5. Plaintiff is precluded from appealing the Trial Court's deletion from the judgment of award of actual damages to plaintiff because plaintiff refused to accept Court's offer to allow plaintiff to prove actual damages and because plaintiff waived its claim to such damages.

6. Ex parte execution on defendant's bond was wrongfully obtained by misrepresentation of plaintiff's counsel.

In view of what we have already said above, defendant's first assignment of error is rejected.

We now consider defendant's second and fourth assignments of error respecting the Trial Court's order striking his answer and entering his default. The prominent pertinent facts are related above. After plaintiff had moved to resume defendant's deposition, defendant made a motion (denied by the Court) for a protective order that his further deposition be taken upon written interrogatories, attaching to his motion his own cable (dated February 25, 1958, two days before scheduled resumption of his deposition) from Santiago, Chile, and attaching his San Francisco doctor's affidavit that he had treated defendant in June and July, 1957 for peptic ulcer and infectious hepatitis and had prescribed for him a program of rest and recommended his activities be confined to his home as far as possible. That was the first time defendant had mentioned his bad health problems to the Court.

At several pre-trial appearances in the Trial Court, defendant's attorneys emphasized his asserted bad health and his unfamiliarity with and fear of past and prospective American court proceedings in his case, and thereby tried to show that his absence from the scheduled resumption of his deposition and from the hearing on plaintiff's motion for an order striking defendant's answer and entering his default was not willful and was justified. The Court, however, was rightly unimpressed by that showing including his own and his doctors' statements as to his health. It is very significant that in defendant's cable of February 25, 1958, two days before the hearing on his motion for protective order, he did not say he was sick in Chile where he then was, nor that he would be in bad health in Uruguay where he would be before the end of that February. He did not at any time explain or attempt to explain the nature or extent of his activities during his Canadian, European and South American trips. Neither did he at any time say why his health would not for so long a time permit his return to San Francisco for further proceedings in his case at the very time when he was able enough to and did go on a foreign trip of about seven months duration. Right up to only a few days immediately before entry of the default he was not too sick to personally continue his both-sides-of-the-world business or other activities.

Upon the whole record, and because of defendant's obvious disregard of the Court's notices and orders, his extensive foreign travels and his conduct in fleeing the United States and in unjustifiably failing and refusing to return for more than seven months before entry of the answer-striking and default order pursuant to plaintiff's motion hearing attended and participated in by defendant's attorneys after notice to them, the Court found that defendant willfully failed, after proper notice, to appear for the resumption of his uncompleted deposition. Accordingly, the Court entered the answer-striking and default order against defendant without prejudice to his right to later move "upon a proper showing" for the vacation of the default order.

We have carefully reviewed those statements as to defendant's health and the further record in the case. Therefrom it appears that defendant did not heed or treat seriously his San Francisco doctor's suggestion of a program of rest and of limiting his activities to his home as treatment for defendant's "peptic ulcer and infectious hepatitis". Instead, he traveled across the United States from San Francisco to the Boston area and from there, in violation of the Court's order not to leave certain stated jurisdictions, he went on a very extensive foreign trip via Montreal, Canada, to Europe and thence to four different nations on the west and east sides of South America.

Defendant was an astute business man and made enormous profits in the wrongful sales of the fifteen vessels here involved. His asserted unfamiliarity with and fear of American court proceedings are not factually or legally justifiable excuses for his refusal to submit to the Trial Court's orders and authority. If that were not so, no litigant who merely feared the outcome of his lawsuit would be required against his own will to submit or continue to submit to any court's authority. Every litigant is bound to submit to the court's lawful jurisdiction.

Defendant was represented by able American counsel whose advice was available to him and was on one critical occasion received by him during defendant's long distance telephone call on March 10, 1958 from Argentina to his attorney in Washington, D. C. who then on the basis of the then existing record advised defendant of the likely unfavorable consequences to him of the default motion then set for hearing on March 13, 1958, when it was heard and granted. Undoubtedly his previous personal knowledge of that default hearing had prompted that telephone call to his attorney who at the March 13th default hearing reported to the Court the subject of that call. The Trial Court was amply justified in disbelieving defendant's excuses because obviously they were not made in good faith and were not trustworthy. In fact, the whole course of defendant's conduct conclusively shows his long sustained willful disregard of the Trial Court's orders and his contumacious attitude towards the Court's authority.

