Balling v. Finch
| Decision Date | 09 May 1962 |
| Citation | 203 Cal.App.2d 413,21 Cal.Rptr. 490 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Otto M. BALLING, Plaintiff and Respondent, v. Oral FINCH, Defendant and Appellant. Civ. 25644. |
Kolts & Kolts, Los Angeles, for appellant.
Ellis D. Reiter, Robert J. Sullivan, Los Angeles, for respondent.
Defendant Finch appeals from an adverse summary judgment.
The complaint is on a promissory note signed by Finch, John Basso 1 and Fred H Laurans. 2 In his answer Finch admitted the execution of the note but alleged four affirmative defenses. On this appeal, however, we need consider only the facts in the affidavits dealing with appellant's defense on the theory of duress and intimidation on the part of plaintiff.
Plaintiff filed a motion to strike the answer and for summary judgment. His motion was supported by two affidavits, one by himself and the other by his counsel. Opposition affidavits were filed by the defendants, Finch and Basso, and Robert F. Jonas. 3 Following a hearing, the motion to strike was granted and judgment in favor of the plaintiff as prayed summarily granted against defendant Finch. It is from this judgment that Finch appeals.
It appears that in the early part of June 1958 plaintiff Balling and defendants Basso and Laurans were interested in forming a corporation by the name of 'Automatic Parking Corporation' and in obtaining a permit to issue certain of its stock for sale to the general public and as promotional shares to be divided among themselves. Finch, who is an attorney, was employed to handle the organization and incorporation of the new concern and later became its president.
On June 3, 1958, plaintiff delivered his check to Finch, payable to his order, in the amount of $1,000. On the face of the check in the left hand corner are these words: 'Corp. Stock per agreement'. Finch delivered a receipt on his letterhead to plaintiff, the material portion of which read: This receipt was signed by Finch. On the lower left corner of this document were these words: 'Automatic Parking Corp.' Thereafter, on July 31, plaintiff delivered to Finch a check signed by plaintiff's wife for $1,000. On its fact were these words: 'Automatic Parking Corp. stock--' Finch delivered to plaintiff a signed receipt which also provided, as did the one previously issued to him, that he was to have both common and promotional stock when issued. The total of these and other checks given to Finch by plaintiff was $4140. During this period Finch prepared and filed articles of incorporation for Automatic Parking Corporation and prepared and filed the original application for permit to issue stock.
Some time prior to August 1959 plaintiff consulted his attorney, Ellis D. Reiter, and related to him these transactions. Mr. Reither advised plaintiff that the money was returnable but that before taking any legal action, an effort should be made to settle the matter.
During the early part of August Basso 4 and Laurans had a conference with Finch and advised him that plaintiff wanted his money back and had made threats to go to the Corporation Commissioner and the District Attorney unless his money was returned to him, and had told them that his attorney had advised him that the receipt given him by Finch, promising him common and promotional stock, when such was issued, was a violation of law. The Jonas 5 affidavit was along the same line.
Some time thereafter, according to Finch's affidavit, Reiter in a telephone conversation with him, stated that 'in his opinion there had been a violation of the Corporate Securities Act and that affiant [Finch] was guilty of such violation and that * * * unless a note was executed by affiant [Finch], Basso and Laurans, that the Corporation Commissioner would be advised of the transaction between the corporation and Balling and that Balling might even go and see the District Attorney about the matter.'
Plaintiff denied having stated he would consult the Corporation Commissioner in an effort to prevent the issuance of a permit to sell the stock of the corporation unless his money was returned. Plaintiff's attorney denied telling Finch that he would advise plaintiff to take the matter before the Corporation Commissioner and the District Attorney in order to get his money back since he believed there had been a violation of the Corporate Securities laws. He also denied stating to Finch that he would consult with either of these officials.
About this time the corporation retained Thomas J. Kelley, an attorney who had had substantial experience in handling matters before the Corporation Commission, to prepare an amendment to the application of Automatic Parking Corporation for a permit to issue stock. It was understood, however, that Finch rather than Kelley was representing the corporation in the Balling matter.
Finch and Kelley conferred about the matters here involved. Kelley advised Finch that in this opinion there had been a violation of the Corporate Securities Act. He also told Finch he did not want the corporate financial statement to show that the corporation owed money to anyone as this might jeopardize securing the permit.
Thereafter, as a result of conferences between the various attorneys, the matter was settled by paying plaintiff $750.00 in cash and giving him a promissory note for $3390.00 here sued upon, executed by each of the defendants. The note, according to Finch's affidavit, was presented to him for his signature by Laurans. Finch stated that he believed that if he did not sign the note the Corporation Commissioner would not issue the amended permit for the corporation to issue stock and also that he 'felt that there was a possibility of a criminal investigation which would be embarrassing to affiant [Finch] although he was an innocent victim of any wrong doing.'
Upon the delivery of the money and note to plaintiff's counsel, plaintiff executed a release discharging Automatic Parking Corporation from any and all claims against said corporation including the right to participate in any of its assets. This release was delivered to Kelley who was then in a position to file financial statement of Automatic Parking Corporation with the Corporation Commissioner showing no indebtedness on the part of the corporation.
The issue to be determined by the trial court on a motion for summary judgment is 'whether or not defendant has presented any facts which give rise to a triable issue or defense, and not to pass upon or determine the issue itself, that is, the true facts in the case.' (Eagle Oil & Ref. Co. v. Prentice, 19 Cal.2d 553, 555, 122 P.2d 264, 265; Herbert v. Delphia, 189 Cal.App.2d 485, 489, 11 Cal.Rptr. 353.) Whether there exists a genuine issue as to any material fact must be determined from the affidavits. (Cone v. Union Oil Co., 129 Cal.App.2d 558, 563, 277 P.2d 464; Coyne v. Kremples, 36 Cal.2d 257, 263, 223 P.2d 244.) In considering the affidavits, the rule is that 'the facts stated in the affidavits opposing the motion must be accepted as true, that such affidavits must be liberally construed and need not necessarily be composed wholly of strictly evidentiary facts, and that those of the moving party must be strictly construed.' (Buffalo Arms, Inc. v. Remler Co., 179 Cal.App.2d 700, 703, 4 Cal.Rptr. 103, 105; J. C. Wattenbarger & Sons v. Sanders, 191 Cal.App.2d 857, 864-865, 13 Cal.Rptr. 92.)
It is clear that the affidavits do present a factual issue; viz., did plaintiff make the threats attributed to him? Since we must accept the statement of facts in appellant's affidavits as true it follows that this question must be answered in the affirmative. The basic question then is whether the threats made by plaintiff may constitute a defense to this action on the promissory note. We have concluded this question must also be answered in the affirmative.
The guiding principles here applicable are set forth in Lewis v. Fahn, 113 Cal.App.2d 95, 98-100, 247 P.2d 831, 833 in approved quotations from Am.Jur. and 17 C.J.S. Contracts § 175, page 533:
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