Opinion
Page __
__ Cal.App.2d __ 290 P.2d 293 Howard A. CLARK, Plaintiff and Appellant, v. Dean S. LESHER, Daniel B. Halcomb, and Roy Wolfe, Defendants and Respondents. Civ. 8613. California Court of Appeals, Third District Nov. 29, 1955[290 P.2d 294] Hearing Granted Jan. 25, 1956.
See, also, 106 Cal.App.2d 403, 235 P.2d 71.
[290 P.2d 295] Stutsman, Hackett & Nagel, and H. A. Savage, Fresno, for appellant.
Green, Green & Plumley, Madera, for respondent Lesher.
S. Everett Phillips, Fresno, for respondent Halcomb.
Everett Coffee, Madera, for respondent Wolfe.
VAN DYKE, Presiding Justice.
Plaintiff appeals from a judgment in favor of defendants in an action brought by him to recover damages alleged to have been suffered by him through defendants' tortious acts.
His third amended complaint alleged the following: For more than twenty-eight years before he began this action 'The Madera Daily Tribune and Mercury' was a daily newspaper of general circulation published in Madera by plaintiff and his father, George A. Clark, as a partnership enterprise; George A. Clark died September 7, 1944, and by his will plaintiff, who owned a one-half interest as a partner in the partnership and its assets, became the owner of an additional one-sixth interest; the remainder of the father's interest was devised to plaintiff's brother and sister; as surviving partner plaintiff continued publication of the paper; before the death of George A. Clark defendant Dean S. Lesher, hereinafter called 'Lesher' was the owner and publisher of a newspaper in [290 P.2d 296] Merced, California, which circulated in the County of Madera; after George A. Clark died Lesher purchased 'The Madera Daily Mews', a newspaper published in Madera; both the Merced paper and and Madera Daily News competed with plaintiff's paper; Lesher appointed defendant Halcomb as manager of his Madera Daily News; thereupon Lesher and Halcomb conspired together and agreed they would eliminate plaintiff's paper and cause it to cease publication, to the end that Lesher would be the owner and publisher of the sole newspaper published in Madera; in furtherance of the conspiracy Lesher first purchased the interest of defendant's brother and sister in plaintiff's paper, subject to administration in the estate of George A. Clark; one R. S. Jay was appointed as administrator with the will annexed of the estate of George A. Clark, deceased; after that appointment Lesher, without the knowledge and consent of Jay, caused an action to be started in the Superior Court of Madera County, entitled 'R. S. Jay, Administrator, etc., v. Howard A. Clark'; this suit had for its purpose and as a part of the conspiracy spiracy aforesaid to bring about the bankruptcy and consequent elimination of plaintiff's paper from competition in the Madera County field; the two conspirators succeeded, through the medium of said administrator's action, in having a receiver appointed to take charge of the assets of the former partnership; defendant Wolfe qualified as such receiver; thereafter he joined said conspiracy, all three agreeing they would contrive to cause plaintiff's paper to cease publication and thus eliminate its competition with Lesher's papers; Wolfe, as receiver, procured an order in the action of Jay, as Administrator, v. Clark, that he take possession of all the assets of the former partnership, including the newspaper and the job printing business conducted in connection therewith and sell the assets including the newspaper; this order, however, required that the receiver sell the newspaper as a going concern and directed the receiver to continue to operate it until sale; Wolfe went into possession as receiver and then obtained a second order, which order was obtained by falsely and fraudulently representing to the judge of the superior court, presiding in the cause of Jay, as Administrator, v. Clark, that it was impossible to continue to publish the newspaper because there were no funds with which to pay expenses for labor and supplies and that it was immediately and imperatively necessary that publication of the newspaper cease; these representations were made for the purpose of carrying out the conspiracy and accomplishing through fraud the cessation of publication, with the further purpose of destroying in large part the value of the newspaper so that it could be purchased by Lesher at a depreciated value; said second order so obtained ordered the receiver to sell the partnership assets, including the newspaper, within a period of 30 days following publication of a notice of sale and in the meantime and within ten days from the date of the second order to cease publication; thereupon Wolfe stopped publication of the paper and continued with the sale thereof and of the partnership assets and Lesher purchased the whole for the sum of $30,550; had the newspaper been sold as a going concern, the partnership assets would have been worth much more; after Lesher's bid was accepted and the sale was confirmed to him the partnership assets were transferred to him; by reason of said wrongful acts of the conspirators plaintiff was damaged in the sum of $50,000.
