Stearns v. Los Angeles City School Dist.

• Decision Date: 08 September 1966
• Court: California Court of Appeals Court of Appeals
• Parties: , 21 A.L.R.3d 164 Francis A. STEARNS, Redwood Empire Title Company of Mendocino County, and Jim E. West as Executor of the Estate of Rose Landier Heiner, Deceased, Plaintiffs, Cross-Defendants and Respondents, v. LOS ANGELES CITY SCHOOL DISTRICT and Los Angeles City High School District, Defendants Cross-Complainants and Appellants. Felicien P. Landier, Landier Investment Company and Honor B. Landier, Cross- Defendants and Respondents. Civ. 22438.

Page 482

53 Cal.Rptr. 482

244 Cal.App.2d 696, 21 A.L.R.3d 164

Francis A. STEARNS, Redwood Empire Title Company of Mendocino County, and Jim E. West as Executor of the Estate of Rose Landier Heiner, Deceased, Plaintiffs, Cross-Defendants and Respondents, v. LOS ANGELES CITY SCHOOL DISTRICT and Los Angeles City High School District, Defendants Cross-Complainants and Appellants.

Felicien P. Landier, Landier Investment Company and Honor B. Landier, Cross- Defendants and Respondents.

Civ. 22438.

District Court of Appeal, First District,

Division 1, California.

Sept. 8, 1966.

Hearing Denied Nov. 2, 1966.

Harold W. Kennedy, County Counsel of County of Los Angeles, John R. Lamoreaux, Special Counsel, Salinas, for appellants.

Spurr, Brunner & Nelson, Ukiah, for respondents Francis A. Stearns and Redwood Empire Title Co. of Mendocino County.

Rawles, Nelson & Golden, Ukiah, for respondent Jim E. West SIMS, Justice.

Los Angeles City School District and Los Angeles City High School District, defendants and cross-complainants, who assert an interest in the property which is the subject of this action as judgment creditors of Felicien P. Landier and Landier Investment Company, have appealed from a judgment and an amended judgment which decreed that title was vested in the plaintiffs hereinafter noted and that the Districts had no interest in the property, and which denied them relief on their cross-complaint, and, as amended, enjoined the Districts from asserting any claim to the property.

The plaintiff and cross-defendant, Redwood Empire Title Company of Mendocino County, concededly only holds record title for the other two plaintiffs and cross-defendants. Plaintiff and cross-defendant Francis A. Stearns' claim to a one-half interest in the property is predicated upon an agreement with Rose Landier Heiner, deceased. The latter's one-half interest is represented by substituted plaintiff and cross-defendant Jim E. West as executor of her estate. Her acquisition of title is predicated upon a judgment she obtained against Landier and the Company which granted her specific performance of an alleged oral agreement entered into with her husband on behalf of himself and the Company. For convenience and to distinguish her from a prior wife of the judgment debtor, she and her estate will be referred to as Rose.

The Districts also named as cross-defendants the judgment debtors and Honor B. Landier. Honor, an earlier wife of Landier, concededly held a deed of trust on the land in question as security for payments due her from her ex-husband. Her negotiations and transactions in connection with the assignment, enforcement, reassignment and eventual transfer of this deed of trust attacked by the Districts in their cross-complaint. ¹

The Districts contend that the trial court erred in the following particulars: (1) by vacating an order whereby it had stayed proceedings in Mendocino County pending determination of a prior action which the Districts had commenced in Los Angeles County; (2) by sustaining the demurrers which were interposed by Redwood and Stearns and by Rose to the Districts' original cross-complaint for money damages; (3) by denying the Districts' motion for nonsuit at the conclusion of plaintiffs' case; (4) by admitting evidence of the records and transcript relating to prior actions between Rose and Landier and the Company; (5) by excluding evidence offered by the Districts to show a fraudulent conspiracy between Stearns and Landier; (6) by refusing to submit to an advisory verdict of the jury, as provided in the pretrial order, the issue of whether the manner in which Rose acquired the title of the Company was in fraud of the Districts; (7) by failing to follow the verdict of the jury, which found that Stearns acquired his one-half interest in the property with the intent to benefit Landier, and in entering a contrary judgment which was not supported by substantial evidence; (8) by amending its judgment to grant injunctive relief which had not been sought in the prayer of the complaint or requested at the trial; and (9) by quieting plaintiffs' title to land in excess of that described in the lis pendens recorded in connection with the action in which Rose secured a judgment establishing her title.

