M. G. Chamberlain & Co. v. Simpson

• Decision Date: 25 August 1959
• Citation: 173 Cal.App.2d 263,343 P.2d 438
• Court: California Court of Appeals Court of Appeals
• Parties: M. G. CHAMBERLAIN & COMPANY, and Marvin G. Chamberlain, Plaintiffs and Appellants, v. Kenneth R. SIMPSON, Jr., et al., Defendants, Kenneth R. Simpson, Jr., Pacific Moulded Products Company, a corporation, West Coast Chemicals and Solvents Corporation Charles D. Thurmond, and Pacific Moulded Products Co., a co-partnership composed of West Coast Chemicals and Solvents Corporation and Lac Chemicals, Inc., Volney S. Anderson, Mildred C. Anderson, Pacific Moulded Products Co., a co-partnership composed of Volney S. Anderson and Mildred C. Anderson, partners, Respondents. Civ. 23592.

Page 438

343 P.2d 438

173 Cal.App.2d 263

M. G. CHAMBERLAIN & COMPANY, and Marvin G. Chamberlain, Plaintiffs and Appellants, v. Kenneth R. SIMPSON, Jr., et al., Defendants Kenneth R. Simpson, Jr., Pacific Moulded Products Company, a corporation, West Coast Chemicals and Solvents Corporation Charles D. Thurmond, and Pacific Moulded Products Co., a co-partnership composed of West Coast Chemicals and Solvents Corporation and Lac Chemicals, Inc., Volney S. Anderson, Mildred C. Anderson, Pacific Moulded Products Co., a co-partnership composed of Volney S. Anderson and Mildred C. Anderson, partners, Respondents.

Civ. 23592.

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

Aug. 25, 1959.

Lyman A. Garber, Beverly Hills, for appellants.

Gibson, Dunn & Crutcher, Julian O. von Kalinowski, and John J. Waller, Los Angeles, for respondents Kenneth R. Simpson, Jr., Pacific Moulded Products Co., a corporation, West Coast Chemicals and Solvents Corporation, Charles D. Thurmond, Pacific Moulded Products Co., sued herein as a copartnership composed of West Coast Chemicals and Solvents Corporation and Lac Chemicals, Inc.

Finch, Bell, Duitsman & Jekel, Inglewood, for respondents Volney S. Anderson, Mildred C. Anderson, and Pacific Moulded Products Co., a corpartnership.

VALLEE, Justice.

Appeal from a judgment of dismissal entered on the sustaining of a demurrer to the third amended complaint, called the complaint, without leave to amend. The complaint is in seven counts. The demurrer was joint and several, was to the entire complaint and to each count separately, and was general only. Concurrently with the demurrer, defendants filed a motion to dismiss the action on the ground each count of the complaint was sham and frivolous. The motion was granted. As will appear, the only question is whether one or more counts of the complaint states facts sufficient to constitute a cause of action.

The complaint is prolix and discursive. It abounds in evidence, conclusions of fact, conclusions of law, argument, and immaterial matter. The rule that the complaint must a contain a statement of the facts in ordinary and concise language is completely ignored. Code Civ.Proc. § 426. Nevertheless, if, intermingled with such matters, there are averments of ultimate facts sufficient to constitute a cause of action, it was error to substain the demurrer without leave.

We must disregard any defects in the pleading which do not affect the substantial rights of the parties. Code Civ.Proc. § 475. It must be assumed that plaintiff can prove all the facts as alleged. Wirin v. Horrall, 85 Cal.App.2d 497, 500, 193 P.2d 470. 'All that is necessary as against a general demurrer is to plead facts entitling the plaintiff to some relief. [Citation.] 'In determining whether or not the complaint is sufficient, as against the demurrer, upon the ground that it does not state facts sufficient to constitute a cause of action, the rule is, that if upon a consideration of all the facts stated it appears that the plaintiff is entitled to any relief at the hands of the court against the defendants, the complaint will be held good, although the facts may not be clearly stated or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.' [Citation.] In passing upon the sufficiency of a pleading, its allegations must be liberally construed with a view to substantial justice between the parties. [Citations.] 'While orderly procedure demands a reasonable enforcement of the rules of pleading, the basic principle of the code system in this state is that the administration of justice shall not be embarrassed by technicalities, strict rules of construction, or useless forms.'' Hardy v. San Fernando Valley Chamber of Commerce, 99 Cal.App.2d 572, 577-578, 222 P.2d 314, 318; Roberts v. Wachter, 104 Cal.App.2d 281, 287-288, 231 P.2d 540; Toney v. Security First Nat. Bank, 108 Cal.App.2d 161, 167, 238 P.2d 645; Augustine v. Trucco, 124 Cal.App.2d 229, 236-237, 268 P.2d 780; Schaefer v. Berinstein, 140 Cal.App.2d 278, 288-289, 295 P.2d 113; Skipper V. Gilbert J. Martin Constr. Co., 156 Cal.App.2d 82, 86, 318 P.2d 732; Lincoln v. Grazer, 163 Cal.App.2d 758, 760-761, 329 P.2d 928.