Wolfe answered the complaint. He denied the conspiracy and the fraud. He set up affirmative defenses as follows: 1. That all of the acts complained of were done by him as receiver pursuant to valid court orders and that plaintiff had no cause of action against him except such as would have to be necessarily advanced in the matter of the receivership. 2. That all of the issues raised by the complaint had been determined in a prior action (that of Wolfe as receiver v. Clark, et al.) and were res judicata. Lesher and Halcomb also answered, raising the general issue and likewise asserting special defenses as follows: 1. That before this action was begun there was pending an action brought by Roy Wolfe as receiver against appellant, Lesher, and others and that while it was so [290 P.2d 297] pending appellant had executed a written assignment to Lesher, for valuable consideration, which provided as follows: That in consideration of the concurrent entry of a certain stipulated judgment in said action Clark transferred and assigned to Lesher all his right, title and interest in the properties of the estate of George A. Clark, deceased, and all claims which Clark had filed against said estate or might thereafter assert against said estate; that he further assigned to Lesher all his interest in the partnership of Clark & Clark and in the assets of said partnership; that the cause of action asserted in plaintiff's complaint here, if any there was, had constituted an asset of said former partnership and passed to Lesher by the assignment. 2. That the judgment entered in the action of Roy Wolfe, Receiver, v. Howard A. Clark was res judicata of the issues tendered by the complaint herein. 3. That plaintiff herein was equitably estopped to assert that the cause of action sued upon had not passed by the assignment and had not been barred by said judgment in the action of the receiver against Clark, because he had led Lesher to believe that such would be the result of the assignment and the judgment. 4. That the things alleged to have been done by the receiver to the damage of plaintiff were done under valid court orders and that plaintiff was limited to said receivership action for relief, if to any. 5. That certain orders entered in the action of Jay, as Administrator, v. Clark were res judicata of the issues raised by plaintiff's complaint.
This action was called for trial before a jury and defendants moved that, pursuant to the provisions of Section 597 of the Code of Civil Procedure, the affirmative defenses be first tried. The motion was resisted by plaintiff, but was granted by the court. In support of the defenses of res judicata the judgment rolls in the subject actions were introduced in evidence. No evidence was otherwise taken. In support of the defense of equitable estoppel evidence was taken as to the conversations preceding the assignment and Lesher testified that therefrom he had gained the understanding that the assignment constituted in substance a general release. No evidence was permitted concerning the fraud alleged in the complaint.
The following instructions in substance were given to the jury, after general instructions, sometimes called stock instructions: The court told the jury that the complaint alleged a conspiracy between the defendants to procure the cessation of publication of the Madera Daily Tribune and Mercury prior to its sale by means of fraudulently procuring an order therefor and that these allegations had all been denied by the defendants; that the case had been heard only as to the special defenses alleged by the defendants and that the determination of a conspiracy or of a fraud in procuring said order was not before the jury; that it would be improper for them to consider the truth or falsity of the allegations of conspiracy as stated in the complaint since no evidence had been given or permitted on either side on such issue; that the sole duty of the jury was to consider the evidence tending to prove or disprove the allegations set forth in the special defenses; that defendants Lesher and Halcomb had set up four special defenses and defendant Wolfe had set up two; that Lesher and Halcomb claimed that before the commencement of the action plaintiff had assigned to Lesher all his interest in the properties in the estate of his father, all his interest in the assets of the former partnership of Clark & Clark, all his interest in the assets of the Madera Daily Tribune and Mercury and that said defendants claimed as a result of such assignment that plaintiff had no basis for the action, since the cause of action, if any existed, actually belonged to Lesher and not to the plaintiff; further that defendants Lesher and Halcomb claimed that Lesher had consented to the entry of the judgment in the case of Wolfe, Receiver, v. Clark, relying upon the representations of plaintiff and his counsel that by doing so all litigation between plaintiff and defendant Lesher would be terminated and that Lesher would not have so consented otherwise; that this defense was sometimes known as 'the defense of equitable estoppel.' Further, on this subject of equitable estoppel the court [290 P.2d 298] told the jury that the vital principle thereof was that he who by his language or conduct leads another to do what he would not otherwise have done should not subject such person to loss or injury by disappointing the representations upon which he acted; that such a change of representation involves fraud and falsehood, abhorrent to the law. The court further told the jury that Lesher and Halcomb claimed as a special defense 'that the gravamen of Plaintiff's cause of action grows out of acts by the Defendant Wolfe, as a Receiver, and