After entry of judgment in plaintiff's favor pursuant to the trial on the merits on the single issue of damages, the defendant moved for a new trial and with that again asked the Court to set aside the default and reinstate his answer. Both of those requests the Court finally refused for the reasons that "no new circumstances are advanced by defendant which in any way indicate that the order of default was not justified at the time it was entered. Although defendant now * * * represents that he is willing to appear in San Francisco to resume his deposition when his health permits, he has made no showing whatsoever of a meritorious defense which might warrant the exercise of the Court's discretion to set aside the default."

The record in this case strongly supports and justifies the action of the Trial Court in striking defendant's answer and entering his default, as being clearly within the proper exercise of the Court's discretion. Defendant's assigned errors numbered 2 and 4, as well as his contentions and objections, respecting the answer-striking and default order are without merit and are all rejected. Upon the facts in this case, that order was specifically authorized by Rule 37(d), F.R.Civ.P., and has the support of authoritative writings and Court decisions. 6 Moore's Federal Practice, Par. 55.10 [2], 2 ed., p. 1833; Jackson v. Heiser, 111 F.2d 310 (9 Cir.); Bourgeois v. El Paso Natural Gas Co., 257 F.2d 807 (2 Cir.); Massa v. Jiffy Products Co., 240 F.2d 702 (9 Cir.).

We affirm the Court's rulings as to all things related to the default.

Defendant's assigned error 3 is based on defendant's objections to the Trial Court's holding him personally liable for acts alleged in plaintiff's amended complaint as an incident of the order striking his answer and entering his default, and particularly to the Trial Court's finding of an alter ego relation between defendant and each of Asia Development Corporation and Hong Kong Shipping Corporation, Limited, as the result of only the amended complaint's allegation of such relation plus the answer-striking and default order, without any supporting evidence.

On that issue our attention is called by plaintiff to the former decision of this Court in Edwards v. United States, 123 F.2d 465 (9 Cir.), which held that, in a criminal proceeding, the mere allegation in effect that one is the alter ego of a corporation is not sufficient to advise the accused of the dominance by and merger of the corporation into an individual. Here in this case, however, the facts of the alter ego relation are much more specifically and adequately set out in plaintiff's amended complaint than they were in the Edwards case, supra. The Trial Court was as a result of the default required at the trial on the issue of damages to accept as true the plaintiff's allegations in substance that the Asia Development Corporation and Hong Kong Shipping Corporation, Limited, were under the complete domination and control of defendant Fong and were merely conduits through which he carried on his individual business. The facts so stated were in plaintiff's amended complaint well pleaded, and in view of the answer-striking and default order, no further supporting evidence was required. That is true even though plaintiff's factual allegations were upon information and belief because they stated facts primarily within defendant's knowledge. 71 C.J.S. Pleading § 82, p. 196. Defendant's assigned error 3 is not well taken and is overruled.

The defendant's assigned error number 5 respecting the right of plaintiff to appeal from the Trial Court's disallowance of plaintiff's claim for actual damages under its fourth cause of action is disposed of by our disposition below of plaintiff's related assignment of error on its appeal.

Defendant claims as his 6th assigned error the Trial Court's levying execution on defendant's bond and its security, and contends that such action by that Court was wrongfully obtained by misrepresentation by plaintiff's counsel in that after defendant's appeal, plaintiff's counsel represented to the Court that plaintiff then had the right to execution against the bond, but that, defendant argues, plaintiff had no such right because the bond was required and posted only as an incident to the proceedings on the first cause of action under the False Claims Act, and that since the Court awarded to plaintiff no relief on that count, the plaintiff has had no right to any benefits under the bond.

After stating that as conditions of the bond, defendant was to appear in Court "* * * in accordance with all notices and with all orders of the Court * *" and that he would "* * * remain within the jurisdiction of the United States District Court for the Northern District of California, or for the Southern District of California, or for the District of Columbia, or for all other districts in the State of New York, * * * unless permission to leave * * * be granted by order of the Court * * *", the bond is further conditioned that "I am to pay any judgment, including interest and costs, which may be entered against me and in favor of the United States", and that "* * * if I fail to perform any one of these conditions, payment of the amount of the bond shall be due forthwith", and further "* * * the security deposited herein is to be applied to payment of any such said judgment, interest and costs, and I consent to the application of said cash bail (later replaced by Government bonds) of Fifty Thousand Dollars in partial satisfaction of any such judgment as may be entered against me." Parenthesis added.

