100 Cal. 30 | Cal. | 1893
In February, 1891, the plaintiff being largely indebted to Mrs. Adella B. Story, defendant, and also to other creditors, made an agreement with her as follows:
“ Whereas, Mrs. A. B. Story has agreed to pay all the debts existing against the Story & Isham Commercial Company on the first day of February, 1891, including those payable to herself, and, whereas, said Story & Isham Commercial Company desires to secure said Mrs. Story for the payments made and to be made by her on account of the said debts:
• “ Now, therefore, in consideration of said agreement and the payment of said debts, the said Story & Isham Commercial Company, pursuant to a resolution of its board of directors, at a meeting thereof duly called and had, hereby agrees to pay to said Mrs. A. B. Story all sums paid, or agreed to be paid, by her on account of*32 said debts, including costs and expenses, notes, attorneys’ fees and judgments, and such things as she may pay on account of said debts, and in procuring the money with which to meet the same.
“And, as security for the payment of said sums, the Story & Isham Commercial Company agrees to and does sell, assign, convey and transfer to said Mrs. A. B. Story all notes, accounts and other demands due or payable to said company, and all goods and merchandise on hand, in store or in transit, owned by it, and all other property owned by it at law or in equity; excepting, however, that said company reserves the right to use in its business the first sums collected by it, either on sales made or demands due, not exceeding two thousand dollars, and also reserves the real estate owned by it, but all sums realized from a sale, pledge or mortgage thereof, not exceeding three thousand dollars, shall be applied as a payment on the sums payable to said Mrs. A. B. Story, as above specified.
' “Said Commercial Company shall use its best efforts to realize as soon as practicable on said demands and merchandise, and apifiy the sums received therefor on the sums payable to said Mrs. A. B. Story, as herein provided.
“ The expense of running the said company shall be divided between the old business and the new in proportion to the sales made on account of the goods hereby sold to Mrs. Story, and those sold on account of transactions subsequent to February 1, 1891.
“The property hereby conveyed to Mrs. A. B. Story shall not be sold at less than it cost the Commercial Company, without a direction of the board of directors of said company.
“ Executed and delivered this fifth day of February, 1891.
“ The Story & Isham Commercial Co.,
“ Per A. H. Isham, Vice-Pres. and Mgr.
“Adella B. Story.”
At that time the plaintiff was engaged in the business of merchandising, and was o turner of certain personal
The court finds that the cost price of the property sold by Mrs. Story to Bates was $38,550; that that was also the value of the same; that at the time when she sold the goods the plaintiff was indebted to her in the sum of $24,206, and that she had also caused debts of the plaintiff to the amount of $5,523 to be satisfied by having its creditors accept in satisfaction of said debts certificates of deposit issued therefor by the California National Bank of San Diego. The court also found “ that by an arrangement between the defendant, Adella B. Story, and the California National Bank, the said bank, on the twenty-sixth day of February, 1891, canceled and marked paid notes of the plaintiff held by said bank in the sum of $15,200, and the same were thereby paid ”; and also that, after the sale and taking of said property, she had paid the balance of the debts of the plaintiff,amounting with the sum paid and amounts due her to $113,000, a portion of which was paid out of the proceeds of the property sold by her to Bates. Upon these findings the court made its conclusions of law that the
It is contended by the plaintiff in the first place that the matters set forth in the answer do not constitute a counterclaim to the cause of action set forth in the complaint, and were not available as a defense thereto.
Section 438 of the Code of Civil Procedure provides that the counterclaim which the defendant is permitted to plead “must be one existing in favor of a defendant and against a plaintiff between whom a several judgment might be had in the action, and arising out of one of the following causes of action:
“ 1. A cause of action arising out of the transaction set forth in the complaint as the foundation of the plaintiff’s claim, or connected with the subject of the action.”
One of.the definitions given by the “ Century Dictionary” to the term “ transaction” is “ a matter or affair, either completed or in course of completion.” Mr. Pomeroy, in his treatise on Remedies and Remedial Rights, sec. 774, defines the term, as used in this section, to be: “That combination of acts and events, circumstances and defaults, which viewed in one aspect results in the plaintiff’s right of action, and viewed in another aspect results in the defendant’s right of action;”
It is for the purpose'of enabling the court to render a judgment by which the rights of the parties may be finally determined in the same action, rather than to compel another action, that the code permits a defendant to set up in his answer any new’' matter arising out of the transaction set forth in the complaint as the foundation of the plaintiff’s claim; and, if the plaintiff omits or fails to set forth in his complaint the entire transaction out of which his claim arose, the defendant may supplement this omission by setting forth in his answer the omitted facts so that the entire transaction may be before the court. The plaintiff is not at liberty to select an isolated act or fact which is only one of a series of acts or steps in the entire transaction, and insist upon a judgment on this fact alone, if the fact is so connected with others that it forms only a portion of the transaction.
The transaction which was the foundation of the cause of action set forth in the complaint herein is not limited to the facts therein set forth, but includes the entire series of acts and mutual conduct of the parties in the business or proceeding between them which formed the basis of their -written agreement. If the plaintiff had set out in its complaint the entire transaction between it and Mrs. Story, beginning with the agreement and the circumstances under which it was made, and giving in detail her sale of the property to Bates, that its value -was thirty-eight thousand five hundred and fifty dollars, and that the proceeds thereof had been applied by her in payment of its debts, and also
Much of the argument of the plaintiff has been directed to the terms of section 2910 of the Civil Code, which provide that the wrongful conversion of personal property by a person holding a lien thereon extinguishes the lien. But, as this action is brought to recover the value of the goods, and not for the goods themselves, the right of the defendant to assert a lien thereon is not involved. If the plaintiff had brought its action against Mrs. Story to recover possession of the goods, the effect of this section would have properly arisen, but by bringing it for the value of the goods he adopts her sale, and affirms the title conveyed thereby. It is a well-established principle that when one has converted to his own use or sold the goods of another, the latter may waive the tort and sue in assumpsit. It is immaterial in which mode he seeks
The court finds that at all times after making the said agreement Mrs. Story claimed that by virtue
The contention of the plaintiff that, inasmuch as this action is brought against the three defendants, a cause of action existing in favor of Mrs. Story alone is not available as a defense, cannot be maintained. The liability of the defendants, if any existed, is several as well as joint, and if Mrs. Story could set up any defense that Would defeat the plaintiff’s right of recovery it was available for the other defendants. Whatever shows that the plaintiff had no right of recovery, as against Mrs. Story, protects the other defendants, who were acting under her and by her authority.
The sum of fifteen thousand two hundred dollars, which the court finds is the amount of the debts of the plaintiff which Mrs. Story caused to be paid on the same day that she sold the goods to Bates by an arrangement between her and the California National Bank, added to the twenty-nine thousand seven hundred and seventeen dollars and fifty-four cents, Which the court also finds was due her from the plaintiff at that
As the court finds that Mrs. Story had fully complied with her part of the agreement, it follows that judgment should have been rendered in her favor for the difference between the amount paid by her for the account of the plaintiff and the value of the goods sold by her to Bates, and the judgment of the court below is reversed, with directions to enter judgment against the plaintiff and in favor of Mrs. Story for the sum of seventy-four thousand four hundred and fifty dollars, with her costs of suit, as of the tenth day of December, 1891.
De Haven, J., McFarland, J., and Fitzgerald, J., concurred.
Rehearing denied.