that if Plaintiff has any cause of action, it should be against the Defendant Wolfe as a Receiver'; that in respect of this defense said defendants specifically referred to the case of 'Wolfe, Receiver, v. Clark, et al.', and alleged that any remedies open to plaintiff should have been taken in that action; that this particular defense actually consisted of two parts, namely that said defendant should be exonerated from liability in connection with these matters because Wolfe was so acting as receiver and not as an individual, and, second, the plea of res judicata. The court further told the jury that defendants Lesher and Halcomb claimed as a further defense that all of the issues 'raised by the Plaintiff in this case were adjudicated and determined in the case of 'Jay v. Clark,' which is Action No. 6555 in this Court', and again this defense was a plea known as 'res judicata'. Similar instructions were given covering Wolfe's special defense based on his status and actions as a receiver and the plea of res judicata in respect of the judgment in the action he brought against Clark. The court defined 'res judicata' as being a matter settled by judgment, and quoted to the jury portions of section 1908 of the Code of Civil Procedure concerning the effect of a final judgment. The court also quoted a portion of sections 1910 and 1911 of the Code of Civil Procedure. The court then gave to the jury the following instruction: 'If you find against the Defendants on all of the special defenses now on trial before you, then you should return a verdict for the Plaintiff. On the other hand, if you find for all of the Defendants on any one or more of the special defenses now on trial before you, then I instruct you that you shall return a verdict in favor of the Defendants.' There was then given to the jury two forms of verdict, and the jury, after deliberation, returned one of them, reading as follows: 'We, the Jury, find for the Defendants, Dean S. Lesher, Daniel B. Halcomb and Roy Wolfe, on the trial of the special defenses.' Judgment was thereupon entered. That judgment recited that after hearing the evidence the jury was instructed, the cause submitted to it, and that it returned the aforesaid verdict. The judgment then concluded as follows: 'Wherefore, It is Ordered, Adjudged and Decreed, that Judgment be, and the same is hereby rendered in favor of Defendants, Dean S. Lesher, Daniel B. Halcomb and Roy Wolfe, on the special defenses and against Plaintiff Howard A. Clark * * *'.
It is apparent from the foregoing that the trial court submitted to the jury for its determination the following issues: 1. Did the plaintiff by executing the assignment to Lesher assign to him, in addition to the matters specifically mentioned in the instrument, the cause of action sued upon by him in this case? 2. By reason of the circumstances shown in the evidence, was the plaintiff estopped to deny that he transferred his cause of action to Lesher by said instrument of assignment and estopped to deny the res judicata effect of the stipulated judgment? 3. Was the stipulated judgment in the case of Wolfe, Receiver, v. Clark res judicata as to the issues tendered by Clark's complaint herein? 4. Were the orders entered in the case of Jay v. Clark et al. res judicata as to the issues tendered by appellant's complaint?
We will discuss first the question of the legal effect of the assignment instrument. The provisions of this document may be summarized as follows: In consideration of the concurrent entry of a judgment in the action of Wolfe, Receiver, v. Clark, then pending, and which action was then in trial, Clark and his wife assigned to Lesher all of their interest in the properties of the estate of George A. Clark, deceased, all of their interest in all claims they had [290 P.2d 299] theretofore filed against that estate or which they might thereafter assert against that estate, all of their interest in ththe partnershi of Clark & Clark, all of their interest in the assets of that partnership; they also expressly waived 'all interest in said assets and in said partnership.' At the time this instrument was executed the action here under review had not been filed. It was filed about two and one-half weeks after the execution of the assignment and the entry of the stipulated judgment. The assignment says nothing about a transfer of any cause of action which Clark might have against Lesher, Halcomb or Wolfe and nothing in its language justifies the inference that if such a cause of action existed it was thereby being transferred to Lesher. However, the assignment was executed concurrently with the entry of a stipulated judgment in the action then on trial and purports to be, in part at least, in consideration of the entry of that judgment. The judgment must, therefore, be considered. That judgment contained the following recitals: '* * * [A]ll parties having in open Court stipulated and agreed to the entry of this judgment in this form; and all counsel having waived Findings of Fact and Conclusions of Law and having waived an accounting by the Receiver; and the said Howard A. Clark and the said Anita L. Clark having agreed, in consideration of this stipulated Judgment, to transfer and assign to the said Dean S. Lesher all of the claims in this proceeding and against the Estate of George A. Clark, Deceased, and all of their interest in the Estate of George A. Clark, Deceased, and all of their right, title, and interest in and to the partnership of Clark & Clark, dba Madera Daily Tribune and Mercury * * *.' It was then decreed that the receiver should out of moneys in his hands pay to Clark and his wife the sum of $5,000; that a certain life insurance policy was an