We think plaintiff correctly contends that the quoted provisions of the bond show explicit intention on the part of both the Trial Court and the defendant that the bond and its security shall cover any judgment of the Court against the defendant whether on the first cause of action or not. Moreover, plaintiff in order to enforce its judgment in this case, in like manner as in any other case, had the right irrespective of the bond provisions to levy execution on any property of the defendant, including the bond's security, found within the Court's jurisdiction. Rule 62(a), F.R.Civ.P., prohibits execution for 10 days after entry of judgment, but does not provide that pendency of an appeal of itself supersedes the judgment. Nor did defendant's post-judgment motions supersede the judgment. He has taken no action before or since he appealed to supersede the judgment, nor since the issuance of execution has he applied for the Trial Court's correction of an allegedly wrongful order. We think plaintiff's and the Trial Court's actions in levying execution on the defendant's bond and its security were proper, and that there is no merit in defendant's 6th assigned error.

On its cross-appeal the plaintiff assigns as error the action of the Trial Court (1) to the extent that its final judgment of February 11, 1959 is in favor of the defendant and against the plaintiff, and (2) in entering the amending order of June 3, 1959 deleting the $511,000.00 item for actual damages from the original judgment of February 11, 1959 in plaintiff's favor, effective 30 days after June 3, 1959, and (3) in conditionally granting on June 3, 1959 the motion to amend the judgment effective 30 days thereafter.

Again here in connection with plaintiff's assigned errors and its claim for liquidated and actual damages, the following provisions of the contract should be noted.

Section IX(F)3 of the contract provided that the primary consideration for the sale of the vessels was the scrapping of them, as to which time was made of the essence, and that defendant should scrap five of the vessels by March 3, 1950 and each of the remaining ten vessels at one month intervals thereafter. Defendant agreed that if the vessels were not so scrapped he would for each unscrapped vessel pay as liquidated damages $100.00 per day for each day's delay for 180 days following the specified scrapping completion date and for continued failure to scrap thereafter defendant agreed to be deemed in total default and to pay an additional lump sum of $25,000.00.

Section IX(F)4 of the contract stipulated that the Maritime Commission might terminate it as to further performance in case of delay in scrapping beyond the 180-day period or in case the defendant should operate or permit the operation of any of the vessels (except upon conditions not here involved). It was also agreed that upon such termination, defendant would thereupon surrender the vessels or any parts of them not scrapped and furnish to the Commission a bill of sale with warranty of title free from liens, and that such termination would not release defendant from payment of the above mentioned liquidated damages.

Section IX(H) of the same contract provided that defendant would not sell or assign any of his rights or obligations under the contract without the written consent of the Commission. For violation of this Section, however, the contract did not provide liquidated damages.

Defendant took delivery of all of the fifteen vessels at Subic Bay on March 3, 1948. Twelve of them were towed to Shanghai for scrapping, but before that was completed, the defendant removed ten of those twelve to Hong Kong while Communist forces were advancing upon Shanghai, leaving two of those twelve vessels at Shanghai where they had been grounded. Three of those ten vessels removed to Hong Kong were sold unscrapped for $210,000.00. One of those three so sold was returned by the vendee to Shanghai and while two of those three were being towed back to Shanghai by the vendee those two were intercepted by a Communist gunboat. Plaintiff's complaint alleges that one of those two intercepted vessels was ultimately scrapped on March 3, 1952, but the Court was not informed as to the final fate of the other one of those two intercepted vessels. Of the remaining seven of those ten vessels so removed to Hong Kong, four were sold unscrapped by defendant in the period November 15, 1950-February 28, 1951, but those four were ultimately scrapped in Hong Kong during 1951. However, the contract time limit for the last vessel scrapping was January 3, 1951. The remaining three of those seven vessels so removed to Hong Kong were sold unscrapped in January, 1951 and towed by their vendees to Canton, China. The record does not disclose the scrapping of these three vessels at any time. There was no scrapping time extension for any of said twelve vessels.

The 181st day after the expiration of the contract scrapping time limit for the first five vessels was August 31, 1950; for the sixth vessel, October 1, 1950; for the seventh, October 31, 1950; for the eighth, December 1, 1950; for the ninth, December 31, 1950; for the tenth, January 31, 1951; for the eleventh, March 3, 1951; and for the twelfth vessel was April 2, 1951.

The record discloses that those twelve vessels above mentioned were not scrapped by defendant or for his account within the contract time limits. As to each and all of those vessels, it is not so shown that within that time or the next 181 days thereafter they were scrapped by anyone, and plaintiff asserts as a fact, not denied by defendant, that they were not so scrapped. Upon the substance of the foregoing situation, the Trial Court ruled that "Consequently it is clear that plaintiff is entitled to the full liquidated damages provided by the contract for the delay in scrapping these twelve vessels. These damages total $516,000.00 * *" (computed on the agreed basis of $100.00 per day for each vessel for each day's scrapping delay up to 180 days following expiration of the contract time limit, with an additional flat sum of $25,000.00 per vessel for further delay beyond the 180 days).

