Copp v. Mulcahy

This action is by plaintiff to recover on two several promissory notes. The complaint is in two counts, in the first of which it is alleged that defendant, on the eleventh day of July, 1924, made, executed, and delivered to plaintiff his promissory note for the sum of $297, payable three months after date, together with interest thereon at the rate of seven per cent per annum. Said note is set out in haec verba in said count. The second count or cause of action is founded on a note for the sum of $58, dated July 19, 1924, and payable, with interest at the rate of seven per cent per annum, on or before three months after date. Said note is also set out in full in the complaint. Each of said notes provided for the payment by the maker (defendant herein) of reasonable attorney’s fees, in case action was instituted to enforce the payment thereof. The complaint alleges that no part of the principal sums, nor any interest accruing thereon, has been paid, and that the said notes “are now due, owing and unpaid,” and that, as to the first cause of action, the sum of $75 is a reasonable amount to be awarded as attorney’s fees, and that, as to the second cause of action, the sum of $25 is a reasonable amount to be allowed for such fees.

The defense interposed by defendant may the better be understood by reciting a brief history of the transactions culminating in the making and delivery of the notes in suit by defendant to the plaintiff before referring to the allegations of the answer. This statement may be taken from the findings, from which it appears that for some time prior to the date of the making of said notes, a corporation known as the New England-California Corporation, organized under the laws of the state of Massachusetts and having its principal place of business at Worcester, Massachusetts, filed with the Secretary of State of California a certified copy of its articles of incorporation and other papers required to be so filed by foreign corporations desiring to transact intrastate business within this state (Stats. 1917, pp. 371-377) ; that thereafter said corporation proceeded to carry on its business in this state, with the plaintiff herein as the managing agent thereof; that during the period of time in which it thus transacted business in California the defendant rented from it a certain number of acres of land in San Joaquin County at a certain specified rental and also from

The answer alleges that the defendant was not indebted to the plaintiff on account of the notes set out in the complaint or on any other account and that the defendant did not knowingly or intentionally make, execute, or deliver to plaintiff either of the promissory notes set out in the complaint; that (referring to the first count of the complaint), in the years 1922 and 1923, the defendant rented from said corporation certain real property belonging to it and situated in the county of San Joaquin, for the sum of $150 per year, which was payable at the end of each year thereof; that “on the 11th day of July, 1924, the plaintiff, who was then and there acting as a servant of said corporation falsely and fraudulently represented and stated to defendant that he (defendant) was then indebted to said corporation in the sum of $297, for and on account of the rental of said corporation’s real property, and that said corporation was then demanding the said rental money from him, and that he had prepared the said promissory note in the amount specified in said note, and had made the same payable to the said corporation in order that it might be for

“That defendant believed and relied upon each and all of the aforesaid false and fraudulent representations and statements, and in consequence thereof and of his belief that the note was made payable to said corporation, he signed said promissory note, and not otherwise.

1 ‘ That defendant never had any personal dealings or business with plaintiff, and never at any time owed him money or other obligation; and that for the purpose of securing defendant’s signature to said note to himself, the plaintiff falsely and fraudulently represented and stated to defendant at the time said note was executed, that it was made payable to the said corporation; and that defendant then

The defendant, by leave of the court, filed an amendment to his answer, alleging that the corporation referred to “was a foreign corporation created under the laws of the State of Massachusetts and which was licensed to do business in this State prior to the 3rd day of March, 1923, and which forfeited that said right in this State on that date by reason of its failure to pay its taxes theretofore due the State of California, and that in consequence thereof the aforesaid promissory notes are null and void.”