asset of the partnership and was transferred to Lesher who was adjudged to be its owner; That certain items of personal property which had been claimed by the receiver as constituting partnership assets were in fact the personal property of Mrs. Clark. The judgment directed: 'That said Receiver, Roy Wolfe, be not required to render an accounting.' Concerning what had been assigned to Lesher this judgment was a restatement of the assignment. On the face of the assignment, therefore, read in connection with the judgment therein referred to, there is a specific description, although in general temrs, of the property and claims passing to Lesher by the assignment, and the cause of action here sued on is conspiciously absent from that statement. We have no plea for reformation of the assignment. On its face, therefore, the written assignment does not transfer the cause of action herein to Lesher. Was it shown by evidence in aid of interpretation that such transfer was in fact intended and effected by the instrument? Defendants placed three witnesses on the stand. They were Harold M. Child, Dean S. Lesher and Roy E. Wolfe. Mr. Child was the first witness sworn. When he began to testify to the execution of the instrument of assignment and to the transactions between the parties antedating the entry of judgment, objection was made that a permit him to so testify would permit him to substitute his testimony in the place of the judgment which was entered and in place of the provisions of the assignment. Thereupon it was stated to the court that the purpose of the defendants in introducing oral testimony of Mr. Child was to establish the equitable estoppel. Said Mr. Green, the attorney for Lesher: 'The purpose of the question, Your Honor, is to go to the matter of estoppel that has been pleaded as an affirmative defense, and as to the representations made by the parties to this action that were relied upon by the Defendant Lesher in executing the documents that have been introduced in evidence in support of it, the files.' Said the court: 'It is my understanding of the statement by Mr. Green that this is offered only as to their special defenses in the nature of estoppel, where Mr. Lesher claims that he would not have signed the document if he had not understood that it settled all of the matters in question. It is a question of fact for the jury to determine whether or not that is the situation. * * * I will overrule the objection, but it is limited to that [290 P.2d 300] aspect of the matter, and that is the evidence that will be received.' Although Mr. Child gave a good deal of testimony concerning conversations between counsel as to statements made to the court before the entry of the judgment in the receivership action, since his testimony was limited to the defense of estoppel we need not here narrate it. Mr. Lesher was next called to the stand. At the outset of his examination the following occurred: 'Mr. Nagel: If Your Honor please, may the record reflect that we voice the same objection to these questions and this line of testimony as heretofore stated? The Court: The objection will be overruled at this time.' Mr. Green had previously stated: 'Now, Mr. Lesher, will you please confine your testimony in this regard to one or two points, * * *, so that we can attempt to confine it within the limits of the 'special defenses'.' When the witness sought to relate a conversation antendating the execution of assignment, attorneys for the appellant objected again as follows: 'Your Honor, I dislike making objections like this, but I feel that this is going beyond the scope of the defense in this matter. I have no objection to the evidence coming in, if we will have opportunity to rebut the statements that are being made as purported facts. However, I feel that it goes beyond the scope of the defense * * *. The Court: This, I understand, is a conversation, is that right, Mr. Lesher? The Witness: That is correct, Your Honor. The Court: I will permit the conversation, but I will not permit any evidence about the facts. * * *' The witness went on to relate conversations between the parties and then the further question was asked: 'Q. Mr. Lesher, if it had not been for the conversation with Mr. Savage which you have just related here, regarding the settlement and the relase of all claims and the termination of all litigation, would you have executed the document entitled, 'Assignment', in which you released your right to an accounting by Howard Clark?' The witness answered that he would not, except for the conversation he had related, have executed the assignment, nor have stipulated to the entry of the judgment. We think it cannot be held otherwise than that, just as the testimony of Mr. Child was limited to the defense of estoppel, so was the testimony of Mr. Lesher. The next witness was Mr. Wolfe, but his testimony was confined to matters of record and when objection was made that said matters were immaterial the court asked of his attorney the following question: 'And now, you are going into your defense of res judicata? Mr. Coffee: That is right, Your Honor.' Appellant Clark was called to the stand in rebuttal, but his evidence was solely confined to equitable estoppel. We find nothing in the record which would throw light upon the proper interpretation of the contract of assignment. Therefore it was for the court to determine as matter of law whether or not the assignment included the cause of action sued upon. We therefore hold that the assignment, read in connection with the stipulated judgment, did not pass title to the cause of action unless, as respondents argue, it passed by the assignment to Lesher of the assets of the partnership.
