Fay v. Crags Land Co.

[446]

WOOD (W. J.), J.

Two actions were commenced by the plaintiffs against the defendants. At the trial of the first action defendants objected to the introduction of any evidence on the ground that the complaint did not state facts sufficient to constitute a cause of action. The court sustained the objection and entered judgment in favor of defendants. This judgment was entered on December 4, 1940. Plaintiffs appealed but thereafter dismissed the appeal and commenced the present action on August 25,1941. At the commencement of the trial of the present action defendants asked the court to first pass upon the special defenses presented, the plea of res judicata, the alleged bar of the statute of limitations, and the claim that, the action being derivative, plaintiffs did not take the steps necessary to enable them to maintain the action. The court granted the request of defendants and in support of the plea of res judicata the judgment roll in the previous action was introduced in evidence. After discussion by counsel the court announced that judgment would be rendered for defendants upon grounds then stated. Thereafter a judgment in writing was signed by the court and filed in which it is set forth: “After due consideration, the court announced from the bench that he would find, First, that the plaintiffs, as stockholders of the Crags Land Company, had no right to bring, prosecute or maintain this action; Second, that the judgment in the previous action between same parties and numbered 446858, was an adjudication of all the material facts set forth in plaintiffs’ complaint in this action, and on which the plaintiffs must recover if at all, and that therefore, the said judgment was and is a complete bar to the further prosecution or maintenance of this action; Third, that the action is barred by the provisions of subdivision 4 of section 338 and the provisions of section 359, both of the Code of Civil Procedure of the State of California; and, Fourth, that the complaint does not state facts sufficient to constitute a cause of action: And that judgment will be against the plaintiffs and in favor of the defendants. Thereupon findings were waived by all parties, plaintiff and defendants.” We have concluded that the ruling of the court on the issue of res judicata is correct. Therefore it will be unnecessary to discuss the other grounds mentioned by the trial court.

According to the allegations of the complaint plaintiffs are the owners of one share of the capital stock of defendant Crags Land Company, a corporation, which they obtained by