The court found, in addition to the findings from which is taken the general statement of the facts hereinabove given, that the defendant, at all times, well knew the relations existing between the plaintiff, the said New England-California Corporation, and said George M. Wright “and acquiesced in and fully understood the circumstances under which said promissory notes were executed and also knew that said New England-California Corporation had forfeited its right to transact business within the State of California, by reason of the forfeiture of its charter within the State of California, as aforesaid, which forfeiture was and is at all times since

It is further found that “each of the allegations of the cross-complaint was, and is, untrue; that no evidence has been introduced showing, or tending to show, that within four years previous to the commencement of this action, or at all, the cross-defendant, plaintiff herein, has been, or ever was, indebted to cross-plaintiff, defendant herein, upon an open, mutual and current account, or any account, in the sum of Four Hundred Fifty Dollars ($450.00), or any sum, for or on account of moneys loaned to him by said cross-plaintiff, or at all.”

Plaintiff, upon the findings and the conclusions of law following therefrom, was awarded judgment in the total sum of $510, which includes the aggregate of the sums for which, respectively, the notes counted upon were given, together with the interest accruing thereon.

The defendant appeals from the judgment in accordance with the provisions of section 953a of the Code of Civil Procedure.

It is admitted that, prior to the making and delivery of the notes in question by defendant to plaintiff, the New England-Califomia Corporation failed to pay the annual tax to the state, as required by the Statute of 1917, supra, and had not paid such tax at the time of the commencement of this action and that the Secretary of State of said state duly and regularly made a record in his office of that fact.

The point primarily made by the defendant for a reversal of the judgment is that the forfeiture of the right of said corporation to transact business in California “disqualified it from collecting any claim or account by suit or otherwise.” It is hence contended that “if the corporation could not legally make such collection or maintain such action against the defendant herein, its agent or servant could have no greater or better right than it had.” There are other points urged by the defendant. One of these is that the corporation “never gave plaintiff any assignment of the

Section 3 of the Statutes of 1917 regulating the right of corporations to transact business in the state of California contains precisely the same provisions as are contained in the corresponding section of the act of 1915, and acts amendatory thereof and supplementary thereto, passed by the legislature subsequent to its session of 1915 and relating to the same subject. (See Deering’s General Laws, 1923, p. 548.) Said section, after providing that a foreign corporation shall file with the Secretary of State an authenticated copy of its charter, together with the payment of a specified filing fee, and also filing an affidavit disclosing its authorized capital stock on January 1st of the current year, etc., provides as follows:

“Sec. 3. Except those corporations hereinafter specified, every corporation incorporated under the laws of this state, and every corporation incorporated under the laws of any other state, territory, or foreign country now doing intrastate business within this state, or which shall hereafter engage in intrastate business in this state, shall procure annually from the secretary of state a license authorizing the transaction of such business in this state, and pay therefor the license tax prescribed herein.

“For the purpose of measuring said tax the secretary of state shall examine all articles of incorporation and all documents on file in his office relating to an increase or decrease in the authorized capital stock of corporations which are subject to said tax, and determine the amount due from each corporation by the following rule.” (Following which is the prescribed amount of the tax, which amount is graduated according to or upon the basis of the authorized capital stock of such corporation.)

In the very recent ease of Perkins Mfg. Co. v. Jordan, 200 Cal. 667 [ 254 Pac. 551 ], the supreme court had before it the above-named section, or the same section as it appears in the Statute of 1917, supra, in a proceeding in mandate to compel the Secretary of State, notwithstanding that the

The findings, other than that purporting to find that the New England-California Corporation had forfeited its right to do business in the state of California by reason of the nonpayment of its taxes, are afforded sufficient evidentiary support. The plaintiff testified that from November, 1919, to the time (March 3, 1923) of the alleged forfeiture of the right of said corporation to transact business in California, he was in the employ of said corporation as an expert and manager; that at the time of the purported forfeiture the said corporation was indebted to him (plaintiff) in a sum approximating $6,000 for personal services rendered by him

The defendant testified that he was in possession of and used a tráct of land consisting of twenty-one acres under a lease from the corporation during the years 1920, 1921, 1922, 1923, “and parts of the year 1924,” said lease by its terms to expire with the expiration of the last-named year; that in the negotiations leading to the making of the lease, the plaintiff acted for and on behalf of the corporation; that during the term of the lease he “once in a while” bought hay from the corporation. He admitted that plaintiff, prior to the date of the making of the first of the notes in suit, told him of the corporation’s indebtedness to him on account of salary or wages for personal services performed for the corporation. He testified that plaintiff stated that the notes were to be made to the corporation; that he agreed to give the notes on condition that threatened foreclosure proceedings against the property of the corporation which embraced the acreages under lease by him did not result in dispossessing him of the land demised to him before his fruit crops were gathered; that plaintiff replied that “it was only a matter of form that they wanted the notes, and they wasn’t going to foreclose if I made the note to the New England Corporation.” He added that,

