Faye v. Feldman

• Decision Date: 25 October 1954
• Parties: Bernard FAYE, Plaintiff and Appellant, v. Gertrude FELDMAN and Sam Feldman and Fidelity and Deposit Co. of Maryland, Defendants and Respondents. Civ. 20158.
• Court: California Court of Appeals Court of Appeals

Page 121

275 P.2d 121

128 Cal.App.2d 319

Bernard FAYE, Plaintiff and Appellant, v. Gertrude FELDMAN and Sam Feldman and Fidelity and Deposit Co. of Maryland, Defendants and Respondents.

Civ. 20158.

District Court of Appeal, Second District, Division 3, California.

Oct. 25, 1954.

Rehearing Denied Nov. 15, 1954.

Hearing Denied Dec. 22, 1954.

Maurice Rose and Max Mayer, Los Angeles, for appellant.

Fendler & Lerner, Beverly Hills, and Crider, Tilson & Ruppe, Los Angeles, for respondents.

VALLEE, Justice.

Plaintiff brought this action against defendants Gertrude Feldman and Sam Feldman for damages for alleged wrongful attachments levied in an action on a promissory note and against Fidelity and Deposit Co. of Maryland, the company which issued the undertakings on the attachments.

Three prior actions are involved. First: An action, numbered 572587, brought by defendant Gertrude Feldman against F. & F. Development Corporation, Bernard Faye--plaintiff in this action, and Sam Feldman--defendant in this action, on a promissory note in which an affirmative defense of nondelivery was sustained. That is the action in which the alleged wrongful attachments were issued. Second: An action, numbered 584331, brought by Gertrude and Sam Feldman--defendants in this action, against F. & F. Development Corporation, Bernard Faye--plaintiff in this action, and Celina Faye, in which the plaintiffs in that action sought dissolution of the corporation, an accounting by Bernard Faye for any indebtedness due from him to the corporation, and payment of the corporation's debts to the Feldmans. Third: An action, numbered 584333, brought by Sam Feldman and F. & F. Development Corporation against Bernard Faye and others.

The three prior actions were tried together. In action 584333 the judgment adjudged that Bernard Faye, plaintiff in this action, was indebted to F. & F. Development Corporation in the sum of $31,122.23. In action 584331 the judgment decreed dissolution of the corporation and required it to transfer the judgment in action 584333 and all rights therein to Sam Feldman. The judgment for $31,122.23 was unpaid when Bernard Faye filed the present action on April 4, 1952.

The original answer of the Feldmans in the present action, filed April 14, 1952, alleged the judgments in actions 584331 and 584333 and, by way of setoff, a balance of $29,465.25 owing from plaintiff to Sam Feldman.

Pursuant to section 15028 of the Corporations Code, Sam Feldman, as judgment creditor in action 584333, sought the appointment of a receiver of Bernard Faye's interest in Fourth and Hill Building Company, a partnership. On June 27, 1952, in action 584333, in open court, Bernard Faye, the Feldmans and others entered into an agreement of settlement providing for the satisfaction of the judgment in that action and terminating all litigation between them or any of them. The agreement of settlement was entered in the minutes of the court and was accepted in open court by the parties thereto, was approved by the court, and each party was directed by the court to do any and all things necessary or proper to effectuate the settlement. Pursuant thereto, the court made a written order embodying the terms of the settlement and commanding compliance therewith. ¹

The present action was set for trial for May 13, 1953. On May 8, 1953, defendants Feldman served a notice of motion, returnable on the day of trial, for leave to file an amended and supplemental answer, pleading as a special defense the agreement of settlement and the order with respect thereto. The motion was granted. Pursuant to section 597 of the Code of Civil Procedure the court proceeded to the trial of such special defense before the trial of any other issue in the case.

On the first day of the trial, counsel for defendant Fidelity and Deposit Company indicated to the court that if defendants Feldman established their affirmative defense, the legal effect would be to release the surety 'and would then operate as a plea in bar of this action.' The court asked counsel for plaintiff if he would stipulate that the answer of the surety be deemed amended by inserting the same matter as set forth in the affirmative defense of the Feldmans. Counsel for plaintiff replied 'I don't believe so, your Honor. In the event the defense is upheld, I submit it could be done by amendment to conform to proof.' Counsel for the surety then moved that the affirmative defense of the Feldmans be deemed the answer of the surety, to which counsel for plaintiff objected. The objection was sustained 'without prejudice to the renewal of the motion.' The next morning following the introduction by defendants Feldman of all of their evidence relating to the special defense, counsel for the surety renewed his motion for leave to file an amended and supplemental answer. The motion was thereupon granted.