Respondents argue that the cause of action sued upon, assuming that a cause of action existed, would, so far as the damages inflicted by the conspiracy be concerned, constitute an asset of the partnership; that even if, as we held in Clark v. Lesher, 106 Cal.App.2d 403, 235 P.2d 71, Clark had a right to sue individually for said damage, a recovery would feed the partnership assets; that he could not recover in his own individual right. These contentions of the respondents cannot be sustained. It is a generally-accepted rule that, in the absence of statutory permission, an action at law as distinguished from an action in equity cannot be maintained between partners with respect to partnership transactions; and that the mere fact that dissolution of the partnership has taken place before the action is brought does not change the rule that no action at law can be maintained between partners. Nevertheless, this partnership had been dissolved except for liquidating purposes by the death of George A. Clark, and when thereafter Lesher, having purchased all of the interest in the partnership assets except those owned by appellant, tortiously and secretly damaged and in part destroyed the value of the [290 P.2d 301] assets and then purchased the depreciated assets from appellant, his actions and those of his alleged co-conspirators were not in any sense actions with respect to partnership transactions. When appellant here sold his interest in the assets of the partnership to Lesher at, so far as anything appears here to the contrary, their full value at that time and thereafter determined as he alleged in his testimony he did, and in his pleadings, that these assets had been depreciated by the fraudulent conduct of Lesher, Wolfe and Halcomb, he was not compelled to set aside what had been done but could sue for the deceit practiced upon him and the damages thereby inflicted. Johnstone v. Morris, 210 Cal. 580, 292 P. 970. We quoted the following from the case of Laughlin v. Haberfelde, 72 Cal.App.2d 780, 790, 165 P.2d 544, 549, where in a similar case that court said:
'While the facts in the instant case are somewhat different the basic principles are essentially the same and, under the authorities above cited, it must be held that this case comes within one of the exceptions to the general rule and that the trial court was in error in concluding that this action for damages could not be maintained separate and apart from an action for an accounting. In a very real sense, the acts of which the appellant complains were not acts 'with respect to partnership transactions'. While the formation of the partnership furnished the opportunity, the acts constituting the tort were entirely outside of and apart from the partnership business.'
By purchasing the assets of the partnership Lesher did not purchase the appellant's cause of action; and by selling the appellant did not sell said cause of action nor his right to recover damages for the fraudulent conduct of Lesher as alleged in the appellant's complaint, measured by his proportionate ownership of the partnership. Such damages when recovered would be his property and would not feed the partnership assets. In testing this matter we must remember that, because the evidence as to the alleged fraud and as to the conditions under which it was committed were not permitted to be shown, we must take the allegations of plaintiff's complaint as stating the truth.
Before leaving this question of the proper construction of the contract of assignment, it is well to recall that the interpretation of a contract or other written instrument, if there is no extrinsic evidence thereon properly admitted, or if the evidence is without conflict and not susceptible of conflicting inferences, is a question of law. In re Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825. It is also settled that the undisclosed intention of the parties is immaterial and that the outward manifestation of expression of assent is controlling. Brant v. California Dairies, Inc., 4 Cal.2d 128, 133, 48 P.2d 13; 1 Restatement of Contracts, sec. 20. Further, the construction of a contract is always a matter of law for the court, no matter how ambiguous or uncertain or difficult its terms, and the jury can only assist the court by determining disputed questions of fact. O'Connor v. West Sacramento Co., 189 Cal. 7, 207 P. 527. The same case holds that it is error to submit to the jury the question of intention, to be derived in part from the language of the contract and in part from extrinsic evidence. We quote the following from, 189 Cal. at page 18, 207 P. at page 532 of said opinion:
'* * * If the facts and circumstances to be considered in the interpretation of the contract are undisputed, there is nothing to submit to the jury, and the court must direct a verdict in accordance with the construction placed on the contract by the court in the light of the admitted circumstances. On the other hand, if such circumstances are in dispute, and the meaning of the contract is to be determined one way according to one view of the facts and another way in accordance with the other view of the facts, then the determination of the disputed fact must be left to the jury, but in no case can the proper construction of the contract be left to a jury.' See also California W. D. Co. v. California M. O. Co., 178 Cal. 337, 341, 177 P. 849.
