State: Utah
Volume: 123
Term: 1953-1953
Jurisdiction(s): Utah
Source: https://static.case.law/utah/123.pdf

SALT LAKE CITY v. J. B. & R. E. WALKER, Inc., et al.
No. 7437. Decided February 4, 1953. (258 P. 2d 365.)

See 67 C. J., Waters, sec. 1112. Locating easement where grant
does not describe its location. 17 Am. Jur., Easements, sec. 86; 110
A. L. R. 174,

Franklin Riter and Fred L. Finlinson, Salt Lake City,
for J. B. & R. E. Walker, Inc.

Frank E. Moss, County Atty., Edward M. Morrissey, Asst.
Co. Atty., A. A. Allen, Jr., and W S. Livingston, Assts. Co.
Atty., Salt Lake City, for Salt Lake County.

E. R. Christensen, City Atty., Homer Holmgren, Asst.
City Atty., and A. Pratt Kesler, Asst. City Atty., Salt Lake
City, for respondent.

LARSON, District Judge.

The District Court of Salt Lake County, on September
1, 1949, made and entered a judgment and decree enjoin-
ing defendant from removing soil, sand, or rocks from cer-
tain lands owned or under lawful lease by the defendant,
except under conditions fixed by the court in the judgment
and decree. A supplemental order and judgment was en-
tered by the court on December 10, 1949. From both the

a:
original judgment and the supplemental one, the defendant
appeals.

The action emerges from the following facts: The plain-
tiff, a municipal corporation of the State of Utah, during
the years of 1906 and 1907, as part of the municipal water
system, constructed and installed a concrete conduit from
the mouth of Big Cottonwood Canyon, located approxi-
mately 15 miles southeast of the plaintiff city, to the city,
for the purpose of transporting water from Big Cottonwood
Canyon Creek to the municipal area, for use by its inhabi-
tants. The conduit is constructed of concrete and has a
measurement, at the points involved in the present contro- °
versy, of approximately 314 feet high by 414 feet wide,
outside measurements (R-800). It has a capacity of 70
cubic feet per second of water. The conduit so constructed
and installed traverses the SW14, of the SW1,, of Section 24,
and the NWI, of the NW%%, of Section 25, T. 2S.,R. 1 E., 8.
L. M. Prior to and during the construction of said conduit,
the plaintiff acquired certain rights of way over the afore-
said quarter sections.

The right of way over Section 24 covers, by the convey-
ance, a strip of land 66 feet wide and 1322 feet long, the
center longitudinal line of which is described by distances
and directions as it winds over the hillsides. Plaintiff's
rights in Section 25 are founded on a deed conveying to
the City five acres of land particularly described and

“Also a vight of way and easement for all reservoirs, dams, ditches,
conduits, pole lines, and the appliances and utilities to be connected
therewith to be constructed by the City, wherever these may be lo-
cated now or hereafter within lands owned by”

the grantor within Sections 23, 26 and 25, Township 2
South, Range 1 East, Salt Lake Meridian. The City’s con-
duit was built and put into operation in 1907, and has been
in continuous operation and use since.

Defendant corporation, at the commencement of this
action and about two years prior thereto, was in lawful

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possession of certain parts of the above mentioned quarter
sections of land adjacent to the conduit. In 1946 defendant
commenced construction of an extensive plant for produc-
tion of sand and gravel from the lands in its possession,
consisting of conveyers and apparatus for crushing raw
materials and classifying the same for use as concrete and
road base aggregate. This plant commenced operation in
the early summer of 1948 and continued during the trial
of the action. Defendant’s operations consisted, in part,
in removing soil, sand, and gravel from the deposits on the
hillsides below the conduit, by means of bull-dozers which

* moved material from its natural deposit down to the “griz-
zly” or trap from which is moved by belt further down the
hillside to the crusher.

In April 1948, plaintiff, hereinafter called the City, com-
menced this action against defendant, hereinafter called
Walker, to restrain its operations. The City contends that
Walker’s operations constitute a serious menace and threat
to the safety of the conduit because the removal of material
from the hillside below was also removing support of the
conduit to which plaintiff was entitled. It sought an in-
junction restraining Walker from making any further ex:
eavations below the conduit, and a mandatory injunction
requiring Walker to restore the natural slope where it had
been disturbed by excavations already made. Walker’s
answer is essentially a general denial, with specific denials,
that the City right of way over Section 25 has a width of
66 feet and also that the conduit is in the center of the right
of way. A county highway, known as Wasatch Boulevard,
crosses the lands involved in Walker’s operations. Part of
Walker’s plant is above the boulevard and part below. The
county, contemplating a widening of the boulevard, inter-
vened, asking the court to determine what, if any, artificial
support the County would be required to provide if it made
excavations and removal of materials in widening the road-
way. After a somewhat extended trial, the court held that
over the lands involved in this action (Sections 24 and

iii.

25) the City’s right of way was 66 feet wide—33 feet on
each side of the center line of the conduit, measured hori-
zontally at right angles to the center of the conduit; that
the safety of the City’s right of way required that the slope
of the surface of the hillside below or on the downhill side
from the conduit be not steeper than two to one, that is two
feet horizontal to one foot vertical, beginning at the outer
edge of the right of way and extending down to the Wa-
satch Boulevard, when or where the slope is denuded of
its natural mantle of shrubs, vegetation, and rocks; that
a slope of two feet horizontal to one foot vertical beginning
at a point two feet vertically above the outer edge of the
conduit extending at a uniform slope down to the Wasatch
Boulevard is essential for the safety of the conduit when
or where the slope is denuded of a mantle of shrubs, vege-
tation and rocks; that where the surface of the slope is
uniform, properly dressed and planted with suitable shrubs
and vegetation, a slope of 14% feet horizontal to one foot
vertical, measured from a point two feet vertically above
the outer edge of the conduit, is a slope of safety for the
conduit, provided that such slope does not extend downward
beyond a point where it would be intersected by a one to
one slope from the outer edge of the City’s right of way,
such one to one slope to be dressed evenly in a workman-
like manner, and planted to sumac, oak, or other native
shrubs and rounded at the top.

The court enjoined the removal of any material that
would leave slopes steeper than those permitted above; and
issued its mandate requiring Walker to restore the surface
of the hillsides within the lands and territory involved in
the action to conform to the slopes and conditions indicated
above wherever Walker’s operations had disturbed the sur-
face to increase the pitch of the slope to a steeper uniform
slope than two to one measured from the outer edge of the
City’s right of way, which outer edge of said right of way,
on the ground is a point vertically below a point 33 feet

—— St

on a horizontal plane out from and at right angles to the
center line of the conduit.

The Judgment contains some minor limited allowable de-
partures not pertinent to our decision except as may be
noted hereinafter. The supplemental order and judgment,
entered December 10, 1949 adjudged that the City needed’
and therefore had over Section 25, a right of way for its
conduit, 66 feet wide, 33 feet on each side of the center line
of the conduit. The grant of right of way over Section 25
did not define the width of the right of way, nor the center
line thereof.

Walker’s appeal presents the following questions:

1. Did the court err in adjudging that the City owns
and holds a right of way over Section 25, of a minimum
width of 33 feet on each side of the center line of the con-
duit as constructed across Section 25, T. 2 So, R.1E., S.
L.B.& M.?

2. Does the evidence support Finding of Fact No. 2
that the conduit is constructed and operated along the
center of a right of way 66 feet?

8. Was the court in error in adjudging the City entitled
to have the hillside maintained, at a slope, not only safe
for the conduit, but also safe for the maintenance of the
right of way?

4, Are the provisions of paragraphs 1 and 2 of the
judgment dated September 1, 1949 erroneous in prohibit-
ing Walker from removing sand, gravel, rocks, etc. from
the City’s right of way, and requiring Walker to restore
the places on the right of way from which soil, gravel, etc.
have been removed by Walker?

5. Should the City be required to mark and stake upon
the ground the west boundary line of its right of way; and
to make and file cross-section surveys of Walker’s land

BS

below the conduit, for guidance of Walker as to how far he
can go in excavating and removing soil, etc?

We note them seriatim:

1. This question does not involve the lands or right of
way in Section 24. Admittedly the right of way over the
lands in Section 24 is 66 feet wide, and the center
line thereof is fixed by a starting point, directions [jl
and distances in the deed creating the easement. The
deed creating the easement over Section 25, however, does
not specifically fix the location nor width of the easement.
The grant is of:

“a, right of way and easement for all reservoirs, dams, ditches,
conduits, pole lines and appliances and utilities connected therewith
to be constructed by the City wherever these may be located now or
hereafter within lands owned by” the grantor in Section 25, T. 2 S.,
R15, 8. L. M. (Italics ours)

Such grant constitutes a “floating” or “roving” easement,
the location of which may be fixed by agreement of the
parties, by the use of a particular way by the grantee with
the acquiescence of the grantor for a considerable period
of time, or by one party in whom the grant vests the right
of selection or the right to fix the grant, or where the rule
of necessity determines the location because any other place
would annul, ruin, or militate against the grant. (a) In
the instant case, the location or site of the right of way
is settled, by selection of locations by the City as provided
in the deed, and also by the long lapse (since 1906) since
construction of the conduit without objections.

The extent or width of the easement, being unfixed by
the grant, must be determined by the purposes of the grant
and the requirements for a safe, proper, reasonable and
convenient enjoyment thereof. (b) It must be a
suitable and convenient way, and afford necessary [i
ingress and egress, and such uses as are reasonably
sufficient for accomplishment of the objects of the grant.
(ce) Such secondary easements include the right to main-

Pe
tain and repair the conduit, and the right to go upon the
lands reasonably necessary to enable the City to construct,
repair, maintain and assure the City the efficient use of
the conduit in conducting its water without unnecessary
loss thereof by seepage, evaporation or otherwise. (d) The
easement includes not only the right to construct and main-
tain the conduit, but also the banks at the sides to prevent
uncovering of the conduit, pipe, cracking thereof, and ero-
sion of soil that might endanger or put added strains upon
the conduit, and to restore any soil beside, along, or upon
the conduit, that may have been carried away by storm,
wind, snow, slides, etc. This includes the right to go upon
the lands with animals, vehicles and machinery that may
be reasonably necessary for such purpose, and to use the
adjacent soil for this purpose if the repairs cannot be made.
in any other way. (e) The easement carries with it so much
of grantor’s land on each side of the conduit as may be
reasonably necessary for the purposes of maintenance, re-
pair, and enjoyment, doing no more injury than is neces- -
sary to insure enjoyment of the easement. By the same
token, it must follow that the servient tenement cannot so
exercise or use its rights in the land as to destroy, hamper,
interefere with, lessen, burden or endanger the dominant
tenement or right or privileges incident thereto or neces-
sary to the full enjoyment thereof. Big Cottonwood Tanner
Ditch Co. V. Moyle, 109 Utah 218, 174 P. 2d 148, 172 A. L.
R. 175. .

It is argued that the trial court should have, and did not,
determine the exact width of the right of way over the
lands in Section 25; that instead the court just found

“that the plaintiff [City] requires a minimum right of way and ease-
ment of 88 feet on each side of the center line of said conduit as
constructed for the proper maintenance, repair and replacement of
said conduit.”

This right of way, a “roving easement,” by the nature of
the grant creating it had such width as was reasonably nec-

“ee

essary for the construction, use, repair, maintenance, re-
placement and reasonable enjoyment of the conduit. Since
the width was not specified in the deed, the court was under
the necessity of determining what width was reasonably
necessary for those purposes. The court determined that
33 feet on each side of the center line of the conduit was
reasonably necessary. This is in effect a finding that the
right of way the City acquired by the deed was 66 feet
wide, 33 feet on each side of the center line of the conduit
as now constructed. Having so determined it follows as of
course that the City owns and holds such an easement.
Dealing here with “floating easements,” which are fixed
and determined by the extents and limitations required for
the proper use and enjoyment of the easement, any argu-
ment as to the meaning of the words—requires and owner-
ship—is specious. The finding that the City is the owner
and holder of a right of way, is the equivalent of a finding
that the City has a right of way.

2. The next question is: Does the evidence support or
sustain the court’s finding that the exercise of the right
of way granted requires an easement of 38 feet over the
Jands bordering the lower side of the conduit, and
measured from the center line thereof? As pointed | |
out supra, the grant of a right of way where no
width is fixed in the deed, as a matter of law creates an
easement of such width as is reasonably necessary for full
enjoyment of the easement granted. Without detailing the
evidence, the City Engineer, the assistant City Engineer,
both of whom had been familiar with the area for many
years, and Dr. Marsell, a professor of geology at the Uni-
versity of Utah and a licensed engineer who had studied
the district for 14 years and for three years had been con-
ducting a detailed survey of the area, including the mater-
ials forming the area, and the force and rate of erosive
forces for the U. S. Geological Survey, all testified, with
reference to numerous diagrams, graphs and pictures, that
a strip of land, or berm, at least 33 feet wide on each side

a
of the center line of the conduit, was necessary and essen-
tial to protect the conduit and enable the City to repair,
maintain, preserve, and when necessary reconstruct the
conduit; and that any narrow area, would in their opinion
not afford sufficient support and protection for the conduit.
The assistant County Engineer, a witness for Walker and
the County as intervenor, while favoring a 11% to 1, instead
of a 2 to 1 slope, testified that the City should have a berm
83 feet wide at the conduit, which should consist of the
natural ground in its natural condition. Dr. Hintze, a
former professor of geology at the University, in testifying
to slopes of safety, stated that he assumed the City had a
right of way, so it could build a road, and could bring in
materials for maintenance and repair work which would
be necessary. There is definite evidence from which the
court could conclude that an easement 33 feet wide on each
side of the conduit was reasonably necessary for the proper
maintenance, repair, replacement and enjoyment of the
right of way.

8. The court found and determined that to assure the
safety of the conduit it was necessary to maintain from
and below the conduit a uniform slope of the hillside, not
steeper than 2 foot horizontal to 1 foot vertical,
measured from a point 2 feet vertically above the [ql
top of the conduit on its lower or west side down to
the Wasatch Boulevard; and that to. maintain that part of
the right of way on the lower or west side of conduit in a
condition where it could be used by the City in maintaining
and repairing the conduit, it would be necessary to maintain
a uniform slope of the hillside down to the Wasatch Boule-
vard, not steeper than 2 foot horizontal to 1 foot vertical
measured from the edge of the right of way, which is found
to be that line on the surface of the ground 33 feet out
horizontally and at a right angle from the center of the
conduit; if said slopes are denuded of their natural mantle
of shrubs, vegetation and rocks. If the slope of safety of
the right of way is dressed evenly and planted to shrubs

.

and vegetation native to the hillside area, such slope of
safety may be steepened to a ratio of 1 to 1, from the lower
side of the right of way down to the Wasatch Boulevard
and enjoined Walker from removing materials which would
steepen either of those slopes.

Walker contends that the court could determine and fix
only the slope of safety for the conduit so as to limit
Walker’s excavations. The point urged is that the right of
way was only for a water conduit and limited to the uses
and extent thereof, and so the City is entitled to support
for the conduit only.

We have already held that the easement included a strip
of land of sufficiently wide area to enable the City to main-
tain, repair, reconstruct the conduit, and to go upon the
ground as a roadway with vehicles, machinery and mater-
ials necessary for such purposes, to make and keep the right
of way and the conduit effective and of value. We have
upheld the court’s determination of the width thereof.- To
hold that Walker could remove all the soil and material of
the 33 feet of the right of way lying to the west of the
conduit, and over or above the slope of safety of the con-
duit, would be to eliminate and destroy completely the right
or ability of the City to come up or over any lands on the
west or lower side of the conduit. To deny the right of
lateral support for a right of way, and especially on a. hill-
side, is to seriously hamper and endanger, if not to com-
petely destroy the easement. A right of way over land
which may be completely destroyed by the servient tene-
ment, would be little more than a license at will. The right
of lateral support exists for an easement as well as. for
ownership or for any other interests or uses. Village of
Haverstraw vy. Eckerson, Sup., 118 N. Y. S. 337, affirmed
on appeal, 192 N. Y. 54, 84 N ©. 578, 20 L. R. A, N.S.
287; City of Troy Vv. Murray, 128 Misc. 419, 219 N. ¥. S.
681.

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4, Since the slope of safety of the right of way has been
determined and defined, any removal of material which
goes through or under that slope of safety presumptively
endangers the City’s easement and impairs its use-
fulness and existence. Since such acts lessen or J
perhaps destroy the easement, the same should be
enjoined. Since the removal of material which has occurred
within the prohibited area constitutes a danger or risk to
the safety, use or existence and enjoyment of the right of
way, the risk should be eliminated by repair of the damage
done. As quoted in Walker’s brief from City of Pasadena
v. California-Michigan Land & Water Co., 17 Cal. 2d 576,
110 P. 2d 988, 985, 1838 A. L. R., 1186,

“Those interests expressed in the grant and those necessarily inci-
dent thereto pass from the owner of the fee.” (Emphasis supplied.)

Can it be doubted that the land occupied by a conduit laid
over a sand gravel hillside carrying the culinary water for
a considerable portion of the residents of the City neces-
sarily requires lateral support? Again in the same deci-
sion we read,

“Whether a particular use of the land by the servient owner
* * * is an unreasonable interference is a question of fact for
the jury.”

In the instant case, the court sitting as a jury determined
the question adverse to Walker. In Big Cottonwood Tanner
Ditch Co. v. Moyle, 109 Utah 218, 174 P. 2d 148, 158, 172
A. L. R. 175, this court said:

“Bach owner must exercise his right so as not unreasonably to
interfere with the other.”

Can it be said that removal of lateral support from the
lower side of a water conduit crossing a sand and gravel
hillside may not be an unreasonable interference? In Stevens
v. Bird-Jex Co., 81 Utah 355, 18 P. 2d 292, 294, this court
said:

a;

“The court will look to the circumstances attending the transaction,
the situation of the parties, the state of the thing granted, and the
object to be attained, to ascertain and give effect to the intention of
the parties”

and again, the use of the property by the owner of the
servient estate
“must not be such as to impair the enjoyment of the easement by

the owner of the dominant estate, or subject him to extra expense
in keeping it in repair.”

Can it be doubted that removal of soil and material from
the right of way on the side of the hill below the conduit
might endanger the conduit, and increase the expenses of
maintenance and repair? A very fine discussion of many
principles involved in this case, and expounding the point
hereunder before us, is found in Ladden v. Atkeson, 112
Mont. 302, 116 P. 2d 881. See also 17, Am. Jur., Sec. 108,
p. 1004; Jones on Easements, Sec. 814, p. 655, also Sec. 820,
p. 659; Yellowstone Valley Co. v. Associated Mortgage In-
vestors, 88 Mont. 73, 290 P. 255, 70 A. L. R. 1002; 28 C. J.
S., Easements, § 91, page 771.

In this connection it is contended that there is no evi-
dence that the removal of soil such as the court prohibited
would imperil the conduit. No useful purpose would be
subserved by setting all the evidence or even the
gist thereof. We shall, however, advert briefly to ||
the testimony of Dr. R. E. Marsell, geologist at the
University of Utah, who made a detailed study of the area
during the winters of 1948 and through 1949. He took ecol-
ored slides which were exhibited to the court through a
projector. The explanation of these sides covers some 25
pages of the record (304,329). The professor showed that
the soil removals at points came within about eight feet
of the center line conduit; that between the fall of 1948 and
April 1949, the rim left by excavations by Walker had
receded up the hill 12 feet or one-fifth of the distance to
the conduit. He further testified that removal of the pro-

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tective mantle of vegetation and a long slow period of lime
cementation, perhaps a hundred years or more in creation
opened up porous material for accumulation of moisture
would tend to cause the banks to slough off and collapse
and thus increase faster erosion on the right of way itself.
(Record, pp. 317-326.) The conclusions of the trial court
on these questions are amply sustained by the evidence.

5. We find’no merit in Walker’s contention that the
court should require the City to make a survey or aid in
making a survey of boundary line of the right of way on
the side nearest Wasatch Boulevard and marking the
same upon the ground, and to make and file cross- |_|
section surveys. But we think the court should in
its findings or its judgment have determined in directions
and distances the location of the center line of the conduit
over Section 25 from its beginning to the junction with the
line defining the center of the conduit or right of way over
Section 24. We understand the court had that information
before it (1) in Exhibit J, but nowhere in the findings nor
judgment is even Exhibit J referred to or made a part of
the findings or decree. The court merely found the City
had a right of way 38 feet on each side of the center of the
conduit as now constructed. That is about the same as say-
ing the City has an easement where it has an easement.
Judgments and decrees affecting real estate as this does,
are not temporary or fleeting things. They stand as inci-
dents of the land as long as the land itself shall exist. Even
though the conduit should be destroyed, the easement would
still exist and be subject to use. Now while the matter was
and is before the court, it seems inescapable that the center
line of the easement recognized and declared should be
defined by the court. The findings should therefore be
amended to define the center line of the conduit as it ex-
tends over the land in Section 25.

We see no necessity for discussing any other matters
argued in the briefs.

The findings should be amended to conform to this opin-
ion.

The case is remanded to the trial court with directions
to amend the findings and decree in accordance with the
views expressed herein and as so amended the judgment
and decree are affirmed. Costs to respondent.

WOLFE, C. J., and McDONOUGH, CROCKETT and
WADE, JJ., concur.

HENRIOD, J., having disqualified himself did not par-
ticipate herein.

HAWKINS v. PERRY, et al.
No. 7786. Decided February 11, 1958, (258 P. 2d 872.)

See 65 C. J., Trusts, see. 72. Parol agreement to buy land for
another as creating constructive trust. 5 Am. Jur., Trusts, sec. 236;
185 A. L. R, 232.

Earl D. Tanner, Salt Lake City, for appellant.

Raymond R. Brady, Lothaire R. Rich and Faux, Rich &
Kirton, Salt Lake City, for respondent.

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CROCKETT, Justice.

This appeal challenges a decree impressing a trust upon
realty in favor of the plaintiff.

In July 1943 LeRoy Hawkins, then a boy of 16, had been
working and had saved $800. He was considering buying
a car, but talked the matter over with defendant Alfred T.
Perry, who was a minister and the plaintiff’s uncle. The
latter advised him that it would be better to put his money
in a certain house he knew was for sale, which could be
used as a home and a part of which could be rented. After
considering it for several days, the plaintiff told Mr. Perry
that he would accept the proposal. Hawkins turned the
money over to Perry, the latter promising that the prop-
erty would be taken in his (Perry’s) name and that he
would transfer it to Hawkins when he became of age.

Thereafter, July 15, 1948, Perry entered into a contract
to purchase the home for $4200; the terms were $300 in

cash and $100 per month until a $400 note was paid off,
$60 going on the note and $40 on the contract, and there-
after $40 per month until paid in full.

From anything that appears, the. project of Perry and
Hawkins would have worked out as intended except for the
unforeseen and unplanned for intervention of a species of
domestic difficulty all too common in our society, a divorce
between Mr. and Mrs. Perry, and the further fact that when
Perry made the contract, instead of taking the property in
his own name as he had agreed, the contract was made out
to Perry and his then wife, defendant Lorene Perry, as
joint tenant purchasers.

Following the purchase, the Perrys and shortly there-
after the plaintiff and his brother moved into the house.
The Perrys stayed there only a few months (until January,
1944) when Mrs. Perry and the children joined Mr. Perry
in Oregon where he had preceded them. The plaintiff has
continued to live in the house ever since; he has collected

-. Ei
the rents, made the monthly payments on the contract, the

utilities and has generally assumed responsibility for the
house.

At the time divorce troubles beset the Perrys (1950),
Mrs. Perry made a demand on Hawkins concerning owner-
ship of the property. The divorce was granted in March,
1950; the decree awarded Mrs. Perry certain alimony and
“all of the right, title and interest” of Perry in the prop-
erty. As a result of her assertion of claims to the property
plaintiff brought this suit. Mrs. A. R. Seriever, assignee
of the seller, was later joined as a defendant.

The trial court found that Perry purchased the property
‘as trustee for plaintiff. He did, however, hold that Hawkins
should reimburse Mrs. Perry $400 allegedly paid by the
Perrys and gave her a lien against Hawkins’ interest for
that amount. Mrs. Perry, the appellant, assails the finding
of the existence of the trust; plaintiff (respondent) cross
appeals charging error in the imposition of the $400 lien.

In considering whether there was sufficient basis to
impress a trust on the property in favor of the plaintiff,
a problem of primary concern is appellant’s charge that
the trial court erroneously admitted important evidence
relating to that issue. Over the objection that their testi-
mony was incompetent and hearsay, witnesses were allowed
to testify hat they were present at the time Hawkins turned
the down payment money over to Mr. Perry, and that they
heard the latter promise that the property would be taken
in Perry’s name until Hawkins became of age at which
time it would be turned over to him. Appellant Lorene
Perry argues that because she was not present and in no
way participated in this conversation, it is hearsay and
incompetent as to her.

If this evidence were eliminated it would indeed leave a
hiatus in plaintiff’s case which would render the judgment
unsupportable.

i

The rationale of the hearsay rule is given us by
Dean Wigmore:

“The Hearsay rule, as accepted in our law, signifies a rule rejecting
assertions, offered testimonially which have not been in some way
subjected to the test of cross-examination, * * #71

But he also notes:

“Where the utterance of specific words is itself a part of the
details of the issue under the substantive law and the pleadings,
their utterance may be proved without violation of the Hearsay rule,
because they are not offered to evidence the truth of the matter that
may be asserted therein.”

Any title which Lorene Perry could have acquired in this
property, either by being named as joint tenant purchaser
in the contract or by the divorce decree awarding her
Perry’s interest, must be derived through him. Thus
his acts in connection with the acquisition of the I |
property are binding’on her; she cannot reap the
benefit of the favorable aspects of his conduct without
being burdened by that which is unfavorable. Perry’s state-
ments at the time of the transaction were not declarations
as to some antecedent happening which the percipient wit-
nesses are relating to us second-hand. They are the verbal
acts which go to make up the very transaction which is
under scrutiny to determine its legal effect. The fact that
promises and representations were made is materal to the
issues of this action; they do not evidence “the truth of the
matter * * * asserted therein * * *,” at least in
the sense that Wigmore uses that phrase. The witnesses
to the fact that such representations to Hawkins did occur

14 Wigmore on Evidence (1940) Sec. 1362, p. 3.

26 Wigmore on Evidence (1940) Sec. 1770, p. 185; See Parry v.
Harris, 98 Utah 317, 72 P. 2d 1044; State v. Corbin, 117 W. Va. 241,
186 S. E. 179; see Golden v. American Keene Cement & Plaster Co.,
98 Utah 28, 95 P. 2d 755.

: (zz

were subject to cross examination. The trial court conrectly
admitted their testimony in evidence.*

But defendant further avers that even if the fidence
be competent, yet there cannot be made out a trust in favor
of the plaintiff because, there being admittedly no formal
express trust, the facts fit neither a resulting nor ‘a con-
structive trust. A view of the distinction between the latter
two is helpful. Scott on Trusts says :*

“The constructive trust * * * is to be distinguished from a
resulting trust. Where A’s money is used by B with A’s consent in
purchasing property in the name of B, a resulting trust arises in
favor of A. Where A’s money is used by B without A’s consent in
purchasing property in B’s name, B holds the property upon a con-
structive trust for A. In the former case, the resulting trust arises
because of the presumed intention of the parties. In the latter case,
the constructive trust is imposed upon B to prevent his unjust en-
richment.”

Concerning a resulting trust this court has quoted
as the rule the following words from the Nebraska | |
case of Bailey v. Dobbins :*

“ ‘Generally speaking, where the purchase money of land is paid
by one person, and the title is taken in the name of another, the
party taking the title is presumed to hold it in trust for him who pays
the purchase price The reason given for this rule is that the party
who pays the money is presumed to intend to become the owner of
the property, and the beneficial title follows such intention.’ ”

Under the arrangement as hereinabove outlined, Hawkins
having consented that Perry use Hawkins’ money to pur-
chase the property in Perry’s name, the pattern necessary
to constitute a resulting trust is made out and so far as
Perry himself is concerned, the matter could be simply
disposed of.

3See 2 Bogert on Trusts (1985) Sec. 454, p. 1862.

48 Scott on Trusts (1939) Sec. 508.1, p. 2487, see Secs. 440.1 &
462.1. See Restatement of Restitution (1987) Sec. 160(b).

567 Neb. 548, 550, 98 N. W. 687; quoted in Wheelwright v. Roman,
50 Utah 10, 19, 165 P 513, 516.

But the fact that Mrs. Perry’s name was added as a co-
purchaser, although Hawkins consented only that the prop-
erty be put in Perry’s name, and her acquisition through
the divorce decree of any interest Perry had in it, coupled
with her assertion of ownership against the plaintiff, create
a situation the overall effect of which is to constitute a
breach of Perry’s duty to convey the realty to Hawkins. It
is therefore proper to consider the case under a construc-
tive trust theory.

Equity imposes a constructive trust to prevent one from
unjustly profiting through fraud or the violation
of a duty imposed under a fiduciary or confiden- | |
tial relationship. The Utah decision of Chadwick v.
Arnold® declares

“» * % that a trust ex maleficio [constructive trust] arises
whenever a person acquires the legal title to property of another by
means of an intentional false or fraudulent verbal promise to hold the
same for a certain purpose, and, having thus obtained the title, retains
and claims the property as his own”

It is now well recognized that actual fraud is not neces-
sary, but may be presumed where there is a relationship
of confidence between the parties to a transaction and there
are

“other circumstances tending to show that some advantage had been
taken by the dominant party with a consequent abuse of confidence.”?

In Haws v. Jensen, we wrote :*

“A constructive trust will be imposed even though at the time
of the transfer the transferee intended to perform the agreement
and even though he was not guilty of undue influence in procuring

634 Utah 48, 56, 95 P. 527, 530.

"Renshaw v. Tracy Loan & Trust Co., 87 Utah 364, 367, 49 PB. 2d
408, 404, 100 A. L. R. 872.

8116 Utah 212, 209 P. 2d 229, 282, See Lawley v. Hickenlooper, 61
Utah 298, 806, 212 P. 526; Restatement of Restitution (1987) Sec.
182; 8 Bogert on Trusts (1946) Sec, 496.

—

the conveyance. The abuse of the confidential relation consists merely
in the failure of the transferee to perform his promise.”

To this may be added, the confidential relation can also be
abused by the promisor’s allowing himself to get into a
position where he cannot perform his promise.

Appellant particularly imputes error in the trial court’s
determination that there was a trust, asserting the evidence
does not establish a fiduciary or confidential relationship
between Perry and Hawkins. Such relationship need
not necessarily be of a formal nature. Whether the | |
status fulfils the pattern of some such label as “fi-
duciary” or “confidential” is not important; the superiority
of one party and the dependence of the other and his trust
and reliance in the former are the important factors.°
Bogert states this concept well :°

“Tf by reason of kinship, business association, disparity in age, or
physica] or mental condition or other reason, * * * [one party]
is in an especially intimate position with regard to the [other], and
the latter reposes a high degree of trust and confidence in the former,
the court may find that the relationship is technically ‘confidential.’ ”

At the time Hawkins gave Perry the money the former
was a boy of 16; he was acting under the advice of
Mr. Perry, who was an older man, his relative, and I |
a minister of the gospel. These circumstances satisfy
the requirement that a confidential relationship exist as a
foundation for the imposition of a constructive trust as
decreed by the trial court.

We are next confronted with the contention that even
if Perry’s interest is burdened with the trust, Mrs. Perry,
as co-purchaser, acquired in her own right an interest in

See Renshaw v. Tracy Loan & Trust Co., 87 Utah 364, 49 P. 2d
408, 100 A. L, R. 872; Newell v. Halloran, 68 Utah 407, 250 P. 986;
Renegar v. Bruning, 190 Okl. 40, 128 P. 24 686; 2 Pomeroy, Equity
Jurisprudence (1918) Sec. 956, p. 2040.

103 Bogert on Trusts (1946), Sec. 496, p. 205; also see Sec. 482.

A
the property and that it is not subject to the trust

since she was unaware of the promise to Hawkins. i |
Perry may have purchased the realty for Hawkins’
benefit and in making the contract have followed common
practice by adding his wife’s name as joint tenant co-pur-
chaser, without intending that she have any actual interest
in it, and fully expecting that at the proper time it would
be conveyed to Hawkins; or Perry may have intended to
make her a gift of some interest in the property. In either
event, she could acquire no interest which would be inde-
pendent of the trust in favor of plaintiff, that is, unless
she could show that she was a bona fide purchaser. The
court found that she was not.

The trial court expressly found:

“that defendant Lorene Perry was placed upon the contract as the
wife of Alfred T. Perry, but that she has not paid any consideration
for the privilege of being placed on said contract and that she is not
a bona fide purchaser in due course and is subject to all of the
rights of the plaintiff as the beneficiary of the trust. And, that
neither Lorene Perry nor Alfred T. Perry have any equity in said real
property.”

The lower court could justly and legally regard Lorene
Perry’s own evidence as not inconsistent with the foregoing
finding. Perry himself negotiated the purchase of the house
and the execution of the contract. Her contention that she
was actually a co-purchaser rests upon the fact that her
husband asked her to sign the agreement, which she did,
and her claim that money which helped make some of the
initial payments on the property in controversy came from
a loan he secured from his employer by pledging “the deeds”
to some property then owned by her. Assuming this loan
was made, she admits that it was repaid from her husband’s
wages; his wages also paid any other payments made by
the Perrys. According to Anderson v. Cercone:*

1154 Utah 345, 348, 180 P. 586, 587.

— |

“Property purchased from the * * * [earnings of the husband
where the wife’s contribution was the labor expended in performing
her wifely duties] belongs to the husband, subject only to such inter-
est as the law gives her in the property of her husband. In other
words, her rights in such property are neither more nor less than
they would be if the husband had bought the property with proceeds
derived from his separate estate.”

Under the facts disclosed by the evidence and as herein-
above discussed, we cannot say that the trial court erred
in concluding that Mrs. Perry had no beneficial interest
in the property or that whatever nominal interest she may
have acquired from the appearance of her name on the con-
tract was subject to the trust in favor of the plaintiff.

As the first point of his cross-appeal the plaintiff de-
nounces as error the court’s allowance of an equitable lien
of $400 in favor of defendant Lorene Perry upon Hawkins’
interest. Although it is difficult to verify this exact
figure from the record, there is sufficient basis in | |
the evidence to support the trial court’s finding that
this amount was paid by the Perry’s. With respect to this
aspect of the case he apparently gave credence to the testi-
mony of Mrs. Perry, who is entitled to all the rights of her
husband in the property. She stated that they (the Perrys)
paid the first “five or six payments.” The rental income
was sufficient to take care of the $40 per month, leaving
$60 for them to contribute. Six (months) times $60 equals
$360. Adding to this sum $50 she claims was advanced
out of her own funds, we arrive at a figure within a few
dollars of that fixed by the trial court. Plaintiff, himself,
although claiming to have paid all the $40 payments did not
do so as to all of the $60 ones on the note. Consequently
the finding should not be disturbed.

22See Haws v. Jensen, 116 Utah 212, 209 P. 2d 229; Corey v.
Roberts, 82 Utah 445, 25 P. 2d 940; Lawley v. Hickenlooper, 61 Utah
298, 212 P. 526; Oliver v. Piatt, 8 How. 333, 44 U. 8. 838, 11 L. Ed.
622,

|

The second point on plaintiff's cross-appeal at-
tacks the portion of the judgment awarding $50 at- [x
torney’s fee to defendant Mrs. Scriever, assignee of
the seller. The contract provides:

“The Buyer and Seller each agree that should they default in any
of the covenants and agreements contained herein, to pay all costs
and expenses that may.arise from enforcing this agreement, either
by suit or otherwise, including a reasonable attorney’s fee.”

There was no default of the buyer on the contract; nor
did any aspect of this action require Mrs. Scriever to en-
force her rights under the agreement. The controversy
was between plaintiff and defendant and she was made a
party merely because she is the seller’s assignee. In the
absence of statute, or agreement between the parties, a
litigant cannot be awarded attorney’s fees.* The award
to her was improper and should be vacated. Except for
this minor item, the judgment is

Affirmed. Costs to respondent Hawkins.

WOLFE, C. J., and McDONOUGH, HENRIOD and
WADE, JJ., concur.

188t. Joseph Stock Yards Co. y. Love, 57 Utah 450, 195 P. 305, 25
A. L. R. 569; 14 Am, Jur., Costs Sec. 63.

]

Ex parte SULLIVAN, et al.
No, 7950. Decided February 6, 1958. (253 P. 2d 378.)

iMares v. Hill, 118 Utah 484, 222 P. 2d 811; State v. Braasch,
119 Utah 450, 229 P. 2d 289.

See 39 C. J. S., Habeas Corpus, sec. 100. Denial of right to counsel
as ground for issuance of habeas coruus. 25 Am. Jur., Habeas Corpus,
sec. 49; 146 A. L. R.

A. W. Sandack, A. J. Moll and Reid W. Nielson, Salt Lake
City for appellant.

McDONOUGH, Justice.

Petitioners seek a writ of habeas corpus from this court,
alleging that they are illegally confined in the Utah State
Prison.

Petitioners were found guilty of first degree murder
after a trial in the district court of the Fifth Judicial Dis-

—_ ie
trict of the State of Utah and were thereafter sentenced
to death. They appealed their conviction to this court and
the sentences were upheld, State v. Braasch, 119 Utah 450,
229 P. 2d 289. Petition for rehearing was denied in this
court on June 19, 1951. Thereafter, petitioners filed a peti-
tion for writ of certiorari in the Supreme Court of the
United States on November 16, 1951. Certiorari was denied
by that court on January 7, 1952, 342 U. S. 910, 72 S. Ct.
304, 96 L. Ed. 681. On February 19, 1952, petitioners made
application to this court for a writ of habeas corpus which
on the same date was denied. On February 20, 1952, they
filed a petition for such writ in the United States District
Court, district of Utah. After a hearing, that court on Sep-
tember 24, 1952 handed down an opinion 107 F. Supp. 514
but entered no judgment on the writ, but retained jurisdic-
tion, while giving the petitioners an opportunity to exhaust
their remedies in the State courts.

We address ourselves to the issues which are raised by
their second petition here.

There can be no doubt about the United States District
Court having jurisdiction to issue a writ of habeas corpus
in a case where a person is held in custody by virtue of
conviction in a State court, if questions as to the
validity of his conviction under the Constitution of | |
the United States are raised by the petition. In 1867,
Congress enacted a statute conferring upon the courts of
the United States, and the several judges and justices there-
of, the power to grant writs of habeas corpus in all cases
where a person is allegedly restrained of his liberty in vio-
lation of the Constitution or of a treaty or law of the United
States. See Carfer v. Caldwell, 200 U. S. 293, 26 S. Ct. 264
50 L. Ed. 488. A case particularly pertinent in the present
proceedings is that Frank v. Mangum, 287 U. S. 309, 35 S.
Ct. 582, 588, 59 L. Ed. 969. Therein the United States
Supreme Court, after referring to the enactment of 1867,
said:

“There being no doubt of the authority of the Congress to thus
liberalize the common-law procedure on habeas corpus in order to

|

safeguard the liberty of all persons within the jurisdiction of the
United States against infringement through any violation of the
Constitution or a law or treaty established thereunder, it results that
under the section cited a prisoner in custody pursuant to the final
judgment of a state court of criminal jurisdiction may have a judicial
inquiry in a court of the United States into the very truth and sub-
stance of the causes of his detention, although it may become neces-
sary to look behind and beyond the record of his conviction to a
sufficient extent to test the jurisdiction of the state court to proceed
to judgment against him. Re Cuddy, 181 U. S. 280, 288, 286, 9 S.
Ct. 708, 33 L, Ed, 154, 155, 157; Re Mayfield, 141 U. S, 107, 116, 11
S. Ct. 989, 85 L. Ed. 685, 688; Whitten v. Tomlinson, 160 U. S. 281,
282, 16 S. Ct, 297, 40 L. Ed. 406, 412; Re Watts, 190 U. 8. 1, 35, 23
S. Ct. 718, 47 L, Ed. 988, 944; 14 Am. Crim. Rep. 48.”

Conceding the jurisdiction of the United States District
Court to try the issue raised under the writ of habeas
corpus, we next confront the question as. to whether this
court should, in light of the fact the same matter is pres-
ently being considered by the United States District Court,
entertain the petition; or whether we should deny the issu-
ance of the writ upon the sole ground that another court
of concurrent jurisdiction in the premises has taken jur-
isdiction of the matter and has not yet entered a judgment.
Normally, comity would stay our hand. But the United
States District Court, sustaining a contention made by the
Attorney General of the State of Utah, held that the peti-
tioners had not exhausted their remedies in the state courts;
and this being a condition precedent to the United States
District Court acting in the matter, he advised that they
take steps to exhaust such remedies and if relief were not
thereby secured, he would enter an appropriate judgment
in the proceedings, in the meantime retaining jurisdiction
under the writ. This ruling was made pursuant to Title
28, U. S. C. A. § 2243, which provides that in habeas corpus
the court .

“shall summarily hear and determine the facts, and dispose of the
matter as law and justice require”,

—

and on the authority of Za parte Wells, D. C., 90 F. Supp.
855, and Shipman v. Dupre, 339 U. S. 321, 70 S. Ct. 640,
94 L. Ed. 877.

While we entertain some doubt about the question, we
are not disposed to deny the writ merely upon the ground
that the United States District Court having assumed jur-
isdiction should proceed to determine the question
without further recourse to this court. The Dupre | |
case, supra, was an action for a declaratory judg-
ment presented to a statutory three-judge federal court
wherein the plaintiff asked that a statute of the State of
Souh Carolina be declared in violation of the Constitution
of the United States. The court heard the matter on the
merits and dismissed the complaint. On appeal, the United
States District Court remanded the case with instructions
that the United States District Court retain jurisdiction,
since it did not appear that the courts of South Carolina
had construed the statute involved, in order to give plain-
tiff an opportunity by appropriate proceedings to have the
statute construed by the state courts of South Carolina. Of
course, construction of state statutes is peculiarly a province
of the state courts, and such construction is binding upon
all of the Federal courts. It was therefore peculiarly appro-
priate that a Federal court not take action declaring a state
statute to be either valid or invalid until construction by
the state courts, since subsequent construction by the state
courts might remove any question as to its constitutionality.

In Ex parte Wells, supra, the petitioner, a prisoner in
Folsom Prison, secured a writ of habeas corpus from the
United States District Court of the Northern District of
California, to test the constitutionality of a sentence of
death imposed upon his being convicted of violating a stat-
ute of the State of California. This statute made it a capital
offense for a person undergoing a life sentence to, with
malice aforethought, assault any other person with a dan-
gerous instrumentality with intent to do great bodily harm.
That conviction, like the one here involved, was appealed

|

to the Supreme Court of California and was there upheld.
One of the questions raised on appeal was the constitution-
ality of the statute in question. Under the authority of
previous cases decided by that Supreme Court and under
the reasoning of the court in the case itself, the constitu-
tionality of the act was upheld, People v. Wells, 38 Cal. 2d
330, 202 P. 2d 58. The attack on the constitutionality of
the statute there made was that, as applied to a prisoner
serving an indeterminate sentence of not less than five
years, whose maximum term at the prison had not been
fixed by Adult Authority, the statute deprives such prisoner
of equal protection of the law.

In the United States court, as we read the opinion, it was
not merely the constitutionality of the statute, as construed
by the Supreme Court of California, which was brought
into question, but its application in the particular case. It
was made to appear by evidence adduced at the hearing in
the United States District Court, that the Adult Authority

of California had refrained from fixing any maximum
sentence upon recommendation of the district attorney of
Sacramento County.

Several years prior to the commission of the offense of
which he was found guilty and sentenced to death, the Adult
Authority, while considering the question of whether the
petitioner should be paroled, addressed a letter on the sub-
ject to the district attorney who had prosecuted the case
against petitioner. In reply to that letter, the district at-
torney suggested and recommended that no maximum term
be fixed by the Adult Authority. He gave as his reason for
this recommendation that if no such action were taken the
maximum sentence would be construed to be a life sentence.
He then stated that since the prisoner was a dangerous
character, should be, in the absence of a maximum term
being fixed, commit such an assault as is defined in the
statute under which he was convicted, he would be guilty
of a capital offense. It was under this state of fact that the
United States District Court concluded that the due process

=
clause had been violated. However, since the precise ques-
tion thus raised, had not, in its opinion, been presented to
the Supreme Court of California, the United States court
retained jurisdiction and reserved a final ruling in the mat-
ter until appropriate proceedings could be taken to exhaust
petitioner’s remedy in the state courts. In short, in the
California case it was held by the United States district
judge that while the constitutionality of the statute in ques-
tion as construed by the California courts had theretofore
been ruled upon, the validity of the sentence in the light of
the additional evidence produced before the United States
District Court had not.

Such is not the case here. The question of due process
and the question of the validity of the conviction under the
Constitution and statutes of the State of Utah by virtue
of the fact that petitioners were deprived of counsel
at the preliminary hearing and that they thereafter i
enacted the crime at the scene thereof were fully
considered and discussed by this court in its opinion in the
case of State v. Braasch, supra. Furthermore, we were
again confronted with the question of due process in the
former application for a writ of habeas corpus made to
this court. True, as stated by the United States District
Court, counsel for petitioners in appearing at the hearing
on the former petition for habeas corpus stated that it
was applied for here in order that petitioners might ex-
haust their State remedies before making application to
the Federal court. But that is not to say that the allega-
tions of the petition were not considered by this court. On
the contrary, they were and the court held, and rightly so,
that no question was there presented which had not been
previously decided by this court on the appeal from the
convictions. Thus, 229 P. 2d at page 298 of the opinion, on
the appeal, after citing a number of United States Supreme
Court cases on the question, we, through Mr. Justice Wade,
stated:

“These cases deal with the right of counsel at the trial not with the
right to consult counsel before a defendant may be questioned by

|

police officers. We have found no case which holds that a confession
is not admissible in evidence merely because the defendant was im-
mature and without the advice of counsel, friends or relatives when
it was made and Mares v. Hill, supra [118 Utah 484, 222 P. 2d 811],
considered this very problem and held that those facts did not make
the confession inadmissible in evidence.”

Again at page 294 of 229 P. 2d we stated, in reference to
the failure to provide counsel at the preliminary hearing:

“But under the circumstances of this case such failure did not
constitute prejudicial error. The preliminary hearing is an inquiry
not a trial—it is held in the place of the common law grand jury
where the accused is only present if called as a witness and is never
represented by counselt * * * Had the defendants first made
their confessions at the preliminary hearing without the aid of counsel
the situation might have been different, but at that hearing there
was no new evidence developed, the evidence introduced clearly estab-
lished probable cause to believe defendants guilty of the crime
charged, there is no showing whatever even in the light of the de-
velopments at the trial that an attorney at that hearing could have
aided their cause. The confessions were made prior to that hearing
and contained substantially all the damaging evidence against them
which they disclosed. True, they re-enacted the crime immediately
after that hearing and before counsel was furnished, but they con-
tinued to clear things up for the officers after counsel was furnished.
Since competent counsel was furnished with ample time to prepare
for trial the failure to furnish counsel for this hearing was not
prejudicial to defendants.”