The court found: the agreement of settlement was entered into and the order made on June 27, 1952; at all times after June 27, 1952, the Feldmans were ready, willing, and able to perform, and repeatedly tendered performance of the agreement of settlement; plaintiff at all times failed, neglected, and refused to do or perform the things agreed to be done and performed by him under the agreement and order; the agreement and order were never abrogated, rescinded, or terminated by the Feldmans or by the superior court; the Feldmans did not waive, or intend to waive, any right granted to them or the performance of any obligation imposed on Bernard Faye under the terms of the agreement or the order; by reason of the facts found plaintiff is estopped to maintain the present action or to assert any claim against defendants. Judgment was for defendants from which plaintiff appeals.

Plaintiff's first point is that the special defense alleged in the answer of defendant Fidelity and Casualty Company does not state facts sufficient to constitute a defense to plaintiff's claim. The special defense of this defendant alleged that on June 27, 1952, the parties entered 'into an agreement, stipulation of settlement, compromise and release of all claims' against defendants, and more particularly, 'the plaintiff did release that claim which is the subject of this action.' Assuming, without deciding, that these statements are conclusions of law and not allegations of ultimate facts, plaintiff was not prejudiced. The special defenses of the defendants Feldman specifically alleged the facts with respect to the agreement of settlement and the order of the court and incorporated the order as a part of their amended and supplemental answer. If the defense of the Feldmans was good, it operated as a bar to any recovery against the surety; if it was not good, a recovery by plaintiff was not barred on that ground. 23 Cal.Jur. 1044, § 38.

It is next asserted that the court erred in granting the motions of defendants for leave to file the amended and supplemental answers. The argument is that the motions came too late. No abuse of discretion has been shown. The agreement of settlement and the order with respect thereto were made after the original answers were filed. They were proper matters to be pleaded by way of supplemental answer. Plaintiff did not incorporate in the record on appeal the affidavits filed in support of the motion. Defendants offered to consent to a continuance of the trial to give plaintiff an opportunity to plead to the amended and supplemental answer of the Feldmans. Plaintiff declined the offer and stated that he had no objection to the court's hearing the motion. Plaintiff expressly stated that defendant surety could amend to conform to proof.

Plaintiff urges several propositions which are in effect that the findings are unsupported by the evidence. It is argued that since it appears from the evidence the Feldmans did not in fact perform the provisions of the agreement of settlement on their part to be performed, but only tendered performance, there is a variance between the allegations of the answer and the proof. The argument is predicated on the assumption that the answer alleged the Feldmans had fully performed the agreement of settlement. The assumption is erroneous. There is no such allegation in the answer.

All of the documents to be executed by the Feldmans under the agreement of settlement and the order thereon were signed by them and delivered to the attorney for plaintiff Faye. Under the agreement Faye agreed, and the order required him to pay $28,500 to the attorneys for Sam Feldman on or before July 15, 1952, and to deliver to them a request for dismissal with prejudice of the present action and a general release releasing all defendants in this action of all claims asserted in the complaint. Faye did not pay the money or deliver either of the documents. His attorney notified the attorneys for the Feldmans that 'Faye refused to go ahead with the order on his part.' On July 21, 1952, Faye having failed and refused to perform the agreement of settlement, the court, in action 584333, appointed a receiver of the interest of Faye in Fourth and Hill Building Company, a partnership, and ordered the receiver to sell such interest. Prior to the sale, plaintiff paid the Feldmans the full amount of the judgment in action 584333. Plaintiff argues that by seeking the appointment of a receiver, after he had refused to perform, the Feldmans abandoned and rescinded the agreement of settlement. ² The court in the present action expressly found to the contrary. ³ The finding is fully supported by the evidence. The agreement of settlement was unconditional. Faye, by the agreement of settlement, entered into an unconditional commitment to do the things agreed to be done by him, including release of all claims involved in the present action. The agreement was embodied in the order of the court and Faye was ordered to perform. The order was also unconditional. Performance by Faye was not dependent on his obtaining the...