It is apparent from the foregoing that the court erred in submitting the interpretation [290 P.2d 302] of the contract of assignment to the jury for its general verdict, as to whether or not it included within its terms the cause of action sued upon. But, in view of the long history of this litigation, the legal effect of the assignment ought to be here determined. The special defense based upon respondents' claims as to its proper meaning has been tried and respondents did not see fit to present extraneous evidence. We may here construe the assignment. 'An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence.' In re Estate of Platt, supra, 21 Cal.2d at page 352, 131 P.2d at page 830. This court's construction is that by the assignment the cause of action herein did not pass.
We take up next the second question asked the jury when the cause was submitted: Is the plaintiff estopped to deny that he transferred his cause of action to Lesher by representations made by him before the execution of the assignment and the entry of the accompanying judgment? We think it apparent that there was error in submitting this issue to the jury without having given to the appellant an opportunity to prove the truth of his allegations of fraudulent conspiracy. The issue could not be fairly and fully tried without going into the merits of the action as set out in plaintiff's complaint. Mr. Child testified concerning the circumstances under which the assignment was executed. He related that at the time the parties were in trial in the action which Wolfe, as receiver, had brought against Clark, Lesher and others, there was also pending the action of Jay, as Administrator, v. Clark. He said that Mr. Savage, Clark's attorney, proposed that the litigation all be settled. He testified that so far as any causes of action by Clark against Lesher were concerned, he had intended that all of them should be settled and that such was the conversation between the parties. Lesher testified much to the same effect; in fact, he went further and said that general language was used to the effect that if he would agree to do as Clark wanted him to in settling matters, Clark would forego any and every claim which he might have against Lesher. (No language of general release appeared in the assignment.) It is Lesher's claim, therefore, that upon such evidence he had shown appellant was estopped to deny that he had released the cause of action here sued upon. He claimed that he knew nothing about the existence of that cause of action and that nothing was specifically mentioned about it; he said that if any hint had been made that further litigation would ensue he would not have entered into the agreement of assignment; that he was shocked and amazed when some two and a half weeks after the assignment had been executed and the stipulated judgment entered this action was begun. We will assume, for purpose of argument, that this proof would have been sufficient to sustain a holding to estoppel. But it becomes immediately apparent that if we also assume to be true, as we must in approaching this question, all of the allegations of the complaint which appellant was not permitted to prove, then, although Lesher testified he knew nothing of the claim of appellants here sued upon, yet that was false for he was in fact guilty of the fraudulent acts with which he has been charged and was in no position to urge an equitable estoppel. Since he committed the tort he must have known that thereby he created in appellant a cause of action for damages for his deceit. In so far as Wolfe and Halcomb are concerned, and in so far as they seek to find shelter behind the plea of equitable estoppel advanced by Lesher, what we have said applies also to them. Therefore, if the general verdict of the jury was based upon the defense of equitable estoppel, the judgment must be reversed for error in the rejection of rebuttal evidence.
We pass now to the pleas of res judicata.
'When a former judgment is set up as a bar or estoppel, the question whether there is such an identity of the parties and of the subject matter or cause of action as will support the plea of res judicata is a question of law for the court when it is determinable from an inspection of the record alone; but if extrinsic evidence is required to effect the necessary identification, or to escape the effect of a judgment set up [290 P.2d 303] as a bar or estoppel, it becomes a question of fact and must go to the jury unless the proof admits of only one conclusion or the right to have the issue tried by the jury has been waived. In any case, when this point is established, or if it is not disputed, it is for the court to decide and declare the effect which shall be given to the former judgment as evidence in the pending action or as a bar to its maintenance. (Italics ours). 50 C.J.S., Judgment, § 846, p. 420.
'* * * It is always the duty of the court to construe the judgment and interpret its meaning the same as any other written instrument that may be offered in evidence, and in determining what is meant by the language used in the judgment reference must be had to the pleadings in the case, and the issues to be tried must be ascertained before it can be determined what the judgment means.' Raney v. Home Ins. Co., 213 Mo.App. 1, 246 S.W. 57, 60-61. See Koontz v. Whitaker, Mo.App., 111 S.W.2d 197, and cases cited in 34 C.J., page 1080, note 93; see, also, California W. D. Co. v. California M. O. Co., supra, 178 Cal. at page 341, 177 P. 849.
