Bowles v. Superior Court of City and County of San Francisco

• Decision Date: 19 May 1955
• Citation: 44 Cal.2d 574,283 P.2d 704
• Court: California Supreme Court
• Parties: Henry Miller BOWLES et al., Petitioners, v. The SUPERIOR COURT OF CITY AND COUNTY OF SAN FRANCISCO et al., Respondents; George W. Nickel, Jr., et al., Real Parties in Interest. George W. NICKEL et al., Petitioners, v. The SUPERIOR COURT OF CITY AND COUNTY OF SAN FRANCISCO et al., Respondents; George W. Nickel, Jr., et al., Real Parties in Interest. S. F. 19122, 19123.

Page 704

283 P.2d 704

44 Cal.2d 574

Henry Miller BOWLES et al., Petitioners, v. The SUPERIOR COURT OF CITY AND COUNTY OF SAN FRANCISCO et al., Respondents;

George W. Nickel, Jr., et al., Real Parties in Interest.

George W. NICKEL et al., Petitioners, v. The SUPERIOR COURT OF CITY AND COUNTY OF SAN FRANCISCO et al., Respondents;

George W. Nickel, Jr., et al., Real Parties in Interest.

S. F. 19122, 19123.

Supreme Court of California, In Bank.

May 19, 1955.

Rehearing Denied June 16, 1955.

John Francis Neylan, Palo Alto, and John F. Duff, San Francisco, for petitioners Bowles and others.

Reginald L. Vaughan, Varnum Paul and Vaughan, Paul & Lyons, San Francisco, for petitioners Nickel and others.

Morse Erskine, San Francisco, for respondents.

C. Ray Robinson, T. Keister Greer, San Francisco, William B. Boone, Merced, Earl F. Hedlund, San Francisco, and Herman F. Selvin, Los Angeles, for real parties in interest.

GIBSON, Chief Justice.

Some of the beneficiaries of a trust established by Henry Miller brought a suit for removal of the trustees and for additional relief. Respondent court appointed a receiver, accepted the resignations of two trustees, removed the third trustee and appointed successor trustees. This proceeding was then commenced by other beneficiaries to prohibit further steps from being taken in that action and to have the orders already made declared null and viod.

Under the terms of the trust, the income was payable for life to Henry Miller and then for life to his daughter and son-in-law, Nellie Miller Nickel and J. Leroy Nickel. After their deaths the income became payable to their three children, George W. Nickel, J. Leroy Nickel, Jr., and Beatrice Nickel Morse, who are life beneficiaries. Upon the death of a life beneficiary his share of the income is to be paid to his issue, and upon the death of the last surviving life beneficiary the trust is to terminate and the corpus, with certain exceptions, is to be distributed to the 'descendants born in lawful wedlock' of Nellie Miller Nickel and her husband, J. Leroy Nickel. To differentiate between the classes of beneficiaries, we shall use the terms 'life beneficiaries' and 'remaindermen.' Life beneficiary George W. Nickel had four children, hereafter called the Nickel remaindermen, and fifteen grandchildren. Beatrice Nickel Morse had three children, hereafter called the Bowles remaindermen, and six grandchildren. J. Leroy Nickel, Jr., had no children. ¹ The trustees were J. Leroy Nickel Jr., one of the life beneficiaries, J. E. Woolley and A. R. Olsen.

The trustee removal action was brought by three of the Nickel remaindermen, George W. Nickel Jr., Mary Nickel Lombardi and John Beverly Nickel. Sally Nickel Mein later joined the other Nickel remaindermen as a party plaintiff. The present proceedings were commenced by two of the life beneficiaries, George W. Nickel and Beatrice Nickel Morse, and by the Bowles remaindermen, Henry Miller Bowles, George McNear Bowles and Amy Bowles Lawrence.

The complaint in the removal action was filed on June 13, 1954, by the Nickel remaindermen 'as beneficiaries of the trust * * * who sue in their own behalf, and in behalf of all other persons who have a beneficial interest in said trust.' They alleged that defendant trustees were guilty of fraud and mismanagement, that the trust, as well as certain corporations in which the trust owned most of the stock, had been defrauded by the acts of C. E. Houchin and others, that the trustees had failed and refused to present claims against the estate of Houchin following his death or to take steps to recover trust and corporate properties, and that claims against the Houchin estate would be barred by the statute of limitations unless presented by June 16. ² The complaint prayed for the appointment of a receiver with authority to file such claims, for the removal of defendant trustees and the appointment of new trustees, for an accounting by the trustees and an order surcharging them in the amounts found due from them to the trust, and for an order directing J. Leroy Nickel, Jr., to return to the trust all income which he had received as a life tenant. While the present proceedings were pending, the Nickel remaindermen amended their complaint by deleting the portion of the prayer which requested that an accounting be had, that the old trustees be surcharged in the amounts due from them and that J. Leroy Nickel, Jr., return to the trust all income received by him as life beneficiary.

