89 P. 1073 | Cal. Ct. App. | 1907
This case has been before the supreme court on a former appeal. It is reported in Shively v. Eureka etc. Co.,
1. Among the allegations of the complaint in intervention and of the answer of the corporation upon which great emphasis is placed is "that prior to the commencement of this action on the __________ day of __________, 1896, in an action brought in the superior court of said Shasta county by the plaintiff against the defendant upon the same alleged causes of action designated in plaintiff's amended complaint 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13, a judgment was duly given and made upon the merits, fully settling and adjusting all matters and things embraced in said alleged causes of action in favor of said defendant and against said plaintiff."
In reference to this plea in bar it is respondent's contention that it is not available "because of a want of identity of parties and of the issues in the two actions and because the matters actually adjudicated in the former action are not presented for adjudication in the present action." The court found in favor of respondent, holding that the parties and the issues were different. But it is apparent that if either the parties or the issues were different the finding must stand. The parties were the same except that John J. Atherton, the owner of fifty shares of capital stock, was intervener in the former, and Mrs. B. C. Northrup, the owner of another fifty shares, was intervener in the present action. But appellant contends that they both appeared in the respective actions as intervening stockholders and defended for the corporation; and, therefore, they appeared in the same capacity and for the same purpose, and hence in legal contemplation both actions must be considered as between the same parties. *239
In Wickersham v. Crittenden,
Although the complaint in intervention does not purport to be for the benefit of the corporation, yet the cases cited seem to go to the extent of holding that the corporation is the real party in interest in each case. If so, there would necessarily be identity of parties. But this becomes immaterial in view of the conclusion that is unavoidable upon the vital question as to whether the same matter was adjudicated and the same facts involved in the former action that arise in the action before us.
The effect and scope of a judgment are so clearly set forth in the provisions of the Code of Civil Procedure as scarcely to need judicial explanation. The difficulty remains, however, of applying the law to the particular facts as they are developed in each case. Subdivision 2 of section
As to how we shall view the judgment in section 1911 we have this rule provided: "That only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto."
At the former trial, after the evidence was all introduced, as stated in the findings, "plaintiff moved the court to be allowed to dismiss said action on behalf of plaintiff, without prejudice, which motion was by the court allowed and granted, and neither plaintiff nor defendant introduced any evidence to sustain the allegations of the respective answers to intervener's *240 complaint." Appellant insists that there was no judgment of dismissal, but that question is unimportant, because it was treated by all parties as a dismissal and none of the allegations of the complaint as such was considered or determined by the court.
However, notwithstanding the dismissal of plaintiff's action without objection, the court proceeded — no one contesting its right so to do — to hear and determine certain issues raised by the complaint in intervention and the answers of plaintiff and defendant thereto. The court, however, did not determine all these issues and, as before seen, the only evidence offered was on behalf of the intervener. The court did determine that John J. Atherton was the owner of fifty shares of stock and was interested in the result of the action; that at all the times in the amended complaint mentioned, and long prior thereto, the directors of said corporation were W. D. Swezey, J. Scott Ludlum, Anna M. Ludlum, George C. Jones, and Peter Scherer. That the question and issue of the consideration of the promissory notes in the amended complaint mentioned was withdrawn from the consideration of the court and no evidence introduced under the allegations thereof; that paragraphs 4, 5 and 6 of the complaint in intervention were withdrawn from consideration. Paragraph 4 related to the charge of conspiracy; paragraph 5 to fraudulent acts of Swezey and Ludlum in carrying out the conspiracy, and paragraph 6 charged that the latter had agreed to work and operate the mine at their own cost and expense. The foregoing paragraphs were substantially in the same language as the corresponding allegations in the present complaint in intervention. The court further found "that said Ludlum, Jones and Swezey did by their own votes as directors of said corporation cause the notes mentioned in the amended complaint to be issued to themselves, and did take part in the proceedings authorizing said notes to be issued to them by said Board of Directors, and did each of them vote therefor and as said directors did deal with themselves as individuals in issuing said notes, and each of them, save and except the notes mentioned in Counts 1 and 10 of said amended complaint, which were issued to persons not directors of said corporation." And it was further found that said notes were not assigned in good faith and for a valuable consideration, but for convenience in collection, and as conclusions of law it was declared that said *241
notes — except the two mentioned — and which, it may be remarked, are the basis for two of the counts in the present action, viz., the note to plaintiff for $75, and to one E. A. Reid for the sum of $35 — "are illegal, null and void. That the same be surrendered and canceled." How there can be any controversy as to what was adjudicated in that action seems almost incredible in view of the language used. The only question determined is that the notes, having been issued by the directors to themselves, were without validity and were assigned for convenience of collection and they were directed to be canceled. And the record shows that the notes were subsequently canceled. But the notes were simply written evidence of an indebtedness, and the effect of the judgment was to remove from consideration the written testimonial of the obligation of the corporation to the payees. The vital questions involved herein as to the existence of the indebtedness, whether the services were performed and the money advanced for the use and benefit of the corporation as set out in the complaint, and the defense of fraud and want of consideration as exhibited in the present complaint of intervention, were expressly left undetermined and they were not affected in any way by the judgment aforesaid. The court found in the present action "that all of the causes of action were founded upon the said promissory notes, while in the present action none of the causes of action is based or founded on any promissory note (except the first and second causes of action stated in the present complaint, which are the subject of subdivisions one and two of the paragraph). The third cause of action is upon an account stated. The fifth cause of action is upon quantum meruit for services rendered. The sixth cause of action is upon quantum meruit for money loaned and advanced, etc. The seventh, eighth, ninth, tenth, eleventh, twelfth, and thirteenth causes of action are for moneys loaned, advanced, and expended for the use and benefit of the corporation defendant." The evidence supports these findings and it must follow that the former judgment is no bar. Indeed, were it not for the character and ability of counsel who urge it, the contention of appellants to the contrary would scarcely merit the courtesy of serious attention. The decisions of our supreme court wherein are discussed the scope and effect of judgments and of the aforesaid provisions of the Code of Civil Procedure are quite numerous and are *242
collated by counsel for the respective parties. Among them, as fairly illustrative of the principle involved, we cite the following: Oakand v. Oakland Water Front Co.,
Appellant seems to rely largely upon Woolverton v. Baker,
The difference between the Bingham case, supra, and the one at bar is apparent from the following statement of the court: "The former action was between the same parties. It involved the same subject matter — the contract concerning the sale of land. The court in the former action had declared the contract valid, and that the defendant had the right to have it foreclosed and to be restored to the possession of the land. The present action is brought for the purpose of having the same contract rescinded and to recover the payments made thereunder." It is true that into the second action the specific allegation of fraud for the first time was injected by the plaintiff, who was defendant in the first action, but this could not change the rule that the validity of the contract having been determined it could not again be brought to judgment by the same parties. We are satisfied that the claim of appellants in relation to the former judgment cannot be maintained.
