ATKINSON v. SUPERIOR COURT IN AND FOR COUNTY OF LOS ANGELES

Reset A A Font size: Print

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

William (Bill) ATKINSON, Jack Barsby, Alfred E. Brain, Clarence (Pete) Carpenter, Russell A. Cheever, Harriet Crawford, Individually and on behalf of all other instrumental musicians similarly situated, Petitioners, v. The SUPERIOR COURT of the State of California, IN AND FOR the COUNTY OF LOS ANGELES, Respondent.

John H. ANDERSON, Jr., Burnett F. Atkinson, Robert Bain, Edwin Vance Beach, Roland E. Bundock, Lawrence B. Bunker, George Callender, individually and on behalf of all other instrumental musicians similarly situated, Petitioners, v. The SUPERIOR COURT of the State of California, IN AND FOR the COUNTY OF LOS ANGELES, Respondent.*

Civ. 22272, 22273.

Decided: April 24, 1957

John W. Preston, Los Angeles, Harold A. Fendler, Daniel A. Weber, Beverly Hills, for petitioners. O'Melveny & Myers, Homer I. Mitchell, Charles G. Bakaly, Jr., Bodkin, Breslin & Luddy, Mitchell, Silberberg & Knupp, Loeb & Loeb, Averill C. Pasarow, Los Angeles, for real parties in interest.

These petitions for writ of mandate present the same legal questions and were heard together, as were the actions in the superior court from which the present applications stem.

They deal with the elastic fictional concept of a jurisdictional res consisting of a debt or contract obligation, and require the determination of the situs to be imputed to it.

The claim of plaintiffs in each action is that defendant American Federation of Musicians of the United States and Canada, an international labor union, acting as their exclusive bargaining agent, defrauded them by making agreements with their employers which divert to one Samuel R. Rosenbaum, as trustee, moneys earned and owing to plaintiffs as wages for services rendered. The trial court held that Rosenbaum, as trustee, is an indispensable party to each action and, as he has not been served personally in this State, the court has no jurisdiction to grant a preliminary injunction or appoint a receiver as a means of sequestering and ultimately determining title to certain moneys confessedly owing by defendant employers and under their agreements payable to said Rosenbaum as trustee.

Atkinson Complaint

The Atkinson case is a representative action brought by 22 instrumental musicians on behalf of all such employees (about 2400 in number) presently or previously hired by defendant motion picture companies. Defendants comprise four classes, (1) American Federation of Musicians of the United States and Canada (hereinafter designated as Federation), (2) numerous motion picture producing companies, e. g., Paramount Pictures Corporation, Loew's, Incorporated, Republic Productions, Inc., Republic Pictures Corporation, (3) numerous corporations engaged in telecasting motion pictures, and (4) Samuel R. Rosenbaum, as trustee.

It is alleged that defendant Federation is an international labor union, that plaintiffs are members of same and of its local known as Musicians' Mutual Protective Association Local No. 47, A. F. of M.; that plaintiffs and those whom they represent are and were employed by defendant motion picture companies as musicians in production of pictures; that Federation is and was their exclusive bargaining agent and as such negotiated with employers the agreements involved in the action. Such agreements were made in 1952 and 1954 and provided that in the event of re-use of any motion pictures on television the employer should make certain ‘re-use payments' (as the pleader designated them) directly to the employee musicians of various classes, viz., $25 to a musician, $50 to a leader, $50 to a contractor, $75 to an arranger, and $25 to a copyist. Such reuse payments were intended and understood to be ‘additional wages or compensation to the musicians involved.’

Contemporaneously with said 1952 and 1954 agreements the defendant motion picture companies were required by Federation to enter into trust agreements with said Rosenbaum, as trustee, which required them to pay to him in that capacity five per cent of the gross revenues from the use of motion pictures on television (designated in the complaint as ‘royalty payments'), which said moneys were to constitute a ‘Music Performance Trust Fund’ and be used in arranging the presentation of personal performances by instrumental musicians in such areas throughout the United Stated and Canada as in the judgment of the trustee would contribute to public knowledge and appreciation of music.

Re-use payments were made to the individual employees until June, 1955, when an amendatory agreement was made by Federation with the employer companies. This was done pursuant to resolution of the International Executive Board of Federation authorizing the president, James C. Petrillo, ‘to take such measures as he might deem fit to cause to be diverted from the plaintiffs to said trust fund the re-use payments aforesaid, upon the ostensible or alleged ground that the musicians who rendered their services in such motion pictures could not be located, well knowing that in truth and in fact said excuse was untrue and a sham, pretense and contrivance adopted by the Federation to effectuate their aims, purposes and intentions aforesaid and hereinafter alleged.'1 The 1955 agreement thus procured worked a diversion of all accrued and future re-use payments into the trust fund held by Rosenbaum and above described. It is alleged that ‘Petrillo and the International Executive Board were actuated by the selfish aim and purpose of perpetuating themselves in office and of maintaining their hold and control over the affairs of the Federation; and in furtherance thereof, used the medium of such trust fund payments to win the support of officials of the Federation's locals and member musicians throughout the United States and Canada, who vastly outnumber the plaintiffs and who were not and are not employed by the motion picture companies, and who make little or no contribution whatever to said trust fund, but who nevertheless benefit as recipients of the trust fund payments made or to be made by the defendant trustee, and whose continued support was and is courted and coveted by Petrillo and the International Executive Board at plaintiffs' expense in the manner aforesaid.’ Approximately $1,495,000 in re-use payments have been diverted from plaintiffs into said trust fund since June 15, 1955, and another $5,000,000 will be so diverted unless injunctive relief is granted, so it is alleged. The re-use payments received by the trustee average $175,000 a month. The trust instrument requires that 90 per cent of the existing fund, not already budgeted for expenditure, by disbursed during each period of 12 months. The number of musicians entitled to said re-use payments is approximately 2,400, and they comprise less than one per cent of the total Federation membership. ‘The entire membership of the Federation consists of approximately 260,000 members. Of this number, not more than 53,000 or less than 21% of the membership of the Federation depend for a livelihood solely upon musical employment, and more than 50% of the total membership are not dependent, wholly or in part, upon such employment; 35% or 88,000 depend for a livelihood entirely on non-musical activities; and 15.4% or 39,000 are fully retired.’