It should further be added that the record made in the
United States District Court which is made a part of the
application for the writ here, does not disclose that any new

1The holding of this court as to the right to counsel before and at
the preliminary hearing is in accord with that of the Court of Appeals
of the Ninth Cireuit where in the case of Price v. Johnston, 1944,
144 F, 2d 260, certiorari denied, 323 U. S. 789, 65 S. Ct. 312, 89 L.
Ed. 629, rehearing denied 323 U. S. 819, 65 S. Ct. 558, 89 L. Ed. 650,
it was held that a prisoner, who was properly arraigned and tried on
indictment by a court having jurisdiction over his person and alleged
offense, was not entitled to discharge from custody on a writ of
habeas corpus on ground that he was denied assistance of counsel at
the time of arrest, immediately thereafter, and when before the
United States Commissioners.

 £[z /n_ =”
or additional information was divulged in the re-enaction

of the crime other than that which was contained in the
prior confessions.

Besides what is said above, there are other compelling

reasons why the petition for a writ of habeas corpus should
be denied. In the first place we have grave doubts that the
testimony given in the United States District Court
by the two condemned men was, in light of the rec- | |
ord made at the murder trial, admissible in evidence.
For while it is true, as noted in the case of Frank v. Mag-
num, supra, that a United States Court may look behind
and beyond the record of a person’s conviction to a suffi-
cient extent to test the jurisdiction of the state court to
proceed to judgment against him, this does not extend to
facts not only outside the record but inconsistent with the
record made in the trial court.

In Riddle v. Dyche, 262 U. S. 338, 48 S. Ct. 555, 556, 67
L. Ed. 1009, the United States Supreme Court, speaking
through Mr. Justice Sutherland, said:

“The power to inquire into facts outside the record, allowed under
some circumstances (In re Mayfield [1891], 141 U. S. 107, 116, 11 S.
Ct. 989, 85 L. Ed, 685 [688]), cannot be extended to such as are
inconsistent with the record.

“The Frank Case [Frank v. Mangum] relied upon by appellant,
does not decide otherwise. ‘The language quoted ([D. C. Ga. 1915]
287 U. S. [809] 881, 85 S. Ct. [582] 589, 59 L. Hd. 969), to the effect
that the court may ‘look behind and beyond the record * * * to
a sufficient extent to test the jurisdiction of the * * * court’
and ‘inquire into jurisdictional facts, whether they appear upon the
record or not, was not meant to abrogate the rule established by
prior decisions that the record may not be contradicted collaterally,
at least where, as here, jurisdiction of the cause or parties is not
involved, and this is demonstrated by the case cited in support of the
statement.”

The evidence given by these applicants in the United
States District Court was inconsistent with, indeed directly
contradictory of that given in the trial court, which bore

Co Ca

on the voluntariness of the confessions received in
evidence, as will appear from what is said herein- t
after. It was likewise inconsistent with the find-

ings made by the trial judge in the State district court on
this issue. It was further inconsistent with the implied
finding of the jury, in the light of the instructions of the
court, with respect to the consideration of the confessions
received in evidence. Surely it was not the intention of
Congress in enacting the Habeas Corpus Act to permit a
retrial in the Federal court of a fundamental issue tried to
a jury under the safeguards of the State and Federal Con-
stitutions in a State court of general jurisdiction. If so, it
was meant to cut through State criminal procedure in such
manner as to accord but limited jurisdiction to state courts
in trying offenses against the sovereignty of the State and
to make of a Federal trial court an appellate tribunal. More
than that, such trial court may do what this court is not
authorized to do on appeal. It may, in effect, set aside a
finding of the trial court supported by uncontradicted evi-
dence,

To express doubt concerning the admissibility of the evi-
dence in question, is not to run counter to Frank v. Magnum,
supra, and the many subsequent cases decided by U. S.
appellate tribunals. In cases where it is alleged that
an apparent waiver of a constitutional right was [ll
induced by coercion, fraud or through ignorance;
where deprivation of the right to counsel at the trial and
in preparation therefor is brought into the issue; where
a plea of guilty is induced by any improper conduct on the
part of the authorities which makes that plea other than
the voluntary and informed act of the accused; where the
very trial itself is fraught with such evidence unfairness
to the accused as to show a violation of his rights; in these
and in other cases, a court in habeas corpus may of course
look beyond the record to determine the truth of those alle-
gations. But this case, in our considered opinion, does not

'

come within the ambit of the cases dealing with such search-
ing inquiry.

But the question of the admissibility of such evidence
aside, to give it credence as a basis for finding lack of due
process, would be to fly in the face of human experience.
At the trial, several witnesses testified in behalf of the
state to the effect that both defendants prior to confessing
were told that they had a right not to make any statement;
that they were told that their statement might be used
against them; that they were again told the same with
respect to signing the confessions after they had been trans-
eribed, They further testified that no coercion of any kind
was employed nor was any promise made to the defendants
to secure the confessions. Neither defendant contradicted
this testimony in any particular, nor was any evidence
adduced contrary thereto. On appeal to this court, addi-
tional counsel were appointed for the condemned men. No-
where in the briefs nor in oral argument was any sugges-
tion made that defendants were not fully informed of their
rights or that any coercion was used upon them. The only
argument made on that phase of the case was that because
the condemned men were young and inexperienced and with-
out friends that the very securing of the confessions from
them was in the nature of coercion. This contention was
rejected by this court, State v. Braasch, supra.

Again, when their present counsel heretofore made ap-
plication to this court in their behalf for a writ of habeas
corpus, no such allegation was contained in the application.
It must be assumed that counsel who represented them on
appeal and on the former petition for habeas corpus con-
sulted with them. And yet, not until more than two years
after the trial of the action was any suggestion made with
respect to their not being informed of their constitutional
rights prior to the confession given in Nevada. But disre-
garding their prior silence, their testimony in and of itself
does not carry conviction. While petitioner Sullivan did
give testimony in the United States District Court relative

A
to not being advised of his constitutional rights not to make
a statement at the time the confessions were secured, never-
theless petitioner Braasch when testifying concerning the
facts surrounding the re-enactment of the crime at Beaver
City, was asked by his counsel,

“Did anyone ever tell you that you had a right not to speak, or
not to reenact the crime, or not to identify these weapons, and that
if you chose to do so that the matter would be—or could be used
against you?”

Answer:
“They told us that about the confessions.”

That petitioners, in their appearance before the United
. States District Court, were able to conjure up facts and cir-
cumstances that had not occurred to their minds before,
or at least which it had not occurred to them to reveal, is
understandable; that we, on the total record, should be ex-

pected to give full credence to their testimony is but a man-
ifestation of that hope which springs eternal in the human
breast. We reject their contention that they were denied
due process. 7

In denying this application, we are fully cognizant of the
fact that this court is as rigidly bound as any Federal court
in the land to guard and protect rights secured by the Con-
stitution of the United States and no less by the Constitu-
tion of the State of Utah. The application for a writ of
habeas corpus is denied.

WOLFE, C. J., and CROCKETT and WADE, JJ., concur.

CROCKETT and WADE, JJ., concur in the opinion of
McDONOUGH, J., and also in the views expressed by
HENRIOD, J.

HENRIOD, Justice (concurring).

Ieoncur. The petition admittedly purports to be bottomed
on evidence adduced incident to a previous petition for writ

—
of habeas corpus filed by defendants in the United States
District Court for Utah, which evidence we believe does
not warrant any change of position by this court. That
court claimed to have, and assumed jurisdiction of the mat-
ter. Such assumption of jurisdiction, we believe, is predic-
able only on the theory that defendants may have been de-
nied constitutional rights under the Fourteenth Amend-
ment to the Constitution of the United States. The United
States District Court heard the evidence presented to it,
and if it had jurisdiction, as it claims, it very well could
have granted or denied the petition. Why it did neither,
but chose to permit this case to find haven again in this
court by way of petition anew, is a matter of conjecture
here and a matter of personal conviction there. In permit-
ting and encouraging its voyage back to the Supreme Court
of Utah, the Federal Court, in a judgment punctuated by
opinion, has intimated strongly that else we do its bidding
wz quite assuredly will, creating the anomaly of two courts
having concomitant jurisdiction, the one to survive a re-
fusal of the other to agree.

The United States District Court may determine the
nature and scope of its own jurisdiction and the matter of
its own responsibility to both the defendants and the citi-
zens of Utah. In so stating, an erroneous public impression,
apparently conceived, gestated, delivered and nurtured by
this case, to the effect that the United States District Court
for Utah is some sort of appellate tribunal to which an ap-
peal can be taken from the Supreme Court of Utah should
be corrected. The Federal District Court has no such jur-
isdiction but is an inferior court in the Federal system,
from which an appeal may be taken to the Circuit and
Supreme Courts of the United States.

The petition and record accompanying it disclose nothing
new of substance that would make imperative any change
in the conclusion that these defendants have been accorded
due process, have had a fair trial under our American and
State systems and have not been denied any constitutional

|

rights under either. Nothing in the record seems to con-
vince that there has evolved anything substantially new
that was not or could not have been presented at the jury
trial, where the defendants, the writer believes, were rep-
resented by able and competent counsel, despite the veiled
innuendo found in the record to the contrary. The judg-
ment and opinion of the United States District Court, made
a part of the record here, seems to accept as gospel the testi-
mony of the defendants, confessed killers, who years after
the admitted homicide, now for the first time testify to
certain purported facts not heretofore divulged, albeit, as
divulged, remain unconvincing as a basis for exculpation
under a claim of denial of due process.

Two learned professors of law, appointed by the United
States District Court, as its friends and advisers, after care-
ful consideration, decided as we do, that defendants had
been accorded due process of law. Apparently the Supreme
Court of the United States also shares our view and that of
the professors, since it refused to review this case on appeal
from the Utah Supreme Court, where the very issue here
—a claimed denial of constitutional rights under the Four-
teenth Amendment, was before it there. It is no answer to
say that in refusing to hear such appeal, the United States
Supreme Court decided nothing by way of affirming our
decision, since that high court treats not lightly the meri-
torious or convincing claim of a citizen of these United
States that he has been denied inalienable and fundamental
human rights guaranteed him under the Constitution. If
defendants’ protestations reasonably had been substantiated
by the record before the United States Supreme Court, or
had indicated even a possible invasion of Constitutional
rights, I believe that high tribunal quickly and quite earn-
estly would have entertained jurisdiction to determine
whether it would grant the relief prayed, else the members
of the court would have treated more lightly the oaths they
took than did they the rights of defendants.

—_ iii

Significant it is that nowhere in this case can be found
an intimation that these defendants ever repudiated their
confessions to the effect that, robbery intended, each de-
liberately fired shots into the body of a respected, law-abid-
ing citizen. It is equally significant that no competent
authority has been cited that, based on the record of this

case, would justify the liberation, by habeas corpus or other-
wise, of these confessed slayers.

We are jealous of the rights of all accused persons, but
we are quite as jealous of the rights of the law-abiding citi-
zen, including the right to be secure in his home and in his
business, free from felonious intrusion by persons armed
and bent on robbery, possessed of a willingness to gain their
ends at the expense of terminating human life in cold blood.

TILLER, et al. v. NORTON, et al.
No. 7770. Decided February 20, 1953. (258 P. 2d 618.)

See 34 C. J. S., Exeeutors and Administrators, sec. 528. Duty of
Executor to locate beneficiaries. 21 Am. Jur., Executors and Ad-
ministrators, sec. 226; 39 A. L. R. 329.

W.D Beatie, Salt Lake City, for appellants.

Shields & Shields, R. Verne McCullough, John D. Rice
and McKay, Burton, McMillan & Richards, Salt Lake City,
for respondents.

HENRIOD, Justice.

Appeal by 2 adult children of Charles Carson, deceased,
from a dismissal of their action against Norton, adminis-
trator, which action attacked the decree of distribution in
which plaintiffs were not included as distributees, and
which action was predicated on the theory that Norton was
guilty of extrinsic fraud by failing to disclose information

——
as to the existence and whereabouts of the plaintiff heirs.

The judgment is affirmed, the parties to bear their own
costs on appeal.

Plaintiffs assign 11 grounds for reversal. We consolidate
and condense them as follows: 1) That the evidence fails
to establish Grace Carson as Charles Carson’s widow; 2)
that Norton conspired with Grace to deceive the court by
failing to disclose information anent the existence and
whereabouts of plaintiffs, thus preventing them from as-
serting claims as heirs; 3) that Norton wilfully failed to
search diligently for the plaintiffs; 4) that no legal notice
was given either to creditors or heirs; and 5) that Norton
converted $300 of estate assets.

The voluminous record contains contradictory but suf-
ficiently satisfactory evidence of marriage to preclude us
from saying that the lower court erred by arbi-
trarily and capriciously finding widowhood, partic- i |
ularly in view of the strong presumption favoring
marriage and negativing concubinage, requiring consider-
ably more convincing evidence to attack than ordinarily is
required.*

We believe the record reflects no conduct amounting to
extrinsic fraud calling for relief. There is not that quality
of clear, convincing evidence required by the au-
thorities proving that Norton, by word or silence, | |
prevented plaintiffs from asserting any claim.2, We
believe that plaintiffs’ burden of establishing extrinsic
fraud was not met, as did the trial court.

A local physician, to protect a $25 claim, petitioned for
and obtained appointment of Tracy-Collins Trust Co. as
special administrator. Grace Carson, claiming as widow,
protested, filed a petition of her own, and asked the ap-
pointment of Norton as general administrator. Tracy-Col-

Un re Pilcher’s Estate, 1948, 114 Utah 72, 197 P. 2d 143.
2U. S. v. Throckmorton, 1890, 98 U. 8. 61, 25 L. Ed. 93.

|
lins administered the estate for more than 8 months and
Norton who finally was appointed general administrator,

administered the estate until it was distributed about 5
months later.

During the time Tracy-Collins handled the estate, several
hearings were had, attended by Norton. After a number
of continuances, granted for the purpose of searching for
plaintiffs, whose possible existence was suggested by frag-
mentary bits of evidence found among Carson’s effects, the
court finally found Grace Carson to be the sole heir. The
trust company, by the Court’s instruction, had conducted
an extensive search by correspondence, although only $25
was allowed for the purpose. A casual reading of the record
impresses us that the trust company performed services of
far greater value than the allowance reflects, pursuing every
possible clue to a dead end. Carson himself had made one
trip to Chicago and South Dakota a year before he died,
in a fruitless search for his children. He also had employed
Barclay & Barclay, lawyers, to conduct what appears to
have been an exhaustive but unsuccessful search, for which
they were paid a substantial fee. Plaintiff’s own able
counsel, then attorney for the trust company, also made an
earnest and diligent effort to locate plaintiffs. Norton made
inquiry of local neighbors and friends of Carson, and called
a relative in Ohio, with no leads.

Difficulty in locating plaintiffs seems to have stemmed,
not from Norton’s fraudulent non-disclosure, but from a
congenital weakness on the part of Carson and his kinfolk
to adopt aliases. In 1899 Carson took a wife as “Tiller.”
By 1910 he was “Swann”, which name accompanied him to
Dakota as a homesteader and to Chicago as a divorcee. Later
he appeared in Salt Lake City with the appellation “Car-
son”, which followed him to the grave in 1948. His son was
a “Swann” in Dakota, but some time after his parents’
estrangement, he assumed the name “Tillier”, closely re-
sembling the old family name of “Tiller”. Carson’s daugh-
ter married one Molinari, divorced him, married one Pelli-

'_ i ___

grini, divorced him and re-adopted the name Molinari. Off
and on over the years she had used the names Allen, Pelli-
grini, Manners, Pelli, Russo, Wood and Gordon.

After 1926 Carson never saw, sought out or heard of his
children, until 1947 when he made a trip East to locate
them. The affection for them which he possessed or lacked
was of reciprocal intensity, since the latter never saw,
sought out, or heard of him, until 1947 when the son in-
quired of a Dakota official if Carson still had property
there, receiving an answer in the negative, and that Car-
son’s whereabouts was unknown.

Under such circumstances, hardly can it be said that a
representative of Carson’s estate easily could have located
the members of this peripatetic, name-changing family.
After the trust company, Barclays, Norton and counsel for
the trust company had searched in vain, and Carson him-
self had made a special trip to find his children, and after
the probate had been continued several times, the estate
finally was distributed to Grace Carson’s executor, Grace
having died during the probate. Norton was beneficiary
under her will, and he petitioned for distribution of Car-
son’s estate only a month after Grace’s death, which infer-
entially might indicate that self-interest could have induced
Norton to withhold information that would assure him of
his good fortune. But such inference would be predicated
upon an assumption of dishonesty which we cannot indulge.

It seems clear that although Norton may not have pos-
sessed the sterling qualities of perseverance possessed by
some, nor the ability or inclination of others to ferret out
aliased heirs, there is no evidence that he failed to
disclose information not already known to the court. I |
It is not beyond reason to believe he may have con-
cluded that if a reputable trust company, its attorney, in-
dependant attorneys, and Carson himself could not locate
the children, there was little else he could do. At least, the
record fails to show that type of non-diligence that would

|

brand Norton with the mark of extrinsic fraud. Further-
more, the authorities impose on an administrator no par-
ticular duty of arduousness in seeking out heirs, but rather
require only that he take possession of the assets, preserve
and account for them, administer them and distribute them
as trustee of the estate® under the supervision and direction
of the court* to those distributees whom the court, at some
time during the administration, has found from the evi-
dence to be entitled thereto.

Counsel for plaintiffs conceded that the probate court in
this case had jurisdiction to determine heirship, and that
if the evidence presented clearly did not establish fraud,
plaintiff’s cause was lost. Under the facts and the authori-
ties we cannot say that the trial court erred in concluding
there was no such fraud, although we are constrained to
believe and to note that the probate well might have been
deferred by the court a little longer in this case in the hope
that what happened would happen,—the appearance of the
children, who became the unwilling victims of a damnum
absque injuria. The rule that leads us rather rarely to such
unhappy result and which makes heirship and entitlement
res judicata, once the court has acquired jurisdiction, fol-
lowed by distribution not vulnerable to attack for fraud,
mistake or the like, is based nevertheless on sound principles
which look to the early settlement of litigation, lest pro-
traction create more frequently for others the very kind
of injustice visited upon the plaintiffs here.°

The question of legal notice to creditors and heirs which
we believe satisfied statutory requirements, needs no treat-

8In re Dryden's Hstate, 1952, 155 Neb. 552, 52 N. W. 2d 787.

4In re Black's Estate, 1923, 30 Wyo. 55, 216 P. 1059; 2 Baneroft’s
Probate Practice, 24 Ed., p. 282, § 834; In re Stevens’ Hstate, 1942,
102 Utah 255, 180 P. 2d 85.

5In re Stevens’ Bstate, supra; Child v. District Court, 1982, 80 Utah
243, 14 P, 2d 1140.

Snyder v. Murdock, 1903, 26 Utah 288, 73 P. 22,

‘_ Ri
ment, since plaintiffs acknowledged the jurisdic-
tion of the court, admitting that upon failure to |
prove extrinsic fraud, their case would fail. The

evidence as to an alleged conversion was conflicting and
such that the trial court’s conclusion is sustainable.

McDONOUGH, CROCKETT and WADE, JJ., concur.

WOLFE, Chief Justice (concurring).

I concur in the finding that the district court, having
jurisdiction of the action for extrinsic fraud, properly dis-
missed that action. I agree with the observation of Mr.
Justice HENRIOD
“that probate well might have been deferred a little longer in this
case in the hope that what happened would happen—the appearance
of the children * * *.”

In a case where it is known that there was a child or
children, a sum equal to their share should have been placed
in savings or in trust with a reliable institution in order
to permit continued search at reasonable expense of their
whereabouts, to be charged against the fund. This is the
English practice. These children not having been heard
from by those who might be expected to hear from them
(which would encompass the father) were subject to the
rebuttable presumption of death. But their children, if
any survived, might have been living and the presumption
that they were dead not indulgeable. While I cannot impute
to Norton or the supposed widow dishonest or ulterior
motives because of the presumption of good faith which
attends them, I incline to the belief that the diligence used
in this case was not reasonably adequate or appropriate to
the occasion or to its importance as advocated in the con-
curring opinion filed in the case of Parker v. Ross, 117 Utah
ANT, 217 P. 2d 373.

I think it unfortunate that these children suffered the
loss of their patrimony to the heirs of a woman in respect

to whom there was doubt as to her marital and widow status
—and this in spite of what seems a tenuous filial devotion
reciprocated by the father. Even under those circumstances
the imagination of the probate court should have been suf-
ficiently awakened to cause him to sense the disappoint-
ment which these children would justly feel upon learning
of the consequences of his too hasty action. Simple and
available administration procedure pending continued
search would have saved them the loss of their property
which furnished a windfall to strangers. Damnum absque
injuria arises here because of the hasty action of the pro-
bate court.

PAULSEN, et al. v. COOMBS, et ux.
No. 7880. Decided February 16, 1958. (258 P. 2d 621.)

See 76 C. J. S., Reformation of Instruments, sec. 84. Ignorance of
facts as ground for reformation of contract. 45 Am. Jur., Reforma-
tion of Instruments, sec. 47; 187 A. L. R. 908.

Stewart, Cannon & Hanson, Don J. Hanson and Ernest
F. Baldwin, Jr., Salt Lake City, for appellants.

Earl P. Staten and Allen H. Tibbals, Salt Lake City, for
respondents.

|

HENRIOD, Justice.

Appeal from a judgment for a balance due on a written
contract for carpenter work. Affirmed, the parties to bear
their own costs on appeal.

Plaintiffs pleaded the contract and defendants counter-
claimed for damages for non-performance, mal-performance
and for certain materials furnished by defendants, which,
under the terms of the contract, plaintiffs were to supply.
By reply, plaintiffs for the first time sought to avoid the
materials clause by asserting it was included by mutual
mistake, asking reformation for that reason. :

Without detailing the voluminous and mostly conflicting
evidence, we conclude that there was sufficient substantial
evidence to support the trial court’s conclusion, the writer,
however, differing from the opinion of Mr. Justice CROCK-
ETT to the effect that there was a mutual mistake as to a
$280.44 item, justifying reformation of the contract pleaded.
All other members of the Court agree with Mr. Justice
CROCKETT as to that item, hence his opinion that the trial
court should be affirmed as to that also is determinative.

The parties read the contract before signing. Its terms
were clear and unambiguous. The contract was pleaded
and relied on in the complaint in its entirety. By answer,
defendants claimed the plaintiffs had not furnished the
materials mentioned in the contract, for cabinet work in
the kitchen, which cabinet fixtures were to be obtained
pre-fabricated. It is significant that the requirement to
furnish materials was incorporated in only one of the para-
graphs of the contract and was applicable only to milled
cabinet work to be milled off the premises. It is not un-
reasonable to assume that plaintiffs, in contracting for an
integrated job, would agree to pay for such materials, even
though defendants did not assert a claim for such materials
until after an argument was precipitated as to who owed
whom what. Nevertheless, the plaintiff who signed the
contract, after having filed a complaint claiming payment

: ze

under the entire contract, when confronted with an offset
for the materials which the contract said he was to furnish,
asserts that he did not notice the word “materials” in the
agreement and therefore seeks to exclude the word, over the
strenuous protest of the defendants,—and succeeds by the
equitable route of reformation in a law action for breach
of contract. Without discussing the propriety of or author-
ity for such procedure, it is difficult to perceive how one
can arrive at the conclusion that there is clear and con-
vineing evidence for the extraordinary relief by way of
reformation, considering the law’s policy to lend dignity to
written instruments and sanctity to the parol evidence rule.
The fact that one is ignorant of the contents of the paper
he signs necessarily does not relieve him of contractual
liability,? and should not do so here. The writer believes
that reformation in such case is to lend undue credence to
one side of a controverted set of facts, and simply ignores
the parol evidence rule.

CROCKETT, Justice (concurring-dissenting).

I concur with the prevailing opinion by Mr. Justice
HENRIOD in affirming the main portions of the judgment
of the trial court. However, I am also inclined to
the view that there is “clear and convincing evi- | |
dence” that there was a mutual mistake with respect
to the item of $280.44 for materials as found by the trial
court and that the judgment should be affirmed in toto.

The only way to evaluate the evidence is to briefly re-
view it. Defendant Kenneth E. Coombs was acting as his
own contractor in building a home. He let a contract to
Paulsen for the carpenter work, which included numerous
separate items. One of these related to cabinet work in
the kitchen, which was described in paragraph 6 of the

1George V. Fritsch Loan & Trust Co., 69 Utah 460, 256 P. 400.
*Williston, Contracts, Rev. Ed., Vol. 1, § 90A, p. 257; Larsen v.
Oregon Short Line Railroad Co., 38 Utah 180, 110 P. 983.

|

written contract. With respect to that paragraph only, the
contract provided that Paulsen should furnish “the labor
and materials.’ (Emphasis added.) The value of such
materials was stipulated to be $280.44.

The trial court concluded that the words “and materials”
were inserted in the contract by inadvertence or mistake
and that Paulsen was not obligated to furnish them. A
survey of all of the evidence seems to indicate quite clearly
that he was right.

As noted in the prevailing opinion, even the defendants
themselves claimed nothing for these materials until after
dispute had arisen concerning major items in the contract.

The only evidence in the record that the parties knew
the words “and materials” were in paragraph 6 and that
the parties intended Paulsen should furnish the material
for the cabinet work was the testimony of the defendant
Kenneth E. Coombs himself. All of the other evidence and
the circumstances shown argue most definitely that the
parties did not know of this provision in the contract and
that they had no such intention at the time the contract
was made.

The foregoing statement is based on the following:

1. The defendants’ original answer filed February 20,
1952 in response to Paulsen’s complaint seeking compensa-
tion for the carpenter work, merely denied that Paulsen
had performed the contract; no specific contention was
made that Paulsen should have furnished materials or that
he had failed to do so; in fact the word “materials” was
not even mentioned.

2. Demand for trial was filed February 20, 1952 and
shortly thereafter a pretrial conference was had at which
there was considerable discussion of the issues of the case
and defendant made no mention that Paulsen either was
supposed to or had failed to furnish such materials.

— ae

8. It was not until just shortly before the trial com-
menced (some uncertainty exists) on April 28, 1952 that
the defendants filed a notice that they would move the
court for permission to amend the answer, adding a set-
off and counterclaim amounting to $3121.18, which in-
cluded this item for materials. Both the court and oppos-
ing counsel expressed surprise at the injection of a coun-
terclaim at that stage of the case, but after considerable
discussion it was agreed that the pleadings would be
amended and the trial go forward as planned.

4. The evidence is uncontradicted that when Coombs
talked to Paulsen, the only subject they discussed and the
only thing Paulsen was asked to bid on was the carpenter
work; there was no discussion whatsoever of the subject
of materials. There was no evidence to refute this; not
even Coombs was willing to say that he ever talked to
Paulsen about furnishing the materials or requested him
to bid on them.

5. After the conversations, Coombs made pencilled notes
concerning the carpenter work; took them to Johnson, the
architect for Coombs, in whose office the agreement was
typed up. In response to the question as to how the phrase
“Jabor and materials” occurred in paragraph 6, Johnson
responded:

“Very likely * * * the stenographer * * * was used to
typing all specifications and contracts from reference to the labor
and materials as a tied-together phrase, as a common phrase”

and further

“Tt [the phrase] appears in the standard forms * * * as pre-
pared in the American Institute of Architects.”

6. When asked if he did not read the contract, Paulsen
stated:

“A. Well I glanced through it but I evidently missed that one
paragraph.” *

es

I concede that reasonable care may have required him to
read it and be charged with knowledge of its contents if
all of the other evidence in this case did not show so con-
clusively the mistake of both parties.

7. Roy Johnson, the architect hired by Coombs, testified
positively that Paulsen was to bid on the labor only. He
stated: “I know that he [Paulson] was not asked to bid on
material.” Johnson further testified that in his opinion it
would not have been possible for Paulsen to make a bid
upon furnishing such materials without a copy of the speci-
fications and also testified “that he never did furnish him
[Paulsen] a copy of the specifications * * *.”

8. It is also undisputed that Paulsen had nothing what-
soever to do with the selection of the materials, nor of the
place they were to be purchased, nor of ordering or paying
for them. Coombs attended to all of this and paid for the
materials without informing Paulsen anything about it,
even as to the price he had paid.

From the foregoing it seems clear beyond doubt that
there was never any intention that Paulsen would furnish
these materials but that after controversy arose concerning
other important matters pertaining to the contract Coombs
discovered the words “and materials” in paragraph 6 and
sought to bind Paulsen to it.

I am entirely in accord with the principle of preserving
the sanctity of written contracts, but this applies only when
the contract represents the intent of the parties. Where
errors occur, clerical, typographical or otherwise,
of course, a contract can be reformed to show the [i
true intent of the parties.’ In order to prove such
mistake and avoid the effects of the written contract, the
evidence must be clear and convincing; that is, it must be

876 C. J. S., Reformation of Instruments, § 25(h).

. EE

such that there is no serious nor substantial doubt what
the true intent is.t

The question of whether evidence is sufficient to be clear
and convincing is primarily for the trial court; his
finding should not be disturbed unless we must say | |
as a matter of law that no one could reasonably find
the evidence to be clear and convincing.*

It thus appears to me that the evidence points inescap-
ably to the fact that the parties did not intend that Paulsen
should furnish these materials and that the trial court was
correct in so concluding. I would affirm the judgment as
it was entered by him.

WOLFE, C. J., and MCDONOUGH and WADE, JJ., con-
cur in the opinion of Mr. Justice HENRIOD, except as
modified by the concurring-dissenting opinion of Mr. Jus-
tice CROCKETT, in which they also concur.

4Greener V. Greener, 116 Utah 571, 212 P, 2d 194; Kirchgestner v.
Denver & R. G. W. R. Co., 118 Utah 37, 238 P. 2d 699.

SNortherest, Inc., v. Walker Bank & Trust Co., 122 Utah 268, 248
P. 2d 692.

In re LYNCH’S ESTATE.
BRENNAN vy. LYNCH.

No. 7951. Decided March 16, 1958. (254 P. 2d 454.)

See 62 C. J., Time, sec. 18. Computation of “month” in construing
judicial proceedings. 58 Am. Jur., Time, sec. 11; 97 A. L, R. 982.

Edward M. Morrissey, Salt Lake City, for appellant.
W. D. Beatie, Salt Lake City, for respondent.

’

PER CURIAM.

Edna Brennan, the above named respondent, petitioned
the court in the above matter for an order directing Mar-
garet M. Lynch, executrix of the above estate, to specifically
perform a contract. Upon the trial the court entered judg-
ment in respondent’s favor, and appellant moved the court
to amend the decree by finding in her favor or to grant a
new trial. This motion was denied on November 22, 1952,
and on December 8, 1952, appellant served on respondent
her notice of appeal but failed to file the same with the
court until December 23, 1952. Respondent moves this court
to dismiss the appeal for lack of jurisdiction, claiming that
the notice was not filed within one month after the motion
to amend was denied.

Rule 78, Utah Rules of Civil Procedure, requires an ap-
peal to be taken within one month from the entry of the
judgment appealed from, that the time for appeal com-
mences to run and is to be computed from the entry of an
order granting or denying a motion to amend the judgment
or a motion for a new trial, and that a party may appeal
from a judgment by filing with the district court a notice
of appeal. Rule 6, U. R. C P., provides that in computing
any period of time the day of the act or event after which
the designated act or period begins to run is not included.

Appellant contends that by excluding November 22, the
day of the act or event from which the period of one month
commences to run, her time commences to run on Novem-
ber 28 and that one month after November 23 gives her all
day of December 23, the day when the notice of appeal was
filed. With this reasoning we do not agree.

One month is a calendar month not a lunar month of 28
days, nor is it necessarily 30 days. Such a month commences
at the beginning of the day of the month on which it starts
and ends at the expiration of the day before the same
day of the next month. Thus a month which starts [jl
with the beginning of the first day of a calendar

|

month would end at the end of the last day of such month,
and not at the last end of the first day of the next month.
If the month in question commenced on a day other than
the first day of such month, such as at the beginning of the
28rd day of such month, it would end at the expiration of
the 22nd day of the next month and not at the expiration
of the 23rd day of the next month, which would be the
beginning of another month. In the present case we exclude
from our calculation the day of the act or event after which
the designated period of time begins to run, which is No-
vember 22, the day on which the motion was overruled, and
start counting from the beginning of the 23rd day of that
month; from that time one month would end at the expira-
tion of the 22nd day of December, or just before the 23rd
commenced, which marked the beginning of another month.
To hold in accordance with appellant’s argument would
require an overlapping of one day into the next month, and
a longer period or greater number of days than the month
in question contains.

Appellant cites 52 Am. Jur. 337, “time”, Section 11,
Bertwell v. Haines, 10 Okl. 469, 63 P. 702; Warshaw v.
De Mayo, N. J. Cir. Ct, 145 A. 738. Those cases do not
sustain his contention. The American Jurisprudence cita-
tion merely holds that usually the United States Courts hold
that a month is a calendar month. The Bertwell case holds
that July 22 is within three months after April 22, the
same as we hold and the Warshaw case holds that July 23
is not within four months after March 23, but is the begin-
ning of the fifth month. We have been referred to and
have found no case which construes a similar statute in
such a manner as to be of aid to appellant and we do not
think such construction would be reasonable. Motion to
dismiss appeal granted.

BIGLER, et al. v. GREENWOOD, et al.
No. 7915. Decided March 10, 1958. (254 P. 2d 848.)

See 63 C. J. S., Municipal Corporations, sec. 1399, Validity of
Assessment for drainage improvement. 17 Am. Jur., Drains and
Sewers, sec. 67; 2 A. L. R. 625.

William S. Frank, Salt Lake City, for plaintiffs.

Alvin I. Smith and Herbert F. Smart, Salt Lake City, for
involuntary party plaintiff.

Frank E. Moss, County Atty., W. T. Thurman and Ed-
ward W. Clyde, Salt Lake City, for defendants.

CROCKETT, Justice.

This is a proceeding for an extraordinary writ to prohibit
defendants as Commissioners of Salt Lake County and as
Directors of the Salt Lake City Suburban Sewer District
from going forward with a project which was initiated to
create, finance, construct and operate a sewer system for a
certain designated area lying south of Salt Lake City in
Salt Lake County.

The parties do not dispute that due to the rapid growth
and development in the area, particularly during World
War II and since, existing methods of private sewage dis-
posal, cesspools, septic tanks and “outside plumbing,” are
a menace to health so that it is highly desirable that an

’

efficient sanitary system for the disposal of sewage be cre-
ated. Joining defendants in this objective, plaintiffs state
in their brief,

“{t is our earnest belief that a sewer project in the area concerned
should be constructed at the earliest possible date.”

They aver that they are not trying to prevent nor do they
desire to delay construction of the sewer, but contend that
the the plan pursued to date arbitrarily imposes undue
burdens upon them as property holders within the district
and that it is without authority of law.

Defendants have proceeding under Sections 1 and 8 of
Chapter 6a, Title 19, U. C. A. 19431, to set up a sewer dis-
trict, construction project and financing plan. This was
initiated by a series of resolutions, October 9, 1946 and
March 18, 1947.

Various impedimenta were encountered, the amount of
the bonds to be issued was changed several times, and the
interest rate was also increased. As a result of much con-
sideration and discussion concerning the entire proposal,
on April 5, 1948 the defendant Commission adopted a reso-
lution which recited:

“All bids for the construction * * * being excessive, and num-
erous objections * * * under the proposed method of financing
thereof have been made * * * the Board of County Commission-
ers deem in [sic] inadvisable * * * to proceed * * *”

and thereupon duly resolved to abandon the project and
rescinded the resolution of March 18, 1947.

No further action was taken until four years later. In
the spring of 1952, the defendants caused a further study
to be made which led to the next significant action. On
October 6, 1952 defendants moved to reactivate the project

1Now Sections 1 and 8, Ch. 7, Title 17, U. C. A. 1953.

i.
by adopting a further resolution reciting that the action of
April 5, 1948

“4s hereby declared to have been adopted by mistake and is hereby
expressly repealed * * *”

and that the proceedings of March 18, 1947

“are hereby approved, ratified and declared to be * * * in full
force * * * in all respects as though said resolution of April 5,.
1948 had never been adopted”

and proposed to go forward with the program, the issuance
of bonds, the letting of a contract for construction, all of
which was interrupted and is held in abeyance by this pro-
ceeding.

In assailing the legality of the defendants’ proceedings,
plaintiffs contend:

1. That when the last mentioned resolution was adopted
October 6, 1952, Chapter 6a, Title 19, U. C. A. 1948, under
which defendants claim authority for their program, had
been rendered null by implication or replacement because
the Legislature had comprehensively covered the field of
the creation and operation of sewer districts in later en-
actments.*

2. That even if the foregoing contentions were not so,
Section 8 of said chapter which relates to the financing -
program, by its express language, is limited to projects
«es * * under the laws of the United States relating
thereto,” i. e. projects, under Federal financing, which
this admittedly is not.

8. That certain of its terms are so vague as to be in-
comprehensible and therefore incapable of interpretation
and application.

*Laws of Utah 1947, Ch. 25; Laws of Utah 1949, Ch. 24, as
amended by Laws of Utah 1951, Ch. 32, 17-6-1 to 19, U. C. A. 1953.

i -_

4, That it violates the constitutional prohibition against
creating a “special commission” which would interfere with
municipal functions.*

5. That the proposed indebtedness (eight million dol-
lars) exceeds the constitutional debt limit of 2% of the
assessed valuation of taxable property.‘

6. That as defendants have interpreted and attempted
to apply Sections 1 and 8 of said Chapter 6a, in forcing
liens upon the plaintiffs’ property, would amount to a dep-
rivation of property without due process of law contrary to
the constitutions of the State of Utah® and of the United
States.* It is expedient that we discuss this last contention
first.

Plaintiffs point out that said Sections 1 and 8 relating
to the creation of the district and the borrowing of money
to finance it make no provision as to notice, objection or
hearing so that the residents are given no voice in its crea-
tion, size, whether one’s property should be included, or
whether it would be benefited; and likewise that no. such
safeguards are afforded with respect to the obligation to
be incurred, the issuance of bonds, the imposition of charges
or rates upon the plaintiffs, the method of payment or the
allocation of the burden. They argue the impropriety of
leaving all of such matters to the exclusive direction and
control of the defendant Commission, which is not selected
by, nor responsible to the residents of the district, which
they aver has resulted in an arbitrary and inequitable bur-
den being placed upon them in the establishment of the
district and the construction of the sewer project, the main
aspect of the inequity being that the present 8600 house-
holders are required to bear practically the entire burden

sArt. 1, § 2; Art. 6, § 29, Constitution of Utah.
*Art. 14, § 4, Constitution of Utah.

5Art, 1, § 7, Constitution of Utah.

°14th Amendment, U. S. Constitution.

|

of the installation of a sewer system designed to take care
of eventually 40,000 to 45,000 homes, while the owners of
vacant property in the area, whose lands will also be bene-
fited by the presence of the sewer system, are not compelled
to bear any of the costs. The net result of all of which, say
plaintiffs, amounts to an arbitrary invasion of their rights
and deprives them of their property without due process
of law.

Defendants claim that the procedural requirements in-
sisted upon by the plaintiffs are not necessary, their posi-
tion being that the plan is simply “revenue bond” financing
which the residents of the area are voluntarily entering
into. They contend that the bonds are to be paid solely out
of revenue to be collected from the operation of the district;
that the district does not pledge the private property therein
nor obligate itself to assess or tax the property, that there
is thus no lien nor burden placed upon it so that there is no
“taking” as a consequence of which the requirements of
notice, opportunity to object and hearing are not essential,
relying on cases previously adjudicated by this Court, the
so-called “special fund” cases.”

To the contrary, plaintiffs maintain that the plan being
carried out by defendants makes it compulsory for the prop-
erty owners to give liens on their property so that it
amounts to “assessment” financing, taking it out of
the “special fund” class of cases and bringing it i |
under the class of cases where the district levies
special assessments or imposes taxes which do become a
lien upon the land. In the latter class of cases, the law is
well established by our previous decisions that due process

Utah Power & Light Co. v Ogden City, 95 Utah 161, 79 P. 2d 61;
Utah Power & Light Co. v. Provo City, 94 Utah 208, 74 P, 2d 1191;
Wadsworth v. Santaquin City, 88 Utah 821, 28 P, 2d 161; Fjeldsted
¥. Ogden City, 88 Utah 278, 28 P. 2d 144; Barnes v. Lehi City, 14
Utah 321, 279 P. 878.

’

of law does require notice and an opportunity to be heard
prior to the imposition of a lien upon one’s property.* This
principle defendants willingly concede.

The nub of the controversy between the parties litigant
here is as to which of the two classes of cases just mentioned
the proposed financing program correctly falls into.

The exigencies of the situation confronting defendants
apparently have placed them in a dilemna: On the one hand
they are under the necessity of making the bonds market-
able at a favorable price, keeping down the cost of financ-
ing and the interest rate which can only be accomplished
by having the bonds become a lien or charge upon the prop-
erty so that the property stands as security for paying off
the bonds; on the other hand, it is a great deal more ex-
peditious and convenient to go forward on the theory of a
non-lien financing program as it was initiated under the
old statutes, Section 1 and 8, Chapter 6a, Title 19, U. C. A.
1948, which would avoid the trouble, expense and delay of
complying with the formal requisites of proceeding as out-
lined in Sections 2 to 7, inclusive of the above chapter, or
later laws on the subject.®

In order to determine whether the program is in fact a
non-lien, purely “revenue bond” financing plan, or
one which creates a charge upon the property, we | |
are obliged to look at the over-all project and what
it amounts to in its essential elements and result rather than
any euphonious title or innocent-appearing form in which
it may be enshrouded.

First, each householder within the district whose prop-
erty is “within 200 feet of the sewer” is under man-
date of a county ordinance to connect with the I |
sewer.*° The ordinance is unquestionably valid and

SArgyle Vv. Johnson, 89 Utah 500, 118 P. 487. See State ew rel.
Lundberg v. Green River Irrigation District, 40 Utah 88, 87, 119 P.
1039.

°See note 2, supra. ;

2Adopted May 18, 1942 as amended May 16, 1951.

|

enforceable. The County Commissioners

«+ * * may make andenforce * * * allsuchlocal * * *
sanitary regulations as are not in conflict with general laws”

and

«x * * make such provision for the preservation of health
* * * as they may deem necessary * * *,12

Such an ordinance is undeniably proposed to protect the
health and welfare and is therefore a valid exercise of
authority expressly conferred under the police power.”*

The householder therefore has no choice other than to
connect with the sewer. Under defendants’ plan he was
required to sign up by a certain day or suffer a penalty of
$100. Five plans for payment were offered. Four
of them expressly provided for liens on his property [ll
to stand back of his contract and insure payment of
the charges. Only one did not contain the express lien pro-
vision. Under it he is required to pay the full connection
fee in cash (usually $150) and advance 18 months’ service
charge at $3 per month, totaling $54, to be kept on deposit
as a guarantee of payment. A threat was also made that
if any charge remained unpaid the culinary water to the
residence would be cut off. This alternative of paying in
cash, plus keeping on deposit 18 months’ advance payments,
amounts to an iron-clad guarantee of payment so the neces-
sity for any lien is eliminated. The burdens of this plan
were such that only six out of more than 6,000 applicants
who signed up selected it, which itself demonstrates the
“voluntariness” of the residents’ entry into the lien contract.
As to owners of three or more vacant lots who desired to.
sign up, and as to multiple unit owners who had to sign up,

1117-5-35, U. C. A. 1953.

1217-5-49, U. C. A. 1958.

18Hutchinson v. City of Valdosta, 227 U. S. 808, 38 S. Ct. 290, 57
L, Ed. 520.

‘

the only application form furnished contained the lien pro-
vision.

A fair and realistic appraisal of the plans offered shows
unmistakably that the home owner was left without choice.
He had to connect; and he had to pay or a lien would at-
tach to his property. That this result was what was in-
tended by the Commission is clearly indicated in the acti-
vating resolution of March 18, 1947.

«cs * * it being the intention to finance the installation of said
sanitary sewer system * * * under the issuance of revenue bonds
* * * payable * * * from the operation * * *, and since
it is contemplated that the charges * * * will constitute liens
against the property in said district, enforceable in the event of a
default in the payment of such charges * * *, this resolution
shall be filed for recording in the office of the County Recorder of
Salt Lake County and when so recorded shall constitute notice to all
persons of the existence, either present or future, of such liens on
the property in said district.” (Emphasis added.)

and also by their representation contained in their “coven-
ant to the bondholders” which was similar.*

“All signed application agreements * * * are hereby recog-
nized as enforceable against the properties covered * * *. The
Board agrees that it will do all things necessary to protect the lien
constituted by such agreements against said properties * * *,
the Board will cause to be done everything necessary to foreclose the
lien of the property * * *, The expenses of such foreclosures
shall be payable from the sale proceeds. * * * The filing in the
office of the County Recorder of the resolution * * * shall con-
stitute notice * * * of the present or prospective existence of the
liens on the property in the district * * *” (Emphasis added.)

If this plan which was obviously designed for the purpose
and actually had the effect of imposing liens on the prop-
erty could be followed and yet remain classified as a purely
voluntary “revenue bond” financing program, then the
constitutional guarantees of due process of law and debt
limits could be circumvented while effectively creating

14Adopted March 18, 1947, re-adopted October 6, 1952.

|

charges upon property. The district should not be permitted
to accomplish by artifice, subterfuge or indirection what
the law will not permit it to do openly and directly.

It follows that the plaintiffs’ contention No. 6, herein-
above set out, is well taken: that the requirements of due
process of law have not been met.** Such conclusion renders
it unnecessary and therefore inadvisable to prolong this
opinion by considering and discussing plaintiffs’ other con-
tentions. This is more so because we are given to under-
stand by counsel for both parties herein that certain amend-
atory and curative legislation is now pending before the
legislature. It therefore may not be necessary to pass upon
such other objections raised by plaintiffs.

The writ is made permanent.

WOLFE, C. J., and McDONOUGH, HENRIOD, and
WADE, JJ., concur.

18Utah Power & Light Co. v. Provo City, 94 Utah 208, 74 P. 2d
16See cases Note 8, supra.
1i9i, 1208.

1
ee

THIRTEENTH & WASHINGTON STS.
CORP. v. NESLEN, et al.

