KAUFMAN v. WALLS (1935)

This action was brought to recover damages for fraud alleged to have been perpetrated upon respondent by the defendants, other than Pacific Indemnity Company, in connection with the sale, exchange, and purchase of real property. Appellant, Pacific Indemnity Company, was surety upon the bond of defendant Cooperative Realty Corporation, Limited, a real estate broker, given pursuant to the California Real Estate Act. St. 1919, c. 605, p. 1252, and amendments thereto; 1 Deering's Gen. Laws, p. 25, Act 112. The penalty of the bond was $2,000. Respondent alleged damages in a sum in excess of $2,000, and prayed judgment for the total amount against all defendants. A verdict was returned for respondent for the sum of $4,500 against defendants Cooperative Realty Corporation, Limited, and Kelly, neither of whom has appealed, and for the sum of $2,000 against appellant, and judgments were entered accordingly.

The principal ground of this appeal is that the superior court did not have jurisdiction of the cause of action as to appellant. Municipal courts have original jurisdiction in cases at law in which the demand amounts to $2,000 or less. Code Civ. Proc. § 89, repealed and re-enacted by St. 1933, p. 1811, § 13. The superior court has original jurisdiction in all civil cases except those in which jurisdiction is given by law to municipal courts, and except other proceedings not necessary to be noted here. Const. art. 6, § 5. In respondent's complaint she prayed for judgment against all defendants in an amount within the jurisdiction of the superior court. However, the question of jurisdiction is not concluded by the amount prayed for, without regard to the allegations upon which the prayer is based. If the facts alleged in the complaint show that the maximum amount of the demand is less than the court's jurisdictional minimum, then the court is without jurisdiction of the action. Consolidated Adjustment Co. v. Superior Court, 189 Cal. 92, 207 P. 552; California Cured Fruit Ass'n v. Ainsworth, 134 Cal. 461, 66 P. 586; Larson v. Du Bain, 135 Cal. App. 433, 27 P.(2d) 393. The complaint alleged that the bond was given pursuant to the California Real Estate Act, supra, and that the penalty thereof was $2,000. This sum was the maximum liability of appellant. Wiggins v. Pacific Indemnity Co., 134 Cal. App. 328, 25 P.(2d) 898. If this action had been against the appellant only, with the same allegation as to the penalty of the bond, the court would have been without jurisdiction, even though the same amount of damages had been alleged and prayed for, because the allegation which disclosed the maximum amount for which appellant was liable would have determined the jurisdiction rather than the allegation as to the amount of damages suffered by respondent. The joinder of principal and surety in one action in which the facts alleged authorize judgment against the principal in a sum within the jurisdiction and against the surety in a sum less than the jurisdictional minimum will not empower the court to render judgment against the surety that it would have been without jurisdiction to render if the action had been against the surety alone.

The cases cited by respondent do not sustain her position. In the case of Paige v. Reinecke, 139 Cal. App. 225, 33 P.(2d) 454, a judgment against a real estate broker's surety for $2,000 and against the broker for a larger amount was affirmed, but the question of jurisdiction was not raised or discussed. In Page v. Ellis, 9 Cal. 248, the bond was for $300, an amount within the jurisdiction of the district court, but judgment was reversed because the complaint showed that the damages were less than the minimum amount of the district court's jurisdiction. In each of the other cases cited by respondent (Continental Casualty Co. v. Crook, 157 Miss. 518, 128 So. 574, 72 A. L. R. 186; Montgomery v. Martin, 104 Mich. 390, 62 N. W. 578; Rawles v. People, 2 Colo. App. 501, 31 P. 941), the damages sought were less than penalty of the bond, each was brought in the court having jurisdiction of the amount of the damages, in each it was contended that the action should have been commenced in a higher court–the court having jurisdiction of the amount of the penalty–and in each it was held that the action was properly brought in the court which had jurisdiction of the amount of damages claimed. No case has been cited which intimates that jurisdiction is conferred by merely demanding a greater sum than is recoverable under the facts stated in the complaint.

Concerning respondent's contention that the provision in section 9a of the statute that an injured party may maintain “an action” against the “broker and his sureties” means that he is restricted to one suit in which he must join the principal and the surety, it is only necessary to say that this provision does not purport to modify the limitations upon the jurisdiction of the courts as established by other statutes and by the Constitution. A joint liability is not created either by the language of the statute or by the fact that the cause of action against the surety arose synchronically with that against the principal. The action against the broker is the common-law action of fraud, while the action against the surety is statutory. If, in the respective courts having jurisdiction, separate judgments had been rendered against the broker and against the surety for the respective amounts for which each was liable, a provision in one or both judgments that the payment of one should operate as a discharge pro tanto of the other would have obviated the third action suggested by respondent as necessary to prevent a double payment.

Jurisdiction of a cause of action against the surety cannot be conferred by joining the surety in a cause of action against the principal, if the court is otherwise without jurisdiction.

The other questions raised by the appeal need not be considered.

The judgment against appellant is reversed.

WILSON, Justice pro tem.

We concur: CRAIL, J.; STEPHENS, P. J.