Record Mach. & Tool Co. v. Pageman Holding Corp.

• Decision Date: 20 July 1959
• Citation: 342 P.2d 402,172 Cal.App.2d 164
• Court: California Court of Appeals Court of Appeals
• Parties: RECORD MACHINE AND TOOL COMPANY, a corporation, Plaintiff and Appellant, v. PAGEMAN HOLDING CORPORATION, a corporation, Defendant and Respondent. Carl Francis BAKER, Oretta Mae Baker, Record Machine and Tool Company, a corporation, Plaintiffs and Appellants, v. Rudolph A. PAGEMAN, Caroline Johnson Pageman, Pageman Holding Corporation, a corporation, Defendants and Respondents. Civ. 23473.

Page 402

342 P.2d 402

172 Cal.App.2d 164

RECORD MACHINE AND TOOL COMPANY, a corporation, Plaintiff and Appellant, v. PAGEMAN HOLDING CORPORATION, a corporation, Defendant and Respondent.

Carl Francis BAKER, Oretta Mae Baker, Record Machine and Tool Company, a corporation, Plaintiffs and Appellants, v. Rudolph A. PAGEMAN, Caroline Johnson Pageman, Pageman Holding Corporation, a corporation, Defendants and Respondents.

Civ. 23473.

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

July 20, 1959.

Hearing Denied Sept. 16, 1959.

Edward L. Condon, Long Beach, for appellants.

Thomas P. Cruce and Max Tendler, Los Angeles, for respondents.

VALLEE, Justice.

Appeal from a judgment in two consolidated actions: superior court numbers 590631 and 659106. The judgment directs the county clerk to pay funds in his hands to Pageman Holding Corporation (superior court No. 590631), and adjudges that the plaintiffs take nothing from defendants (superior court No. 659106).

On April 16, 1947 Pageman Holding Corporation, called Pageman, agreed to assign five United States letters patent and to convey certain real and personal properties to Record Machine & Tool Company, a corporation, called Record, for $100,000 on terms and conditions detailed in a conditional sales contract. On August 23, 1951 Record tendered, at the place specified in the contract, the total unpaid balance of $26,549.18 and its demand that Pageman perform the contract by depositing the necessary instruments of title in escrow for delivery concurrently with Pageman's receipt of the last mentioned sum. Pageman refused the tender and refused to perform the contract or to deliver any title paper conveying any of the properties to be conveyed to Record although Record was able and willing to perform according to its tender. In action 590631 for specific performance of the contract, the court found that Record performed all the conditions required of it by the contract and that the tender was valid and immediately vested in Record all title Pageman had in the properties to be conveyed. Pageman did not convey one of the patents, No. 2133022, designated as 022, and was unable to do so because it had previously conveyed it to others. Patent 022 was a master patent. No manufacture, use, or sale could be made under the four other patents named in the contract without the consent or license of the person or persons to whom patent 022 had been conveyed. In action 590631 the trial court adjudged that Record was entitled to performance, but failed to find the amount that should have been credited on the purchase price of $100,000 by reason of Pageman's failure to convey patent 022. On appeal the judgment was reversed with directions to 'render the same judgment heretofore given, but in addition, shall ascertain and declare the rights of the parties with respect to the payment of the unpaid balance of the purchase price, if any, under the contract, and the effect thereon of defendant's [Pageman's] inability to give good title to the patent it does not own.' Record Machine & Tool Co. v. Pageman Hold. Corp., 42 Cal.2d 227, 266 P.2d 1, 5. On a retrial, the court found that $12,000 was the amount to which Record was entitled by reason of Pageman's inability to convey patent 022. On appeal from the ensuing supplementary judgment, Pageman questioned the amount of the award. The reviewing court affirmed the supplementary judgment, holding that the award complied with the Supreme Court order in that it was a proper amount for damages resulting to Record by its loss of the exclusive right to operate under the patent. Record Machine & Tool Co. v. Pageman Hold. Corp., 132 Cal.App.2d 821, 283 P.2d 724. The original and the supplementary judgment in action 590631 contained this provision: 'plaintiff [Record] is not precluded by the judgment herein from asserting any other claims from the defendant [Pageman] under said conditional sales contract, and preventing plaintiff from having full use of all properties, real, personal or mixed, described in said conditional sales contract from and after the date of said tender on or about August 23, 1951.'

