NORTH v. CECIL DE MILLE PRODUCTIONS

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District Court of Appeal, First District, Division 2, California.

NORTH et al. v. CECIL B. DE MILLE PRODUCTIONS, Inc.a1

Civ. 9309.

Decided: June 13, 1934

Walter J. Little and W. Eugene Craven, both of Los Angeles, for appellants. Neil S. McCarthy, Earl L. Banta, and Howard P. Hall, all of Los Angeles, for respondent.

In the lower court appellants, as receivers for the Elmer Company, Limited, joined with the Elmer Company, Limited, as plaintiffs in a complaint against respondent corporation setting forth four separate and distinct causes of action for alleged violations of the Usury Law. To that complaint respondent filed an amended demurrer claiming misjoinder of parties plaintiff, and a general demurrer to each of said four causes of action. The demurrer was sustained. Respondent having failed to amend within the ten days allowed, judgment was entered dismissing the action as against the appellant receivers, from which judgment this appeal is taken.

The questions presented in this appeal are: Is a receiver for a corporation appointed by a federal court the “personal representative” of such corporation within the meaning of section 3 of the Usury Law (Stats. 1919, p. lxxxiii); was there a misjoinder of parties plaintiff, in that the receivers were joined as plaintiffs with the corporation; and do the respective counts in the complaint each state a cause of action?

1. The first question is answered in the affirmative by our Supreme Court in Scott v. Hollingsworth, 215 Cal. 314, 9 P.(2d) 836, 82 A. L. R. 995, a case decided after judgment in this case in the lower court. It was there held that for the purpose of enforcing any debt or penalty arising out of the provisions of the Usury Law general receivers appointed for a corporation by a federal court were the “personal representatives” of the corporation within the meaning of the said Usury Law and as such were entitled to maintain the action.

2. Whether there was a misjoinder of parties plaintiff, namely, whether the corporation as such was a necessary party to this action, is not before us. The Elmer Company, Limited, is not a party to this appeal. The receivers, being the “personal representatives” of the corporation within the meaning of the Usury Law, were entitled to maintain the action. Scott v. Hollingsworth, supra. The trial court should not have required the receivers to file an amended complaint nor should judgment have been entered against them unless the complaint failed to state a cause of action. Section 578, Code of Civil Procedure, provides: “Judgment may be given for or against one or more of several plaintiffs * * * and it may, when the justice of the case requires it, determine the ultimate rights of the parties on each side, as between themselves.” Our Supreme Court has construed the meaning of this section in Gillespie v. Gouly, 152 Cal. 643, 93 P. 856, holding that where a clear right of action is stated in some of the plaintiffs it would seem that judgment should not be rendered for the defendant even though proper objection to the misjoinder is made but the action should be dismissed as to the party improperly joined.

3. As to the first cause of action set forth in the complaint, we find that the contract alleged to be usurious was entered into on the 25th day of January, 1930, and that on that same day the claimed usury was paid or delivered to respondent, and we further find that the complaint was filed on March 7, 1931, more than a year after the payment or delivery of the alleged usury. Section 3 of the Usury Law (St. 1919, p. lxxxiii) provides that an action thereunder for such usury “shall be brought within one year after such payment or delivery.” Therefore, the demurrer to the first cause of action was properly sustained.

Where a statute creates a right that did not exist prior to its enactment and also prescribes a remedy, the procedure for such remedy is exclusive. People v. Craycroft, 2 Cal. 243, 56 Am. Dec. 331; Roberts v. Landecker, 9 Cal. 262; County of Monterey v. Abbott, 77 Cal. 541, 18 P. 113, 20 P. 73; Russell v. Pacific Railway Co., 113 Cal. 258, 45 P. 323, 34 L. R. A. 747; In re Estate of Ward, 127 Cal. App. 347, 15 P.(2d) 901.

The other three counts in the complaint are substantially stated in like language except as to dates and the particular transaction. The main contention of appellants is that some of the allegations of these respective causes of action are set forth upon “information and belief.” Each cause of action shows that the facts alleged were not within the actual knowledge of the receivers and must have been based upon statements made to them by others. Therefore, it was proper for the receivers to make the allegations upon information and belief. A pleader may allege upon information and belief “matters which are peculiarly within the knowledge of the other party, or which he can learn only by statements made to him by others,” and it was so stated in the syllabus in Campbell-Kawannanakoa v. Campbell, 152 Cal. 201, 92 P. 184.

Respondent further claims that these causes of action are defective in that it is not alleged as to any one of the causes of action that there was a corrupt intent to evade the provisions of the usury act. This contention is answered by the very case relied upon by respondent, namely, Martin v. Kuchler, 212 Cal. 536, at page 539, 299 P. 52, 53: “The usury law as interpreted by this court * * * forbids the making and entering into such a transaction, declaring the same to be usurious, and imposes the penalty provided in said statute for the collection of interest according to the terms and conditions of such a transaction. This being so, the intent of both or either of the parties engaged in such a transaction is immaterial for the reason, if for none other, that it is a conclusive presumption under subdivision 1 of section 1962 of the Code of Civil Procedure that a malicious and guilty intent is presumed from the deliberate commission of an unlawful act.”

The judgment of the lower court in so far as it sustained the general demurrer to the first cause of action is affirmed, and in so far as it sustained the demurrer against appellants for the misjoinder of parties plaintiff, and sustained the general demurrer as against appellants to counts 2, 3, and 4, is reversed with instructions to the lower court as to counts 2, 3, and 4, to enter its order overruling the demurrers.

SCHMIDT, Justice pro tem.

We concur: NOURSE, P. J.; STURTEVANT, J.

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