Summarized, the allegations of ultimate fact are these:

Count I

At all times plaintiff M. G. Chamberlain & Company, a corporation, Possessed a license as a business opportunity broker (Bus. & Prof.Code, § 10250 et seq.), and is referred to in the complaint as 'plaintiff.' Plaintiff Marvin G. Chamberlain was its president and managing officer.

Defendant Pacific Moulded Products Company is a corporation. Prior to February of March 1955 its name was Lac Chemicals, Inc. For clarity, Pacific Moulded Products Company and Lac Chemicals, Inc., will be referred to as Lac Chemicals. Defendant West Coast Chemicals and Solvents Corporation is a corporation and his referred to as West Coast. At all times defendant Simpson was president and defendant Thurmond was vice-president of defendants Lac Chemicals and of West Coast and were their duly authorized agents, acting within the scope of their authority in the acts and agreements to be referred to. Lac Chemicals, West Coast, Simpson, and Thurmond are referred to as buyers. Defendant Pacific Moulded Products Co., referred to as Pacific, is a partnership composed of defendants Volney S. Anderson and Mildred C. Anderson. The partnership and the partners conducted the business which was the subject of the purchase and sale to be referred to. Defendant Volney S. Anderson is sometimes referred to as Anderson. Pacific and the Andersons are referred to as the sellers.

About March 15, 1954, defendant Simpson contracted orally to pay plaintiff a finder's fee of 5 per cent of the purchase price of any business which plaintiff found for him and which he purchased. At the same time Simpson named defendant Thurmond as his agent in dealing with plaintiff, and Thurmond so acted. About March 22, 1954, pursuant to the '5%-finder's-fee contract,' plaintiff introduced Thurmond to Anderson. Neither Simpson nor Thurmond, nor any of the corporate defendants, had previously known Anderson or the business of Pacific. At that time plaintiff informed Thurmond that plaintiff was employed by Pacific as a business and financial consultant.

On information and belief, pursuant to oral negotiations in the months of December 1954 and January 1955, of which plaintiff had no knowledge, an oral contract of sale and purchase of Pacific's business was entered into; and about February 9, 1955, the Andersons, as sellers, and Lac Chemicals and West Coast, as buyers, executed written agreements respecting the contract.

On information and belief, the purchase price of the partnership business was at least $585,000, and plaintiff's finder's fee was $29,250. Plaintiff has performed all duties on its part to be performed and has demanded of the buyers payment of the finder's fee, which has been refused.

Count II

Count II realleges all the allegations of count I. It alleges plaintiff had no knowledge or suspicion of the transfer of the business of Pacific from the sellers to the buyers until April or May 1955. About July 6, 1955, plaintiff queried Simpson by letter about the payment to it of the 5 per cent finder's fee. About July 22, 1955, Simpson replied by letter which did not deny the existence nor the accruing of the finder's fee but claimed reliance on an agreement of January 27, 1955. The agreement of January 27, 1955, is as follows:

'Agreement for Compromise and Release

'This Agreement made January 27, 1955, at Los Angeles, California, by and between Marvin G. Chamberlain, Also known as M. G. Chamberlain, Florence M. Chamberlain, his wife, and M. G. Chamberlain & Company, a corporation, hereinafter collectively referred to as 'First Party,' and Volney S. Anderson and Mildred C. Anderson, copartners, doing business as Pacific Moulded Products Co., hereinafter collectively referred to as 'Second Party,'

'Witnesseth:

'Whereas, heretofore and on or about January 8, 1952, a written Memorandum Agreement was entered into between M. G. Chamberlain and Second Party, relating to and concerning the terms and conditions upon which Chamberlain would be compensated if, as and when the Pacific Moulded Products Co. enterprise was sold as the result of the efforts of Chamberlain. This agreement, by its terms, terminated and ended March 15, 1952, without any such purchaser being secured, and was not thereafter renewed; and

'Whereas, Second Party had periodically and from time to time issued and delivered certain checks to First Party, the last of which was issued under date of May 8, 1953 aggregating $14,295.00, of which sum $10,000.00 was for 'interest' or participation on account of a proposed financing enterise; and

'Whereas, the proposed financing enterprise was not completed so far as Second Party was concerned and, on or about May 1, 1953, Marvin G. Chamberlain delivered a note from M. G. Chamberlain & Company to Volney S. Anderson for the sum of $10,000.00, and later, on September 30, 1953, replaced that note with a note for $5,000.00 and a payment of $5,000.00, said $5,000.00 note bearing interest at 6% per annum, commencing May 1, 1953 and due April 30, 1954, which note has not been paid. Concurrently with the execution of the last above mentioned note, M. G. Chamberlain handed to Anderson Certificate No. 1 of M. G. Chamberlain & Company evidencing ninety-nine (99) shares of the capital stock of that Company, and Certificate No. 2 Evidencing one (1) share of the capital stock of that Company, in the name of (Mrs.) Florence M. Chamberlain, neither of which certificates was endorsed. Thereafter, and on or about July 8, 1954, M. G. Chamberlain & Company presented its invoice to Pacific Moulded Products Co. for assorted services for the period May 1,...