There has now been given in substance all the testimony regarding the transactions resulting in the execution and delivery of the notes in suit to plaintiff. It is thus readily to be seen that there is evidence warranting the conclusion that the plaintiff was authorized to collect, either for himself as assignee or for the corporation as its agent, the moneys due the corporation from defendant and represented by the notes in suit. But, at all events, if it were necessary to admit that there is, as a proposition of law, any force to the defense, interposed by defendant to plaintiff’s action, to the effect that the plaintiff falsely represented to him (defendant) that the corporation was made the payee of the notes and upon such representation alone he signed and executed the instruments, nevertheless the finding that such defense was or is unfounded in fact is fully sustained by the testimony of the plaintiff.

Although we have referred herein to the testimony of the defendant that he was wrongfully ousted from the premises by a Stockton bank as a result of some unexplained foreclosure proceeding involving the property under lease by the defendant, it should be stated that that testimony is of no importance whatever under the issues of the case, since the defendant has not claimed here nor asked for any affirmative relief by way of damages for his asserted wrongful eviction from the premises and asserted consequent loss of crops.

As to the allegations of the cross-complaint to the effect that the plaintiff (cross-defendant to said cross-complaint) was indebted to the defendant upon an open, mutual, and current account in the sum of $450, there was not, as the

There was an attempt by defendant to show that he had paid the debts evidenced by the notes. Some checks given by defendant to the plaintiff for the corporation were introduced in evidence. These checks, however, were shown to have been for an indebtedness accruing in favor of the corporation from defendant prior to the time that the indebtedness evidenced by the notes was created. At any rate, the court was well within its discretion in so finding from the evidence upon that subject.

The objection to the rulings of the court permitting the plaintiff to prove by parol that the corporation assigned to him the claims it held against the defendant on the ground that such assignment is not valid or of any legal force because it was not reduced to writing is untenable. In this state, a thing or a chose in action, arising out of an obligation, may verbally or without a writing be transferred by assignment by the owner to another. (Civ. Code, secs. 954, 1052 and 1624; Dingley v. McDonald, 124 Cal. 90 , 94 [ 56 Pac. 790 ].) And, if it is to be assumed that

the verbal assignment by the corporation to plaintiff of the claims existing in favor of the corporation against the defendant was effectuated entirely in the state of Massachusetts, then the validity of the assignment may, under the circumstances of this case, be sustained upon the presumption, which obtains in this state, that, in the absence of proof that the law of a sister or foreign state upon any subject is different from our own law upon the same subject, the law of such sister or foreign state is the same as our law on such subject. (O’Sullivan v. Griffith, 153 Cal. 502 [ 95 Pac. 873 , 96 Pac. 323 ]; Wills v. Wills, 166 Cal. 529 , 532 [ 137 Pac. 249 ] ; McCormack v. McCormack, 175 Cal. 292 [ 165 Pac. 930 ]; Estate of Pusey, 177 Cal. 367 , 373, 374 [ 170 Pac. 846 ]; Fox v. Mick, 20 Cal. App. 599 [ 129 Pac. 972 ]; 5 Cal. Jur., pp. 430, 431, and eases named in the footnotes.) There was no evidence received, nor, indeed, any attempt to prove, in this ease, that at the time the assignment in question here was made, the law of the state of Massachusetts regarding the requisites of a valid assignment of a chose in action was not the same as our law upon that subject. The presumption, therefore, is that,

There are no other points requiring notice herein.

The judgment is affirmed.

Plummer, J., and Finch, P. J., concurred.

A petition by appellant to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on September 6, 1927.