Michelin Tire Co. v. Bentel
Michelin Tire Co. v. Bentel
Opinion of the Court
The above-entitled actions were tried together upon the same evidence. The judgment in each case was for the defendants and the plaintiff has appealed therefrom. They are presented upon the same transcript. Case No. 5050 is upon an undertaking to release an attachment. Case No. 5051 is upon the individual guaranty of Bentel covering the same claim. We will consider them in numerical order.
L. A. No. 5050.
This is an action upon an undertaking executed by the defendants under the following circumstances: On January 17, 1912, the plaintiff, Michelin Tire Company, a California corporation, began an action to recover money against Coleman & Bentel Company, a corporation, in the superior court. A writ of attachment was duly issued therein. By virtue thereof the sheriff, on or before January 25, 1912, levied upon personal property belonging to Coleman & Bentel Company, and took it into his custody. It was then agreed between the parties that if the undertaking sued on herein were executed, together with a certain bond of George R. Bentel, the plaintiff would release the property from the levy and would not have the writ levied on any other property. Thereupon the undertaking was executed. Therein the said Baldwin, Keating, and Bentel undertook and promised that “in case the plaintiff recovers judgment in said action, defendant will pay to plaintiff the amount of the judgment to be recovered in said action, or that in default thereof, the said sureties will, on demand, pay to plaintiff the amount of said judgment so recovered,” not exceeding fifteen thousand dollars, the amount of the undertaking. In consideration thereof the property was released and no further levy was made under the writ.
The theory of the defense is that the undertaking of the sureties was for the payment of any judgment that might be rendered in the action pending at the time it was executed ; that afterward, and without their consent, an amended complaint was filed which set forth a new and different cause of action; that the cause then proceeded upon said new cause of action; that the judgment recovered was upon said new cause of action and not upon the cause of action *318 averred in the original complaint. Upon this the claim is that, as the contract they made as sureties was thereby altered, they are exonerated. (Civ. Code, secs. 2819, 2840, 2844.)
For the better understanding of the question raised it is necessary to state at some length the facts preceding the attachment suit, together with the pleadings and judgment therein.
Two corporations were in existence, both named “Michelin Tire Company,” one, plaintiff herein, organized under the laws of California, the other organized under the laws of New Jersey. The California corporation was formed by the stockholders of the New Jersey company for the purpose of acting as agent for the latter company in carrying on and facilitating its California business. The New Jersey corporation was a manufacturer of automobile tires and accessories in New Jersey. It had appointed Coleman & Bentel Company its agent in Los Angeles to sell its goods at that place, under a contract whereby the agent agreed to make to the principal monthly remittances of the amounts received for goods of the principal sold by the agent. From time to time goods were shipped by the New Jersey corporation to Coleman & Bentel Company, some directly to it and some through the medium of the California Michelin Tire Company as its agent, all to be sold in its behalf by said Coleman & Bentel Company. From these sales a debt amounting to a sum over twenty thousand dollars accrued from Coleman & Bentel Company to said New Jersey corporation. The attachment suit was begun by the California corporation on January 17, 1912, as above stated. The complaint then filed alleged that defendant, Coleman & Bentel Company, had entered into a contract with the said Michelin Tire Company of California whereby said Tire Company agreed to supply said defendant with automobile tires and accessories to be sold by the said defendant as the exclusive agent of said plaintiff, the title to said tires to remain' in the plaintiff until sold and paid for, and that said defendant should remit to plaintiff each month the amount due to said plaintiff under said agency on account of such sales, and that under said contract there existed a mutual, open, and current account between the plaintiff and defendant upon which there had become due to the plaintiff from said defendant the sum of $22,366.19, which remained unpaid and for which judgment was demanded *319 in favor of said plaintiff against said defendant. Bentel was also ■ a party to said suit, and with respect to him it alleged that he was the holder of twenty-five thousand shares of stock of said Coleman & Bentel Company, and by reason thereof was liable for a certain portion of said indebtedness, for which judgment was asked against him. It was the action upon this complaint that was pending at the time the undertaking herein sued on was executed and, of course, it was to this action that the undertaking referred, and it was the judgment in this action which the sureties therein undertook and promised to pay.
