Clark v. Lesher

• Citation: 106 Cal.App.2d 403,235 P.2d 71
• Parties: CLARK v. LESHER et al. Civ. 7969.
• Decision Date: 30 August 1951
• Court: California Court of Appeals

Page 71

235 P.2d 71

106 Cal.App.2d 403

CLARK v. LESHER et al.

Civ. 7969.

District Court of Appeal, Third District, California.

Aug. 30, 1951.

Rehearing Denied Sept. 24, 1951.

Hearing Denied Oct. 25, 1951.

H. A. Savage, Fresno, for appellant.

Green, Chandler & Green, Madera, for respondents Lesher & Holcomb.

E. L. Coffee, Madera, for respondent Roy Wolfe.

VAN DYKE, Justice.

Defendants in the trial court had judgment that plaintiff take nothing against them after their demurrers to the third amended complaint had been sustained without leave to amend. Plaintiff appeals.

The action purports to be brought to recover damages suffered by appellant as the result of a conspiracy among the defendants in violation of the Cartwright Act. Gen.Laws Act 8702. That act, which now appears in Sections 16700 to 16758 of the Business and Professions Code, declares unlawful any combination of capital, skill or acts by two or more persons with the purpose, among other things, of creating or carrying out restrictions in trade or commerce or to increase the price of merchandise or any commodity. The allegations of the third amended complaint may be summarized as follows: In 1920 appellant and his father formed a partnership which became the owner of the Madera Daily Tribune and Mercury, a newspaper published in Madera. Each owned a half interest in the partnership. Appellant's father died in 1944 and appellant, as surviving partner, continued the business of publishing the newspaper. Appellant's father left surviving him three children, and each by inheritance, and subject to probate, succeeded to a one-sixth interest in the partnership property. About that time respondent Lesher purchased the Madera Daily News, another newspaper published in Madera, which paper competed with the Tribune and Mercury. Lesher appointed respondent Halcomb as manager. The two then conspired to eliminate the Tribune and Mercury as a competitor to the News so that Lesher would be able to monopolize the publishing business in Madera County and unreasonably advance advertising prices and subscriptions. In furtherance of the conspiracy, Lesher purchased the two-sixths interest in the Tribune and Mercury from the other heirs of appellant's father. R. S. Jay, then public administrator for Madera County, was appointed administrator of the father's estate and later, at the instigation of defendants, brought action against appellant as surviving partner asking that a receiver be appointed to act in winding up the partnership affairs. In that action the court entered an interlocutory decree declaring that appellant herein was, as surviving partner, no longer entitled to continue in possession of the paper and ordering that a receiver be appointed, with directions to inventory the assets of the business, continue publication of the paper and to sell the partnership assets, as a going concern, during publication. This decree was appealed and was affirmed. See Jay v. Clark, 85 Cal.App.2d 88, 192 P.2d 462. After affirmance, the court named one and then another receiver, both of whom failed to qualify. In the meantime appellant was continuing publication of the paper. On June 24th respondents Lesher and Halcomb, carrying out their original conspiracy, further conspired and agreed with respondent Roy Wolfe that he would be appointed receiver and as such would contrive to cease publication of the paper. He was appointed and qualified. On June 25, 1948 he took possession of the business and assets of the partnership and 'ousted plaintiff therefrom.' On July 7th following, Wolfe, as receiver, presented to the judge who presided in the receivership action a supplemental order which directed the receiver to inventory the assets of the partnership business and to sell the same as soon as possible, but not later than thirty days from the date of the order; and in the meantime to cease publication of the paper. This order to cease publication was alleged to have been procured by Wolfe by falsely stating to the judge that there were no funds available to continue publication whereas in fact such funds were available. These representations of Wolfe, alleged to be part of the conspiracy among respondents, were made, knowing that when the paper ceased publication its status as an established newspaper and its good will dependent thereon would be lost. Wolfe proceeded to publish notice of sale of the assets of the partnership and Lesher bid the same in for $30,750. Before publication ceased, the good will of the paper was worth $50,000 and the value of its status as an established newspaper for the publication of legal notices and the like was worth $25,000. These assets it is alleged were lost through cessation of publication, so that respondent Lesher was able to purchase at the depreciated value represented by his bid. Finally, on the subject of damages which appellant seeks to recover it is alleged that by the wrongful conspiracy the value of the assets of the partnership business was partially destroyed and lost when the publication of the paper ceased and that by reason of these matters appellant suffered damage in the sum of $50,000, which pursuant to the provisions of the Cartwright Act, he asked be duplicated and that he be awarded judgment for such augmented sum.

It is to be noted that the damages which appellant seeks to recover are by his pleading expressly limited to those which flow from the partial destruction of the partnership assets. Such damages, however, are not recoverable under the provisions of the Cartwright Act and it follows, therefore, that if the Cartwright Act be the sole source to which the court must look in determining whether or not appellant's complaint states a cause of action, then this Court must declare that no such cause is stated. The Cartwright Act, in so far as it authorizes private persons to sue for damage does so in these terms: 'Any person who shall be injured in his business or property by any other person or corporation or association or partnership, by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any court having jurisdiction thereof in the county where the defendant resides or is found, * * * and to recover twofold the damages by him sustained.' It was early pointed out by the appellate courts of the state that the damages recoverable under the foregoing provisions of the act must be such, and could only be such, as resulted directly from the fact of the existence of the unlawful combination or trust and flowed solely from restrictions in trade or commerce fostered thereby. We quote the following from Munter v. Eastman Kodak Co., 28 Cal.App. 660, 665, 153 P. 737, 739: "* * * while one whose business or property has been injured solely because of the restrictions in trade carried out by a trust organized and maintained for that purpose may maintain an action under the provisions of the antitrust law for double the damages he has actually suffered from the injury so inflicted, yet he could not maintain an action based upon said law if the injury, although directly the result of the wrongful acts of the trust or the constituent members thereof, did not arise by reason of the restrictions in trade or commerce carried out by such trust or combination." (Italics added.) See, also, Overland Publishing Co. v. Union Lithograph Co., 57 Cal.App. 366, 207 P. 412.

The application of the foregoing interpretation of the provisions of the Cartwright Act authorizing suit by private persons is obvious. The complaint makes it quite clear...