Metropolitan Casualty Insurance v. Margulis

WHITE, J.

This is an appeal from an order granting a motion to strike a cross-complaint.

Metropolitan Casualty Insurance Company commenced the present action by filing a complaint alleging in substance that the defendants, J. Margulis and Jack Stollman, having theretofore subdivided a tract of land and prepared a map thereof containing a certificate of dedication to public use of streets, avenues and alleys shown on said map, entered into a written agreement with the- county of Los Angeles whereby, in consideration of the acceptance by the county for public use of the streets, avenues and alleys so offered for dedication, said defendants, Margulis and Stullman, agreed to construct within one year certain improvements upon said tract, to wit, grading and surfacing, curbs, sidewalks and storm drain; that said agreement further provided for the filing of a bond to secure the faithful performance of the terms of said agreement; that the defendants, as principals, and the plaintiff, Metropolitan Casualty Insurance Company, as surety, made, executed and delivered to the county of Los Angeles such a bond in the sum of $15,650; that the defendants performed the work required by the agreement only in part; that the county subsequently commenced an action against defendants and the casualty company which resulted in a judgment against defendants and the casualty company

[713]

for the principal amount of the bond, interest and costs, which the casualty company paid, and for which in the present action it seeks reimbursement from the defendants.

Defendants filed an answer admitting, by failure to deny, all the material allegations of the complaint, but nevertheless denying the conclusion of law “that plaintiff is entitled to a judgment”. At the same time there was filed by Margulis and Stullman, the defendants, and Margulis-Stullman Company, a corporation, a cross-complaint, naming A. Hershell, Max Rosenthal, Dorothy Rosenthal, Bank of America National Trust and Savings Association, and Stockton Savings & Loan Bank as cross-defendants, wherein it was alleged that cross-defendant Hershell held a mortgage on said tract in the sum of $72,500 which he had transferred to Stockton Savings & Loan Bank “as collateral security”; that cross-complainants sold a large number of lots in the tract on instalment contracts and that the same were deposited with Bank of America “for collection as funds for A. Hershell and Max Rosenthal and Dorothy Rosenthal”; that “as part of the consideration of the cross-complainants transferring to Max Rosenthal, Dorothy Rosenthal and A. Hershell all of the unsold lots and purchasers’ contracts ... A. Hershell, Max Rosenthal and Dorothy Rosenthal agreed in-writing to install, at their own expense, sidewalks and curbs on the streets in said tract and to make, grade and surface the streets”, but had failed to do so, whereupon the county of Los Angeles, as hereinbefore set forth, had recovered a judgment against the bonding company, to the damage of cross-complainants. Cross-complainants prayed for judgment against cross-defendants in the amount of $19,688.46, being the same amount for which plaintiff, Metropolitan Casualty Insurance Company, sought judgment against defendants.