Goldstein v. Enoch

• Citation: 248 Cal.App.2d 891,57 Cal.Rptr. 19
• Parties: Milton GOLDSTEIN, Plaintiff and Appellant, v. Herbert ENOCH, Defendant and Respondent. Civ. 30939.
• Decision Date: 28 February 1967
• Court: California Court of Appeals Court of Appeals

Page 19

57 Cal.Rptr. 19

248 Cal.App.2d 891

Milton GOLDSTEIN, Plaintiff and Appellant, v. Herbert ENOCH, Defendant and Respondent.

Civ. 30939.

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

Feb. 28, 1967.

Rehearing Denied March 23, 1967.

Milton Goldstein, Beverly Hills, in pro. per.

Nathan Goller, Beverly Hills, for respondent.

FOURT, Associate Justice.

Milton Goldstein appeals from an order of the superior court dismissing his action against Herbert Enoch after Enoch's general demurrer to the complaint was sustained without leave to amend. ¹

The first cause of action discloses that Goldstein is an attorney who owned, at all times herein relevant, 20% Of the stock of R.R.R. Inc., a California corporation. Enoch owned the remaining 80%. On or about March 8, 1964, Enoch proposed to Goldstein that he might be able to sell all the stock for a price which would return Goldstein $100,000 for his share, but in order to do so he would need a false financial statement. Enoch suggested that Goldstein prepare such a statement and sign it as a certified public accountant which Goldstein refused to do.

On or about April 8, 1964, Enoch called and negotiated with Goldstein for the purchase of Goldstein's interest. Enoch said he was then anticipating the sale of the R.R.R. Inc. stock to a prospective buyer on the basis of a false financial statement prepared and certified by another at his request and for this purpose. When Goldstein advised Enoch that for ethical reasons he could not be a party to a transaction which might jeopardize his professional career, Enoch proposed to purchase his stock. This time Enoch stated that the proposed sale price was $450,000 and Goldstein's share would be $90,000, but that on account of Goldstein's refusal to participate in the sale, Enoch felt he should be satisfied with less. Ultimately Goldstein agreed to and did sell his interest to Enoch for $39,350 and agreed to assume 20% Of any income tax Enoch might be forced to pay as a result of the acquisition of the stock.

All allegations constituting the first cause of action except the paragraph alleging the measure of damages are incorporated by reference in the second cause of action. Goldstein asserts that he was induced to part with his R.R.R. Inc. stock at an inequitable price as a proximate result, alternatively, of (1) duress and menace exerted by Enoch which entitles him to recover the difference between the sales price and the then fair market value of the stock, or (2) Enoch's intentional misrepresentation of the price he would obtain on resale for which Goldstein prays to recover 20% Of the difference between the amount Enoch falsely represented as the total consideration and the amount actually received by him.

Goldstein contends that the complaint states at least one valid cause of action, or that he should be granted leave to amend it so to do. He declined to amend, however, because he could aver no additional facts and those upon which Goldstein relies are set forth with sufficient clarity for us to determine that no cause of action is or could be stated.

A pleading of facts entitling the plaintiff to some relief is all that is necessary as against a general demurrer (De Zemplen v. Home Federal S. & L. Assn., 221 Cal.App.2d 197, 200, 34 Cal.Rptr. 334; Schaefer v. Berinstein, 140 Cal.App.2d 278, 288, 295 P.2d 113), and in viewing Goldstein's complaint we are bound to accept as true all of its factual allegations pleaded in proper form. (Stigall v. City of Taft, 58 Cal.2d 565, 567--568, 25 Cal.Rptr. 441, 375 P.2d 289) Inconsistent causes of action may prevail even in a verified pleading so long as the factual allegations are not antagonistic to one another, but in any event specific factual allegations control the more general allegations in each cause of action (Steiner v. Rowley, 35 Cal.2d 713, 221 P.2d 9; Faulkner v. California Toll Bridge Authority, 40 Cal.2d 317, 328, 253 P.2d 659). We observe particularly that Goldstein's complaint is verified under oath and since the first paragraph of the second cause of action incorporates specifically all the factual allegations from the first cause of action, we are compelled to the conclusion that the circumstances do not justify recovery.

The first cause of action depends on 'duress and menace' but construed in the light most favorable to Goldstein the facts fail to support these conclusionary averments. Neither wrongful confinement of the person nor detention of property as specified in Civil Code section 1569 are literally required to constitute duress today (Shasta Water Co. v. Croke, 128 Cal.App.2d 760, 276 P.2d 88) and the threat of injury to Goldstein's character might constitute menace under Civil Code section 1570. (Miratti v. Banca Popolare Fugazi, 99 Cal.App 1, 277 P. 905) However, duress and menace arise by virtue of unlawful action, and menace requires that an unlawful threat which is more than some statement or act from which the guilty party becomes apprehensive of prosecution be made by the defendant. (Miller v. Walden, 53 Cal.App.2d 353, 127 P.2d 952) An action for duress and menace may not be based upon a simple request made by the defendant of the guilty party to so act as to avoid the consequences of his prior conduct. (Lyon v. Lyon, 70 Cal.App. 607, 233 P. 988) A fortiori, an action for duress and menace cannot be sustained when the voluntary action of the apprehensive party is induced by his speculation upon or anticipation of a future event suggested to him by the defendant but not threatened to induce his conduct. The issue in each instance is whether the defendant intentionally exerted an unlawful pressure on the injured party to deprive him of contractual volition and induce him to act to his own detriment. (Lewis v. Fahn, 113 Cal.App.2d 95, 247 P.2d 831; Sistrom v. Anderson, 51 Cal.App.2d 213, 124 P.2d 372)

Goldstein was not induced to participate in a fraudulent scheme by unlawful pressure executed by Enoch; he merely acted in avoidance when Enoch disclosed the plan to him. Goldstein was not compelled either to prepare a false financial statement or to part with his stock to Enoch. If his sale was prompted by advance information Enoch disclosed to him, it nonetheless took place as a voluntary bargain and sale negotiation; Goldstein was at all times able to protect...