Plaintiffs complain that a fraud has been committed upon them by their agent and a constructive trust in their favor exists with respect to moneys now due from defendant companies and remaining unpaid.2 The petition avers that various companies stipulated at the hearing below that substantial sums of money owing by them had accrued prior to December 31, 1956, and remained unpaid. Also, that Republic Productions, Inc. and Republic Pictures Corporation, conceded that the sum of $67,000 for re-use payments had accrued under their agreements, together with another $126,000 under the trust agreement, assuming its validity (apparently referring to ‘royalty payments'). All such moneys are payable under the agreement to trustee Rosenbaum who maintains his office in New York City and deposits all receipts in eastern and Canadian banks, none of it in California. The first cause of action3 seeks declaratory judgment: ‘Declaring that the provisions thereof requiring the making of such re-use payments and royalty payments to the trust fund and the diversion thereof to the defendant trustee to be invalid and unlawful, including any and all proceedings and measures taken by the defendants in pursuance thereof; * * * Enjoining the defendant motion picture companies and television users from making any further wage increase payments or royalty payments to said trust fund or the defendant trustee; and requiring that the same be paid to those of the plaintiffs who are entitled thereto, or in the case of any deceased musician, to his widow or estate; * * * Requiring that during the rendency of this action any and all such re-use payments or royalty payments in the possession, custody or control of the defendant trustee, or any which may be due or accrue hereafter be impounded; and that the defendant trustee and defendant motion picture companies and television users transmit the same to a receiver to be appointed by the Court for such purposes, or to pay the same directly into Court.’ Forty-seven defendant California corporations, 24 corporate defendants doing business in California but organized elsewhere, and five partnerships were personally served in this state. Rosenbaum, being resident in New York, was served pursuant to court order by delivery of summons and complaint and motion papers within the State of New York. He has not appeared.

Plaintiffs immediately sought a preliminary injunction against defendant motion picture companies making any payments, then or thereafter payable, to defendant Rosenbaum and moved for the appointment of a receiver to take into possession and control all funds and moneys then payable or thereafter payable to defendant Rosenbaum, as trustee, under any or all of the above mentioned agreements, and for other injunctive relief.

As previously stated, the trial judge held that Rosenbaum is an indispensable party, without whose presence (in the absence of personal service) an injunction or receivership cannot be granted. This for the reason that the obligation owing from a defendant company, under its agreement, for accrued re-use payments does not constitute a res within this jurisdiction sufficient to support an action in rem, or quasi in rem.

Anderson Complaint

The Anderson complaint presents the same problems. Its averments closely parallel those of Atkinson. Some 91 instrumental musicians, employed by defendant recording companies in the producing of phonograph records, bring a representative action on behalf of about 6,000 fellow workmen similarly situated. Defendants are Federation, some 87 recording companies doing business in California, and said Rosenbaum as trustee. Plaintiffs' membership in Federation and its Local No. 47 is alleged. It is also averred that Federation, as exclusive bargaining agent for musicians engaged in making recordings, effectuated in December, 1948, an agreement with defendant recording companies for a term ending December 31, 1953, which governed wages, hours and other conditions of employment and had a specific wage scale attached thereto. As a part of said 1948 negotiation the employers were required to enter into a trust agreement with Rosenbaum which bound them to pay to him, as trustee, for use as a Music Performance Trust Fund, certain percentages of their gross revenues derived from sales of recordings (‘royalty payments'), said fund to be expended in the manner described in the above resume of the Atkinson complaint.

In January, 1954, Federation, as such exclusive bargaining agent, negotiated with the employers for the grant of wage increases for the musicians (plaintiffs and those represented by them), urging that they were entitled to increases over the existing 1948 scale; the recording companies agreed to make wage increases of ten per cent above the existing scale for the first two years of the new agreement, plus further increases aggregating 21 per cent above the existing scale for the last three years, i. e., from January 1, 1956 until December 31, 1958. It was orally agreed that these increases be paid directly to the musicians, but when the arrangement was reduced to writing Federation required the companies to enter into a trust agreement with defendant Rosenbaum bearing date of January 1, 1954, and providing for payment of moneys representing said increased wages into a fund which was substantially the equivalent of the Music Performance Trust Fund of the Atkinson case, to be disbursed in the same manner and for the same purposes. The petition for mandate alleges: ‘During the negotiations for the 1954 phonograph record labor agreement, Mr. Conkling [then Vice President of Capitol Records] testified that the employers ‘recognized the need for some increase to their musician employees'; that the defendant phonograph recording companies recognized the ‘need to both reward them and maintain their morale in the studio’ and to provide them with incentive ‘but that under no circumstances could we consider any additional contributions to the fund’ (Conkling Deposition, pages 48–50), but that Petrillo, as President of the defendant Federation ‘more or less laid it on the line to us' and required as a condition to not calling a strike that the same amount of money which the defendant recording companies were willing to pay to their musician-employees as wage increases ‘be paid to the trust fund instead of paying it directly to the musicians' (Conkling Deposition, pages 53–55); and that solely by reason of Petrillo's demand the defendant recording companies finally agreed to the ‘application to the trust fund’ of the musicians' wage increases, although the amounts paid to the trust fund are still reflected on the recording companies' books as ‘cost for musicians' paid out in connection with the accompaniment of recording artists (Conkling Deposition, page 61).’

Since January, 1954, said moneys have been paid to the trustee and disbursed by him, and the employers have paid the musicians under the 1948 wage scale and nothing more. Approximately $1,737,900 of ‘wage increase payments' have been paid to said trustee and unless enjoined the companies will pay an additional $2,250,000 of such moneys to the trustee during the term of the 1954 contract. The petition further says it was stipulated below that various defendant recording companies owed substantial sums which were then payable; Fidelity and Specialty Records, Inc. conceded that it owed $9,000 which would be payable on February 15, 1957; Liberty Records, Inc. stated that $10,661.64 plus $6,731.98 had accrued under the agreements for the six months' period ending December 31, 1956. Plaintiffs and the musicians represented by them in the action comprise only 2 1/2 per cent of the membership of Federation, and receive only a minimal indirect benefit from expenditure of said funds. It is alleged that all this was an abuse of the bargaining power by Federation, a fraud upon plaintiffs. Also, that ‘Federation so acted with the aim and purpose of, and it pursued a plan and scheme of, utilizing and bargaining power of the class or unit for whom the Federation was bargaining, i. e., the plaintiffs in this action, and of trading away the just wage and property interests of the plaintiffs for services actually rendered and to be rendered by them, for the purpose of benefiting others than the plaintiffs through the device of such trust fund payments; and the Federation abused its said duties and responsibilities and its said fiduciary relationship toward the plaintiffs in that all of the acts, omissions, measures and conduct on the part of the Federation hereinbefore and hereinafter alleged were motivated by the Federation's hostility and opposition to the plaintiffs and their interests. * * * The Federation arbitrarily decided and decides whether or when wage increments or increases which the defendant recording companies were and are prepared to pay for the plaintiffs' services shall actually be paid to the plaintiffs or to the trust fund at the plaintiffs' expense, with virtually no corresponding benefits to the plaintiffs for such losses, either in the form of trust fund payments or otherwise.’

