Difani v. Riverside County Oil Co.

This is an appeal from an order, as amended, striking from the files of the superior court of the county of Riverside an order to show cause theretofore issued in the above-entitled action.

The action was instituted by the plaintiff, as assignee of the president of the defendant oil company, to recover on a claim against said company for salary and commissions alleged to be due and owing to the plaintiff’s assignor. Service was had upon the defendant company by leaving a copy of the complaint and summons with its vice-president. An attachment, duly and regularly issued out of the lower court upon the institution of the action, was on February 6, 1925, levied upon some 1,320 feet of well casing in the possession of the defendant company. Upon the expiration of the statutory period and pursuant to the authority conferred by subdivision 1 of section 585 of the Code of Civil Procedure, the clerk, on March 2, 1925, entered a default judgment against the defendant company in the sum of

The appeal was placed upon a special calendar of this court upon an order to the respondents to show cause why said order should not be reversed, or that such order be made as might be meet in the premises. At the time of the placing of the cause upon said calendar, and the entry of the order to show cause herein, it appeared that the appellants’ brief had been filed herein but that no brief had been filed on behalf of the respondents although the time for the filing of such brief under the rules of this court had long since expired.

[1] We are of the opinion, for the reasons hereinafter mentioned, that the order to the respondents to show cause in the court below why the judgment and attachment complained of should not be vacated and set aside was properly stricken from the files thereof. An order to show cause is a notice of motion and a citation to the party to appear at a stated time and place to show cause why a

[3] The appealing creditor of the defendant corporation is a stranger to the record and not a party to the action. In view of the authorities it could not, therefore, make any motion in the court below or come into the litigation for any purpose. It follows that said creditor could not properly inject itself into this action for the purpose of moving to set aside the judgment and attachment against the defendant corporation. The order of the court below striking from its files the order to show cause why said judgment and attachment should not be vacated did not, therefore, prejudicially injure the Twin Cities Gas Company, the appealing creditor. Nothing said herein, however, is to be considered as an expression of opinion precluding said creditor from directly attacking the asserted fraudulent judgment and attachment in an appropriate proceeding, for it has been held that persons who are necessarily affected by the entry of a fraudulent judgment may, even though strangers to the record of the action wherein the judgment was rendered, attack the same in an appropriate proceeding instituted for that purpose. (Bennett v. Wilson, supra; 1 Freeman on Judgments, 5th ed., secs. 317-319; 1 Black on Judgments, 2d ed., secs. 291, 293, 295.) As to the merits or availability of such a proceeding to the appealing creditor herein we undertake to express no opinion.

[5] Moreover, a member or stockholder cannot have redress for any wrong or injury to the corporation until he has exhausted all the means within his reach to obtain redress from the managing body of the corporation and the corporation itself has failed, after proper application to it, to take the necessary and proper steps in the premises. (Whitehead v. Sweet, 126 Cal. 67 [ 58 Pac. 376 ]; Ashton v. Dashaway Association, 84 Cal. 61 [ 7 L. R A. 809 , 22 Pac. 660 , 23 Pac. 1091 ]; James v. Steifer Min. Co., 35 Cal. App. 778 [ 171 Pac. 117 ].) It is the general rule that where a corporation defendant refuses to defend an action, or, having begun a defense, it is made to appear that the corporation will not press it in good faith, a stockholder may, upon a proper application showing the facts, be allowed to become a party and defend on behalf of the corporation, but he must show that he cannot induce those in control to do that which is fair and right. (Favorite v. Superior Court, 181 Cal. 261 [ 8 A. L. R. 290 , 184 Pac. 15 ] ; Waymire v. San Francisco etc. Ry. Co., supra.)

[6] In the instant case the appealing stockholder made no charge in her affidavit filed in the court below, and no showing has been attempted on this appeal, that the governing board of directors or trustees of the defendant cor

In our opinion either of the foregoing reasons would seem sufficient to warrant a holding that the appealing stockholder has not been prejudicially injured by the striking from the files of the lower court of the order to show cause. [7] There is, however, in our opinion still another ground equally capable of sustaining the action of the court below, for even if it be assumed that the appealing stockholder had made the necessary showing and was properly before that court she would be clothed with no other or greater rights than those of the corporation defendant. In other words, she would merely stand in the shoes of the corporation, the latter remaining the real party in interest. (Turner v. Markham, 155 Cal. 562 [ 102 Pac. 272 ]; Willis v. Porter, 132 Cal. 516 [ 64 Pac. 896 ]; Wickersham v. Crittenden, 110 Cal. 332 [ 42 Pac. 893 ].) This being so, she could avail herself only of those remedies open to the corporate entity. (Turner v. Markham, supra; Willis v. Porter, supra.) The only remedies that were available herein to the defendant corporation to avoid the asserted fraudulent judgment were an appeal therefrom, a motion for new trial, and a motion to vacate and set aside said judgment under section 473 of the Code of Civil Procedure. Fraud is recognized as a ground for relief under said code section. (In re Yoder, 199 Cal. 699 [ 251 Pac. 205 ].) An inspection of the record in the instant case fails to disclose that the appealing stockholder seasonably pursued, on behalf of the defendant corporation, any one of' the enumer

There is nothing in the authorities cited by the appellants inconsistent with the views herein expressed. [8] Nor do we deem of importance the fact that the court below attempted to justify its order on grounds other than those considered in this opinion. (Troy v. Troy, 72 Cal. App. 757 [ 238 Pac. 143 ]; 2 Cal. Jur. 809.)

The order appealed from is therefore affirmed.