Opinion
Rehearing Denied June 28, 1967.
Hearing Granted July 26, 1967.
Richard A. DeSantis, Los Angeles, for appellant.
Staitman & Snyder, Beverly Hills, for respondent.
FLEMING, Associate Justice.
White Lighting Company brought suit in municipal court against Wolfson to recover $850 advanced to Wolfson against future commissions. Wolfson denied the indebtedness and cross-complained for money due and owing it and for other relief in excess of municipal court jurisdiction, joining Samuel Shaft and Samuel Beber as cross-defendants, whereupon the action was transferred to the superior court. Demurrers to the cross-complaint were sustained, as were demurrers to an amended cross-complaint, and demurrers to a second amended cross-complaint which joined Basin Builders as a cross-defendant. Demurrers to the third amended cross-complaint were sustained without leave to amend, and cross-defendants' motions to strike were granted. Wolfson has appealed the order of dismissal of the cross-complaint.
Wolfson's final cross-complaint claimed that cross-defendants induced him to purchase 5000 shares of White Lighting Company from Basin Builders at a price of $3 per share. Wolfson claimed the shares were part of a public offering of White securities and that no registration statement had been filed with the Securities and Exchange Commission at the time of him purchase on January 19, 1964. Wolfson charged the 5000 shares were delivered to him in a way made unlawful by section 5(b) of the Securities Act of 1933, for Basin sent them to him through the United States mail without a prospectus meeting the requirements of section 10 of the Act. Wolfson claimed the violation by the cross-defendants of section 5 of the Securities Act of 1933 entitled him to rescind his purchase of the 5000 shares.
The trial court granted cross-defendants' motion to strike Wolfson' third amended cross-complaint, saying it had no subject matter relationship to the original complaint (Code Civ.Proc., s442). In the original complaint, White Lighting sought to recover $850 allegedly advanced to Wolfson against future commissions. The final cross-complaint sought rescission and damages from strangers to the original complaint for a business deal which has no demonstrated nexus to the transaction under which Wolfson would receive compensation for his services an an officer of White Lighting. Although both transactions had some connection with Wolfson's employment by White Lighting, in all generosity we cannot find the two events part of a single transaction or a series of separate transactions which could be deemed part of a larger encompassing transaction, so as to qualify as a cross-complaint under Code of Civil Procedure, section 442. (Taliaferro From the multiple pleadings submitted, it is apparent the Wolfson received ample opportunity to plead and replead. The record does not shown any offer to plead any addition which would cure the defective pleading. We assume it is through lack of fact rather than lack of skill that Wolfson was unable to state a cause of action having th requisite subject-matter relationship to the original complaint. The court did not abuse its discretion, in withholding leave to amend. (39 Cal.Jur.2d 249; Deauville v. Hall, 188 Cal.App.2d 535, 10 Cal.Rptr. 511.)
In the pleadings superseded by Wolfson's third amended cross-complaint, he set out four causes of action to which demurrers were sustained without leave to amend. We review them here, for the court's ruling as to them was final.
The first cause of action was premised on a theory of promissory estoppel and breach of contract. Wolfson claimed his oral employment agreement entitled him to 1% of the annual gross sales of White Lighting in excess of $1,000,000, which defendants refused to pay. He claimed that in reliance on his contemplated permanent employment with White, he purchased 5000 White shares, causing him $15,000 damages since he had materially changed his position to make this investment.
The court correctly sustained the demurrers to the first cause of action on the ground that it was invalid under the statute of frauds. (Code Civ.Proc., § 1973, sub. 1; Civ.Code, § 1624.) By the very terms in which Wolfson sets out the alleged agreement, the one per cent due him under the agreement could not be computed until one year had elapsed, so that the annual gross over $1,000,000, if any, might be first determined.
Wolfson's second cause of action claims $16,800 in damages for cross-defendants' alleged breach of a settlement agreement under which they purportedly promised to repurchase the securities for $15,000 and to pay him severance pay and his moving costs to his former home in Chicago.
Wolfson's second cause of action was based on he alleged oral agreement of the defendants ot purchase a chose in action in excess of $500, to pay him $1200 severance pay and $1200 for transportation back to Chicago in return for Wolfson's promise to resign. The consideration promised by the defendants, though consisting of three items, was part of a package deal to be exchanged for a single item from Wolfson. Since the defendants' promise included an oral agreement to purchase a chose in action in excess of $500, violative of Code of Civil Procedure, section 1973a, and Civil Code, section 1924a, the contract violates the statute of frauds and is unenforceable.
The fourth cause of action seeks recovery on the basis of the reasonable value of services rendered. Where a common count is joined to other causes of action, as this one was to the two counts previously discussed, and is identical with them, as here, it is judged by the more specific allegatons in those counts, and, if they fall, it falls with them. (Orloff v. Metropolitan Trust Co., 17 Cal.2d 484, 110 P.2d 396; Harris v. Kessler, 124 Cal.App. 299, 12 P.2d 467.)
Wolfson's fifth cause of action charged the defendants with 'abuse of process.' Wolfson charged that the sole reason cross-defendants caused an attachment to issue against him was to vex, harass, and injure him. The essential elements of abuse of process consist of an ulterior purpose and 'a wilful act in the use of the process not proper in the regular conduct of the proceeding. Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.' (Spellens v. Spellens, 49 Cal.2d 210, 232, 317 P.2d 613, 626; emphasis ours.) Wolfson did not allege Fairfield v. Hamilton,
Coy v. Advance Automatic Sales Co., Crews v. Mayo, Crews v. Mayo,Order affirmed.
ROTH, P. J., concurs.
HERNDON, Associate Justice (dissenting).
I dissent.
In my opinion there is validity in appellants' contention that the causes of action alleged in the complaint and in the third amended cross-complaint arise out of, or relate to, the contract of employment and hence that there is a sufficient nexus to authorize and justify their litigation in one action.
As I understand it, the statute of frauds in not applicable to a contract of employment which is terminable at will even though the measure of the employee's compensation is expressed in annual terms. Similarly, an agreement settling the rights of the parties upon termination of such employment is neither barred by the statute of frauds nor lacking in consideration.
Lastly, I believe that appellant has stated a cause of action for abuse of process by reason of respondents's excessive attachments. However, in view of the apparently inconsistent holdings in the early cases of Waugenheim v. Graham, 39 Cal. 169, and Jeffreys v. Hancock, 57 Cal. 646, I am uncertain whether or not such cause of action should be considered one arising out of the transaction set forth in the complaint. (Cf. 6 Cal.Jur.2d § 151, pp. 63-65, footnoted 15 and 16.) It seems to me that modern concepts might dictate an affirmative answer.