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

MATHER et al. v. MATHER.

Civ. 13275.

Decided: April 10, 1947

Don Lake and James R. Jaffray, both of Los Angeles, for appellants. Marcel E. Cerf and Robinson & Leland, all of San Francisco, for respondent.

This appeal presents a tragedy of errors covering a period of more than twelve years, twelve years filled with technical arguments and decisions after which, for reasons which do not appear, some essential issues have still remained unsettled, though four prior judgments have been reversed on appeal in the Supreme Court.

On August 3, 1934, Mr. Mather began an action in the Los Angeles Superior Court against his former wife for rescission of a property settlement made in Hawaii in June, 1933, shortly before their divorce; in which settlement he gave her money, securities, and a one-half interest in an approved claim against the estate of Louis R. Greenfield of which a separate assignment was also made. That assignment transferred to Mrs. Mather ‘one-half (1/212) of all sums becoming payable to said grantor from said estate, both by way of principal and interest.’ In that action the administrators of the Greenfield estate were joined as defendants to have them enjoined from making further payments to Mrs. Mather on the assigned half of the claim. In their answer—subsequently held by the Supreme Court to be in the nature of an interpleader—the administrators disclosed that they were holding a sum of $12,549.60 on account of the Mather claim subject to the orders and direction of the court.

The complaint in this action of Mr. Mather, herein further referred to as the Los Angeles action, was in three counts: one based on fraud, the second on misrepresentation and the third on the ground that under the Hawaiian law a married woman at the time in question was not permitted to contract with her husband. Against the third cause of action a demurrer was sustained without leave to amend and on January 4, 1935, a judgment was entered that plaintiff take nothing by the third cause of action. After trial on the first two counts the court found for Mrs. Mather. Among other facts it was found that the allegations with respect to fraud and misrepresentation were untrue and that Mr. Mather on June 16, 1933, assigned to Mrs. Mather one-half of the title to the approved claim against the Greenfield estate, then amounting to $38,699 together with accrued interest. On March 14, 1935, judgment was entered to the effect that plaintiff take nothing by reason of his complaint, the recitals referring only to the trial on the issues joined by the first and second counts of the complaint. Although a temporary injunction restraining payment to Mrs. Mather was dissolved, no express directions were given to the administrators. Mrs. Mather demanded payment on the basis of the two judgments but Mr. Mather disputed their validity and opposed payment.

In April, 1935, the administrators filed in the San Francisco Superior Court an original action in interpleader, the action in which this appeal is taken. It will be referred to as the San Francisco action. Their complaint pleaded that the Mather claim against the estate had been paid in full except for the sum of $12,549.60, which it asked leave to deposit in court. Mr. and Mrs. Mather, Don Lake and Carl B. Rhodes, the latter as assignees of Mrs. Mather, were all made parties defendant. On August 15, 1935, the administrators were authorized to deposit the sum of $12,549.60 with the clerk, and on June 5, 1936, they were discharged from the case after the four defendants had filed cross-complaints and answers. Mrs. Mather filed her cross-complaint in October, 1935, alleging the assignment by Mr. Mather to her of half the Greenfield claim on which she had been paid but $7,441, and pleading the provision of the assignment directing the administrators ‘as moneys shall become due and payable and shall be paid on account of said obligation owing by the estate to A. W. Mather, to pay one-half (1/212) of all such moneys, both principal and interest, to Dorothy Devore Mather until the full amount of the indebtedness owing to said A. W. Mather shall have been completely and fully discharged. * * *’ She prayed that ‘a decree may be entered fixing and declaring the rights of Dorothy Devore Mather and said estate, and the amount remaining unpaid of principal and interest under said assignment and conveyance. * * *’ In November, 1935, Mr. Mather filed his cross-complaint in which he pleaded the invalidity of the whole settlement agreement—in this San Francisco action only on the ground of the Hawaii statute—alleged the facts as to all transactions that had taken place under this settlement, among which the fact that in June, 1933, the Greenfield estate was still indebted on the claim in the sum of $38,699 and that Mrs. Mather had received on account thereof $7,441, and claimed not only the amount in the hands of the administrators but also return of everything received by Mrs. Mather under that agreement and for all other relief that may be meet and just. He did not allege what he had received from the estate. Mrs. Mather also prayed for all other relief both as against the administrators and as against Mr. Mather. She stated that her rights were subject to the claims of her assignees Don Lake and Carl B. Rhodes, but Mr. Mather denied their rights alleging that the assignments to them were void, without consideration, and made for the purpose of hindering him.

