Schaefer v. Berinstein

Two appeals are before this court. They will be considered together since the two actions were tried together in the trial court. Each case has been before this court on a prior appeal with respect to the sufficiency of the pleadings of the plaintiff. (Schaefer v. Berinstein, 140 Cal.App.2d 278 [ 295 P.2d 113 ]; Terry v. Bender, 143 Cal.App.2d 198 [ 300 P.2d 119 ].) Herein reference will be made to them as the Schaefer case and the Terry case, respectively.

In each instance, the appeal of the plaintiff is from the judgment, from the order denying a motion for a new trial, from the order denying a motion for a different judgment on the findings, and from the order denying a motion made before judgment for leave to amend the complaint so as to seek attorneys fees.

An appeal does not lie from an order of the trial court denying permission to amend a complaint (Kline v. Beauchamp, 29 Cal.App.2d 340 , 342 [ 84 P.2d 194 ]), but such order is reviewable on the appeal from the final judgment in the action. (Fuss v. City of Los Angeles, 162 Cal.App.2d 643 , 646 [ 328 P.2d 831 ].) The same is true with respect to each appeal from an order denying a motion for a different judgment since such motion was based on grounds which existed before the entry of judgment and which are available on the appeal from such judgment, the purpose of the motion being to obtain a change in the decision of the court upon the same facts. (Litvinuk v. Litvinuk, 27 Cal.2d 38 , 44 [ 162 P.2d 8 ].) The order made in each case denying a motion for a new trial is not appealable. (Singleton v. Perry, 45 Cal.2d 489 , 500 [ 289 P.2d 794 ].)

The nature of the complaint in the Schaefer case is set forth in the opinion on the prior appeal and need not be here repeated. Briefly stated, Schaefer, suing in a representative capacity as a taxpayer, sought relief on the ground that certain municipal transactions were void. The findings of fact of the trial court were as follows: 1. The city of Compton has been a chartered city since July 1, 1925. 2. The plaintiff has been a resident and taxpayer of the city for a period of time beginning more than one year prior to the commencement of the action; that prior to the time he instituted the action, he demanded that the city council cause an action to be filed with respect to the subject matter but the city council refused to do so; and that the plaintiff commenced the action on behalf of himself and other taxpayers of the city. 3. On and after October 19, 1937, the defendant John

Based upon such findings of fact, the trial court reached the following conclusions of law: 1. The demand by the plaintiff that the city commence an action against the defendants was properly refused. 2. There was no conspiracy to defraud the city. 3. All matters and facts concerning dealings between the defendants and each of them and the city were known, or with due diligence could have been known, to the city and to its council and officials more than four years prior to the commencement of this action. 4. The city was not seised or possessed, within five years prior to the commencement of this action, of any of the real properties above described as the Bender, Allen and Elbert, Ltd., purchases. 5. The city and the citizens and taxpayers thereof have been guilty of laches and are barred and estopped from prosecuting this action. 6. Adams and Bender, as to the Bender purchases of August 24, 1943, September 1, 1944, and, as to five lots, of February 13, 1945, and Adams, Bender and Allen, as to the Allen purchases, were for more than five years prior to the commencement of this action in the sole, adverse and exclusive occupancy and possession, under claim of ownership, of such properties, and paid all taxes and assessments thereon. 7. The agreement between Bender and the city of January 11, 1944, should be cancelled as of August 25, 1953. 8. Bender is entitled to recover from the city under the contract all costs advanced by him for the city up to the time of trial and all fees for services rendered to the city prior to August 25, 1953, with respect to properties sold by the city or appropriated to public use by the city prior to August 25, 1953, but he is not entitled to recover

In the Terry case, the plaintiff brought an action as a taxpayer for an injunction under section 526a, Code of Civil Procedure, to enjoin the payment to Bender of a warrant in the sum of $15,095.74. Some of the findings of fact paralleled findings in the Schaefer ease with respect to sales of city property and subsequent transfers, the Bender-Bussing loan, and related subjects. Accordingly, only a portion of the findings of fact in the Terry case need be stated here. Parts of the findings of fact were: 1. Defendant Bussing was the mayor and a member of the city council of the city at all times between July 1, 1953, and December 31, 1956. 2. Defendant Chapman is the city treasurer and has been such officer at all times since July 1, 1953. 3. On January 4, 1955, the city council approved a warrant of the city payable to Bender in the amount of $15,095.74, which was for costs advanced and for services rendered to the city by Bender under the contract of January 11, 1944, as reflected by statements furnished to the city by Bender and audited and approved by the city controller. 4. Chapman, as treasurer, refused to honor the warrant and it has never been paid; by resolution adopted by the city council on November 13, 1956, the motion approving the warrant was rescinded and the warrant was cancelled.

