Diamond Nat. Corp. v. Golden Empire Builders, Inc.

• Decision Date: 20 February 1963
• Docket Number: No. 10463,10463
• Citation: 28 Cal.Rptr. 616,213 Cal.App.2d 283
• Parties: DIAMOND NATIONAL CORPORATION, a corporation, Plaintiff and Appellant, v. GOLDEN EMPIRE BUILDERS, INC., a corporation, Irvin E. Borchert, Chester D. Fippin, Allan Lindsey and Thomas J. Miller, individually and doing business as Cal-Ore Construction Company, Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

Page 616

28 Cal.Rptr. 616

213 Cal.App.2d 283

DIAMOND NATIONAL CORPORATION, a corporation, Plaintiff and Appellant, v. GOLDEN EMPIRE BUILDERS, INC., a corporation, Irvin E. Borchert, Chester D. Fippin, Allan Lindsey and Thomas J. Miller, individually and doing business as Cal-Ore Construction Company, Defendants and Respondents.

No. 10463.

District Court of Appeal, Third District, California.

Feb. 20, 1963.

Rehearing Denied March 14, 1963.

Hearing Denied April 17, 1963.

Matthew E. Marsh, Chico, for appellant.

Bradford, Cross, Dahl & Hefner, Sacramento, for respondents.

PIERCE, Presiding Justice.

This is an appeal by plaintiff from an order granting a motion by defendants to set aside a clerk's default and default judgment against all defendants. The grounds of the motion were (1) the defective service of summons and (2) that no judgment in this action could be made without exercise of judicial discretion, and that, consequently, the clerk's judgment was void. ¹

The complaint in its caption named a corporate defendant and four persons, purporting to sue them 'individually, and doing business as CAL-ORE CONSTRUCTION COMPANY.' In this caption the nature of the entity known as CAL-ORE CONSTRUCTION COMPANY is not stated. There is no mention in the body of the complaint, either of this firm or that defendants are being sued as members of it.

The complaint is in two counts: Count I alleging an indebtedness by defendants (without naming them or specifying in what capacity they were being sued) to plaintiff on an open book account for goods sold at the agreed price of $25,877.77 and Count II alleging indebtedness for said amount as 'the reasonable value' of said goods.

A summons was issued bearing the same caption as the caption of the complaint. It is addressed: 'To the above named Defendants.' The separate certificates attached show service upon defendants Irvin E. Borchert and Allan Lindsey and upon defendant Golden Empire Builders, Inc., a corporation, by service upon its president. All of these defendants were served in an individual capacity. Other certificates show service upon Chester D. Fippin and Thomas J. Miller. Each of the latter two certificates show service 'individually and doing business of CAL-ORE CONSTRUCTION COMPANY,' and in each certificate there is an attempt at compliance with the notice requirements of Code of Civil Procedure, § 410. ² Service against the latter two was defective to the extent that the name 'CAL-ORE CONSTRUCTION COMPANY' was not inserted in the certificate in the space provided for the common name under which business was conducted by the associates. The certificate did, however, show compliance with the code section requirement that said defendants be informed they were being served as individuals as well as such associates. Each of said certificates shows the notice contained the statement: 'You are also served as an individual.'

Service was completed upon all defendants on November 22, 1960. No appearances were made by any of the defendants in any capacity. Default was entered December 5, 1960, and on the same date a clerk's judgment was entered which recites 'that the plaintiff Diamond National Corporation a corporation do have and recover from the defendants Golden Empire Builders, Inc., a corporation, Irvin E. Borchert, Chester D. Fippin, Allan Lindsey and Thomas J. Miller, individually, and doing business as Cal-Ore Construction Company, jointly and severally, the sum of Twenty-five Thousand Eight Hundred Seventy-Seven and 77/100 dollars ($25, 877.77) * * *.' It is clear from the foregoing recital that service of summons was defective as a means tt bind the joint property of the associates (if they were in fact such) doing business as CAL-ORE CONSTRUCTION COMPANY. In the first place, the firm was neither sued under the common name nor had the defendants been properly sued as members thereof. The fact they were so designated in the caption of the complaint is not the equivalent of a proper statement of a cause of action against them as associates in the body of the complaint. (39 Cal.Jur.2d 'Pleading', sec. 76, p. 114, and cases cited.) Secondly, the notice requirements of Code of Civil Procedure, § 410 were not fully complied with to bind the defendants as members of an association, or to bind the joint property. Service of summons having been defective to that extent, the taking of a default and default judgment against the defendants as associates was improper.

But this does not necessaritly nullify the effect of the default and default judgment against the defendants, including the corporation, in their individual capacities. Service in this case had been made properly against all of the defendants, including the corporation, individually. They also had all been named properly and causes of action had been properly alleged against them, individually. When they were served with summons they were all notified they were being sued in their individual capacities and they could not claim they had been misled to believe that liability was being sought against them only as associates. When they did not appear within the required period the clerk was obliged upon request to take their defaults. (Code Civ.Proc. § 585, par. 1.)

The clerk also was required, under said code section, to enter default judgment against them if this is 'an action arising upon contract for the recovery of money or damages only.' What does this mean? While the language is quite broad, its meaning is necessarily limited by the fact that the clerk may act ministerially only; he does not possess, and therefore may not exercise, judicial powers. He may not perform acts requiring the exercise of a judicial discretion. Therefore it is settled that the code provision must be limited to apply 'to contracts which provide for some definite fixed amount of damages ascertainable from the contract sued on or from the terms of which a certain computation or calculation may be made by the clerk.' (Landwehr v. Gillette, 174 Cal. 654, 657, 163 P. 1018, 1019.)

In this action plaintiff, as we have seen, sued upon an open book account for 'goods, wares and merchandise sold and delivered by the plaintiff to said defendants at said defendants' special instance and request' for which said goods said defendants are alleged (in the first Count) to have promised to pay the sum prayed for. The allegations of this Count clearly state a cause of action against all defendants on a contract for a sum certain fixed by the contract which is the type of action in which the clerk, acting ministerially, can enter default judgment.

But respondents argue (and the trial court in vacating the clerk's judgment accepted this argument) that the powers of the clerk are further limited by the provisions of Code of Civil Procedure § 579 as such limitation has been court construed. Section 579 provides:

'In an action against several defendants, the Court may, in its discretion, render judgment against one or more of them, leaving the action to proceed against the others, whenever a several judgment is proper.' (Emphasis supplied.)

The effect of this...