On June 13 the superior court issued an ex parte order appointing M. Mitchell Bourquin as receiver with authority to file claims on behalf of the trust, and the trustees were ordered to show cause why they should not be removed and new trustees appointed. On June 15, the return day, J. Leroy Nickel Jr., and A. R. Olsen resigned as trustees. The third trustee, J. E. Woolley, was removed by the court on the ground that there was a conflict in interest, since he was a trustee of a trust declared in Houchin's will and attorney for Houchin's executor. The receiver was appointed as temporary trustee, and the hearing on the appointment of successor trustees was then continued to June 30.

When the hearing was resumed the petitioning life beneficiaries and the Bowles remaindermen presented complaints in intervention and requested leave to file them. ³ The court informed petitioners that their applications to intervene would be acted upon at a later date. The Bowles remaindermen then requested the court to appoint Henry Miller Bowles as trustee. The petitioning life beneficiaries suggested the appointment of a corporate trustee and two unbiased individuals, and they offered the names of several banks and a number of persons. J. Leroy Nickel, Jr., concurred in these suggestions. The court stated that the appointments would be made 'today,' that no one having a direct interest in the trust would be selected and that three completely disinterested persons would be appointed. The court asked if any other counsel wished to be heard and, upon receiving no response, appointed M. Mitchell Bourquin, Louis Ferrari and Jesse H. Steinhart as trustees. None of these persons was among those suggested by petitioners.

The court-appointed trustees assumed administration of the trust and, as holders of the stock of Miller & Lux Incorporated, participated in stockholders' meetings at which changes were made in the board of directors. On authorization of the directors, a contract was entered into with C. Ray Robinson, who was counsel for the Nickel remaindermen, employing him as attorney for the corporation in the investigation and prosecution of claims against the persons who were named in the trustee removal action as having defrauded the trust.

Pursuant to directions from the court to report at the earliest possible moment on the status of the administration of the trust, the trustees filed a report on July 30, and a hearing was had on August 2. The life beneficiaries and the Bowles remaindermen were present. A second complaint in intervention was offered by the Bowles remaindermen, and they made a motion that they be joined as necessary and indispensable parties. ⁴ The court stated that it would not entertain a petition or ex parte motion at that time, that the previous applications to intervene had been denied and that any subsequent motion for leave to intervene should come up 'regularly, on notice and not ex parte.' The report of the trustees was approved.

The present proceedings were thereafter commenced, and the District Court of Appeal issued alternative writs of prohibition, followed later by a peremptory writ. A hearing in this court was then granted.

Claims were filed by the receiver against the Houchin estate on June 15, and thereafter a suit based on them was commenced by Miller & Lux Incorporated in the United States District Court. Subsequently, Miller & Lux Incorporated, the new trustees and the Nickel remaindermen entered into an agreement not to sue the Houchin estate or the Houchin executors, who agreed in return that Miller & Lux Incorporated should receive more than two million dollars in cash together with property having a value of several million dollars.

We are confronted at the outset with the question of whether petitioners may use the writ of prohibition to determine if the trial court exceeded its jurisdiction in refusing to permit them to intervene as formal, named parties in the action. The writ, of course, is not available where there is a plain, speedy and adequate remedy in the ordinary course of law, Code Civ.Proc. § 1103, and in the absence of special circumstances the right to an immediate review by appeal is considered an adequate remedy. Phelan v. Superior Court, 35 Cal.2d 363, 370, 217 P.2d 951. Although section 963 of the Code of Civil Procedure, which designates appealable orders and judgments in civil cases, does not specifically list an order denying a request for leave to file a complaint in intervention, such an order has long been held appealable on the theory that the denial is a final determination of the litigation as to the party seeking to intervene. Stich v. Goldner, 1869, 38 Cal. 608, 610; Dollenmayer v. Pryor, 150 Cal. 1, 3, 87 P. 616; Braun v. Brown, 13 Cal.2d 130, 133, 87 P.2d 1009; see People v. Pfeiffer, 59 Cal. 89. None of the cited cases involved attempted intervention by a person who was, or was claimed to be, a member of a class on whose behalf an action was being prosecuted as a representative suit, but we see no valid reason why the right of appeal should not be afforded to any petitioner who is denied the right to intervene and thus become an active participant in the litigation.

While the existence of the right to an immediate appeal may constitute an adequate remedy, we are not required to dismiss the proceedings under the circumstances present here. The District Court of Appeal issued alternative writs, considered and...