An examination of the record reflects that the court did err in failing to stay the instant action pending determination of the prior action; and that since the evidence does not compel the conclusions which were reached by the trial court and because there were errors in its rulings, the judgment should be reversed.

Summary of proceedings

The facts reflect that in November 1951 the Districts commenced an action (Los Angeles County Superior Court No. 591996) against Landier and related companies to recover $1,500,000 for alleged irregularities in connection with contracts for the transportation of pupils. On August 17, 1954 a stipulation was entered into whereby the Districts agreed to accept in full satisfaction of their claims, and Landier and the Company agreed to pay the sum of $264,776.86 in installments of $33,097.11 commencing within 60 days of the date of the stipulation and thereafter on October 20th of 1955 and each succeeding year. The agreement provided that in the event of default, judgment would be entered for double the sum due at the time of default. ²

Three installments were paid on this contract, but Landier and the Company were unable to pay the installment due October 20, 1957. In connection with a request to secure an extension of the time for payment of this installment Landier, on November 5, 1957, submitted a financial statement which showed the ranch property, the subject of this suit, at a value of $375,000 subject only to $56,000 due Honor, as his principal asset. Concededly title to the ranch was in the name of the Company, but he claimed its value by virtue of ownership of all of the stock of the Company. Pursuant to this application the time for payment of the installment was extended until June 30, 1958.

At or about the time of securing the aforementioned extension of time Landier and Rose, whom he had held out as his wife since 1956, had meeting with Landier's attorney concerning his obligation to the Districts, his debt to a bank for which shares of stock other than those of the Company were pledged by him as security, and his obligation to Rose for moneys advanced or to be advanced to assist him financially. On December 26, 1957, Landier and Rose were married, and in January 1958 the attorney prepared a draft of an agreement whereby Landier would undertake to convey the ranch to Rose. This agreement was never executed.

Thereafter, dissension developed between Rose and her husband and on April 16, 1958 she filed an action for divorce, an action to recover damages for assault and battery, and an action against Landier and the Company (Mendocino County Superior Court No. 21860) to require Landier and the Company to convey the ranch to her. A Lis pendens was filed in connection with the last action on that date.

On November 5, 1958, the Districts secured judgment pursuant to the stipulation filed in the original Los Angeles County action, and on November 21, 1958 an abstract of that judgment was recorded in Mendocino County.

On May 4, 1959 Rose's action to secure specific performance of Landier's oral agreement to convey the land to her came on for trial. On November 24, 1959, findings of fact and conclusions of law in favor of Rose were signed and filed. On January 20, 1960, Landier and the Company filed a notice of appeal. Judgment, however, was not signed and filed until December 30, 1960, on which date a certified copy was also recorded with the Mendocino County recorder.

On January 26, 1960 the attorney for Landier in Rose's action advised an attorney for the Districts of the pendency and status of that action and urged that the Districts intervene.

In March 1961 it was arranged that the appeal in Rose's action would be dismissed, and in April of that year the appeal was dismissed. Rose conveyed the property to Redwood pursuant to a holding agreement that it should hold the property for her and Stearns.

On May 16, 1961, the Districts caused an execution to be levied on the ranch property for the collection of the Los Angeles County judgment, and thereupon on May 22, 1961 commenced an action in Los Angeles County Superior Court (No. 771560) in the nature of a creditor's bill to have various conveyances of the ranch property set aside as having been made in fraud of creditors. The action was against Landier, the Company, Redwood, Rose and others claiming under the Company or Landier. Redwood was served on May 25, 1961, and Rose some time thereafter. These defendants appeared and filed a motion for change of venue which was denied. In connection with those proceedings it appeared that Landier, the Company, and Honor, who had all been served, were residents of Los Angeles County. (See Los Angeles City School Dist. v. Redwood Empire Title Co. (1962) 206 Cal.App.2d 398, 23 Cal.Rptr. 662, passim.)

On July 14, 1961 the present action was filed in Mendocino County Superior Court by Stearns, Redwood and Rose against the Districts and fictitious defendants.

On August 14, 1961 the Los Angeles action was amended to make Stearns a party.

On August 17, 1961 the Districts filed a demurrer and motion for stay of proceedings supported by the affidavit of their counsel in the Mendocino County proceedings. By opinion and order filed February 1, 1962, the court ordered 'that all further proceedings in this action should be stayed pending final determination of Action No. 771560, in the Superior Court of the State of California, in and for the County of Los Angeles, or until the further order of the Court.'

Thereafter, on July 30, 1962, plaintiffs filed their notice of motion to vacate the prior order. By other filed November 13, 1962 this motion was granted and plaintiffs were...