Stenderup v. Broadway State Bank

PRESTON, J.

We hereby adopt as a portion of this opinion, the following statement prepared by Mr. Justice Sturtevant as a part of the decision heretofore rendered herein by the Honorable District Court of Appeal, First Appellate District, Division Two.

“Claiming that a judgment in an accounting suit was fraudulently obtained, the plaintiff commenced an action against the defendants. The defendants appeared and filed a demurrer; the demurrer was sustained without leave to amend and judgment was entered in favor of the defendants for their costs. From that judgment the plaintiff appealed. After the demurrer was sustained the plaintiff appeared and moved to set aside the order sustaining the demurrer and to allow him to file an amended complaint. The motion was denied and from that order the plaintiff has appealed. The order herein last mentioned contained a direction that the action be dismissed. The defendants thereafter made a motion that said language be stricken out. The motion was granted. From the order granting that motion the plaintiff has also appealed. The briefs are confined to, and this opinion will be confined to, a consideration of the appeal from the judgment.

“In language reasonably free from objection the plaintiff alleged the following facts: Prior to March 15, 1928, the Broadway State Bank had been duly organized and was transacting business in Los Angeles. It had a capital stock and the shares were owned by a number of stockholders. W. D. Howard, representing L. B. Howard, his wife, purchased the bank. The purchase was accomplished by purchasing all of the stock from the stockholders and obtaining from the directors written resignations. The price paid was $35,000. At the time of the purchase the bank held certain notes of doubtful value. Under the terms of the purchasing agreement those notes aggregating $31,100 were not purchased but were taken out of the assets of the bank and impounded and left in the possession of the bank for collection and liquidation. They were to be so held by the bank from the date of the purchase, March 15, 1928, to March 15, 1929. On the latter date on demand made the bank agreed

[595]

to turn over to the former stockholders all moneys collected from the impounded notes, or other notes in lieu thereof, and all of the notes that had not been collected. For some reason the bank did not make the settlement on March 15, 1929, and the stockholders assigned their rights to the plaintiff and he commenced an action for an accounting. He sued the bank and Mrs. Howard. The defendants answered and a trial was had before the trial court sitting without a jury. The trial court made findings in favor of the plaintiff. Among other things it found that the defendant bank had collected $14,021.68 prior to March 15, 1929, and $1,227.97 after March 15, 1929. For the $14,021.68 collected the court found that the bank elected to retain the same and to surrender several notes specified in the findings. It also found that the defendant bank held impounded notes which, with those just mentioned, aggregating $27,107.69, which had been placed in the possession of the court. The court awarded the plaintiff judgment for $1,227.97 with interest and it also directed that said unpaid notes in the sum of $27,107.69 which were then in the possession of the court, should be turned over to the plaintiff as the property of plaintiff’s assignors. The judgment on said findings was thereafter entered. No appeal was taken. After the plaintiff obtained possession of the notes so turned over to him, he attempted to collect them. After he had proceeded for a while in his effort to collect, he alleges that he learned that five of the notes aggregating $9,816.78, which had been turned over to him as uncollected, had, in fact, been wholly paid. In the accounting suit the bank admitted that it had held the impounded notes as trustee. It is alleged that Mr. W. D. Howard, as manager, and Mr. Charles S. Lewis, as cashier, testified that the bank had collected, between March 15, 1928, and March 15, 1929, the sum of $14,021.68 and after March 15, 1929, it collected $1,090.73 and no more, and that the defendants produced the impounded notes in open court, placed them in the custody of the clerk, and offered to surrender them to the plaintiff. It is also alleged that the plaintiff knew nothing as to what collections had been made; that no testimony was offered except the testimony of the defendants, that the plaintiff relied on that testimony and that the trial court accepted it and acted on it and rendered the judgment above mentioned. Continu