Based upon the findings of fact, the trial court reached the following conclusions of law: 1. The warrant having been cancelled and rescinded, there is no necessity for determining whether an injunction should be granted to prohibit the payment thereof. 2. Since Bussing is no longer mayor and a member of the city council, there is no necessity for determining the issue of whether Bussing should be enjoined from participating in any deliberations of the city council or voting on any matters in which Bender is involved. 3. The rights between Bender and the city under the contract of January 11, 1944, having been determined by the judgment in the

In addition to the specific findings of fact as above set forth, in each case a general omnibus finding was made as follows: “All material allegations of the third amended complaint and the answers thereto which are in conflict with the facts herein found to be true are not true. ’ ’

We must assume that the evidence is sufficient to support the specific findings of fact of the trial court because the plaintiff in each case has failed to show on his appeal that there is no substantial evidence to support any challenged finding. As was said in Routh v. Palm Oil Co., 160 Cal.App.2d 359 , at pages 360-361 [ 324 P.2d 936 ] : “Where an appellant claims that some particular issue of fact is not sustained by the evidence, he is required to set forth in his brief all of the material evidence on the point and not merely his own evidence. If this is not done, the error assigned is deemed waived. (Kruckow v. Lesser, 111 Cal.App.2d 198 , 200 [ 244 P.2d 19 ], and eases cited.)’’ The soundness of such requirement that a fair and adequate statement of the evidence be made is demonstrated in this matter in which the reporter’s transcript is more than 2,400 pages in length. However, so that the matter may be thoroughly considered, we have examined with care the transcript of the testimony before the trial court. Reference to such record will be made in the course of this opinion.

In the Schaefer case, the appellant contends that the trial court failed to make findings of fact as to allegations of actual and constructive fraud. It is true that the general omnibus finding, to which reference has been made, is not a finding on such issues. Such finding is insufficient for any purpose because it is uncertain; it cannot be determined what averments were deemed material by the trial court. (Turner v. Turner, 187 Cal. 632 , 635 [ 203 P. 109 ]; McKannay v. McKannay, 68 Cal.App. 709 , 714 [ 230 P. 218 ];

In the Schaefer case, the appellant states that the trial court found that the defendants did not conspire to defraud “but did not pass on the question whether the defendants committed fraud either jointly or individually.” He states that “ [b]oth actual and constructive fraud are pleaded in great detail in the complaint” and that “ [t]he trial court failed to pass on the truthfulness of those allegations,” in that it found as set forth in the general omnibus finding to which reference has been made above. The light in which the findings must be examined is stated in Chamberlain v. Abeles, 88 Cal.App.2d 291 , at pages 299-300 [ 198 P.2d 927 ] : “The principles governing the duty on the part of the court with respect to the necessity of making findings, is succinctly stated in Petersen v. Murphy, 59 Cal.App.2d 528 , 532 [ 139 P.2d 49 ], as follows: ‘It is well established that unless waived full findings are required on all material issues raised by the pleadings and evidence in a case (24 Cal.Jur. 935-936); that where a court renders a judgment without making findings upon all material issues of fact, the decision is against law, and constitutes ground for granting a new trial provided it appears that there was evidence introduced as to such issue and the evidence was sufficient to sustain a finding in favor of the complaining party if the omitted findings might have the effect of countervailing or destroying the effect of the other findings (24 Cal.Jur. 940-941; Powell v. Johnson, 50 Cal.App.2d 680 , 683 [ 123 P.2d 875 ]; Wilcox v. West, 45 Cal.App.2d 267 [ 114 P.2d 39 ]).

“‘ But it is equally well established that the findings of a court are- to receive such a construction as will uphold rather than defeat its judgment thereon (Breeze v. Brooks, 97 Cal. 72 , 77 [ 31 P. 742 , 22 L.R.A. 256 ]), and are

As to .the purchases by Elbert, Ltd., the court found that in several instances persons and corporations, including Elbert, Ltd., who had employed Bender as an attorney, made purchases of real property from the city. But the crucial finding was that it was not true that Bender represented such persons or corporations in any negotiations or transactions with the city. Moreover, the court found that the city council knew that Bender represented such persons or corporations as an attorney in other matters. With particular reference to the purchases by Elbert, Ltd., the court found that the “City Council received legal advice and consented to such purchases.” Furthermore, it was found that each Elbert, Ltd., purchase was “without any advance understanding or agreement with defendants, or any of them, to later re-sell the same to defendants, or any of them” and that no Elbert, Ltd., purchase was made on behalf of any other defendant. A further finding was that there were no facts with respect to such purchases which were concealed from, or unknown to, the city at the time thereof.