The labor agreement, paragraph 14(a), provides that a breach of the trust instrument shall at the option of Federation render ‘of no further force and effect for the duration of your failure to perform such obligations,’ any of the provisions of the labor agreement. It is also provided in the same paragraph that the Federation shall have the right at all reasonable times to ‘examine and audit your records and accounts concerning all transactions involving your sale of phonograph records which you shall keep pursuant to said Trust Agreement, and such other records and accounts as may be necessary;’ all to the end of verifying and ‘determining the amount of payments due by you thereunder.’

The course of this case was the same as Atkinson. It appears that 32 defendant California corporations, 32 defendants doing business in California as individuals or partnerships, and 23 defendant corporations organized elsewhere but doing business in California, have been served or can be served in this jurisdiction. The prayer of the complaint seeks judgment: ‘Declaring that the provisions of said 1954 phonograph record labor agreement and 1954 phonograph record trust agreement requiring the making of such wage increase payments and royalty payments to the trust fund and the diversion thereof to the defendant trustee are invalid and unlawful; * * * Adjudging that any and all of such wage increase payments hereafter accruing in connection with, or deriving from, the rendition of any services by the plaintiffs, are and shall be the property of, and shall belong to, those of the plaintiffs who have rendered such services in connection with such phonograph recordings made pursuant to said 1954 phonograph record labor agreement, and adjudged that the plaintiffs have a property right therein.’ Plaintiffs sought a preliminary injunction and the appointment of a receiver, both of which were denied by the trial judge solely because of his conclusion that jurisdiction is lacking due to failure to serve defendant Rosenbaum within the State of California. In so ruling the court said that ‘if the court had jurisdiction to do so, the exercise of a sound discretion would probably require the granting of a preliminary injunction and perhaps the appointment of a receiver.’

The Law

The instant petitions seek mandate commanding the superior court to assume and exercise jurisdiction with respect to the applications for preliminary injunction and appointment of a receiver. Mandamus is the appropriate remedy, Financial Indem. Co. v. Superior Court, 45 Cal.2d 395, 399, 289 P.2d 233, and we therefore proceed to the merits.

Since Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, was decided in 1878, and indeed before that time, see Cooper v. Reynolds, 1870, 10 Wall. 308, 19 L.Ed. 931, it was and has been recognized that due process (as reflected in the Fourteenth Amendment and independently thereof) has been accorded a nonresident defendant whose property, situated within the forum of suit, has been seized by the court, actually or constructively, either as the object of the action or in a proceeding such as attachment ancillary thereto, when he has been served by publication in such manner as to be calculated to give him reasonable notice of the opportunity and necessity of appearing and defending. ‘The fundamental requisite of due process of law in judicial proceedings is the opportunity to be heard.’ Baker v. Baker, Eccles & Co., 242 U.S. 394, 403, 37 S.Ct. 152, 155, 61 L.Ed. 386. But the jurisdiction so acquired through substituted service extends only to property thus seized in the forum rei sitae. If the action is originally in personam, a seizure such as an attachment converts it into one quasi in rem upon failure of the nonresident befendant to appear, and narrows the proceeding to one directed at disposition of the property so drawn into the custody of the court. Quoting from the Cooper case, supra, Pennoyer v. Neff, supra, says, 95 U.S. at page 725: “If the defendant appears, the cause becomes mainly a suit in personam, with the added incident, that the property attached remains liable, under the control of the court, to answer to any demand which may be established against the defendant by the final judgment of the court.

‘But if there is no appearance of the defendant, and no service of process on him, the case becomes in its essential nature a proceeding in rem, the only effect of which is to subject the property attached, to the payment of the demand which the court may find to be due to the plaintiff.”

The property within the jurisdiction and so seized is subject to the judgment and the owner is bound by it so far as disposition of that property is concerned. The fact that he is an indispensable party or that he has been served constructively becomes inconsequential.

In the instant cases the res which will sustain constructive service on defendant Rosenbaum must be found, if at all, in the contractual obligation of the employer defendants and accrued payments due and to become due thereunder. It is admitted that there are substantial sums now owing by employer defendants who are within this jurisdiction, able and ready to pay the same. Witness the stipulation that the Republic defendants are holding $67,000 had $126,000 which will be paid to the trustee if the agreement so to do is held valid. The problem at bar reduces itself to the question whether a debt owing by a resident and payable to a non-resident who refuses to appear is a res within this jurisdiction of such substantiality as to support a judgment disposing of that debt upon the basis of constructive service. Defendants assert that it is not, because plaintiffs seek to establish a right to same which resides in themselves as a result of the fraud practiced upon them and do not claim under or through the absent trustee. They assert that an attachment of the debt in an action against the absentee claimant would be valid and to the extent of that property would sustain a judgment based upon the constructive seizure. They argue that this is so because the attaching creditor claims under and through the absentee and admits he is the owner of the debt. They say that the rule does not apply when the plaintiff asserts a right in himself adverse to the non-resident claimant and seeks an adjudication that he, the plaintiff, is the true owner of the debt. The basis of the distinction is not clear on principle and rests upon a ruling of the United States Supreme Court in an interpleader suit later discussed herein. New York L. Ins. Co. v. Dunlevy, 241 U.S. 518, 36 S.Ct. 613, 60 L.Ed. 1140. According to defendants we have a res within this jurisdiction in the one instance and no res in the other.

Being incorporeal, a debt is intrinsically incapable of a situs in fact. This is generally recognized in the authorities, which by a process of inclusion and exclusion have attributed a fictional situs to the debt or refused to do so according to the demands of practical justice in specific factual situations. ‘An intangible, unlike real or tangible personal property, has no physical characteristics that would serve as a basis for assigning it to a particular locality. The location assigned to it depends on what action is to be taken with reference to it.’ In re Estate of Waits, 23 Cal.2d 676, 680, 146 P.2d 5, 8. This last sentence explains the disparity in the decided cases.

The fictional nature of the situs of a debt has been recognized repeatedly by decisions of the United States Supreme Court which pass upon the presence or absence of due process.

Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023, holds that a debt may be attached not only at the domicile of the debtor but also in any jurisdiction where effective personal service of process may be made upon him. At page 223 of 198 U.S., at page 627 of 25 S.Ct., the court said: ‘In such case the situs is unimportant. It is not a question of possession in the foreign state, for possession cannot be taken of a debt or of the obligation to pay it, as tangible property might be taken possession of. Notice to the debtor (garnishee) of the commencement of the suit, and notice not to pay to his creditor, is all that can be given whether the garnishee be a mere casual and temporary comer, or a resident of the state where the attachment is laid.’

Chicago, R. I. & P. R. Co. v. Sturm, 174 U.S. 710, 715, 19 S.Ct. 797, 799, 43 L.Ed. 1144: ‘The essential service of foreign attachment laws is to reach and arrest the payment of what is due and might be paid to a nonresident to the defeat of his creditors. To do it you must go to the domicil of his debtor, and can only do it under the laws and procedure in force there. This is a legal necessity, and considerations of situs are somewhat artificial. If not artificial, whatever of substance there is must be with the debtor. He and he only has something in his hands. That something is the res, and gives character to the action as one in the nature of a proceeding in rem.’

Propper v. Clark, 337 U.S. 472, 488, 69 S.Ct. 1333, 1342, 93 L.Ed. 1480. Discussing a receivership of certain royalties owed by a resident of New York to a nonresident, the court said: ‘Pennoyer v. Neff merely holds that a personal judgment cannot be obtained against a nonresident on service by publication. It recognizes at page 733 of 95 U.S., that for an in rem action it is sufficient that the property be within the state subject to the control of the Court, and that there be some form of service which is reasonably calculated to give notice to parties whose interests may be affected by the judgment. [Citations.] The first requirement can be met in other ways than seizure of title, e.g., by an injunction against transfer of the property [citations]; by an attachment [citation]; or by personal service on the party holding the property within the state [citation]. We have no doubt that where property is in a state and comes under the control of a court, as here by appointment of the temporary receiver, it is fair to permit substituted service.’

In Standard Oil Co. v. New Jersey, 341 U.S. 428, 71 S.Ct. 822, 95 L.Ed. 1078, it appeared that certain shares of stock in Standard Oil Company, a New Jersey corporation, and certain unpaid dividends declared thereon, had been adjudged escheated to the State because the owners and their addresses were unknown for 14 successive years. The company appealed, claiming among other things that the property had no situs in New Jersey for purpose of escheat; that since the property could not be seized or escheated the company would remain liable to its stockholders (creditors) and a requirement of payment of the dividends to the State would deny due porcess. The court said, 341 U.S. at page 438, 71 S.Ct. ag page 828: ‘Appellant is a corporation of New Jersey, amenable to process through its designated agent at its registered office. [Citations.] This gave New Jersey power to seize the res here involved, to wit, the ‘debts or demands due to the escheated estate’. * * * That power to seize the debt by jurisdiction over the debtor provides not only the basis for notice to the absent owner but also for taking over the debt from the debtor. [Citation.] It is true that fiction plays a part in the jurisprudential concept of control over intangibles. There is no fiction, however, in the fact that choses in action, stock certificates and dividends held by the corporation, are property. Whether such property has its situs with the obligor or the obligee or for some purposes with both has given rise to diverse views in this Court.

‘We see no reason to doubt that where the debtor and creditor are within the jurisdiction of a court, that court has consitutional power to deal with the debt. Since choses in action have no spatial or tangible existence, control over them can ‘only arise from control or power over the persons whose relationships are the source of the rights and obligations.’ [Citations.] Situs of an intangible is fictional but control over parties whose judicially coerced action can make effective rights created by the chose in action enables the court with such control to dispose of the rights of the parties to the intangible. Since such power exists through the state's jurisdiction of the parties whose dealings have created the chose in action, we need not rely on the concept that the asset represented by the certificate or dividend is where the obligor is found. The rights of the owners of the stock and dividends come within the reach of the court by the notice, i. e., service by publication; the rights of the appellant by personal service. That power enables the escheating state to compel the issue of the certificates or payment of the dividends.'

Security Sav. Bank v. People of State of California, 263 U.S. 282, 44 S.Ct. 108, 68 L.Ed. 301. Escheat of unclaimed bank deposits. The court said, 263 U.S. at page 285, 44 S.Ct. at page 110: ‘Over this intangible property the state has the same dominion that it has over tangible property.’ Also, 263 U.S. at page 287, 44 S.Ct. at page 110: ‘These are generally considered proceedings strictly in rem. But whether the proceedings should be described as being in rem or as being quasi in rem is not of legal significance in this connection. In either case the essentials of jurisdiction over the deposits are that there be seizure of the res at the commencement of the suit; and reasonable notice and opportunity to be heard. [Citations.] These requirements are satisfied by the procedure prescribed in the statutes of California. There is a seizure or its equivalent. And the published summons to the depositors named as parties defendant is supplemented by the notice directed to all claimants whomsoever. Moreover, there is no constitutional objection to considering the proceeding as in personam, so far as concerns the bank; as quasi in rem, so far as concerns the depositors; and as strictly in rem, so far as concerns other claimants.’

It must be recognized that the situs attributed to an intangible ‘depends on what action is to be taken with reference to it’, In re Estate of Waits, supra, 23 Cal.2d 676, 680, 146 P.2d 5, 8, and that the adequacy of substituted service ‘so far as due process is concerned is dependent on whether or not the form of substituted service provided for such cases and employed is reasonably calculated to give him [defendant] actual notice of the proceedings and an opportunity to be heard. If it is, the traditional notions of fair play and substantial justice [citation] implicit in due process are satisfied.’ Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278.

In conformity with these basic principles California statutes and cases have recognized the propriety of substituted service in cases in which plaintiff seeks to establish his right to a local asset which will be paid or delivered to a non-resident claimant unless an injunction is granted or a receiver appointed.

Section 17, subdivision 3, Code of Civil Procedure, provides: ‘The words ‘personal property’ include money, goods, chattels, things in action, and evidences of debt.' Section 412 of the same code authorizes substituted service upon a non-resident in an action ‘which relates to or the subject of which is real or personal property in this State, in which such person * * * has or claims a lien or interest, actual or contingent, therein, or in which the relief demanded consist wholly or in part in excluding such person * * * from any interest therein * * *.’ (Emphasis added.)

