GOLAND v. PETER NOLAN CO

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District Court of Appeal, Second District, Division 1, California.

GOLAND et ux. v. PETER NOLAN & CO. et al.

Civ. 7976.

Decided: June 04, 1934

Jos. M. Wapner and Henry Cohen, both of Los Angeles, for appellants. Freston & Files, of Los Angeles, for respondents.

This appeal comes to us from a judgment entered upon an order sustaining defendants' demurrer to plaintiffs' second amended complaint without leave to amend.

In order to present an intelligent consideration of the points to be discussed, it will be necessary to quote at length from the second amended complaint which, in the interest of brevity, will be referred to as the complaint, and also from the demurrer.

After alleging the necessary preliminary matters, the complaint proceeds with a declaration that on or about June 8, 1928, “the defendant, Peter Nolan & Company, a corporation, maliciously and for the purpose of injuring the plaintiffs herein, filed an action in the Superior Court of Los Angeles County, on a pretended and unfounded claim against said H. Goland for the sum of Six Thousand ($6,000.00) Dollars; * * * that said defendant herein, Peter Nolan & Company, a corporation, well knew that said claim was fraudulent, pretended and did not in fact exist; and in furtherance of said defendant's Peter Nolan & Company design to harass and maliciously injure the plaintiffs herein it filed with the clerk, of the above entitled court, an Affidavit for and an Undertaking on Attachment, and thereupon the Clerk of said Court did, under his hand and seal of office, issue a Summons and also a Writ of Attachment demanding and authorizing the Sheriff of said Los Angeles County, State of California, to levy a garnishment and attachment upon the property of the plaintiff herein, H. Goland, to satisfy the amount alleged due on said pretended and unfounded claim in said action.

“That on or about the 8th day of June, 1928, pursuant to said Writ of Attachment * * * the Sheriff of said county did levy, garnishee and attach all the right, title and interest of the plaintiffs in the within action, as aforesaid, in that certain real property situate in the City and County of Los Angeles, State of California, and described as follows, to-wit:

“The South eighty-one (81) feet of Lots Two (2) and four (4) of Block three (3) of Fairview Tract, * * * together with an escrow then pending for the purchase and sale of the above described property.

“That * * * defendant, Peter Nolan & Company, did on or about the 12th day of May, 1930, voluntarily abandon such action and attachment and dismissed said action with prejudice and released said attachment.

“That plaintiffs at no time were indebted to defendants, Peter Nolan & Company, a corporation, * * * that said action was filed, commenced and instituted by said Peter Nolan & Company, a corporation, and the said Writ of Attachment caused to be issued as alleged herein and said property and escrow garnisheed and attached maliciously and without probable or any cause therefor, and for the sole and only purpose of harassing, annoying and injuring plaintiffs and putting them to trouble and expense.”

The complaint then proceeds with an allegation that the plaintiff H. Goland “agreed to and did purchase certain real property * * * hereinbefore described, and had entered into an escrow, as aforesaid, for the purpose of consummating said sale and purchase and had paid to the vendors the sum of Five Thousand ($5,000.00) Dollars as a deposit and part payment on said property; that in the negotiation of the purchase of the property hereinbefore mentioned it became necessary for plaintiff, H. Goland, to place an encumbrance on said property in the sum of One Hundred Thousand ($100,000.00) Dollars; that by reason of the commencement, filing and institution of the said action by the defendant * * * and the issuance and levy of said Writ of Attachment, * * * the purchase of said property could and was not consummated and the plaintiffs forfeited said Five Thousand ($5,000.00) Dollars paid to the vendors, all to their damage in the sum of Five Thousand ($5,000.00) Dollars, no part of which has been paid.”

It is then alleged that the plaintiffs were the owners of a trust deed in the sum of $26,000, which was used as collateral security in borrowing the $5,000, which was paid to the vendor in the alleged transaction; that said trust deed was on property valued greatly in excess of the sum of $26,000; and “that by reason of the acts and conduct of the defendant, Peter Nolan & Company, as aforesaid, plaintiffs were unable to redeem said trust deed heretofore placed as collateral security for the loan of said $26,000.00, all to their damage in the sum of Twenty-one Thousand ($21,000.00) Dollars.”

