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McRAE v. VISCOSE AMBULATORIUM

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

Mack McRAE, Plaintiff and Appellant, v. VISCOSE AMBULATORIUM, a corporation, et al., Defendants,

Clyde W. Cook, dba Viscose Ambulatorium, a corporation, Respondent. Clyde McRAE, Plaintiff and Appellant, v. W. F. BATES et al., Defendants, Clyde W. Cook, Respondent.

Nos. 25225, 25226.

Decided: September 05, 1961

Edward B. Freed, Inglewood, for appellant. Arthur E. Briggs, Los Angeles, for respondent.

The appeals in these two cases have been consolidated for hearing in this court. One appeal (No. 25226) involves a joint debtor proceeding under sections 9891 –994 Code of Civil Procedure. Plaintiff has appealed from an order quashing a joint debtor summons. In the other case (No. 25225) plaintiff appeals from a judgment of dismissal following the sustaining of a demurrer without leave to amend.

The initial action was commenced in August 1952, against defendant Bates for damages for malpractice. A judgment was recovered against him in May 1958. Respondent Cook was not a party to this action, nor was any cause of action attempted to be stated against him. In February 1960, plaintiff-appellant obtained issuance of a joint debtor summons against Cook. Thereafter Cook made a motion to quash said summons. His motion was granted. Plaintiff has appealed from the ensuing order.

‘If the complaint does not state a cause of action against the alleged joint debtor a judgment cannot be entered against him.’ Fried v. Municipal Court, 94 Cal.App.2d 376, 378, 210 P.2d 883, 884. In Iwanaga v. Hagopian, 39 Cal.App. 584, 179 P. 523, the court had for consideration the application of proceedings against joint debtors growing out of a partnership transaction where the connection of some of the partners with the firm was unknown to the plaintiff when he commenced his action. The court pointed out (39 Cal.App. at page 585, 179 P. at page 523) that sections 989 and 414 of the Code of Civil Procedure ‘do not go so far as to reach persons not made parties to the original suit, even though such persons were dormant partners and the plaintiff at the time of the commencement of the action was unaware of their interest.’

Applying these principles to the facts in the instant proceeding, it is apparent that there is no basis for holding Cook liable as a joint debtor for the judgment rendered against Bates, since no cause of action was alleged against him and he was not even made a party to the action. The trial court accordingly properly quashed the joint debtor summons. The appeal from the order must therefore be affirmed.

Appeal No. 25225

Upon plaintiff's failure in the joint debtor proceedings to persuade the court that Cook should be bound by the judgment which had been rendered in plaintiff's favor against Bates, plaintiff filed a new action in which he sought a decree in equity to the effect that defendants were bound by the previous judgment and should be ordered to pay the same, together with costs and interest.2

Plaintiff's theory seems to be that by reason of Cook's asserted fraud in concealing his relationship with Bates, he, plaintiff, failed to name him as a defendant in the initial action, and that equity ought to excuse plaintiff from meeting this requirement.3 But under the decision in Iwanaga v. Hagopian, supra, a plaintiff is not entitled to have parties bound by a prior judgment simply because he is unaware of their interest or relationship to the transaction at the time the original action is commenced. At common law, if one of two or more joint debtors was not served in an action, a judgment against the others could not be enforced against the unserved party, nor could any other recourse be had against him ‘for the reason that the joint obligation is deemed merged in the judgment. (Citations.)’ Hobgood v. Glass, 161 Cal.App.2d 208, 211, 326 P.2d 546, 549; Iwanaga v. Hagopian, supra. Sections 989 and 414 provided a procedure which alleviates the hardship of this rule. It is obvious, however, that before a plaintiff can obtain the advantage provided by these sections their provisions must be followed. As pointed out in Cooper v. Burch, 140 Cal. 548, 551, 74 P. 37, 39, and in the Fried case, supra, ‘the entire proceeding is statutory and exclusive * * *.’ In this new suit in equity, plaintiff is simply trying by indirection to do that which he was not entitled to do under the established statutory procedure. This he has no right to do.

