Wulfjen v. Dolton

CURTIS, J. The propriety of the trial court’s conclusion that the maintenance of a prior action was ground for abatement of this action governs the disposition of this appeal.

On February 15, 1940, plaintiff herein filed an action in the Superior Court of Los Angeles County (the prior action) against O. L. Dolton, Jr., Lindley W. Potts, Helen King and Concrete Homes Corporation, a corporation. By her amended complaint therein plaintiff alleged that the individual defendants were the organizers and promoters of the defendant corporation and that such defendants at all times mentioned “held the majority and absolute control of said corporation.” It is next alleged that the corporate defendant was at all times the alter ego of the individual defendants Dolton and Potts. The amended complaint then recited that plaintiff having been induced, through the fraud and misrepresentations of the named individual defendants, to part with and having parted with substantial sums of money to the defendant corporation, which she later learned to be insolvent, “plaintiff has elected to and has rescinded said agreement and each and every transaction relating thereto.” The quoted language related to a “Notice of Rescission” addressed to Dolton, Potts and the corporation. Prior to the institution of suit this notice was served on all the defendants therein sued and following the chronological enumeration of the various sums of money advanced by plaintiff under the respective identifying circumstances, it was recited in said notice that “the consent of this rescinding party was obtained and given through fraud, misrepresentation and undue influence exercised by you and each of you in connection with each of the above transactions.” The amended complaint contained five causes of action, the first four being each divided into two counts—one for fraud and rescission, the other for money had and received—and the fifth setting forth a claim for work, labor and services performed by one Rathbun (who was not a party to that action but who is a party to the present action), which claim was assigned to plaintiff prior to the filing of suit.

During the trial of said prior action a nonsuit was granted [893]as to defendant Helen King on all five causes of action and upon each count thereof, and as to defendants Dolton and Potts on the first cause of action only. The trial then proceeded on the remaining causes of action as to defendants Dolton and Potts, and at the conclusion of said hearing the court found that the rescission was effective against the corporation because it consented thereto by defaulting; that the corporation was not the alter ego of the individual defendants or any of them; and that all money advanced by plaintiff went to the corporation. On November 14, 1940, judgment was entered in favor of plaintiff and against the defendant corporation only in the sum of $6,950 on the second, third and fourth causes of action; and for the defendant corporation on the first and fifth causes of action; and in favor of defendants Dolton and Potts on the second, third, fourth and fifth causes of action. Prom the adverse portions of the judgment so rendered plaintiff appealed, and such appeal was pending at the time plaintiff instituted the present action, and is still pending. No appeal was taken from the judgment against the defendant corporation and it has become final.