Loaiza v. Superior Court, 85 Cal. 11, 24 P. 707, 9 L.R.A. 376, dealt with money and securities held in California by Loaiza as agent of two persons named Aguayos who were residents of Mexico. Two English corporations sued in the California superior court to effect a rescission of a purchase from the Aguayos of certain mining properties situate in Mexico, the rescission being based upon alleged fraud. Loaiza and the two Aguayos were made defendants. The Aguayos being non-residents and not served in person or appearing, an order was made enjoining the transfer of the money and securities to them by Loaiza and appointing a receiver of said property. The order was challenged on certiorari as one made without jurisdiction. After discussion of Pennoyer v. Neff, supra, 95 U.S. 714, 24 L.Ed. 565, and various other authorities, the court denied the writ and said, 85 Cal. at page 34, 24 P. at page 712: ‘And the real and primary purpose of the action here under review is to determine the title and right to possession of the moneys and securities now within the jurisdiction of the court, secured from the plaintiffs in the action by fraud, under a contract which they were by law authorized to rescind, and did rescind, upon discovery of the fraud.

‘Our statute says that in such a case the person who gains a thing by fraud is an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it. Civ.Code, § 2224. This being so, it cannot be that the arm of equity is so short or so weak that the fraudulent trustee,—he who has become trustee by fraud,—by remaining beyond the jurisdiction of the court, can prevent the court from seizing upon the subject of the trust within its jurisdiction, and restoring it to the defrauded cestui que trust.’ This case was not concerned with a mere debt owing by a domiciliary because ‘[m]ost of those moneys, or the securities in which they have been invested, and the other things of value which were so given, are all ear-marked, so that they can be traced and identified, and were within the jurisdiction and are now within the possession, of the court in which the action was brought.’ 85 Cal. at page 31, 24 P. at page 711. The decision supports the proposition that determination of adverse claims to any res having situs within the jurisdiction affords proper occasion for substituted service upon an absentee claimant.

Murray v. Murray, 115 Cal. 266, 47 P. 37, 37 L.R.A. 626, was an action for maintenance without divorce; plaintiff also sought to set aside as fraudulent certain transfers made by defendant Owen Murray to his brother James Murray who was also made a defendant. Both of them being absent from the jurisdiction, service was made by publication. The property involved consisted of mortgage notes and real estate. A receiver was appointed. The transfers were adjudged to be fraudulent and were set aside. Upon appeal the jurisdiction was attacked but the court upheld it upon the theory that the receiver's possession of the property was a seizure which formed valid basis for constructive service and a judgment binding that specific property. To that end the receivership was analogized to an attachment. 115 Cal. at page 276, 47 P. 37. Here again the Supreme Court committed itself to the doctrine that determination of conflicting claims to a res found within the jurisdiction is proper though based on constructive service of the absent claimant. Nichols v. Superior Court, 1 Cal.2d 589, 36 P.2d 380, 95 A.L.R. 894, makes substantially the same holding, relying upon Murray v. Murray, supra, as good precedent.

Although the foregoing decisions had no occasion to apply their doctrine to a mere chose in action, a debt owing by a resident, that step was taken by the district court of appeal in Standard Dredging Co. v. Title Ins. & Trust Co., 96 Cal.App. 93, 273 P. 871. Title Insurance and Trust Company was trustee under an agreement securing certain collateral trust notes; the funds for redemption had been deposited with it and the land reconveyed. Plaintiff sued the title company, Mrs. Kendall Morgan and George C. Morgan, Jr., alleging that it owned certain of the notes and that they had been delivered to Morgan, Jr., as its agent; that he disobeyed his instructions and never returned the notes which came into possession of Mrs. Kendall Morgan. Plaintiff sought judgment against the title company for the amount of the funds alleged to be owing to it (offering to give the company adequate indemnity), and served the two Morgans by publication under court order. Mrs. Kendall Morgan appeared and claimed ownership of the note and a right to the funds in the hands of the trustee. The trustee took the position that George C. Morgan, Jr., was a necessary party; ‘that he is not within the state of California and therefore the court has no jurisdiction of any property or any choses in action belonging to such defendant.’ 96 Cal.App. at page 96, 273 P. at page 872. On this ground the court granted a nonsuit, which was reversed on appeal. The reviewing court relied upon Pennington v. Fourth Nat. Bank, 243 U.S. 269, 37 S.Ct. 282, 61 L.Ed. 713, among others,—a case discussed infra. The title company had control over an intangible, a debt owing to the owner of the notes, and the case hald that that was a res within this State sufficient to sustain a valid judgment determining ownership of the same after service of the non-resident claimant by publication. At page 97 of 96 Cal.App., at page 872 of 273 P. the court quotes from Cooper v. Reynolds, supra, 10 Wall. 317, 77 U.S. 317: “So the writ of garnishment or attachment, or other form of service, on a party holding a fund which becomes the subject of litigation, brings that fund under the jurisdiction of the court, though the money may remain in the actual custody of one not an officer of the court * * *. The service of the summons on the bank is, under the doctrine thus established, the equivalent of a seizure of the property of each depositor in his account with the bank and gives the court jurisdiction over it to the same extent as in cases in garnishment and other proceedings quasi in rem.” It also quotes Security Sav. Bank v. People of State of California, supra, 263 U.S. 282, 44 S.Ct. 108, as follows: “Seizure of the deposit is effected by the personal service made upon the bank. Provident Inst. for Saving in Town of Boston v. Malone, 221 U.S. 660, 31 S.Ct. 661, 55 L.Ed. 899, 34 L.R.A.N.S., 1129. Thereby the res is subjected to the jurisdiction of the court.” See also, McElroy v. McElroy, 32 Cal.2d 828, 831–832, 198 P.2d 683.

Pennington v. Fourth Nat. Bank, supra, 243 U.S. 269, 37 S.Ct. 282, was a divorce action in which the wife, in order to insure payment of alimony, joined the bank in which defendant had an account; the court made a preliminary injunction against the bank paying out any portion of the deposit; finally it was ordered to pay the whole thereof to plaintiff wife, and that was done. The husband later presented his check for payment, it was dishonored, and he sued the bank claiming that the orders of the divorce court were void for want of jurisdiction because he was a non-resident and had been served by publication only. This contention was rejected, the court saying, in part: ‘The 14th Amendment did not, in guarantying due process of law, abridge the jurisdiction which a state possessed over property within its borders, regardless of the residence or presence of the owner. That jurisdiction extends alike to tangible and to intangible property. Indebtedness due from a resident to a nonresident—of which bank deposits are an example—is property within the state. * * * The power of the state to proceed against the property of an absent defendant is the same whether the obligation sought to be enforced is an admitted indebtedness or a contested claim. It is the same whether the claim is liquidated or is unliquidated, like a claim for damages in contract or in tort. It is likewise immaterial that the claim is, at the commencement of the suit, inchoate, to be perfected only by time or the action of the court. The only essentials to the exercise of the state's power are presence of the res within its borders, its seizure at the commencement of proceedings, and the opportunity of the owner to be heard. Where these essentials exist, a decree for alimony against an absent defendant will be valid under the same circumstances and to the same extent as if the judgment were on a debt,—that is, it will be valid not in personam, but as a charge to be satisfied out of the property seized.’ 243 U.S. at page 271, 37 S.Ct. at page 282. (Emphasis added.)