No. 7875. Decided March 16, 1953. (254 P. 2d 847.)

a

See 52 C. J. S., Landlord and Tenant, sec. 458. Failure of landlord
to furnish heat as constituting eviction. 32 Am. Jur., Landlord and
Tenant, sec. 259; 69 A. L. R. 1093.

i Lerner!

Albert J. Colton, Peter W. Billings, Fabian, Clendenin,
Moffat & Mabey, Salt Lake City, for appellant.

Leonard W. Elton, Salt Lake City, for respondents.

CROCKETT, Justice.

Defendants, a group of lawyers, vacated certain office
space before their lease on it had run, claiming a construc-
tive eviction. Plaintiff, their lessor, was unable to re-rent
the space at the same rent until 8 months later and sued
for loss of rent during that period. The trial court entered
judgment for defendants. Plaintiff appeals, charging: that
the evidence does not support the findings, and that the
findings which were made do not constitute a constructive
eviction.

The building involved, now known as the Darling Build-
ing, was formerly a large department store on Main Street
in Salt Lake City. During the extreme scarcity of office
space following World War II plaintiff essayed to convert
part of it into an office building. Defendants negotiated
with P. H. Kipp, plaintiff’s agent, who assured them that
the building would be made into a “first-class office build-
ing, to the extent the physical structure permitted” and be
so maintained. Before remodeling was completed, March
27, 1948, defendants entered into a five-year lease on offices
on the 3d floor and moved in during May of that year.

Various provisions of the lease and the rules incorpor-
ated therein, pertinent to matters in dispute on this appeal
are:

“Lessees * * * shall not in any way obstruct the * * *
entry, passages, * * * or elevators, or use the same in any other
way than as a means of passage to and from their respective offices,
*  * nor bring nor keep anything therein * * * which will
obstruct or interfere with the rights of other tenants * * *”

“The building will be open from 8 a. m. until 12 p, m. Tenants
desiring the use of office before or after these hours should apply
at building office for permission.”

|

“Night Watch—After 7 p. m. the building is in charge of the night
watchman, and every person entering or leaving the building is ex-
pected to be questioned by him * * * if unknown * * %”

“Heat will be provided * * * from 8:00 a. m. until 9:00 p.m.
whenever such heat shall, in the owners’ judgment, be required for
the comfortable occupation of said premises. Temporary failure to
furnish heat shall not, however, be construed as an eviction of the
tenant, = *

“The owners [lessors] * * * assume the charge of cleaning
and keeping in order the halls and stairways and passageways of the

building * * * [and doing] all janitor work upon the premises.
ee

“The lessors shall be * * * the sole judge as to the amount
of and time when heat and light shall be supplied * * * and
* * * of the character and amount of the janitor and elevator
service to be supplied.”

In surveying the evidence to see whether the trial court
was justified in holding that there was a construc-
tive eviction, we review it, and every inference fairly I |
arising therefrom in the light most favorable to the
defendants, they having prevailed below.*

One of the major difficulties about which defendants
complain is that near the time they moved in, a shoeshine
stand‘and barber shop were established in the entrance and
lobby, forming somewhat of an obstacle course which visi-
tors and clients had to contend with and which actually
confused some into thinking they had missed the entrance
of the building. Plaintiff made some effort to alleviate this
confusion by having signs showing the direction to the ele-
vators, but it was not until after defendants moved out
that the barber shop was partitioned off from the foyer.
There were also some blocking of the passage to the stair-
way; this was accentuated about a year before defendants
moved out when a beauty shop was also established in the
lobby.

1See Toomer’s Estate v. Union Pac. R. Co., 121 Utah 87, 239 P.
2d 163.

74 errr!

Defendants also experienced serious difficulties with re-
spect to the hours the building remained open. It will be
noted that the second provision above quoted provided that
the building would be open from 8 a. m. until 12 p.m. Not-
withstanding this, the outer doors were locked at 8 p. m.
each evening and on all holidays and Sundays. Plaintiff
justifies this because of the provision that the night watch-
man. would be on duty after 7 p. m. and question all un-
known persons. Evidence adduced showed the necessity of
lawyers receiving clients and doing part of their work in
the evenings, and the inconvenience to all concerned in mak-
ing arrangements to have someone (defendants had keys)
at the door to let clients or other proper visitors in or out.
Concomitant with this grievance of locking the building was
the fact that no elevator service was provided after 8 p. m.
When the attorneys and their clients had to use the stair-
way, it was often unlighted at night so that they had to feel
their way up and down. There was also evidence that on
occasions the stairway was used as a “latrine” and that the
approaches to its lower landing were occasionally partly
blocked by beauty parlor supplies, janitorial equipment and
racks of clothing.

Lack of heat was another source of vexation. Defendants’
evidence was that on frequent occasions during the winter
the building was so cold that they, their employees and
clients had to keep on their overcoats. Although, after the
first winter, thermostatic controls were installed in the
quarters, such discomfort persisted ; further annoyance was
experienced because the restroom facilities were unsanitary,

. continually foul-smelling, improperly ventilated and inade-
quately supplied with soap, towels and other essentials.
After the beauty shop was set up, due to lack of proper
ventilation, the aroma of beauty preparations penetrated
to the floors above, mingling with the other odors to make
a melange, unpleasant and unacceptable in an office build-
ing.

|

Numerous and repeated protests concerning these condi-
tions were made and improvement in them promised. How-
ever, the situation continued to be highly unsatisfactory.
Defendants inquired in other office buildings for space and
finally procured suitable accommodations and on June 30,
1950, moved, paying the rent only up to the time they va-
cated. The lease had three more years to run. Plaintiff
sued for the rent for the eight months the offices were
empty before being re-rented, and would of course be en-
titled to recover unless the defendants were Justified in
claiming a constructive eviction.

Plaintiff asserts that “constructive eviction” is not avail-
able to defendants, contending:

1. That there was not a grave, substantial nor perma-
nent interference by plaintiff with defendants’ use of the
premises ;

2. That constructive eviction requires an intent to evict,
which was not shown;

3. That the terms of the lease make the lessor the “sole
judge” of certain of the services complained of and there-
fore plaintiff’s act would have to have been wilful and
wanton or wholly outside reason, which plaintiff avers
defendants also failed to prove. and

4, That defendants did not abandon the premises as a
consequence of the conditions complained of, nor within
a reasonable time.

We consider these points in order:

1. Concerning the general law regarding what
interference will constitute a constructive eviction, | |
American Jurisprudence* has this to say:

“« * = any disturbance of the tenant’s possession by the land-
lord, or someone acting under his authority, which renders the prem-

282 Am. Jur. Landlord & Tenant, Sec, 246, p. 231.

76 eee
ree

ises unfit for occupancy for the purposes for which they were demised
* * * amounts to a constructive eviction, provided the tenant

abandons the premises within a reasonable time.”

but properly adds this qualification:

“%* * * To constitute a constructive eviction, the interference
* + * with the tenant’s enjoyment of the demised premises must
be of a substantial nature and so injurious as to deprive him of the
beneficial enjoyment of a part or the whole of the demised premises.”

Plaintiff argues that because the adverse conditions re-
lied upon by defendants were mainly omissions, and the
acts of others, they were not “interference by plain-
tiff.” With this contention we do not agree. The | |
failure to do some act or to adequately perform it,
may render a building just as untenantable as affirmative
interference. The text in American Jurisprudence,* further
reads:

“an eviction may be based on the landlord’s omission to act where it
is his duty to act.”

Where the landlord authorizes conduct by another it is
imputable to him and he must bear the responsibility for it.
Plaintiff’s agents could well foresee that the shoe-
shine stand, barber shop and beauty parlor installa- L |
tions would bring about the difficulties that were
encountered. The plaintiff is answerable for the natural
and probable consequences of the placement and operation
of these business, as well as for the direct consequences of
its own acts or failures to act.

882 Am. Jur., Landlord & Tenant, Sec. 248,

*See 52 C. J. S., Landlord and Tenant, § 480, p. 240; Pembroke
Stationery Co. v. Rogers, 41 Utah 411, 414, 125 P. 866; 1 Taylor,
Landlord & Tenant (1887) p.195,“* * * torender * * * [the
landlord liable] the nuisance must be one that necessarily arises from
the tenant’s ordinary use of the premises for the purpose for which
they let, and not be avoidable by reasonable care on the tenant’s part.”

|

2. The principle just expressed also applies to the
plaintiff’s second point; the contention that an in- | |
tent to evict must be shown. In the case of Barker v.

Utah Oil Refining Company, we stated :>

“* * * there is a ‘constructive eviction when the [landlord],
without intent to oust the latter, does some act which deprives the
tenant of the beneficial enjoyment of the demised premises or mater-
jally impairs such enjoyment.” (Emphasis added.)

Properly interpreted, this comports with the general rule
as expressed by Tiffany,* that intent is,

“* © * ordinarily of a purely legal nature, inferred from the
character of the landlord’s acts. * * *”

Thus, an intent to evict may be implied whenever his con-
duct is such that it substantially deprives the tenant of the
use of the premises for the purpose for which they were
demised.

3. The fact that the lease made the plaintiff “the sole
judge” of the amount of heat, light, janitor and elevator
service to be furnished is of course to be taken into con-
sideration. Such provision itself, however, must be
weighed in the light of what is reasonable, neces- i
sary and customary in connection with the furnish-
ing of similar services in office buildings of the character
of the one in question. The plaintiff's “sole” judgment in
the matter could not be wholly capricious, unreasonable or
arbitrary so as to entirely, or even to substantially, deprive
defendants of such services. Where the defect is so flagrant
as to be wholly unreasonable, the contract terms would not
protect the landlord from the duty to reasonably maintain
such services nor from liability for his failure to do so.”

S111 Utah 808, 178 P. 2d 886, 388.

61 Tiffany, Law of Real Property (1989) Sec. 142, p. 282, See
Hotel Marion Co. v. Waters, TT Or. 426, 250 P. 865, 868.
‘See 17 C. J. S., Contracts, § 495,

78 Leerssen!
ee

It is true as plaintiff alleges that the trial court made no
specific finding that, in the terms just discussed, the fail-
ures were flagrant, wanton or wholly unreasonable; the
fact remains that he found they were inadequate and
that, coupled with the other deficiencies complained [qjll
of, they constituted a constructive eviction. The
failure to make such a finding does not prevent considera-
tion of these conditions, along with other factors complained
of, in determining whether the cumulative effect of all
was sufficient to establish a constructive eviction. The
finding actually made, together with the conclusion that
the constructive eviction was effected, fairly implies a
finding by the court that the failures mentioned were un-
reasonable to the extent that they violated the terms of the
lease. From the fact that the court found the issues in
favor of the defendants and accepted their evidence, it
appears that the testimony with respect to the unsatisfac-
tory restroom facilities, the lack of enough heat and the
unlighted stairway was such that the deficiencies in the
services involved could only have been flagrant and un-
reasonable. Where findings as to propative facts are made
from which must necessarily follow the existence of a re-
quired ultimate fact, the failure to expressly formulate a
finding as to the ultimate fact is not prejudicial error.* The
judgment cannot be held fatally defective because of fail-
ure to make findings explicitly in the language that “de-
ficiencies in such services were flagrant and unreasonable.”

It is not our problem to evaluate separately the condi-
tions complained of. It may well be that various of them
taken alone would not be of sufficient import to create a
substantial impairment of the use and enjoyment of the
premises. However, it is the cumulative effect of them all
which must be considered in determining the soundness of
the judgment. This cause was tried to the court and it was
peculiarly his prerogative to determine whether the diffi-

8Fouch vy. Bates, 18 Idaho 874, 110 P. 265; Jessen v. Peterson,
Nelson & Co., 18 Cal. App. 349, 123 P, 219.

|

culties were sufficient to constitute a constructive eviction
of the tenants. He could consider among other things the
nature and purpose for which the premises were to be used.

The law is a dignified profession involving the selling of
one’s services. Professional standards prevent a lawyer
from advertising his talents, and as a consequence he is
dependent upon other means of attracting and holding a
clientele. In connection with the promise of a “first class”
building, defendants had a right to expect that the entrance,
corridors and offices would present a businesslike and at-
tractive appearance consonant with the dignity and re-
spectability of their profession and that the building ser-
vices would also comport therewith. However, even Mr.
Kipp, plaintiffs building manager, admitted that certain “
of the conditions fell below such standard.

The trial court having found the facts as it did and con-
cluded that the grievances complained of were suf-
ficient to constitute a constructive eviction causing | |
defendants to vacate, this court will not reverse it so
jong as there is substantial evidence to support the findings.

4. But plaintiff maintains that even if it be assumed
that otherwise there would be a basis for a con-
structive eviction, the defendants waited an unrea- |_|
sonable amount of time before leaving the premises
and that they thereby waived their rights to so claim and
vacate.

Tt is true that the troubles as to most of the defects com-
plained of continued practically through the length of de-
fendants’ occupation and that during both winters defen-
dants had heating problems but did not move out until early
summer when such problems would not exist. However,
repeated complaints were followed by promises from plain-
tiff’s agents that the conditions would be improved. De-
fendants were justified in waiting to see if the promises
would be fulfilled, especially in light of the “sole judge”
provisions of the lease arrangement which would make haz-

80 ___
re

ardous any precipitous abandonment of the offices. Defen-
dants entered into the second year of their tenancy and
found that the situation was aggravated by the presence in
the foyer of the newly established beauty shop and the
difficulties it brought, later learning on the advent of an-
other winter that notwithstanding some efforts at improve-
ment, their heating problems still remained.

Although subjection to unsatisfactory conditions for a
short period of time, with hope for improvement, may not
sufficiently deprive the tenant of the use of the premises
to constitute an eviction, a long continuance thereof could °
—especially when the situation was burdened by the later
addition of further complicating factors.

Then, too, it is uncontroverted that there was an extreme
scarcity of first-class office space in Salt Lake City at the
time. The court found, in accordance with defendants’ evi-
dence, that they moved from the Darling Building “as soon
as they could find suitable quarters for their use as at-
torneys’ offices.” Thus, there appears no basis upon which
to disturb the trial court’s finding that the defendants did
not wait an unreasonable time before moving.®

Affirmed. Costs to defendants and respondents.
WOLFE, C. J., and McDONOUGH, JJ., concur.
HENRIOD., J., concurs in the result.

See Frosh v. Sun Drug Co. 91 Colo. 440, 16 P. 2d 428; J. C. Penney
Co. v. Birrell, 95 Colo: 59, 82 P, 2d 805; Palumbo v. Olympia Theatres,
276 Mass. 84,176 N. E. 815, 75 A. L. R. 1114, 1119.

8

cae

COX v. THOMPSON.
No. 7796. Decided March 28, 1958. (254 P. 2d 1047.)

See 61 C. J. S., Motor Vehicles, sec. 470. Contributory negligence
of pedestrian crossing outside of crosswalk. 5 Am. Jur., Automobiles,
sec. 454; 67 A. L. R. 320,

Brant H. Wall and Jay Elmer Banks, Salt Lake City, for
appellant.

Stewart, Cannon & Hanson and Edward M. Garnett, Salt
Lake City, for respondent. ‘

|
WOLFE, Chief Justice.

About 1:30 a. m. January 21, 1951, Jackson Blaine Cox
while crossing U. S. Highway 91 in Orem, Utah was struck
and fatally injured by an automobile driven by Cyril P.
Thompson, defendant. Plaintiff, Norma D. Cox, his widow,
as administratrix of his estate, brought this action against
defendant Thompson to recover damages for the wrongful
death of her husband. The trial court directed a verdict
for defendant on the grounds that decedent was contribu-
torily negligent as a matter of law, and as a matter of law,
his negligence proximately contributed to his death. Plain-
tiff appeals.

The grounds for her appeal are three in number. (1)
The trial court erred in finding decedent contributorily
negligent as a matter of law because (a) decedent is pre-
sumed to have been acting with due care and such presump-
tion was not overcome and (b) decedent’s contributory

negligence was a question of fact improperly withheld from
the jury. (2) Assuming decedent was negligent, the ques-
tion of whether his negligence proximately contributed to
his death was a question of fact erroneously withheld from
the jury. (8) The trial court erred in failing to submit the
case to the jury on the theory of last clear chance.

If the presumption that a person in a place of danger
exercises due care for his own safety applies in this case,
it will be extinguished if the evidence properly sustains
the finding that decedent was contributorily negli-
gent as a matter of law. See Tuttle v. Pacific Inter- t |
mountain Express, 121 Utah 420, 242 P. 2d 764;
Compton v. Ogden Union Ry. & Depot Co., 120 Utah 453,
285 P. 2d 515; Mingus v. Olsson, 114 Utah 505, 202 P. 2d
495; Clark v. Los Angeles & Salt Lake R. Co., 73 Utah 486,
275 P. 582; Ryan v. Union Pac. R. Co., 46 Utah 580, 151 P.
71; Evans v. Oregon Short Line R. Co., 37 Utah 481, 108 P.
688. Contributory negligence becomes a question of law
when from the facts reasonable men can draw but one in-

— sd

ference and that inference points unerringly to the negli-
gence of decedent as contributing to his death. Compton
v. Ogden Union Ry. & Depot Co., supra; Lewis v. Rio
Grande Western R. Co., 40 Utah 483, 123 P. 97.

In determining whether decedent was contributorily
negligent as a matter of law, the evidence, and all
reasonable inferences therefrom, must be viewed in | |
the light most favorable to plaintiff. Finlayson v.
Brady, 121 Utah 204, 240 P. 491; Mingus v. Olsson, supra.

The accident took place in Orem, Utah on U. S. Highway
91 (which runs approximately north and south) from fifty
to one hundred feet north of the point where Center Street
running east and west, intersects and terminates with that
highway. The highway is 96 feet wide and has six lanes,
the eastern three for northbound traffic. The center of the
highway is marked by two sets of double lines with a neutral
zone of three or four feet between the sets. The eastmost
of the three western lanes is marked 1 followed by 2 and
three proceeding westward. (See diagram) Hach of lanes
one and two has a width of 12 feet. Lane 3 has a width
of twenty-five feet. To the north of Center Street and
west of the highway is the Crown Cafe surrounded by its
parking area. To the north of Center Street and east of
the highway, and almost directly across from the Crown
Cafe is thé Orem City Hall. The road is straight and un-
obstructed. There are no cross-walks nor traffic control
devices in the immediate area.

About 1:30 a. m. Mr. and Mrs. Cox (decedent and plain-
tiff) with Mr. and Mrs. Ferre left the lounge of the Crown
Cafe to go home. Two couples whom they had expected
to join them there had not arrived. At the moment they
left the cafe the overdue friends drove into the surrounding
parking area. The group, with the exception of the decedent
started to return to the cafe.

|

Mrs. Ferre testified that Mr. Cox announced, “I am going
home.” She testified she told plaintiff that decedent was
leaving. She further testified,

“We [Mrs. Ferre and plaintiff] turned around, [decedent was walk-
ing east across U. S. 91] and I asked him to please come back, and
Yd get Alma [Mr. Ferre] to take him home in the car. And Mrs.
Cox hollered and told him to come back.”

Mrs. Cox (plaintiff) testified that at the moment the
group started to return to the cafe Mrs. Ferre said to her,
“Are you leaving—Are you going? Jack (decedent) is
leaving.” Mrs. Cox testified that she glanced up and saw
decedent walking across U. S. 91 going east, apparently on
his way home. He was at a point 6 or 7 feet east of the
double lines marking the center of the road. (See circle
marked “A” on the diagram.) Mrs. Cox testified that she
called to him, “Come on back. If you are going home, we
will go in the car.” She observed him turn and start to walk
west toward them. She looked away from decedent and
then “heard the screech of brakes and knew that something
had happened.” At that moment the deceased was struck
by the automobile proceeding south. Neither Mrs. Cox nor
Mrs. Ferre observed the impact, nor the car prior to the
impact. They heard no horn.

Mr. Alma Ferre when in the cafe missed his wife and a
moment before the accident returned outside. As he stood
at the front of the cafe (“F” on diagram) he observed over
the top of his automobile which was parked there, Mr. Cox
returning from the east to the west side of the highway. He
testified that he first observed him at the spot indicated
by the circle marked “A” on the diagram—6 or 7 feet east
of the middle of the highway. He testified that he watched
decedent on his way back to the point of impact, may have
glanced away from him for a second or two, and then ob-
served the “flash of the impact” as it occurred and “seen
Jack (decedent) go in the air and land on the cement.”
He approximates the point of impact at about the dividing

*
line between lanes ones and two and marked with an “X”
on the diagram. He observed no car prior to the impact.

Defendant, Cyril P. Thompson, and his two companions,
Leon Wimber and Karl Smith, were traveling from Salt
Lake to Springville in a late model Hudson automobile. They
were traveling south about 35 to 40 miles per hour in lane
number two. All three were in the front seat, defendant
driving, Wimber on the right (west) and Smith in the
middle. The lights of the car were dimmed to city driving
intensity.

Wimber testified,

«* * * T saw a dark shadow step from the left hand side of
the automobile which was on the east of us, directly into our lights
from the side. He stepped from the side into our lights. I saw a
person move, from the east to the west, into our lane of traffic.”

Wimber was asked,

“And how far did he get into your lane of traffic, the last time
you saw him there?”
He answered,

“Half way across approximately.”

Wimber stated Cox appeared to be,
«* %* * approximately 15 feet ahead of the car.”

He testified that the car swerved sharply to the east and
the impact between the car and decedent took place in the
lane of traffic in which the car had been moving.

Smith testified that the car was traveling in lane number
two. He further said,

“I looked up just about the time we started swerving, and there
was a pedestrian and he appeared to be about 15 feet in front of us.
* ‘* * He [decedent] appeared to be in the middle of the south-
bound lane, and at the time of the impact, it [the car] just seemed
to pick him up and just drop him off to the side of the fender.”

|

Cyril P. Thompson, defendant, and driver of the automo-
pile testified that the first thing he noticed was decedent
stepping into the lights of his automobile. Decedent was
headed west across the street. He was asked,

“When you first saw this silhouette in front of you, I will ask you

how far ahead of you it was, appeared to be, as far as your vision
was concerned?”

He answered,

“Well, I could see the full length of him, and possibly—probably
two or three feet of highway. I couldn’t specify as to how much high-
way, but I could see the full height of the man.”

When Mr. Thompson observed decedent “stepping to the
west” he “immediately swerved the car to the east. * * *”

Decedent was struck by the right front (west) fender
of the Thompson car as it swerved to the east. He was
lifted onto the hood and dropped off the right side. Cox was
dressed in dark clothing. There is testimony by one of the
officers who investigated the accident that there was a dark
area on the highway at the spot where the accident occurred.
Officer Peters who investigated the accident, noted that
decedent’s breath smelled of liquor. There is evidence that
Cox had consumed at least 4 drinks of liquor during the
evening.

Small pieces of chrome, broken from the automobile grill,
were found in lane two from three to five feet north of
Cox’s body. There appears to be a slight conflict in the
evidence as to the position of decedent’s body on the high-
way after the accident. Officer Peters who investigated
the accident and took measurements places the body at a
spot approximately fifty feet north of the Center Street
north sidewalk and on the line which separates lanes one
and two. (Marked “Z’” on diagram) Mrs. Cox testified that
she really couldn’t tell but placed the position of the body
just west of the center of the highway and several yards

Parking
Area

south of the spot indicated by Peters. (Marked “Y” on
diagram.)

Plaintiff argues that there is a conflict in the evidence
as to the exact point of impact. She claims such a conflict
if resolved in favor of decedent, would be highly probative
of his non-negligent conduct. She contends that the ques-

|

tion is a factual one which should properly have been sub-
mitted to the jury. Mr. Alma Ferre, as stated before, ap-
proximated the point of impact as being about on the line
which separates lanes one and two. (“X” on the diagram.)
The testimony of others who observed the mishap placed
the point impact somewhere in lane two. The plaintiff’s
theory is that defendant through excitement negligently
swerved into Mr. Cox as he stood in lane one waiting for
defendant’s car to pass. Considering that Mr. Ferre ob-
served the mishap from the front of the cafe, that he viewed
the scene over his parked automobile, that he did not see
the car prior to the impact, that he glanced away from the
scene for a second or two, that the street was dimly lighted,
his testimony and the testimony of others do not conflict
in any material degree.

On the evidence set forth, the trial court correctly found
decedent contributorily negligent as a matter of law. From
a fair appraisal of the evidence reasonable men can draw
but one inference and that inference points uner-
ringly to the negligence of the decedent. In response [ll
to a call from his wife decedent, who was walking
east across a poorly lit highway, turned and walked directly
into the path of defendant’s automobile. Crossing a high-
way at a point where there was no marked cross walk,
decedent was duty bound to yield the right of way to a
vehicle upon the roadway. See 41-6-79 Utah Code Anno-
tated 1953. This he failed to do. He, in addition, apparently
failed to look, or having looked failed to see what he should
have seen and paid heed to it. He said nothing and did noth-
ing which indicated he was in any way aware of the danger
presented. Decedent was properly found negligent as a
matter of law. See Mingus v. Olsson, supra.

Decedent’s negligence was a “proximate” or “legal” cause
of his death. Generally speaking, the proximate cause of
an injury is the primary moving cause without which it
would not have been inflicted, but which, in the nat-
ural and probable sequence of events, and without [jl
the intervention of any new or independent cause,

a
produces the injury. Kawaguchi v. Bennett, 112 Utah 442,
189 P. 2d 109; Strong Vv. Granite Furniture Co., 77 Utah
292, 294 P. 308, 78 A. L. R. 465; Haarstrich v. Oregon Short
Line R. Co., T0. Utah 552, 262 P. 100; Rollow v. Ogden City,
66 Utah 475, 243 P. 791; Stone v. Union Pac. R. Co., 32
Utah 185, 89 P. '715; see also dissent in Hess v. Robinson,
109 Utah 60, 163 P. 2d 510. The Restatement of the Law of
Torts, Vol. 11, Sec. 411, attempts a simple and compre-
hensive definition as follows:

“The actor’s negligent conduct is a legal cause of harm to another
[himself] if,

“(a) his conduct is a substantial factor in bringing about the
harm,

“(b) there is no rule of law relieving the actor from liability be-
cause of the manner in which his negligence resulted in the harm.”

If decedent had yielded the right of way to defendant’s
automobile, or if he had looked up the road and seen the
approaching car and paid heed to the danger which it pre-
sented, the accident would never have happened. It is patent
that the negligence of the decedent was a substantial factor
in bringing about his death.

The last clear chance doctrine is inapplicable in the
present instance. In order for the question of last clear
chance to be properly submitted to a jury the evidence
must be such as would in all probability reasonably
support a finding that there was a fair and clear i
opportunity, in the exercise of reasonable care, to
avoid the injury. It would not be sufficient that it appear
from hindsight that by some possible measure the defen-
dant by the “skin of his teeth” could have avoided the
injury. See Morby V. Rogers, 122 Utah 540, 252 P. 2d 231.

This court has adopted as the rule in this state
the last clear chance doctrine of Sections 479 and | |
480 of the Restatement of Torts. See Compton v.
Ogden Union Ry. & Depot Co., supra. Section 480 reads:

“A plaintiff who, by the exercise of reasonable vigilance could have
observed the danger created by the defendant’s negligence in time to

|
have avoided harm therefrom, may recover if, but only if, the defen-
dant (a) knew of the plaintiff's situation, and (b) realized or had
reason to realize that the plaintiff was inattentive and therefore un-
likely to discover his peril in time to avoid the harm, and (c) there-

after is negligent in failing to utilize with reasonable care and com-
petence his then existing ability to avoid harming the plaintiff.”

(See concurring opinion in Morby v. Rogers, supra,
wherein Sec. 480 of the Restatement of Torts is discussed
concerning the apparent need for defendant to be anteced-
ently negligent and the suggestion therein made that it is
unnecessary to frame a rule in the light of defendant’s
antecedent negligence.)

Thus the matter was properly withheld from the jury
if the evidence, taken in the light most favorable to the
plaintiff, would not reasonably and clearly support a find-
ing that (a) defendant knew of decedent’s situation
of danger, and (b) realized or had reason to realize | |
that plaintiff was inattentive and unlikely to dis-
cover his peril in time to avoid harm, and (c) the defendant
was thereafter negligent in failing to utilize with reason-
able care and competence his then existing ability to avoid
harming decedent.

In viewing the facts to determine the presence of the
requisite elements necessary to invoke the theory of last
clear chance we find that defendant was traveling south
on U. S. 91 at a speed of 35 to 40 miles per hour. His lights
were dimmed to city driving intensity. He first observed
decedent when he walked into the cone of light projected
from the automobile. There is no definite statement as to
the distance the car was from the decedent at the time de-
fendant first observed him crossing in front of the car. On
examination by plaintiff’s counsel defendant estimated the
distance at roughly 19 steps or 57 feet. The testimony of
defendant’s two companions as to the proximity of the de-
cedent to the automobile would lead one to believe the dis-
tance was less than that estimated. But, taking the esti-
mate at its face value, and noting the speed of the automo-

—_ i
bile, it would have been impossible to halt the car prior to
the impact. At 35 miles per hour defendant would travel
about 39.25 feet during his reaction time before the brakes
were applied. After application of the brakes, assuming
they were “good” brakes, the car would travel another 63
feet before coming to a halt. (Figures from a publication
of the Utah State Highway Patrol.) The total stopping
distance would be 102.25 feet, 45.25 feet more than the 57
feet available. It seems clear that defendant could not have
avoided the impact by the application of his brakes.

Being unable to stop, defendant could but attempt to
maneuver the car so as to avoid hitting decedent. In answer
to the question,

“And what did you do if anything when you saw him [decedent]?”

defendant said,

“Well, I could see him stepping to the west, so I immediately
swerved the car to the east, which would have been my left.”

The clutch was depressed. The brakes were applied. A
reasonable mind could not conclude that defendant was neg-
ligent in failing to utilize his then existing ability to avoid
harming decedent, if he had any such ability. It was as
reasonable, if not more reasonable to turn left as to turn
right. Defendant seemingly did all in his power to avoid
harming decedent. Certainly there is no evidence that de-
fendant had a last clear chance to avoid harming decedent.
It was not error to refuse to submit the case to the jury on
the theory of last clear chance.

Judgment is affirmed. Costs to respondent.

McDONOUGH, CROCKETT,. HENRIOD and WADE,
JJ., concur.

8
Ce

STATE v. NEAL.
No. 7813. Decided March 28, 1953. (254 P. 2d 1053.)

[

See 40 C. J. S., Homicide, sec. 211. Admissibility of evidence of
other crimes. 20 Am. Jur., Evidence, sec. 818; 63 A. L. R. 605.

Edward M Morrissey and Arthur A. Allen, Jr., Salt Lake
City, for appellant.

Clinton D. Vernon, Atty. Gen., J. Lambert Gibson, Dep-
uty Atty. Gen., Allen B. Sorensen, Asst. Atty. Gen., Q. L. R.
Alston, Asst. Atty. Gen., and Bruce S. Jenkins, Asst. Atty.
Gen., for respondent.

WADE, Justice.

Defendant, Don Jesse Neal, appeals from the jury’s ver-
dict of murder in the first degree and the death sentence,
contending: (1) That the verdict is not supported by the
evidence because (a) with his hands cuffed behind him
he could not have fired the fatal shot and (b) he could not
have formed a deliberate and premeditated intention to kill
for the shooting occurred during a scuffle; and (2) that
inadmissible evidence was received.

About 2 p. m. of May 23, 1951, Owen T. Farley, a Salt
Lake police officer, arrested the defendant near a car, which
defendant had been using, which was parked at the curb
on the west side of State Street near the east entrance to
Auerbach Company department store. After searching and
handcuffing his hands behind him, the officer placed the
defendant in the middle of the front seat of the car between
defendant’s woman friend, a Mrs. Tully, on the right hand
side and the officer under the wheel on the left hand side.
The officer started the car, backed it out from the curb,
made a “U” turn to the north and started toward. the police
station. As they proceeded across the intersection of State
and Third South Streets, a scuffle commenced between de-
fendant and the officer in which the officer was fatally shot

|

and the car stopped by colliding with the rear end of a car
which was parked on the east side of State Street a few
hundred feet north of the intersection. Whereupon, Mrs.
Tully got out of the right hand or east side door and disap-
peared into the crowd. The defendant and the officer con-
tinued to scuffle and defendant was heard to shout, “If
you want another one I’ll give you one more.” The officer
fell head first out of the right hand or east front door of the
car and the defendant who although almost out of that door
drew back into the car and slid to the left hand side under
the wheel and got out on that side and went across the
street. A mail carrier and another police officer who rushed
to the officer’s aid before he lost consciousness heard him
say distinctly: “I am a police officer.” “He shot me.” “Call
the Department.” The officer was removed to the hospital
where he died'a few hours later from a bullet wound which
entered his body slightly above and to the right of his navel
and came out slightly lower and on the left side of his spinal
column.

After the defendant crossed the street he ran toward the
south until he came to the northwest corner of State and
Third South Streets. He was carrying a pistol in his hands
which were cuffed behind him and partly covered by his
coat. He boarded a bus which was stopped at that corner
taking on passengers edging his way in ahead of other pas-
sengers and threatened the driver, saying, “Get this thing
rolling.” The bus started toward the south and as it began
slowing up to stop at Fourth South Street the defendant
again threatened the driver saying, “Keep moving. I just
shot a man.” The driver drove to the next crossing at Fifth
South Street before stopping where the defendant got off
at the A & W. Root Beer stand where he approached a
woman seated in a parked automobile and ordered her out
of the car. When she questioned him he said, “I have a gun
here and I’ll shoot you if you don’t do what I say.” The
defendant objected to the admission in evidence of these
statements. ‘

—

From the parked car defendant ran west toward Main
Street into an alley where he entered an automobile dealer
and repair shop, where he threatened one of the employees
with the pistol. By that time he had worked his body and
legs through his hands so that they were in front of him.

Shortly thereafter, policemen swarmed in on the place and
he was captured after he had thrown his gun into a sink.

The jury could reasonably find from the evidence that
all reasonable doubt that defendant shot and killed the offi-
cer was eliminated. The evidence shows that at the inter-
section the defendant and the officer were scuffling. It
would be unusual for him to start a scuffle with the officer,
hand-cuffed as he was, unless he had the gun with which
he intended to overpower the officer. Defendant’s claim
that there was no scuffle until just before the shot was
fired and the car collided with a parked vehicle, when the
officer suddenly leaped out from behind the wheel in front
of defendant facing directly toward the east where he was
shot from that direction is obviously unbelievable. The only
possible inference from that story is that Mrs. Tully threat-
ened the officer with the gun and as he got in that position
trying to take the gun from her she shot him. It would be
almost impossible for the officer to suddenly leap to that
position, and if she threatened him his training as an offi-
cer would certainly teach him not to expose the whole front
of his body to gunfire when he could have protected himself _
by keeping the defendant between him and her. His story
that after the woman had left the car he felt the pistol land
on the seat near his hands and that he automatically picked
it up or it got caught in his fingers is also preposterous.

On the other hand, the woman’s testimony is not improb-
able, and if true the defendant did the shooting. She testi-
fied that shortly after the officer had backed the car out
from the curb and started to the north, the defendant
started the scuffle, that he first seemed to reach for some-
thing, (probably reaching his. hands which were cuffed
behind him into the space between the horizontal and up-

|

right seat cushions and got the gun) then he began shoving
his back against the officer, leaving a space between the
defendant and her. This would bring his hands with the
gun against the officer. That the officer turned the front
part of his body toward defendant which would bring de-
fendant’s hands holding the gun right in the officer’s
stomach where the bullet entered his body. At that point
she testified that she heard a shot and the officer lost con-
trol of the car and it collided with a car parked at the curb,
and she opened the door and got out of the car and went
into a nearby hotel. There is nothing about this testimony
that requires any impossible physical feat or which the
jury could not reasonably believe.

There is evidence that the defendant twice asserted that
he shot the officer. Two mail carriers on the street as the
collision occurred heard the defendant shout during the
scuffle: “If you want another one I’ll give you one more.”
Under the surrounding circumstances this was an assertion
that he had shot the officer and a threat to shoot him again.
Also his statement to the bus driver to “Keep moving. I
just shot a man.” under the existing conditions was a di-
rect statement that he shot the officer. Also, the officer
before he passed out was heard by one of the mail carriers
and a police officer to say distinctly “He shot me.” Defen-
dant does not deny that he carried the gun with him away
from the place of the shooting, and threw it away shortly
before he was recaptured. His only explanation is an in-
timation that Mrs. Tully shot the officer and then placed
the pistol on the seat beside him as she left the car and he
automatically picked it up or that it got caught in his fin-
gers. This would require her to shoot the officer with cool
deliberation although he testified that in the motel holdup
the day before in Ogden she was so upset and nervous that
she was unable to operate the cash register and take the
money. Considering all the facts and surrounding circum-
stances, the finding that defendant shot and killed the offi-
cer is amply supported by the evidence.

— |

The evidence also reasonably supports a finding that the
defendant formed a cold, deliberate and premeditated in-
tention to kill the officer. The fact that there was a scuffle
at the time of the fatal shot does not show the con-
trary. Murder in the first degree is often committed | |
during a scuffle. Here the evidence tends to show
that after defendant was arrested, handcuffed and placed
in the car, he deliberately reached between the seat cush-
ions and got the gun, then maneuvered himself into posi-
tion so he could shoot the officer, which he did without
hesitation or warning. He had plenty of time to plan his
course before he got the gun in his hands and from then
on he seems to have operated according to his plans until
he had shot his way temporarily out of custody, without
even giving the officer an opportunity to comply with his
wishes without shooting. The evidence is clearly sufficient
to support a finding that this killing was intentional and
the result of cold, deliberate and premeditated planning.

The court did not err in receiving in evidence the testi-
mony of the bus driver that defendant threatened him with
his gun and said, “Keep moving. I just shot a man.” nor
the testimony of the woman seated in the parked car
that he threatened her and said, “I have a gun here [ll
and I’ll shoot you if you don’t do what I say.” Defen-
dant’s argument that these statements were too remote to be
a part of the res gestae and not admissible as such are imma-
terial because they are clearly admissible on other grounds.
Coming as they did while defendant was trying to make
good his escape, these incidents and statements tend to show
his purpose and design to use the gun to the extent he
thought necessary in order to effect his escape and that
he had formed such purpose and design in making his
escape from the officer’s custody. See People v. Coughlin,
18 Utah 58, 44 P. 94; State v. Nemier, 106 Utah 307, 148 P.
2d 827. In the Coughlin case testimony that defendant shot
at officers several days before the crime charged was held
admissible even though it tended to prove another offense
because it indicated a purpose to kill any one who attempted

|

to arrest him. And in the Nemier case we held that the
details of a gun battle after an escape from the state prison
was admissible for the same purpose. Evidence of any fact
which rationally tends to prove any material issue is admis-
sible unless forbidden by some specific rule,’ and should be
received if offered for an admissible purpose although it
would be inadmissible if offered for some other purpose.”

The testimony of the bus driver that the defendant threat-
ened him saying, “Keep moving. I just shot a man” is ad-
missible also as an admission contrary to his claim as a
party to the action. Such statements by a party to
the action are universally deemed admissible when | |
offered by the opponent to such party both as testi-
monial assertions and for impeachment purposes. This is
true regardless of whether at the time when made the
statement was against the interest of the party or not and
no showing is required that the person making the state-
ment is now dead or unavailable as a witness, for the per-
son who made the statement, being the party to the action
against whom it is received, is the only person who can
object to it as hearsay and he does not need the opportunity
to cross-examine himself because he has full knowledge of
what his answers would be, and has full opportunity to take

4$ee 1 Wigmore on Evidence, 3d Ed. 298, Sec. 10, II citing Thayer
“presumptions and the Law of Evidence,” 8 Harvard Law Review
148; to the same effect see the American Law Institute Model Code
of Evidence, Rule 9(f) and the Foreward thereto by Edmund M.
Morgan, p. 8; also see Chief Justice Wolfe’s prevailing opinion in
State v. Scott, 111 Utah 9 at page 20, 175 P. 2d 1016 at page 1021.
2See State v: Nemier, 106 Utah 807, 148 P. 2d 827; State v. Scott,.
supra; also 2 Wigmore on Evidence, 3d Hd. 300, Sec. 18, where he
says: “In other words, when an evidentiary fact is offered for one
purpose, and becomes admissable by satisfying all the rules applicable
to it in that capacity, it is not inadmissible because it does not satisfy
the rules applicable to it in some other capacity and because the jury
might improperly consider it in the latter capacity. This doctrine,
though involving certain risks, is indispensable as a practical rule.”

the witness stand and make any explanation which he has
to refute such evidence.*

It was not error to permit the district attorney to cross-
examine defendant as to other offenses. Over defendant’s
objection the district attorney asked him if he committed
four robberies in California, giving the time and
place of each, within six days prior to this shooting, [jl
which he denied. Since no evidence was produced
that he was ever charged with or convicted of any of such
robberies and the state produced no evidence to that effect,
defendant contends that such questions were propounded
without having any proof that he committed any of such
robberies and the only purpose in asking such questions was
to suggest to the jury that he was an habitual criminal and
had the disposition and propensity for committing violent
crimes and that it was erroneous and highly prejudicial to
allow such examination.

Of course, if this questioning stood alone and was made
in bad faith without the district attorney having reason to
believe him guilty of such offenses, such procedure would
be highly improper and the case should be reversed. But
the evidence does not show that such was the case. On
direct examination defendant of his own accord testified
that the day before this shooting he and Mrs. Tully at the
point of a gun robbed a motel in Ogden. On cross-examina-
tion he admitted that he had been convicted of four previous
felonies mentioning forgery, burglary and one robbery and
that he was then on parole from California on the robbery.
He denied that he knew that he was wanted in California
for parole violation or that there was any reason to believe
that he could not readily adjust all the grievances which

8See 4 Wigmore on Evidence, 8d Ed. 2 to 7, Secs. 1048 and 1049.
In the 1st Ed. Dean Wigmore adopted a different theory which he
changed after an acute criticism thereof by Prof. Edmund M. Morgan,
“Admissions as an exception to the Hearsay Rule,” 30 Yale Law
Journal 355 (1921); see also the American Law Institute Model Code
of Evidence, Rule 506, and comment thereon to the effect that the
rule reflects the common law rule on that subject.

the California parole board had against him. He admitted
however, that shortly before leaving that state he stole the
payroll checkbook of a business establishment with its name
printed on such checks and that he had forged and passed
about 47 of such checks and obtained approximately $600
therefrom, but he claimed that his father, aunt and wife
were negotiating to'make restitution of that money. Then
he was asked if he committed these four robberies, to which
he objected, and when required to answer he denied com-
mitting any of them. Thereupon he was asked if he had
not admitted to the police officers that he had committed
such robberies, to which he answered that he did not re-
member making such an admission but if he did it was
from duress and coercion. Later the State called a police
officer and started questioning him as to such admissions
and on defendant’s objection on the ground of coercion a
hearing in the jury’s absence was held where defendant
testified that he was severely beaten and subjected to other
third degree tactics in obtaining his statement. Thereupon
the district attorney stated that he had not anticipated that
such a claim would be made and that rather than spend the
time necessary to produce evidence to refute it he would
withdraw the question.

This evidence does not indicate bad faith on the part of
the district attorney nor that the purpose of this question-
ing was to merely show that he was an habitual criminal
with the propensity for committing violent crimes. It shows
clearly that defendant had committed many felonies both
before and since he was last in custody. It further shows
that the avowed purpose of this examination was to estab-
lish that defendant was facing a series of prosecutions in
Utah and California and thereby supplies a strong motive
for trying to shoot his. way to freedom at the time he es-
caped from Officer Farley.

Defendant’s contention that evidence of other crimes was
inadmissible, under the circumstances of this case, is in-
correct. He quotes the Nemier case, supra, and concludes

therefrom that there is a general rule that evidence of other
crimes is not admissible but that there are exceptions to
such rule where such proof is relevant to prove intention,
design or motive in or for the offense. But the part quoted
purports to be a statement of an erroneous theory of the law
in such matters. That case held that the state may not
prove other offenses where the sole and only purpose of
such proof is to show defendant’s propensity to commit
crime because the jury is apt to give such evidence undue
weight, but such evidence is admissible when offered for the
purpose of showing an intention or design to or a motive
for commission of the offense charged. In other words, the
rule as stated in the Nemier case and more clearly by Mr.
Chief Justice Wolfe in the Scott case supra, is that evi-
dence of other offenses is excluded only where the sole
purpose is to show defendant’s propensity for the commis-
sion of crime and does not include cases where the purpose
of such evidence is to show defendant’s intention or design
to or motive for commission of the crime charged. Here
it is clear that the avowed purpose of the district attorney
in this cross-examination was to show that defendant had
a strong motive for shooting the officer, so evidence that
defendant committed these four robberies would have been
admissible. Since there are circumstances which indicate
that the district attorney had reason to believe that the
defendant would admit that he committed these robberies
the same as he admitted the other offenses about which
he was questioned, it was not error to admit such questions.

We have carefully examined the other contentions of
defendant and find them to be without merit.
Judgment affirmed.

WOLFE, C. J., and McDONOUGH and CROCKETT, JJ.,
concur.

HENRIOD, J., not participating.

KELLER v. WIXOM.
No. 7778, Decided March 81, 1958. (255 P. 2d 118.)

See 68 C. J. S., Partnership, sec. 440. Proceedings to compel ac-
counting on dissolution of partnership. 40 Am. Jur., Partnership,
sec. 328.

George M. Mason, Brigham, Fred L. Finlinson, Salt Lake
City, for appellant.

Newell G. Daines, Logan, Walter H. Anderson, Pocatello,
Idaho, of counsel, for respondent.

McDONOUGH, Justice.

This action was brought by the plaintiff to secure a disso-
lution and an accounting of a partnership venture alleged
to have existed between plaintiff and defendant from March
19, 1947 to August 10, 1950. The lower court made findings
of fact, supported by sufficient evidence, as to the major
items of controversy and awarded a judgment against the
defendant in the sum of $138,488.52. Defendant appeals
from this judgment basically contending that the court
erred in not particularly specifying certain items of ex-
pense and cost and by not rendering an itemized account
of how he arrived at the amount of judgment. The record

reveals that after findings of fact were submitted to the
court certain amendments thereto were proposed by the
defendant. Some of these amendments were adopted and
some were rejected, but none of the proposed amendments
requested the specific findings, each of which is here ad-
vanced as a ground of reversal.

While the trial court did not make a specific find-
ing on every minor item, we believe the general find- | |
ing
“that upon an accounting and making all of the charges to each of
the partners which should be made to them and giving all of the
credits to which each of the parties is entitled * * * there is a
balance due and owing from said Wixom to said Keller in the sum
of $18,438.52”

was sufficient to indicate the modus operandi of the court
and this, joined with the specific findings as to the major
items, sufficiently discharged the court’s responsibility.
Particularly is this so where appellant proposed no amend-
ments in the respects complained of to the findings pre-
pared by respondent and made no objection to them.

