Santa Clara County v. Hayes Co.

• Decision Date: 29 October 1954
• Court: California Supreme Court
• Parties: COUNTY OF SANTA CLARA, a public corporation and a political subdivision of the State of California, Plaintiff and Appellant, v. HAYES COMPANY, a California corporation, Defendant and Respondent. S. F. 19062. . In Bank

Page 456

275 P.2d 456

43 Cal.2d 615

COUNTY OF SANTA CLARA, a public corporation and a political subdivision of the State of California, Plaintiff and Appellant, v. HAYES COMPANY, a California corporation, Defendant and Respondent.

S. F. 19062.

Supreme Court of California.

In Bank.

Oct. 29, 1954.

Rehearing Denied Nov. 24, 1954.

Howard W. Campen, County Counsel, and Donald K. Currlin, Asst. County Counsel, San Jose, for appellant.

Campbell, Custer, Warburton & Britton, Austen D. Warburton, Edwin J. Owens, San Jose, for respondent.

TRAYNOR, Justice.

Plaintiff has appealed from a judgment of dismissal entered after it declined to amend its first amended complaint following the sustaining of a demurrer. In its first cause of action plaintiff alleged that it orally contracted with defendant for the latter to publish in its newspaper a propsed county charter fot ten days before the election of November 2, 1948. Owing to defendant's negligence the publications of September 17th, 18th, 19th, 20th and 21st were so defective that the charter was invalidated in quo warranto proceedings commenced a few weeks after the charter went into effect on July 1, 1949. These proceedings were terminated by a decision of this court on May 28, 1951. On or about September 27, 1948, defendant filed its affidavit with plaintiff that the charter had been published for ten days, and plaintiff did not discover that five of the publications were defective until November 10, 1948, after the charter had been approved by the voters. In May 1949, plaintiff submitted the charter to the Legislature, and it was adopted and approved. Plaintiff seeks to recover the expenses it incurred in the preparation of the charter and its presentation to the voters. In its second cause of action plaintiff realleged the facts stated in its first cause of action and also alleged that the oral contract had been reduced to writing by defendant on September 30, 1948. A copy of the writing, consisting of the bill sent by defendant to plaintiff for the publishing costs, was attached to the complaint. In its third cause of action plaintiff realleged the facts stated in its first cause of action and also alleged facts purporting to show that defendant was estopped to plead the statute of limitations. Defendant demurred to each cause of action on the ground that it was barred by the provisions of subdivision 1 of section 339 of the Code of Civil Procedure, and on the ground that it was uncertain, ambiguous and unintelligible.

Section 339(1) provides a two year statute of limitations for an action 'upon a contract, obligation or liability not founded upon an instrument of writing * * *.' Defendant contends that plaintiff's cause of action arose in September 1948 when the mispublications occurred, and that since this action was not filed until November 1951, it is barred by the two year statute. Plaintiff contends, on the other hand, that the cause of action did not arise until this court affirmed the judgment invalidating the charter in 1951, and that in any event, either section 337(1) or section 343 of the Code of Civil Procedure is the applicable section. It also contends that if the cause of action accrued at the time of the mispublications, the statute was tolled from July 1, 1949 to May 28, 1951, the period the charter was in effect.

It is unnecessary to decide whether plaintiff's cause of action accrued when defendant failed properly to publish the charter, when plaintiff learned of the mispublications, or when the mispublications resulted in damage. Even if it is assumed that plaintiff's cause of action accrued at the earliest of these dates, the action was timely brought.

In the light of the decision invalidating the charter, People by Howser ex rel. Levin v. County of Santa Clara, 37 Cal.2d 335, 231 P.2d 826, it is clear that plaintiff would have been justified in not presenting the charter to the Legislature for approval at the 1949 session. Had it followed that course nothing would have prevented it from immediately bringing an action against defendant for damages. Instead, however, plaintiff took the position that the mispublications were not sufficient to invalidate the proceedings, and it seccessfully prevented the superior court from enjoining the certification of the charter to the Legislature. Santa Clara County v. Superior Court, 33 Cal.2d 552, 203 P.2d 1. Thereafter the charter was approved by the Legislature, and it went into effect on July 1, 1949. Once the charter had been put into effect, however, it could only be attacked in quo warranto proceedings. Taylor v. Cole, 201 Cal. 327, 333, 338-340, 257 P. 40, and cases cited; see, American Distilling Co. v. City Council, Sausalito, 34 Cal.2d 660, 667, 213 P.2d 704, 18 A.L.R.2d 1247. Under these circumstances the principle stated in Dillon v. Board of Pension Commissioners, 18 Cal.2d 427, 116 P.2d 37, 136 A.L.R. 800, is applicalbe. 'It is well recognized that the running of the statute of limitations is suspended during any period in which the plaintiff is legally prevented from taking action to protect his rights.' 18 Cal.2d at page 431, 116 P.2d at page 39; see also, Berger v. O'Hearn, 41 Cal.2d 729, 733, 264 P.2d 10; Estate of Caravas, 40 Cal.2d 33, 40, 250 P.2d 593; Judson v. Superior Court, 21 Cal.2d 11, 14, 129 P.2d 361; Christin v. Superior Court, 9 Cal.2d 526, 532-533, 71 P.2d 205, 112 A.L.R. 1153; Kinard v. Jordan, 175 Cal. 13, 15, 164 P. 894; Marden v. Bailard, 124 Cal.App.2d 458, 268 P.2d 809; Martin v. Goggin, 107 Cal.App.2d 688, 690, 238 P.2d 84; Burns v. Massachusetts etc. Co., 62 Cal.App.2d 962, 970, 146 P.2d 24; Wells v. California Tomato Juice, Inc., 47 Cal.App.2d 634, 638, 118 P.2d 916; Archer v. Edwards, 19 Cal.App.2d 253, 256, 65 P.2d 115; Estate of Morrison, 125 Cal.App. 504, 510, 14 P.2d 102; Elliott & Horne v. Chambers Land Co., 61 Cal.App. 310, 312, 215 P. 99; Code Civ.Proc. § 356. While the charter was in effect, plaintiff could not attack it in an action against defendant and thus could not establish damages flowing from the mispublications.

It is contended, however, that since plaintiff could have avoided the bar of the rule against collateral attack of its charter by not submitting the charter to the Legislature for approval, it should not be allowed to rely on that bar now. Plaintiff was not in a position, however, indefinitely to delay proceedings. See, Dillon v. Board of Pension Com'r, supra, 18 Cal.2d 427, 430, 116 P.2d 37. As was pointed out in Santa Clara County v. Superior Court, supra, 33 Cal.2d 552, 554, 203 P.2d 1, plaintiff was required to submit the charter to the then current session of the Legislature, if it was to become effective at all. It was confronted with the choice of assuring damages by failing to submit the charter or attempting to avoid any damage by putting in into effect. It would be anomalous if by the very act of attempting to prevent damage from defendant's wrong, it should lose the benefit of the rule tolling the statute while its action was barred. See, Christin v. Superior Court, supra, 9 Cal.2d 526, 532-533, 71 P.2d 205; Burns v. Massachusetts etc. Ins. Co., supra, 62 Cal.App.2d 962, 969-971, 146 P.2d 24. Moreover, plaintiff may not reasonably be held responsible for the delay incident to attacking the charter in quo warranto proceedings. Even if it is...