Omaha Nat. Bank of Omaha, Neb. v. Federal Reserve Bank, 8 Cir., 26 F.2d 884, 885. The trail court dismissed the action for want of jurisdiction, the Circuit Court of Appeals reversed and the Supreme Court denied certiorari in [Wyoming Nat. Bank of Casper, Wyo. v. Omaha Nat. Bank] 278 U.S. 615, 49 S.Ct. 19, 73 L.Ed. 539. The action was brought under § 57 of the Judicial Code, § 118, Title 28, U.S.C.A., by Omaha National Bank of Omaha, Nebraska, against Federal Reserve Bank of Kansas City, Missouri; Wyoming National Bank of Casper, Wyoming; First National Bank of Cheyenne, Wyoming, and T. E. McClintock as receiver of the last named bank. The said section deals with local actions and, as stated by the court, requires not only diversity of citizenship but another indispensable showing, namely, ‘that the subject-matter, the res, is within the territorial jurisdiction of the court.’ The court said that the purpose of the suit was to enable plaintiff ‘to obtain a judgment or decree that will bind the res, though the defendants are all nonresidents and cannot be personally bound unless they enter general appearance or should be served within the district.’ 26 F.2d at page 885. Plaintiff, claiming to have been defrauded by Wyoming National Bank of Casper, and having given notice of rescission, 26 F.2d at page 887, sought to enforce an equitable title to funds on deposit with Omaha Branch of Federal Reserve Bank of Kansas City, Missouri. The action was brought in the District of Nebraska wherein defendant Federal Reserve Bank was doing business. Plaintiff sought an injunction against payment of said deposit to the Wyoming National Bank and prayed judgment to the effect that the deposit should be paid to it. The court held that there was a constructive trust of the deposit due to the fraud in its acquisition, 26 F.2d at page 887. It was contended that there was no res within the jurisdiction of the court. At page 888 of 26 F.2d the opinion says: ‘In every practical and business sense the $60,000 is there, and it is a sacrifice of substance to form to say it is not. For remedial purposes on plaintiff's bill we think the situs of any property interest in the transferred deposit was at Omaha.’ This language is followed by citation and quotation of various cases, including Chicago R. I. & P. Ry. Co. v. Sturm, supra, 174 U.S. 710, 19 S.Ct. 797, and Pennington v. Fourth Nat. Bank, supra, 243 U.S. 269, 37 S.Ct. 282. The case is essentially foursquare with the one at bar, for it recognizes a debt owing by a resident company as a res within the jurisdiction of his residence, a res which will support substituted service in an action brought and maintained for the purpose of adjudicating adverse interests thereto, one of the claimants being a non-resident.

Respondents rely principally upon New York L. Ins. Co. v. Dunlevy, supra, 241 U.S. 518, 36 S.Ct. 613. Effie J. Gould Dunlevy recovered from New York Life Insurance Company the surrender value of a life insurance policy which she claimed to have been assigned to her; the judgment was rendered by the California superior court. The insurance company claimed res judicata on the basis of a judgment rendered by a state court of Pennsylvania. The policy was a tontine which had matured and the company recognized an obligation to pay the sum of $2,479.70 to one of two adverse claimants, either Mrs. Dunlevy or her father, Joseph W. Gould. So it brought an interpleader action in Pennsylvania, deposited the money in court, personally served Gould who lived in the state, and served Mrs. Dunlevy by publication, as she resided in California. She defaulted and judgment was rendered in favor of Gould. On appeal from the later California judgment it was held that there was no res judicata because the Pennsylvania judgment was void as to Mrs. Dunlevy for want of personal jurisdiction over her. Speaking of a certain judgment which Boggs & Buhl had recovered against Mrs. Dunlevy, based on valid personal service, the court, through Mr. Justice McReynolds, said, 241 U.S. at page 520, 36 S.Ct. at page 613: ‘Beyond doubt, without the necessity of further personal service of process upon Mrs. Dunlevy, the court of common pleas at Pittsburgh had ample power through garnishment proceedings to inquire whether she held a valid claim against the insurance company, and, if found to exist, then to condemn and appropriate it so far as necessary to discharge the original judgment. Although herself outside the limits of the state, such disposition of the property would have been binding on her. * * * But the interpleader initiated by the company was an altogether different matter. This was an attempt to bring about a final and conclusive adjudication of her personal rights, not merely to discover property and apply it to debts. And unless in contemplation of law she was before the court, and required to respond to that issue, its orders and judgments in respect thereto were not binding on her. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Shinn, Attachment & Garnishment, § 674. See Cross v. Armstrong, 44 Ohio St. 613, 623, 625, 10 N.E. 160. * * * The established general rule is that any personal judgment which a state court may render against one who did not voluntarily submit to its jurisdiction, and who is not a citizen of the state, nor served with process within its borders, no matter what the mode of service, is void, because the court had no jurisdiction over his person.’ It was not held that there was no res in Pennsylvania; that question was not discussed. The citation of the Ohio case of Cross v. Armstrong, 10 N.E. 160, indicates that what Mr. Justice McReynolds had in mind was the proposition that an interpleader action is essentially in personam and cannot be converted into a proceeding in rem by deposit of the disputed money in court. In the Cross case, supra, it is said at page 165: ‘The proceeding was clearly one of interpleader, and that only. We do not understand that an action in personam, simply because a debtor brings money, the right to recover which is in contention, and gives to the custody of the court a sum sufficient to discharge his debt, changes into an action in rem, or that an interpleader suit is, in its nature, a proceeding in rem. In the Philadelphia case the company could have begun the action by original bill, and obtained a complete standing in court, if, with other proper averments, the pleader had alleged a willingness to bring the money into court. Manifestly, the action thus begun would not have been in rem. Then, does the mere fact that the company, (the debtor,) being sued, voluntarily delivers money to the clerk of the court, rather than keep it in its own safe, or to its credit in bank, or loaned upon call, change the action from one in personam to one in rem? We think not.’

