Campbell v. Clark

• Decision Date: 17 April 1958
• Citation: 324 P.2d 55,159 Cal.App.2d 439
• Court: California Court of Appeals Court of Appeals
• Parties: Emma CAMPBELL, Plaintiff and Appellant, v. Ethel M. CLARK, Maurice Wilson, Harry A. Wardenburg, Warren Hook, Willis Clark, Ernest W. Tiegs, and California Test Bureau, a corporation, Defendants and Respondents. Civ. 22625.

Page 55

324 P.2d 55

159 Cal.App.2d 439

Emma CAMPBELL, Plaintiff and Appellant, v. Ethel M. CLARK, Maurice Wilson, Harry A. Wardenburg, Warren Hook, Willis Clark, Ernest W. Tiegs, and California Test Bureau, a corporation, Defendants and Respondents.

Civ. 22625.

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

April 17, 1958.

Marvin Gross, Beverly Hills, for appellant.

Waters, Arditto & Waters, Los Angeles, for respondents.

HERNDON, Justice.

This appeal is companion to Campbell v. Clark, Cal.App., 324 P.2d 51. The judgment here under review likewise followed rulings which sustained defendants' objection to the introduction of any evidence and denied plaintiff's request for leave to amend her complaint. The record discloses that defendants filed a general demurrer to the complaint, but it was stricken by the judge presiding in the Law and Motion Department on the ground that its filing was 'not timely.'

It is unnecessary to repeat here the general rules of law governing our review of this judgment and the rulings upon which it is based. Those rules and the supporting authorities are adequately set forth in our opinion in Campbell v. Clark, 324 P.2d 51. Suffice it to say that defendants' objection to the introduction of any evidence was designed to subject plaintiff's complaint to the same test that the judge presiding in the Law and Motion Department would have been called upon to apply had he ruled upon the merits of defendants' general demurrer instead of striking it from the record.

Our decision can be meaningful only in the light of a thorough and detailed analysis of the complaint. It is denominated 'Complaint for Damages (Fraud and Extortion in Transfer of Corporate Stock).' It joins as parties defendant the corporation and the several individuals alleged to have been its officers and directors during the times herein mentioned. It alleges that on various dates between August 23, 1933, and October 11, 1946, plaintiff acquired shares of stock until on the latter date she owned eighty shares. In paragraph VII, it is alleged that from October 11, 1946, until June 17, 1953, plaintiff owned the eighty shares; that during this period the corporate defendant was operating at a profit; that at various times during this period defendants importuned her to sell; that defendants, and each of them, did, on at least three occasions threaten plaintiff 'that they, the defendants, and each of them, would dissolve defendant corporation, pay off the corporate creditors and have nothing left with which to pay off the shareholders, of which this plaintiff was one, and would thereafter re-open said business and operate the same under a partnership form.' Paragraphs VIII to XI read as follows:

'VIII

'That defendants, and each of them, on or about the 17th day of June, 1953, falsely and maliciously caused and procured the said plaintiff to endorse over to the defendant corporation her aforesaid stock certificates representing her ownership in 80 shares of said corporation; that said plaintiff was induced, intimidated and threatened, then and there, and against her will and protesting that she did not desire to surrender her stock in said corporation, was nevertheless forced and compelled by these defendants to surrender said shares of stock to the corporate defendant or one that it would designate, as aforesaid; that at said time and place defendants, and each of them, did misrepresent to this plaintiff the extent of the corporate assets and liabilities so as to give an untrue picture of the same to this plaintiff.

'IX

'Since the time of this plaintiff's original ownership of shares of stock in defendant corporation this corporate defendant has made substantial financial gains and profits which said gains and profits have been concealed and withheld from this plaintiff and have wrongfully been paid to the officers and directors thereof; that the exact amount of said sums thus wrongfully withheld and illegally paid to officers and directors of said corporation is unknown to this plaintiff, but this plaintiff is informed and believes, and therefore alleges, that such sums are in excess of $750,000 of which her rightful share is in excess of $60,000.

'X

'That plaintiff, for the first time, discovered the false and fraudulent representations of these defendants relative to the gains, profits and wrongful withholdings of moneys of said corporate defendant by these named defendants in a hearing before the office of the Corporation Commissioner of this state during the period of June through December 1953 and again in January, 1954.

'XI

'That the statements of the defendants, and each of them, as aforesaid, with regard to the dissolution of the defendant corporation and the extent of profits and liabilities of the corporate defendant were untrue and known by defendants, and each of them to be untrue and were made to plaintiff with the intent to deceive, mislead, intimidate and induce plaintiff to transfer her aforesaid shares of stock and that this plaintiff was thereby defrauded, induced and coerced into transferring her shares as aforesaid; that as a result of said transfer, as aforesaid, this plaintiff has been deprived of her present, past, and future rightful share in the profits and earnings of defendant corporation; that plaintiff would not have transferred her shares, as aforesaid, but for the fraud, force and...