We acknowledge that a failure to find on a material issue
is not cured by the appellant’s failure to request amend-
ments, but the lower court here did not fail to find on a
material issue. The sole problem is that it is difficult
to ascertain what the court did find in respect to [ll
certain items. If these items had been brought to the
attention of the trial court at the proper time, a proper
correction, if called for, would no doubt have been made.
Defendant, however, not only made no objections to the
findings before they were signed, but he raised none of
these questions in his motion for a new trial. Hence, he
cannot now be permitted to criticize the findings for am-
biguity, inexplicity, or uncertainty. Alles v. Hipp, 108 Cal.
App. 2d 730, 239 P. 2d 451; Abel v. O’Hearn, 97 Cal. App.
2d 747, 218 P. 2d 827; Gaines Bros. Co. v. Gaines, 188 Okl.
300, 108 P. 2d 177. Such objections, now made on appeal,
come too late.

Appellant’s second contention is that the trial court erred
in refusing him the opportunity to introduce evidence in
support of his claim for extra compensation for services
and work required to. be done for the benefit of the
partnership. The record reveals that no express or | |
implied agreement existed as to partner’s wages or
compensation; that both partners rendered labor and ser-
vice in furtherance of the partnership venture, but that
appellant contributed more in this respect than did respon-
dent; that at the trial defendant proffered evidence of his
greater exertion, but the court sustained objection to such
offer on the ground that as a matter of law partners re-
ceived no compensation for action in the partnership busi-
ness (other than splitting the profits) unless there was
an express agreement or provision for such remuneration.

Section 48-1-15(6), U. C. A. 1953, provides that

“No partner is entitled to remuneration for acting in the partner-
ship business, except that a surviving partner is entitled to reasonable
compensation for his services in winding up the partnership affairs.”

To the same effect is Forbes v. Butler, 73 Utah 522, 275 P.
772, 775, wherein we stated:

“The amount of compensation either party in a partnership or
joint venture is entitled to receive, in the absence of contract other-
wise, is dependent upon the profits made from such joint venture.”

We conclude no error arose in the exclusion of defendant’s
proffer of proof.

Defendant’s final point on appeal is that the court erred
in its mathematical calculations in arriving at the judg-
ment. In support of this contention, defendant’s ingenious
and exhaustive argument is:

“Wixom calls the Court’s attention to the calculations of the Court
—obviously erroneous.”

It is generally accepted that Ha

“On appeal from a judgment stating an account, the presumption
is in favor of the trial court’s findings on contested items; and, except

|

in the case of a fundamental error, the appellate court will not at-
tempt a detailed examination of accounts for the purpose of finding
errors not specifically pointed out”. 1 C. J. S., Accounting, § 44, page
689; Gaines Bros. Co. v. Gaines, supra.

The “obviously erroneous” calculation did not appear in our
reading of the record. For this reason, this court is not
disposed to closely scrutinize some three volumes of evi-
dence and multitudinous exhibits to ascertain whether or
not the lower court was proficient in arithmetic. Appel-
lant, failing to point out arithmetical error, takes nothing
under this contention. The judgment of the lower court
is affirmed. Costs to respondent.

WOLFE, C. J., and CROCKETT and WADE, JJ., concur.

HENRIOD, J., having disqualified himself did not par-
ticipate herein.

DOWSE v. SALT LAKE CITY CORP., et al.
No. 7815. Decided April 2, 1958. (255 P. 2d 723.)

See 62 C. J. S., Municipal Corporations, sec. 228 (8). Changes
after adoption of zoning regulations, discretion as to, 58 Am. Jur.,
Zoning, 196; 147 A. L. R. 167.

La Mar Duncan, Salt Lake City, for appellant.

E. R. Christensen, City Atty., Homer Holmgren and A.
P. Kesler, Asst. City Atty., Salt Lake City, for respondent.

McDONOUGH, Justice.
Appeal from lower court’s dismissal of plaintiff's com-
plaint, no cause of action.

Plaintiff owns land located in a potential commercial or
industrial area, but established as a residential district
under the zoning laws of Salt Lake City. A request to re-
zone plaintiff’s land was refused by the city authorities, and

this action was brought to declare the zoning ordinance
unconstitutional as it applied to the lots involved. Plain-
tiff’s complaint alleged that his land is unsuitable for resi-
dential property ; that it is located in a potention industrial
or commercial zone; that the zoning ordinance, as applied
to his property, serves no beneficial use, and in no manner
promotes the health, safety, morals or general welfare of
the community; that the value of his property would be
greatly enhanced if it could be used for industrial purposes;
and that under these circumstances the zoning ordinance is
SO oppressive as to be confiscatory and unlawful.

Defendant moved to dismiss on the ground that plaintiff's
complaint failed to state a claim upon which relief could be
granted, and this motion was sustained by the trial court.
The sole issue is whether plaintiff, in compliance with Rule
8, U. R. ©. P. 1950, stated a claim which entitled him to
relief.

In addition to the allegations recited above, plaintiff's

complaint reveals that his property consists of one-half of
the lot on the corner of a block. The zoning ordinance of
Salt Lake City is pleaded by giving its title and the
date of its passage. This invokes judicial notice of | |
the provisions of said ordinance. Rule 9(i), U. R.
C. P. 1950. The prayer of the complaint asks the court by
its decree to enjoin the City Commission and the members
thereof from interfering with his use of the property for
commercial purposes and further asks that the City Com-
mission be required to re-zone the district insofar as it
affects his lot.

Examination of the pleaded ordinance reveals that much
of the property in other blocks in the neighborhood of the
one on which plaintiff’s half lot is located are zoned for
commercial purposes. However, the entire block of which

+Rule 8, U. R. C. P. 1950, states: “A pleading which sets forth a
claim for relief * * * shall contain (1) a short and plain state-
ment of the claim showing that the pleader is entitled to relief.”

this half lot is a part, as well as the block to the south and
the one to the southeast thereof, are zoned exclusively for
residential purposes.

The factual allegations in the complaint with regard to
the plaintiff’s property must be read in light of these fur-
ther recited facts. Plaintiff’s complaint stated that his
property was located in a potential, industrial commercial
area; that it was. unsuitable for residential property; that
its value would become greatly enhanced if it were re-zoned
to industrial uses. Such allegations do not show a confis-
eatory, discriminatory or arbitrary action by the City
authorities which would justify a judicial alteration or
extension of the boundaries of the zone. As stated in
Wilkins v. City of San Bernardino, 29 Cal. 2d 332, 175 P.
2d 542, 549:

“Zoning necessarily involves boundary problems and, when ‘spot’
zoning is permitted in a residential district, the legislative body must
determine where the boundary is to be placed, attempting, as far as
possible, to minimize the resulting inconveniences. This is essentially
a legislative problem, and the determination may be attacked only if
there is no reasonable basis therefor. Often there may be little dif-
ference in the character of the property on either side of the line,
but such a showing will not justify a judicial alteration or extension
of the boundaries.”

We quoted the foregoing with approval in Phi Kappi Iota
Fraternity v. Salt Lake City, 116 Utah 536, 212 P. 2d 177,
181.

In this jurisdiction the discretionary power to district
and zone cities for various purposes incident to the public
interest is granted to the governing body of the city by
statute. Sec. 10-9-1, 2, 8, U. C. A. 1958. Palpably the
exercise of the zoning power is a legislative func: [i

. tion and activity. Walton v. Tracy Loan & Trust
Co., 97 Utah 249, 92 P. 2d 724, 726. The wisdom of the
plan, the necessity, the number, nature and boundaries of
the district are matters which lie in the discretion of the
City authorities, and only if their action is confiscatory,

dil

discriminatory or arbitrary may the court set aside their
action. Marshall v. Salt Lake City, 105 Utah 111, 141 P.
2d 704, 149 A. L. R. 282. The fact that plaintiff's one-half
lot might be more profitably used for commercial than for
residential purposes, or indeed, the fact that it has become
unsuited for residential-purposes does not show discrimina-
tion or reveal arbitrary action. The character of the dis-
trict as a whole must be kept in mind in determining
whether the health, safety, morals or general welfare of
the district and hence of the community would be promoted
by permitting encroachment into the residential area of
commercial or industrial establishments. Cf. Leahy v. In-
spector of Buildings, 308 Mass. 128, 31 N. E. 2d 436;
Dundee Realty Co. v. City of Omaha, 144 Neb. 448, 18 N.
W. 2d 634. The factual allegations of plaintiff’s complaint
do not support the conclusions drawn by the plaintiff there-
from and stated in such pleading. The judgment of the
lower court, therefore, was correct. It is affirmed. Costs
to respondents.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,

JJ., concur.

OLSEN, et al. v. WARWOOD, et al.
No. 7789. Decided April 15, 1958. (255 P. 2d 725.)

ot

See 79 6. J. S., Schools and School Districts, see. 440. Liability
for injury to child by school bus. 47 Am. Jur., Schools, sec. 57; 160
ALL. RB. 197.

J. Rulon Morgan, Provo, Elias Hansen, Salt Lake City,
for appellant.

Stewart, Cannon & Hanson, Salt Lake City, Ernest F.
Baldwin, Jr., Rea J. Hanson and Don J. Hanson, Salt Lake
City, for respondent.

McDONOUGH, Justice.

Appeal from a judgment on a verdict in favor of the
defendant, Warwood, and against plaintiff, no cause of
action.

Plaintiff, a 6-year old school child, was run over by the
right rear wheels of a school bus from which he had just
alighted. His father, as guardian ad litem, brought this
action against the driver of the bus, Sheldon T. Warwood,
and against the Board of Education of the Alpine School
District who, at the time of the accident, owned and oper-
ated the vehicle. The action was dismissed by the court
below, on motion of the defendant’s counsel, as to the Board
of Education and the individual members of such board.
No question is here raised as to the correctness of this
ruling. The case was submitted to the jury on the issue of
the negligence of the driver, defendant Warwood. Plain-
tiff’s assignments of error are directed to the failure of
the court to give a requested instruction and upon claimed
errors in certain instructions given.

114

Plaintiff by the complaint as finally amended, after
alleging that he was a passenger on the school bus being
driven by the defendant, set forth the alleged negligence
of the driver in the following paragraph:

“That while plaintiff was such passenger and at said time and
place aforesaid, when in the act of getting out of and off from the
said school bus, and being still thereon, to wit: on the steps thereof,
the said school bus was, through the carelessness and negligence of
the said defendant suddenly started and put in motion wihout giving
plaintiff sufficient time to safely get off, and in consequence of the
negligence and carelessness of the defendant in the running and the
operating of said school bus the plaintiff was thrown from the bus,
underneath the same, and the defendant then and there negligently
drove said school bus upon and over the plaintiff Ronald Ralph Olsen.”

Plaintiff’s testimony supported the foregoing allegation.
He testified that while one foot was on the lower step of
the bus and the other foot on the ground the bus was put
in motion by the driver and he was thrown under the bus
and run over by the right rear wheel. He was corroborated.
by the testimony of a little girl who was at that time sitting
in the bus. On the other hand, the defendant driver testi-
fied that after stopping the bus at the accustomed place
he opened the door by means of a lever provided for such
purpose, whereupon Ronald and two other children alighted.
They were, according to his testimony, some 5 feet away
from the side of the bus when he closed the door and then
put the bus in motion. This was all of the evidence as to
how the accident happened. We discuss the assignments
of error in light of the recited allegation and the stated
evidence.

Appellant’s first assignment of error raises the issue
as to the degree of care required of a school bus driver.
The lower court refused an instruction requested by appel-
lant to the effect that defendant Warwood was re-
quired to exercise a high degree of care to enable the I
plaintiff to alight and move from the bus in safety;
that the degree of care required was such as a very prudent,

careful and competent person would exercise under similar
circumstances. In lieu thereof the trial court instructed:

“In determining whether or not, at the time and place alleged, the
defendant used reasonable care, you may take into consideration the
type of vehicle he was operating, its purposes, the number and ages
of its passengers, * * * and any and all other facts and circum-
stances shown by the evidence affecting the care which a reasonable
and prudent person under like conditions and circumstances would
use.”

We shall assume, without here deciding, since it is not
necessary to a decision on the point, that the requested in-
struction was substantially correct. However, the failure
of the court to give such request could in no way prejudice
the defendant in view of a specific instruction directed to
the very fact put in issue as to the conduct of the defendant.
By instruction No. 8 the court directed the jury as follows:

“If you find from a preponderance of the evidence that the bus
driven by the defendant did not stop long enough for the plaintiff
to have alighted therefrom and get away from the bus in safety, and
if while the plaintiff was endeavoring to get off and away from said
bus, it was started, and if by reason thereof plaintiff was caused to
fall and was run over and was injured, then you will find for the
plaintiff.”

Thus the jury was instructed that if they found the con-
duct of the driver of the bus to be such as was alleged in
plaintiffs complaint and testified to by him and his witness
they should find a verdict for him. Confronted by this
specific direction, the jury would be little aided by any
definition as to the degree of care imposed upon the driver
of a school bus. They could not be misled by an instruction
which failed to define the full measure of his duty ab-
stractly, when the court instructed that if he did as alleged
by the plaintiff he violated that duty.

Appellant’s second contention is that the court erred in
instructing the jury that they could not return a verdict
in favor of the plaintiff and against the defendant unless

the number of jurors required to reach a verdict

agree as to the defendant’s negligence, upon the | |

. Same act or acts, or upon the same failure to act.
It must be conceded, even assuming such an instruction to
be proper where distinct fact situations involving negligent
conduct are submitted to a jury, it was not called for in
this case. Either the bus was started before Ronald was
safely away from it as testified to by him, or it was not
started until he was in a place of safety, as testified to by
the defendant. Hence, it was error to so charge the jury.
However, the very sharp conflict in the evidence on this
one vital matter, taken in connection with Instruction No.
8 quoted hereinabove, leads us to conclude that the jury
could not possibly be misled thereby to the prejudice of the
plaintiff.

Appellant also contends there is no evidence in the record
showing that plaintiff ran or moved towards the bus and
hence it was prejudicial error to instruct that:

“Ef therefore you find from the evidence that after the plaintiff
* * * had been discharged from said vehicle and that thereafter
when said vehicle started in motion Ronald Olsen ran toward the side
of the bus near the right wheels at a time and in a place where de-
fendant could not see him then your verdict must be in favor of the.
defendant and against the plaintiff.”

It is well settled in this jurisdiction that an instruction
must be based on evidence, and that it is prejudicial error
to-submit a charged act of negligence to a jury for its con-
sideration in the absence of evidence tending to
support a finding that the act occurred. Smith v. [Hl
Clark, 37 Utah 116, 106 P. 653, 26 L. R. A, N.S,

953, and see Griffin v. Prudential Ins. Co.. 102 Utah 563,
183 P. 2d 333, 144 A. L. R. 1402; Kendall v. Fordham, 79
Utah 256, 9 P. 2d 183. Likewise it is well settled that the
court may not permit the jury to speculate upon the evi-
dence and that a finding of fact cannot be based upon sur-
mise, conjecture, guess, or speculation. Jackson v. Colston,
116 Utah 295, 209 P. 2d 566; Dern Inv. Co. v. Carbon

County Land Co., 94 Utah 76, 75 P. 2d 660. It is manifest,
however, that a jury may find any fact which must reason-
ably and of necessity flow from other facts which are in
evidence.

There is no testimony in the record stating that plain-
tiff ran or walked into the side of defendant’s bus. Defen-
dant, however, did testify that he brought the bus to a
complete stop; that the children, including plaintiff,
were permitted to disembark from the right front | |
door in safety; that he observed the plaintiff a good
five feet out and away from the bus before the vehicle was
put back into motion; that the vehicle proceeded on and
away from plaintiff’s position; and that he observed no
child or person close enough to plaintiff to push or throw
him under the wheels. This testimony along with the ad-
mitted fact that plaintiff was run over by the right rear
wheels of the bus is sufficient to support an inference that
plaintiff ran or walked toward the bus after it regained
forward motion. No other inference cam be drawn from
defendant’s testimony stating plaintiff was five feet away
from the vehicle; was not thrown or pushed under the ve-
hicle by a third person or object; was not driven into by
the vehicle; and yet was run over by the rear wheels of
such conveyance. The instruction permitting the jury to
make such an inference was not based on non-evidentiary
facts, nor did it permit a finding based on surmise, conjec-
ture, or speculation. Such instruction though not a model
one under the facts before the trial court, did allow a logical
and reasonable finding to be made which was based on
testimony properly in evidence. Therefore, no prejudicial
error was committed in giving it.

Appellant’s final contention of error is that the
trial court erred in giving Instruction No. 11, which I |
stated:

“In weighing the evidence adduced in this cause pertaining to

defendant’s alleged negligence, it is your duty to consider it under all
of the facts and circumstances existing at the time of the accident,

and not to consider it as you would in looking back upon the event
from this later date. Quite ordinarily, individual actions in any
given set of circumstances may disclose faults and criticisms when
looked back upon and tested by cool and deliberate thinking away
from the event, which would not be apparent to a reasonable and
prudent person at the time he is surrounded by the circumstances of
the accident. Thus the question is whether or not the defendant at
the time of the accident, and surrounded by all of the circumstances
shown by the evidence to have surrounded him at such time, acted
in all respects as a reasonable and prudent person would act. If he
did so act, he was not negligent, and therefore, he is not responsible
for damages resulting from the accident. But if he did not so act
in any particular alleged in the pleadings then he was negligent,
and is charged with all damages proximately caused by such negli-
gence.”

Appellant contends this. instruction was argumentative
and that, in effect, the court was commenting on the weight
of evidence. As we read it, the instruction lays down a
correct rule of law, i. e., that the jury should consider the
facts and circumstances surrounding the accident as they
existed at the time of mishap. The instruction comments
on no issues of fact nor does it infer that any particular
result is to be reached by the jury. It weighs no evidence
and balances no equities. It merely says that in weighing
evidence the jury must view the situation in light of the
factors confronting the defendant at the time of the occur-
rence, and then leaves the jury the question as to whether
defendant acted as a reasonable and prudent man. This
being so, there is no error in giving this instruction. The
judgment of the lower court is affirmed. Costs are awarded
to the respondents.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,
JJ., concur.

119

BLANCHARD v. SMITH, et al.
No. 7869. Decided April 9, 1958. (255 P. 2d 729.)

———TT—T—T—T—T—TTTTTTTTTTTTTETE—————————_——_—————___,,,,,,,_____ Tl,
> (i
See 11 C. J. S., Boundaries, sec. 82. Oral agreement, establishnient
of boundary line by, 8 Am Jur., Boundaries, see. 78; 118 A. L. R.

Leon Fonnesbeck, Logan, for appellant.
George C. Heinrich, Logan, for respondents.

HENRIOD, Justice.

Appeal from a decree settling a boundary between the
litigant neighbors. Affirmed, the parties to bear their own
costs on appeal.

Plaintiff purchased by metes and bounds the souther-
most of 3 lots owned by one Tiller. Not knowing the true
boundary, plaintiff inquired of Tiller’s daughter. She em-
ployed a surveyor, who established the line, which 45 years
later proved to be erroneous by about 1 rod. On the strength
of the survey, plaintiff built a fence, so the court found,
on the surveyor’s line, and the fence has remained in place
since, the property north thereof and the property south
thereof having been occupied by defendants and their pred-
ecessors and by plaintiff respectively, acquiesced therein
for nigh onto a half century. A recent survey for special
improvements revealed the error, shorting plaintiff 1 rod,
about which there is no question. Plaintiff sues to quiet

title to the disputed strip on the north, on the theory the
fence was placed through mutual mistake. Strangely
enough, plaintiff all these years has occupied a strip to
the south of his described property of almost identical area,
believing it to be his. Actually it belonged to Logan City,
from whom plaintiff recently obtained a quitclaim deed
for a nominal sum. Over the years plaintiff has paid taxes
and special assessments on the disputed strip to the north,
but has not had to pay any such charges on the strip to the
south. The record clearly shows that for many years plain-
tiff knew the fence on the north was not on the true boun-
dary line, he having testified he knew it was off the true
line at least 214 feet. Yet he acquiesced in the continued
existence of the fence.

We repeatedly have held that neighbors, by oral agree-
ment may establish a common boundary’ which, after suf-
ficiently long acquiescence, cannot be disestablished.? Our

* conclusions have been predicated on a principle of
repose designed to set at rest boundaries commonly [il
the subject of strife.* But plaintiff here urges that
there is a limit to the rule, which prevents such establish-
ment, where such agreement is arrived at under mutual
mistake.* Difficulty here is that plaintiff admits he was
not mistaken, since he knew the fence was off center by
at least 214 feet, and the fact it was actually off center
about 1 rod makes the matter of his knowledge of inaccur-

1Rydalch v. Anderson, 87 Utah 99, 107 P. 25; Tripp v. Bagley, 74
Utah 57, 276 P. 912, 914, 69 A. L. R. 1417.

2Brown v. Milliner, 120 Utah 16, 282 P. 2d 202; Ekberg v. Bates,
121 Utah 128, 289 P. 2d 205.

*Holmes v. Judge, 31 Utah 269, 87 P. 1009.

‘Brown v. Milliner, supra; 8 Am. Jur., Boundaries § 77, p. 801:
“Tf, however, the parties undertake by a parol agreement to fix the
location of a boundary line under the belief that they are fixing the
true boundary line, when, in fact, it is not, their agreement is not
binding and may be set aside by either party upon the discovery of
the mistake [citations], unless there is some element of estoppel
which would prevent them from doing so, [citations], as where the
rights of innocent third parties have intervened.”

acy of boundary only one of degree. Since plaintiff truly
was not mistaken about the accuracy of the boundary for
many years, his acquiescence brings him within the rule of
repose we have mentioned, and the trial court did not err
in establishing the boundary for the parties at the fence line
instead of that called for by the metes and bounds descrip-
tion.

Plaintiff urges that if the fence be determined as the
established boundary, he should be reimbursed for taxes
and special assessments he has paid on the disputed
strip. On simple principles of equity and good con- | |
science, the writer agrees with plaintiff, suggesting
that he has authoritative support for his contention,’ but
the majority of the court differing, it is concluded that
under the facts of this particular case, and without enunci-
ating any general principle, such reimbursement is pre-
cluded here.

Plaintiff further complains that defendants’ counsel
designated more of the record than was necessary under
Rule 75(e), thus unnecessarily burdening the record
with expense. The designation, which was made late i |
because of excusable neglect, was sanctioned and
authorized by the trial court, and the record, being com-
paratively brief, constrains us to conclude that counsel for
defendants did not exercise that degree of unreasonable and
arbitrary discretion that would justify our intervention
under the Rule.®

WOLFE, C. J., and McDONOUGH, J., concur.
CROCKETT and WADE, J.J., concur in the result.

5Restatement of Restitution, Sec. 43(1), 1987, 86 A. L. R. 1211.
°Treasure Imports, Ine. v. Henry Amdur & Sons, 2 Cix., 1941, 127
F., 2d 8, Id, D. C., 40 F. Supp. 880.

MEAGHER v. UINTAH GAS CO. et al.
(255 P. 2d 989.)

No. 7728. Decided February 11, 1953.

a
mt

126

See 58 C. J. S., Mines and Minerals, sec. 220, Transfer of oil
lessor’s interests as affecting successor’s royalties. 24 Am. Jur., Gas
& Oil, sec. 98; 185 A. L. R. 557,

Gustin, Richards & Mattsson and Ray, Rawlins, Jones &
Henderson, Salt Lake City, Oliver .W. Steadman, Cody,
Wyo., for appellant.

Herbert Van Dam, Jr., Salt Lake City, Gilbert C. Wheat,
San Francisco, Cal., for respondent.

HENRIOD, Justice.

Again this case is here on appeal after we reversed a
quiet title decision wherein a modified oil and gas lease was
adjudged terminated. 1947, 112 Utah 149, 185 P. 2d 747.
We held the lease still in force, remanding the case for
further proceedings. We affirm the lower court in this
present appeal, except that portion awarding operating
rights in the North 40, which we order. awarded to de-
fendant Ashley Valley Oil, and except that portion award-
ing a 2% (oil, not gas) royalty to Meagher, which we order
reduced to 114%, remanding with instructions to modify
the conclusions of law and judgment to conform to this
decision, each party to bear its own costs on appeal.

Our former opinion outlined the facts prior thereto, and
we refer to them. Since then, fee owner Meagher, by quit-
claim delivered and recorded during pendency of mandamus
proceedings designed to clarify the remaining portion of
our former decision, has transferred his interest, reserving
a royalty. Defendant Juhan has transferred his interest
in the operating rights to Equity Oil, and it to Weber Oil,
neither litigants here. Both companies joined in a working
agreement with Stock and Juhan to drill. As a result oil
was discovered in September 1948, producing $672,000
gross to trial time.

127

Since our former decision, three claims were allowed to
be brought into the case: 1) Meagher’s, by amendment
to assert an oil royalty assigned in 1930 to Stock and
Phebus, calling for reconveyance on condition broken; _

2) Stock’s, by counterclaim, to assert a one-half |
interest in operating rights in 440 acres, in opposi-

tion to Meagher’s identical claim; and 3) Meagher’s, by
amended reply, to claim ownership of such interest by
transfer from Stock. Working rights in the 440 spring
from a 1924 oil and gas lease, modified in 1927. By mesne
conveyance, Stock and Phebus each became owner of a half
interest therein. Meagher claims nothing through Phebus,
but claims a one-half interest through Stock’s “release,”
principal subject of this suit, which, eliminating non-
essentials, reads:

“Whereas, a certain oil and gas lease dated the 4th day of June,
1924, given by James Wash Sheridan * * * to R. C. Hill, lessee
* * * was recorded on the 25th day of July, 1924 * * * and

“Whereas the lessee and his assigns agreed that upon failure to
fulfill the terms of the lease, ‘The lessee hereby agrees to relinquish,
cancel and surrender the same to the lessors and to clear the record
title of said lands from the lien or burden of said lease by making,
executing, acknowledging and delivering a proper conveyance or
release thereof and causing the same to be recorded’ * * *

“Whereas, Paul Stock derived his interests by virtue of an assign-
ment of the rights under this original lease;

“Whereas, the said lease and all rights thereto or incidental thereto
are now owned by N. J. Meagher by virtue of cancellation of the
Jease by termination of production of oil and gas in accordance with
the terms of the lease;

“Now, therefore, know all men by these presents, that Paul Stock
does hereby cancel, release, relinquish and surrender to N. J. Meagher,
his heirs and assigns, all of his right, title and interest in and to the
said oil and gas lease, and all of his right, title and interest in and to
the said oil and gas lease in so far as it conveys the lands above
described.

/signed/ Paul Stock.”

The lower court, on the evidence, held this instrument
transferred Stock’s interest to Meagher. We affirm such
holding.

Appellants Stock, Phebus and Juhan claim error 1) in
allowing Meagher to amend his reply to assert title acquired
from Stock four days after action brought; 2) in holding
Meagher the real party in interest; 3) in adjudging
Meagher free from laches and 4) fraud; 5) in concluding
the Release was supported by consideration; 6) in nega-
tiving mistake justifying rescission; 7) in failing to hold
the Release abortive as a surrender or 8) a transfer; and
9) in allowing Meagher to litigate 2/3 of 1% royalty inter-
est in this action. We agree only as to 9).

Appellant Ashley Valley asserts error in awarding oper-
ating rights in 40 acres (North 40) to Meagher instead of
to Ashley Valley, with which contention we agree.

Mindful of principles heretofore enunciated that the
trial court’s findings will not be disturbed unless
manifestly against the weight of the evidence,’ ap- i |
pellants’ objections are met in the order named.

1. Meagher, by amendment, properly was permitted
to attack Stock’s alleged interest by pleading title acquired
four days after commencement of the action. This action
and most of the pleadings were filed before we
adopted the new rules. Without discussing what im- Hi
pact, if any, the rules would have, had the action
been brought after their adoption, we can say generally
that an entirely new and different cause may not be pleaded
by reply. Nor could a plaintiff in a quiet title action assert
title acquired after its commencement.? But there are ex-

2Stanley v. Stanley, 1989, 97 Utah 520, 94 P. 2d 465; Haws v.
Jensen, 116 Utah 212, 1949, 209 P. 2d 229; In re Linford’s Estate,
121 Utah 118, 239 P. 2d 200.

2Hartford Accident & Indem. Co. v. Clegg, 1948, 103 Utah 414, 185
P, 2d 919.

sWelner v. Stearns, 1911, 40 Utah 185, 120 P. 490, Ann. Cas. 19140,
1175; Rowley v. Davis, 1917, 34 Cal, App. 184, 167 P. 162.

ceptions. Such title acquired after action begun, but before
defendant pleads adversely, may be pleaded and proved: in
derogation of the defendant’s adverse claim.4 We cannot
view Meagher’s claim of one-half interest alleged in his
amended reply as a new or different cause. After reversal
by this court, he conceded only half ownership in the origin-
ally pleaded whole. Meagher’s action persists on the same
theory, — one to quiet title. One may allege a greater and
prove a lesser title, as is held generally® and by this court,®
and we see no reason to disturb the rule because the lesser
is pleaded by reply. Appellants’ authorities seem confined
to cases of clear departure, and not, as here, to cases where
the theory persists but the quantum of estate is reduced by
amendment.

2. We think Meagher’s transfer of interest during
pendency of the action does not deny him a continued role
as plaintiff, nor does that role do violence to former
Title 104-3-19, U.C.A. 1948, or Rule 25(c), U-R.C.P., i
both of which allow prosecution of an action in the
name of either grantor or grantee.”

3. Appellants’ claim of laches by Meagher is not borne
out in the record. Over the years Meagher pursued and ac-
quired the fee, a landowner’s royalty and the Release from
Stock. He named Stock defendant, wrote him re-
questing a release to clear the record, and received | |
the same 4 days after action filed, promptly record-
ing it. He pursued his action against Stock no further, but
complained to him by letter about a recorded quitclaim

*Welner v. Stearns, supra.

574 C. J. S., Quieting Title, § 75, p. 115.

8State v. Rolio, 1927, 71 Utah 91, 262 P. 987.

"Utah Rules of Civil Procedure, 25(c): “In case of any transfer
of interest, the action may be continued by or against the original
party, unless the court upon motion directs the person to whom the
interest is transferred to be substituted in the action or joined with
the original party.”

130

to the same property given to another. Stock never an-
swered this correspondence, asserted no claim, nor did his
grantee, until nearly 5 years after Meagher brought action,
2 years after we validated the lease, and nearly 1 year after
oil discovery. When he did appear by voluntary counter-
claim, Meaher promptly resisted, pleaded title through
Stock and without unreasonable delay pressed for trial.
Under such circumstances we cannot say the trial court
erred in exonerating Meagher from suspicion of laches.

4, As to the claim that Meagher was fraudulent by
inserting recitals of forfeiture in the Release which he pre-
pared for Stock’s signature, and in correspondence with
the latter, the simple answer lies in the facts that
Stock admitted he had merely glanced at the Release [I
and accompanying letter, thought he was signing a
royalty transfer, and obviously was indifferent to and unin-
fluenced by such recitals and statements. All this. predated
our validation of the lease after lessee’s 15 years of inactivi-
ty, all of which not unreasonably may have led a person to
believe apparently as did Meagher, the trial court, and a
dissenting Justice of this court, that forfeiture by abandon-
ment had occurred, justifying the recitals. The fact that
Stock did not rely on the recitals mentioned precludes rescis-
sion for fraud, since actionable fraud will not lie where one
is induced to change his position, not because of any practi-
cal deceit, but because of his own mistake.® The record fur-
ther seems to reflect that Stock was an oil man with a wealth
of experience in oil matters involving large sums, an un-
likely target for deception. His testimony at the trial con-
tradicted his pleading that he relied on such recitals, since
he stated he believed he was transferring oil royalties and
that to date he had not read the counterclaim filed on his
behalf.

®8Under a trust agreement revealed at the trial, giving Stock 1244 %
of any proceeds from a proposed action against Meagher to test
Stock’s claim, if any.

°28 Am. Jur. 939.

5. The Release was supported by sufficient considera-
tion. Meagher’s acceptance and recordation thereof relieved
Stock of leasehold obligations, including a duty to
match any offer of development by others, and the |_|
duty to drill if neighbors struck oil. Such relief from
obligation will support a transfer.”

6. That the Release was given by mistake warranting
rescission could have merit if the record disclosed clear and
convincing evidence of the mistake which Stock pleaded
in his complaint, and diligence on his part promptly
to rectify it. The record does not show clearly such |_|
mistake, and a five-year lapse in taking affirmative
action to rectify hardly seems the type to satisfy the rule.
Stock’s admitted mistake was a belief he signed an oil
royalty transfer, not a belief that he signed an instrument
to clear the record because of forfeiture. On such facts,
it does not seem unreasonable that the trial court concluded
there was no mistake warranting rescission.

7. Since we conclude that Stock’s interest passed, we
need not discuss the Release as a surrender.

8. Since Stock did not heed the recitals in the Release,
they did not induce him to sign. Therefore, the authorities
cited reflecting that intention to convey or not to
convey may be interpreted by examing recitals in an [J
instrument are inapropos. Hence we examine the
words in the grant clause. We find the following:

“Paul Stock does hereby cancel, release, relinquish and surrender
to N. J. Meagher, his heirs and assigns, all of his right, title and
‘interest in and to the said oil and gas lease, and all of his right,
title and interest in and to the said oil and gas lease in so far as
it conveys the lands above described.”

10Williston on Contracts, Rev. Ed., Vol. 1, Sec. 115, p. 890; National

Ass'n of Creditors V. Menish, 1927, 144 Wash. 150, 257 P. 241,
uPomeroy’s Equity Jurisprudence, Vol. 8, Sec. 859a; Weight v.

Bailey, 1915, 45 Utah 584, 147 P. 899.

Our statute requires no word of art to quitclaim,” and in
kindred cases a transfer was held intended and effected.**
Care must be indulged in construing an instrument to pass
title. Each case stands on its own words, combinations
thereof, recitals and other attendant, facts, having in mind
the rule that generally the instrument is construed in favor
of a grantee. We see no error in finding a transfer of
interest upon the particular facts of this case. If none re-
sulted this court fell into error in its former opinion when
it assumed such transfer, saying:

“On Oct. 21, 1944, Stock released his interest in the lease to the
plaintiff Meagher.”

9. We believe the 2/3 of 1% (oil, not gas) royalty inter-
est claimed by Meagher properly not determinable here.
In 1930 he assigned such interest to Stock and Phebus, to
be reconveyed on condition broken. 20 years later,

16 years after the right to have it returned, 6 years ||
after commencing his action, and after oil was dis-

covered, Meagher asserted his claim. During the 20 years
there were many transfers of interest, some to persons not
joined. Many questions may be posed as to intervening
rights, right to specific performance or damages in a quiet
title action, the matter of limitation of actions, rights of
bona fide purchasers, estoppel, laches, ete., none of which we
decide, but some of which well might vitally interest persons
not joined. Should we decide any of these, we would. look
somewhat askance at, and with much less sympathy toward
Meagher’s claim of laches by Stock, than we would Stock’s
claim of laches by Meagher, after 20 years silence and an
apparent indifference toward the 2/3 of 1% oil royalty that
now looms large with discovery of oil. To hold Meagher the
owner of the disputed percentage would require persons not
parties to assume the burden and expense of asserting any

.2Title 78-1-12, U. C. A. 1943, now Title 57-1-18, U. C. A. 1958.

1Adams Vv. Reed, 1895, 11 Utah 480, 40 P. 720; Ruthrauff v. Silver
King Western Min. & Mill. Co., 1988, 95 Utah 279, 80 P. 2d 388;
Osburn v. Finkelstein, 1911, 189 Ind. 90, 126 N. E. 11.

4 16 Am. Jur. 580.

rights they might have therein. We believe Meagher should
shoulder that burden in a different proceeding, if he is
disposed to feel his claim meritorious.

As to the North 40: In June, 1924, 480 acres, including
the North 40, were leased to Hill for 3 years. In October
1924, Hill assigned the operating rights in 440 to Utah
Oil, reserving 40 and an overriding royalty. Hill ap-
parently did nothing during the term, but transferees | |
of rights in the 440 did sufficient to induce this court
to conclude that operating rights were in good standing in
the 440 in 1947. In November, 1927, Hill assigned the Utah
Oil agreement to Ashley Valley. That company thereby not
only acquired Hill’s rights (other than operating rights) in
the lease and the override, but assumed the burdens of the
modified lease as to 440 acres. At the end of the 3-year term
of the original lease, one Smith was fee owner of the entire
480 acres. However, prior thereto, on May 27, 1927, one
week before expiration of the term, Smith signed a modifi-
eation agreement with Ashley Valley, under the terms of
which the entire 480 acres, “the lands the subject of this
agreement,” were included “insofar as they (the parties)
have the power so to do.” Utah Oil acquiesced by separate
agreement with Ashley a few days later as to 440 acres. Hill
signed neither and was bound by neither, but Smith bound
himself to the terms, encumbered the fee therewith, and defi-
nitely obligated himself to include the North 40 if he had the
“legal right and power so to do.” We take it that a fair
interpretation of such language requires the conclusion that
if there were a reverter the next week when the term ex-
pired, he not only intended, but legally and equitably bound
himself to recognize inclusion of North 40 rights in “the
lands the subject of this agreement.” No other logical
conclusion can be indulged, since the parties to the agree-
ment and consenting holders of landowner’s royalties, of
which Meagher was one, knew that rights in the North
40 were outstanding in Hill, inescapably leading to the
conclusion that those agreeing and consenting, including

Meagher, intended the inclusion of the North 40 as to
lessee’s and override rights. The terms of the agreement
would bind Smith’s privies having knowledge thereof.
Meagher not only was in privity with Smith, had knowl-
edge of the terms, signed a rider consenting to its terms,
but took the position, as stated in his brief, that being owner
of a landowner’s royalty, he’was part owner in the prop-
erty itself,_which, if true, should bind Meagher to its
terms no less than landowner Smith. Under such circum-
stances it is difficult to understand how Meagher. would
not be duty bound to abide by what appears to have been
an intention on his part to include the North 40 in the
agreement when and if the parties, and himself, had the
“right and power” to do,it. Meagher had the “right and
power” at any time after he became fee owner, and it
hardly lies in his mouth to denounce what appears to have
been his own solemn intention and consent.

It is significant that the modification agreement was
signed one week before expiration of the original lease,
which seems to point up an intention on the part of all con-
senting, to include the North 40 in the event Hill failed to
comply. Hence, assuming a reverter, Smith and Meagher
must be considered to have intended and agreed to include
the North 40. Assuming no reverter, and that the work
on the 440 acres kept rights in the North 40 alive, a matter
discussed later, Ashley Valley obtained operating rights
therein by virtue of Hill’s transfer in October, 1930.
Further evidence that Meagher intended the North 40 to
be included in the agreement is found in his own reply,
filed 18 years later, when he admitted that Smith and Ashley
Valley
“with the consent of the royalty owners, entered into a modification
agreement whereby the lease of June 4, 1924 * * * was modi-
fied,”

although Meagher qualified the quoted significant language
in later pleadings.

One other matter bears discussion. The parties stipu-
lated that if the North 40 were not included in the modifi-
cation agreement, operating rights reverted to Meagher as
Smith’s grantee, otherwise they belonged to Ashley
Valley. We ave bound by this stipulation, but disagree [i
with the reason upon which apparently it was based.

It appears that an assumption was indulged that Hill, having
transferred operating rights in 440 acres, nevertheless per-
sonally was bound to comply with all of the terms of the ori-
ginal lease on the North 40 which he reserved. Whether cor-
rect in believing such an assumption was indulged, we do say
this: That 7f operations on the 440 acres satisfied the terms
of the original lease of June 4, 1924, we are of the opinion
that the lease was in good standing as to the North 40, the
operations mentioned having inured to the benefit thereof
as though conducted thereon,—thus preventing forfeiture
and reverter. Such conclusion is sanctioned in a line of well
reasoned decisions.’® We believe the rule consonant with
practically and common sense in an industry newly born
in Utah, involving large expenditures, — where transfers
of partial interests may be important in attracting neces-
sary risk capital, not only to protect the whole tract, but to
protect a lessee’s retained interest until such time as he
better may be able to develop it. There is something of an
analogy, technically debatable, in annual labor cases relating
to mining claims, where work performed on one claim
which benefits others may be credited to such other claims.'*

The rule expressed is as it should be, since the lessor
seldom can be harmed if the work is accomplished any-
where on the leased premises, and the lessee, who may be

18Gypsy Oil Co. v. Cover, 1920, 78 Okl. 158, 189 P. 540, 11 A. L. R.
129; Harris v. Michael, 1912, 70 W. Va. 366, 73 S. E, 984; Fisher v.
Crescent Oil Co., Tex. Civ. App., 1915, 178 S. W. 905; Walker v. Lane,
Tex. Civ. App., 1921, 283 S. W. 634; Cowman v. Phillips Petrolewm
Co., 1985, 142 Kan, 762, 51 P. 2d 988,

2Morrison Mining Rights, 16th ed., p. 117; Miehlich v. Tintic
Standard Mining Co., 1922, 60 Utah 569, 211 P. 686; Nevada Explora-
tion & Mining Co. v. Spriggs, 1912, 41 Utah 171, 124 P. 770.

one of hundreds of small undercapitalized investors in an
infant industry, may take advantage of partial transfer to
attract risk capital, retaining a portion of the tract unto
himself, without facing the choice or risking all by expen-
sive individual effort and expenditure, or losing all on
the altar of the same risk capital.

McDONOUGH and WADE, J.J., concur.

WOLFE, Chief Justice (concurring in part—dissenting
in part).

I am prepared to agree that operating rights in the North
40 should be awarded to the Ashley Valley Oil Company;
and also in the awarding of 1-1/3% royalty in oil, not gas,
to Meagher instead of 2% awarded by the lower court.

I am not prepared to hold that the so-called Release (Ex-
hibit A-30) signed by Stock on October 21, 1944 was in-
tended to be a conveyance of Paul Stock’s interest in the
lease of June 4, 1924 as the same was modified by the Modi-
fication Agreement of May 21, 1927, nor that it was any-
thing but a “Release” of Stock’s interest in the lease of
1924.

I concur in the holding that the two-thirds royalty in-
terest of Meagher cannot be adjudicated in this action.

I concur as to the conclusion that no error was committed
by the lower court allowing Meagher to amend so as to at-
tack Stock’s alleged interest by pleading title acquired four
days after commencement of this action because issues had
not then been joined and that no new cause of action was
introduced by permitting Meagher to amend his reply.
Also that Meagher could continue as plaintiff after he
had assigned his interests to his children.

I agree that the charge that Meagher was guilty of laches
in pursuing the present action and that the charges of
fraud by Meagher have not been sustained by the evidence
and that technically there is a consideration for the so-

called Release, whatever may be its extent and nature, but
am not prepared to hold that it was intended to be nor was
an instrument of conveyance, or if so that it conveyed
Stock’s interest in the lease of June 4, 1924 modified by the
Modification Agreement of May 21, 1927, there being doubt
that Stock acquiesced or agreed with such modification.

CROCKETT, J., concurs in the result.

REICH et ux. v. CHRISTOPULOS et al.
No. 7908, Decided April 16, 1958. (256 P. 2d 288.)

See 12 C. J. S., Brokers, sec. 69. Broker’s commission as affected
. by refusal of customer to complete contract. 8 Am. Jur., Brokers, sec.
186; 73 A. L. R. 926.

Gaylen S. Young, Salt Lake City, for appellant.

Rawlings, Wallace, Black, Roberts & Black, Dwight L.
King, Robert Murray Stewart, Salt Lake City, for respon-
dent. :

CROCKETT, Justice.

This suit arose as a consequence of George B. Christo-
pulos’ repudiation of an arrangement to purchase the
Prescott Apartments in Salt Lake City from Harry A.
Reich and his wife. The Reiches’ complaint asked for an
adjudication of rights in the transaction, naming Christo-
pulos and his wife, Roy M. Hill (the broker who procured
the deal) and his firm, the Salt Lake Real Estate and In-
vestment Company, as defendants. Hill and his company
counterclaimed for a commission on the transaction. This
appeal challenges only that portion of the judgment below
which denied Hill recovery from the Reiches on his counter-
claim. All other issues are at rest, having been determined
adversely to the plaintiffs by the trial court and no appeal
being taken therefrom.

The plaintiffs Reich listed the apartments for sale at
an asking price of $147,000 with Wright-Worthlin Com-
pany, realtors, which had the effect of permitting sale
under “multiple listing” by any member of the Salt Lake
Real Estate Board of which Hill’s firm was a member.
The sales agency (listing) contract, which was Hill’s
authority for acting, reads in part:

«& & * if you find a buyer who is ready, able and willing to buy
said property * * * at said price and terms, or any other price
or terms to which I may agree in writing * * *, I agree to pay
you the Salt Lake Real Estate Board commission on such sale.

ee

“In the event that a prospective purchaser makes a deposit or part
payment * * * and thereafter forfeits same or any part thereof,
you are hereby authorized, in my name or otherwise, to declare such
forfeiture, and to retain so much of said sum as would equal your
commission if such sale had been fully consummated.”

Mr. Hill got Mr. Christopulos to make in the form of the
usual “earnest money receipt and agreement” a signed
offer to the Reiches of $105,000. The agreement recited
the receipt of the $5,000 “to secure and apply on the pur-
chase price,” required a further down payment of $25,000
on or before September 1, 1951 and $800 a month there-
after and includes the following stipulation:

“In the event the purchaser fails to pay the balance of said pur-
chase price or complete said purchase as herein provided, the amounts
paid hereon shall, at the option of the seller, be retained as liquidated
and agreed damages.”

The agreement was signed on Thursday, August 9, by
Christopulos who gave Hill a check for $5,000, on the top
of which he wrote, “This check deposited and cashed if
we close the deal for the apts.” He asked Hill not to cash
it for “a day or two” until he could transfer money from
another bank to cover, to which Hill agreed.

Hill then took this offer to the Reiches. They were some-
what hesitant, for various reasons, including the fact that
they wanted a higher down payment. Hill patted his chest
pocket and said, “I have got $5,000 on the transaction”
but did not disclose the information about holding the
check. The Reiches accepted the offer and signed the
earnest money agreement.

Mr. Hill held the check and proceeded with having the
abstract brought up to date and attending to other details.
necessary for the execution of the real estate contract.
The evidence shows that on Sunday the Christopuloses
heard certain derogatory statements concerning the deal
and the property and learned that the Reiches had paid
only $85,000 for it just two years before. On Monday,
Christopulos saw his attorney about either getting out
of the deal or beating the price down. An order to stop
payment on the check was given to the bank first thing
Tuesday morning. The next day, Wednesday the 15th, a
notice of rescission was served upon Mr. Hill, as agent

for the Reiches, and a copy sent them by registered mail;
it recited several reasons for so doing. The record bears
out, however, that such “reasons” were likely but excuses,
the real reason being that because of the information
given him, Christopulos had become dissatisfied with the
bargain.

