Hellman v. Logan

SHAW, J.

The defendants appeal from an order denying their application for a change of the place of trial of the action.

The suit was begun in the superior court of the city and county of San Francisco. A. D. Logan was then, and still is. a resident of Glenn County, and the Grangers’ Business Association was then, and still is, a resident of San Francisco. The ground of the motion is that Logan being a resident of Glenn County, the city and county of San Francisco is not the proper place of trial, under section 395 of the Code of Civil Procedure. The complaint states a cause of action upon a promissory note executed by the defendant Logan, secured by a pledge of certain shares of stock in the defendant corporation. The defendants contend that Logan was the only proper or necessary party to the action; that no cause of action is alleged against the corporation defendant; and that the plaintiffs cannot defeat the right of Logan to have the cause tried in the county of his residence by making a person residing in San Francisco a party defendant, and stating no cause of action against him, or in any case where such co-defendant is not a necessary party. With respect to the corporation defendant, the complaint alleges “that the defendant Grangers’ Business Association claims some lien or interest upon said shares of stock by reason of some alleged contractual relation between said defendant and the defendant A. D. Logan, the nature and extent of which lien or interest are unknown to plaintiffs, but plaintiffs allege that said lien or interest, if any there be, is subsequent and subject to plaintiffs’ rights in the premises.” The relief asked concerning this alleged claim of the corporation defendant is, that plaintiffs’ debt be declared a first lien on the property, and that it be adjudged “that the lien or interest of the defendant Grangers’

[60]

Business Association in or to said stock, if any there be, is subject and subsequent to plaintiffs’ rights in the premises,” and that the said stock be sold and the proceeds applied to plaintiffs’ debt by a commissioner appointed for that purpose. It is of course true that if plaintiffs had desired no other relief than to obtain a judgment against Logan, and a sale of Logan’s interest alone in the stock to satisfy such judgment, the Grangers’ Business Association would have been neither a proper nor a necessary party. But the allegation is that the association makes some claim to the stock. A suit against Logan alone would have left the stock, after the judicial sale, subject to the claims of the association, or, at all events, without a foreclosure thereof. It was the right of the plaintiffs to have all of those claims, whatever they may have been, foreclosed by the suit and disposed of by the sale, so that purchasers thereat would obtain absolute title, and thus be induced to offer a higher price. In order to obtain relief of this character, it was not only proper, but indispensably necessary, that the Grangers’ Business Association should be made a party defendant. It was not requisite to this necessity that the association should have an actual interest in the property pledged nor that the complaint should aver that it had such interest. It was enough to show that it made some claim thereto; for the plaintiff who seeks a judicial sale of pledged property to satisfy his debt is entitled to have a foreclosure of all claims, as well as all subordinate interests, so that he may obtain the full benefit of a sale of all outstanding subordinate interests in the property, free from all claims of every character, whether well founded or not.