In truth and in fact the Michelin Tire Company of California had not made any contract with or sold or consigned any goods to Coleman & Bentel Company, the latter had not sold any goods for or on behalf of the former, and was in no wise indebted to it in any sum whatever. The Coleman & Bentel Company had, however, sold tires as agent for the Michelin Tire Company of New Jersey and had become and was indebted to it therefor as before stated. Some time between the execution of this undertaking and the second day of April, 1912, it was discovered by the plaintiff, or its attorneys, that a mistake had been made and that the goods sold by the Coleman & Bentel Company were wholly for the account of and under a contract with the Michelin Tire Company of New Jersey, and that said company was the real creditor to whom said debt was due and with whom the account had accrued. On April 2, 1912, the Michelin Tire Company of New Jersey transferred and assigned to the Michelin Tire Company of California all of its claims as aforesaid against said Coleman & Bentel Company.
An answer to the original complaint was filed in March, 1912, taking issue on the material allegations of the said complaint. These issues never came to trial. They were disposed of in the following manner: In May, 1912, after the aforesaid assignment by the New Jersey corporation to the plaintiff, the attorneys of the plaintiff informed the defendants’ attorneys that plaintiff had no cause of action against said defendants at the time the action was begun and that it could not recover in the action. No lawful course was then open to the plaintiff, except to dismiss the action and begin a new action on the claim assigned to it by the New Jersey corporation. Apparently for the purpose of avoiding *320 such dismissal, a stipulation was then made between the parties. It recited that said plaintiff held no claim against said defendant when the action was begun, but that it had, on April 2, 1912, acquired by assignment the claim of the New Jersey corporation against defendants, and that by reason of these facts it would be necessary to dismiss the action, unless the defendants would permit the plaintiff to file an amended complaint and would waive the objection that said plaintiff was not the owner of the claim, or any claim, against defendants at the time the action was begun. Following this recital was an agreement declaring that the plaintiff was not the owner of the claim sued on at the time the action was begun and that defendants were not, nor was either of them, indebted to plaintiff at that time in any sum whatever ; that on April 2, 1912, the plaintiff acquired by assignment the claim of the New Jersey corporation against the defendants and was then the owner thereof, and further agreeing that the plaintiff might file an amended complaint upon the aforesaid assigned claim of the New Jersey corporation and that the objection that the plaintiff was not the owner of the claim at the time of the commencement of the action “shall be for the purposes of the further prosecution of this action waived, in consideration of, and subject to the conditions” expressed in the stipulation, and that no objection to the prosecution of the action would be made by the defendants on the ground that plaintiff was not the owner of the claim when the action was begun. It further declared that the plaintiff waived all costs accrued up to that time. The conditions referred to were that if the defendants, or either of them, desired to sue the plaintiff for damages on account of the beginning of the action, or any proceedings theretofore taken therein, the facts declared in the stipulation should be admitted as true in such action and that with respect to such action the action then pending should be treated as having been dismissed at the date of the stipulation and that the consent of the defendants to the further prosecution of the claim as then held by assignment should be without prejudice to any rights of the defendants, or either of them, against said plaintiff.
Thereupon the plaintiff filed an amended complaint wherein it alleged the accrual of the indebtedness from the defendant, Coleman & Bentel Company, to the New Jersey *321 coloration for goods sold under the agency above mentioned; its assignment on April 2, 1912, to the plaintiff; its nonpayment, together with the holding by Bentel of a certain portion of the stock in the defendant corporation and his liability as such stockholder. Judgment was asked against the defendant for the full amount of the claim, and against Bentel for his proportion thereof. In the meantime, however, about two thousand dollars had been paid on the New Jersey corporation claim and the amount of the judgment asked was less than in the former complaint by reason of such payment. Upon the trial of the action judgment was given in favor of the plaintiff for the amount found due to the New Jersey corporation and assigned to the plaintiff, as above stated.