On August 31, 1951, this action was commenced against
Christopulos in the names of the Reiches. After further
contacting Christopulos and being told that he would not
go through with the deal, the Reiches sold the apartments
through another realtor for the sum of $114,000, $9,000
higher than Christopulos had agreed to pay. Thereafter,
an amended complaint was filed adding Hill and his com-
pany as parties defendant. Hill filed a counterclaim for
his commission of 5%, totaling $5,250, claiming that he
had fully performed his duties as a realtor in that he had
procured a ready, willing and able buyer, who had signed
a binding contract.

The trial court found that the representation that a
$5,000 down payment had been made was a material in-
ducement to the Reiches in accepting the proposal, that
they would not have done so had they known the facts
and further that the Christopuloses had sufficient ground
for rescission because of certain unauthorized false repre-
sentations about the property made to them by Hill. Ac-
cordingly, he dismissed Hill’s counterclaim. From this
order, Hill appeals, attacking only the ruling denying him
recovery of his commission from the Reiches.

This case does not present a fact situation analogous to
that of Ogden Savings & Trust v. Blakely wherein we up-
held the lower court’s allowance of commission to a broker-
plaintiff. That decision was bottomed upon the proposition
that the broker had produced a “ready, willing and able
buyer,” who had entered into an agreement to purchase
even though he later repudiated it. There was no reason

166 Utah 229, 241 P. 221,

shown why he was not bound to perform. It was held that
the broker should not be deprived of his commission merely
because the purchaser changed his mind and stopped pay-
ment on his check after having signed a binding contract.

That an earnest money receipt may constitute a binding
contract which sufficiently consummates a deal to earn the
broker his commission, as held with respect to the con-
tract in the Blakely case, is not gainsaid. However,

a survey of the fact situation here indicates some | |
important differences which justified the trial court

in refusing to apply the rule therein announced and in
denying Mr. Hill his commission.

The earnest money receipt here was only preliminary;
it looked toward the execution of a uniform real estate
contract. Hill’s own conduct in accepting the check with
a promise to hold it and his failure to disclose this fact
to the Reiches made it possible for Christopulos to back
out of the deal and stop payment on the check before the
Reiches had an opportunity to enter into such contract.
There is nothing to indicate that at any time while Christo-
pulos was willing to go through with the deal the Reiches
were unwilling to do so, or that any fault on their part
prevented consummation of the transaction.

Whether the trial court was correct in concluding that
Christopulos had the right to rescind the contract as a
consequence of unauthorized false representations by Hill
concerning the property, we need not decide. The fact
is that Christopulos did repudiate the transaction before
the Reiches had an opportunity to complete it and it was
Hill’s own conduct which enabled him to do it.

In undertaking the sale of the property for the Reiches,
Hill had a duty to represent their interest in good
faith, to discharge it with reasonable skill and dili- | |
gence and to disclose to them all pertinent facts

which would materially affect their interest. As is noted
in American Jurisprudence. :*

“The faithful discharge of his duties is a condition precedent to
any recovery upon the part of a broker for the services he has ren-
dered his principal. Thus, he is not entitled to compensation if he
fails to disclose to his principal any personal knowledge which he
possesses relative to matters which are or may be material to his
employer’s interests * * *.”

He knew that they had wanted an earnest money pay-
ment of more than $5,000 and only reluctantly agreed to
accept that amount. On cross examination, he freely ad-
mitted that “one of the very prime considerations”
for Reich’s acceptance of Christopulos’ offer was i |
the understanding that a down payment of $5,000
had been made. It is common knowledge that sellers or-
dinarily do not want to commit their property and forego
the chance of selling it to others on a mere unsecured
promise to buy, nor do they wish to lose the advantage
flowing from a substantial down payment acting as an
inducement to complete performance.

Acceptance by Hill of this illusory down payment with-
out the knowledge or approval of the Reiches deprived
them of the above mentioned benefits; Christopulos was
left free to back out on the deal and the Reiches were
placed in a position of being unable to forfeit the $5,000.
Had the down payment actually been made, under the
terms of the “sales agency contract” and the “earnest
money receipt and agreement,” upon Christopulos’ default,
either Hill or the Reiches could have declared a forfeiture
of the $5,000 which would have covered the entire com-
mission except for $250.

The fact that the Reiches were able to sell their property
at a higher figure than the Christopulos deal is in no way

212 C. J. S., Brokers, § 41; Restatement, Agency (1983) Vol. 2,
Sec. 881; Baird v. Madsen, 57 Cal. App. 2d 465, 184 P. 2d 885.
34 Am. Jur, Brokers Sec. 142, p. 1067.

144

material to the rights of Mr. Hill. The overall effect

of the way the Christopulos transaction turned out i |
was that the Reiches lost that sale. It may well have

been that they could not have sold their property at all,
or they may have been forced to take a lower figure.

The circumstances -hereinabove set out, which indicate
Hill’s failure to properly discharge his duty to the Reiches,
make it manifestly unjust to permit him to collect
a commission from them‘ for services he purported i |
to perform but which in fact his own conduct pre-
vented from being completed for their benefit. The trial
court was therefore correct in denying him recovery.

Hill also contends that prejudicial error was committed
against him because, after the trial, the court allowed an
amendment of the pretrial order to include issues
relative to the down payment. This matter was fully ui
explored during the trial. There was no showing,
nor offer to show, that Hill was taken by surprise or de-
prived of an opportunity to present any evidence to meet
that issue. Rule 15(b) U-.R.C.P. provides for:

«* * * amendment of the pleadings as may be necessary to

cause them to conform to the evidence. * * * even after judg-
ment * * #”

And Rule 16 provides that the pretrial order may be
‘os * * modified at the trial to prevent manifest injustice.”

It would be anomalous if the pleadings could be so
amended but the pretrial order could not. The amendment
made was equivalent to an amendment to conform to the
evidence. The trial court did that which was necessary
and proper to effectuate justice.

Judgment affirmed. Costs to respondents Reiches.

WOLFE, C. J., and McDONOUGH, HENROID and
WADE, JJ., concur.

‘Restatement, Agency (1988) Vol. 2, Sec. 445.

LAMBERT v. SINE et al.
No. 7572, Decided April 22, 1958. (256 P. 2d 241.)

. Pa
ES

See 51 C. J. S., Landlord and Tenant, sec, 24. Guests of inn as
distinguished from tenants. 28 Am. Jur., Innkeepers, sec. 16; 145
A. L. R. 868.

Richards & Bird and Dan S. Bushnell, Salt Lake City,
for appellants.

Wm. S. Frank, Salt Lake City, for respondent.

KELLER, District Judge.

Throughout the period of the occurrences out of which
this action grew, the appellants, defendants below and so

referred to hereafter, were the operators of the Se Rancho
Motor Lodge in Salt Lake City. On January 2, 1950, the
respondent, plaintiff below and so referred to hereafter,
his brother Charles and one Dan Moore, following negotia-
tions had that day with the defendants, commenced living
in a three-room apartment or unit of the motel. The plain-
tiff’s brother and Moore discontinued living at the apart-
ment early in March 1950, and on March 15 the defend-
ants changed the locks on the apartment doors and there-
by excluded the plaintiff from further occupancy. “Upon
inquiry at the motel office, the plaintiff was advised that
he was locked out for failure to pay rent and that his
clothes were being held as security for the delinquency.

By the plaintiff's action, he sought to recover $1000
for wrongful dispossession of the apartment, $200 for
conversion of personal property, and $1000 punitive dam-
ages. The defendants counterclaimed for unpaid rent.
The trial court found that the plaintiff had been wrong-
fully dispossessed, awarded him a judgment for $250 on
account of mental anguish and suffering, and gave the
defendants a judgment for $64.96 on their counterclaim.

Errors assigned and argued by the defendants are sum-
marized as follows:

1. That the trial court erred in finding that the relation-
ship of the defendants and plaintiff was that of landlord
and tenant.

2. That the trial court failed to find that the defendants
committed a wilful or malicious wrong and failed to find
that the plaintiff suffered any actual damage, and con-
sequently was in error in awarding the plaintiff damages
for mental anguish and humiliation.

8. That the trial court erred in refusing to grant de-
fendants’ motion to dismiss at the close of the plaintiff's
case.

4. That the damages awarded were excessive.

Tf an actionable wrong was done the plaintiff, it must
rest upon a determination that the relation of the parties
was that of landlord and tenant and not that of inn-
keeper and guest. If the relation was that of land- | |
lord and tenant, the plaintiff could only be dispos-
sessed of the apartment by resort to the statutory remedy
of unlawful detainer. Buchanan v. Crites, 106 Utah 428,
150 P.2d 100, 154 A.L.R. 167; Paxton v. Fisher, 86 Utah
408, 45 P.2d 903.

Counsel for the parties have no differences respecting
the distinctions between the two relations nor respecting
the rules to be applied to resolve the question of whether
the relationship of the parties was that of landlord
and tenant or innkeeper and guest. The defendants, Hl
however, insist that the trial court arrived at the
wrong conclusion on the evidence before it. There was no
written agreement upon which the court could place a
construction which resolved the question. In such cases,
the character of the relation is a mixed question of law
and fact. Roberts v. Casey, 36 Cal.App.2d Supp. 767, 93
P.2d 654, 657. That case states the problem and rules to
be applied in resolving it in very appropriate language as
follows:

“While in their broad lines the distinctions between tenants on the
one hand and mere guests or lodgers on the other are entirely clear
yet in some classes of establishments their tendency is to shade into
each other, and, therefore, attention has to be given to the detailed
criteria that must be relied on to decide into which class given indi-
viduals fall. * * *

“In determining, then, what was, in legal contemplation, the status
of the parties in their relations with each other, it is manifest that
the result cannot be said to depend on any one factor, as being de-
cisive. It is rather a question of which direction the general effect
of the various tests that have been applied, after weighing opposing
ones against each other, can be said to take. It is not a question of
what the relation would be if considered in some isolated aspect, but
rather what is its dominant characer. * * *

149

“Though we treat the question, however, not as one of fact merely
but as one of mixed law and fact, it is still clear that an appellate
tribunal is only justfied in overruling the view taken by a trial court
if the factors that enter into the relation, and mark it as of the char-
acter opposite to that found by the lower Court, so dominate the sit- '
uation as to clearly nullify the effect of the factors opposed to them.”

In the instant case, pointing toward the conclusion that |
the relation was that of innkeeper and guest are the fol- |
lowing: The motel of the defendants was designed pri- |
marily for supplying lodging to travelers, and that was
their general business; at the beginning of the plaintiff’s
occupancy, one of the occupants signed a “guest registra-
tion” card, the same as that used for guests of the motel;
the defendants furnished heat, light, water, telephone and
garbeg disposal, all furniture and clean linens as well as 4
facilities for cleaning the apartment, and retained a pass- |
key to the apartment. i

Pointing toward the relation of landlord and tenant are
the following: The particular apartment chosen by the :
plaintiff and his associates was designed and equipped for |
more or less permanent housekeeping; in discussion pre-
ceding the occupancy, the defendants insisted on the plain-
tiff and his associates remaining in the apartment for
a period longer than was expected from the usual traveler ;
the plaintiff and his associates made a selection of the
apartment because, in the main, it supplied the living
needs provided by a home; no maid service in the usual
sense was furnished by the defendants; the rent reserved
was payable bi-monthly in advance; the plaintiff and his
associates had the responsibility of cleaning the apartment.

We cannot say that the criteria pointing to the con-
clusion that the relationship of the parties was that
of innkeeper and guest so dominates the situation | |
as to nullify the effect of the factors pointing to the
conclusion that the relationship of the parties was that
of landlord and tenant. The trial court did not err in its

conclusion that the relationship of the parties was that of
landlord and tenant.

Did the trial court err in making an award of damages
for mental anguish and humiliation in the face of its find-
ing that the defendants’ acts were not malicious and with-
out assessing other nominal ‘compensatory dam-
ages? We think that it did not. A finding that the [ql
acts of the defendant were not malicious is not the
equivalent of a finding that the acts of the defendants
were not wilful in the sense that that term is used to dis-
tinguish a conscious deliberate act from one done negli-
gently or by innocent mistake. In the instant case we
are not called upon to sustain a judgment for exemplary
or punitive damages in the absence of an assessment of
damages for physical injury to the person or for loss or
damage to property. The plaintiff’s action is one for
wrongful eviction. The case is not one where no actionable
wrong existed except for mental pain and suffering. A
eause of action exists apart from the element of pain and
suffering. Mental pain and suffering in connection with
a wrong which apart from such pain and suffering con-
stitutes a cause of action is a proper element of damages
where it is a natural and proximate consequence of the
wrong. 25 C.J.S., Damages, § 68, page 549; Westesen v.
Olathe State Bank, 78 Colo. 217, 240 P. 689, 44 A.L.R. 1484,

Beginning at page 936, 17 A.L.R.2d, there is an annota-
tion of cases under the title,

“Recovery by tenant of damages for physical injury or mental
anguish occasioned by wrongful eviction.”

The case of Hargrave v. Leigh, 73 Utah 178, 273 P. 298,
among others from other jurisdictions is cited as support-
ing the proposition that even though there is no allegation
of physical injury and a claim is made for damages due
to mental anguish or humiliation alone, the courts generally
permit the tenant to recover. On the facts relating to

151

damages, Hargrave v. Leigh, supra, is not distinguishable
from the instant case, and although in the Hargrave case
a finding by the trial court that the landlord acted mal-
iciously enabled the court to make the comment that the
judgment for damages could be supported as one for
exemplary or punitive damages, it cannot for that reason
be said that it did not sustain the judgment as one for
actual or compensatory damages for mental suffering and
humiliation. We believe the case in point to sustain the
position we have taken in the instant case.

The trial court did not err in denying the defendants’
motion to dismiss made at the close of the plaintiff’s case
in chief. The plaintiff’s evidence from which we
have concluded that the trial court did not err in its | |
finding that the relationship of landlord and tenant
existed was before the court. The eviction was admitted.
It follows, therefore, that at that stage of the proceedings
the plaintiff was entitled in any event to a judgment for
nominal damages.

The contention that the award of damages is excessive
is overruled. In the case of Hargrave v. Leigh, supra, an
action for unlawful eviction, where the only element of
damage was mental anguish and humiliation, there
being no allegation of personal injury, an award of i
six hundred and fifty dollars was upheld. That
judgment was rendered in 1924. In light of the devaluation
of the dollar in the interim, we are unable to say that, if
under the facts of that case six hundred and fifty dollars
was not excessive, two hundred and fifty fifty-cent pieces
is so generous in the instant case as to be unreasonable.

Judgment affirmed. Costs to respondent.

WOLFE, C. J., and McDONOUGH, HENRIOD and
WADE, JJ., concur.

CROCKETT, J., being disqualified, did not participate.

152

GREGERSON v. EQUITABLE LIFE & CASUALTY
INS. CO.
No. 7674. Decided April 29, 1953. (256 P. 2d 566.)

See 45 C. J. S., Insurance, see. 702, Estoppel of insurer relating
to reinstatement of policy. 29 Am. Jur., Insurance, sec. 272; 164 A.
L. R. 1067.

Skeen, Thurman & Worsley and Verl C. Ritchie, Salt
Lake City, for appellant.

Claude T. Barnes, Salt Lake City, for respondent.

|

McDONOUGH, Justice.

Defendant appeals from a judgment entered in favor
of plaintiff and against the defendant for $3,000, the face
amount of an insurance policy sued upon.

Dr. Grant Gregerson was insured for several years under

a policy issued by the Mountain States Insurance Company.
In May 1947, Dr. Gregerson made written application to
the Mountain States Insurance Company for a policy (No.
1707-OL) to replace the prior one. In this application he
answered questions to the effect that he was in good health
and had suffered no prior serious illness, although the
record reveals that in 1946 he had spent approximately
15 days in a hospital due to cardiac failure and hyper-
tension. The new policy (1707-OL) contained the usual
provisions as to premium payments; grace periods, and
additional provisions as to the application being part of
the contract itself, and all statements in such application
being warranties and not representations.

In September 1948, the defendant’s name was changed
from the Mountain States Insurance Company to the
Equitable Life and Casualty Insurance Company and the
policy with Dr. Gregerson was assumed by the latter com-
pany. The premium due on January 1, 1950 was not paid
by Dr. Gregerson or by the plaintiff, who was the bene-
ficiary under the policy, and no premium was received
by defendant within the grace period of thirty days. Two
days after the expiration of the grace period plaintiff
tendered to defendant the premium due on January 1,
1950 and requested reinstatement of the policy. Defendant
refused to accept the tendered payment or to reinstate the
lapsed policy unless an application for reinstatement and
a statement of health was submitted to its office. At this
time Dr. Gregerson suffered an illness which later proved
to be fatal and was unable to sign the application for re-
instatement or statement of health. To indicate Gregerson’s
eligibility for premium waivers and tax discounts, insured’s

‘ iii

doctor submitted a letter stating that Dr. Gregerson had
been completely incapacitated from hypertension for a
whole year. On the basis of this letter defendant refused
to reinstate the policy until insured could furnish satis-
factory evidence of insurability. Insured died approxi-
mately three months later and plaintiff tendered the month-
ly premiums due for the intervening months to the de-
fendant who refused to accept them. Action was then
brought upon the policy with this appeal resulting.

The basic and decisive issue in this case is whether de-
fendant waived the right to insist upon compliance with
the requirement of a showing by insured of physical in-
surability before granting a timely request for reinstate-
ment. We believe such a waiver was made.

The provision for reinstatement provides:

“This poliey may be reinstated any time within thirty days and
less than six months after lapse on payment to the Company of
arrears of premium * * * provided that such reinstatement shall
require evidence of insurability satisfactory to the Company and
subject to reinstatement provisions (Commuted Benefits).” (Italics
ours.)

The Commuted Benefits provision stated:

“(a) If the application for this Policy is accepted and a Policy
issued without a satisfactory Medical Examiner’s report, as a condi-
tion precedent to the taking effect of this Policy, the Insured must
be in good and vigorous health and free from all bodily ailments and
disease at the date of issue and delivery of this Policy or at the date
of reinstatement after any lapse thereof. Otherwise, any benefits
aceruing under this Policy are hereby forfeited and the Company
is relieved of all liability hereunder.

“(b) If the Insured shall die from any cause except accidental
causes within six months following the effective date of this Policy
or following the date of reinstatement after any lapse thereof, one-
half of the benefits otherwise payable hereunder will be paid.” (Ital-
ies ours.)

When the new policy (No. 1707-OL) was issued to re-
place the prior one an instrument designated a “Waiver”

was “Attached to and made part of policy No. 1707-OL
issued upon the life of Grant Gregerson the insured” This
instrument provided:

“Whereas, Grant Gregerson the above insured has for a period of
more than six months immediately last past been insured under a
policy in the Mountain States Insurance Company; and

“Whereas, all of the premiums due on said policy for a period of six
months or more immediately prior to the date hereof have been paid
before the same became delinquent;

“Now Therefore, in consideration of the premises, it is hereby
agreed that the penalties contained in the commuted benefits provi-
sions of this policy are hereby waived as to the said Grant Gregerson
to the extent of the principle amount of the policy heretofore in force
upon the life of the said insured to wit: the sum of $3000.00.

“{t is further agreed that all amounts in excess of the amount on
the life of each of said insured in the original policy hereinabove
mentioned shall be subject to the provisions of this contract.” (Ital-
ios ours.)

The policy allows for reinstatement any time within
thirty days and less than six months after a lapse of pre-
mium payments.

“provided that such reinstatement shall require evidence of insura-
bility satisfactory to the Company and subject to reinstatement pro-
visions (Commuted Benefits).” (Italics ours.)

The use of the conjunctive “and” indicates that rein-
statement depends upon the fulfillment of two require-"
ments: (1) evidence of insurability which is satisfactory
to the Company, and (2) compliance with the requirements
of the Commuted Benefits provisions. This proviso is am-
biguous and redundant in that evidence of insurability
generally refers to physical fitness for risk and the re-
quirement as to such fitness is found in Section (a) of the
Commuted Benefits section which requires the Insured to

“be in good and vigorous health and free from all bodily ailments
and disease * * * at the date of reinstatement after any lapse
thereof.”

a. rrr

Further confusion is added by Section (a) of the Com-
mauted Benefits provision since it completely abrogates
any benefits accrued under the policy if the requisites as
to physical insurability are not met. Since abrogation is
not commutation it would appear section (a) is unaffected
by the waiver and insured would lose the benefit thereof
unless it was the Company’s intent that the penalty of
section (a) be considered as commutation in respect to
reinstatement of the policy.

That such intent existed is first indicated by the in-
clusion by the company of section (a) under a provision
entitled “Commuted Beriefits.” In cases of am-
biguity, a strict interpretation against the drawer of [jl
the contract is applied. Under such construction this
provision alone may be sufficient to find such intent. Addi-
tional support for such interpretation is found in the fact
that the policy itself considers Section (a) as Commuted
Benefit in respect to reinstatement. In addition to the
proviso

“that such reinstatement shall require evidence of insurability satis-
factory to the Company and subject to reinstatement provisions (Com-
muted Benefits)”

the reinstatement clause states

“the acceptance by the Company of a past due premium within thirty
days after lapse without notice to the insured will be considered a
reinstatement as provided under Commuted Benefits.”

Section (a) itself states that it applies upon “the date
of reinstatement after any lapse thereof”; and the attached
“waiver” waives all penalties contained in the Commuted
Benefits provisions of the policy. (Italics ours.) Hence,
it appears that the company intended section (a) to be con-
sidered as a-Commuted Benefit and thereby waived by the
attached instrument.

In Gressler v. New York Life Insurance Co., 108 Utah
182, 163 P.2d 324, 164 A.L.R. 1047, we held that an insured

|

person has a contractual right to fully reinstate a policy
upon compliance with the conditions for reinstatement
contained in the policy. The reinstatement provisions of
the instant policy, as applicable to the insured, subjected
him to the Commuted Benefits provisions which required
that at the date of reinstatement (and in the absence of
a Medical examiners’ report) he “must be in good and
vigorous health and free from all bodily ailments and dis-
ease.”

The waiver attached to and made a part of the policy in
1947 waived

“the penalties contained in the commuted benefits provisions of the
policy * * * to the extent of the principal amount of the policy
heretofore in force upon the life of the said insured, to wit: the sum
of $8000.00.”

We believe that where the penalty involved is a release
of the insurer’s liability and a forfeiture of the benefits

accruing under the policy a waiver of such penalties is in
effect a release of the requirements. Hence, upon con-
version or a timely request for reinstatement, the physical
condition of the insured was to be accepted as it existed
under the old policy and without further requisites.

By its terms such waiver applied only to the extent of
the principal amount of the old policy. Since this action
was instituted for the original principal of $3,000 only,
no question as to additional amount exists. The judgment
of the lower court is affirmed.

WOLFE, C. J., CROCKETT and WADE, JJ., and
BAKER, District Judge, concur.

HENRIOD, J., having disqualified himself did not par-
ticipate.

TEBBS & TEBBS et al. v. OLIVETO.
No. 7841. Decided May 2, 1958. (256 P. 2d 699.)

See 5 C. J. S., Appeal and Error, sec. 1688. Insufficiency of evi--
dence as ground for new trial. 39 Am. Jur., New Trial, sec. 129.

|

E. LeRoy Shields and Elias Hansen, Salt Lake City, for
appellant.

B. L. Dart, Luke G. Pappas and Edward Sheya, Price,
for respondent.

WADE, Justice.

This action was brought to recover a premium on an
insurance policy which Tebbs and Tebbs Agency claim to
have sold to Sam L. Oliveto, a dentist, upon his agreement
to render dental services in the amount of $158 to H. C.
Tebbs, one of the partners in Tebbs and Tebbs Agency
and to pay the remainder of the premium in cash as
evidenced by a postdated check for $1050. Dr. Oliveto
denied purchasing the policy and claimed that the check
for $1050 was given conditionally and was postdated for
30 days so that he would be permitted to retain possession
of the policy for that length of time for the purpose of
examining and deciding whether to accept or reject it and
that he had decided to reject it before the 30 day period had
expired. Defendant also pleads that Tebbs’ offer to accept
$158 of the premium in dental services, which arrangement
did not appear in the policy, violated the provisions of
Sections 48-7-16 and 43-7-17, as amended, Laws of Utah
1947, c. 68, which sections prohibit any insurance company
or its agents from offering inducements to buy insurance
which do not appear in the policy, whether by way of re-
bate or other method specified therein. This case was
tried twice. The first time it was tried before a judge
sitting without a jury who found in favor of Tebbs and
Tebbs Agency but granted a new trial and the second. time
it was tried with a jury which found in favor of Oliveto.
This appeal is taken by Tebbs and Tebbs Agency from
occurences in both trials.

The case was originally commenced by Tebbs and Tebbs
Agency and the Occidental Life Insurance Company as
plaintiffs. At the time of the trial, after a number of

demurrers had been sustained, The Occidental Life In-
surance Company was left in the third amended complaint
as the real party in interest, the Tebbs and Tebbs Agency,
somewhere along the route not apparent to us here from
the record, having failed to come in and amend its com-
plaint on a demurrer sustained against it. At this stage
of the proceedings plaintiffs’ attorneys having decided
that a mistake had been made as to the real party in
interest, moved the court to dismiss the third amended
complaint without prejudice against both plaintiffs. Upon
defendant insisting he was ready to go to trial and ob-
jecting to the dismissal of the complaint without prejudice,
attorneys for plaintiffs asked leave to dismiss the com-
plaint of the insurance company and to file a fourth
amended complaint for Tebbs and Tebbs Agency. The court
was uncertain whether it could attach conditions to allow-
ing a fourth amendment to be made but was of the opinion
that under Rule 41(d) which provides that,

“Tf a plaintiff who has once dismissed an action in any court com-
mences an action based upon or including the same claim against the
same defendant, the court may make such order for the payment of
costs of the action previously dismissed as it may deem proper and
may stay the proceedings in the action until the plaintiff has com-
plied with the order”,

if it granted a dismissal without prejudice it could stay
any new action which might be commenced until costs of
the action which had been dismissed including attorney’s
fees had been paid. Under these circumstances the at-
torneys for plaintiffs agreed to pay the $150 attorney’s
fee required by the court as a condition to filing their
fourth amended complaint.

Appellants argue that the court erred in requiring them
to pay attorney’s fees as a condition for allowing them
to file their fourth amended complaint because Section
104-14-4, U.C.A.1948 provides that:

“Nothing but the actual, taxable costs of the action accruing on
and after the default, not including attorneys’ fees, shall be imposed

by the court under the provisions of this section authorizing the im-
position of terms as a condition upon which relief is granted.”

They concede that Section 104-14-4 was repealed by the
adoption of Rules 15 and 60, but argue that since those
rules are silent as to whether attorney’s fees may be im-
posed as a condition of granting relief no intention to
change the rule of the repealed section is shown.

It is not necessary for us to determine whether under
the rules the court may grant attorney’s fees as a condition
for granting relief of this kind because appellants invited
the court to impose such conditions in order to avoid
a dismissal and the necessity of starting over again, | |
in which case they did not question the right of the
court to require them to pay the costs of the action in-
cluding attorney’s fees as a condition for allowing the
prosecution of the second action. Appellants were not en-
titled to amend as a matter of course either under the rules
or the previous statute. And their right to do so was so
doubtful that they first asked the court to dismiss their
case without prejudice. Neither Rule 41, nor Section 104-
29-1, U.C.A.1948, which it superseded, expressly excluded
attorney’s fees as a part of the costs taxable in case the
pending action were dismissed and a new action ¢om-
menced, as did Section 104-14-4 if an amendment were
allowed. Under these circumstances appellants offered to
pay attorney’s fees as a condition for permission to amend
their complaint. Their necessity to amend or dismiss at
that stage resulted from their own fault and not from the
actions of the court. Under these conditions the court’s
requirement was neither coersive nor unfair to them, and
it not a ground for reversal regardless of whether or not
the payment of such attorney’s fees are authorized by the
rules. See Supreme Lodge Knights of Honor v. Davis, 26
Colo. 252, 58 P. 595, where under similar circumstances
that court held that the party by accepting the condition,
even though it may have been erroneously imposed waived
the error and could not avail itself of it on appeal.

Appellants also argue that the court erred in granting
the new trial. In the order granting the new trial the
court stated that it was of the opinion that it had erred
in denying defendant’s motion to dismiss at the end of
plaintiffs’ case and that its decision and judgment were
against the law. Appellants contend that in granting the
new trial for the reasons stated above, the court must have
concluded that defendant was correct in his contention
that the failure to recite in the policy that part of the
premium was to be paid in services barred the action by
plaintiffs. It is further argued that if the court erred in
such conclusion it erred in granting the new trial since
there was sufficient evidence to sustain its original find-
ings that respondent had agreed to accept the policy and
had given the postdated .check and his promise to perform
dental services of the value of $158 as payment for the
premium, and therefore the original findings of facts, con-
clusions of law and judgment should be reinstated and the
verdict and the judgment thereon in the second trial should
be vacated. Appellants also contend that if the court did
not err in granting the new trial the court committed error
at the second trial in denying their motion to confine the
trial to the question of the validity of the insurance con-
tract and the premium agreement.

Under Rule 59 of U.R.C.P. and Sec. 104-40-2, U.C.A:1943,
a new trial may be granted because the judgment is against
the law. If the trial court granted the new trial solely
because it concluded that the decision was against the law
and it was satisfied with the findings of fact, then it
should have limited the new trial to the questions of law
and not allowed a new trial of the facts.

Was error committed at the second trial in deny-
ing appellants’ motion to confine the trial to the [|
questions of law? We think not. Rule 59, U.R.C.P.
reads:

“(a) Grounds. Subject to the provisions of Rule 61, a new trial
may be granted to all or any of the parties and on all or part of the

163

issues, for any of the following causes; provided, however, that on a
motion for a new trial in an action tried without a jury, the court
may open the judgment if one has been entered, take additional testi-
mony, amend findings of fact and conclusions of law or make new

findings and conclusions, and direct the entry of a new judgment:
* * * * =

“(6) Insufficiency of the evidence to justify the verdict or other
decisions, or that it is against law.”

In the first trial this case was tried without a jury.
Under the above rule, if the court was convinced that its
decision was wrong solely because it was against the law,
it did not need to grant a new trial but could have opened
up the judgment, made new findings and conclusions and
entered a new judgment; or it could have specifically
limited the issues in the new trial to the questions of law
involved. This the court failed to do. Although it indicated
in its order for a new trial that it was granted because the
court thought it had erred in denying defendant’s motion
to dismiss the action at the end of plaintiffs’ evidence and
that its decision and judgment were against the law, it did
not go further and limit the issues of the new trial to those
questions. Under these circumstances we conclude that
one of the grounds for granting a new trial was to re-
examine the facts because the court doubted that the evi-
dence was sufficient to sustain the judgment.

We have carefully considered appellants’ other assign-
ments of error but find no merit to them.

Affirmed. Costs to respondent.

CROCKETT and HENRIOD, JJ., concur.
McDONOUGH, J., concurs in the result.

WOLFE, Chief Justice (concurring in the result).

I concur in the result. As to the contention of the ap-
pellants that the trial court erred in requiring them to pay
attorney’s fees as a condition for leave to file their fourth
amended complaint, I think that by the superseding of

' i

Sec. 104-14-4, U.C.A.1943, by Rules 15 and 60, the pro-
hibition contained in Sec. 104-14-4 against permitting the
imposition of attorney’s fees as a condition for the allow-
ance of further amendments was eliminated. I, therefore,
deem it unnecessary to consider the correctness of Mr.
Justice WADE’S reasoning in arriving at the same result.

Turning now to the contention that the lower court erred
in granting a new trial, after the lower court at the first
trial had entered judgment in favor of the plaintiffs, a
motion for a new trial was made by the defendant upon
five grounds, two of which grounds are as follows:

(1) “That the court erred in denying defendant’s motion for the
dismissal of the action made at the conclusion of plantiffs’ evidence;”
(2) “That the decision was against law.”

Subsequently, the lower court granted a new trial upon
those two grounds. It is argued by the plaintiffs that the
new trial was granted because the lower court concluded -
it had erroneously decided a question of law. Were this
assumption true, I think we would have to determine wheth-
er the lower court at the first trial did actually erroneous-
ly determine a question of law, and if we concluded that
it had made an erroneous determination of law, then there
could be no question but what it was correct in granting
a new trial. But if we concluded that the lower court at
the first trial did not make an erroneous determination
of a question of law, it would seem that the lower court
erred in granting a new trial since trial courts have no
discretion in determining questions of law—unlike ques-
tions of fact. Findings of law under any particular set
of facts are for the court to determine correctly. There is
no room for choice once the facts are found.

However, while it is not entirely clear from the record,
I think the lower court granted a new trial after the first
trial because he desired to re-examine questions of fact as

well as questions of law. One of the grounds upon which
the new trial was granted was :

“That the court erred in denying defendant’s motion for a dismissal
of the action made at the conclusion of plaintiffs’ evidence.”

The defendant’s motion for dismissal which is referred
to was as follows:

“Comes now the defendant in this case, and moves the Court to
dismiss this action on the grounds and for the reason that upon the
facts and the law the plaintiff has shown no right to relief, * * *”
(Emphasis added).

Thus it will be seen that the defendant’s motion for a
dismissal of the action which he made at the conclusion
of the presentation of the plaintiffs’ evidence was that
the plaintiffs could not recover upon the facts or the law,
and when the defendant moved for and the lower court
granted a new trial upon the ground, inter alia,

“That the court erred in denying defendant’s motion for a dismissal
of the action made at the conclusion of the plantiffs’ evidence,”

the lower court may well have concluded that it had not
correctly found the facts and desired to re-examine them
as well as the law. While that ground is not specified in
Rule 59, Utah Rules of Civil Procedure, as one of the
grounds for granting a new trial, it is in substance a com-
bination of several grounds therein set forth. When the
lower court granted a new trial because it desired to re-
examine questions of fact, it in effect granted a new trial
because of “insufficiency of the evidence to justify the
decision”—one of the grounds specified in Rule 59, Utah
Rules of Civil Procedure.

The conclusion that the lower court desired to re-examine
questions of fact as well as questions of law when it
granted a new trial is further borne out by the fact, as
stated by Mr. Justice WADE in his opinion, that the court
did not limit the second trial to re-trying questions of law,

166

as he could have done, and had he desired only to re-ex-
amine questions of law, he could have done so under Rule
59 without granting a new trial.

I, therefore, conclude that the lower court, desiring to
re-examine questions of fact as well as questions of law,
did not abuse its discretion in granting a new trial even
though it may have correctly decided at the first trial all
questions of law. A new trial having been had, and the
jury having found against the plaintiffs on the facts, they
have no legal ground for complaint even though the ques-
tions of law should have been resolved in their favor.

McGRIFF v. CHARLES ANTELL, Inc. et al.
No. 7879. Decided May 4, 1958. (256 P. 2d 708.)

See 20 C. J. S., Corporations, sec. 1834. Solicitation as constituting
business within state. 28 Am. Jur., Foreign Corporations, sec. 376;
146 A. L. R. 941.

Pugsley, Hayes & Rampton, Salt Lake City, for appellant.
Rich & Strong, Salt Lake City, for respondent.

HENRIOD, Justice.

Appeal from an order quashing service of process. Af-
firmed. Costs on appeal to defendant.

Plaintiff alleges injuries from use of defendant’s hair
application. She served process on a local television sta-
tion’s manager on the assumption that he or the station
from which defendant, a foreign corporation, purchased
advertising time, was either doing the business of or was
in charge of defendant’s office or place of business in Utah,
within the meaning of that portion of Rule 4(e) (4), Rules

168

of Civil Procedure, relating to service of process on for-
eign corporations doing business in the state.*

Defendant paid the local station for time to advertise
its product. At the end of its program, a spokesman for
the company invited televiewers to place orders by phon-
ing a number flashed on the screen, that of the television
station, where such calls were received and the information
obtained mailed to the company in Maryland, without any
additional charge other than the regular advertising fee.
Plaintiff responded to the invitation and in due course
received defendant’s product by mail from Maryland, C.O.D.

Plaintiff urges that defendant was (1) doing business
in Utah, (2) the television station was its office and (3)
service on the station’s manager brought defendant with-
in the jurisdiction of our courts. We cannot agree that
defendant was doing business in the sense that subjected
it, as a foreign corporation, to such jurisdiction.

To prove plaintiff’s contention, her attorney’s secretary
testified that she frequently had seen defendant’s television
program, that its spokesman gave a fine talk, suggesting
that if he had convinced his listeners that defendant’s
product would do what he said it would do, they should
call the number which would be flashed on the screen,—
that of the television station. She further stated that aft-
er plaintiff had sought the advice of her lawyer-employer,
and at the latter’s request, she called the television station.
In testimony of questionable admissibility, she then asserted
that in response to her call a lady answered, who, when
asked where the product could be ordered, replied that it
would have to be ordered through the television station

Rule 4(e) (4). “Upon any corporation, not herein otherwise pro-
vided for * * *. If no such officer or agent can be found in the
state, and the defendant has, or advertises or holds itself out as hav-
ing, an office or place of business in this state, or does business in
this state, then upon the person doing such business or in charge of
such office or place of business.”

by name and address, whence the company would send
it C.0.D. Upon being asked if there were any place in the
city where the product could be bought directly from the
company, the lady at the station stated that the company
“had no one here who sold it”; that the only way it could
be obtained was by order through the station and the com-
pany would send it, probably with some literature, and that
if something else were desired it could be obtained directly
from the company. A second phone call produced sub-
stantially the same response.

Plaintiff leans heavily on Industrial Commission v. Kem-
merer Coal Co., 1944, 106 Utah 476, 150 P.2d 378, to sup-
port her contention that defendant was “doing business”
in Utah, and was subject to our jurisdiction. In that case,
decided on the ground that process had been served on
the wrong person, as to the matter of “doing business”,
this court quoted language from Frene v. Louisville Cement
Co., 177 U.S.App.D.C. 129, 134 F.2d 511, 515, 146 A.L.R.
926, that “very little more than ‘mere solicitation’ is re-
quired” to constitute doing business in the jurisdictional
sense. This language followed the statement that

“itis * * * lear that if, in addition to a regular course of solici-
tation, other business activities are carried on, such as maintaining a
warehouse, making deliveries, ete. the corporation is ‘present? for
jurisdictional purposes.”

The obvious difference between the Kemmerer case and
this, and the reason it is not controlling here, are apparent
when one recalls that the coal company maintained and
paid for an office in a local building, had its name painted
on the door, listed itself in the phone and building direc-
tories, owned furniture and fixtures, operated 3 automo-
biles here, and had 8 authorized resident agents seeking
and doing its business locally,—factually quite dissimilar,
and reflecting activities far beyond solicitation only.

In determining whether a foreign corporation is doing
business in a state for jurisdictional purposes, each case

170

factually must be examined as it arises.? A hard and fast
formula cannot determine algebraically every case.
Common sense must dictate the result. The law, in | |
our opinion, would be a faithless servant if today it
demanded that solicitation of business in and of itself sub-
jected a foreign corporation to the local forum. Of equal
disservice to the common good would be a rule that soli-
citation of business by television, radio, the press or in
periodicals,—with nothing more, clothed such medium of
advertising with the raiment of a process agent. Such a
rule would leave little to the imagination if a vendor sought
orders through a newspaper box number, and thus submit-
ted to the local jurisdiction and the mailman would acquire
new stature as one doing the business of countless foreign
corporations, and the one upon whom process might be
served to bring his unknown foreign corporation prin-
cipals within the jurisdiction of the state courts.

This is not to say that in a proper case solicitation plus
something else, or use of radio plus something else, could
not constitute doing business in the jurisdictional sense,
or could not ascribe to such advertising medium the
role of process agent under our rules. The test goes i
to the “something else.” Somewhere a line is to be
drawn and the courts judiciously must mark it. To date
the pattern, which in a changing world is ever changing,
excludes solicitation alone as justifying jurisdiction con-
ferred. Beyond such solicitation the activity to confer
jurisdiction must be of sufficient substance and of such
scope and variety as would lead a court of last resort to
conclude that immunization of the foreign corporation
against the power of our forum would be unrealistic, un-
reasonable and a vehicle for oppressing or meting out
injustice to our own local citizens. But to subject foreign
corporations to our local jurisdiction without carefully

2International Shoe Co. v. Washington, 1945, 826 U. S. 810, 66 S.
Ct. 154, 90 L. Bd. 95; Goodrich, Handbook of Conflicts of Laws (1949)
p. 216.

weighing the facts, the practicalities and the relative bur-
dens of the litigants, well might be inimical to our own
welfare by wounding the very trade through whose veins
courses the blood of our economy.

We think the instant case is one, the type of which does
not and should not justify the imposition of our powers
on a foreign corporation. We are not unmindful of the
hardship and difficulty in requiring a local citizen
sometimes to seek a foreign tribunal for redress, nor | |
are we unmindful of the burdens to which a foreign
corporation could be put were we too lightly to pit our
jurisdiction against it. Our fundamental principles de-
mand protection of the individual, but not unreasonably at
the expense of others. The facts.here, we believe, do not
fit the authorities? cited by plaintiff’s able counsel, but
rather synchronize more nearly with the ratio decidendi of
those presented by defendant’s equally able counsel.*

McDONOUGH and CROCKETT, JJ., concur.

WOLFE, Chief Justice (concurring in the result).

I concur on the ground that solicitation of business inter-
state by a foreign corporation by electronic means, where
the foreign corporation is not otherwise within this state
when the solicitation is made, does not, without more, con-
stitute having an office or place of business within this
state, nor is it doing business in this state nor holding it-
self out as having an office or place of business in this

8Industrial Commission v. Kemmerer Coal Co., 106 Utah 476, 150
P. 2d 878; Dahl v. Collette, 202 Minn. 544, 279 N. W. 561; Williams
v. Bruice’s Juices, Inc., D. C., 35 F. Supp. 847; Wabash R. R. Co. v.
District Court, 109 Utah 526, 167 P. 2d 973.

4Parke, Davis & Co. V. Fifth Judicial District Court, 93 Utah 217,
72 P. 2d 466; Cannon v. Time, Inc., 4 Cir., 115 F. 2d 423; Gloeser v.
Dollar S. S. Lines, 192 Minn. 376, 256 N. W. 666, 95 A. L. R. 1470;
Holloway Material & Supply Co. v. Perfection Oak Flooring Co., 191
Oki. 350, 180 P. 2d 296; People’s Tobacco Co. v. American Tobacco
Co., 246 U. S. 79, 88 S. Ct, 238, 62 L. Ed. 587; Junior Frocks, Inc.,
v. District Court, 105 Colo. 82, 94 P. 2d 694,

state, nor advertising as having such an office or place
of business in this state. It seems to me that this disposes
of the problem. Of course, if the soliciting corporation
has offices within the state or otherwise does do business
in the state, we have a problem different from that here
presented.

WADE, Justice (concurring in the result).

Because the cases hold that merely advertising for orders
to be sent to the office of an advertising medium within
this state, to be forwarded to an out of state business con-
cern is not doing business within this state I concur with
the result. However, I do not entertain the misgivings
expressed in the prevailing opinion that it would be a bad
policy to allow a suit by a local resident against the out
of state business firm involving claims arising out of such
business. It seems to me that the fact that such out of state
business firms cannot be sued within this state creates a
definite hardship on the local residents.

GIBBONS & REED CO. v. GUTHRIE et al.

No. 7850. Decided May 7, 1958. (256 P. 2d 706.)

See 58 C. J. S., Mines and Minerals, sec. 226. Review of facts by
appellate court. 8 Am. Jur., Appeal and Error, sec. 883.

Grover A. Giles, Salt Lake City, for appellant.
Clyde & Mecham, Salt Lake City, for respondent.

WADE, Justice.

Gibbons & Reed Company, respondent herein, filed suit
against S. Y. Guthrie, Adam K. Grafe and Robert I. Lud-
wig to recover for monies expended under an oral agree-
ment to do exploratory work on certain uranium mining
claims for them and to furnish the equipment and personnel
for the project. By their answer defendants admitted the
oral agreement but sought to avoid liability on the ground
of substantial non-performance by respondent and counter-
claimed for damages because of respondent’s failure to
supply usable equipment and parts resulting in failure
to perform in accordance with a written report or estimate
of costs submitted by respondent to appellants thereby nec-

essitating the termination of the contract and doing the
work themselves.

At the trial the action against Robert I. Ludwig was dis-
missed upon its being made to appear that he was not a
partner but only an agent of Guthrie, Grafe and Bates
and Son. Bates and Son were substituted as parties to
the action but were not served with summons, so that only
Guthrie and Grafe appeal from the judgment in favor of
respondent and a dismissal of their counterclaim.

The court as the trier of the facts found that respondent
had bona fidely fulfilled its part of the agreement which
was to supply heavy duty equipment, assume the payment
of labor and other costs and do the preliminary and explor-
atory work necessary to start uranium mining, such as
building certain roads and trails, establishing a camp for
workmen and removing overburden but that appellants
had refused to reimburse them for the expenses incurred in
the performance of its agreement.

Appellants contend that the court erred in making these
findings of fact and its conclusions of law because the
evidence is conclusive that respondent had failed to supply
good, workable equipment and had failed to perform more
than 10% of the work it had agreed to do after half the
time in which the work was to be completed had elapsed,
so that it became apparent that unless appellants took over
the work themselves it would never be completed in time.

It needs no citation of authority that this court will not
redetermine facts found by the fact finder in the
lower court in law cases if in the light most favor- i |
able to the respondent the evidence is sufficient to
sustain such findings.

The record discloses that about February 8, 1951, ap-
pellants were negotiating with a lessee of some uranium
mining claims in the Henry Mountain area in Garfield Coun-
ty, Utah, for the possession of such claims but before they

committed themselves they wanted more information about
the people with whom they were dealing and whether there
would be sufficient ore to make it feasible for them to
enter into the deal. Appellants, being non-residents of
this state and having previously had some business dealings
with respondent, called upon it to aid them in their in-
vestigation. Appellants allowed respondent to believe that
if the project proved worthwhile they would construct an
ore processing mill in Green River, Utah, which might re-
sult in some profitable work for respondent. Respondent
was anxious to get in a favorable position to get the work
which might eventuate and therefore cooperated to the ful-
lest extent in investigating the people and the project and
offered to provide equipment and do the necessary pre-
liminary and exploratory work on the claims so that appel-
lants could get the desired information. Appellants had ad-
vised respondent that they had an option until April 15, 1951
and would need the information by that time in order to de-
termine whether or not they would exercise the option to
mine the claims. After several discussions respondent on
February 8th submitted a written estimate of costs at the
request of the appellants, wherein it was set forth what
they thought should be the type of work done, the amounts
it would probably cost for equipment, labor and other items
for a 60-day operation and which also contained the follow-
ing statements:

“The number of days the operation is continued is, of course, your
option. The estimated performance for the three operations is: (1)
Four 20-ft. deep holes drilled and checked per day, (2) Four 6-ft.
deep holes stripped per day, and (3) One ton of material drilled, shot
and moved per man per day.

