City of Los Angeles v. Pacific Tel. & Tel. Co.

• Court: California Court of Appeals
• Writing for the Court: LILLIE; WHITE, P. J., and FOURT
• Citation: 330 P.2d 888,164 Cal.App.2d 253
• Decision Date: 16 October 1958
• Parties: The CITY OF LOS ANGELES, a Municipal Corporation, Plaintiff and Respondent, v. The PACIFIC TELEPHONE & TELEGRAPH COMPANY, a Corporation, Defendant and Appellant. Civ. 23211.

Page 888

330 P.2d 888 164 Cal.App.2d 253 The CITY OF LOS ANGELES, a Municipal Corporation, Plaintiff and Respondent,
v.
The PACIFIC TELEPHONE & TELEGRAPH COMPANY, a Corporation, Defendant and Appellant. Civ. 23211. District Court of Appeal, Second District, Division 1, California. Oct. 16, 1958.

Page 889

[164 Cal.App.2d 255] John A. Sutro, Francis N. Marshall, Noble K. Gregory, Pillsbury, Madison & Sutro, San Francisco, Leslie C. Tupper, Lawler, Felix & Hall, Los Angeles, for appellant.

Roger Arnebergh, City Atty., Bourke Jones, Asst. City Atty., Ralph J. Eubank, Deputy City Atty., Los Angeles, for respondent.

LILLIE, Justice.

Plaintiff, city of Los Angeles, filed an action in the Superior Court of Los Angeles County against defendant, The Pacific Telephone and Telegraph Company, a corporation, to recover the value of street occupancy. Its answer was filed and after plaintiff's demand for a jury defendant noticed its motion for a change of place of trial under section 394, Code of Civil Procedure. Defendant sought a change of venue to either Alpine or Mono County where it claimed it does not do business. From the minute order denying the motion, defendant appeals.

Section 394, Code of Civil Procedure, reads in pertinent part as follows: 'Whenever an action or proceeding is brought by a * * * city, against a resident of another county, city and county, or city, or a corporation doing business in the latter, the action or proceeding must be, on motion of either party, transferred for trial to a county * * * other than that in which the plaintiff is situated * * * and other than that in which the defendant resides, or is doing business, or is situated.'

The factual situation controlling the issue whether The Pacific Telephone and Telegraph Company is entitled to the benefit of a change of venue under this section is a simple one. It is conceded that the corporate defendant does business in the county of Los Angeles as well as in other counties of the state. Its principal place of business is the city and county of San Francisco. The city of Los Angeles has sued the defendant in the Superior Court of Los Angeles County, a proper forum.

Appellant contends that since it is doing business in more than one county, and section 394 is silent concerning the corporate defendant also doing business in the county in which it is sued, it is entitled to a literal interpretation of the section to invoke a mandatory application requiring a change of place of trial from the county of Los Angeles. On the other hand, respondent claims that under the section a corporate defendant doing business in a county other than that in which the action is brought by a municipality situated

Page 890

therein is not [164 Cal.App.2d 256] entitled to the benefit of the change of venue therein provided if it is also doing business in the county in which the action is brought.

It is apparent from the phraseology employed in the controlling portion of section 394 that an ambiguity arises because of the nature of a corporate entity and its business operations, which if literally applied would be neither reasonable nor in keeping with the purpose and intent of the statute. This situation is the result of the difference in factors determining the mandatory application of the section. In the case of an individual the determining factor is his 'residence'; in the case of a corporation it is the fact of 'doing business.' When an individual defendant is a 'resident of another county' (other than that in which the action is brought), it is clear from the statutory language that he may invoke the benefit of the change of venue--because legally he has only one county of residence. But since a corporate entity may do business in more than one county of the state, the use of the phrase 'doing business in the latter' creates an indeterminate meaning, particularly when the corporate defendant is also doing business in the county in which the action has been properly brought. The meaning and language of this section is not as 'clear-cut' as appellant would have us believe. Does the terminology employed, 'doing business in the latter,' mean that, if a corporation is doing business in more than one county, it is entitled to a change of venue regardless of whether it also does business in the county in which it is sued by a city located therein, as contended by appellant; or does it mean, as urged by respondent, that a corporate defendant doing business in a county in which an action is brought against it by a city located therein, regardless of where else in the state it is also doing business, is not entitled to a change of venue?

'* * * (I)t is a cardinal rule of construction that words must be given such interpretation as will promote rather than defeat the general purpose and policy of the law * * *.' Department of Motor Vehicles of California v. Industrial Accident Commission, 14 Cal.2d 189, 195, 93 P.2d 131, 134; People v. Centr-O-Mart, 34 Cal.2d 702, 214 P.2d 378; In re Lynwood Herald American, 152 Cal.App.2d 901, 313 P.2d 584. It is well settled that 'where the language of a statute is reasonably susceptible of two constructions, one of which in application will render it reasonable, fair and harmonious with its manifest purpose, and another which would be productive [164 Cal.App.2d 257] of absurd consequences, the former construction will be adopted.' Department of Motor Vehicles of California v. Industrial Accident Commission, 14 Cal.2d 189, at page 195, 93 P.2d 131, at page 134.

For many years our courts have freely acknowledged the purpose of the legislature in passing section 394. In City of Stockton v. Wilson, 79 Cal.App. 422, 249 P. 835, in interpreting the second sentence of section 394 in its application to an individual...