Edlund v. Los Altos Builders

• Decision Date: 20 August 1951
• Citation: 235 P.2d 28,106 Cal.App.2d 350
• Court: California Court of Appeals Court of Appeals
• Parties: EDLUND et ux. v. LOS ALTOS BUILDERS (two cases). Civ. 14852, 14956.

Page 28

235 P.2d 28

106 Cal.App.2d 350

EDLUND et ux. v. LOS ALTOS BUILDERS (two cases).

Civ. 14852, 14956.

District Court of Appeal, First District, Division 1, California.

Aug. 20, 1951.

Alfred W. Bowen, Gardner Bullis, W. Gordon Eustice, Los Altos, for appellant.

Moerdyke & Anderson, Palo Alto, for respondent.

PETERS, Presiding Justice.

The Edlunds, husband and wife, as two of the four directors of Los Altos Builders a California corporation, and as claimed owners of a one-half stock interest therein, brought an action against the corporation to secure its involuntary dissolution. The complaint alleges that the two plaintiffs cannot agree with the other two directors and owners, the Turners, as to the management of corporate affairs, that the Turners have been guilty of fraud, mismanagement and abuse of authority, and that there is danger that the corporate property and business will be impaired or lost. The corporation's answer denies the material allegations of the complaint, and cross-complains, alleging that the Edlunds had resigned as directors, were indebted to the corporation, and had been guilty of some acts of fraud. The cross-complaint prays that the Edlunds be enjoined from disposing or selling any of the corporate property, and, in connection with the cross-complaint, certain property belonging to the Edlunds was attached.

Several orders and motions have been made in this action that have led to the various motions now pending before this court. After the involuntary dissolution case was at issue, Carl Edlund filed an affidavit calling the attention of the court to the pendency of the dissolution proceedings and to the fact that the four directors were evenly divided and could not agree as to corporate policy, and averring that there was danger that, for such reasons, the corporate business and property might be impaired and lost. Thereupon, the trial court, based upon the complaint and affidavit, issued its order requiring the corporation to show cause 'why a provisional director should not be appointed pursuant to the provisions of Section 4655 of the Corporations Code.' Thereafter, a counter-affidavit was filed by the accountant of the corporation on its behalf. No hearing was had or other evidence taken. On September 21, 1950, the trial court granted the motion to appoint a provisional director, and appointed one Michael Dowley as such director until further order of the court or until removed by the vote of a majority of the voting shares of the corporation. The defendant then moved to vacate or to amend the order appointing the provisional director. This motion was denied on November 10, 1950. The defendant has appealed from both orders. Plaintiffs have moved to dismiss both of these appeals on the ground that they have been taken from non-appealable orders. These appeals are numbered 1 Civ. 14852.

In January of 1951 the Turners secured a temporary restraining order, and an order requiring the Edlunds to show cause on February 5, 1951, why they should not be restrained from doing any act intended, designed or having the effect of interfering, controlling, changing or otherwise obstructing the course and management of the involuntary dissolution proceeding, the existing attachment on the Edlunds property, and including the appeals in 1 Civ. 14852. This order restrained the Edlunds, their servants, agents and attorneys from doing any of the above acts pending the hearing of the order of show cause. The Turners also filed a notice of a motion for a preliminary injunction to restrain the Edlunds, their servants, agents or attorneys from doing the acts mentioned in connection with the order to show cause.

The affidavit of William G. Turner, filed in connection with the motion for the preliminary injunction (and perhaps also in connection with the order to show cause) avers that on January 21, 1951, he received a notice of a directors' meeting of the Los Altos Builders; that he was out of town at that time; that the meeting was called for January 25, 1951; that he had to be away on business that day; that the purpose of the meeting was stated to be to discharge present counsel for the corporation and employ new counsel and to employ a certified public accountant to audit the corporation's books; that he had attorney Bowen so advise Dowley, the provisional director, of the purpose of the meeting, and the attorney also told Dowley that he objected to the Edlunds voting on the matters at the meeting; that on January 26, 1951, Bowen was notified in writing that he was discharged as attorney for the corporation. It is averred that this is a scheme of the Edlunds to tie the corporation up in litigation, and to release the attachment on the Edlunds' property.

The motion for a preliminary injunction was denied by an order dated February 28, 1951, and filed March 2, 1951.

Also on March 2, 1951, the trial court filed another order, also dated February 28, 1951, granting a motion, opposed by the Turners, to substitute Bowen out as attorney for the corporation.

A notice of appeal has been filed purporting to appeal from both of the orders of March 2, 1951. The notice is signed:

'Alfred W. Bowen,

'Gardner Bullis,

'Gordon Eustice,

'By Alfred W. Bowen

'Attorneys for Defendant.'

Respondents have moved to dismiss both appeals. These appeals are numbered 1 Civ. 14956.

The appellant has also moved in this court to consolidate the four appeals, and to take some additional evidence.

The Appeals from the Order Appointing the Provisional Director, and from the Order Refusing to Vacate That Order--1 Civ. 14852.

These two appeals must be dismissed because the order appointing a provisional director is, in our opinion, not appealable. This necessarily means that the order refusing to vacate that order is also non-appealable. Litvinuk v. Litvinuk, 27 Cal.2d 38, 162 P.2d 8.

In our opinion, the order appointing the provisional director is not appealable, for the following reasons: If that order is interlocutory in nature no appeal will lie therefrom. Only those interlocutory orders are appealable that are expressly made appealable by statute. David v. Goodman, 89 Cal.App.2d 162, 200 P.2d 568. It is conceded that there is no statute making an order appointing a provisional director appealable. Therefore, if that order is appealable, it is so only because it is a final order or judgment within the meaning of section 963 of the Code of Civil Procedure. We think that it is not a final order within the meaning of that section.

It is true, as urged by appellant, that to come within the purview of section 963 the order or judgment need not be the final order or judgment. It is appealable if it is a judgment or order that finally determines a collateral matter distinct or severable from the general subject of the litigation. Howe v. Key System Transit Co., 198 Cal. 525, 246 P. 39; Carradine v. Carradine, 75 Cal.App.2d 775, 171 P.2d 911; Grant v. Superior Court, 106 Cal. 324, 39 P. 604; City of Los Angeles v. Los Angeles C. Water Co., 134 Cal. 121, 66 P. 198; Fish v. Fish, 216 Cal. 14, 13 P.2d 375. In Sjoberg v. Hastorf, 33 Cal.2d 116, page 119, 199 P.2d 668, page 670, the Supreme Court, in holding that an order finding that there was no agreement to arbitrate was not appealable stated: 'An appeal is allowed if the order is a final judgment against a party in a collateral proceeding growing out of the action. [Citing cases.] It is not sufficient that the order determine finally for the purpose of further proceedings in the trial court some distinct issue in the case; it must direct the payment of money by appellant or the performance of an act by or against him [Citing cases.] There is no such direction in the present case. If appellants have a right to arbitration they may assert it on the appeal from the final judgment in the contract action. Thus no greater hardship will result than in any case where a party is forced to stand trial because of an erroneous ruling of the trial court.'

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