“The prices quoted above are our costs and are offered to help you
determine the expediency of further work in the district at a mini-
mum cost. If we can be of any assistance at any time please call
on us.”

Upon receipt of this estimate by appellants they told
respondent to proceed with the work. Appellants told re-

spondent a Mr. Harold Ecker should be in charge of the
operation and respondent thereupon employed Mr. Ecker
and he hired the other workmen with the exception of an
engineer sent by appellants and a heavy equipment me-
chanic and operator sent by respondent. Work was begun
by Mr. Ecker on February 9th although delivery of the
heavy equipment was delayed until February 25th due to
a threat of a trespass action by the lessee of the claims
until a written agreement had been concluded between the
lessee and appellants. After the equipment arrived the
work of building roads, drilling test holes, stripping over-
burden, etc., progressed. Occasionally the equipment would
break down and if parts were needed it was necessary to
send to Salt Lake City for them. Respondent besides fur-
nishing the equipment paid for all the labor, material, sup-
plies and others costs of the project.

On March 12th the appellants visited the claims and
upon finding the heavy duty caterpillar broken down, the
compressor out of order and only about 11 holes with an
aggregate of about 250 feet drilled, decided to discontinue
using respondent’s services and equipment and took the
job over themselves as of March 18th. Appellants retained
all the men working on the project except the heavy duty
mechanic and operator originally hired by respondent.
Appellants exercised their option to mine the claims on
April 15th, even though they did not get any heavy equip-
ment on the job until April 8th and-very little work was
done from the time respondent was relieved of its respon-
sibilities and the date they exercised their option. It also
appeared that in the week between April 8th and 15th,
appellants’ equipment broke down several times, thus delay-
ing work, and that such breakdowns are not unusual in
that type of work.

Since appellants by their pleadings and also in their
testimony admitted that respondent’s work was done under
an oral agreement to do sufficient preliminary and explor-

atory work to enable appellants to decide whether

it would be feasible to take up their option and the | |
writing submitted by respondent on February 8th

was merely an estimate of the kind of work respondent
thought would be necessary and the costs of same for a
60-day period and not the agreement for work to be done,
and since in half the allotted time with very little more
additional work enough had been done by respondent so
that appellants were able to determine that they wanted
to exercise their option, which was the object of the agree-
ment, and since admittedly they did not pay respondent
for the rental of the equipment and costs the evidence
was more than sufficient to sustain the findings of fact
and conclusions of law.

Appellants contend that the judgment may include an
item for $800 or $400 for airplane rides charged by re-
spondents but which the trial court had indicated were
not allowable. Respondent’s evidence showed that appel-
lants were charged with the sum of $15,383.82 for all items,
including the charges for the airplane rides and other dis-
puted items. The disputed items totaled less than $2,500
and the court awarded damages in the sum of $12,356.75.
From this it is reasonable to assume that the court did
not include charges for airplane rides as part of the dam-
ages.

We have carefully considered all of appellants’ other as-
signments of error and find no merit to them.

Affirmed. Costs to respondents.

WOLFE, C. J., and McDONOUGH, CROCKETT and
HENRIOD, JJ., concur.

HENDRICKS v. HENDRICKS
No. 7893. Decided May 15, 1958. (256 P. 2d 366.)

See 27 C. J. S., Divorce, sec. 67. Comparative rectitude doctrine
in divorce cases. 17 Am. Jur., Divorce and Separation, sec. 235; 159
ALR. 784,

L. E. Nelson, Logan, for appellant. :

Harvey A. Sjostrom, Logan, LeRoy B. Young, Ogden,
Young, Thatcher & Glasmann, Ogden, for respondent.

WADE, Justice.

Plaintiff sued and defendant conterclaimed for divorce.

From a judgment dismissing the action plaintiff appeals.

The trial court found that each party was guilty of cruel
treatment of the other and refused to grant a divorce to
either. The factual background of this. case reveals circum-
stances which often lead to domestic distress and end in the
divorce court. When this marriage was contracted the par-
ties had each reared his family, were well advanced in years
and because of conflicting attachments and interests found
themselves in disagreement in far more areas than those in
which they were in accord.

The court, counsel and the parties all seem to agree that
this marriage is hopelessly on the rocks; that the marriage
relationship has become so intolerable that both would be
happier, if they were free to go their separate ways. Fur-
thermore, there are pressing property rights which should
be settled by a court of equity, which further increases the
distress and unhappiness of all concerned. It is from the
refusal of the trial court to offer some solution to this
predicament that relief is sought.

The principle that a divorce will ordinarily not be granted
where both parties are at fault is of ancient origin and
has long persisted, although in modern times it is probably
true that it has been more honored in the breach
than in the observance. There are undoubtedly some | |
circumstances, such as mutual conviction of a felony,
adultery or other serious offenses which may justify a court
of equity in refusing to grant either party relief. Whether
this be regarded as recrimination or an application of the
basic precept that one who seeks redress for violation of a
contract resting upon mutual covenants must have per-
formed his own, or merely of the “clean hands” doctrine of
equity is of no importance here.

1See 27 C. J. S. Divorce: Recrimination, Sec. 67; 17 Am. Jur. Div.
Sec. 238 et seq.; Studley v. Studley, 129 Neb. 784, 268 N. W. 139.

180

To affirm that a guilty spouse is never entitled to a
divorce is a position difficult to apply to the facts of life.
It is seldom, perhaps never, that any wholly innocent party
seeks a divorce against one who is wholly guilty.
Awareness of this fact and the giving of attention i
to the social implications of divorce has given rise
to the various exceptions and limitations on the doctrine
of recrimination.? A realistic approach to it is indicated
by the court in the case of Dearth v. Dearth? wherein it con-
eluded that where mutual delinquencies of husband and
wife made further living together intolerable, a divorce
should be granted and the court was not called upon to bal-
ance such delinquencies but only to determine which party
was least at fault in causing the bad situation. This is based
upon the doctrine of “comparative rectitude” which is often
used* and has been given tacit recognition by this court.®
Although some statutes specify that a divorce may be
granted to “the party not in fault” our statute wisely con-
tains no such provision.’ Our policy has been to take con-
sideration of the practical exigencies of such situations,
and in cases such as the instant one, where both are at fault,
approve the granting of a divorce to the one least to blame.

From anything that appears in the instant case, no good
purpose, either social, moral, ethical or legal could be served
by refusing to grant a divorce and settle the property
rights of the parties. It would be but a mockery of the
true concept of matrimony to thus purport to compel these
two people, clearly ill-suited and maladjusted to each other
to continue to retain the legal relationship of husband
and wife.

2See Texts £. Note 1.

2141 Pa. Super. 844, 15 A. 2d 87.

+See 27 C. J. 8. Divoree, § 67, p. 624; 17 Am, Jur. 269.

SAlldredge v. Alidredge, 119 Utah 504, 229 P. 2d 681; Pinion v.
Pinion, 92 Utah 256, 67 P. 2d 265.

*Section 0-8-1, U. C. A. 1958. See Schuster v. Schuster, 88 Utah
257, 58 P. 2d 428; Rackham v. Rackham, 119 Utah 598, 280 P. 2d 566.

In view of the fact that neither spouse is accused of
the commission of a felony, adultery or any other heinous
offense but the reciprocal claims rest upon various acts
and omissions alleged to constitute cruelty to the
other, the trial court would best perform its function | |
in the administration of justice by determining
which party was least at fault, granting a divorce and
adjusting their rights, giving due consideration to the ap-
plicable factors outlined in our recent opinion of MacDonald
v. MacDonald."

The cause is remanded with directions to proceed in ac-
cordance with this opinion. Each party to bear his own
costs.

WOLFE, C. J., and McDONOUGH, CROCKETT and
HENRIOD, JJ., concur.

7120 Utah 573, 286 P. 2d 1066.

CONDER v. UNIVERSITY OF UTAH et al.
No. 7868. Decided April 22, 1958. (257 P, 2d 367.)

See 14 C. J. §., Colleges and Universities, sec. 14. Land grants and
appropriations. 55 Am. Jur., Universities and Colleges, sec. 26; 67
ALL. BR. 1032,

Arthur H. Nielsen, Salt Lake City, for plaintiff.

Clinton D. Vernon, Atty. Gen., Allen B. Sorensen, Asst.
Atty. Gen. (William H. Leary, Salt Lake City, of counsel),
for defendants.

WADE, Justice.

This proceeding was brought to restrain the University
of Utah acting through its Board of Regents from entering
into a loan agreement with the United States Government
to finance the building of two dormitories for men. The

agreement which the University proposes to enter into
would provide for the sale by it to the United States
Government of about $1,000,000 in revenue bonds. These
bonds are to be secured by a first and exclusive lien upon
the net revenue and income which will be derived from the
operation of the dormitory buildings and also by a first
and exclusive lien on the interest and income to which the
University is entitled from the Federal Land Grants de-
scribed in Sec. 5, Art. X, Constitution of Utah and known
as the Land Grant Funds.

The University proposes to enter into this loan agree-
ment under authority of Chap. 126, Laws of Utah 1947
which under. Sec. 2, provides that to pay for the buildings
the Board of Regents of the University
“is authorized to borrow money on the credit of the income and rev-
enues to be derived from the operation of the building, and on the
imposition of student building fees or both, or from other sources
other than by appropriations by the Legislature of the State of Utah

oe aD

It is plaintiff’s contention that if the University is per-
mitted under the above statute to pledge its income from
the Land Grant Funds as well as the income to be derived
solely from the operation of the buildings sought to be
constructed, then the act is unconstitutional because it will
allow the University to enter into an agreement whereby
a debt will be created against the state within the meaning
and provisions of Sec. 2, Art. XIII and Sec. 1, Art. XIV,
Constitution of Utah.

The plaintiff concedes that under our holding in Spence
v. Utah State Agricultural College, Utah, 225 P.2d 18,
had the University of Utah proposed to pledge funds de-
rived solely from revenues to be obtained from the oper-
ation of the project sought to be constructed or from funds
derived from students, then such a loan would not con-
stitute a debt within the meaning of the above constitu-
tional prohibitions. However, plaintiff contends that if

Chap. 126 allows the University to pledge the income and
interest from the Land Grant Funds to which it is entitled
as well as student fees or revenues to be derived solely
from the proposed project, then the Act violates the above
constitutional provisions because it would allow the Uni-
versity to contract a general obligation for which the state
would be liable and would be outside “the special fund
doctrine” as announced by this court in the past.

For a full discussion of “the special fund doctrine” as
enunciated by this court in earlier cases, the reader is
referred to Spence v. Utah State Agricultural College,
supra. In that case it was sought to restrain the Agri-
cultural College from entering into a loan agreement with
the United States Government under the authority given
it by Chap. 126, Laws of Utah 1947. The College proposed
to build a student Union Building with money to be bor-
rowed from the United States Government. The loan was
to be secured by bonds pledging the revenues to be derived
from the operation of the student Union Building and from
student fees. This court in holding that the bonds which
were proposed to be issued would not create a debt against
the State of Utah which would be in violation of Sec. 2,
Art. XIIT and Sec. 1, Art. XIV, Constitution of Utah,
pointed out that in conformity with the Act the bonds
would show on their face that neither the State, the College
nor the Board of Trustees would be liable for their pay-
ment and that the holders of the bonds could only look for
payment from revenues to be derived solely from the
operation of the building and from student fees. The bonds
would not require the State to make or guarantee any of
the payments should there be insufficient revenues from
the sources pledged and payments could only be made from
those special funds.

The question to be determined. in the instant case is
whether pledging the income and interest of the State Land
Funds to which the University is entitled in addition to
the revenues to be derived from the operation of the build-

186

ings would make the loan a debt which would have to be
paid by the State and thereby come in conflict with the
constitutional provision on debt limits.

It is plaintiff’s contention that under the “restricted
special fund theory” which this court has followed in the
past, the pledging of the interest and income of the State
Land Funds was prohibited by the Constitutional provisions
because it pledged funds other than that to be derived
solely from the operation of the buildings. The “restricted
special fund theory” is based on the reasoning that if any
funds of the borrower other than that derived from the
project for which the loan is made, is diverted to pay this
loan, then the amount which is so paid out will not be
available for other needs of the borrower and the funds
for such needs will have to be augumented by general
taxation. This was the reasoning in Fjeldsted v. Ogden
City; 83 Utah 278, 28 P.2d 144. See also Wadsworth v.
Santaquin City, 83 Utah 321, 28 P.2d 161. Plaintiff con-
cedes that the Fjeldsted case, (and the same would apply
to the Wadsworth case) in which this court adopted the
“restricted special fund theory” is distinguishable from
the instant case because it was applied to a municipality
upon which there are constitutional limitations on the
amount of general indebtedness it can assume in a year
and there are no such limitations on the University. Plain-
tiff nevertheless argues that the reasoning as exemplified
by the “restricted special fund theory” was used by this
court in State ex rel. University of Utah v. Candland, 36
Utah 406, 104 P. 285, 24 L.R.A.,N.S., 1260, in arriving at
its conclusion that the Act involved therein authorizing the
University to borrow from the State Land Grant Fund to
construct a building was unconstitutional because it was
clear that the debt would have to be paid by the state and
not by the University. The act involved in that case pro-
vided that payments were to be made from funds to be
appropriated for the use of the University, which funds,
of course, were to be obtained through general taxation.

187

In arriving at the conclusion that the act was unconstitu-
tional because it violated Sections 1 and 2 Art. 14 of the
Utah State Constitution limiting state debts, this court
used language which showed it believed the University, in
spite of the fact that it was a corporation and therefore
a legal entity, was an agency of the state incorporated for
the convenience of the state in conducting that institution
and any property it held belonged to the state and was
merely held by the University in trust for the state. This
being so, it reasoned further, that any debts the University
incurred would be obligations of the state and any funds
which could have been used by the University for its main-
tenance but which were diverted to other purposes would
mean that the state would have to make up the funds so
diverted by appropriations from general taxes. It is be-
cause of this reasoning that plaintiff contends that “the
special restricted fund theory” in determining what is a
debt under the constitutional limitations has been adopted
by this court for state institutions as well as municipalities.

There would be merit to plaintiff's argument if that
reasoning had been necessary for a decision in the Candland
ease. However, as this court pointed out in that case it
was unnecesssary to decide whether the University
as a legal entity could contract debts for which it | |
alone would be liable since the act in fact and in
law contemplated that the debt should be that of the state:
The facts in the instant case are entirely unlike those in
the Candland case. It is not contemplated either by the
Act nor by the proposed loan agreement that the state is
to be the actual obligor. The payments are to be made only
from funds derived from revenues obtained from the oper-
ation of the project and the income and interest from state
land funds which the University has the right to use for
its support and maintenance. A state cannot be sued like
a municipality. In the event of a failure to pay the in-
debtedness the state would be under no obligation to ap-
propriate money from general taxes to pay it. Such an

obligation is not a debt in the contemplation of the con-
stitutional limitations unless we wish to extend the reason-
ing of the “restricted special fund theory” which we have
applied to borrowing by municipalities and say that even
though the state would not be legally obligated to pay the
indebtedness it would be morally so obligated and in any
event it might have to make up from general taxation the
amount which the University expended from its income
from land grant funds for this project which could have
been used for other purposes. We do not choose to ex-
tend this doctrine to obligations assumed by state institu-
tions. As pointed out in an interesting and informative
article on this doctrine entitled “Municipal Improvements
as Affected by Constitutional Debt Limitations” 37 Colum-
bia Law Review, pages 192 to 197, on page 195:

“Superficially, the restricted special fund theory has attraction.
The theory concedes that constitutional limitations refer to debts
payable from taxation, but maintains that an obligation the result
of which may be to deprive the general municipal funds of proprietary
revenue then being received is in effect a contingent burden on the
taxpayer; hence it is a debt.

“The answers to this line of reasoning are both logical and prac-
tical. If the validity of the special fund doctrine be assumed, the
debt affected by constitutional limitations is an obligation for the
payment of which the levy of taxes may be required. It is inconsis-
tent with that assumption to treat as debt an obligation for the pay-
ment of which taxation cannot be required.”

The above article also calls attention to the fact that the
doctrine has proved unsatisfactory even as applied to muni-
cipalities and has been repudiated by some of the states
which had previously adopted that theory. See also notes
to that article commencing on page 209 for citation of
cases on this subject. In view of the experience of other
states with this doctrine we are not inclined to unneces-
sarily extend it.

Plaintiff also contends that the interest and income

from the land grant fund cannot lawfully be used

for building purposes but only for educational pur- i
poses. He concedes that whether that is true or not
depends upon an interpretation of Sec. 8 of the Enabling
Act which granted certain lands to the state for the es-
tablishment of the University of Utah and which provided
that .

“the proceeds of the sale of said lands, or any portion thereof, shall
constitute permanent funds, to be safely invested and held by said
State; and the income thereof to be used exclusively for the purposes
of such university”

and Sec. 5, Art. 10 of the Utah State Constitution which ©
provides that the permanent funds shall

“be safely invested and held by the State; and the income thereof
shall be used exclusively for the support and maintenance of the dif-
ferent institutions and colleges, respectively, in accordance with the
requirements and conditions of said Acts of Congress.”

Plaintiff cites some early cases from Idaho and Washing-
ton, Roach v. Gooding, 11 Idaho 244, 81 P. 642 and Sheldon
v. Purdy, 17 Wash. 185, 49 P. 228, which in interpreting
similar provisions held that wording therein that the in-
come was to be used for “university purposes” and for
“support and maintenance” meant that it must be used
for current expenses and educational purposes and not
for building purposes. However, plaintiff admits that more
recent cases from other jurisdictions have held the term
“support and maintenance” authorized the construction
of buildings. There is nothing in the wording of the en-
abling act nor in Sec. 5, Art. 10 of the State Constitution
which compels us to find that the income from the per-
manent funds can only be used for current expenses of
the University. Buildings are a necessary part of a Uni-
versity and the terms “support” or “maintenance” do not
necessarily exclude the right to repair or construct them.
As stated in Arnold v. Bond, 47 Wyo. 236, 34 P.2d 28, on

page 31 of the Pacific Reporter in answer to similar argu-
” ments made under provisions similar to ours:

«x the conclusion that the term ‘support’ excludes the right
to use any part of the money for erecting buildings does not neces-
sarily follow. The meaning of the term ‘support’ was discussed in
the ease of State v. Board, 8 Wyo. 104, 55 P. 451, 461, and it was held
that it included the erection of buildings as well. The court speaking,
through the late Chief Justice Potter, said: “The statutes of this
state have for many years provided that there shall be levied annually
a tax “for the support of the common schools.” * * * 26 Stat.
222, Would it be contended, in the absence of express, adverse legis-
lative provision, that school houses could not be erected or repaired
from the proceeds of the tax, or the income, or avails from the donated
public lands? Is not the erection of suitable buildings as necessary
a part of the support of the common schools as the employment of
teachers? What feature in the support of any public institutions is
more essential than providing a house in which its operations may
be carried on, or in making such repairs as its condition demands?”

See also State ex rel. Blume v. State Board of Education
of Montana, 97 Mont. 371, 34 P. 2d 515.

We conclude that neither the wording of our enabling
Act nor that in Sec. 5, Art. 10, of our State Constitution
precludes the use of the income or interest from the land
grant funds by the University for erection or repairs of
buildings.

We adopt Mr. Justice McDonough’s opinion on
the construction of Chap. 126, L. Utah 1947 as the [i
opinion of the court.

The peremptory writ of prohibition is denied and the
Alternative Writ recalled. No costs allowed to either party.

CROCKETT, Justice concurs in the opinion of
WADE, J., and also in the views expressed by Mc- [i
DONOUGH, J.

WOLFE, Chief Justice (concurring).

I concur. I have concluded that the phrase ||

“support and maintenance of the different institutions and colleges,
respectively * * *”

used in Section 5 of Article 10 of the State Constitution,
includes building for university purposes. Support and
maintenance of a university or college must be different
than support and maintenance of a single or even a group
of buildings. Maintaining a university must include main-
taining a teaching force, which includes in turn paying
sufficient salaries to obtain and keep first-class men, con-
structing buildings for the housing of students (dormi-
tories) and for classrooms, laboratories and all the mani-
fold and incidental structures necessary for the conducting
of the various schools of the university. It would include
kitchens, dining halls, auditoriums, student union build-
ings, field houses and stadiums, all of which are also desig-
nated as the subjects of self-liquidating projects in Chap-
ter 38 of Title 58, U.C.A.1953. Under that phrase I opine
that the University could accumulate the yearly revenue
from the land grant fund over the years, and with the ac-
cumulations build a dormitory or contract for its building,
or perhaps build it on force account, if there is no pro-
vision for advertising for bids in matters involving over
a certain amount.

I opine also the resort to Chapter 38, Title 53, U.C.A.
1953 is not compelled. That chapter grants permission.
I stated in my concurring opinion in Spence v. Utah State
Agricultural College, 119 Utah 104, 225 P. 2d 18, at the bot-
tom of page 34 of the Pacific Reporter:

“An examination of Ch. 126, Laws of Utah, 1947, reveals that said
Ch. 126 is not a requirement that the University or College erect any
new buildings. It is a tender by the Legislature of provisions to be
pursued if the governing boards of either institution decides to erect
any of the self-liquidating projects covered by the act but it leaves
to those governing boards the decision as to whether they shall build
such structures. * * *”

I am still of that opinion and might add that it is within
the discretion of the Board as to how they shall finance the
building; whether it shall be financed by borrowing or by
savings out of “other sources.” Having arrived at such

conclusion it follows logically (and would if otherwise con-
cluded be highly illogical) that “other sources other than
by appropriations by the legislature of the state of Utah”
does not preclude using the income from the Land Grant
Fund as a credit to be pledged to secure payment of dor-
mitory bonds. There is nothing which expressly or by
implication prevents the use of the income from the Land
Grant Fund to be pledged for borrowings and their pay-
ment together with student building fees and the net rev-
enues from the building. In fact, the Legislature has in
Sections 2 and 3 of Chapter 38 of Title 58 so specified.

There is nothing in that chapter or elsewhere that I
know of which requires us to read into the phrase “from
other sources” a limitation that “other sources” are, be-
cause of subsection (7) of Section 3 of Chapter 38, Title
58, to be limited to revenue and rents from the building
which includes student fees. The language in subsection
(7) reading that
“the income and revenues * * * from the operation of the build-
ing, and are expressly required to be fully sufficient to assure the
prompt payment of principal and interest on the bonds as each he-
comes due * * *”

certainly cannot be construed to prohibit the use of gifts
or bequests to the University expressly given for the build-
ing of dormitories or for University purposes generally.
Certainly such funds, or the income therefrom, could be
used or pledged to pay the bonds. What as intended was
that the income and revenue derived from the operation
of the building are expressly required to be fully sufficient
to assure the prompt payment of any net still owing on
principal and interest of the bonds as such net on each
bond becomes due not otherwise taken care of by gifts,
bequests and other sources “other than by [expected] ap-
propriations by the legislature of the state of Utah”.

The limitations on “other sources” is that it must not
include an expected appropriation of the Legislature as a

|

source. Of course, it could not include a gift, legacy or
other source which by its terms was expressly dedicated to
some other named special purpose or purposes in con-
nection with the University. But the income from the Land
Grant Fund is usable for support and maintenance of the
University, which phrase, I take it, is roughly equivalent
to “University purposes.”

In so holding I deem it unnecessary to explore the ques-
tion of the power of the Legislature to narrow, should
it choose to do so, the purposes for which the income from
the Land Grant Funds may be expended so long as those
purposes were includable within “support and mainte-
nance” as I interpret the meaning of that phrase found
in Art. X, Sec. 5.

McDONOUGH, Justice (concurring).

The opinion of Mr. Justice HENRIOD correctly points
out that neither in the briefs nor in the court’s opinion
in this case has the construction of Chapter 126, Laws of
Utah 1947, been discussed. The reason it has not is that
it was assumed that if the use of the interest on the land
grant fund would not be prohibited by application of the
“restrictive special fund doctrine” or the provisions of the
Constitution and Enabling Act relative to the land grant
funds, then it could be used under the provisions of the
statute. Mr. Justice HENRIOD concludes that the statute
itself does not authorize the use of the funds in question.
Tam of the contrary opinion.

Section 1 of Chapter 126, Laws of Utah 1947, now Sec-
tion 53-88-1, U.C.A.1958, authorizes the University to build
certain enumerated types of structures and “other self-
liquidating projects, and other revenue producing
buildings”. The use of expression “self-liquidating” | |
does not, of course, mean that the indebtedness
incurred in errecting the structure, plus the interest there-
on, must be obtained from the revenues from the structure

194

itself. This is evident from the body of the Act which
defines what is meant by self-liquidating. Thus, the Board
of Regents is authorized to

“collect student building fees from all students and to pledge said
fees to the payment of building bonds”; Section 58-88-8, U. C. A.
1958, subsection (8).

In addition, the University is authorized to borrow the
money upon the credit of those various items and “other
sources other than by appropriations by the legislature
of the state of Utah”. The expression “self-liquidating”
is not, in all cases, as restricted in meaning as to require
that the structure itself produce all of the moneys to pay
off the indebtedness incurred in its erection. See Green-
halgh Vv. Woolworth, 361 Pa. 548, 64 A.2d. 659, 662, 663.

Addressing next Section 2 of the Act: It authorizes the
Board of Regents

“to borrow money on the credit of the income and revenues to be
derived from the operation of the building, and on the imposition of
student building fees or both, or from other sources other than by
appropriations by the Legislature of the State of Utah * * *.”

Section 2, upon which much reliance is placed in the opinion
of Mr. Justice HENRIOD, provides that the bonds

“shall be special obligations payable solely from the revenues to be
derived from the operation of the building and student building fees,
ete, # HY

It must be conceded that the use of “etc.” in a statute

is not only unusual, but, were it standing alone with- i
out context to give it meaning, it would be too in-

definite to permit its application. But it seems clear in
view of the previous section of the act that “etc.” is used to
mean precisely what “other sources” means in Sec. 53-38-2,
U.C.A. 1958, namely, “from other sources other than by
appropriations by the legislature of the state of Utah.”
Unless given that meaning in Section 58-88-3, then the em-

ployment of such words in the previous section becomes
meaningless. What clearly was meant is that the Regents
of the University might look to any other source which is
available to the University for building purposes. 1 shall
return to this concept later on. Presently, I address myself
to subsection (7) of 58-38-3.

Subsection (7) is one of 11 subsections of the section
referred to. Those 11 subsections relate to the authority
of the Board in taking action to assure payment of the
bonds which are to be issued. The introduction to such sub-
sections is as follows:

“In order to secure the prompt payment of such principal and
interest and the proper application of the revenues pledged thereto
the Board is authorized by appropriate provisions in the resolution
or resolutions authorizing the bonds”;

to do various things. Among them are those specified in
subsection (7). That subsection authorizes the Board

“to fix rents, charges and fees, including student building fees, to be
imposed in connection with and for the use of the building and the
facilities supplied thereby, which rents, charges and fees shall be
considered to be income and revenues derived from the operation of
the building, and are expressly required to be fully sufficient to
assure the prompt payment of principal and interest on the bonds as
each becomes due * * *.” (Emphasis added.)

The requirement, it is to be noted, is not that those fees
specifically enumerated are to be sufficient to pay the
principal and interest on the bonds, but to assure the
prompt payment thereof. This wording is significant. It
is plain from the very section of the statute in which this
requirement is found, as well as the previous section, that
it was the intention of the Legislature that other sources
be available for payment of the principal and interest of
the obligations. The grant of authority to the Board to re-
sort to “other sources” is contained in the preceding sec-
tion. The section under discussion deals with the steps to be
taken to provide for liquidation of the bonds. Hence the

196

Board in fixing fees, charges and rents which will be suffi-
cient to assure prompt payment of the principal and interest
of the bonds, may take into account other sources of income
pledged to their payment. To give any more restricted
meaning to the requirement of subsection (7) is by impli-
cation to give no meaning to the “other sources” provision
of both Sections 2 and 3. We cannot ascribe to the Legis-
lature an intention to withdraw an authorization given in
one sentence by another sentence in the same section. If
this be the proper construction of subsection (7), then we
have merely to determine whether or not the income de-
rived from the land grant funds is encompassed within the
phrase “other sources other than by appropriations by the
legislature of the state.” That is, other sources available
for building purposes.

To attempt to restrict the meaning of the “other sources”
as used in the statute under the doctrine of “ejustem
generis,” to revenues derived from the building other than
the customary revenues received therefrom is to give it no
meaning at all; because in the very sentence in which the
phrase “other sources” is used, all of the income and reve-
nues to be derived from the operation of the building are
specifically mentioned as a source for the payment of the
bonds. Furthermore, if “other sources” as used in the Act
does not authorize recourse to the building and maintenance
fund hereinafter referred to, I am unable to apply such
words to any other source. If grants, devises, or bequests
were made to the University for building purposes, the Re-
gents have, and have had for many years, authority to use
them for that purpose without authorization in the 1947
enactment. By Section 53-31-3, U.C.A. 1953, the Univer-
sity is given authority to take such grants, devises or be-
quests of money or property. It is therein provided that

“it may convert property received by gift, grant, devise or bequest
and not suitable for its uses into other property so available or into
money. Such property so received or converted shall be held, invested
and managed, and the proceeds thereof used by the board, for the

purposes and under the conditions prescribed in the grant or dona-
tion.”

It may well be, as suggested in the opinion of Mr. Jus-
tice HENRIOD, that the “dedicated credits” mentioned in
Chapter 85, Laws of Utah 1951, may, under the construc-
tion here given of the statute, be available to supplement
revenues and income from the building and student build-
ing fees in the construction of a building or buildings au-
thorized by Chapter 126, Laws of Utah 1947. The credits
mentioned in Ch. 85 have since 1915 been set aside for a
specified purpose. Chapter 80, Laws of Utah 1915, pro-
vided

“All moneys received by the University of Utah as entrance or
tuition fees or moneys received from any source whatsoever shall be
paid into the State Treasury at the close of each month, and shall

be placed to the credit of the maintenance account of the University
of Utah.”

This provision remained substantially unchanged until 1939
when, by amendment, such moneys were placed to the credit .
of the maintenance and building accounts. As amended the
provision reads:

“All money received by the university of Utah or Utah state agri-
cultural college from any source whatsoever, except as otherwise pro-
vided, shall be paid into the state treasury at the close of the months
of June and December of each year, and shall be placed to the credit
of the maintenance and building accounts of the respective institu-
tions”. See Chapter 70, Laws of Utah 1939, and Section 75-2-6, Utah
Code Annotated 1943,

Interestingly, although in 1951 it was provided that the
“dedicated credits” should be retained by the University
of Utah and used in its work program, the provision quoted
above from the 1939 statutes was carried into the Utah
Code Annotated 1953 as Section 53-34-6. Such credits, then,
are still set aside in a maintenance and building account.

While such dedicated credits might be so used, I am not
so fearful of the dangerous implications of the construc-

tion indulged as is my associate. This for two reasons:
First, such “other sources other than by appropriation”
are to be used to supplement the revenues from the build-
ing and student building fees. Secondly, should the Board
of Regents of the University of Utah be so unmindful of
the maintenance requirements of the University as to at-
tempt to use the total of the dedicated credits for building
purposes—an attitude upon the part of the Board of Re-
gents which their past conduct and their standing in the
community would not justify us in anticipating—the Legis-
lature has the authority to curb such raids. It is not likely
that the visualized building expansion program will be
undertaken before the next legislative session. If the grant
of authority relative to the use of the “dedicated credits”
be thought to be too broad, the Legislature can narrow it.

As to whether or not the interest on the land grant funds
is available for building purposes, we are required to define
“support and maintenance” as used in Section 5, Article
10, of the Utah State Constitution quoted in the opin-
ion of Mr. Justice Wade. I agree with the meaning IM
given thereto in the opinion, namely, that such
phrase is not so restrictive as not to include the building
of buildings or the purchase of sites therefor. So conclud-
ing, I am compelled to likewise conclude that the income
from such funds is encompassed within the phrase “other
sources other than by appropriations by the legislature.”
I think we must so conclude unless we are of the opinion
that in using such phrase the Legislature had in mind what
is termed in the opinion of Mr. Justice WADE the “re-
strictive special fund theory,” and legislated with that con-
cept in mind. I do not think that they did. I find nothing
in the words used or the implications thereof which would
justify such conclusion. I therefore think the act itself au-
thorizes the use of the funds and in accordance with the
opinion of Mr. Justice WADE believe that the restricted
special fund theory as applied to the constitutional pro-

vision invoked should not be adopted to preclude the secur-
ing of the bond issue by the income from such funds.

HENRIOD, Justice (dissenting).

I dissent, respectfully suggesting that those of the ma-
jority opinion who participated in Spence v. Utah State
Agricultural College, appear to have departed from former
concepts as to the nature and extent of authority granted
under Chap. 126, L.Utah 1947. In so doing, the door is
opened for invasion of public funds never contemplated by
that statute.

This is a suit allegedly instituted on behalf of all tax-
payers, advocacy for whom seems to be mostly honored
in absence. Nowhere are the true purpose and intent of
Chapter 126 discussed, and only a passing reference is
made to Spence v. U. S. A. C., — the case which in the opin-
ion of the writer is controlling here. There is no discussion
or reference at all to the implications of the majority opin-
ion, and great emphasis is placed on the Candland case and
the special fund doctrine, both of which may or may not be
pertinent. But the context of the act itself and the princi-
ples enunciated in the Spence case certainly seem pertinent
here. Nowhere has counsel for either side discussed princi-
ples of statutory construction applicable to or the real
meaning of the ephemeral words “other sources” and “ete.”
around which this entire case of necessity must revolve.

In passing, it is submitted that so far as this case is con-
cerned, whether the income from the land grant fund may
be pledged for the payment of the bonds depends entirely
on the language of Chap. 126, (now 58-38, U.C.A. 1953)
since all of the litigants here assert their claims solely under
the provisions of Chap. 126, and no question of general,
independent or inherent power is involved.

Mr. Justice WADE asserts that the question to be deter-
mined here is whether pledging the income from the land
grant fund in addition to revenues derived from the opera-

tion of the project would make the loan a debt payable by
the State and hence unconstitutional. That may be one
of the questions here, but there are other important ques-
tions first to be determined, viz.: 1) whether the specific
language of Chap. 126 authorizes the use of the income from
the land grant fund, and 2) whether this court has or has
not already settled the interpretation of Chap. 126 as ex-
cluding such use.

A casual reading of the act indicates that it authorizes
only “self-liquidating” projects, which, as reflected in the
Spence case, means that the cost is payable out of the
project itself, and which logically demands use of funds
produced by the project itself, to the exclusion of funds
not produced from its operation and existence. The act’s
title reflects the legislative intent that this is so when it
authorizes the Board of Regents to “Fix Rents, Charges and
Fees to Assure Payment of Principal and Interest” of the
ponds. The very first section (Sec. 1) authorizes the Board
to set aside portions of the campus to build dormitories,
kitchens and the like and “other self-liquidating projects.”
Sec. 2 authorizes the borrowing of money on the credit of
the income and revenues “‘to be derived from the operation
of the building,” on the imposition of student building fees
or both, or from other sources “other than by appropriations
by the Legislature,” and to issue bonds to raise the money,
such bonds to be payable “from the combined revenues of
all buildings acquired and/or student building fees to be
collected.” Sec. 8, part of whose subtitle is “Special Funds,”
declares that the bonds shall not be obligations of the State,
the University or its Regents, but “shall be special obliga-
tions payable solely from the revenues to be derived from
the operation of the building and student building fees,
ete.’ In order to assure prompt payment of the bonds,
the Board of Regents, by resolution can “covenant as to
the operation of the building” and administer the revenues
“derived from such operation.” It is further authorized
by resolution to collect “student building fees” and to pledge

“said fees” for the payment of the bonds; also to “fix rents,
charges and fees” which “shall be considered to be income
and reevnues derived from the operation of the building,
and are expressly required to be fully sufficient to assure
the prompt payment of principal and interest on the bonds
as each becomes due.” Further, the Board is authorized to
covenant against any other obligations payable “from the
revenues to be derived from the building.” Sec. 6 that all
“income and revenues derived from the operation of the
building” shall be deposited in a bank. Sec. 9, allowing for
an alternative method of financing through a non-profit
corporation, nevertheless provides that the Board can agree
with the corporation to “make such fees and charges ade-
quate to provide a sum sufficient to pay the cost * * * and
the amortization of the cost of the building.”

Such language makes it obvious that the act itself con-
templates only “self-liquidating” projects, to be paid for out
of funds produced by the project itself. Neither the ma-
jority opinion, nor counsel, discusses the language of the
act or its purpose, except the phrase “other sources” and
the abbreviation “etc.”, — whatever those words mean.
“Self-liquidating” should, from the act’s language alone,
mean but one thing—that the project pays for itself without
resort to any funds other than those it produces. Little
solace comes in arbitrarily concluding that “other sources”
includes something unspecified in the act or something
that is antithetical to such concept of self-liquidation.
The majority opinion takes phrases, meaningless unless
viewed in the light of the context of which they are a part,
and attaches to them a connotation that is unnatural, illogi-
cal, unreasonable and unsupportable under any syllogistic
reasoning, — a meaning that does violence to the logic and
reason of the rule “ejusdem generis,” a rule prescribing
that general words following those of specific meaning, shall
not be construed in their widest extent, but apply only to the
same general kind of thing mentioned by those preceding.
Applying the rule to this case it appears obvious that the

phrase “other sources” is akin to “income and revenues
derived from the operation of the building,” and to “student
building fees.” It takes little imagination to conclude that
“other sources” in this case easily could include rental for
use of a hall or a classroom in the building itself, rental for
use of the grounds or other parts of the premises such as
the cafeteria, rental of the dormitory rooms to private
citizens at times when school is not in session, income from
the sale of surplus heat to public or private interests, pro-
ceeds from the sale of used furniture, books, equipment, or
advertising space, and a thousand and one other items of
income derived from the project itself. Although none is
specifically mentioned in the act, all would fall within the
category of “other sources” of income from the “operation
of the building” and would satisfy the rule “ejusdem
generis.” On the other hand it is difficult to know how the
rule would be satisfied by including within the term “other
sources,” in a self-liquidating project, the income from a
land grant fund which was in existence for over half a
century before the self-liquidating project ever was born.

Mr. Chief Justice WOLFE seems to justify his position
by asserting that there is no reason to exclude gifts and
bequests made to pay the bonds or for university purposes.
The fundamental fallacy of such assertion is two-fold:
1) if the gift be earmarked to pay the bonds, the existence
of the project is the reason for the gift, and therefore a court
easily could conclude that such gift is included in “other
sources” resulting from the operation of the project itself,
such as rentals and student building fees, since the gift is
the result of the existence of the project, else it never would
have been made, — all of which satisfies the rule “ejusdem
generis” logically and factually; and 2) a gift does not
affect the taxpayer adversely, but operates in reverse, and
represents a windfall to him that actually cuts his tax
burden rather than raiding funds in which he has a vested
interest, requiring replacement by taxes if dissipated.

The dangerous implications of the majority decision are
pointed up when one refers to Chap. 85, L.Utah 1951, which
provides that

“The dedicated credits, such as tuitions, fees, federal grants, and
proceeds from sales, received by the university and colleges may be
retained by these institutions and used in accordance with each insti-
tutional work program.”

In the biennium ending June 30, 1951, the University
acquired $4,078,561.35 of such dedicated credits,’ and the
estimated amount of such credits for the biennium ending
June 80, 1958, is $8,637,231.2 In other words, the University
receives about $2,000,000 of dedicated credits annually,
included in which is the income from the land grant fund,
which amounts only to about $25,000 per year, significantly
the smallest or one of the smallest dedicated credits pos-
sessed. If the dedicated credit known as “Fees and Li-
censes” which amounts to about $1,350,000 had been
pledged, or committed, if you please, to secure or pay the
contract here, the taxpayers’ burden of replacement would
have ben pointed up in bold relief, and the decisions in the
Spence, Candland and Barnes Vv. Lehi City, 74 Utah 821, 279
P. 878, cases then would have assumed considerably more
significance. But by pledging the income from the land
grant fund, the smallest dedicated credit available, we have
been lulled into a false sense of security on the theory that
a little pregnancy is unobjectionable. In this respect, the
writer is unimpressed with oral arguments that there is
only a remote possibility that the income from the land
grant fund ever will be needed. Little pregnancies seldom
result in the still-born.

Under the authority of the main opinion, there seems to
be little or no reason why the $2,000,000 annual dedicated

1Utah State Auditor’s Report for periods ending June 30, 1950 and
June 30, 1952.

2Governor’s Biennial Budget, transmitted to the Legislature, Jan.
15, 1951.

204

credits of the University, and lesser but nonetheless stag-
gering annuities of other institutions of the State,’ could
not be used for constructing “self-liquidating” projects
under Chap. 126. Nor is there any reason that such amounts
could not be so used annually in the future. Any substantial
use of such funds makes obvious the necessity of replace-
ment by legislative appropriation out of tax funds, — in
fact, such amounts not only would require replacement,
but the added construction, representing an expansion
of the institution, would demand additional public funds
for support and maintenance. It becomes apparent what
the unnecessary and unjustified interpretation of “other
sources” and “etc.”, contained in a statute designed for
purely self-liquidating projects could do, and illustrates the
point that conclusions arrived at because of the exigencies
of a particular situation, might loom as spectres later come
to haunt us.

Great emphasis has been given to the Candland case and
to the principle of the special fund doctrine, while very little
has been accorded the act or the decision in Spence v. U. S.
A. C., — to the point where the writer suggests we can’t
see the forest for the trees. The facts in the Spence case
were identical to those here, except that in the instant case,
something new has been added, — an attempted use, under
the very same statute, of funds quite foreign and logically
inimical to the concept of self-liquidation. But the decision
in the Spence case certainly strikes down the use of any
such funds not produced by the project itself. The very
reason that Spence v. U. S. A. C. was decided as it was (and
the majority opinion and concurrence of Mr. Chief Justice
WOLFE clearly bear me out), is that the Agricultural Col-
lege carefully pledged only those funds produced by opera-

Departmental Estimated Dedicated Credits for Biennium ending
June 80, 1953; University of Utah, $3,687,281; U. S. A. C., $2,135,
084.48; Weber College, $452,265.00; Carbon College, $94,100.00;
Branch Agricultural College, $54,100.00; Snow College, $50,176.00;
Dixie College, $49,500.00.

tion of the project, and carefully avoided pledging any
funds not produced by the project. The decision in that
case clearly reflects that it was rendered only because the
project was “self-liquidating” and did not call upon any
other funds than those charged for rentals and student
building fees, negativing any idea that funds other than
those produced by the project could be tapped. Mr. Justice
LATIMER without doubt indicated that had any funds
been suggested for use other than were produced from the
project itself, the college would have exceeded its authority
under the statute, when he said, in giving his reasons for
the decision, that:

“The bonds which will be sold to the public show * * * that
money necessary for repayment cannot be obtained from sources
other than from the revenue and income derived from the operation
of the student union building and the student fees paid by students
of the college”. [225 P. 2d 28.]

Such language and the entire tone of the decision indicate
that had there been an attempt to use other funds than
those produced by the project itself, a violation of the
same statute, Chap. 126, L.Utah 1947, (under which de-
fendants here have claimed, and under which they must
stand or fall), would have occurred.

It seems obvious that Mr. Chief Justice WOLFE felt
the same way since he used the phrase “self-liquidating” on
9 oceasions in his opinion, and the phrase (or substantially
the phrase) that the bonds were payable “solely from the
revenues to be derived from the operation of the building
and student building fees” about as many times. It would
seem that his present position deserts his language in the
Spence case when he said:

“The Legislature by the passage of Ch. 126 sought to avoid the
effect of Sec. 1 of Art. XIV by permitting the issuance of building
revenue bonds, the principal and interest of which were to make
payable entirely and only out of revenues derived from the building
itself and thus by making such bonds a charge aainst a special fund”.

PS

206

Also it is to contradict his further language that:

“If the Board decides to build, Ch. 126 provides the manner and
method of issuing revenue-building bonds which are made payable
as to principal and interest only out of the revenues derived from the
building which is constructed.”

Nor is his present position consistent with his remarks
there that: .

“Ch. 126 * * * furnishes legislative authority for the issuance
and sale of negotiable revenue bonds for the purpose of financing the
building of certain self-liquidating projects * * * under certain
conditions, limitations and restrictions. One of these restrictions is
that the bonds issued should not constitute an indebtedness * * *
but shall be special obligations payable solely from the revenues to
be derived from the operation of the building and student building
fees.”

Other language of the Chief Justice in that case, is similar,
and as emphatic. It is no answer to say the University
could build without authority of Chap. 126. That problem
was raised unsuccessfully by amicus curiae in the Spence
case. Here, unlike there, the question is not even raised,
and the parties have chosen to stand or fall under the pro-
visions of Chap. 126 which necessarily involves only the con-
struction to be placed on that statute’s language, particu-
larly the words “other sources” and “etc.” It is impossible
for the writer to understand how the Chief Justice conceiv-
ably can conclude that income from the land grant fund
is includable in the phrase “other sources” in Chap. 126, in
the light of his expressions in the Spence case, — unless
he intends to reverse himself, rendering impotent the word
“self-liquidating” which he used so freely and unequivo-
cally in the Spence case.

The special fund doctrine was born in Barnes v. Lehi
City, has never been repudiated and has been reaffirmed
time and again. We are invited to repudiate it now because
some other jurisdictions have done so. Why they have done
so is the subject of many debatable explanations, not the

least of which might be a changing attitude in the past few
decades looking toward a more indiscriminate use of tax-
payers’ money to satisfy the exigencies of an existing eco-
nomic emergency. But the doctrine, though repudiated else-
where, has foundation in good sense, since it is based pri-
marily on the protection and preservation of taxpayers’
funds. The principle is embodied in constitutional inter-
dictions against tax levies in excess of those expressly
granted. This court consistently has frowned on plans and
schemes to circumvent that philosophy, as is reflected in
the decisions and language of State v. Candland, Barnes v.
Lehi, Fjeldsted v. Ogden, Wadsworth v. Santaquin, U. P.
& L. v. Ogden City, 95 Utah 161, 79 P. 2d 61 and Spence v.
U.S. A.C. It is difficult to determine how this court now
can say that the plan of the defendants to use income from
the land grant fund, a fund having no connection with the
project, can be a part of a special fund created by a project
that is supposed to pay for itself.