At the trial herein and in support of the pleas of res judicata the proof consisted of the introduction in evidence of the entire clerk's file in the cases of Jay v. Clark and Wolfe v. Clark.
During the course of administration of the estate of George A. Clark, deceased, his administrator, R. S. Jay, filed an action against appellant herein and it is claimed that orders entered in that action constitute adjudications of the issues tendered by the complaint herein. The complaint in Jay v. Clark alleged that appellant had continued as surviving partner to carry on the partnership affairs; that he had failed to keep accounts and was for that reason unable to render accounts to Jay, as administrator, concerning his handling of the partnership business; that Jay had been unable to obtain a settlement of partnership affairs and the payment to him of sums due deceased from partnership assets. The relief asked was that Clark be compelled to account, count, that the partnership assets be sold, the debts of the partnership paid and the surplus distributed. To this pleading Clark filed his answer and also a cross-complaint. He admitted he had continued to carry on the partnership business, and had not theretofore rendered an account. He denied he had failed to keep accounts and alleged that after the settlement of partnership debts there would be nothing due the plaintiff administrator. By his cross-complaint he asserted that he had a claim against his father's estate for something in excess of $2,000 for services rendered and he prayed for a judgment in that amount, but the cross-complaint was dismissed by court order on motion of the plaintiff administrator. The cause was tried and the court found that Clark had been guilty of failing to wind up the partnership affairs and of failing to account for his activities as surviving partner; that there had never been any settlement of partnership accounts during the lives of both and that the value of the interest of decreased could not be ascertained without an accounting, which accounting had been refused. The court thereupon, by an interlocutory judgment or order, directed the surviving partner to account and ordered that all of the property of the partnership be sold and that all obligations be paid. It was further decreed that a receiver was necessary to wind up the partnership affairs; that when that had been accomplished and when the accounts of the receiver had been settled final judgment should be entered in the administrator's favor as to any sum found to be due the estate of deceased. Appellant herein appealed from said interlocutory judgment and this court affirmed the same. See Jay v. Clark, 85 Cal.App.2d 88, 192 P.2d 462. It appears from the file of the cause that thereafter Wolfe was appointed as receiver and that he thereafter reported to the court he had taken possession of the partnership assets, including the newspaper, and had sold all of the assets to Lesher; that he had received from the sale the sum of $30,750, which he had on hand, less claimed expenses; [290 P.2d 304] that he had filed a suit as receiver against appellant herein, his wife and various Does. (We will examine the record of the judgment in said receiver's action hereinafter.) He also reported that a stipulation had been entered into whereunder he was, from assets in his hands, to pay to appellant herein and to his wife a total sum of $5,000 in full satisfaction 'of all claims and demands against said receiver and against the Estate of George A. Clark, Deceased' and he reported said sums have been paid as stipulated. He further reported that all interested parties had agreed as follows: 1. To the waiver of any account by the receiver in the receivership proceedings. 2. To the entry of an order discharging the receiver as though a full and complete accounting had been made. 3. To permit the receiver to draw a check from the receiver's assets in the sum of $1,800 to himself as receiver in compensation for his services as such. 4. To pay certain sums to a Mr. Coffee in compensation for his services as attorney for the receiver. 5. To pay all remaining sums to Jay, as administrator of the estate of Clark. He reported it was further agreed that without notice orders carrying out the agreements could be made. It appears that orders were made in the receivership in accordance with the receiver's said report and that, without accounting, he was discharged upon making the disbursements aforesaid. It appears from the clerk's file received in evidence that no final judgment in the action of Jay, as Administrator, v. Clark was made.
