Feykert v. Hardy

• Decision Date: 18 February 1963
• Parties: Peter J. FEYKERT and Robert Tuck, Plaintiffs, Cross-Defendants and Respondents, v. Henry Gifford HARDY and Berne Tocci-Guilbert, Defendants, Cross-Complainants and Appellants. Civ. 19786.
• Court: California Court of Appeals Court of Appeals

Page 510

28 Cal.Rptr. 510

213 Cal.App.2d 67

Peter J. FEYKERT and Robert Tuck, Plaintiffs, Cross-Defendants and Respondents, v. Henry Gifford HARDY and Berne Tocci-Guilbert, Defendants, Cross-Complainants and Appellants.

Civ. 19786.

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

Feb. 18, 1963.

Bacigalupi, Elkus & Salinger, San Francisco, for appellants.

Fred Leuenberger, San Francisco, William B. Boone, San Bruno, for respondents.

SULLIVAN, Justice.

This is an action on a promissory note in which the makers, defendants and cross-complainants herein, while in effect admitting the unpaid balance, asserted by way of counterclaim and cross-complaint that the plaintiffs retained certain personal property of the defendants having a value in excess of such unpaid balance and claimed general, special and exemplary damages therefor. The court below rendered judgment in favor of the plaintiffs and denied all recovery to the defendants and cross-complainants. We have concluded that its judgment should be affirmed.

The parties had been associated together in certain corporate ventures. After differences arose between them, they reached an agreement pursuant to which the plaintiffs transferred all their interest in the business to the defendants to the end of terminating their association. At such time, the defendants executed and delivered to the plaintiffs the above promissory note. Subsequently another dispute arose and the defendants, claiming that all of the property of the business had not been delivered to them, refused to pay the balance due on the note. This action followed.

Plaintiffs' complaint alleged the execution and delivery to them on or about December 31, 1957, of defendants' sixty-day note in the sum of $5,000, the payment of $1,278.30 on account, an unpaid balance of $3,721.70 and prayed for the recovery of such balance, interest, attorneys' fees and costs. Defendants filed an answer, counterclaim and cross-complaint thereto. The answer in substance alleged that, on the due date of the note, plaintiffs had possession of certain personal property of the defendants of a value in excess of the amount allegedly due and that defendants had on the due date tendered the balance due on the condition that said personal property be delivered to them. The counterclaim set forth three and the cross-complaint four separately stated causes of action. Generally speaking, the counterclaim and cross-complaint were coextensive. ¹ Their allegations may be fairly summarized as follows: That defendants delivered the note in question to plaintiffs on or about January 10, 1958; that as partial consideration for the execution and delivery thereof, plaintiffs executed and delivered to defendants a certain bill of sale, a copy of which was attached to the pleading and incorporated therein by reference; that, on information and belief, plaintiffs at some time between the taking of inventory on October 15, 1957, and January 25, 1958, removed from the business premises certain items of personal property covered by the bill of sale and have refused to deliver them to the defendants; that as partial consideration for the promissory note, plaintiffs executed and delivered to defendants a certain release and quitclaim, a copy of which was attached to the pleading and incorporated therein by reference; that plaintiffs retained 'customer listings, pending orders, advertising materials and the like, and all intangibles' covered by the above document; that defendant Hardy was the owner of a certain drawing board and attachments which on January 10, 1958, the date of execution and delivery of the promissory note and for many years prior thereto, said defendant had lent to the plaintiffs; that as partial consideration for the joinder by said defendant Hardy in the execution and delivery of the promissory note, said plaintiffs had agreed to return the aforesaid property to Hardy but, on information and belief, at some time between January 10, 1958, and January 25, 1958, the plaintiffs had converted such property to their own use. The plaintiffs and cross-defendants filed an 'answer to counterclaim and cross-complaint,' admitting that in consideration of the execution and delivery of the promissory note on January 10, 1958, they delivered to defendants the above-mentioned bill of sale, denying that the release and quitclaim was delivered by them to the defendants in consideration of the promissory note, averring that 'the only consideration for the delivery of said promissory note was the sale and transfer of the materials described in said Bill of Sale * * *,' and in general denying all of the remaining allegations of the counterclaim and cross-complaint.