Paragraph IX of the complaint reads as follows: “Plaintiffs further allege that had it not been for the acts of defendant, Peter Nolan & Company, a corporation, in instituting and filing said suit on said pretended claim, which in fact did not exist, and in causing the issuance and levy of said Writ of Attachment, as aforesaid, thereby preventing the consummation and purchase of said property, as hereinbefore mentioned, plaintiffs would have made a net profit and/or earned and/or acquired their equity in the same over and above the encumbrance in the sum of Two Hundred Thousand ($200,000.00) Dollars.”

The complaint further alleges: “That plaintiffs herein had entered into an agreement for the exchange of their equity in the property above mentioned, together with property located in Block Island, Rhode Island, for certain real property described as follows:” (then follows a description of certain lots and parcels of land situate in Orange and Imperial counties, Cal.); “Whereby plaintiffs would have earned and made a net profit of Two Hundred Fourteen Thousand ($214,000.00) Dollars; said exchange could not be consummated by reason of the suit and action, as aforesaid, all to plaintiffs' damage in the sum of Two Hundred Fourteen Thousand ($214,000.00) Dollars.”

The second count undertakes to plead a cause of action on stockholders' liability. There is, however, no allegation in the complaint as to the amount of capital stock authorized, or issued, or subscribed, or the par value thereof, nor is there any allegation as to the number of shares owned by the fictitiously named stockholders of the Peter Nolan & Co. corporation, although the complaint does allege that the plaintiffs did not know the true names of the stockholders or the respective amounts of stock owned by said defendants. The complaint asks, in addition to the compensatory damages alleged, the additional sum of $100,000 as punitive damages.

The complaint was demurred to on the following grounds: (1) That several causes of action have been united and not separately stated. (2) There is a defect and misjoinder of parties plaintiff. (3) There is a defect and misjoinder of parties defendant. (4) The complaint does not state sufficient facts to constitute a cause of action.

The demurrer also charges that the complaint is uncertain, ambiguous, and unintelligible.

Under each stated ground of demurrer, the pleader sets forth in extended detail the considerations urged in support thereof.

The complaint as to each count is clearly vulnerable to attack on grounds of both general and special demurrer. There is no allegation as to what, if any, right, title, or interest plaintiffs or either of them had in the land upon which the attachment was levied. The allegation that plaintiff H. Goland “agreed to and did purchase the real property described and had entered into an escrow * * * for the purpose of consummating said sale and purchase, and had paid to the vendors the sum of $5,000 as a deposit and part payment on said property,” leaves much to be desired in the way of direct allegation as to what right, if any, plaintiffs did have in the land which was the subject of H. Goland's negotiations. Nor does it appear in what way plaintiffs' rights, if any, they had in the land attached, were interfered with by the levy. The only allegation bearing upon the effect of the suit and attachment is that “the purchase of said property could and was not consummated.” This statement is markedly lacking in the necessary allegations to show that the suit and attachment were the proximate cause of the failure to consummate the purchase. Indeed, no facts are stated from which it may be even inferred in what respect, if at all, the filing of the suit, or the levy of the attachment, or both, were the proximate cause of the alleged losses or any of them. Material allegations must be distinctly stated. People v. Jones, 123 Cal. 299, 55 P. 992; Clement v. Dunn, 114 Cal. App. 60, 299 P. 545.

As to the damages claimed because the purchase of the Fairview tract lot was not consummated, there is no allegation as to the market value of the lot, or the price at which plaintiffs had agreed to purchase it. Indeed, there is no allegation that the purported vendors ever agreed to sell this lot to plaintiffs. Nor does it appear that the plaintiffs could have borrowed $100,000 on the Fairview lot, even if the suit had not been filed and the attachment levied.

The same and additional defects appear in the allegations concerning the proposed exchange of the Fairview tract lot and the Rhode Island property.