Mr. Justice WADE attempts to distinguish the instant
case with the group of cases cited above on the theory that
the former involves a state institution while the latter in-
volves municipalities, giving as a reason for the distinction
the fact that the state, unlike municipalities, cannot be
sued. He has overlooked the fact that in the very case
which gave birth to the doctrine, Barnes v. Lehi City, the
municipality was not subject to suit under any circum-
stances, the contract giving rise to the litigation expressly
providing for non-liability on the part of the city. The
special fund doctrine is not predicated on any tenuous dis-
tinction as to whether an institution can or cannot be sued.
It is bottomed, rather, on the fundamental principle that
where a fund created by an improvement is charged with
full payment of its cost, without additional burden on public
funds, it is a valid constitutional arrangement, and if there
is an attempt to include in such fund, other funds in which
the taxpayer has a vested interest, requiring replacement
with public funds other than those solely produced from

the improvement itself, such attempt is constitutionally
objectionable until and unless all constitutional interdic-
tions first have been observed. It is submitted that the
inclusion here of the income from the land grant fund in
the so-called special fund to be created by the dormitories
themselves, fails to stand the test of the special fund princi-
ple since it obviously takes university funds (and therefore
state funds) and commits them to a “self-liquidating” proj-
ect, which is rendered not “self-liquidating” if it does not
pay for itself. It is no answer to say the State cannot be
sued and is not legally obligated to pay, since it is unreal-
istic to say that the State will not carry out its mandatory
duty to support the University in perpetuity, which requires
the substitution of funds pledged to that support if for one
reason or another they are lost or dissipated.

Mr. Justice WADE concedes that the special fund doc-
trine applies in the case of municipalities, but that it should
not be extended where a state institution is involved. To
say we are extending the doctrine when we apply it to state
institutions is an ipse dixit, since the doctrine, if sound,
is applicable in both instances, — perhaps more so where
a state institution is involved, since more taxpayers are
involved. It was held applicable, without distinction and
without any suggestion of extension of the doctrine, to an
improvement planned by a state institution, in Kasch vy.
Miller, 104 Ohio St. 281, 185 N.E. 813.

As to State v. Candland, which declared that a loan of
the land grant fund to the University created a debt of the
State, that case has never been repudiated in this State.
The majority opinion attempts to distinguish that case from
the instant case by asserting that the act authorizing the
loan in the Candland case in fact and in law contemplated
that the debt created was that of the State. It was this
court that said the act contemplated a State debt, — the
act itself specifically stating that “such loan shall be a debt
of the University of Utah, and not of the State of Utah.”
Laws 1909, c. 124, §2. So that the distinction attempted

to be made by the majority opinion seems unmeritorius
since, in the instant case, we just as reasonably could say
that Chap. 126 in fact and in law contemplates that the
pledge of the land grant fund income is in fact and in law
a pledge of the State.

The writer can see no practical difference of obligation
on the part of the State where the corpus of the fund is
joaned, or where the income therefrom is used. The Cand-
Jand case, whose wisdom is reflected in its language far
better than this writer can assert, says the loan to the
University was a subterfuge to circumvent the constitution.
In the instant case, using the income from the land grant
fund is a subterfuge not only to circumvent the constitution,
but a device to weaken or destroy the special fund doctrine
and read into a statute authorizing only self-liquidating
projects, something that isn’t there. If all of the $8,000,000
of dedicated credits available to the University in the past
two bienniums had been used up on “self-liquidating” proj-
ects under the provisions of Chap. 126 and the authority
of the main opinion, it is obvious that all or a goodly por-
tion of such amount of necessity would have required re-
placement by appropriation of public funds, in which event
the wisdom of the Candland case, the special fund doctrine,
and the Spence case readily would have become crystal clear.
To say that in such case the state could not be sued, would
not be obligated legally to replenish such fund, but has only
a moral obligation to do so, is to blind oneself to reality,
particularly since the public is charged with the duty of
supporting and maintaining the University in perpetuity.
The replacement of the $8,000,000, or the smaller amount
representing the income from the land grant fund is a
matter of degree only, but the implications of the main opin-
ion persist nonetheless—regardless of the magnitude of the
one situation or the pusillanimity of the other.

‘These funds not only cannot be pledged for the reasons
heretofore stated, but they cannot be pledged or used under

210

the very wording of Chap. 126 which the majority opinion
uses to arrive at its result. Great stress is laid on the words
“other sources.” The entire phrase is “other sources other
than by appropriations by the legislature.’ The interest
from the land grant fund is a dedicated credit, and dedicated
credits are biennially appropriated by the Legislature.
They not only are appropriations, but must be expended
for educational purposes before other general appropria-
tions of the Legislature are expended.

Under Chap. 128, Laws of Utah, 1951 (and the same is
true under the 19538 act, not yet published, but being H.B.
239, 30th Legislature), which is entitled “Appropriations
Act of 1951”, it is provided in Sec. 11 and

“All * * * dedicated credits * * * shall be deposited at
least monthly and shall be credited * * * to the appropriations
account * * *, Such * * * dedicated credits shall be first
allotted for expenditures to the extent of such collections, All * * *
dedicated credits shall be subject to all provisions of law applicable to
appropriated funds * * *”

It is obvious, therefore, that the interest from the land
grant fund cannot be pledged or used to pay for a building
under the self-liquidating provisions of Chap. 126, since
it does not come from another source “other than by ap-
propriations by the Legislature.” In fact, were this item
not an appropriation by the Legislature it still couldn’t be
used as a practical matter, since, being a dedicated credit,
it must be deposited at least monthly and must be “first
alloted for expenditure.” Furthermore the interest from
the land grant fund, if any remains, lapses two months after
each biennium and ceases to exist, as is provided tn Sec.
10 of the 1951 Appropriations Act (and the same provision
is found in the 1953 Act), where it is provided that

“The state finance commission shall, on or before August 81 * * *
close out to the proper fund or account all unexpended balances of
appropriations * * ¥*”

The same is true of all dedicated credits.

Since the foregoing was written, my learned colleague,
Mr. Justice McDONOUGH, has written an opinion which
not only attempts to refute what has been said in this dis-
sent but apparently represents a reversal of his concurrence
in Spence v. U.S.A.C., Utah 225 P. 2d 18, which opinion
I shall discuss hereinafter.

The report of this decision in The Salt Lake Tribune of
April 28, 1958, in part confirms the matters about which
I am concerned, but about which Mr. Justice MCDONOUGH
apparently is not, when it reported that the comptroller
of the University, stated that this decision cleared the way
for the $1,800,000 Union Building. This being so, there is
no reason, under the main opinion, why $1,800,000 of dedi-
cated credits could not be used to build the new, second and
additional Union Building, and if this were accomplished,
it becomes obvious that the taxpayers would have to re-
place the $1,800,000 by appropriation at the next legislature.

In defense of my position, I feel constrained to answer
what Mr. Justice McDONOUGH has to say. He cites Green-
halgh v. Woolworth, to support his statement that

“The expression ‘self-liquidating’ is not, in all cases, as restricted

in meaning as to require that the structure itself produce all of the
moneys to pay off the indebtedness incurred in its erection.”

The case may be authority for such a broad generalization
but it does not say that Chap. 126 is the type of statute
where “self-liquidating” does not mean what it says. He
fails to point out that the Greenhalgh case, supra, is not
similar in any respect to the case here, and that the Green-
halgh case actually and specifically recognizes that there
are situations like that here where “self-liquidating” means
just that — “self-liquidating.”

Mr. Justice MecDONOUGH says

“The use of the expression ‘self-liquidating’ does not, of course,
mean that the indebtedness incurred in erecting the structure * * *

must be obtained from the revenues from the structure [project]
itself.”

This is an ipse dixit which, I believe and respectfully sug-
gest, Mr. Justice McDONOUGH fails to support. He says
that “self-liquidating” does not mean “self-liquidating” be-
cause that fact is evident from the body of the Act which
defines what is meant by self-liquidating. The body of the
act does not specifically define the word, but the repetition
of the word “self-liquidating” in the act seems to contra-
dict Mr. Justice McDONOUGH’s conclusion. In supporting
his contention he has lifted out of the context of the act
subdivision (3) of section 8, Chap. 38, Title 58, which gives
the Board of Regents authority

“to ‘collect student building fees from all students and to pledge said
fees to the payment of building bonds’”,

and then assumes that this means fees from students other
than those using the facilities of the project. It is submitted
that the phrase mentioned applies only to those taking ad-
vantage of such facilities, if read in light of the entire con-
text of the act. Such construction of the act is clearly
shown to have been intended in subdivision (7) of the same
chapter, having to do with the power to fix such fees, when
it says the Board can

“fix Yents, charges and fees, including student building fees, to be
imposed in connection with and for the use of the building and the
facilities supplied thereby, which rents, charges and fees shall be
considered to be income and revenues derived from the operation of
the building, and are expressly required to be fully sufficient to
assure the prompt payment of principal and interest on the bonds
rearaans

It seems clear, therefore, that the construction given the
phraseology of subsection (8) is not only strained, but is
negated in the very section from which Mr. Justice Mc-
DONOUGH lifts a phrase, and to which he attaches an
important significance.

Mr. Justice McDONOUGH says that as to subdivision (7)

“It is plain from the very section * * * that it was the inten-
tion of the Legislature that other sources be available for payment of
the principal and interest * * *.”

It would seem that it is not only not plain but it is very
plain that the Legislature intended just the opposite when
it says that such rents, charges and fees (from the building)
are “expressly required to be fully sufficient to assure the
prompt payment” of the bonds. To attach any connotation
to the word “fully” other than that with which it univer-
sally is accompanied simply is to ignore its meaning; and
to say the wording only means that such rents, charges and
fees are supplemental to something else is to ignore the
whole act, which announces in its very first section that it
authorizes “self-liquidating” projects, — not the type of
project where 99% is paid out of dedicated credits and
1% from the revenue it might or might not produce.

Mr. Justice McDONOUGH asserts that to restrict the
phrase “other sources” to revenues derived from the project
is to give the phrase no meaning at all, because the sentence
in which the phrase is used specifically includes all of the
income and revenues to be derived from the operation of
the building. This is not so. My learned colleague forgets
that the legislature did not include in the sentence men-
tioned other sources of income such as a gift earmarked
for payment of the bonds, a legacy charged with the same
trust, sales of used equipment no longer needed, sales of
advertising media, and a host of other conceivable sources
of income that might spring from the existence of the
project itself, and only by reason of its existence.

Mr. Justice McDONOUGH speaks of Title 53-31-3, U.C.A.
1953, in support of his contention. This section has nothing
to do with this case, was never mentioned by counsel in
argument or brief, — and I repeat that the litigants must
stand or fall within the four corners of Chap. 126, arid

not within those of some other statute. It is obvious that
this other statute has no relevancy, since it is designed only
to allow the acceptance of gifts charged with a trust, and
if the trust imposed is for payment of the bonds, then the
gift must be used to help pay the bonds, — which would
be an item included in “other sources” which spring from
the existence of the project itself, — else the gift never
would have been made.

Mr. Justice MCDONOUGH discusses dedicated credits as
going into a maintenance and building fund under the
statute. No one has any quarrel with such statute, but it is
difficult to see how that has anything to do with this case.
Such fund has other statutory interdictions, and if the
legislature had intended to have such funds usable under
Chap. 126, it would have been a simple matter to have said
so. If that were the case, there would be little need for
Chap. 126, the self-liquidating project statute. The Univer-
sity could then issue building bonds and pledge the monies
in the maintenance and building fund without Chap. 126.
Without discussing them, it is suggested that serious ques-
tions of sanction for such procedure would arise.

I join in the confidence Mr. Justice McDONOUGH
reposes in the present Board of Regents and our future
legislatures, but such confidence hardly is a basis for an
opinion of this court, and amounts only to saying that we
think a Saviour likely would not be followed by a Judas.
His statement that

“It is not likely that the visualized building expansion program
will be undertaken before the next legislative session”

‘was made meaningless by the pronouncement of one of the
University’s officials that this decision clears the way for
a $1,800,000 new building in addition to the dormitories.

The attempt to include the income from the land grant
fund in this obviously self-liquidating project violated Chap.
126, Laws of Utah 1947, the constitution as reflected in the

Candland case, the decision in Spence v. U.S.A.C., and the
special fund doctrine, and the relief prayed for should

have been granted.

COOPER v. FORESTERS UNDERWRITERS, Inc.
No. 7941. Decided June 1, 1958, (257 P. 2d 540.)

Limitations on scope of review by appellate court. 8 Am. Jur., Ap-
peal and Error, sec. 820.

Romney & Boyer, Salt Lake City, Harold R. Boyer, Salt
Lake City, for appellant.

Frank FE. Moss, County Atty., Salt Lake City, for respond-
ent.

HENRIOD, Justice.

Appeal from a judgment for plaintiff in an action for
payments under an accident policy. The record in this case
is extremely brief, and the facts presented therein so
fragmentary and incomplete as to make it impossible for
this court to render a decision without looking dehors the
record, — a process we cannot indulge. The record factu-
ally is builded on a colloquy between court and counsel

216

during which reference was made to a purported stipula-
tion, unsigned, presented to the City Court, but which,
however, is not a part of the record before us. We cannot
consider facts stated in the briefs which may be true but
absent in the official record. This case is remanded, there-
fore, with instructions to vacate the judgment, entertain
further proceedings consonant with the pleadings, the bur-
den of proof of the respective parties and this opinion, in-
cluding the taking of evidence, if necessary.

No costs awarded on appeal.

WOLFE, C. J., and McDONOUGH, CROCKETT and
WADE, J.J., concur.

PATTERSON et al.v. BLAIR et ux.
No. 7948. Decided June 3, 1958. (257 P. 2d 944.)

&
I
a

See 12 6. J. S., Brokers, sec. 93.

Claude T. Barnes, Salt Lake City, for appellants.
Allen L. Hodgson, Payson, for respondents.

CROCKETT, Justice.

The problem with which we are here concerned is the
meaning to be given the term “offered for sale” as it is
used in a certain real estate listing contract.

Defendants Blair signed an agreement listing their farm
near Payson, Utah for sale with plaintiffs, real estate
brokers. It gave the latter exclusive right to sell the prop-
erty for six months and provided that if Blairs sold it with-
in 12 months after that time “to any person to whom * * *
[plaintiffs] have previously offered it,” defendants were
to pay a commission.

There was no sale during the listing period, but within
twelve months after it expired Blairs sold the property to
a Mr. Paul Hurst. Plaintiffs claimed that they had “offer-
ed” the Blair property to Hurst during the listing time and
demanded that tle Blairs pay commission on the sale. They
refused, wherefore this suit. A jury returned a verdict for
the defendants.

Plaintiffs appeal asserting that the evidence compels a
finding that they had offered the property to Hurst during
the time specified. The undisputed evidence upon which
the plaintiff bases this contention is briefly:

That during the listing period, George T. Eckersley,
an agent for plaintiffs, was attempting to sell or trade Mr.
Paul Hurst’s store and to get Hurst a ranch; he took Hurst
to various places including Montana and Wyoming to show
him such properties; there was conversation between the

two concerning the Blair property which in the main is re-
flected by the following excerpts from Hurst’s testimony:

“Q. * * * Now when Mr. Eckersley took you to the Blair
place and told you that he had that place for sale * * *? A. He
didn’t take me to the Blair place, he was just riding by * * *”

* * * * *

“A, We were riding along the road, and Mr. Eckersley said, ‘I
have got to go in and see this man a minute about his place.’ We
just rode in the lane * * * and he talked to him.

“Q. Did Mr. Eckersley say anything about the place being for
sale? A. He said ‘This place is for sale,’ yes.

“Q. Did he say anything else about the place? A. He said, ‘I
don’t believe you want this place. It is a man-killer.” He said, ‘It is
killing Mr. Blair.’

“Q. Did he say anything more about the place? A. That is all
that was said, as I remember.”

In addition to the foregoing uncontroverted facts, it
should be said that there was also testimony from plain-
tiffs’ agent Eckersley that in a conversation with Hurst
in the latter’s store regarding various properties
plaintiffs had listed for sale, he mentioned the Blair | |
farm as one of them; that values were discussed and
that Hurst “intimated” that if Eckersley could sell the store
he would be interested in buying the Blair place or some
other property. Eckersley was an interested witness and
it was the jury’s privilege to determine what credit and
effect they would give to his testimony just recited.*

Concerning Eckersley’s activities in regard to sale of the
farm, about all that can be made out from undisputed evi-
dence is that he casually, and one might almost say inad-
vertently, let Hurst know that the property was for sale
and that if he wanted to buy it Eckersley would be willing
to sell it to him.

1See Jones v. California Packing Corp., 121 Utah 612, 244 P. 2d
640; and authorities therein cited; Kelly v. Jones, 290 Ill. 875, 125 N.
E. 884, 8 A. L, R. 796; 82 C. J. S., Evidence, § 1038, page 1089; 20
Am. Jur. 1081,

Plaintiffs’ counsel has devised some ingenious arguments
that Eckersley’s conduct actually amounted to an offer
to sell the place. He suggests that in telling Hurst “I don’t
believe you want this place. It is a man-killer * * * It is
killing Mr. Blair * * *” he was using a bit of subtle sales
psychology—presenting the place as a challenge to Mr.
Hurst’s feeling that he was superior and could overcome
such difficulties. Admittedly, this is at least a possibility.
However it does not exactly comport with plaintiffs’ evi-
dence as to the effort and expense they go to to please
prospective purchasers and to point out all the favorable
aspects of properties they are trying to sell.

Hurst did live in the locality and had a general knowledge
concerning the place, but it is undisputed that he was never
shown the Blair farm by plaintiffs or Eckersley; that he
was never informed what the asking price was nor anything
concerning the livestock or equipment, and that he did not
know nor was he told by Eckersley just how many acres it
eaintained or anything definite about its water rights.

We are entirely in accord with the thought that collusion
to cheat one out of just compensation for honest effort is
reprehensible and to be frowned on by the law and those
charged with the responsibility of administering it.

Nor is there any discord with the idea that real es- | |
tate brokers are engaged in an honorable calling,

rendering useful service in getting buyers and sellers of
property together. The fact they do not buy the property,
take it into a store or sales floor to display and sell it does
not render their efforts less valuable and essential than
those of other sales merchants. Such service is “worthy of
its hire.” It is duly licensed and entitled to all reasonable
safeguards. On the other hand, although the clause with
which we are concerned is perfectly valid and to be invoked
for the broker’s protection in a proper case, it surely was
not intended to benefit a real estate man who has done
nothing, by conferring upon him a “windfall” commission
because he casually or inadvertently mentioned the listing

to someone who thereafter happened to purchase it in the
normal course of affairs and quite independent of the
broker’s activities. If so, he might well content himself with
letting everyone possible know of a listing in the hope that
some such eventuality would inure to his benefit, instead of
really working on selling the property.

Whether what Eckersley did amounts to an “offering for
sale” as that term was used in the contract depends some-
what upon the meaning to be given to the term “offer.”
It is undoubtedly difficult and perhaps impossible to
reduce the word “offer,” by itself, to any absolute i
and precise meaning which would be of universal
application under all fact situations. Words are at best
imperfect and only approximate conveyors of thought; they
are necessarily to be construed in the frame of reference
in which used. The word “offer” in a legal sense is often
used to signify a formal proposal to enter into a legal
contract. It seems unlikely, and defendants do not even
contend, that the parties intended such requirement here.
Eckersley’s activities fell far short of it.

The court in formulating its instructions to the jury
as to what constituted an offer as a matter of law could
take into consideration the facts and circumstances sur-
rounding the transaction as indicating what the
parties intended by the term. It is apparent that |
the purpose of including the clause in the contract
was to protect a real estate man who had expended time,
effort and/or money in attempting to sell property, from
being cheated out of his commission by a prospect who
would wait until after the listing period had expired to
buy it.

In the light of that purpose, the trial court was justi-
fied in interpreting the clause under discussion to require
some affirmative offer to sell, or activity toward develop-
ing the sale, such as solicitation, showing or attempted
persuasion to buy. This issue was squarely presented to

*_

the jury. The court instructed them:

«* * %* the question is whether or not under the terms of
* * * [the] listing agreement, the plaintiffs offered the prop-
erty for sale to Mr. Hurst”,

and further told them in substance that to “offer”? means
“to hold out,” “to tender,” or “to present” for sale, and
advised them that if plaintiffs had so offered the property
to Hurst, plaintiffs should recover. We see no error in
such instructions and no exception was taken to them.

We are not confronted with the question whether the
proof supports a finding that plaintiffs did not offer the
property for sale, but rather, does the evidence compel a
finding that such offer was made? The burden
of proof was upon the plaintiffs. Even if there were | |
some evidence upon which such a finding could
rest, or if the evidence were equally balanced on the issue,
yet the jury could be in such a state of mind that they were
not convinced by a preponderance of the evidence that
the plaintiffs’ activities amounted to an offer of sale to
Hurst.

The things Eckersley did are equivocal: there was no-
thing particularly significant or unusual about his actions
relating to the Blair place which could not logically and
reasonably be regarded as mere casual occurrences
while trying to sell Hurst other properties; they | |
do not necessarily indicate that he was actually
doing anything purposed towards selling the Blair property
to him. That being so, the determination of the fact lay
within the province of the jury. If reasonable minds acting
fairly and honestly could remain unconvinced that an offer
of sale was made, the verdict must not be disturbed.?
Such is the case here by reason of the fact it cannot be
said that the only reasonable conclusion to be drawn was
that Eckersley offered the property for sale to Hurst.

2Stiekle v. Union Pacific R. Co., 122 Utah 477, 251 P. 2d 867.

Judgment affirmed. Costs to respondents.
McDONOUGH, HENRIOD and WADE, JJ., concur.

WOLFE, Chief Justice.

I concur in the result. It should be noted that the plain-
tiffs, who are the appellants did not offer any evidence as
to what the parties meant by the word “offered” as used
in the listing agreement and that the plaintiffs do not
claim that it was the function of the jury and not the court
to determine what the parties meant by the word “offered.”
The court instructed the jury as to the meaning of the word
“offered” and no exception having been taken to that in-
struction by the plaintiffs, the definition given by the

- court is the “law of the case”. Thus it is immaterial what
meaning we think should be ascribed to the word or whether
the trial court’s definition was correct.

We have before us for decision, therefore, only the nar-
row question whether the evidence compels a finding that
the plaintiffs through their agent, Eckersley, “offered”
the property to Hurst during the listing period, as that
word is defined in the instructions. I conclude that the
evidence does not compel that finding.

MOONEY v. DENVER & R. G. W. R. CO.
No. 7847. Decided June 1, 1958. (257 P. 2d 947.)

225

See 57 C.J. S, Master and Servant, sec. 584,

Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City,
Clifford L. Ashton and Dennis McCarthy, Salt Lake City,
for appellant.

Rawlings, Wallace, Black, Roberts & Black, Salt Lake
City, Calvin W. Rawlings and Brigham E. Roberts, Salt
Lake City, for respondent.

HENRIOD, Justice.

Appeal from judgment on a verdict for plaintiff, de-
fendant’s employee, in an action under the Safety Appliance
Act and the Federal Employers Liability Act.2 Affirmed.
Costs on appeal to plaintiff.

M45 U.S. C. A. § 11 et seq.
245 U.S. ©. A. § 51 et seq.

226

Defendant claims error in the trial court’s giving one
instruction and in refusing to give two, and in denying a
motion to dismiss for reasons governed by the doctrine
“forum non conveniens.”

In this same case this court reversed an order granting
such a motion.? It held that the showing made was in-
sufficient to deny plaintiff access to the Utah forum under
the established doctrine reflected in the words “forum non
conveniens,” thus concluding that the trial court’s ruling
had been arbitrary.

After remittitur, defendant renewed the motion, pre-
senting somewhat more in detail its anticipated hardship
and inconvenience. The trial court denied the motion, be-
lieving that defendant still had not shouldered the burden
of showing sufficient reason for invocation of the rule.

At the trial defendant procured nonresident witnesses
not amenable to process of this state, about whose volun-
tary appearance the movant was concerned. We
affirm the trial court’s ruling, not being convinced | |
clearly that a showing was made of hardship and
inconvenience of the type necessary to foreclose the use
of our courts by a litigant, though nonresident.

As to asserted errors relating to instructions, we be-
lieve the record and the instructions given sustain our
holding that no prejudicial error occurred. Instruction 6,
assailed by defendant, is more or less standard in F. BE. L. A.
cases, outlining elements of liability. Defendant does not
quarrel with it except as given here, where, defendant
asserts, it applies to issues not within the pleadings or
supported by the evidence.

Plaintiff was injured in releasing a flat-car hand brake.
He claimed the device, having a bent staff, was defective,

8Mooney Vv. Denver & R. G. W. R. Co., 118 Utah 307, 221 P. 2d 628,

resulting in an eccentric whirling when released,
which in this case knocked plaintiff off the car, | |
creating liability under the Safety Appliance Act.

He also claimed negligence in failure to furnish a safe
place to work, under the F. E. L. A., by permitting the
scattering of sundry tools on the ecar’s bed, requiring
plaintiff, in releasing the brake, to work in a restricted
and unsafe area.

Plaintiff admitted he’ was knocked off the car when
struck by the brake, whose staff, being bent, whirled in
a wider perimeter. He further said there was nothing
about the way he was standing that in any way contributed
to his accident. From this and similar testimony, defen-
dant urges that defendant could not be negligent in failing
to remove the tools, hence the instruction was erroneous.
Were that all, we would incline to agree, but other testi-
mony makes it appear that even if plaintiff’s stance did
not contribute to the accident, in his opinion, the fact that
he may have had to stand in a restricted area because of
the presence of tools where elsewhere he may have stood,
could create a situation where, absent the tools, the acci-
dent may not have occurred,—reasonably presenting a
jury question. Mooney testified that “in this particular
instance it was very hard to really pick out a good place
that was good and firm and safe”; that “I got the best
[stance] I could get for the conditions”; that “behind me
was a grab-iron and there was very little room to stand,
and there was stuff scattered all over there”; that it would
have been safer had he been able to get directly behind the
brake staff, but that he was unable to do so “because the
tool box was there.” Other similar testimony appears,—
all of which is of such character as to present a jury ques-
tion concerning negligence or non-negligence in failing to
furnish a safe working place,—thus justifying the instruc-
tion mentioned.

Defendant complains of the court’s failure to instruct
as to the possibility of plaintiff’s conduct being the sole

cause of the injury. The verdict was for an amount at-
tributable to defendant’s negligence, from which an
amount attributable to plaintiff was deducted [qi
proper in an F. E. L. A. case. The court instructed

that if the negligence of plaintiff were alone the cause
of the accident, such finding under the F. E. L. A. would
wipe out damages and the jury would have to return a no
cause of action verdict. Although an instruction on dam-
ages, the jury certainly was aware that if plaintiff’s con-
duct soley caused the accident he could recover no dam-
ages, and the result would be identical,—no cause of action.
Failure to give the instruction, therefore, was not preju-
dicial.

Finally, defendant attacks the court’s refusal to in-
struct that defendant is not an insurer, that no presump-
tion of liability arises out of the fact of injury, and that
negligence or a violation of the Safety Appliance
Act must be proved in order to recover. The court t
did instruct (No. 5) that the burden was on the
plaintiff to show that the brake was not free from defect,
and the instruction on damages based on comparative
negligence reasonably made it obvious that defendant was
no insurer, since plaintiff’s negligent conduct could wipe
out damages,—a result hardly consonant with a conception
of absolute insurability, or that the jury might have been
misled as to the burden of proof, making it appear that
the jury was instructed substantially on the matters com-
plained of by defendant.

WOLFE, C. J., and McDONOUGH, CROCKETT and
WADE, JJ., concur.

|

WESTERN GAS APPLIANCES, Inc. v. SERVEL, Inc.
No. 7958. Decided May 25, 1958. (257 P. 2d 950.)

ocd
a

See 20 C. J. S., Corporations, sec. 1849,

E. L. Schoenhals and J. Royal Andreasen, Salt Lake
City, for appellant.

Cheney, Marr, Wilkins & Cannon and Richard H. Neb-
eker, Salt Lake City, for respondent.

CROCKETT, Justice.

We are here confronted with the question of whether the
defendant corporation was doing business in this state so
that service of summons upon its regional service manager
brought it within the jurisdiction of our courts.

Defendant, a Delaware corporation, has its principal
place of business in Indiana, where it manufactures gas and
electric home appliances which are distributed nationally
through wholesale distributors in the various states. Plain-
tiff, Western Gas, Inc., was for several years one of such
distributors. On June 10, 1951, Servel terminated its con-
tract and gave Zion’s Cooperative Mercantile Institution
of Salt Lake City the franchise. As a result of alleged

wrongs in connection therewith, plaintiff commenced this
action.

It is not disputed that Servel maintains no place of busi-
ness of any kind in Utah, has no office, telephone nor real
nor personal property, and has no employee located here.
Because of this, plaintiff attempted service of summons
on defendant by serving a Mr. Frank Reid, regional service
manager for Servel, who was temporarily within the state
of Utah staying at a hotel.

The trial court granted defendant’s motion to dismiss
for lack of jurisdiction. Plaintiff appeals.

The part of rule 4(e) (4) U.R.C.P. dealing with service
of summons on corporations and under which plaintiff
claims to have acquired jurisdiction of the defendant is:

“Ifno * * * officer or agent [of the corporation] can be found
in the state, and the defendant * * * does business in this state,
then upon the person doing such business * * *.”

There is implicit in the trial court’s order granting the
motion to dismiss a finding that defendant was not
doing business in Utah although he made no express [jl
findings of fact. As this court stated in Mower v.
McCarthy

“In reviewing a case * * * where issues of fact are involved
and there are no findings of fact, we do not review the facts but
assume that the trier of the facts found them in accord with its
decision, and we affirm the decision if from the evidence it would
be reasonable to find facts to support it.”

Also to be remembered is that plaintiff has the burden
of affirmatively showing that defendant was doing busi-
ness within the state.?

Under Servel’s contract with its distributor title to all
shipments passed from Servel in Indiana. The contract

1122 Utah 1, 245 P. 2d 224, 226.
*Mayer v. Wright, 284 Towa 1158, 15 N. W. 2d 268,

233

required the distributor itself to handle all the business
of marketing Servel products in Utah, to maintain agree-
ments for distribution to local dealers (retailers), to pro-
mote and stimulate sales activities, maintain an installation
and service department “for the purpose of supervising
the service activities of dealers * * * and training
dealers’ service men” and to “accept responsibility for ser-
vicing * * * all Servel products sold by * * *
[such] dealers” and to maintain an adequate stock of parts
for the above purposes and to fufill the warranty on Servel
products. The only deviation from this method shown
was that one shipment of water heaters, while still the
property of Servel, was sent to plaintiff to replace defec-
tive heaters, in accordance with terms of a Servel war-
ranty; there was also an isolated transaction of the instal-
lation of one air-conditioning and heating system by Servel
in the year 1948.

Plaintiff cites and relies on Industrial Comm. v. Kem-
merer Coal Co.* and the Wabash Railroad Co. v. District
Court of Third Judicial Dist.t wherein we approved the
doctrine that a regular course of solicitation of busi-
ness coupled with other business activities would [jl
constitute “doing business” in the state. But what
plaintiff here claims was “solicitation” amounted only
to infrequent sales talk about the Company’s products
generally, designed to influence people to buy Servel equip-
ment from dealers. The evidence is that regional managers
for sales and for service, each visited the distributor about
every 90 days for the purpose of general promotion and
supervision of the business; the sales manager talked with
architects, contractors and prospective customers in the
interest of stimulating sales, but not for the purpose of
consummating particular sales; the service manager in-
spected defective parts to see if they came within the
terms of the Servel warranty, and on several occasions

#106 Utah 476, 150 P. 2d 373.
4109 Utah 526, 167 P. 2d 978.

went to homes to give advice to service men (not Servel
employees) working on Servel appliances, but he maintains
that he never personally serviced such appliances. Certain
of defendant’s employees also participated in periodic
clinies in which local service men were instructed in ser-
vicing the products and also took part in annual confer-
ences arranged for by the distributor where retailers and
their salesmen were shown new models of Servel wares
and given instructions and “pep talks” about the products
and sales techniques.

There is no evidence that the defendants’ employees
either solicited, or made, any direct sales of goods in Utah,
or sold any destined for Utah except to the wholesale dis-
tributors. The statement of Seward Abbott, regional man-
ager for Servel, is:

“No * * * representative of Servel has business relations with
any dealers [retailers] or members of the public in Utah.”

Plaintiff seeks support in the statement of its
president, Harold A. Fresne, that a former regional | |
service manager of the defendant

“Blair Hughes * * * [while] an employee of Servel * * *

has serviced defendant’s products in the State of Utah on many and
numerous occasions.”

This matter would not be controlling for three reasons:
(1) The court was not obliged to so find because of the
evidence that the regional service manager had no such
duty and does not perform such services; (2) Mr. Hughes
was a “former” regional service man and his activities
did not relate to the time in question; (3) there is no in-
dication that Hughes or Servel made any charge or received
any compensation for such services, and (4) it is extreme-
ly doubtful whether servicing equipment, even if by Servel,
would amount to doing business within the state. However,
as is apparent from the circumstances herein delineated,

it is unnecessary for this decision to rest upon any such
narrow point.

No authority has been cited which would support a con-
clusion that the activities of defendant herein above enu-
merated, are sufficient to render a foreign corporation
amenable to process. It is indisputable that the mere
presence here of an officer of a foreign corporation i |
will not subject it to suit,5 nor will the sale of goods
at a foreign factory to an independant distributor located
within this state*; neither is the aiding of the distributor
in his duties of promoting sales and servicing activities
of independent dealers [retailers] through instructing or
training them and their employees;’ nor the giving of a
warranty and the shipping to an independent dealer the
parts and units to meet its terms.

It is also well settled that an isolated trans-
action such as the installation of the one air-con- | |
ditioning unit and heating system would not create
the status of doing business here.2 As the court said in
Dahl v. Collette :®

«s * # if * * * [the corporation’s presence] is manifested
only by casual, sporadic, or isolated exertions of the kind which it
ordinarily performs, these indicia of its presence are too equivocal
and uncertain to support the inference that it is doing business here.”

Thus before defendant’s acts could properly be classified
as doing business within the State, it would have to be

58. Clair v. Com, 106 U. 8. 350, 1 S. Ct. 854, 27 L. Bd. 222.

‘Holzer v. Dodge Brothers, 233 N. ¥. 216, 185 N. B. 268; S. B.
McMaster, Inc., v. Chevrolet Motor Co., D. C., 8 F. 2d 469; Truck
Paris, Inc., v. Briggs Clarifier Co., D. C., 25 F. Supp. 602.

"See Truck Parts, Inc., v. Briggs Clarifier Co., supra, Peebles v.
Chrysler Corp, D. C., 57 F. 2d 867.

8See Advance-Rumely Thresher Co. v. Stohl, 75 Utah 124, 283 P.
781,
9202 Minn. 544, 279 N. W. 561, 566.

shown that there was some degree of continuity or
regularity of such acts, coupled with some manner
of entering into direct business transactions with
others. If such circumstances did exist, the acts of defend-
ant herein shown might properly be considered in aug-
mentation of other proof as to doing business.

We are appreciative of the fact that the policy under-
lying decisions of the court in cases such as this requires
consideration of fair play to citizens desiring to seek re-
dress in court for claimed injuries, as well as to the fact
that foreign corporations who do business here should not
be afforded any unfair advantage against local competing
companies who pay taxes and licenses for doing business
here and are subject to the jurisdiction of our courts.

But jurisdiction of citizens of other states may not be
arbitrarily conferred by the law, nor assumed by
the courts, of sister states. Under the federal con- [I
stitution as interpreted by the United States Su-
preme Court, the authority of state courts over foreign
corporations is limited to cireumstances where they do

“business in the state * * * in such a manner and to such an
extent that its actual presence there is established.’1°

In this context, as noted in International Shoe Co. v.
State of Washington,” the term “presence” is
“used merely to symbolize those activities of the corporation’s agent

within the state which courts will deem to be sufficient to satisfy the
demands of due process.”

If the rule were otherwise, burdens might be imposed
upon manufacturers of nationally known and marketed
products which they would be unwilling to risk, thus mak-
ing it difficult or impossible for resident wholesalers to

Bank of America v. Whitney Central National Bank, 261 U. S.
171, 43 S. Ct. 811, 812, 67 L. Ed. 594; Street & Smith Publications v.
Spikes, 5 Cir., 120 F. 2d 895.

11826 U. S, 810, 66 S. Ct. 154, 90 L. Hd. 95.

237

purchase such products even at the factory as plaintiff was
doing in the instant case.

There has been cited no authority, and we have found
none which would bring the paucity of facts upon which
plaintiff contends that the defendant Serve! was doing
business here within the meaning of that phrase as es-
tablished by the numerous cases adjudicated upon the
subject.2 The trial court correctly so ruled.

Affirmed. Costs to respondent.
McDONOUGH and HENRIOD, JJ., concur.
WADE, J., concurs with the result.

WOLFE, Chief Justice.

I concur in the result. At the incipience of his opinion,
Mr. Justice CROCKETT quotes from Mower v. McCarthy,
122 Utah 1, 245 P. 2d 224, 226, as follows:

“In reviewing a case * * * where issues of fact are involved
and there are no findings of fact, we do not review the facts but
assume that the trier of the facts found them in accord with its de-
cision, and we affirm the decision if from the evidence it would be
reasonable to find facts to support it.”

In certain cases, it is no doubt proper for this court to
indulge in that assumption. In my dissenting opinion in
Mower v. McCarthy, I explained why I thought in view
of the state of the record in that case we could not indulge
in that assumption. In the instant case, I think we need
not resort to that assumption. While it is true that the
trial court made no findings of fact, the court did state in
its “Order and Judgment of Dismissal” that “the defend-
ant corporation is not subject to service of process within
the State of Utah.” Thus I think it clear without indulging
in any assumption that the trial court found that the
defendant was not doing business in Utah.

wMcGraff v. Charles Antell, Inc., 123 Utah 166, 256 P. 2d 708; see
146 A. L. R. 945, 101 A. L. R. 129, 60 A. L. R. 1011.

MUGLESTON vy. GLAITTLI.
No. 7676, Decided June 8, 1958. (258 P. 2d 438.)

239

See 60 C. J. S., Motor Vehicles, sec. 482. Liability of parent for
injury inflicted by minor child using automobile without parent's
consent, 5 Am, Jur., Automobiles, sec. 360; 12 A. L R. 816.

Shields & Shields, Salt Lake City, Robert Backman, Salt
Lake City, for appellant.

Horace J. Knowlton, Salt Lake City, for respondent.

McDONOUGH, Justice.

Defendant owned an automobile and a panel truck. On
September 18, 1950, while hurriedly preparing to attend
a show with his wife and another couple, defendant warned
his 15-year-old son to leave the cars alone except to drive
them into the yard and to particularly not get any “bright
or funny ideas” about driving them elsewhere. As soon as
defendant left, and evidently in conformity with a pre-
conceived arrangement among several neighborhood young-
sters, including the plaintiff, the defendant’s son drove the
car into the yard, piled the youngsters into the panel truck
and departed upon a joy ride. During this ride the truck
was negligently driven into a barrow-pit and plaintiff was
injured. There is testimony to the effect that defendant
had, in the past allowed his son to drive his car around the
neighborhood. The lower court awarded a judgment against
the defendant upon the theory that anyone who negligently
leaves his automobile where it is available to a child under
16 is absolutely liable for any injuries caused by the child
while driving, ~

The one real question raised by defendant on appeal is
whether a parent who is absent and who has not
directed the son to use the automobile, nor consented | |
to its use, is guilty of negligence which will support
a judgment against him. We believe he is not.

Section 57-4-26, U.C.A.1948, states:

“Every owner of a motor vehicle causing or knowingly permitting
a minor under the age of eighteen years to drive such vehicle upon
a highway, and any person who gives or furnishes a motor vehicle
to such minor, shall be jointly and severally liable with such minor
for any damages caused by the negligence of such minor in driving
such vehicle.”

Section 57-4-81 (a), U.C.A.1943 provides:

“No person shall authorize or knowingly permit a motor vehicle
owned by him or under his control to be driven by any person who
has no legal right to do so or in violation of any of the provisions of
this act.”

Defendant cannot be held under either of these pro-
visions. Section 57-4-26 requires that the owner “causing
or knowingly permitting” such operation. Section 57-4-31
(a) requires such owner to “authorize or knowingly per-
mit” the violation. Neither plaintiff or defendant contend
that the defendant knowingly permitted, authorized, or
caused the unlawful operation of the vehicle on the occasion
in question. The testimony, in fact, is that such use of
the automobile was éxpressly forbidden. The authorization
to drive the cars into the yard cannot be construed to be
general permission to use the automobiles in any other
manner or for any other purpose. Indeed such authori-.
zation was not one to drive on the highway at all, except
as to the few feet from the front of the house to the drive-
way entrance. Under such circumstances these statutory
provisions have no application to the appellant.

It remains to consider whether defendant is to be held
under the theory of common-law negligence. We hold that
he is not.

Respondent cites several authorities and cases holding
the parent responsible where permission was given to use
the automobile.

241

The basis for negligence in these cases was the entrusting
of the machine to an incompetent driver. Since there was
no such “entrustment” or permission given by appellant
such cases have no application to the case at bar. It
is a familiar principle of law that liability can exist, [jl
apart from the parents’ own negligence in entrust-
ing the machine to an incompetent person, only where the
tortious act is done by the child as the servant or agent
of the parent, or where the act is consented to or ratified
by the parent. 39 Am.Jur. Parent and Child §§ 55, 691.
The parents’ responsibility in such case is governed by
the ordinary principles affecting the liability of a principal
for the act of his agent or a master for his servant. One
of these basic principles is that even where a principal-
agent relationship exists the parent cannot be held re-
sponsible for an act of the child who is engaged in some
private venture of his own.

If the question here involved were whether the minor
was driving on the highway pursuant to authority from
the parent to so use the car as occasion demanded, evi-
dence that the minor drove the car on such frequent oc-
casions and under such circumstances as to justify an infer-
ence that the parent had notice thereof, would justify a
finding of authorization. And this would be true although
the parent denied the granting of permission. Lowder v.
Holley, 120 Utah 231, 233 P. 2d 350. This case, however, was
not tried or ruled upon such theory; but rather upon the
- theory, as we understand the record and briefs, that the
parent negligently left the vehicle where the minor could
use it in violation of law, in consequence whereof the parent
was liable for damage proximately resulting from such use.

The authorities cited by respondent in support of such
theory all deal with injury inflicted by a minor child with
a dangerous instrumentality left accessible to him, see an-
notation in 12 A.L.R. 812, such as a firearm or ex-
plosive. But a motor vehicle, as such, is not a dan- (qj
gerous instrumentality. 5 Am.Jur., Automobiles § 11.

It may, however, be regarded as such in the hands of an in-
competent driver, and an owner thereof who knowingly
entrusts its operation to such a driver is liable, even in
the absence of statute, for the proximate consequences of its
operation in such hands. Stapleton v. Independent Brewing
Co., 198 Mich. 170, 164 N.W. 520, L.R.A.1918A, 916, and
see annotation 36 A.L.R. 1150.

Under the facts we can find no basis for a principal-
agent or master-servant relationship between appellant and
his son. Hence, we conclude that the lower court was in
error. The judgment appealed from is reversed. Costs to
appellant.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,

JJ., concur.

LITTLE COTTONWOOD WATER CO. et al.
v. SANDY CITY, et al.
No. 7898. Decided June 3, 1958. (258 P. 2d 440.)

See 67 C. J., Waters, sec. 436. Appropriation of subterranean
waters, 56 Am Jur., Waters, sec. 109; 109 A. L. R. 408.

Christensen, Holmgren & Kesler, Salt Lake City, for
appellants.

Victor G. Sagers, Sandy, Ben G. Bagley, Midvale, Clinton
D. Vernon, Atty. Gen., and J. Lambert Gibson, Asst. Atty.
Gen., for respondents.

WADE, Justice.

An appeal from the decision of the State Engineer and
the District Court approving the joint application of Sandy
and Midvale cities to appropriate 1 cubie foot per second of
underground water. Respondents propose to pump water
from two wells near the mouth of Little Cottonwood Can-

245

yon and thereby increase the water available for use from
the surface flow of Little Cottonwood Creek which increase
they propose to appropriate for domestic use. The appel-
lants, Salt Lake City and Little Cottonwood Water Com-
pany claim that the evidence conclusively shows that such
pumping merely dries up the porous materials under the
bed of the creek thereby allowing the surface stream to sink
underground without increasing the volume of water avail-
able for use. We do not agree with that contention.

Little Cottonwood creek runs westerly down Little Cot-
tonwood Canyon through the high mountains southeast
from Salt Lake City. It veers to the north as it emerges
from the Canyon across the Wasatch fault line and enters
Salt Lake Valley. Murray City diverts water into its pipe-
line a short distance above the mouth of the canyon and
carries most of such water a few miles northwest to its
power plant, and thereafter the water is divided among the
adjudicated owners, most of whom are parties to this ac-
tion, for consumptive use. The pipeline will carry 30 cubic
feet of water per second and all of the waters of the creek
are diverted into the pipeline whenever the surface flow
at the intake is less than its carrying capacity.

Little Cottonwood Canyon is thought to have been occu-
pied by glaciers during various prehistoric periods and its
bottom down to bedrock and at various places on its sides
are filled with a deep bed of unconsolidated glacial materials.
This material is porous and absorbs water like a sponge
down to bedrock. Such water travels slowly underground
probably not more than two or three feet per day, through
the bottom of the canyon like passing through a trough filled
with porous materials but cannot escape except out of the
mouth of the canyon on the impervious bedrock which lines
the bottom and sides of the canyon. When the water reaches
the Wasatch fault line, much of it sinks through the break
in the earth’s crust down into artesian basins below and
is lost to the natural surface streams until it reaches the
Great Salt Lake.

246 ee)
eee

When all the surface flow of the creek is diverted into
the Murray City pipeline the creek bed is dry for a short
distance down stream, but the diversion dam does not go
down to bedrock or interfere with the underground flow.
The stream of the creek from the pipeline intake to the
mouth of the canyon is constantly increasing from the
underground flow through small springs in the creek bed,
spring areas on the sides of the creek and springs which
emerge on higher ground, so the surface stream reappears a
short distance below the diversion dam and increases in
volume to the mouth of the canyon.