The pretrial conference order which is before us contains, inter alia, the following: 'This is an action on a promissory note. The defense is that the note was given in return of a bill of sale and for the sale of personal property and that some of the items of personal property for which the note was issued were missing from the inventory. Plaintiffs contend that they have a receipt for the inventory in full.' ²

The trial court found so far as is here pertinent that the defendants executed and delivered the promissory note in question on or about January 10, 1958; that there was due thereon unpaid balance of principal in the amount of $3,721.70, interest in the sum of $694.70, and attorneys' fees in the reasonable amount of $850; that it was untrue that plaintiffs on the due date of the note had any personal property of the defendants; that the consideration for the execution and delivery of said note was the bill of sale; that on or about December 15, 1957, plaintiffs produced for the account and inspection of defendants all the personal property to which defendants were entitled under the bill of sale; that it was not true that plaintiffs removed from the business premises any of the property covered by the bill of sale as claimed by the defendants except a certain cable and cleanup machine attachment found to be the sole property of plaintiff Feykert; that it was not true that the release and quitclaim was the consideration for the delivery of the note or that the plaintiffs retained any of the personal property covered by the release and quitclaim as claimed by the defendants; that it was true that Hardy owned the drawing board and attachment but untrue that he lent such property to plaintiffs or that plaintiffs as consideration for Hardy's execution of the promissory note, agreed that would deliver such property to Hardy or that plaintiffs converted such property; that it was not true that plaintiffs converted any property belonging to the defendants or either of them; and concluded that the plaintiffs were entitled to judgment for the balance due on the note, interest, attorneys' fees and costs and that the defendants and cross-complainants were entitled to no recovery on their counterclaims or cross-complaints. Judgment was rendered accordingly.

With the one limited exception hereafter noted, defendants do not question the sufficiency of the evidence to support the findings. It is their position that the promissory note and bill of sale were only two of a series of seven documents constituting an integrated agreement which had not been fully performed by the plaintiffs. On this foundation defendants construct the following contentions on appeal: (1) That it was an abuse of discretion for the trial court to deny defendants' motion, made during the trial, to modify the pretrial conference order; (2) that the court's finding that it was untrue that the release and quitclaim was consideration for the delivery of the promissory note was unsupported by the evidence and was on a material issue; and (3) that defendants were not given the opportunity to show failure of consideration for the promissory note and the extent of the damage suffered by them.

At the outset of the trial the plaintiffs called the defendant Hardy under the provisions of section 2055 of the Code of Civil Procedure, proved through him the execution of the promissory note and of the bill of sale and, without objection of the defendants, introduced both documents in evidence. Mr. Hardy identified his and Tocci-Guilbert's signatures on the last page of the bill of sale where, in an addendum, both defendants stated that they 'do herewith acknowledge receipt and delivery of all of the items hereunder transferred and sold by virtue of the herein Bill of Sale.' The plaintiff Tuck then testified inter alia to the unpaid balance of the note. When on cross-examination Tuck was asked if all documents signed at the same time were not in fact part of the consideration for the promissory note, the court sustained plaintiffs' objection that according to the defendants' pretrial statement the consideration for the note was the sale to the defendants of certain personal property evidenced by the bill of sale. The plaintiffs then rested.

As their first witness, the defendants then called under the provision of section 2055 of the Code of Civil Procedure the plaintiff Feykert who identified a certain 'Agreement' executed by the parties. Upon the objection of the plaintiffs, the defendants thereupon made an offer to prove that such agreement was signed contemporaneously with the promissory note and bill of sale and 'as part of an integrated agreement of settlement, and that it constitutes part of the consideration for the execution of the promissory note and bill of sale, * * *' The court then sustained an objection of the plaintiffs that such exhibit and evidence were outside the issues as framed by the pretrial conference order and as set forth by the defendants themselves in their pretrial statement, both quoted by us above. Counsel for the defendants thereafter attempted to elicit responses from Feykert in respect to a suit which had been pending in the Federal court whereupon the court sustained...