J. C. Millett Co. v. Latchford-Marble Glass Co., LATCHFORD-MARBLE

• Decision Date: 08 October 1956
• Docket Number: LATCHFORD-MARBLE
• Citation: 144 Cal.App.2d 838,301 P.2d 914
• Court: California Court of Appeals Court of Appeals
• Parties: J. C. MILLETT CO., a corporation, and The Northern Glass Company, a partnership consisting of J. C. Millett and Lori Podesta, Plaintiffs and Respondents, v.GLASS CO., a corporation, Latchford-Marble Package & Supply Co., Latchford-Marble Container & Supply Co., Edwin E. Balling, Jr., Reuben J. Ingold, William J. Latchford, W. Baird Marble, William B. Marble, John E. McCandless, J. N. Pettker, William Simkins et al., Defendants and Appellants. Civ. 16819.

Page 914

301 P.2d 914

144 Cal.App.2d 838

J. C. MILLETT CO., a corporation, and The Northern Glass Company, a partnership consisting of J. C. Millett and Lori Podesta, Plaintiffs and Respondents, v. LATCHFORD-MARBLE GLASS CO., a corporation, Latchford-Marble Package & Supply Co., Latchford-Marble Container & Supply Co., Edwin E. Balling, Jr., Reuben J. Ingold, William J. Latchford, W. Baird Marble, William B. Marble, John E. McCandless, J. N. Pettker, William Simkins et al., Defendants and Appellants.

Civ. 16819.

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

Oct. 8, 1956.

George H. Emerson, Los Angeles, for appellants.

Leon A. Blum, J. Albert Hutchinson, San Francisco, for respondents.

PETERS, Presiding Justice.

This is an appeal by the corporate and individual defendants from an order denying their motions for a change of venue.

The action was brought in San Francisco by a San Francisco corporation and partnership against three corporate and eight individual defendants. The action is for breach of contract and an accounting, the contract having been executed in 1950 between the Latchford-Marble Glass Company as seller and the plaintiffs as buyers, whereby the seller agreed to furnish the buyers with beverage bottles, and to give the buyers the exclusive right, with certain exceptions, to market such bottles in Northern California. It is alleged that the Glass company organized the other two corporate defendants as subsidiaries of the Glass company, enticed several of plaintiffs' employees into the employ of these subsidiaries, and then offered for sale and sold glass containers in Northern California in competition with plaintiffs and in violation of the contract.

The three corporate defendants and the eight individual defendants filed separate motions for a change of venue to Los Angeles County, averring that the corporate defendants were residents of that county, with their principal places of business there, and that all eight individual defendants reside in that county. In addition, all defendants averred that the contract was made and to be performed in Los Angeles, that the obligation arose there, and the breach, if any, occurred there. Plaintiffs filed no counter-affidavits. The trial court denied the motions. Defendants appeal.

It may be conceded that, under Article 12, Section 16 of the Constitution, the action, so far as the three corporate defendants are concerned, was properly filed in San Francisco. The complaint alleges that defendants breached a covenant not to compete with the plaintiffs in the sale of bottles in Northern California, and it is a reasonable inference that the breach of this covenant occurred in Northern California. San Francisco is, of course, in Northern California. Plaintiff is entitled to the presumption that he has brought the action in a proper county, and the burden, to secure a change of venue, is on the defendant. Chase v. South Pacific C. Railroad Co., 83 Cal. 468, 23 P. 532; Konig v. Associated Almond Growers, 37 Cal.App.2d 360, 99 P.2d 678; Pacific Bal Industries v. Northern Timber, 118 Cal.App.2d 815, 259 P.2d 465.

We may assume, therefore, that as to the corporate defendants the place of performance or the place of breach of the contract was alleged to be San Francisco, and that as to these defendants the action was properly filed in that city and county.

It is equally clear, however, that the individual defendants, all of whom are admittedly residents of Los Angeles, were entitled to a change of venue. Section 395 of the Code of Civil Procedure provides: 'In all other cases, except as in this section otherwise provided, and subject to the power of the court to transfer actions or proceedings as provided in this title, the county in which the defendants, or some of them, reside at the commencement of the action, is the proper county for the trial of the action. * * * When a defendant has contracted to perform an obligation in a particular county, either the county where such obligation is to be performed, or in which the contract in fact was entered into, or the county in which the defendant, or any such defendant, resides at the commencement of the action, shall be a proper county for the trial of an action founded on such obligation, and the county in which such obligation is incurred shall be deemed to be the county in which it is to be performed unless there is a special contract in writing to the contrary. * * *'

It is quite apparent that, since the individual defendants are not parties to the contract here involved, the first sentence of the section is applicable, and that under it the individual defendants were entitled to be sued in the county of their residence.

Thus, the problem involved arises out of the fact that the corporate defendants probably were properly sued, on a ground other than residence, in San Francisco, and the eight individual defendants, considered separately, were entitled to be sued in Los Angeles.

The solution to this problem is clear. When a corporation is properly sued other than at its residence on a transitory cause of action, and individual defendants are joined who, if sued alone, would be entitled to be sued in the county of their residence, the plaintiff waives his right against the corporation, and the individual defendants are entitled to a change to the county of their residence. The proper rule is stated as follows in 1 Witkin,...