McCreary v. Falconer
McCreary v. Falconer
Opinion of the Court
Plaintiffs appeal from judgment rendered against them in an action in interpleader.
On November 26, 1919, defendant May Bland Falconer executed to City Savings Bank of Santa Cruz, her $6,000 promissory note, secured by trust deed, wherein these plaintiffs were named as trustees. Plaintiffs were at said time officials of the bank, being respectively treasurer and president thereof. It appears that their service in the capacity of trustees was purely nominal. All matters of every kind connected with the transaction were handled by the bank’s then attorney, Ralph H. Smith. In the name of the trustees he instituted and carried on the proceedings next hereinafter described:
On demand of the bank, after default of the debtor, upon notice and all legal steps duly taken, and on April 27, 1922, he caused the property covered by the trust deed to be sold to satisfy said indebtedness. This property was purchased by one Jansen for $12,250, which sum was turned over to Smith on behalf of said trustees. After applying it to satisfy the indebtedness, costs of sale and other expenses, there remained in the hands of Smith $3,328.62, in the distribution of which amount various persons claimed a right to participate. Therefore, on March 16, 1923, this action in interpleader was instituted. A complaint was prepared and filed by Smith wherein the trustees were named as plaintiffs and said debtor and other persons < claiming an interest in said residue were named as defendants. After setting forth the facts relative to foreclosure of the trust
According to testimony later given by the county clerk at the time Mr. Smith filed said complaint, he handed the clerk his personal check for $3,328.62 but failed to explain its connection with the filing of the action. The clerk placed the check in the money drawer, where it remained until the death of Smith, hereafter referred to, awaiting Smith’s explanation of its purpose.
On July 3, 1923, defendant Frey filed an answer, asserting his claim to said sum. On January 7, 1925, defendant Bias filed an answer and cross-complaint, asserting his claim thereto. On March 28, 1928, Smith died. In November or December of that year the attention of the county clerk was again called to the check, which had then become valueless by reason of Smith’s death. Finally, on October 20, 1930, this cause was called for trial. On November 17, 1930, the court permitted plaintiffs to file an amendment to their complaint, alleging that neither of them had ever received said sum of money and that it had never been deposited in court. On said date, also, plaintiffs moved to be dismissed from the action on the ground that the court had lost jurisdiction because of the lapse of more than five years after filing of the last answer. (See. 583, Code Civ. Proc.) This motion was never decided and the trial was never completed by reason of resignation of the trial judge.
The cause next came on for hearing on October 21, 1931. The amendment to the complaint of November 17, 1930, was withdrawn and the action was dismissed as to all defendants save said answering defendants, Bias and Frey, who stipulated that defendant Bias was entitled to $1,828.62 of said sum and defendant Frey to the other $1,500 thereof, each to receive half the interest due on the alleged court deposit and each to pay his own costs. Evidence was then taken. Among other testimony was that of • plaintiffs to the effect that at all times until after Smith’s death they believed that
To this supplemental pleading defendants Frey and Bias filed separate answers alleging that Smith had received said residue as attorney and agent for plaintiffs and hence they were personally accountable to defendants therefor, without regard to their ability to collect from said estate. No hearing was had on the issues tendered by these supplemental pleadings. The court made an order dismissing the action as to said executrix of the Smith estate and thereafter, on October 6, 1932, made findings in accord with the allegations of said supplemental answers, followed by judgment awarding said $3,328.62 to said answering defendants in the respective proportions to which their stipulation entitled them. The trial court had theretofore, on August 15, 1932, filed a written memorandum stating his conclusion that defendants were not in privity, either of contract or otherwise, with said Smith, and his tortious act in failing to make said deposit could in nowise prejudice their right to receive said fund from plaintiffs; that this situation, so far as plaintiffs are concerned, is deplorable but Smith was selected by them as their attorney and agent and they must look exclusively to his estate for such relief as may be available.
(1) This claim falls before the fact that the fund disposed of by the judgment was held by appellants through their agent and attorney Smith. In this behalf the above-mentioned analysis of the case by the trial court is correct. Appellants cannot avoid the consequences of their conduct in delegating all their duties as trustees to their said agent and attorney. Had he followed the customary procedure of depositing the fund in court to await decision in the ease, appellants would have been exempt from a personal judgment. The act of said agent in holding the fund became the act of appellants and the situation is the same as if they themselves had possession thereof. The judgment is not rightly denominated an affirmative judgment against appellants as it goes merely to distribution of the fund held by them, in which they have disclaimed any interest. It is a proper judgment in an equitable action in interpleader, according appellants the relief prayed for, to wit: litigation by defendants of their several claims to said fund and order for its proper distribution. Furthermore, appellants are not prejudiced by this holding' as, having no right to the fund themselves, they would in any event be liable therefor were the claimants relegated to separate actions against them for money had and received.
(2) Effect of amended pleadings ordering new party brought in. Although the court permitted the filing of these amended pleadings, prior to judgment it ordered dismissal of the new party thereby brought into the action, to wit: the executrix of said Smith estate. No new issue was raised by the amendments and there was no necessity
(3) Dismissal of action under section 583 of the Code of Civil Procedure. It was not incumbent upon the court to dismiss the action, as the running of the five-year period started anew upon the filing of the several amended pleadings. (Mercantile Investment Co. v. Superior Court, 218 Cal. 770 [25 Pac. (2d) 12].)
The judgment is affirmed.
Curtis, J., Shenk, J., Seawell, J., Thompson, J., and Waste, C. J., concurred.
Rehearing denied.
Reference
- Full Case Name
- T. G. McCREARY v. MARY E. FALCONER, Defendants HARRY J. BIAS
- Status
- Published