In the meantime Mr. Mather had appealed from both Los Angeles judgments. In September, 1935, the appeal with respect to the first two counts, the judgment of March 14, 1935, was dismissed for failure to file a transcript; on March 17, 1936, the Supreme Court dismissed the appeal from the judgment of January 4, 1935, as to the third cause of action as an invalid piecemeal disposition of the action and not a final judgment. Mather v. Mather, 5 Cal.2d 617, 55 P.2d 1174.

In the San Francisco action Mrs. Mather contended that the judgment of March 14, 1935, the appeal from which was dismissed for failure to file a transcript, was a bar to all claims of her husband. The court decided in her favor and distributed all the fund held by the clerk of the court to her and to her assignees. However this judgment was reversed by the Supreme Court (Greenfield v. Mather, 14 Cal.2d 228, 93 P.2d 100) on the ground that the Los Angeles judgment of March 14, 1935, just as the judgment of January 4, 1935, only disposed of part of the case and was not final. The court mentioned (14 Cal.2d at page 232, 93 P.2d 100) that the Los Angeles proceedings were still pending and that appellant could proceed independently either in Los Angeles or in San Francisco. Mrs. Mather then proceeded in Los Angeles and moved the court to enter a final judgment adjudging that plaintiff Mr. Mather take nothing on any count, that the injunctions be dissolved and that the administrators pay to Mrs. Mather the total sum deposited in court. From judgment entered accordingly Mr. Mather appealed because allegedly this judgment deviated from the original findings in 1935, and because the motion was made on insufficient notice. The Supreme Court reversed on both grounds. Mather v. Mather, 22 Cal.2d 713, 140 P.2d 808. The court said (22 Cal.2d at page 718, 140 P.2d at page 810): ‘The judgment, being based upon a finding that Anna Inez Mather was the owner of one-half of the claim against the Greenfield estate, is erroneous in adjudging her to be the owner of the whole of said claim.’ The remark must be made that this statement of the Supreme Court seems somewhat elliptic. A decision which adjudges that Mrs. Mather was entitled to the whole of a balance of $12,549.60 based on a finding that she was the owner of half of a claim of $38,699 plus interest is not necessarily erroneous. We presume that the actual intention of the Supreme Court was the same as that expressed more amply in the prior opinion before rehearing (Mather v. Mather, Cal.Sup., 134 P.2d 795, 799), namely, that as the court had found that Mrs. Mather had but a one-half interest in the claim against the Greenfield estate, she ‘should be entitled to only one-half of any moneys in the hands of the administrators for payment of the claim, in the absence of anything in the record to the contrary.’

Thereafter Mr. Mather made a motion in the Los Angeles action for the entry of a judgment in accordance with the decision of the Supreme Court which required (22 Cal.2d at page 719, 140 P.2d at page 811): ‘the entry of a judgment properly responsive to the prior rulings of the trial court herein—the findings made at the conclusion of the trial on the first two counts and the order sustaining the demurrer to the third count of the complaint—(which) would simply serve to complete the judgment roll in effectively disposing of all the issues in controversy by a single pronouncement of decision as to the entire case.’ Mrs. Mather, however, now desired a judgment not directing what should be done with the amount paid into court. She had in the Los Angeles proceeding only defended the validity of the property settlement and assignment and had evidently not been aware that the character of the answer of the administrators might be considered to require her to litigate the extent of her claim to the fund in their hands then and there, but had expected to litigate this point in the original interpleader action in San Francisco. The Los Angeles court again followed Mrs. Mather and on November 1, 1943, entered a judgment which did not make any reference to the disposition of the claim against the Greenfield estate. The Supreme Court again reversed (Mather v. Mather, 25 Cal.2d 582, 154 P.2d 684, 686) ‘with directions to the trial court to bring this case to a proper termination by including in its judgment a provision that the sum now held on account of the claim against the Greenfield estate be paid as follows: one-half to the plaintiff, A. W. Mather, and one-half to the defendant Anna Inez Mather.’

