Amacorp Indus. Leasing Co. v. Robert C. Young Associates, Inc.

• Decision Date: 28 October 1965
• Citation: 237 Cal.App.2d 724,47 Cal.Rptr. 294
• Court: California Court of Appeals Court of Appeals
• Parties: AMACORP INDUSTRIAL LEASING CO., Inc., a corporation, Plaintiff, Cross-Defendant and Respondent, v. ROBERT C. YOUNG ASSOCIATES, INC., a corporation, Defendant, Cross-Complainant and Appellant. Addressograph-Multigraph Corp., a corporation, Cross-Defendant and Respondent. Civ. 28644.

Page 294

47 Cal.Rptr. 294

237 Cal.App.2d 724

AMACORP INDUSTRIAL LEASING CO., Inc., a corporation, Plaintiff, Cross-Defendant and Respondent, v. ROBERT C. YOUNG ASSOCIATES, INC., a corporation, Defendant, Cross-Complainant and Appellant Addressograph-Multigraph Corp., a corporation, Cross-Defendant and Respondent.

Civ. 28644.

District Court of Appeal, Second District, Division 2, California.

Oct. 28, 1965.

Song, Kell & Schwartz, by George W. Kell, Monterey Park, for respondent Amacorp Industrial Leasing Co., Inc.

Steven L. Dobbs, Los Angeles, for appellant Robert C. Young Associates, Inc.

McCutchen, Black, Verleger & Shea, and Howard J. Privett, Sheldon A. Gebb, and Franklin H. Wilson, Los Angeles, for respondent Addressograph-Multigraph Corporation.

ROTH, Presiding Justice.

Respondent, as plaintiff Amacorp Industrial Leasing Co., Inc., sued appellant Robert C. Young Associates, Inc. (Young) for money allegedly due on a lease contract executed on or about May 10, 1962 covering an offset duplicating press. The contract called for the payment of $14,115.00 payable in 60 monthly installments. $1,646.75 was paid.

Young denied each and every allegation of the complaint, admitting only the payment of the $1,646.75. Young set up an affirmative defense in his answer and cross-complained against Amacorp, adding as a new cross-defendant, Addressograph-Multigraph Corp. (hereinafter called Multigraph). The allegations of the affirmative defense and of the cross-complaint are substantially the same. These allegations in pertinent part are that:

On or about January 25, 1962, Young entered into a contract with Multigraph for the purchase of the printing press; a copy of this contract is attached to the cross-complaint and incorporated by reference (this was a form contract, describing the press, the parties to the contract, and the total price of the press as $10,693.28; the terms of payment were not filled in, nor was it signed or accepted by Multigraph); on or about May 10, 1962, Young was led to believe by Multigraph that Amacorp was a subsidiary of Multigraph and Young was persuaded by Multigraph to sign a lease of personal property with Amacorp; a copy of the lease is attached to the cross-complaint and incorporated by reference (a form lease fully completed and apparently duly executed by both parties on May 10, 1962, describing the same press); prior to January 25, 1962, Young explained to Multigraph the particular use to which the press was to be put, and Multigraph warranted that the press would do the job; prior to January 25, 1962, Multigraph delivered the machine in pursuance of the sales contract [between Multigraph and Young]; Multigraph 'represented to the cross-complainant that AMACORP * * * would enter into a leasesales agreement * * *' referring to the lease agreement 'wherein cross-complainant agreed to pay the rental for the use of the * * * press in the sum of $14,115.00 at the monthly rental rate of $235.25 and under the said alleged agreement the cross-complainant paid $1,646.75'; after delivery of the press it proved to be deficient [in certain specified ways]. Appellant prayed for a rescission of the agreements and for damages.

Amacorp answered the cross-complaint. Multigraph demurred specifically and generally. On September 25, 1963, the court sustained the demurrer on all grounds with leave to amend in ten days. Young's request for an extension of time to amend was orally stipulated to by Multigraph and on November 8, 1963, Young served an amended cross-complaint on Multigraph, but did not file it with the court. The amended cross-complaint was in substance a repetition of the original cross-complaint. Multigraph again demurred, but solely on the ground that the amended cross-complaint failed to state a cause of action; in addition Multigraph moved to strike the pleading on the grounds that it was a sham and that its filing was untimely.

On November 14, 1963, Amacorp filed an answer to the amended cross-complaint, which although not filed with the court until December 2, 1963, was served on Amacorp apparently on the same day it was served on Multigraph, to wit, November 8, 1963.

On Friday, November 29, 1963, hearing was held on the demurrer and motion to strike, at which time Young had still not filed its amended cross-complaint with the court. The minute order of November 29 states that it was stipulated that the amended cross-complaint could be filed that day.

On December 2, 1963, the following Monday, the amended cross-complaint was filed. On December 9, 1963, the court sustained the demurrer without leave to amend and also granted the motion to strike. A judgment was entered dismissing the cross-complaint in favor of Multigraph. Young appeals from this judgment. Appellant urges that the trial court erred in sustaining without leave to amend the demurrer of Multigraph and in granting Multigraph's motion to strike the cross-complaint against it and entering a judgment of dismissal in favor of Multigraph. We agree.

It is settled that a complaint or a cross-complaint challenged by a general demurrer must be liberally construed and the demurrer overruled if any cause of action is stated by the plaintiff. (Boren v. State Personnel Board, 37 Cal.2d 634, 638, 234 P.2d 981; Gressley v. Williams, 193 Cal.App.2d 636, 638-639, 14 Cal.Rptr. 496.)

To determine the sufficiency of a complaint or cross-complaint, the court must look to the whole of the pleading, construing each part in its total context. (Speegle v. Board of Fire Underwriters, 29 Cal.2d 34, 42, 172 P.2d 867; Reed v. Norman, 152 Cal.App.2d 892, 899, 314 P.2d 204.)

It is clear from Young's amended cross-complaint that he is attempting to state a cause of action for breach of warranty. Reading the amended cross-complaint as a whole, it is inferable that Young went to Multigraph to purchase the printing machine; that Multigraph warranted that the press would function according to Young's particular needs; that some sort of agency relationship existed between Multigraph and Amacorp under which Young purchased the printing press on a sale-lease arrangement whereby he would lease the machine, paying rent for five years after which time he would own the machine. This inference is bolstered by the fact that the unsigned contract of sale alleged by Young contains a purchase price of $10,693.28, which if paid for a period of five years at a compound interest rate of 5 1/4% equals an amount very close to the lease price of $14,115.00.

Multigraph points to the incomplete contract incorporated in Young's amended cross-complaint and cites Silvers v. Grossman, 183 Cal. 696, 192 P. 534, and Gilmore v. Lycoming Fire Ins. Co., 55 Cal. 123, and argues that no breach of warranty could be stated against it, since the amended cross-complaint fails to allege that Multigraph is under any contractual obligation to Young. These cases cited are not in point. Silvers deals with a settlement contract pleaded in haec verba in defense of a personal injury suit. The contract was ambiguous as to whether it was an executory accord or an accord and satisfaction. The court held that the answer was subject to demurrer since the contract as adopted failed to show an essential fact which ...