The Trial Court included that total sum in its judgment in favor of plaintiff, and finally, upon defendant's motion for new trial or for correction of the original judgment of February 11, 1959, rejected defendant's contention in his fourth error assignment that before the entry of that judgment plaintiff waived its claim for liquidated damages, and held that plaintiff had not waived that claim, saying that "* * * an examination of the trial record and the arguments and briefs of counsel as a whole shows beyond question that the claim for liquidated damages was not abandoned." From that action of the Court defendant now appeals, but our review of the record convinces us of the correctness of that quoted statement and of the cognate ruling of the Court, and we approve and affirm that action of the Trial Court and its award of said $516,000.00 as liquidated damages.

Of the original 15 vessels, the three remaining at Subic Bay after the above mentioned twelve had been removed were towed to Japan by defendant in 1953 and there sold by him unscrapped with the understanding, however, that they were to be scrapped, and they were there actually scrapped by defendant's vendees in 1953, within the contract time limit as extended by the Maritime Commission. At the trial plaintiff claimed liquidated damages from defendant as to these three vessels on the theory that defendant in selling them unscrapped had made it impossible for him to scrap them and had thereby failed and refused to scrap the vessels himself or to have them scrapped for his account within the specified time. The Court, although agreeing with plaintiff's contention that defendant's sale of the vessels resulted in defendant's failure and refusal to scrap them within the agreed time limit, held nevertheless that, since those three vessels were ultimately scrapped by the vendees within the contract time limit as extended, plaintiff had suffered no liquidated damages respecting them. Hence the Court refused to allow plaintiff's requested award for liquidated damages as to those three vessels. We agree with that conclusion, and to the extent that plaintiff's first assigned error may apply to it, we hold that such error assignment is without merit.

As to actual damages, the Trial Court ruled that five of the 13 vessels sold by defendant unscrapped have never been scrapped, and that plaintiff would be entitled under the agreed IX(F)4 provision to terminate the contract and repossess these vessels, but that since defendant's wrongful sale of the vessels made that impossible, plaintiff has thereby been actually damaged to the extent of the value of these five vessels, and found that such value based on the sales price of them received by the defendant totals $511,000.00, for which sum as actual damages in addition to that awarded for liquidated damages the Trial Court on the fourth count awarded judgment to plaintiff in the Court's original judgment of February 11, 1959.

As before stated, the Court, however, subsequently on June 3, 1959 granted defendant's alternative motion to delete from the judgment all the $511,000.00 actual damages item because in the fourth count, upon which the judgment was entered, plaintiff did not before the defendant's default demand actual damages and because Rule 54(c), F.R.Civ.P., precludes in default cases judgment different in kind or amount from that demanded before entry of the default. From the order so deleting actual damages, plaintiff now cross-appeals.

Rule 54(c), F.R.Civ.P., does specifically provide: "A judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment. * * *".

In 6 Moore's Federal Practice, 2 ed., Par. 54.61, pp. 1205-1206, it is said: "Since the prayer limits the relief granted in a judgment by default, the prayer must be sufficiently specific that the court can follow the mandate of the Rule. * * *

"Where, however, the defendant appears at the hearing on the application for judgment, the court, in the exercise of a sound discretion, may permit the claimant to amend his prayer for relief", citing, Peitzman v. City of Illmo, 141 F.' 2d 956, 962 (8 Cir., 1944).

In that case, however, the United States Court of Appeals for the Eighth Circuit said that "In this connection it should be observed that the record is in a confused condition; it in fact presents a paradox", in that, pre-trial attempts in the Trial Court to effectuate on the record an increase in the demanded amount of the plaintiff's claim pursuant to notice and the court's approval order resulted instead in a decrease by one-half the amount demanded in the complaint before the attempted increase. At the trial, plaintiff moved to again amend the complaint "in the actual damages up to $5,000.00, and to amend the amount of punitive damages to $20,000.00." The Appellate Court at page 962 said that "In this state of the record it is doubtful whether the prayer for punitive damages was in fact increased in amount" since the amount of punitive damages finally stated was the same amount as that stated before any amendments were made.

That Appellate Court further stated that "Rule 54(c) apparently is a general rule applicable in case of a non-appearing defendant in complete default. On a hearing on the question of damages, under Rule 55(b) a defendant, though in default, is in court on a hearing limited to the question of the amount of damages, to the same extent that he is in court in a trial on the merits, and we think amendments at the trial are as appropriate in the one case as in the other. Amendments to a pleading may be allowed at the hearing on damages as to the relief prayed, subject to the right of the defendant, if taken by surprise or put to a disadvantage, to ask for a continuance or for time in which to prepare to meet the enlarged claim * * *".