The Dunlevy case has been cited from time to time as support for a rule that the presence of an intangible within the forum does not authorize a determination of the rights of the creditor thereto unless personal service is had upon him within the jurisdiction. This is exemplified by Estin v. Estin, 334 U.S. 541, at page 548, 68 S.Ct. 1213, at page 1218, 92 L.Ed. 1561, which considered the effect of a Nevada default divorce upon a previous New York decree for separation and maintenance: ‘Jurisdiction over a debtor is sufficient to give the State of his domicile some control over the debt which he owes. It can, for example, levy a tax on its transfer by will [citations], appropriate it through garnishment or attachment [citations], collect it and administer it for the benefit of creditors. [Citations.] But we are aware of no power which the State of domicile of the debtor has to determine the personal rights of the creditor in the intangible unless the creditor has been personally served or appears in the proceeding. The existence of any such power has been repeatedly denied. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Hart v. Sansom, 110 U.S. 151, 3 S.Ct. 586, 28 L.Ed. 101; New York L. Ins. Co. v. Dunlevy, 241 U.S. 518, 36 S.Ct. 613, 60 L.Ed. 1140.’ But general statements such as this, divorced from the actual ruling, do not advance the inquiry very far. The holding in Estin is that the husband, by taking up residence in Nevada, could not serve the wife by publication and there rid himself of his existing obligation to her through a default judgment. That is but an expression of the self-evident truth that a debtor cannot select a remote forum, effect substituted service upon his creditor and terminate his obligation through a judgment rendered at a place where the creditor is not able to assert his rights. In such a proceeding there is no res at the forum because the ends of practical justice forbid, rather than promote, extension of the fictional intangible res to the jurisdiction so selected by the plaintiff. The basic difficulty faced by the insurance company in the Dunlevy case, supra, was that it was attempting to select its own jurisdiction for an elimination of claims of remote non-residents to the debt owing by it.

The actual effect of the Dunlevy holding is that a debtor cannot pick his own forum for determination of conflicting claims to the debt owed by him. The case does not hold (and the question seems not to have been presented) that one claimant cannot sequester such property at the domicile of the debtor and there determine the validity of his claim as against another claimant who is a non-resident and served by publication only. Nor does it hold that it is essential to the existence of a jurisdictional res at the domicile of the debtor that the claimant who has sequestered the debt must claim under the nominal creditor (as in attachment), rather than assert a claim in his own right.

So far as it was able to do so, and as a practical matter, Congress reversed the policy of the Dunlevy ruling of 1916 by passage of the Federal Interpleader Act in 1917, Chap. 113, 39 Stat. 929, which provided a remedy for insurance companies and fraternal societies enabling them to maintain in the federal courts interpleader actions where one or more citizens, resident in the territorial jurisdiction of the court, claim adversely to one or more citizens of another state insurance moneys which the company or society concedes to be payable. The statute was amended in 1925, 1926, 1936, 1948 and 1949. In its present form, 28 U.S.C.A. §§ 1335, 1397, 2361, it is available to any person, firm or corporation having money or property of $500 or more payable to adverse claimants who are citizens of different states. See Annos. in 106 A.L.R. 626 and 17 A.L.R.2d 741.4

The Dunlevy case, supra, has not been applied to a situation such as that presented at bar. Although it was not cited in the opinion in Omaha Nat. Bank of Omaha, Neb. v. Federal Reserve Bank, supra, 8 Cir., 26 F.2d 884, that ruling made in 1928, impliedly supports the view that Dunlevy does not control a controversy such as we have here.

It is interesting to note that some of the state courts have had no difficulty in finding a res within the court's jurisdiction in an action brought against a resident insurance company to determine the right to proceeds of a policy where the adverse claimant is a non-resident who has been served by publication only. See State ex rel. Richardson v. Mueller, 230 Mo.App. 962, 90 S.W.2d 171, 174; Oishei v. Pennsylvania Railroad Co. 117 App.Div. 110, 102 N.Y.S. 368, 371; Id., 191 N.Y. 544, 85 N.E. 1113; Morgan v. Mutual Benefit Life Ins. Co., 189 N.Y. 447, 82 N.E. 438, 440; Kumor v. Scottish Union & National Ins. Co., 47 Wyo. 174, 33 P.2d 916, 920–921; Taylor v. Security Mut. Life Ins. Co., 38 Misc. 575, 77 N.Y.S. 1012.

Respondents place considerable reliance upon Bank of Jasper v. First Nat. Bank, 258 U.S. 112, 42 S.Ct. 202, 66 L.Ed. 490. Bank of Jasper, incorporated and doing business in Florida, had received certain funds in a general deposit but had immediately issued against same certificates of deposit which absorbed the entire credit; the certificates became the property of First National Bank of Rome, Georgia. It sued the Jasper bank on these obligations and was met by the plea of res judicata based upon judgments obtained against that bank in Florida in suits brought by persons who claimed to have been defrauded and sought to impress a trust upon the debts represented by the certificates; there had been no personal service upon the Georgia bank in the State of Florida, merely constructive service followed by nonappearance of this non-resident defendant. It was held that there was no res judicata because there was no jurisdiction over the defendant or any of its property. At page 119 of 258 U.S., at page 204 of 42 S.Ct. the court said: ‘The contention that the proceeds of the discounts of the notes constitute a res within the state, of which the certificates of deposit were merely evidence, rests upon a misapprehension. No specific fund was ever set apart by the Jasper bank. Its discounts resulted in general credits by the bank to the makers of the notes. * * * The credits—called deposits—so transferred, became an indebtedness of the Jasper bank to the American Company. That indebtedness, if it had rested in open account, would have been property of the creditor within the state of Florida. In an appropriate proceeding it might have been reached to satisfy a claim against its owner. Pennington v. Fourth Nat. Bank, 243 U.S. 269, 37 S.Ct. 282, 61 L.Ed. 713, L.R.A.1917F, 1159. But the suits in the state court were not proceedings of that character. In them the complainant asserted that, by reason of the fraud alleged, the Jasper bank was indebted not to any of its co-respondents, but to the complainant. Moreover, there was no indebtedness on open account to any of the Georgia corporations; for this account had been closed by giving certificates of deposit; and these had been transferred to the First National Bank. * * * As neither the certificates of deposit nor the holder thereof were within the state of Florida, its courts could not, in the absence of consent, acquire jurisdiction to determine the liability of maker to holder.’