The court mentions (25 Cal.2d at page 585, 154 P.2d at page 685) that Mrs. Mather by ‘a complicated mathematical argument’ tries to show that she is entitled to the whole amount of said claim, but that this point had already been finally decided in the 22 Cal.2d decision. At the same time the Supreme Court rejected definitely Mr. Mather's argument of the invalidity of the settlement under the Hawaii statute.

On March 29, 1945, the Los Angeles court entered its judgment providing:

‘It is Hereby Ordered, Adjudged and Decreed 1. That the sum of $12,549.60 admittedly in the hands of the Estate of Louis R. Greenfield and Edna Greenfield, as administratrix, and Herman Wobber and Hugo D. Keil, as administrators, thereof, subject to the order and directions of the court in this action, be paid as follows: One-half of the said sum of $12,549.60 to plaintiff, A. W. Mather, and one-half thereof to defendant, Anna Inez Mather:

‘2. That otherwise than as above provided, plaintiff take nothing by his complaint.’

After this judgment had become final without appeal, Mr. Mather filed with leave of the court a supplemental cross-complaint in the San Francisco action in which he pleads this final judgment as a bar in this, the San Francisco action. Mrs. Mather and the two assignees filed their joint answer on July 5, 1945, wherein they pleaded the assignment of one-half of the claim against the Greenfield estate; that that claim inclusive of interest amounted to $46,259.65, of which Mrs. Mather was entitled to one-half or $23,129.82 1/212; that there had been paid to Mr. Mather on account of the claim $7,441 on September 3, 1935, $5,581 on January 1, 1934, $6,327.50 on March 2, 1934, and $6,919.55 on July 24, 1934, as against only $7,441 paid to Mrs. Mather on September 5, 1933; that therefore Mrs. Mather was still entitled to $23,129.82 1/212 minus $7,441 which equals $15,688.82 1/212; that Mr. Mather and his attorneys had concealed from Mrs. Mather and from the courts that Mr. Mather's share had been fully paid and more than that before the commencement of any action between the parties and that by certain fraudulent misrepresentations in the pleadings in the Los Angeles action, they had led the courts to assume, without any evidence as to this point having been received, that the payments to each of the parties had been equal. The prayer was for judgment against Mr. Mather for $15,688.90.

At the trial on June 25, 1945, Mrs. Mather offered in evidence accounts, reports and vouchers of the administrators of the Greenfield estate showing all the payments to Mr. and Mrs. Mather stated above and mentioning under creditors Dorothy Devore Mather, held in trust pending suits $11,908.50, interest due $641.10, unpaid $12,549.60. However, objections to this evidence were sustained on the ground that the matter was concluded by the last Los Angeles judgment.

Without hearing any evidence the court found that the sum of $12,549.60 mentioned in the Los Angeles judgment of March 29, 1945, is the same as the sum paid to the clerk of the San Francisco court and that by that judgment it is finally adjudicated that Mr. Mather is entitled to one-half of that sum plus certain costs. The judgment provides only for disposition of that sum in accordance with that Los Angeles judgment.

Mrs. Mather and her assignees contend on appeal that the court had failed to find on material issues joined by the pleadings, both as to the rights of the assignees and as to those of Mrs. Mather as against Mr. Mather and that the court erred in refusing to ascertain an account between the parties regarding the distributions between them of the original claim against the Greenfield estate and in rejecting evidence regarding the payments made in that respect.