The claimed damages are segregated into four items: (1) $5,000, which was paid to the vendor of the Fairview lot as a deposit, and forfeited when the purchase of “said property could not be consummated”; (2) $21,000 because “plaintiffs were unable to redeem” a certain trust deed of the face value of $26,000, which they had put up as collateral security for the loan of the $5,000 deposit on the proposed purchase of the lot in the Fairview tract; (3) $200,000, which is the profit plaintiffs allege they would have made had they consummated the purchase of the Fairview lot; and (4) $214,000, which is a profit plaintiffs alleged they would have made in a proposed deal wherein they expected to trade the Fairview lot, if and when acquired, and property in Rhode Island for real property situate in Orange and Imperial counties, Cal.

The alleged profits which constituted the larger part of the alleged damages are at best conjectural and remote. Profits on anticipated future deals are rarely allowed as damages, because of the difficulty, if not the impossibility, of adequately stating and proving what may result in the future, whether it be a loss or a profit. Damages that are recoverable in a tort action “must be the clear, proximate, and natural results of the wrong, and must be confined to the principal thing complained of, and to its naturally attendant consequences.” Section 3333, Civ. Code; Martin v. Deetz, 102 Cal. 55, 68, 36 P. 368, 372, 41 Am. St. Rep. 151. “Conjectural profits of the kind sought here cannot be recovered as damages in such cases. They must be damages capable of ascertainment by proof to a reasonable certainty. Uncertain and speculative profits, which might or might not have been realized, are not recoverable in such action.” Crow v. San Joaquin Irr. Co., 130 Cal. 309, 62 P. 562, 563, 1058; Friend & Terry Lumber Co. v. Miller, 67 Cal. 464, 8 P. 40; Gross v. Wright & Callender Bldg. Co., 116 Cal. App. 480, 2 P.(2d) 857; Martin v. Deetz, supra; Elder v. Kutner, 97 Cal. 490, 32 P. 563.

For the reasons indicated, as well as others that might be pointed out, we are of the opinion that the general demurrer, as well as the special demurrer for uncertainty, was propely sustained as to the first cause of action.

The second cause of action appears to be identical with the second cause of action in the first amended complaint, a demurrer to which cause of action was sustained without leave to amend. Including this second cause of action in the second amended complaint might well have justified the court in striking it from the complaint. However, no such action was taken and the complaint is before us with both causes of action to which the demurrer was again sustained. This second cause of action is defective, in that it contains no allegations as to the amount of authorized capital stock, or the amount of subscribed and issued capital stock of the defendant Peter Nolan & Co., a corporation. Nor does it allege that the fictitiously named stockholders were stockholders, or subscribers at the time the alleged cause of action arose. Roebling's Sons Co. v. Butler, 112 Cal. 677, 45 P. 6; San Francisco Commercial Agency v. Miller, 4 Cal. App. 291, 87 P. 630; Bidwell v. Babcock, 87 Cal. 29, 25 P. 752.

Apparently as an afterthought, appellants for the first time at the close of their reply brief suggest that if the demurrer was well taken, they should have been allowed to file a third amended complaint. It has been ruled that after a pleading has once been amended, the right to further amend lies wholly within the discretion of the court. Billesbach v. Larkey, 161 Cal. 649, 120 P. 31; Galusha v. Fraser et al., 178 Cal. 653, 174 P. 311.

Under the circumstances as disclosed by the record, we cannot say the trial court abused its discretion in sustaining the demurrers without leave to amend. An examination of the three complaints filed, as also the demurrers filed, discloses that the vulnerable points found in the second amended complaint appear in the original and the first amended complaints, notwithstanding the demurrers filed to each of the complaints were directed toward the weaknesses pointed out. The trial judge may well have concluded that inasmuch as the pleaders failed in their third pleading to correct the defects pointed out in their previous complaints, they were unable under oath to supply the matters necessary to a sufficient complaint.

Having concluded that the judgment must be affirmed for the reasons stated, it will serve no useful purpose to consider the other points raised by appellants.

Judgment is affirmed.

HAHN, Justice pro tem.

We concur: HOUSER, Acting P. J.; YORK, J.

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