The original complaint in action 659106 was filed April 17, 1956. The complaint named Carl Francis Baker and Oretta Mae Baker as the parties plaintiff, and they appeared in propria persona. They alleged they were the sole owners of Record Machine & Tool Company, a corporation. On demurrer, the court ordered that Record be made a party plaintiff, which was done on the face of the complaint. Each of six amended complaints was filed by Carl Francis Baker and Oretta Mae Baker in propria persona. Defendants successfully demurred to the original complaint and to five amended complaints. On January 30, 1957 the Bakers, as the only plaintiffs, filed the sixth amended complaint, hereinafter referred to as the complaint, in which for the first time they alleged that on January 29, 1957 Record had assigned all of its interest in the contract which was the subject of the controversy in action 590631 and all of its rights therein and causes of action against defendants, to them.

The complaint contained four counts. As affirmative defenses defendants pleaded that the cause of action alleged in each count was barred by the provisions of sections 337(1), 338(4), and 343 of the Code of Civil Procedure and by the prior judgment in action 590631.

At the pre-trial hearing in action 659106 it was agreed that all files, exhibits, and records in action 590631 be received in evidence in that action by reference and that the judgment in action 659106 should provide for the disposition of funds then on deposit with the county clerk as a result of payments made pursuant to proceedings in action 590631.

Pursuant to section 597 of the Code of Civil Procedure the court proceeded to the trial of the special defenses before the trial of any other issue in the case. The questions were submitted on the allegations of the complaint in action 659106 and the record in action 590631. The court found that no filing fee for Record had been paid to the clerk as a filing fee in the action; Record did not appear in the action by reason of nonpayment of the filing fee, and it did not appear by licensed attorney; it was not a party plaintiff in the action; each of the four counts was barred by sections 337(1) and 343 of the Code of Civil Procedure; and the prior judgment in action 590631 was res judicata as to each count. Judgment was that plaintiffs take nothing by their complaint.

If, on the trial of special defenses, only the decision is in favor of the defendant pleading the same, the trial is at an end (Steiner v. Thomas, 94 Cal.App.2d 655, 658, 211 P.2d 321); a judgment is then entered for the defendant; and, on a motion for a new trial or upon appeal from the judgment, the decision on the special defenses and all rulings on the trial of them may be reviewed. Woodhouse v. Pacific Elec. Ry. Co., 112 Cal.App.2d 22, 25, 245 P.2d 701.

No point is made in plaintiffs' brief with respect to that part of the judgment directing the county clerk to pay funds in his hands to Pageman. Plaintiffs are deemed to have abandoned their appeal from that part of the judgment. Bellon v. Silver Gate Theatres, Inc., 4 Cal.2d 1, 17, 47 P.2d 462.

Plaintiffs contend that counts I, II, and III of the complaint are not barred by the statute of limitations and that the judgment in action 590631 is not res judicata as to those counts. They make no contention with respect to the fourth count. We, therefore, deem that plaintiffs have abandoned the appeal in respect to that count. Clay v. Lagiss, 143 Cal.App.2d 441, 452, 299 P.2d 1025.

Count I

Count I incorporates a copy of the conditional sales contract of April 16, 1947 and alleges that under its terms plaintiffs on that date should have immediate possession and retain possession of all of the property described therein, including work in process, completed parts, and fully assembled rotary drill bits, of a sales value of $30,000; and defendants, by the contract, authorized plaintiffs to manufacture, assemble, and sell any part of said stock, and apply the proceeds in payment pro tanto of the conditional sales contract. It alleges that about April 16, 1947 plaintiffs entered into possession and immediately thereafter ascertained that defendants had no usuable or salable work in process, no completed parts and no assembled rotary bits on hand, and defendants never delivered same, to plaintiffs' damage in the amount of $30,000.

It clearly appears that the cause of action for failure to deliver the stated items accrued at the time plaintiffs took possession on April 16, 1947 and found no such items 'on hand.' Action 590631 was filed September 14, 1951. The breach occurred more than four years before that action was filed. The cause of action accrued on the breach and was barred by the statute prior to the filing of action 590631. Code Civ.Proc., § 337(1). The reservation in the judgment and in the supplementary judgment in action 590631 to the effect that Record was not precluded from asserting any claim for damages because of not having full use of the properties described in the contract from and after August 23, 1951 could not, and did not, save a cause of action which was barred by the statute at the time that action was commenced.

Count II

Count II realleges all the allegations of count I. It alleges that prior to the execution of the contract defendants, on June 24, 1939, granted to a third party the exclusive right and license to manufacture, use, and sell rotary drill bits incorporating the invention of patent number 022 and thus controlling the four other patents named in the contract. It alleges the failure to grant an exclusive license to manufacture sell, and use under patent 022 to Record. It alleges that by reason of the failure of defendants on April 16, 1947 to deliver work in process, completed parts, and...