Belle Vista Investment Co. v. Hassen

FORD, J. This is an appeal by cross-defendant Erwin E. Hassen from a judgment in favor of Belle Vista Investment Company, a corporation. In lieu of both a reporter’s and clerk’s transcript, the appellant presents his appeal wholly on a settled statement. (Cal. Rules of Court, rule 7(b).) He has designated two points to be raised by him on appeal. We have determined that it is necessary to consider only the question raised as to the legal effect of the fact that at the time of the rendition of the judgment the corporate powers, rights and privileges of the cross-complainant had been suspended because of failure to pay the franchise tax required of it as a domestic corporation. (See Rev. & Tax. Code, § 23301. 1

Pertinent portions of the settled statement are in substance as follows: On June 16, 1958, the City National Bank of Beverly Hills filed this action to recover from Jay Miles, Inc., a corporation, a balance of approximately $63,000 due to it upon a promissory note. Persons who had guaranteed payment of the note, including Erwin E. Hassen and Herman Kaye, were named as codefendants. Thereafter Kaye paid to the bank the unpaid balance and received an assignment of the note. On June 8, 1959, he filed an amended and supplemental cross-complaint against Jay Miles, Inc., and other persons, including the guarantors, in which he sought “indemnification and contribution from the co-guarantors.” On December 24, 1959, Kaye assigned his rights and causes of action relating to the note to Belle Vista Investment Company, a corporation, and Bella Vista Community Hospital, a [839]corporation. The assignees were substituted as the cross-complainants on November 29, 1960. The case came on for trial on March 5, 1962. Judgment was entered on May 18, 1962, in favor of the cross-complainant Belle Vista Investment Company and against cross-defendant Hassen for the principal sum of $10,500, together with accrued interest and costs. On June 25,1962, cross-defendant Hassen’s motion for a new trial was denied. Thereafter, on September 11, 1962, cross-defendant Hassen filed a motion to vacate the judgment on the ground that he “had just discovered the fact that said corporation had been suspended at all times since February 1, 1960, for non-payment of the corporate franchise tax, as provided in section 23302 of the Revenue and Taxation Code.”2 The motion was supported by a “Certificate of Filing and Suspension” of the Secretary of State which had been filed in the case by the county clerk on order of the court on August 10, 1962. When the motion was heard on September 21, 1962, there was before the court a “Certificate of Revivor” issued by the Franchise Tax Board on September 19, 1962, wherein the board certified that, as to the cross-complainant corporation, “the corporate powers, rights and privileges ... are hereby reinstated and revived to good standing in this State.”3 On October 10, 1962, the superior court denied the motion, its order, however, being in part as follows: “The Court refuses to entertain the motion, on the ground of want of jurisdiction, since appeal is pending4 and Court cannot say the judgment is beyond doubt void in the absolute sense.” A motion for reconsideration was thereafter denied.