Rosen v. Kessler

• Decision Date: 07 November 1956
• Citation: 303 P.2d 110,145 Cal.App.2d 676
• Court: California Court of Appeals Court of Appeals
• Parties: J. Frederick ROSEN, Plaintiff and Appellant, v. Leslie M. KESSLER et al., Defendants and Respondents. Civ. 5268.

Page 110

303 P.2d 110

145 Cal.App.2d 676

J. Frederick ROSEN, Plaintiff and Appellant, v. Leslie M. KESSLER et al., Defendants and Respondents.

Civ. 5268.

District Court of Appeal, Fourth District, California.

Nov. 7, 1956.

Hearing Denied Jan. 4, 1957.

Shaw & Barnett, Riverside, for appellant.

Kessler & Kessler and Harold J. Abraham, Oakland, for respondents.

GRIFFIN, Justice.

Plaintiff, an attorney at law, brought this action entitled: 'Complaint for Rescission, Accounting and Damages' against defendants Leslie M. Kessler, Albert H. Kessler, Frank Maun, Edith Maun, Jack H. Zamsky, Robert L. Lippert, Charles J. Maestri, F. & E Theatre Co., Inc., a corporation, Desert Valley Theatres, Inc., Indio Associates, et al.

It is alleged in the first cause of action that Lippert and Maestri were and are the owners and operators of numerous theatres throughout the State; that the Kesslers were and are attorneys and associates of Lippert and Maestri with offices in Oakland, and that Maun was an employee of said defendants in the theatre operations; that Maun and Zamsky were officers and equal owners and operators of the Coachella Valley Drive-in Theatre, Inc. (hereinafter referred to as the Drive-in Theatre) located on certain described real property in Coachella Valley in Riverside County owned by plaintiff and which was worth about $25,000, subject to a note and trust deed for $13,000; that about December 15, 1952, plaintiff advanced to the Drive-in Theatre about $10,000, and obligated himself for the payment of debts of said corporation by certain written and oral guarantees in excess of $10,000; and that prior thereto he had executed a note as co-maker with Zamsky for $7,500. It is alleged that the Drive-in Theatre had financial difficulties and defendants promised plaintiff that if he would convey said Drive-in Theatre property to defendant Maestri and transfer his interest to the F & E Theatre Co. and waive any claim for monies he had advanced to said Drive-in Theatre, defendants would assume and pay all debts of the Drive-in Theatre and pay the balance due on the note for $13,000, pay plaintiff $2,000 in cash plus a note for $1,500 and pay plaintiff, as a retainer for legal services, the sum of $2,200; that plaintiff executed a deed of conveyance of said Drive-in Theatre property to Maestri, agreed in writing to sell and assign his interest in it to F & E Theatre Co. and waived all claims for monies advanced to the Drive-in Theatre; that defendants paid plaintiff $2,000 and delivered a promissory note to him executed by Maestri, for $1,500 and one for $2,200 executed by F & E Theatre Co., and that defendants verbally agreed to assume and pay the balance due on the $13,000 note; that pursuant to the agreement defendants entered into possession of the Drive-in Theatre on December 23, 1952; that payments were made to plaintiff on the $1,500 and $2,200 notes but defendants failed to pay the $13,000 note they orally agreed to pay or assume, and failed to pay obligations due to creditors of the Drive-in Theatre; that suits were filed by said creditors against plaintiff and he was required to defend them; that plaintiff was compelled to pay some of said claims and, for failure of defendants to pay money on the $13,000 bank note plaintiff was compelled to pay $1,000 thereon to avoid suit; that thereafter, on July 24, 1953, Maestri and wife conveyed the Drivein Theatre property to Lipperts and they conveyed undivided portions to the Kesslers; that certain representations made proved to be false and untrue and were made for the purpose of inducing plaintiff to part with his Drive-in Theatre property; and that on December 20, 1954, plaintiff elected to and did rescind the agreement and deed of conveyance. Notice of rescission was mailed to defendant Kessler in Alameda County. It is then alleged that the 'transactions, agreements and contracts' herein mentioned were made and entered into in the County of Riverside.

As a second cause of action, an accounting is sought of the earnings of the Drivein Theatre while in the defendants' possession. In a third cause of action he seeks damages for $35,000 for refusal of the defendants to carry out the agreement. The fourth cause of action is for damages for $15,000 for failure of defendants to pay the creditors and the bank note, for humiliation and embarrassment and loss of income from the practice of his profession. The relief sought is rescission of all contracts and conveyances and an order that defendants be required to reconvey the property to plaintiff, that the parties be restored to their prior status, for an accounting, judgment for damages as claimed in the fourth and fifth causes of action, and general relief. A general and special demurrer was filed and a motion for change of venue to Oakland was granted on a showing by affidavit that the defendant Albert H. Kessler was a resident of Alameda County and that none of the defendants resided in Riverside County; that the corporations sued likewise had their principal places of business in San Francisco; that Indio Associates, one of the defendants, is a joint venture whose members are the non-resident defendants and do business in San Francisco. No opposing affidavits were filed. This appeal is from the order. A petition for writ of supersedeas to stay the execution of the order was denied.

In support of the order, defendants argue that the first cause of action purports to set forth a cause of action for fraud which is transitory in character; that it also contains an allegation seeking rescission of some claimed agreement, which is also a transitory action; that although it seeks rescission of a conveyance of real property it also, in said cause of action, seeks the cancellation of an agreement involving the sale of personal property, i. e., the theatre business and equipment; that the theatre business was owned and operated by a corporation entirely distinct from plaintiff and that plaintiff personally owned the real property; that even though the first cause of action may be considered a local action, if joined with a transitory action, such as the second, third and fourth causes of action, venue is determined from the transitory action; and that since the notice of rescission was served in Alameda County, the right of action arose there, citing such authority as Myers v. Superior Court, 75 Cal.App.2d 925, 172 P.2d 84; Smith v. Smith, 88 Cal. 572, 576, 26 P. 356; Vaughan v. Roberts, 45 Cal.App.2d 246, 113 P.2d 884; Stesel v. Santa Ana River Water Co., 35 Cal.App.2d 117, 94 P.2d 1052; Strosnider v. Pomin, 32 Cal.App.2d 103, 89 P.2d 179; Bybee v. Fairchild, 75 Cal.App.2d 35, 170 P.2d 54; Postin v. Griggs, 66 Cal.App.2d 147, 151 P.2d 887; and Fitzhugh v. University Realty Co., 46 Cal.App. 198, 188 P. 1023.

It is well established in this state that the nature of the action is to be determined from the complaint and whether it is a local or transitory action depends on its character and the character of the judgment permissible on default. Hale v. Bohannon, 38 Cal.2d 458, 466, 241 P.2d 4; Kaluzok v. Brisson, 27 Cal.2d 760, 762, 167 P.2d 481, 163 A.L.R. 1308, and cases cited. In the latter case the plaintiff elected to seek affirmance of a contract and sued for damages. The court held such an action transitory. It pointed out a distinction if plaintiff had elected to rescind the contract, cancel the debt and restore the real property to defendants, thus effecting a reconveyance. In Postin v. Griggs, supra, which involved an action for rescission of certain relinquishment of interest in a partnership involving mining property, several of the cited authorities were discussed, which stated that an action, the gravamen of which is fraud, is triable in the county of the residence of the defendant, and the mere fact that incidentally rights in real property may be involved does not change the rule; that an accounting and an injunction based upon fraud is a personal action which the defendants are...