As to the above quoted statements from Moore's Fed.Prac., supra, the author did not, and plaintiff for its related contentions did not, cite any court decisions other than Peitzman, supra, — a most notable and significant situation in view of the great mass of cases interpreting the Federal Rules of Civil Procedure decided subsequent to Peitzman, supra.

It must be borne in mind that the mandate of the Rule is very simple, clear and decisive that a judgment "shall not be different in kind from or exceed in amount that prayed for in the demand for judgment" in default cases. Peitzman, supra, was not based upon facts like those in this case, in that, the record was in a "confused condition", and was such that "In this state of the record it is doubtful whether the prayer for punitive damages was in fact increased in amount". Very likely the court in that case in accepting the so-called trial amendment ostensibly increasing the amount of demanded damages, thought that all the court did was to put the statement of the damages demand as to amount back in the very same condition of that statement in the pleading before any changes ever were made, as the parties intended, thus correcting an obvious mistake.

In view of the foregoing, we conclude that for the reasons stated Peitzman, supra, is distinguishable from this case, and should not control or influence our decision here. Moreover, we are unable to escape the explicit and emphatic mandate of Rule 54(c) which unmistakably commands that upon the facts and circumstances of this case the judgment "shall not be different in kind from or exceed in amount that prayed for in the demand for judgment" at the time of the entry of the default.

Plaintiff also bases its asserted right to have retained in its judgment the $511,000.00 actual damages item on the theory that it is entitled to invoke in aid of its deficient fourth count the allegations of the second count of the amended complaint, which according to plaintiff's contention will supply any and all additional facts and statements needed to sufficiently state in the prayer of the fourth count a particular demand for judgment for actual damages. As to that contention, however, the rule is that different causes of action must not only be separately stated, but also that each "must contain in itself sufficient averments to constitute a good cause of action", and that a valid "objection to one count is not" overcome "by an averment in another count". That was the common law rule, and it is the same under modern code pleading systems, with this condition, that allegations of one count may be incorporated by reference into another cause of action in the same complaint. 41 Am.Jur. 365, § 108. Here, however, no count two allegations or damages demands were incorporated in count four.

As to that count two, it is completely displaced as if dismissed by the Court's adoption of the fourth count on which to award judgment, which the Court did in harmony with plaintiff's alternative pleading of the several counts as emphasized in plaintiff's written closing statement filed August 13, 1958. The fourth count did not incorporate any statement whatsoever from the second count which plaintiff contends stated a valid cause of action, and from which plaintiff claims the right to borrow and add to count four the needed statement of demand for actual damages to sustain the Court's original award of actual damages on count four, and to support plaintiff's contention that the Trial Court should not have deleted the actual damages item from the original judgment of February 11, 1959.

Without such incorporation from count two in the fourth count, and since count two as to each and every part of it has been put out of the case by the Court's rightful use of only the fourth alternative count on which to base its judgment, no statement in count two is available for supplying the omission of actual damages from the statement of the demand for judgment in the fourth count. Whether or not count two states a valid cause of action with sufficient statement of actual damages in the demand for judgment in count two, and since count four does not itself state in its demand for judgment any request for actual damages, we are unable to adopt plaintiff's theory that it may borrow from count two a demand for actual damages to supply the omission of such demand in count four.

Plaintiff further argues that by reason of the incorporation in the fourth count of the first count's paragraphs 5 to 19 plaintiff had the right under the contract to repossess the vessels for failure to timely scrap them, and that such right of repossession had been defeated by defendant's wrongful sale of the vessels thereby giving to plaintiff the right to be paid actual damages in addition to liquidated damages. Plaintiff in its brief asserts that at the trial on the issue of damages, defendant was advised in the course of plaintiff's opening statement that it was seeking actual damages as well as liquidated damages under plaintiff's fourth count, and that thereby defendant was notified of that fact. But count one's paragraphs 5 to 19 do not state a demand for judgment in any sum for any kind of damages. To allow plaintiff actual damages on the fourth count in which such damages were not when the default was entered requested in the demand for judgment would be a judgment different in kind and more in amount than "that prayed for in the demand for judgment".

We conclude that the Trial Court in its order of June 3, 1959 was right in deleting the item for actual damages from its original judgment, and we affirm the Trial Court's action in doing so. All of plaintiff's assignments of error are overruled.

We have examined the record regarding all the assigned errors and the related contentions and arguments of counsel. We find no reversible error in the record and the action of the Trial Court both on the defendant's appeal and the plaintiff's cross-appeal is affirmed.

So ordered.