A different question is presented with respect to the liability of the defendant Bentel. He was a party to the action in which the attachment was issued and judgment was asked therein against him on account of his liability as a stockholder. He joined with the other defendant in the answer filed in March, 1912, and they were both represented by the same attorney. The stipulation above mentioned, agreeing to the continuation of the action upon the amended complaint and waiving the objection that the plaintiff was not the owner thereof when the action was begun, was signed by the attorney for both defendants, including Bentel. Consequently, it cannot be claimed that he did not consent to the change in the cause of action.
It does not purport to have that effect. Its import is to the contrary. One of the conditions stated in the stipulation was that the consent to the prosecution by the plaintiff of the newly acquired claim in the old action should be “without prejudice to any rights which the defendants, or either of them, may have” against said plaintiff. This plainly refers to and includes other rights than that of making a defense against the new claim, for that right they would have had without the condition. It therefore included and reserved the right of Bentel, in any suit upon the undertaking for the release of the attachment, to claim in defense thereto that he was not liable thereon for any judgment rendered in the further prosecution of the main action, for that it covered only the cause of action originally alleged and which would *325 be, in effect, abandoned by the amendment to the complaint to which he was consenting. Consequently, it did not alter the undertaking so as to make it apply to the new cause of action.
For these reasons we conclude that the court below was correct in rendering judgment in favor of the defendant Bentel.
The judgment in case No. 5050 is affirmed.
L. A. No. 5051.
This action is upon a guaranty given by the defendant, Bentel, for the purpose of obtaining the release of the attachment hereinbefore mentioned. It was given simultaneously with and in the same action as the undertaking sued on in appeal No. 5050. At the time the attachment was issued a *326 levy was made, not only on the property of Coleman & Bentel Company, but also upon several parcels of real property belonging to Bentel. The guaranty signed by Bentel aloné was made in pursuance of the same negotiations for the release of the attachment which led to the execution of the undertaking. Bent el’s agreement recited that the defendants were desirous of substituting for the attachments a bond for the release thereof and that plaintiff had agreed to accept such bond on condition that Bentel “shall personally guarantee the payment of any judgment that may be obtained in this action on the account sued upon, and personally guarantee the payment of whatever -amount is actually due the plaintiff from the defendant Coleman & Bentel Company.” The agreement then followed, stating that in consideration of the release of the attachment and the surrender of certain uncollected accounts previously pledged to the plaintiff, the said Bentel “does hereby guarantee the payment of any judgment that may be obtained in this action against the defendants or either of them, and personally promises to pay whatever amount is found to be due to the plaintiff from the defendants.”
It will be seen that the language of this instrument, executed as it was on January 25, 1917, eight days after the beginning of the action and prior to any amendment of the complaint therein, necessarily referred solely to the cause of action set forth in the complaint as it then stood. It therefore contains no promise to pay any judgment rendered upon some other and different cause of action. Bentel had a right to insist that the case should stand as it then was, in which event, since, as we have shown, the plaintiff then had no cause of action against the defendants, or either of them, and could not recover .any judgment against either of them, Bentel would never have become liable to the plaintiff upon his guaranty for any sum whatever. The subsequent amendment of the complaint in pursuance of the stipulation to which we have already referred expressly reserved any right which Bentel had against the plaintiff. This, as we have said with reference to his obligation upon the undertaking, included his right to defend any action upon this guaranty on the ground that it did not cover or make him liable for any judgment that might be rendered in the newly alleged cause of action set up in the amended complaint in pursuance
*327
of the consent given in the stipulation upon the conditions therein stated.
The judgment in case No. 5051 is affirmed.
Olney, J., Lennon, J., Angellotti, C. J., Lawlor, J., and Sloane, J., concurred.
Reference
- Full Case Name
- MICHELIN TIRE COMPANY, Appellant, v. GEORGE R. BENTEL Et Al., Respondents; MICHELIN TIRE COMPANY, Appellant, v. GEORGE R. BENTEL, Respondent.
- Cited By
- 11 cases
- Status
- Published