2. Appellants attack the finding of the court upholding the allegations in the fourth count of the complaint in reference to the stated account of George C. Jones. There was evidence, however, to show that the account had been stated and agreed to by the parties, but the court found that subsequently to the statement of the account a payment was made which was not credited, "but that the said account stated was for *244
services actually performed and for money actually advanced to the said defendant corporation, by the said George C. Jones; and when said sums were so advanced and said services so performed, and when said account was stated, neither the said George C. Jones or any of the persons alleged and complained of by the defendant and intervener, as confederates of the said George C. Jones, was a director of the said defendant corporation." Without setting out the evidence, it is sufficient to say that an examination of the record discloses support for this finding. No express agreement was required to be shown. It might be implied. (Hendy v. Murch,
3. Appellants also insist that the court erred in finding that Ludlum, Swezey, Anna Ludlum and Jones were elected directors for the reason that they were not elected at a regular meeting and no notice was given of said meeting. It is admitted that they were de facto officers. And assuming for the sake of argument that they were irregularly elected, it cannot avail appellants, because the act of incurring a just indebtedness by persons who are de facto directors cannot be impeached by showing an irregularity in their election. (Barrell v. Lakeview Land Co.,
It is claimed that the rule does not apply to money advanced by the directors. In the language of appellants: "De facto
officers can bind the corporation so far as third persons are concerned, but they cannot recover upon any claim on their part." It seems, however, from the decisions that the directors may bring and maintain actions in the form of quantum meruit
against the corporation for money expended and services performed in good faith for the use and benefit of the corporation, although they may not execute or join in the execution of a promissory note to themselves which will bind the corporation. (Seeley v. San Jose I. M. L. Co.,
4. The finding that "the escrow agreement between Watson D. Swezey and J. Scott Ludlum and the stockholders of the defendant did not provide that the said Ludlum and Swezey should at their own cost and expense operate the mine of defendant" is also vigorously assailed. It was contended at the trial that the agreement provided that they should do this work at their own expense. But while Mr. Ludlum was on the stand he identified as the original agreement a document which contained no such provision. A similar provision was, however, afterward attached and signed by Swezey, but according to his testimony it was not to be binding unless ratified and signed by Ludlum, which Swezey's deposition shows was never done. There is at least evidence to support this as well as all other findings of the court.
5. The claim of fraud and conspiracy was passed upon by the court and deliberately found against defendant and intervener. The same learned judge presided at the three trials to which reference has been made, and he had rather exceptional opportunities to weigh the evidence and determine the credibility of the witnesses. It is true, as suggested by appellants, that it is usually difficult to establish fraud clearly, and that positive and express proof is not required; but it must be remembered, also, that charges of this character are easily made, and they often have no foundation in fact. Surmise is *246 not evidence and something more than suspicion is required as the basis for judicial action. We have considered the circumstances declared by appellants to be badges of fraud, and we are satisfied that they do not present sufficient reason for disturbing the findings of the court against appellants.
6. During the progress of the trial exceptions were taken by appellants to certain rulings of the court. Most of them present the same questions hereinbefore considered, and they do not require further notice. I think there is merit in some of the objections, however, but the rulings would not justify a reversal of the judgment. For instance, this question was asked Mr. Ludlum: "During the time you acted and performed services for the company as you have testified, what was the reasonable value of those services?
"Mr. Woods: We object to that upon the ground that it is not shown that he knows."
He ought to have been interrogated more fully as to his knowledge of the value of such services, but it is doubtful whether the objection raises the question of his competency to testify. Besides, it is a matter addressed largely to the discretion of the trial court, and we cannot say there is no justification for the inference that he had shown himself qualified.
Again, the same witness said: "I requested the board of directors on Jan. 1, 1895, that they have stated accounts made of the indebtedness that was against the company at that timeof which this was one.
"Mr. Robinson: We move to strike this out, your Honor, on the ground that an account stated is a conclusion of law.
"The Court: I will deny the motion."
In my opinion, the motion should have been granted; but the ruling did no harm, as the conclusion must necessarily follow from the facts stated.
We find no prejudicial error, and the order denying the motion for a new trial is affirmed.
Chipman, P. J., and Hart, J., concurred.
A petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on May 15, 1907. *247