joined these respondents if he had sued for the entire amount, and the final judgment would have been the same in such a case as in this one, where they themselves can ask for such relief as they may desire. An entirely different situation is presented here, where these parties are joined, and can defend their rights in the subject-matter in the one action, than in the ordinary case of splitting a cause of action, where one person sues to recover part of his claim in one action, and later brings a second action to recover the remainder. Even in such a case, the defendant's objection would not be to the circumstance that the plaintiff brings; the first suit for a less amount than is due, but that a second action is brought to recover the balance. (Paladini v. Municipai Markets Co.,
"Respondents have cited several authorities in support of their position, but in our opinion none of them is authority for their contention. The first of these isNightingale v. Scannell,
[3] "Respondents in this connection contend appellant has never properly joined respondents E.R. Dudley and B.B. Dudley as parties defendant under section
[4] As above stated, we are satisfied that the evidence sufficiently shows that the obligation of the corporation accrued before March 17, 1911. That a deed was received by the corporation before that time and that in consideration thereof a note was executed in the corporate name on behalf of the corporation by the president, and secretary and indorsed by five of the directors is conceded. The only doubt as to the authority of the president and secretary to execute the note of March 7, 1911, on behalf of the corporation arises from the fact that no record was kept of the transaction at the meeting of the board of directors. Several witnesses, *197
however, testified there was such a meeting and that at such meeting the purchase of land and the execution of the note were authorized. This evidence was sufficient to sustain the finding of the court to the effect that the obligation was authorized by the corporation and that its liability thereupon accrued more than three years before the amendment of the complaint joining the defendants first named in the amended complaint, filed March 17, 1914, to wit, C.B. Jackson, J.M. Birkhead, T.E. Winters, O.L. Flynn, H. Roth, A.P. Haliburton and P.M. Northern, (Gilson Quartz M. Co. v. Gilson,
The trial court found that the indebtedness of the corporation was incurred March 7, 1911. At that time there was outstanding 20,000 shares of the capital stock of the corporation, of which the defendants E.H. Howe, Ernest Howe, W.A. Morley, H.E. Redmond, L.A. Sturgeon, L.G. Stallings, M.W. Grace and W.K. Flynn each owned 2,000 shares so that each was liable for one-tenth of the indebtedness. The other 4,000 shares outstanding were owned, 2,000 by H.A. Briscoe and 2,000 by W.S. Berry, who were not made parties defendant in the second amended complaint. The court found that the total indebtedness of the corporation upon the note in question was $28,000, less certain payments which reduced the principal sum to $24,000. The trial court found that the plaintiff J.D. Martin owned forty-four per cent of the indebtedness and defendants B.B. Dudley and E.R. Dudley each owned twenty-eight per cent of the indebtedness.
It is unnecessary that the case be retried.
The judgment in favor of defendants C.B. Jackson, J.M. Birkhead, T.E. Winters, O.L. Flynn, H. Roth, A.P. Haliburton and P.M. Northern is affirmed. The judgment in favor of the other defendants is reversed. The trial court is directed to enter judgment in favor of the plaintiff and *198 the defendants B.B. Dudley and E.R. Dudley against the defendants E.H. Howe, Ernest Howe, W.A. Morley, H.E. Redmond, L.A. Sturgeon, L.G. Stallings, M.W. Grace and W.K. Flynn in accordance with their rights and obligations ass fixed in this opinion; that is to say, the judgment against each defendant shall be one-tenth of the amount due on the obligation of the corporation as fixed in the findings of fact, and this amount shall be apportioned as follows, to wit: Forty-four per cent to the plaintiff and twenty-eight per cent to defendant B.B. Dudley and a like amount to defendant E.R. Dudley. The amount of indebtedness found by the trial court to be due from the corporation shall be credited with the payments, if any, resulting from the foreclosure of the mortgage securing such indebtedness. The court may permit such supplementary pleadings and evidence as may be necessary to establish such payments, if any have been made.
Lawlor, J., Lennon, J., Waste, J., Sloane, J., Shurtleff, J., and Shaw, C. J., concurred.