It is important therefore to determine just what issues have been tendered for decision in this San Francisco action and what has been heretofore adjudicated.

The issues joined were certainly not restricted to the disposition of the balance of $12,549.60 only. Even the original cross-complaints of the respective parties and their answers thereto, as stated herein before, tendered the issues of the validity of the whole property settlement and of the respective rights of Mr. and Mrs. Mather in case of validity or invalidity of that settlement. Although in that state of the proceedings the claims of Mrs. Mather as to Mr. Mather were still vague; they were made precise and stated with sufficient exactitude in Mrs. Mather's pleading of July 5, 1945, entitled answer to supplemental cross-complaint of A. W. Mather. In that pleading Mrs. Marther set up the respective payments received by the parties on account of the Greenfield claim and sought a judgment in the nature of an accounting, on the basis that each of the parties was entitled to an equal half of that claim. The record does not show any objection to the filing of this pleading, nor any motion to strike out any part of it, nor any request that the submission of the cause be set aside. The trial judge mentions it as a basis for his findings. Under these circumstances we need not and cannot review whether this method of procedure was regular or not. Groom v. Bangs, 153 Cal. 456, 459, 96 P. 503; Eldridge v. Mowry, 24 Cal.App. 183, 190, 140 P. 978; Stoops v. Pistachio, 70 Cal.App. 772, 777, 234 P. 423. We hesitate the less to consider this pleading as regular and determinative of the issues, as liberality in permitting amendments is favored in furtherance of justice and in the present case no justice between the parties can be done without an accounting of the respective payments they received. Appellants' allegations and offers of proof, which seem not to be seriously denied show that Mr. Mather surreptitiously received $18,528.05 more than Mrs. Mather, whereas both should have received equal amounts. The amending or supplementing of the pleadings does not cause any prejudice to respondent ‘unless the deprivation of an opportunity to defeat a just claim on unsubstantial and technical grounds can be said to be prejudicial. The rule is to the contrary.’ San Joaquin Valley Bank v. Gate City Oil Co. 170 Cal. 250, 253, 149 P. 557, 558. Even if the affirmative relief prayed for is in the character of a cross-complaint, the pleading contains sufficient allegations for such a cause of action. If such is the case it is immaterial that the appellants designate it an answer. Holmes v. Richet, 56 Cal. 307, 311, 38 Am.Rep. 54; Hanes v. Coffee, 212 Cal. 777, 780, 300 P. 963.

We are therefore satisfied that the evidence offered was within the issues raised by the pleadings and admissible if the trial of these issues was not barred as res judicata, as held by the trial court. However, we do not find any prior adjudication with respect to final accounting between the parties of the payments they received on the claim. Three issues can be considered as finally adjudicated:

1. That the property settlement and assignment were valid. It was so held in all decisions in the Los Angeles action and finally decided by the Supreme Court in 25 Cal.2d 582, 587, 154 P.2d 684, and in the decision of the Los Angeles court of March 29, 1945, holding that—except for half of the amount in the hands of the administrators—plaintiff take nothing by his action attacking the validity of the assignment.

2. That appellant was entitled to one-half of the title to the approved claim against the Greenfield estate at the time of the assignment amounting to $38,699 together with accrued interest. It was so found by the Los Angeles court in the findings of March 14, 1935, and on these findings the Supreme Court in 22 Cal.2d 713, 718, 140 P.2d 808, based its reversal of a judgment, adjudging Mrs. Mather to be entitled to the whole of the moneys in the hands of the administrators.

