M.H. Golden Const. Co. v. Superior Court of State, in and for Imperial County

• Decision Date: 08 August 1950
• Citation: 98 Cal.App.2d 811,221 P.2d 218
• Court: California Court of Appeals Court of Appeals
• Parties: . EL CENTRO PROPERTIES, Inc. v. SUPERIOR COURT OF STATE, IN AND FOR SAN DIEGO COUNTY et al. Civ. 4216, 4220. District Court of Appeal, Fourth District, California

Page 218

221 P.2d 218

98 Cal.App.2d 811

M. H. GOLDEN CONST. CO. v. SUPERIOR COURT OF STATE, IN AND FOR IMPERIAL COUNTY et al.

EL CENTRO PROPERTIES, Inc. v. SUPERIOR COURT OF STATE, IN AND FOR SAN DIEGO COUNTY et al.

Civ. 4216, 4220.

District Court of Appeal, Fourth District, California.

Aug. 8, 1950.

Rehearing Denied Sept. 5, 1950.

Hearing Denied Sept. 25, 1950.

H. G. Sloane, San Diego, for petitioner M. H. Golden Const. co.

Horton & Knox, El Centro, Martin & Mahedy, San Diego, Sanner, Fleming & Irwin and Thomas J. Madden, Los Angeles, for petitioner El Centro Properties, Inc.

Clarence B. Smith, El Centro, for receiver, Aage Kaiser.

Horton and Knox, San Diego, Martin and Mehedy, San Diego, Sanner, Fleming & Irwin and Thomas J. Madden, Los Angeles, for Superior Court of Imperial County and others.

H. G. Sloane, San Diego, for Superior Court of San Diego County and others.

MUSSELL, Justice.

On April 17, 1950, Golden Construction Company, as plaintiff, filed an action in San Diego County in which a money judgment and declaratory relief was sought against El Centro Properties, Inc. Summons was issued and served on the defendant corporation on the following day. El Centro Properties, Inc., appeared in the action, filed a demurrer and various motions. The demurrer was overruled, the motions were denied and the defendant then filed an answer and cross-complaint. After an answer was filed to the cross-complaint, the matter was set for trial before a jury in the Superior Court of San Diego County.

On March 20, 1950, an action was filed in the County of Imperial by certain stockholders of El Centro Properties, Inc. against the Golden Construction Company in which the plaintiffs alleged that the corporation had failed to take court action for the protection of itself and its stockholders and that such action was filed as a derivative action in behalf of the corporation. The summons was issued at the time the action was filed but was not served on the defendant, Golden Construction Company, until April 21, 1950, three days after the service of the summons in the San Diego action.

On May 5, 1950, the Superior Court in Imperial County appointed a receiver, who took charge of certain real property in that county belonging to the El Centro Properties corporation.

On May 20, 1950, plaintiff in the Imperial County action filed a third amended complaint to which the defendants interposed their demurrer, setting up therein the pendency of another action between the said parties for the same cause, namely: the action then pending in San Diego County. At the same time the Golden Construction Company filed notice of motion to abate the proceedings in Imperial County and to discharge the receiver. Defendants' demurrer was overruled and the motion to abate the proceedings and to discharge the receiver was denied.

The Golden Construction Company then on June 27, 1950, filed its petition herein for a writ to prohibit the Superior Court in Imperial County from taking any further proceedings in the action in that county. El Centro Properties on July 10, 1950, filed its petition herein to restrain the Superior Court in San Diego from taking any further proceedings in the action therein pending.

The primary question for our determination is whether the Superior Court in San Diego has jurisdiction to proceed with the action filed in that county. Jurisdiction is ordinarily determined by the nature of the case as made by the complainant and the relief sought. Ransome-Crummey Co. v. Martenstein, 167 Cal. 406, 408, 139 P. 1060. The nature of the action is fixed by the allegations of the complaint. Becker v. Superior Court, 151 Cal. 313, 317, 90 P. 689.

The action in San Diego County is primarily one to recover moneys alleged to be due plaintiff on a building contract providing for the construction by plaintiff of houses, sewers, roads, curbs and paving on property owned by the defendant corporation in El Centro. In a second cause of action, an account stated was set forth and it was further alleged, among other things, that in order to induce plaintiff not to take action against the defendant and not to record claims of lien on defendant's property, all the directors and stockholders of the defendant corporation agreed to place the control of the corporation in plaintiff; that this was done in order that there might be no dispute or delay in using defendant's assets in discharge of its obligations to plaintiff; that a proxy agreement was executed by all of defendant's shareholders, pursuant to which three nominees of Golden Construction Company were elected to defendant's board of directors; that in subsequent meetings of the new board, actions were taken to liquidate the indebtedness, including a resolution of March 20, 1950, to sell sufficient of the assets of defendant corporation as might be required to discharge the indebtedness to plaintiff; that at this meeting a resolution was adopted amending the articles of incorporation so as to state that the principal office for the transaction of the business of the corporation is located in San Diego County; that on March 29, 1950, the minority directors of defendant corporation delivered to plainti...