An examination of the file in the case of Wolfe v. Clark, which was the action filed by Wolfe as receiver against appellant herein, and which is pleaded as res judicata of the issues tendered in appellant's complaint in this action, discloses that the receiver by his complaint alleged the following matters: That pursuant to court orders he had as receiver sold and delivered all of the assets of said partnership to Lesher and had received the price therefor from him; that Clark and others, however, claimed an interest in and to that part of the assets consisting of the newspaper and the proceeds from the sale thereof of adverse to the receiver, which claims were without right. He prayed a decree declaring that such claims of adverse interests were without right. Appellant herein as defendant in the receiver's action answered the complaint and admitted that he did claim an interest in the funds and property in the hands of the receiver as such and affirmatively alleged that he had a claim against the assets of the receivership for services rendered in conducting the newspaper, both before and after the appointment of the receiver; that he also held a certain life insurance policy which he claimed belonged to him, but which the receiver refused to give over. He asserted his half interest in the partnership assets and that he was, therefore, entitled upon conclusion of liquidation proceedings to receive one-half the net proceeds. Lesher also filed an answer in said action alleging that he appeared as having been sued as Doe One. He admitted the allegations of the complaint, but said he had not received the assets which he purchased at the receiver's sale and that he also claimed the life insurance policy as a part of those assets. He further alleged his purchase of all partnership assets; that he had not received delivery of the same and had been damaged thereby. He also cross-complained against the receiver and against the other parties, but his cross-complaint was based on the same matters referred to in his answer. The receiver filed answers to the various counter pleadings and thereafter the stipulated judgment hereinbefore referred to was entered in the cause. The exact form of the judgment to be entered was stipulated to and the form was adopted by the court and entered as the court's judgment.
It is apparent from an examination of the two causes claimed to have resulted in adjudication of the issues tendered by the complaint in this action that said judgments do not in any way expressly adjudicate said issues. No mention, direct or inferential, is made therein concerning the claim herein sued upon, that is, appellant's claim that Lesher, Halcomb and Wolfe had fraudulently conspired to compel cessation of publication of the [290 P.2d 305] Madera Daily Tribune and Mercury and to compel its sale to Lesher at a depreciated price and that they had succeeded in consummating their conspiracy. Respondents make no claims to the contrary, but they say that such issues, nevertheless, could have been, by the appellant herein, affirmatively tendered in various ways in the action brought against him by Jay, as administrator, and in the action brought against him by the receiver and by way of opposing the receiver's account; that, therefore, since appellant did not so tender such issues, but on the contrary withheld them he is now estopped to litigate such issues in this action. Of course all this assumes that when the stipulated judgment was entered in the receiver's action, when accounting by the receiver was waived, and when the issues of fraudulent conspiracy were not injected into the administrator's action that appellant herein knew that he had been damaged by the conspirators and had a cause of action against them, for, of course, if he did not have such knowledge then nothing done or not done by him in said actions could estop him from seeking redress in this action. It is equally true that if his ignorance was due to the conspirators' having concealed their nefarious activities behind the shield of the receivership, they would themselves be estopped to rely upon estoppel by judgment. 'A party may assert a counter estoppel against an estoppel offered by the adverse party. Where an estoppel exists against an estoppel, the matter is set large, or is left as if neither estoppel had been offered; the two estoppels destroy each other and the interest of justice requires that both parties be liberated therefrom.' 31 C.J.S., Estoppel, § 65. Thus as against the claim that what he did and failed to do in the actions counted upon as affording support for the plea of res judicata, he could have shown the fraud alleged in his complaint and his ignorance thereof at the time he might have urged the same in said pending actions. This he was not permitted to do since by the orders of the trial court no evidence would have been received touching upon the matters alleged in the appellant's complaint. However, we think that in any event the plea of res judicata is not borne out by the evidence here, consisting, as it does, solely of the record in the two pending actions. We have hereinbefore said that by virtue of the situation existing when the alleged tort was committed its commission gave to appellant a right of action completely separate from the partnership affairs and constituting no part of partnership assets. Therefore, he was not obliged to litigate that cause of action in either of the two pending actions.
'* * * '[T]he general rule that a judgment is conclusive, not only as to that which is actually determined, but also as to every other matter which the parties might have litigated in the action, is not always applicable literally.' It has no application to those independent matters which the parties may, but are not required to and do not in fact plead or rely upon, such as other causes of action which may be joined or independent matters which might form the basis of a counterclaim or cross-complaint, or constitute an equitable defense to an action at law; nor does it apply to new rights acquired pending the action which might have been but were not required to be injected into the case * * *' (15 Cal.Jur. 'Judgments', sec. 194, p. 145.)
We hold that the pleas of res judicata were as a matter of law not sustained by the evidence offered in support thereof.
In accordance with the foregoing it is ordered that the judgment appealed from be and the same is hereby reversed and the cause is remanded for the limited purpose of retrial as to the issues of equitable estoppel and as to the merits. It is further ordered that judgment be entered in favor of plaintiff on the pleas of res judicata.
PEEK and SCHOTTKY, JJ., concur.