YOUNG v. SUPERIOR COURT IN AND FOR SAN DIEGO COUNTY (1940)

Petition for writ of review. On March 28, 1938, in an action numbered 89218 in the superior court of the state of California, in and for the county of San Diego, the Pacific Coast Joint Stock Land Bank, a corporation, obtained a judgment against Thomas N. Crofton in the sum of $4,951. On June 30, 1938, the Land Bank Corporation, judgment creditor, duly assigned and sold the judgment to O.F. Neal. On July 18, 1938, one John Crofton commenced an action numbered 93426, in the superior court of San Diego county, state of California, against the Land Bank Corporation to quiet title to certain real estate. On October 1, 1938, O.F. Neal, by order of the court, was joined as a party defendant in said action with the Land Bank Corporation and was given ten days from said date to file an answer and cross-complaint. The answer and cross-complaint were duly filed, alleging the assignment of the Land Bank Corporation judgment to him, and seeking to have it adjudged that he (Neal) had a first lien upon the real estate by virtue of the judgment, and also seeking to have a certain recorded deed of the same property from Thomas N. Crofton to John Crofton, dated April 26, 1935, declared void for the reason that the deed was without consideration and was given for the purpose of defrauding creditors. On July 2, 1938, Thomas N. Crofton was adjudged a bankrupt. On October 20, 1938, plaintiff John Crofton having failed to answer the cross-complaint, O.F. Neal, as defendant and cross-complainant, caused a default to be entered on the cross-complaint. On November 9, 1938, after default had been entered, plaintiff John Crofton filed an answer to said cross-complaint. In May, 1939, Fred S. Young, petitioner, as trustee in bankruptcy for Thomas N. Crofton, filed in said action a motion seeking substitution in the place of O.F. Neal as a party defendant and cross-complainant. On June 5, 1939, the motion was granted and an order of court making the substitution followed. In June, 1939, petitioner trustee, as defendant and cross-complainant, filed a motion to strike the answer of plaintiff John Crofton to the cross-complaint for the reason that the said answer was filed after default had been duly entered on the cross-complaint, and on June 12, 1939, the court made such an order. On July 17, 1939, the respondent court, upon motion of plaintiff John Crofton filed June 24, 1939, made an order striking from the files of the court the order made on October 1, 1938, bringing in O.F. Neal as a party defendant, struck the answer and cross-complaint of O.F. Neal filed thereunder, and set aside the default of the clerk on the cross-complaint, and also set aside the order theretofore made substituting petitioner trustee as party defendant and cross-complainant in the place and stead of O.F. Neal.

Petitioner now contends as a ground for review, that the respondent judge had no power to set aside the order of October 1, 1938, bringing in O.F. Neal as a party defendant, nor the authority to set aside the default entered on October 20, 1938, nor to strike the answer and cross-complaint, nor to set aside the order of June 5, 1939, substituting petitioner trustee in the place of O.F. Neal, for the reason that more than six months had elapsed from the time of the making of the said orders and from the entry of default. Sec. 473, Code Civ.Proc. By the instant proceeding petitioner seeks an order annulling the last-mentioned order of respondent court and seeks a further order to be directed to said court to reinstate the answer and cross-complaint of the substituted defendant O.F. Neal and the substitution of petitioner trustee therein, and that the court be ordered to strike from the files the answer of John Crofton to the cross-complaint of the said O.F. Neal. Petitioner alleges that he has no speedy and adequate remedy at law by appeal from said order for the reason that the order has deprived him of his right to appear in the action and protect his interest in the income-producing real property involved. Respondent has furnished no brief or argument supporting the order.

Unless the order of October 1, 1938, joining O.F. Neal as a party defendant was void for lack of jurisdiction, no authority to grant such a motion is given under section 473 of the Code of Civil Procedure unless made “within a reasonable time, in no case exceeding six months, after such * order or proceeding was taken”. If the order was merely erroneous, such erroneous action was not in excess of jurisdiction, but was an erroneous exercise thereof, which may be corrected on appeal. County of Sutter v. Superior Court, 188 Cal. 292, 296, 204 P. 849. The order bringing in Neal as a party defendant was not in excess of jurisdiction. Sec. 379, Code Civ.Proc. However, from the record, it appears that more than six months had elapsed before the order was attacked by motion to strike or to set it aside. The trial court, therefore, in that respect had no jurisdiction to grant the motion. In re Morehouse, 176 Cal. 634, 169 P. 365.

That portion of the order setting aside the default not having been made within the prescribed six months' period as provided by section 473 of the Code of Civil Procedure was not only erroneous but beyond the power and jurisdiction of the court to make. Hunt, Mirk & Co., Inc. v. Hesperides Mining Co., 200 Cal. 382, 253 P. 317; Mader v. Christie, 52 Cal.App. 138, 198 P. 45; Title Insurance & Trust Co. v. King etc. Co., 162 Cal. 44, 120 P. 1066.

Respecting the order finding that the petitioner as trustee of the bankrupt estate of Thomas N. Crofton succeeded to all the right, title and interest of O.F. Neal and ordering him substituted in his place and stead, the trial court may have determined that this finding was an erroneous conclusion. From the record before us, their interests do not appear to be identical. The trial court on proper motion made within the six months' period was therefore authorized under section 473 of the Code of Civil Procedure to correct such an order by striking it from the files. Upon proper application the trustee may be made a party defendant, or should it develop that the petitioner is a necessary party, it is the duty of the plaintiff to amend and bring in such parties as may have succeeded to defendant's interest, in whole or in part, and if he neglects to do so the court, of its own motion, should order it to be done at the proper time in order that the whole controversy may be settled in one action. Robinson v. Gleason, 53 Cal. 38; Moffatt v. Moffatt, 5 Cal. 280. The trial court's power extends not only to the bringing in of new parties to the action but also to the dismissal of the action as to any person improperly joined or brought in as a party. These are matters incidental to its exercise of jurisdiction in any cause pending before it. Agassiz v. Superior Court, 90 Cal. 101, 27 P. 49.

The answer filed by the plaintiff Crofton to the cross-complaint of O.F. Neal, in view of the conclusion herein reached, is ineffective, for a defendant against whom a default is entered “ ‘is out of court and is not entitled to take any further steps in the cause affecting plaintiff's right of action’ ”. Title Insurance etc. Co. v. King etc. Co., supra, 162 Cal. at page 46, 120 P. at page 1067.

Summarizing the conclusions reached, it is our judgment that that portion of the order striking the order bringing in O.F. Neal as an additional party defendant, the portion of the order striking the answer and cross-complaint of O.F. Neal, and the portion of the order setting aside the default of John Crofton for failure to answer the cross-complaint should be and is annulled. That portion of the order striking the order substituting petitioner in the place and stead of O.F. Neal is affirmed.

GRIFFIN, Justice.

We concur: BARNARD, P.J.; MARKS, J.