As to all sales, the court found that every bid which was accepted by the city council was the highest bid received for the particular property being sold.

Such specific findings of fact show that there could be no finding of actual fraud and that the determination of the trial court with respect to that issue was contrary to the

Other attacks are made upon the findings of fact on the ground that some findings are uncertain or are in the nature of negative pregnants. An examination of the instances cited leads to the conclusion that they fall within the category aptly described by Mr. Presiding Justice Moore in Heifetz v. Bell, 101 Cal.App.2d 275 , at pages 277-278 [ 225 P.2d 231 ] : “The doctrine still obtains that findings are to be accorded a liberal construction with a view of supporting rather than defeating a judgment, and where it is plain that the intent was to find the material facts against appellant, the trial court’s decision will not be set aside. (Johndrow v. Thomas, 31 Cal.2d 202 , 208 [ 187 P.2d 681 ]; McAuliffe v. McAuliffe, 53 Cal.App. 352 , 355 [ 199 P. 1071 ]; Ballagh v. Williams, 50 Cal.App.2d 10 , 14 [ 122 P.2d 343 ].) It is clear from the findings as a whole and a review of the entire record that it was intended to find adversely on each of appellants’ allegations relative to any material fraudulent representations. If there be error present, it is not such as to have prejudiced appellants or resulted in a miscarriage of justice. Section éYz, article VI of the Constitution was enacted for the purpose of preventing reversals in just such situations as are presented here. Where the record indicates that a fair

We turn now to the validity of the various transactions even though actual fraud did not exist with respect thereto. In considering that problem, we are, of course, bound by the doctrine of the law of the ease. That doctrine, as stated in Nathanson v. Murphy, 147 Cal.App.2d 462 , at page 465 [ 305 P.2d 710 ], is “that where on appeal the court, ‘in deciding the appeal, states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal.’ ” Upon the trial, the evidence

We turn now to a consideration of the Elbert, Ltd., transactions. The court found, based on substantial evidence, that Bender did not represent Elbert, Ltd., in such transactions with the city and that he disclosed to the city council that Elbert, Ltd., was his client in other matters. In that respect the court found that “the city, its council and officials had knowledge that Elbert had employed Bender to perform legal services in matters connected in part with purchases of properties from the City of Compton.” (Emphasis added.) That finding is to be construed so as to support rather than to defeat the judgment. (Johndrow v. Thomas, 31 Cal.2d 202 , 207 [ 187 P.2d 681 ].) It appears that such finding was based on evidence that Bender’s services after such sales consisted of taking steps to perfect title in the purchaser, an undertaking consistent with the city’s purpose of returning property to its normal status with reference to the payment of taxes and the use of the property. The contracts of sale were made on behalf of the city by the city council rather than by Bender and the findings of fact negative the existence of any improper influence by Bender upon the council. Accordingly, cases such as People v. Sullivan, 113 Cal.App.2d 510 [ 248 P.2d 520 ], where a city officer used her position to influence the council for her own private gain, and Miller v. City of Mar

Under the seventh cause of action in the Schaefer case, the plaintiff sought recovery on behalf of the city of monies paid to Bender for services and costs relating to the sales in which he was the actual purchaser. Neither the 1925 charter nor the 1948 charter contains an express provision for the recovery of such payments such as was the case in County of Marin v. Messner, 44 Cal.App.2d 577 [ 112 P.2d 731 ], wherein the applicable section of the Political Code prescribed the duty of the district attorney to institute suit to recover the money of the county which was improperly disbursed. In that case, it was said at page 591: “With respect to the disputed question as to which of the three statutes of limitations must govern, it will suffice to say that the action is not one, as contended by defendant, upon an implied contract for money had and received, wherein the two-year statute is controlling; nor is it one, as contended by the county, to recover money from an involuntary trustee, wherein the four-year statute applies. As heretofore stated, it is an action based upon a liability created by statute, to wit, section 4005b of the Political Code; and therefore, as held by the trial court, the three-year statute (Code Civ. Proe., § 338, subd. 1), is controlling.” In the present case, the appellant Schaefer has not directed attention to any payment to Bender in connection with the Allen or Bender sales which was made within four years of the institution of the action. Clearly, if the two-year limitation relating to money had and received does not apply (Code Civ. Proc., § 339, subd. 1), the four-year limitation would appear to constitute the longest period of time which could be urged by the appellant. The following language in City of Petaluma v. Hickey, 90 Cal.App. 616 , at page 621 [ 266 P. 613 ], is pertinent with respect to the recovery of money illegally paid: “As we have shown above, the liability of the defendant, if any, was that of an involuntary trustee, but it has been frequently adjudged that an action against an involuntary trustee must be commenced within four years and that the statute applicable is section 343 of the Code of Civil Procedure. (Nougues v. Newlands, 118 Cal. 102 , 106 [ 50 P. 386 ]; Broder v. Conklin, 121 Cal. 282 , 288 [ 53 P. 699 ].) The statute of limitations had run.” (See also Moss v. Moss, 20 Cal.2d 640 , 645 [ 128 P.2d 526 , 141 A.L.R. 1422 ].)