3. That the amount in the hands of the administrators be paid one-half to appellant, one-half to respondent Mather. It was so ordered in the judgment of March 29, 1945, responsive to the express direction to that effect of the Supreme Court in 25 Cal.2d 582, 587, 154 P.2d 684. In her pleading of July 5, 1945, appellant attacked the validity of this last adjudication on the ground of fraudulent misrepresentations of Mr. Mather and his attorneys which had led the courts to assume that the payments to each of the parties had been equal. The trial court found in this respect. ‘Each of the allegations of the answer of cross-defendants Dorothy Devore Mather, Carl B. Rhodes and Don Lake to the supplemental cross-complaint of A. W. Mather, which purports to contradict or impeach the adjudication, purport or effect of said judgment of March 29, 1945, is untrue, including, without affecting the generality of the preceding portion of this finding, Paragraphs XX, XXII, XXIII, XXV, XXVII, XXVIII, XXX, XXXI, XXXIII, XXXV and XXXVI.’

There may be some doubt whether this finding is sufficiently definite to support a judgment (Krug v. F. A. Lux Brewing Co., 129 Cal. 322, 61 P. 1125), but we do not think that the issue presented by the alleged misrepresentations is material and therefore neither the truth of these allegations nor the question whether they can form a basis for a collateral attack on the judgments in the Los Angeles action needs decision. We do not find any prior adjudication, either express or implied, that the payments made to each of the parties on the Greenfield claim have been equal. No prior equal payments need be assumed to justify equal division of the moneys in the hands of the administrators. As pointed out in the prior opinion of the Supreme Court, before rehearing, 134 P.2d 795, the indenture of assignment provided that each separate amount that became payable should be divided equally. In the Los Angeles action no accounting of the total amounts received on the claim was at issue at all. The only original issue was the validity of the property settlement and assignment. Incidentally the administrators brought up the disposition of the money in their hands. To decide their interests in this amount the parties could have investigated all prior payments; they were under no duty to do so and they did not do so. No allegations whatever as to prior payments were made in the Los Angeles court before trial; no evidence as to it was offered at the trial there, nothing as to it was in the record that went up to the Supreme Court. Before rehearing, 134 P.2d 795. The decision equally to divide the moneys in the hands of the administrators which was before the court as a separate specific issue is supported by the agreement of the parties independent from the equality of the prior payments.

‘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.’ Section 1911, Code of Civil Procedure. In Title Guarantee & Trust Co. v. Monson, 11 Cal.2d 621, 631, 81 P.2d 944, 949, it is said: ‘Although it is a general rule that a judgment operates as an estoppel to the maintenance of a subsequent action as between those persons who were parties to the former action, not only as it may affect each issue that actually was raised in such action, but also as to every other issue which properly might have been litigated and determined therein, nevertheless, in each of many jurisdictions, exceptions to that rule have been announced, which include a situation wherein it has appeared that the questioned issue in the subsequent action was neither germane to nor essentially connected with the actual issues that were raised in the former action, even though, with propriety such issues might have been presented therein. 34 C.J. 818, 823. Nor is the rule applicable to rights, claims or demands, although growing out of the same subject matter, but which constitute separate or distinct causes of action, and which were not put in issue in the former action. 34 C.J. 823.’ See also our decisions in Schumacker v. Industrial Acc. Com., 46 Cal.App.2d 95, 98, 115 P.2d 571, and Progressive Collection Bureau v. Whealton, 62 Cal.App.2d 873, 877, 145 P.2d 912.

The trial of the issue in the nature of an accounting of prior payments, tendered by the pleadings was therefore not barred by any prior adjudication and the evidence offered in that respect was admissible.

Neither has there been any prior adjudication of the rights of the assignees who had not been made parties to the Los Angeles action.

The trial court should accept the final judgment of the Los Angeles court as res judicata of the three issues there decided—that the property settlement and assignment are valid and that each party is entitled to one-half of the claim and one-half of the sum on deposit. It should then determine how much of the claim has been paid to each and enter a judgment which will give to each their respective one-half in accordance with the former judgment. If it is found that respondent has received more than his share the appellants should have a lien on that portion of the deposit awarded to respondent under the Los Angeles judgment. The rights of the assignee appellants herein should be finally determined.

Judgment reversed.

NOURSE, Presiding Justice.

GOODELL and DOOLING, JJ., concur.

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