We apprehend that the reference to a specific fund, found in this and certain other cases, does not point to a controlling factor in the problem of presence or absence of a res. The court did not hold that a specific fund in Florida was essential to a res; it merely remarked upon the absence of one in taking the step to its further statement (probably dictum) that the indebtedness ‘if it had rested in open account, would have been property of the creditor within the state of Florida.’ The credit having been converted into a negotiable instrument which had an actual situs in Georgia, the court held that there was no res and hence no basis for a Florida judgment in rem or quasi in rem.

Once it is recognized that the doctrine which gives a particular situs to an intangible is a fiction created to meet the needs of practical justice it must be further conceded that the recognition of a special or segregated fund as a res is but one of the steps in the process of transition from corporeal to incorporeal property in the field of situs; that the presence of a special or segregated fund may be an aid but it is not a sine qua non to the recognition of situs of a debt at the domicile of the debtor,—not only for the purpose of attachment or garnishment, but also as a jurisdictional predicate in any other situation where the requirements of substantial justice demand the recognition of such local situs.

That a special or segregated fund is not of the essence of situs of an intangible is recognized in State v. Security Savings Bank, 186 Cal. 419, 199 P. 791, affirmed in 263 U.S. 282, 44 S.Ct. 108, supra. Considering the question of due process in a proceeding for escheat of bank deposits, the court, after quoting the statute, said: ‘This language, if taken literally according to its legal significance, would be appropriate to describe money in the custody of the bank as bailee of its depositors. It is evident, however, from the context and from the purpose and object to be accomplished, that it was not intended to apply exclusively to moneys held by the bank as such custodian or bailee, although possibly it might include such special deposits. It is not an accurate use of language to speak of the general deposits in an ordinary bank as the money of the depositors. When a general deposit is made with a bank, the title to the money delivered to it passes at once to the bank. The relation thereby established between the bank and the depositor is that of debtor and creditor and not that of bailee and bailor. The bank is the debtor and the depositor the creditor to the amount of the deposit. It is of some importance, in view of the argument presented, to note that the statutes in question do not provide for an actual seizure of any money, either before or after the judgment, but do provide, with respect to each depositor, for the payment to the state by the bank of the debt the bank owes to the depositor.’ 186 Cal. at page 423, 199 P. at page 792. ‘The argument of the appellant on this subject is mainly based on the proposition that the proceeding authorized by section 1273 is an action in personam, and that the judgment therein to be rendered is a personal judgment against the bank and the several depositors made defendants therein. This proposition is not maintainable. The judgment does not seek to declare or enforce any obligation of the depositors or any of them to any other person or persons. Its sole object with respect to them is to act upon the obligations they respectively hold against the bank, to effect a substitution of the state for the bank with respect to such obligation, and to transfer the title of that particular property of the depositors, respectively, to the state. Such proceedings are not proceedings strictly in rem; but they are proceedings quasi in rem. The proceeding is not in that respect distinguishable from an ordinary garnishee process against a debtor of a defendant to appropriate the debt to the payment of the plaintiff's demand. In such cases the defendant in the action may be a non-resident or not within reach of the process of the state court. But if service is made on the garnishee, the court has jurisdiction to dispose of that asset of the defendant and apply it to the payment of the plaintiff's debt.’ 186 Cal. at pages 425–426, 199 P. at page 794. ‘The service of the summons on the bank is, under the doctrine thus established, the equivalent of a seizure of the property of each depositor in his account with the bank, and gives the court jurisdiction over it to the same extent as in cases in garnishment and other proceedings quasi in rem.’ 186 Cal. at page 427, 199 P. at page 794.

Counsel for respondents argue that defendant Rosenbaum can have no property in a debt within this state unless it is conceded that the money is owed to him rather than someone else; that the obligation owed by the debtor is not property, for the chose in action consists of the right of the creditor to enforce the debtor's obligation; that unless that right be conceded there can be no property of the non-resident creditor, no res, within the jurisdiction. The argument proves too much. The word ‘debt,’ when used in discussion of situs, necessarily includes the right of enforcement of the obligation, which can occur only at the domicile of the debtor or in such other place as service of process may be had upon him. But it does not follow that it must be a recognized right; a disputed claim properly may fall in the same category. The definition of personal property in subdivision 3 of § 17, Code of Civil Procedure, includes ‘things in action,’ as does § 14, subdivision 3, Civil Code. See Finley v. Winkler, 99 Cal.App.2d Supp. 887, 890, 222 P.2d 345. The right to recover a debt is commonly termed a chose in action, and that term is defined in Bouv. Law Dict., Rawle's Third Revision, p. 483, as ‘a right to receive or recover a debt, or money, or damages for breach of contract, or for a tort connected with contract, but which cannot be enforced without action.’ Where situs is concerned the obligation to pay and the right to collect are equivalents and they reside at the place of available process upon the debtor.

Inasmuch as our present task is to determine whether the doctrine of intangible res shall be recognized as applying to a controversy over ownership of a debt, considerations of practical justice may not be ignored. The only impediment to the exercise of jurisdiction in the instant cases appears to be the unwillingness of defendant Rosenbaum to appear therein. The convenience of real parties in interest would be promoted by completion of the litigation in this jurisdiction where most of them reside and where most of the witnesses and documentary evidence seem to be available. We are persuaded that the debt owing by any respondent company constitutes a sufficient res in this jurisdiction to sustain an order or judgment based upon substituted service in a controversy over ownership of that debt, and that petitioners should prevail in these proceedings.

Let the writ of mandate issue in each case commanding respondent superior court to assume and exercise jurisdiction over petitioners' application for preliminary injunction and appointment of receiver as prayed herein.

FOOTNOTES

1.  The returns to the petitions for mandate in this court are demurrers; hence we must accept as true for present purposes all allegations of each petition; this is also true of each complaint below, for the presence or absence of a res in this jurisdiction must be determined from an inspection of plaintiffs' pleading. 13 Cal.Jur.2d, § 52, p. 538.

2.  ‘The bargaining representative, whoever it may be, is responsible to, and owes complete loyalty to, the interests of all whom it represents.’ Ford Motor Co. v. Huffman, 345 U.S. 330, 338, 73 S.Ct. 681, 686, 97 L.Ed. 1048. See also Upholsterers' Inter. Union of North America v. Leathercraft Furn. Co., D.C., 82 F. Supp. 570, 574.

3.  Other counts seeking recovery under §§ 222 and 224, Labor Code, recovery of money on common counts and the like, do not enter into problem presented by the first cause of action.

4.  The fear expressed by defendant employers that they will be subjected to double payment, as in the Dunlevy case, probably could have been obviated by invoking this Federal Interpleader Act.

ASHBURN, Justice.

FOX, Acting P. J., and RICHARDS, J. pro tem., concur.

Copied to clipboard