Certain allegations suggest the possible application of the theory expressed in Mirabito v. San Francisco Dairy Co., 8 Cal.App.2d 54, 47 P.2d 530, and Thomson v. L. C. Roney & Co., 112 Cal.App.2d 420, 246 P.2d 1017 (although plaintiff does not cite either case). In those cases judgments rendered against subsidiary corporations were amended to include the names of dominant corporations. The latter were found to be merely the alter ego of the former, and due process was held to have been met in that the attorneys of both corporations were the same, the corporations were fully aware of all proceedings, and the litigation was subsidized by them.4 But plaintiff cannot avail himself of this procedure. It is not claimed nor are facts alleged which show that any of the defendants is the alter ego of Bates. They are separate individuals who may have separate defenses (plaintiff's allegations to the contrary notwithstanding) which they are entitled to litigate. As was stated in Motores De Mexicali, S. A. v. Superior Court, 51 Cal.2d 172, 331 P.2d 1, 2, which case refused to extend the doctrine of the Mirabito and Roney cases, the 14th Amendment ‘guarantees that any person against whom a claim is asserted in a judicial proceeding shall have an opportunity to be heard and to present his defenses. * * * Nor is this difficulty overcome by the suggestion that [the parties whose names were sought to be added to the judgment] should have intervened in the action brought solely against [the defendant named therein], if they desired to assert any personal defenses against the drafts. They were under no duty to appear and defend personally in that action, since no claim had been made against them personally.’

Plaintiff cannot therefore have the judgment against Bates amended to include the names of defendants herein; and although his complaint is not clear in many respects, it is nevertheless quite apparent that he is not seeking to bring and try a separate action against defendants for fraud or negligence. For these reasons the trial court properly sustained the demurrer without leave to amend.

The order in appeal No. 25226 is affirmed; the judgment in appeal No. 25225 is affirmed.

FOOTNOTES

1.  Section 989, Code of Civil Procedure, reads: ‘When a judgment is recovered against one or more of several persons, jointly indebted upon an obligation, by proceeding as provided in section 414 of this code, those who were not originally served with the summons, and did not appear in the action, may be summoned to appear before the court in which such judgment is entered to show cause why they should not be bound by the judgment, in the same manner as though they had been originally served with the summons.’ Section 414, Code of Civil Procedure, reads: ‘When the action is against two or more defendants jointly or severally liable on a contract, and the summons is served on one or more, but not on all of them, the plaintiff may proceed against the defendants served in the same manner as if they were the only defendants.’

2.  In paragraph 56 of his third amended complaint, plaintiff says that he ‘seeks and prays a Decree in Equity, addressed and directed to defendants named herein, Ordering and Directing that they, and each of them, pay over to plaintiff these sums, together with Costs and Interest as plaintiff is entitled to by reason of that certain Judgment, Exhibit ‘C”; that is, the judgment plaintiff recovered against Bates for $31,207.08 in the prior suit.

3.  Various allegations indicate this may have been his theory. For example: ‘[A]ll allegations are for the sole purpose of obtaining equitable relief’; ‘[I]f plaintiff had known the facts * * * plaintiff would have joined said defendants in said case number 603192 as parties defendant’; ‘[F]urther, if plaintiff had known the facts * * * during the time from filing 603192 to July 14, 1958, the date of Bates' testimony in bankruptcy court [revealing defendants' relationship to Bates], Plaintiff would have asked leave to amend and join the new parties defendant’; ‘[C]onsequent upon the facts alleged plaintiff was * * * induced to proceed with the 603192 against Bates * * * and obtain judgment as alleged’ (Emphasis added.). Following the prayer set forth in footnote 2, supra, plaintiff alleges facts relating to the course of the joint debtor proceeding and relates that he moved to vacate the order quashing the joint debtor summons on the ground that the only reason defendants' names weren't included in the former action was because of their ‘concealment.’ He further relates that the motion to vacate was denied on the ground that fraud was immaterial since the joint debtor statute was to be strictly construed. Because of this, plaintiff alleges he has no other remedy at law or equity and asks a decree ordering defendants to pay the former judgment.

4.  Plaintiff alleged: ‘[D]efendants actively participated in said suit 603192 [and] the attorney for Briggs [apparently meaning Bates] was in truth and in fact defendants' paid counsel and all costs of suit in connection with the defenses of the action were paid for and the defense was maintained by defendants'; ‘[P]laintiff seeks a decree in equity to recognize defendants herein as the real parties in interest against whom judgment would have been obtained if they had not [acted as alleged]’; ‘[T]here is no defense to 603192 which defendants did not already maintain and paid to maintain and which they could not now maintain’; ‘[D]efendants * * * were at all times the real defenders in said suit and * * * they are estopped to deny that the judgment obtained against Bates was in essence * * * against them; and they are estopped to deny that they, as the principals are liable on the judgment and costs in 603192 * * *.’

FOX, Presiding Justice.

ASHBURN and HERNDON, JJ., concur.

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