J. M. Wildman, Inc. v. Stults

• Decision Date: 28 December 1959
• Parties: J. M. WILDMAN, INC., etc., Plaintiff and Respondent, v. Walter STULTS et al., Defendants and Appellants. Civ. 23780.
• Court: California Court of Appeals Court of Appeals

Page 651

1 Cal.Rptr. 651

176 Cal.App.2d 670

J. M. WILDMAN, INC., etc., Plaintiff and Respondent, v. Walter STULTS et al., Defendants and Appellants.

Civ. 23780.

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

Dec. 28, 1959.

Rehearing Denied Jan. 19, 1960.

Francis T. Cornish, Berkeley, for appellants.

Gallagher, Madden & Hart, Paso Robles, for respondent.

LILLIE, Justice.

Plaintiff brought this action against defendants, husband and wife, to recover the deficiency due on the contract price of certain farming equipment after repossession and sale pursuant to the terms of the agreement. Defendant Walter Stults appeared by way of answer; defendant Genie H. Stults defaulted and her default was regularly entered on July 23, 1956. More than two years later, in October of 1958, the cause proceeded to trial and judgment was rendered against both defendants in the sum of $1,293.68, plus interest and attorney's fees. From this judgment they have appealed.

Although Walter Stults is named in the agreement as the sole purchaser, and his is the only purchaser signature thereto, it is alleged in the complaint that defendant Walter Stults 'for himself and as agent for the defendant, Genie H. Stults, entered into a conditional sales contract' with the plaintiff for the purchase of the subject equipment in designated installments, and subsequently defaulted in payments thereunder. The answer of Walter Stults denied that 'in entering into any contract with plaintiff this defendant acted for and on behalf of defendant, Genie H. Stults.' The record, in the form of a settled statement, fails to show that any evidence was introduced to prove the alleged agency, and we can only assume that this failure of proof stemmed from the claimed admissions of Genie in that respect which assertedly resulted from the entry of her default; thus, the settled statement discloses that 'no testimony was introduced by Genie H. Stults in contradiction of her admissions resulting from the entry of her default.' The only testimony otherwise bearing on the relationship between the defendants was that of Walter Stults who, the settled statement recites, 'testified that they were husband and wife, and that the ranching activities for which the equipment was used was upon the land owned by the defendant, Genie H. Stults, and that this ranching operation was a joint activity of Walter Stults and Genie H. Stults.'

The trial court made findings that the defendants were and are husband and wife; that defendant Walter Stults entered into the conditional sales contract sued upon; that by the terms of the contract 'the defendant' became obligated to make designated payments and that 'the said defendant Walter Stults failed to pay * * *'; and that '(a)11 of the material allegations of the complaint have been confessed and admitted by the defaulting defendant Genie H. Stults.' No specific finding was made with respect to the complaint's allegation that 'Walter Stults, for himself and as agent for the defendant, Genie H. Stults, entered into a conditional sales contract,' nor was there a finding as to the denial by Walter that he there and then acted for or on behalf of his wife. Lastly, there is this general finding: 'with reference to the remaining material allegations in the complaint and the answer of defendants (sic) Walter Stults thereto the court finds that all such allegations not found herein to be true or untrue are found to be untrue.'

It is agreed that the sole issues on appeal are (1) whether the allegation in the complaint that Walter Stults acted as agent for Genie H. Stults is sufficient upon which to base a judgment against the latter without any testimony of written or oral authority to bind her, and (2) whether under such circumstances a judgment can be obtained against both defendants, or (3) whether the plaintiff is required to elect between the undisclosed principal and the agent.

Preliminarily, it is contended by Mrs. Stults that, despite her default, the default judgment thereafter rendered against her is appealable (Gudarov v. Hadjieff, 38 Cal.2d 412, 240 P.2d 621; Jameson v. Simonds Saw Co., 144 Cal. 3, 77 P. 662; Lemon v. Hubbard, 10 Cal.App. 471, 102 P. 554). In the Lemon case, supra, the court took note of the fact that a default judgment is, in effect, a consent judgment, 'yet in this state, under the decision in Jameson v. Simonds Saw Co., 144 Cal. 3, 77 P. 662, it is apparent that the judgment would be open to attack by direct appeal or by motion to vacate and set it aside. Plaintiff was therefore placed in a position where, through an appeal within the time limited by statute, his judgment might be reversed.' (Emphasis added.) 10 Cal. App. at pages 475, 476, 102 P. at page 556. The above holding has never been disapproved; however, more recent cases adhere to the view that the defaulting party must take steps in the trial court to set aside the entry of the default or an appeal will be futile (Howard Greer Custom Originals v. Capritti, 35 Cal.2d 886, 888, 221 P.2d 937, and authorities therein cited). No such steps were taken by Mrs. Stults. 'A defendant against whom a default has been entered is out of court, and is not entitled to take any further steps in the cause affecting plaintiff's right of action; he cannot thereafter, until such default is set aside in a proper proceeding, file pleadings or move for a new trial, or demand notice of subsequent proceedings. (Citing cases.) If the judgment were vacated, it would be the duty of the court immediately to render another judgment of like effect, and the defendants, still being in default, could not be heard in opposition thereto' (Howard Greer Custom Originals v. Capritti, supra, 35 Cal.2d 888, 889, 221 P.2d 938, quoting Brooks v. Nelson, 95 Cal.App. 144, 147-148, 272 P. 610). It is also suggested on behalf of Mrs. Stults that the judgment included an award of attorney's fees and therefore falls within the rule discussed in Landwehr v. Gillette, 174 Cal. 654, 163 P. 1018, to the effect that a clerk may only compute and cannot adjudicate. But the cited case and the controlling statute (Code Civ.Proc. § 585) have reference to a default judgment and not a default. Accordingly, what is said hereinafter with respect to the purported rights of Mrs. Stults on this appeal must be viewed in the light of the rules just mentioned.

Mrs. Stults was not named in the contract, nor did she execute the agreement; hence she was an undisclosed principal. True, where one deals with another whom he believes to be the principal but subsequently learns was acting for an undisclosed principal, he may recover from either but he cannot hold both (Imperial Valley Box Co. v. Reese, 105 Cal.App.2d 401, 403, 233 P.2d 629). This, of course, presupposes the existence of an agency, the establishment of which is indispensable to the liability of the principal (2 Cal.Jur.2d 868); and the burden of proof rests with the party asserting that the agent had authority to enter into the contract (Wahyou v. Kiernan, 145 Cal.App.2d 443, 445, ...