We have, accordingly, come to the conclusion that the

A claim of error is founded upon the refusal of the trial court to permit the appellant to introduce evidence tending to prove that Bender purchased properties through dummies in other cities, one or more of which were represented by him. Such rulings were not prejudicial in the light of the evidence and the findings of fact that Bender made known to the Compton city council that he was purchasing in the name of Alzóla and in view of the determination of the trial court upon the matter of the statute of limitations. (Cf. Calistoga Vineyard Co., Ltd. v. Luchetti, 129 Cal.App. 374 , 380 [ 18 P.2d 729 ].) Other claims of error with respect to the admissibility of evidence have been examined. No prejudice to the appellant is discernible.

The appellant Schaefer asserts that the trial court should not have made an affirmative award in favor of Bender. He states: "The peculiarity of the procedure followed by the trial court was that by not insisting on any pleadings on the part of Bender for his affirmative recovery, there was no opportunity to assert a defense in the Schaefer suit to Bender’s claim.” Such contention is without merit. As is hereafter discussed, the Schaefer action was equitable in nature. Equity has power to do complete justice. A court of equity will make a final disposition of the litigation governed by the circumstances as shown to exist at the time judgment is rendered rather than at the inception of the litigation. A supplemental pleading is not necessary to that end. (Kazanteno v. California-Western States Life Ins. Co., 137 Cal.App.2d 361 , 376 [ 290 P.2d 332 ].) Under the eighth cause of action, the appellant sought a declaration as to the validity of the sales in question and the “present validity” of Bender’s contract with the city. In his prayer, he asked for “judgment declaring the rights of the parties under the contract,” under certain resolutions and under the contracts of sale approved by such resolutions. The city was a party and appeared in the action. Pursuant to that cause of action, the court had jurisdiction of the entire matter and was not restricted to a declaration that Bender was entitled to a particular amount under the contract but could render judgment in his favor for that amount. (California Bank v. Diamond, 144 Cal.App.2d 387 , 390 [ 301 P.2d 60 ].)

In the Terry appeal, the appellant contends that he should have a judgment to the effect that Bender was

On the record before us the appellant in each case has failed in his effort to establish fraud or misconduct with respect to Bender’s advice, or lack thereof, on the subject of the effect of the 1945 amendment to section 2911 of the Civil Code.

Appellant in each case argues that he should have been allowed costs in the trial court. Aside from the fact that the cause of action for declaratory relief in the Schaefer ease was equitable in nature (Adams v. Cook, 15 Cal.2d 352 , 362 [ 101 P.2d 484 ]), an action by a taxpayer who alleges a fraudulent or illegal alienation of public property, or a fraudulent or illegal application of public funds, is one in equity since he has no remedy at law. (64 C.J.S. Municipal Corporations § 2157; 52 Am.Jur., Taxpayers’ Actions, § 28.)

In each case, complaint is also made of the refusal of the trial court to permit an amendment to the complaint for the purpose of seeking recovery of counsel fees. There was no error. “In the absence of statutory authority and where no fund has been created or preserved, a taxpayer is not entitled to the allowance of counsel fees.” (Note, 5 A.L.R. 2d 874 , 877; see Williamson v. Los Angeles County Flood Control Dist., 42 Cal.App.2d 622 , 628 [ 109 P.2d 992 ].) While the actions have resulted in a saving to the city and, to that extent, a public service has been rendered, the city treasury was in no sense in the custody or control of the trial court and that court could not order any amount paid therefrom as counsel fees in either ease. The same reasoning applies to the claims of each appellant with respect to reimbursement for expenses of investigation and litigation.

The essential issues in the controversy upon which both cases were based were properly determined in the Schaefer ease. Under such circumstances, no error appears as to the disposition made in the Terry case.

The city has paid the judgment for money in the Schaefer ease. But in view of the determination made herein it is not necessary to pass upon the effect, with respect to this appeal, of such action of the city. (Cf. Oakman v. City of Eveleth, 163 Minn. 100 [ 203 N.W. 514 ].)

In each case, the appeals other than from the judgment are dismissed and the judgment is affirmed. Each party will bear his own costs on appeal.

Shinn, P. J., and Vallée, J., concurred.

A petition for a rehearing was denied May 18, 1960, and appellants’ petition for a hearing by the Supreme Court was denied June 14, 1960.