The South Despain Ditch which is diverted from the south
side of the creek about 5100 feet down stream from the pipe-
line intake, is the first stream diverted below the intake,
and about 200 feet further down the canyon widens out into
the Despain Springs area. This area is about 300 feet wide
and 1300 feet long. The Sandy and Midvale Wells are lo-
cated on the table land south of this springs area, about
320 feet apart and about the same distance south of the
stream; one is 61 and the other 75 feet deep. They were
drilled prior to 1940 to insure clear water for domestic
use when the creek water is muddy and have been used for
that purpose ever since. The North Despain Ditch is di-
verted from the north side of the creek down stream from
the west well, and further down stream and still within the
springs area the Sandy Midvale pipeline is diverted from
.the south side of the creek. Just west of the springs area
Salt Lake City has constructed a pipeline from the Murray
City pipeline to the South Despain Ditch, then the canyou
narrows and the creek runs through a deep rocky gorge,
and to the south and west of which on higher grounds the
Granite Company Springs appear. About 3000 feet down
stream from the first springs area the canyon widens out
and the creek turns toward the north, and to the south is
the Beaver Pond Springs area. It runs north and south, is
about 1000 feet long and about 300 feet wide at the south
end but narrower to the north, and below this the Wasatch

fault line occurs at the western edge of the mountain range
where the ground makes a sharp drop of about 60 feet.

Except for short periods at the peak of the high water
runoff, all of the surface water from Little Cottonwood
Canyon has long been appropriated and such rights adjudi-
cated on June 15, 1910, by the Morse Decree. Respondents,
who own some of such rights, filed their application to ap-
propriate on April 18, 1941, since then, records have been
kept to the effect of such pumping on the surface flow of
water from all sources from this canyon. On November 21,
1944, after one pump had been in constant operation for a
long time, in order to experiment on the effects thereof,
both pumps were kept in almost constant operation until
April 10, 1945. This test was conducted at a time when
the surface stream is normally low and does not increase
until the spring runoff begins, and it had the effect of
drying all of the surface stream around the Despain Spring
area; it affected somewhat the Granite Company Springs
but had no appreciable effect on the Beaver Pond Springs
area or the water at the fault line. The pumping was dis-
continued on April 10, 1945, when on account of the spring
runoff the surface stream reappeared in spite of the pump-
ing. Mr. Richards, an engineer of long experience, as City
Engineer for respondents, Mr. Ward, an experienced en-
gineer, representing the State Engineer’s Office, and Dr.
Marsell, a professor of geology at the University of Utah,
representing Salt Lake City, each conducted experiments.
These experiments demonstrated that while both pumps
were operating, and the full stream was diverted into the
Murray City pipeline at its intake, the water produced as a
surface stream from all sources was .6 of a cubic foot per
second greater than it was when they were not operating.

Shortly after this experiment closed, all of the avail-
able records and data were submitted to the State Engineer
and approval of the application requested. The appellants
protested such approval, and Mr. Ward continued to study

248 _
eee}

the situation until May 19, 1950, when on his recommenda-
tion the application was approved only

“during the period of time when all the flow of Little Cottonwood
Creek is diverted through the Murray City pipeline and the time
when there is more water available in Little Cottonwood Creek than
is required to satisfy existing rights”

and such approval was “subject to prior existing rights.”
Respondents concede that the application to appropriate the
surface water only if there is more than enough to satisfy
all the adjudicated claims was properly approved. The only
problem presented is whether the evidence establishes rea-
sonable grounds to believe that the pumping of these wells
produces more surface water for beneficial use than is
naturally produced without such pumping.’

Respondents rely on the opinion of Dr. Marsell that pump-
ing these wells produces no additional water. He gave the
opinion that the porous material in the bottom of the can-
yon is in places as deep as 300 feet, that the pumping draws
the water from a cone shaped area around each one not
deeper than the well, that the materials which would be
saturated by the water which is pumped from the well
would all be saturated from surface water which otherwise
would have run in a surface stream within a short distance
down stream from the pumps and so none of the under-
ground water would be prevented from reaching the Was-
atch fault line. He conceded that there was a temporary in-
erease in the volume of the water brought to the surface

Little Cottonwood Water Co. v. Kimball, 76 Utah 248, 280 P. 116;
Eardley v. Terry, 94 Utah 67, 77 P. 2d 862; Tanner v. Bacon, 108
Utah 494, 186 P, 2d 957; Rocky Ford Irrigation Co. v. Kents Lake
Reservoir Co. 104 Utah 202, 185 P. 2d 108; Whitmore v. Welch, 114
Utah 578, 201 P. 2d 954; Lehi Irrigation Co. v. Jones, 115 Utah 186,
202 P. 2d 892; McNaughton v. Baton, 121 Utah 394, 242 P. 2d 570;
United States v. District Court, 121 Utah 1, 288 P. 24 1182, Petition
for rehearing denied, 121 Utah 18, 242 P. 24 774; Whitmore v. Mur-
ray City, 107 Utah 445, 154 P. 2d 748; Riordan v. Westwood, 115
Utah 215, 208 P. 2d 922.

249

when the pumps are operating. His experiments showed
that in the spring area near the wells the starting and
stopping of the pumps affected the surface flow within
minutes and that such springs made a complete recovery
within a few days at most after the pumping ceased, and
that some springs which were considerable distance from
the wells did not completely recover within 28 days. He
concluded that this temporary increase would have to be
replaced from appropriated waters from the surface. The
two engineers, Richards and Ward, disagreed with this,
concluding that the evidence shows that there was addi-
tional water produced although they did not attempt to
explain geologically just how it could or might have occur-
red.

Appellants claim that this application does not propose
to save water by a new diversion system but proposes to
develop water from a new source. They further claim that
all of the waters from this creek, including all of its sources
of supply and support are fully appropriated, and since the
evidence shows that the underground waters are in direct
contact and communication with the surface flow, respond-
ents have the burden of proof that the waters which they
propose to appropriate comes from a different source. If
all of those statements of basic facts were just as they
sound then our problem would not be difficult. Some of
them are correct, others require explanation, and some
seem to be contrary to the facts. So a clarification is in
order.

First, it is true that during most of the year all of the
waters of this surface stream are fully appropriated. Also,
no one can interfere with the source of supply of this
stream, regardless of how far it may be from the
place of use, and whether it flows on the surface [Jj ,
or underground, in such a manner as will diminish
the quantity or injuriously affect the quality of the water of

250 Leena
ee

these established rights.? The evidence shows that a large
portion of this underground flow never again reaches the
surface stream and can only be used for carrier purposes.
Such waters are unappropriated and available for appro-
priation if they can be extracted from the ground without
‘interfering with the quantity or quality of water available
for the use of the prior appropriators.? The fact that this
water comes from the same source of supply as the surface
stream which has been fully appropriated, and in a sense
has been appropriated as carrier water to bring the sur-
face water to the diverting works, does not make it un-
available for appropriation if it can be beneficially used
without diminishing the supply available for prior appro-
priators. This is true although the surface stream and
the underground waters are directly connected and affect
each other.

The record does not support appellants’ statement that
the application is to appropriate a new supply of water and
not to affect a saving by a new system of diversion. The
application recognizes that the underground water is di-
rectly connected with and supports the surface flow and

*Hanson V. Salt Lake City, 115 Utah 404, 205 P. 2d 255; Richlands
Irr. Co. V. Westview Irr. Co., 96 Utah 408, 80 P. 2d 458; Rasmussen
v. Moroni Irr. Co., 56 Utah 140, 189 P. 572; Salt Lake City v. Gar-
dener, 39 Utah 30, 114 P. 147; Sullivan v. Northern Spy Mining Co.,
11 Utah 438, 40 P. 709, 30 L. R. A. 186; Herriman Irr. Co. v. Keel,
25 Utah 96, 69 P. 719; Peterson v. Wood, 71 Utah 77, 262 P. 828;
Wrathall v. Johnson, 86 Utah 50, 40 P. 2d 755; Justesen v. Olsen, 86
Utah 158, 40 P. 2d 802; see also Hutchins, Selected Problems in the
Law of Water Rights in the West, pages 178 to 180, dealing with
“Appropriations of Ground Water.” Note that the cases which are
cited are in accord with the above statement, but that the author
suggests a contrary rule under the Utah law, which would be less
favorable to appellants, also note our comment on those cases and the
suggested rule in Hanson v. Salt Lake City, supra. See also section
‘78-8-28, U. C. A. 1958, formerly section 100-3-23, U. C. A. 1948, grant-
ing the right of replacement “to any junior appropriator whose ap-
propriation may diminish the quantity or injuriously affect the qual-
ity” of prior appropriators, but providing that such replacement be
“at the sole cost and expense of the applicant”.

8See authorities cited in Note 2, and Little Cottonwood Water Co.
v. Kimball, supra, and Eardley v. Terry, supra, cited in Note 1.

251

that the pumping will diminish that flow. It expressly
proposes to use the waters which are pumped from the wells
to replace in full the waters of the natural stream the same
as they would have been without the pumping. Respondents
claim the right to appropriate only the amount of additional
water which they can produce above the amount required
to replace in full the stream which would have flown in
the surface stream without the pumping. If through the
pumping additional water is actually produced and respond-
ents can furnish adequate proof that fact they are entitled
to appropriate such additional water. I do not understand
that appellants claim otherwise.

The difficult problem is to determine whether the pump-
ing produces additional water. The evidence shows that
the pumping directly and immediately affects the surface
stream. The size of mountain streams such as this being

dependent on many factors, does not remain constant but .

fluctuates from one season to another and sometimes from
one day to the next, so while the pumps are operating there
is no way to tell exactly the size which the stream would
have been without the pumping. If the pumping caused a
proportionately large increase, then it would be readily
ascertainable that there was an increase but the exact
amount of increase could still be uncertain. There is also
the further problem of determining whether the increase
is merely temporary to be followed by a decrease, as claimed
by Dr. Marsell. Though the problem is difficult and filled
with uncertainties, the application should not be denied and
thereby close the door to future attempts to save such
underground waters for beneficial use.

The cases do not sustain appellants’ position that a
showing must be made that a new source of water has
been found, they merely hold that there must be a
showing that additional water can be beneficially i |
used without interfering with prior rights. The
cases are clear that in cases of this kind, before an appropri-
ation of such waters can be made there must be a showing

252 rere!
ee

by “satisfactory evidence” that the waters claimed have not
heretofore been appropriated.‘ That such is and should
be the law we have no doubt.

But those cases were dealing with an action to determine
the right to the use of the waters in question. Here we are
concerned only with whether the application to appropriate
should be approved. The effect of such an approval
is to allow the applicant to proceed with his plans [jl
to try to appropriate new water. It does not adjudi-
cate that there are unappropriated waters in the source
claimed nor that the proposed plan or system will have
the effect of producing such waters. It merely has the
effect of allowing the applicant to proceed with their plans
to appropriate unappropriated waters. It means that appli-
eants are allowed to make the necessary experiments to
determine whether new waters are being produced; it gives
them no right to take and use disputed waters until a certi-
ficate of appropriation has been obtained, or an adjudi-
cation is made that such an appropriation has been accom-
plished. Such being the case the application should be
approved if the evidence shows reasonable ground to believe
that unappropriated waters may be appropriated under
the application. Such a policy encourages development of
the water sources of this State which are so badly needed.
But before such appropriation can be established there
must be a showing by satisfactory proof that such water
has not been previously appropriated.

Judgment affirmed with costs to respondents.

WOLFE, C. J., and MeDONOUGH, and CROCKETT,
J.J., concur.

HENRIOD, J., concurs in the result.

4Silver King Consol. Mining Co. v. Sutton, 85 Utah 297, 89 P. 2d
682; Mountain Lake Mining Co. v. Midway Irr. Co., 47 Utah 846, 149
P. 929; Bastian v. Nebeker, 49 Utah 390, 163 P. 1092; Midway Irr.
Co. v. Snake Creek Mining & Tunnel Co., 260 U. 8. 596, 48 S. Ct. 215,
67 L. Ed. 428.

5See cases cited in Note 1 above.

253

EMPLOYERS’ MUT. LIABILITY INS. CO.
OF WISCONSIN v. ALLEN OIL Co.
DASTRUP et ux v. ALLEN OIL CO.

Nos. 7788, 7784. Decided June 15 1958. (258 P. 2d 445.)

po
Ht
B

See 82 C. J. S., Evidence, sec. 529. Explosion resulting from negli-
gence in delivery of petroleum products. 24 Am. Jur., Gas and Oil,
see, 129; 151 A. L. R. 1261. .

Wilson & Wilson, Ogden, for appellants.

John D. Rice, Salt Lake City, Dallas H. Young, Provo,
for respondents.

WOLFE, Chief Justice.

These are appeals of two actions arising out of the same
circumstances. Both actions were tried together and they
have been consolidated for the purpose of appeal. In case
No. 7784, the appellants, LaForge Dastrup and Flora Das-
trup, his wife, sought damages for the loss of their store
and gasoline station at Altamont, Duchesne County, Utah,

resulting from an explosion and fire occurring while the
respondent Kenneth Thoresen, an employee of the respond-
ent Allen Oil Company, was making a tanker delivery of
gasoline to the Dastrup station. One Dean Cox, a customer
at the station, sustained personal injuries from the explo-
sion and the pick-up truck which he was driving, owned by
his employer, the Moon Lake Electric Association, was ex-
tensively damaged by the fire. Case No. 7733 is an action
by the Employers Mutual Liability Insurance Company of
Wisconsin, insurer of the truck and carrier of workmen's
compensation insurance on Cox, to recover, as a subrogee,
amounts paid by it to the Moon Lake Electric Association
and Cox under the policies of insurance. At the trial a
jury returned a verdict of “no cause of action” in both cases
and from judgments entered on those verdicts in favor of
the respondents, these appeals are brought.

On August 23, 1946, a clear hot day, Thoresen drove a
loaded gasoline tanker from Salt Lake City to Altamont, a
distance of about 160 miles, where he delivered his load at
the Dastrup station. The Dastrups had on previous occa-
sions purchased gasoline from the Allen Oil Company and
there was testimony that Thoresen had made one of those
prior deliveries. The station consisted of three gasoline
pumps erected on a cement island with drive strips on either
side of the pumps. The island set in front of a store build-
ing which faced south in which the Dastrups carried on a
retail trade in groceries, confections, automobile accessories,
etc. Three tanks in which gasoline was stored lay directly
beneath the north drive strip (running between the island
and the front of the store.) This drive strip was a concrete
slab, 16x18 feet and ranging from 12 to 24 inches in thick-
ness. The three tanks rested off the ground on cement
eradles in an underground room or chamber, 16x18x10 feet,
unfilled with dirt. The walls of the chamber were con-
structed of cement. From each tank ran an outlet pipe
up into the corresponding gasoline pump through which
gasoline was pumped out of the tanks. Vent pipes also led

256 Leen!
ee

out of the tanks to the outside to allow the escape of air
and vapor. The tanks were filled through intake pipes run-
ning from the island down into the tanks. Adjoining the
underground room in which the tanks were situated was a
smaller room in which an electric air compressor was
housed. The compressor motor turned on and off auto-
matically. This small room lay directly beneath the front
part of the store building. The two rooms were closed off
from each other by a heavy wooden refrigerator door.

On the day in question Thoresen arrived at the Dastrup
station between two and two-thirty o’clock in the afternoon
and drove onto the south drive strip (between the island
and the highway). On arrival, the contents of the center
and west tanks were measured to ascertain how much
gasoline would be required to fill them. The east tank had
just been installed and was known to be empty. After
cautioning Thoresen not to overflow the center tank, Mrs.
Dastrup left Thoresen, who was in the process of filling
the east tank with white gasoline, and went into the store.
Mr. Dastrup was in the hospital at that time and Mrs.
Dastrup was operating the station and store with the aid
of their 18-year old son, Neal. After emptying all the white
gasoline in the tanker into the east tank, Thoresen com-
menced filling the center tank with bronze gasoline. What
happened thereafter is in conflict. According to Thoresen,
he knew from the measurements that had been taken that
the center tank would not hold his entire load of bronze
and hence he watched closely to determine when the center
tank was full; that when that tank was full he commenced
filling the west tank with the remaining bronze gasoline
in the tanker, spilling only about a quart of gasoline on the
ground in making the change-over from the center to the
west tank; that about this time Dean Cox drove up in his
employer’s pick-up truck onto the north drive strip (be-
tween the island and the store) and began filling the truck
with gasoline from the west pump; that because he (Thore-
sen) knew the west tank would hold all the remaining

gasoline in the tanker, he went into the store where he
made out and had Mrs. Dastrup sign an invoice for the load;
that he then returned to the tanker, determined that it was
empty, proceeded to put the fill-hose which he had been
using to fill the tanks back in a rack on the tanker, and
to close the outlet valves on the tanker and cover them
with safety caps, when he heard a hissing noise behind him;
that the cement slab forming the north drive strip broke
up into pieces, one of which hit him in the back, and he
was swept under the tanker by the explosion.

According to Neal Dastrup, who was sitting on the tanker
while the center tank was being filled, Thoresen went into
the store and allowed that tank to run over, spilling a large
quantity of gasoline on the ground; that he called to Thore-
sen who came running out of the store and turned the out-
let valve on the tanker off; that he (Neal) then went into
the store and had been there for about two and one-half
minutes when the explosion occurred.

Cox was thrown by the explosion onto the top of the
tanker and struck by a piece of flying concrete. The pick-
up truck was overturned and caught fire. Thoresen was
able to move the tanker away without it being damaged.
The store building caught fire and was destroyed with all
its stock and inventory.

Mr. Dastrup returned to his home in Altamont from the
hospital the following day. Upon inspection of the burned
premises he found that the center gasoline storage tank
had ruptured and was black inside from fire which had
consumed its contents. In the intake pipe to that tank he
found the nozzle from the fill-hose used by Thoresen to fill
the tank and on the ground near the island he found the
coupling which fitted onto the other end of the fill-hose
where it was connected onto the outlet valve on the tanker.
A wrench used to turn the tanker outlet valves on and off
was also found on the ground. Mr. Dastrup testified that
he had gone into the underground chamber about two

258 ees!
|

weeks before the explosion occurred for the purpose of
checking the tanks for leaks, but had found none.

At the trial it was the contention of the appellants (plain-
tiffs below) that the explosion and the fire resulted from
the ignition of an explosive medium of air and gasoline
vapor by a spark; that the explosive medium was produced
by the spilling of gasoline on the hot pavement around the
pumps and island; that the spark was engendered by Thore-
sen in either inserting the nozzle of the fill-hose into an in-
take pipe, by dropping a wrench or hose coupling onto the
graveled surface, by static electricity discharging from the
tanker, by Thoresen walking on the pavement or gravel, or
by some other act of Thoresen. The respondents (defend-
ants below) contended that the Dastrups were negligent in
housing their gasoline storage tanks in an unfilled cham-
ber; that through leaks in the tanks or by drippings from
the pumps an explosive medium was created in the chamber
which permeated into the adjoining compressor room and
that the medium was ignited by a spark produced when the
compressor motor turned on.

As error, the appellants have first assigned the trial
court’s action in allowing one V. C. Langford, an expert
witness called by the respondents, to testify that the Das-
trup’s gasoline storage facilities did not comply with safe
practices in the oil industry. It is urged that the witness
invaded the province of the jury by expressing an opinion
on an ultimate fact. Assuming without deciding, the cor-
rectness of the appellants’ assumption that an expert witness
may not express an opinion on an ultimate fact to be deter-
mined by the jury, the question asked Langford was not
ultimate. The ultimate question on this subject was whether
the Dastrups were negligent in the manner in which they
stored their gasoline. This is quite different from the ques-
tion asked Langford and which he was allowed to answer,
viz., whether the setup at the Dastrup station complied
with “safe practices in the oil industry.” Failure to comply
with the generally recognized safe practices in an industry

is only evidence to be weighed with other factors in deter-
mining negligence.

Be that as it may, there was no error in allowing the

witness to so testify. In Hayes v. Southern Pacific Co., 17
Utah 99, 53 P. 1001, 1002, action was brought by a railroad
employee to recover damages for injuries sustained
by him when he was struck by the beam of an engine | |
which had pulled into a coal shed where he worked.
The plaintiff claimed that the railroad was negligent in its
construction of the shed. This court held it proper for an
expert witness called by the railroad to answer the following
question:

“From your experience as a railroad engineer and your experience
as a civil engineer, please state whether those sheds were carefully
and properly built for the purposes for which they were erected”?

The plaintiff claimed that the question called for the opin-
ion of the witness on a question that the jury was to deter-
mine and was therefore improper. Said the court:

“The general rule is that a witness must testify to facts, and not
conclusions. To this rule, however, there are exceptions, and we think
this question falls within the exceptions. The contention of the appel-
lant at the trial was that the coal sheds were negligently constructed.
This was controverted by the respondent, and thus one of the main
issues was whether they were properly erected for the purpose for
which they were intended. Now, it is apparent from the evidence that
these sheds are peculiar and more or less complicated structures,
results of mechanical skill—and appear to be necessary for, and used
exclusively in, the business of railroading. Thus, the very nature and
use of the structure precludes the idea that the average layman is
competent to judge of their proper or improper construction. It was
therefore permissible to resort to the opinion of a person possessed
of such requisite mechanic skill and experience as enabled him to
form a correct judgment as to whether or not the sheds were care-
fully and properly constructed. The building of such sheds for the
purpose of railroading is not a subject of general knowledge, but it
depends so far upon skill in and knowledge of the mechanic arts, out-
side the knowledge and experience of ordinary jurors, as to render the
opinions of those who are competent, from special training in the art
of construction, and experience, to form them, admissible. This is
so because of the difficulty in placing before jurors unskilled in such

260 eee!
ee

matters a state of facts which would enable them to draw correct
conclusions without the aid of such opinions.”

The question asked the witness in that case concerning
the proper construction of railroad coal sheds is analogous
to the question propounded to Langford in the instant case
regarding generally recognized safe practices in the oil
industry. What we said there concerning the need of expert
opinion to aid the jury to form an intelligent opinion
on matters which they would otherwise be incompetent to
judge, applies with equal force in this case.

It is next urged by the appellants that the trial court
erred in excluding from evidence certain testimony of O.
C. Allen, president of the respondent Allen Oil Company
at the date of the explosion. Mr. Allen was called as a
rebuttal witness by the appellants and would have testified,
according to the appellants’ offer of proof, that prior to the
date of the explosion he learned of the installation of the
gasoline tanks in the unfilled underground chamber at the
Dastrup’ station. Appellants contend that with this fact
known to the president of the Oil Company, it was negligent
for that company through its servant, Thoresen, to permit
the center gasoline tank to overflow on the hot concrete
surface, thereby forming an explosive medium around the
pumps, and after having done so, to fail to take precautions
to avoid the creation of a spark which would ignite the in-
flammable medium around the pumps which would spread
to the underground storage chamber. The record with re-
spect to the exclusion of the testimony in question of Mr.
Allen is as follows:

“Q. [Propounded by counsel for the appellants] Mr. Allen, direct-
ing your attention to the fact that on the LaForge Dastrup premises
in Altamont there were certain tanks, gasoline storage tanks, installed
in an underground, unfilled chamber. Did you know of that condition
on and prior to August 23, 1946?

“Mr. Rice [counsel for Allen Oil Co.]: Just a minute.

“Mr. Young [counsel for Thoresen]: On behalf of the defendant
Thoresen we object to that.

261

“The Court: On what ground?

“Mr. Young: On the ground it is immaterial and incompetent—
any knowledge upon him can’t be binding upon this defendant as an
individual. They’re suing this man as an individual, your Honor.

“The Court: I wonder if this question of knowledge has anything
to do with what we have before us.

“Mr. Rice: I object to it on the ground that it is immaterial and
irrelevant, your Honor.

“ (argument)
“The Court: The objection will be sustained.”

In his memorandum denying the appellants’ motion for
a new trial, the trial judge justifies his ruling on the ground
that the proferred testimony should have been introduced
as a part of the appellants’ case-in-chief and was not prop-
erly rebuttal testimony. Counsel for the appellants attack
this ground relied upon by the trial court because the record
reveals that neither Mr. Rice, counsel for the Allen Oil Co.,
nor the court had in mind that the proferred testimony
was out of order, but that it was immaterial and irrelevant,
and had he known that such was the basis of the court’s
ruling, he would have moved to re-open his case-in-chief.
The trial court counters this argument with the statement
in his memorandum that he would not have granted a mo-
tion to reopen had it been made, at that stage of the trial.

Aside from these considerations, we conclude that no
prejudicial error was committed in excluding from evi-
dence the proffered testimony of Mr. Allen. As shown by
the excerpt from the record set out above, Mr.
Young, counsel for Thoresen, objected to the question I |
on the ground that any knowledge of Mr. Allen con-
cerning the manner in which the tanks were installed could
not be imputed to Thoresen, who was a co-defendant with
the Allen Oil Company. This objection was well taken
because knowledge of a master is not imputed to his servant
when the servant is being sued personally. Had the court

262 ee
ee

allowed the testimony of Allen in evidence against Thore-
sen, error would have been committed as to Thoresen.
Assuming that the proffered testimony was admissible
against the Allen Oil Co., no prejudicial error could have
resulted in excluding it from evidence. It must be remem-
pered that it was the Dastrups who installed and maintain-
ed their tanks in an unfilled chamber. If because of this
manner of installation, special precautions which otherwise
would not have been necessary, should have been observed
by the Allen Oil Co. to constitute due care on its part, the
Dastrups cannot avail themselves of its failure to do so.
If the Oil Company knowing the manner of the installation,
was negligent in failing to take added precautions in filling °
the tanks, the Dastrups were equally negligent in installing
and maintaining the tanks in such a manner that such
added precautions were necessary. The plaintiff Insurance
Company, of course, had no part in installing the tanks and
had counsel offered the testimony only on behalf of the
Insurance Company against the Allen Oil Company, we
think it should have been admitted. Not having so limited
his offer, there was no error in sustaining an objection
to it.

Turning now to a consideration of errors alleged to have
been committed in instructing the jury, appellants complain
that it was error to charge the jury in instruction No. 19
that even though they found the respondents negligent in
spilling gasoline on the Dastrup premises, the appellants
could not recover unless the jury also found that the spilled
gasoline was ignited by some further act of negligence on
the part of the respondents or by natural causes. It is
claimed by the appellants that a person negligently spilling
gasoline should reasonably foresee that it might be ignited
by some act of a third party and if such occurs, the person
spilling the gasoline would be liable for the ensuing damage.
In the instant case there was evidence that a spark capable
of igniting the vapors from the spilled gasoline could have
been produced by Cox or Neal Dastrup in scuffing their

a
shoes on the concrete and graveled surface, or that a spark
could have been emitted from the motor on the pump which
Cox turned on to fill the gasoline tank on this truck. There-
fore as to each plaintiff in the case (Dastrups and the
Insurance Company) there was evidence that the act of a

third party — not the act of the respondents — might have
ereated the spark which ignited the gasoline vapors.

The appellants’ objection in the trial court to instruction
No. 19 was couched in general terms, viz.
“on the grounds and for the reasons that such instruction is not

supported by, and is contrary to, the law and the evidence. That
it is misleading, and can only serve to confuse the jury.”

The objection failed to comply with the require- 3,5
ments of Rule 51 Utah Rules of Civil Procedure, that

“In objecting to the giving of an instruction, a party must state
distinctly the matter to which he objects and the grounds of his ob-
jection.”

One of the purposes in requiring counsel to make ob-
jections to instructions in the trial court is to bring to the
attention of the court all claimed errors in the instructions
and to give him an opportunity to correct them if he deems
it proper. The objection should be specific enough to give
the trial court notice of the very error in the instruction
which is complained of on appeal. But an objection that an
instruction is “not supported by, and is contrary to, the
law” lacks specificness and does not direct the court’s at-
tention to anything in particular. A proper objection to
instruction No. 19 which would have called the court’s at-
tention to the error raised on this appeal would have been
“That it does not correctly state the limits or extent of the
respondents’ legal liability.” No objection having been made
which pointed out with any degree of particularity wherein
instruction was not supported by the law, we will not here
consider the instruction on its merits. However, any error
in instruction No. 19 as to the limits of the respondents’

264 Deen!
Pe

legal liability was corrected as to the Dastrups in instruc-
tion No. 22. That instruction charged the jury that if any
person other than the respondents were negligent and his
negligence was a proximate cause of the explosion, they
could not find in favor of the Dastrups and against the
respondents unless they also found that the respondents
were negligent and that their negligence combined with
the negligence of the other person to produce the damage.

Appellants complain of instruction No. 28 advising the
jury that they could not return a verdict in favor of the
Employers Mutual Liability Insurance Company if they
found that Cox was negligent in any respect and
that such negligence proximately contributed to cause | |
the accident. An objection was made to this instruc-
tion on the ground that there was no evidence of any negli-
gence on the part of Cox. Assuming the objection to be well
taken, no prejudicial error was committed because the
court had already submitted to the jury in instruction
No. 9 the question. of contributory negligence on the part
of Cox. No objection was taken to the submission of that
question in instruction No. 9.

There was no error in the court’s refusal to give the ap-
pellants’ requested instruction No. 7 to the jury. This
proposed instruction read:

“Tf you find that the plaintiffs Dastrup constructed and maintained
their premises in such a manner as to constitute a fire hazard such
fact or facts may or may not constitute contributory negligence.
There is no evidence that any act of the plaintiffs in this case was
unlawful and the law allows a person to make any lawful use of his
property he deems best. Furthermore the law does not require a
person to anticipate the negligent acts of another.” (Italics added.)

It would have been misleading to have instructed the
jury that there was no evidence of any “unlawful act” by
the appellants. It is true that there was no evidence of any
violation by the appellants of any state statute or city or
county ordinance. But the requested instruction did not

state that. It encompassed all acts which might be termed
‘unlawful.” A lay jury might well think of contributory
negligence as an “unlawful act” since it prevents recovery
by a plaintiff. Since the instruction might have well con-
fused the jury on the question of contributory negligence,
the trial court exercised good judgment in refusing to give
the instruction.

We have examined other matters assigned as error in the
instructions, but we find them without merit. The judg-
ment below is affirmed. Costs to respondents.

McDONOUGH, J., concurs.

CROCKETT, J., concurs in the opinion of WOLFE,
C. J., and also in the views expressed by WADE, J., with
regard to opinion evidence.

HENRIOD, J., concurs in the result.

WADE, Justice (concurring in the result).

I agree that the court properly allowed expert testimony
that Dastrup’s storage facilities did not comply with stand-
ard safety practices in the oil industry, not because that is
not an ultimate fact, for I think that makes no difference,
but because such evidence would tend to aid the jury in ar-
riving at the truth. The so-called rule that opinion evidence
is not admissible on ultimate facts even though it would aid
in ascertaining the truth because it invades the province
of the jury is a spurious doctrine and should be completely
discarded.*

“The purpose of a trial is to investigate the facts so as to ascertain
the truth, and the modern tendency is to regard it as more important
to get to the truth of the matter than to quibble over distinctions
* * © a witness may be permitted to state a fact known to him

1ee my dissenting opinion on this question in Jémines v. O’Brien,
117 Utah 82, 218 P. 2d 887, and the authorities cited and quoted
therein; also my concurring opinion in Hooper v. General Motors
Corp., 128 Utah 515, 260 P. 2d 549.

266 Leer!

because of his expert knowledge, even though his statement * * *
may involve the ultimate fact to be determined by the jury.”

I think it unfortunate that the prevailing opinion should
dodge the real question presented and sustain the trial court
on the ground that the question is not ultimate, for the only
sound reason this evidence is admissible is because it tends
to aid the jury in determining the truth. Whether it is the
ultimate question or an evidentiary one is immaterial for it
is more important for the jury to arrive at the truth on
ultimate questions than on mere evidentiary ones from
which the ultimate questions might be inferred, for the
ultimate questions are determinative of the case whereas
other questions may not be.

It is not dicta to hold as above indicated. Certainly the
court may choose the most logical ground on which to base
its decision where there is more than one theory which will
support its conclusions.

As to the rest of the points discussed in the prevailing
opinion I concur for the reason that I find no prejudicial
error. Although I believe that several of the court’s rulings
were erroneous, and the grounds for sustaining the court
in the prevailing opinion are technical rather than substan-
tial, I think no prejudicial error was committed.

2Cropper V. Titanium Pigment Co., 8 Cir., 47 F. 2d 1088, 1048, 78
A. L. R. 787 at page 745.

STATE v. HENDRICKS
No. 8008. Decided June 15, 1958. (258 P. 2d 452.)

rp
a

See 23 C. J. S., Criminal Law, sec. 1217. Homicide in connection
with negligence in operation of an automobile. 26 Am. Jur., Homicide,
sec, 215; 99 A. L. R. 756.

Grant Macfarlane, Salt Lake City, for appellant.
E. R. Callister, Jr., Atty. Gen., for respondent.

PER CURIAM.

James L. Hendricks was convicted by a jury of involun-
tary manslaughter.

This appeal challenges the propriety of giving two in-
structions to which he took due and timely exception. These

are:
Inst. 11

“Mere negligence is not sufficient to justify a verdict of involuntary
manslaughter. * * * If you believe from the evidence beyond a
reasonable doubt, that the defendant was not driving his automobile
recklessly or unlawfully or with a marked disregard for the safety
of others, and that such manner of driving was not the proximate
cause of the accident, then you will not be justified in bringing in a
verdict of guilty.”

Inst. 12

«* * * If you believe from the evidence beyond a reasonable
doubt, that the defendant was suddenly confronted with the situation
of peril which he could not avoid, then you are instructed to bring
in a verdict of not guilty.” (Emphasis added.)

It is elementary that in criminal cases the State has the
burden of proving every essential element of the crime
beyond a reasonable doubt. Both as to the proof of the

State’s case, and as to matters of defense, all that is
necessary to entitle the defendant to an acquittal [jl
is that there exist a reasonable doubt as to his guilt.

And this is so whether the defendant offers any evidence
or not. Instead of indulging the defendant with his pre-
sumption of innocence, the burden was shifted upon him
to prove facts showing his innocence beyond a reasonable
doubt. This was prejudicial error.*

The fact that elsewhere in the instructions the jury were
correctly instructed on the presumption of izmocence
does not cure the instant error. Although the in- [jl
structions are to be considered as a whole, where
they are in irreconcilable conflict, they could but confuse
or mislead the jury?

Reversed, with directions to grant a new trial.

1State v. Laris, 78 Utah 188, 2 P, 2d 248,
2Jensen v. Utah Railroad Co., 72 Utah 366, 270 P. 349; State v.
Waid, 92 Utah 297, 67 P. 2d 647.

no
a
S

WOLD v. OGDEN CITY et al.
No. 7927. Decided June 10, 1953. (258 P. 2d 458.)

See 63 C. J. S., Municipal Corporations, sec. 850. Municipal lia-
bility for injury due to condition of street. 25 Am. Jur., Highways,
sec. 405; 109 A. L. R. 605.

Rawlings, Wallace, Black, Roberts & Black, Dwight L.
King, Salt Lake City, for appellant.

Young, Thatcher & Glasmann, Paul Thatcher, Ogden,
for respondents.

HENRIOD, Justice.

Appeal from an order granting motions to dismiss plain-
tiff’s action for injuries allegedly sustained when he fell
into a trench dug by defendant Wheelwright Company,
contractor for Ogden City. Affirmed with costs on appeal
to defendants.

The motions were based on 4 grounds: that plaintiff’s
proposed proof as presented in the statement to the jury
showed that plaintiff was 1) contributorily negligent, 2)

assumed the risk of injury, that 3) defendants were not
negligent, but if so 4) there was no proximate causal con-
nection with the injuries. The court did not indicate the
specific grounds upon which it based its decision. Plaintiff
assailed the ruling on grounds that 1) it unconstitutionally
denied plaintiff a jury trial and 2) the plaintiff was not
contributorily negligent as a matter of law.

Without discussing the matter of which grounds the
trial court relied on in making its decision, we believe that
had he specifically based his decision either on contributory
negligence claimed as error by appellant, or on the doc-
trine of assumption of risk, no error was committed, and
therefore appellant was not deprived of any constitutional
right to a jury trial.

Plaintiff pleaded injury when he fell into a trench con-
structed by the Wheelwright Company for Ogden City “be-
cause of the negligent * * * manner in which said trench
was left,” particularly because they 1) placed a dangerous
obstruction in the street, 2) failed to construct a “safe
and adequate way” to cross from the street to the sidewalk
at 336-18th Street and 8) failed to provide sufficient light
to cross the hazard. Defendants countered with contribu-
tory negligence and assumption of risk.

Facts outlined by plaintiff’s counsel to the jury, so far as
pertinent here, substantially are as follows: Avenues Grant,
Kiesel and Washington run north and south, with Kiesel
in the middle, 14 block from the other two. 18th Street
bisects Grant and Washington, but Kiesel dead-ends north-
erly at 18th Street. Plaintiff’s home is opposite the west
sidewalk of Kiesel, facing south on 18th Street. Plaintiff
had been home at 4 p.m. and observed the trench dug in the
street on the north side of 18th Street. The removed dirt
was in a large pile along the south side of the trench, which
was 4 feet deep and 214 feet wide. Plaintiff was injured
at 2:30 a.m. after he had returned with his wife from a
visit, when, on an extremely dark night, no street lights

burning in the vicinity, with only a flare-pot 14 block away
at Grant, and after he had driven north on that street,
turned east on 18th and parked slightly east of Kiesel,
he walked diagonally across the street toward his home,
“looked this situation over,” asked his wife to wait a
minute, climbed over the pile of dirt, “decided he could
safely cross,” straddled the trench to assist his wife across,
and fell into the trench when one of its banks gave way
under his foot. One neighbor had unsuccessfully asked
the construction company to provide a means of driving his
car in and out of his property, and others had jumped across
the trench on a number of occasions. There were no open-
ings in the embankment, or bridges across the trench, and
18th Street residents had to jump the trench or travel 14
block to Grant or Washington to get in or cross the street.

Under such facts we believe plaintiff was contributorily
negligent and also assumed a known risk precluding re-
covery as a matter of law, denying no constitutional
right to a jury trial+ In contending otherwise, [i
counsel for plaintiff quotes the language of the recent
case of Stickle v. Union Pacific R. R. Co.,2 wherein we said,
through Mr. Justice Crockett, that the jury is the arbiter
of the facts and the safeguard against the arbitrary powers
of the court. However, therein we just as strongly pointed
out that

“Of course, the rights of litigants should not be surrendered to the
arbitrary will of juries without regard to whether there is a violation
of legal rights as a basis for recovery.”

Plaintiff further cites Bailey v. Central Vermont Ry2
in support of his contention, but the factual differ-
ences there are such as to make it apparent that i
the case is not truly authoritative here. The posi-

Raymond v. Union Pacifie R. R. Co., 118 Utah 26, 191 P. 2d 187,
141.

7122 Utah 477, 251 P. 2d 867, 871.

8319 U. S. 350, 63 S. Ct. 1062, 87 L. Ed. 1444, an action for injur-
ies under the Federal Employers’ Liability Act, 45 U. S.C. A. § 51
et seq.

tion of our court on the matter is reflected in the language
of Mr. Chief Justice Wolfe in a case decided by this court
that :*

“It has been strenuously argued by plaintiff that this decision has
deprived him of his constitutional right to a jury trial. That con-
tention has been urged upon this court in almost every case of non-
suit and directed verdict brought before us. This court is charged
with the duty of protecting all of the rights of all litigants. This is
especially true of those fundamental rights guaranteed by the State
and Federal Constitutions. But the right to have a jury pass upon
issues of fact does not include the right to have a cause submitted to
a jury in the hope of a verdict where the facts undisputably show
that the plaintiff is not entitled to relief.”

In plaintiff’s complaint he attributes negligence to de-
fendants in failing to provide a safe passage from street to
sidewalk in front of his home. It would be an un-
reasonable burden on cities digging temporary i
trenches in the streets to provide access to every
home, and we think it quite reasonable under such circum-
stances to require residents temporarily to be inconven-
ienced by having to walk only 14 block.

Plaintiff admitted the hazardous condition in his com-
plaint. Also in his brief when he said

“We have presented by the facts of this appeal a situation of ap-
pellant exposing himself to a known danger in order to exercise the
right and privilege which he has to use the highways and streets.”

But such right and privilege are not without limitation
and certainly cannot include the prerogative of use without
the exercise of due care. It would seem that a reasonable,
prudent person would not expose himself to a known
danger when there is an easy, known and convenient (jl
route around it.> Plaintiffs conduct, aside from the
concept of assumption of risk, was unreasonable in the light

4+Raymond v. Union Pacific R. R. Co. supra.
®Tharp v. Pennsyluania R. Co., 882 Pa, 283, 2 A. 2d 695.

of this known hazard and the existence of a convenient,
hardly burdensome detour at the intersection of Grant
and 18th Street, where the trench ended, and through which
plaintiff had driven shortly before his injury. To deliber-
ately attempt to cross under such circumstances seems to
be that type of lack of due care not attributable to the
ordinary prudent person exercising care for his own safety.

Plaintiff also is precluded, having assumed the risk of
injury under the circumstances of this case. We emphasize
the fact that he knew of the hazard at 4 p.m. and at 2:30
a.m. when he “looked this situation over.” The doctrine of
assumption of risk, originally applicable to employer-
employee relations, has been extended to some situations
where one knows of a condition and concludes to accept
its attendant hazards and acts accordingly without force
of necessity.

Dean Prosser® points up the principle as it ap-
plies to the instant case when he asserts that an ob- [I
jective standard must maintain, and that

“the plaintiff cannot be heard to say that he did not ‘comprehend a
risk which must have been obvious. to him.”

Further that

“as in the case of negligence there are certain risks which anyone
of adult age must be taken to appreciate: the danger of slipping
on ice, or falling through unguarded openings”, ete.

He goes on to say that

“In the usual case, his knowledge and appreciation of the danger
will be a question for the jury; but where it is clear that any person
of normal intelligence in his position must have understood the danger,
the issue must be decided by the court.”

©Prosser on Torts, Chap. 9, Assumption of Risk.

276

We think the facts of this case bring it within the princi-
ples announced, and it is no answer to say that the plaintiff
may not have known the bank of the trench would give
way, since no adult person of ordinary intelligence, know-
ing of the trench, would take such chances on what counsel
characterized as being an “extremely dark area, no lights,
and in the middle of the night and in the shade of the
trees,” where there was an easy and safe access to his home
in a matter of minutes.

WOLFE, C. J., and McDONOUGH and CROCKETT,
J.J., concur.

WADE, Justice (dissenting).
I dissent.

The question here presented is whether it would be un-
reasonable for a jury to find that plaintiff acted as a
reasonably prudent person in standing across this trench
in the night time for the purpose of helping his wife across
so that they could reach their home and thereby save them
from walking a half a block each way in order to get to
their home. If such a finding would be within the bounds
of reason then a jury question was presented, because a
person who acts as a reasonably prudent person is not
guilty of contributory negligence, nor of assumption of risk
which will prevent him from recovering for injuries caused
by the negligence of another. The evidence shows that a
number of neighbors stepped across this trench in order to
reach their homes, and it seems to me that it would be
the normal thing for at least half of the people who were
in good health to do as plaintiff did under the same cir-
cumstances. This seems to me to show that it would be well
within the bounds of reason to conclude that he acted as a
reasonably prudent person would act under the existing
conditions. I, therefore, think a jury question was pre-
sented.

GALE v. GALE
No. 7944. Decided June 16, 1953.

(258 P. 2d 986.)

See 27 C. J. S., Divorce, sec. 322. Counsel fees for application to
crease alimony. 17 Am. Jur., Divorce and Separation, sec. 576; 15
A. L. R. 2d 1280.

Shirley P. Jones, Jr., Salt Lake City, for appellant.

McCullough, Boyce & McCullough, Salt Lake’ City, for
respondent.

CROCKETT, Justice.

The legal principle controlling in this case is that a di-
vorce decree may not be modified unless it is al-
leged, proved and the trial court finds that the i |
circumstances upon which it was based have under-
gone a substantial change.*

The plaintiff was awarded a decree of divorce May 29,
1951. A property settlement was approved which gave her
the family home (being purchased under contract), certain
personal property and the custody of four minor children

1Chaffee v. Chafee, 68 Utah 261, 225 P. 76; Osmus v. Osmus, 114
Utah 216, 198 P. 2d 283.

for whose support the defendant was required to pay $25
per month each, totaling $100. .

Highteen months later, plaintiff filed the instant pro-
ceeding, seeking to modify the decree by increasing the
support money for the children, alleging that the “needs
of the children have increased” and that “the defendant has
bettered his financial condition” but fails to state any
further particular with regard thereto. After hearing,
the trial court made similar findings in the language above
quoted and ordered the support money increased to $35
per child, totaling $140, from which order defendant ap-
peals.

Review of the evidence taken at the hearing shows that
although the defendant was ill at the time of the divorce,
had been hospitalized and was temporarily off his
job, the award was based on his then earning capa~- [jl
city on that job. The plaintiff so testified and the
decree reads:

“At such time as the defendant resumes employment * * * he
shall pay plaintiff $25.00 per month for each child * * *.”

The record shows with certainty not to permit of mis-
understanding that the defendant is now employed on the
same job, with the same company, bus driver with Pacific
Greyhound Lines, as he was at the time of the divorce;
and further that his rate of pay, 714¢ per mile, and other
conditions of his employment are the same, so that there
has been no substantial change in his income. For the
twelve months period prior to the divorce, his average
monthly take-home pay after expenses and deductions was
$829.05 as compared with an average for 15 months since
the divorce of $309.28; as indicated, this shows no increase
but actually a decrease. But even if this variation were
that much the other way, it would hardly justify any modi-
fication of the decree.

It is true that children’s needs increase as they get older.
These children ranged in age from 2 to 12. But except for
the fact that they had become 18 months older in the mean-
time there is no evidence showing any added needs. This
short advance in age is not alone any such substantial change
in circumstances as would warrant modification of the
decree.

There is no question but what plaintiff cannot fully sup-
port the children on $100 a month, and that she needs the
$140. That, however, is only one of a number of important
factors to be considered in making an award for their
support. When one blanket is cut to fit two beds it seldom
will cover them both. The best that the court can do usu-
ally is to make such division of the income as seems most
reasonable, fair and equitable to all concerned under the
circumstances. This is often done indulging the hope that
the slack may be made up some other way. That is what
appears to have been done in the instant case. The evidence
shows that the plaintiff herself has been employed since the
decree, and that at the time of the hearing she was making
$170 per month. It further shows that the defendant had
made all his payments under the decree, yet no request was
made or negotiations undertaken with him for the purpose
of obtaining an adjustment in the decree prior to the initia-
tion of this proceeding. Based on these latter considerations,
the trial court refused to award the plaintiff an attorney’s
fee. In this regard the order is affirmed, but as to the order
increasing the support money from $25 per child to $35 per
child, the order is annulled and the decree as originally
entered is reinstated.

Costs to appellant.
McDONOUGH, HENRIOD and WADE, JJ., concur.

WOLFE, Chief Justice (dissenting) .

I dissent. In view of all the evidence, the ages of the
four children, and the fact that two years has now expired

since the original decree was entered, I think that there
was shown a change of circumstances to require, in fair-
ness and equity, a change in the terms of the decree. Par-
ticularly do I think this true because the original decree
made an inequitable allotment of support money — less
than one-third of the defendant’s take-home pay, $100, to
suport four children, two of. whom are 2 years old, and the
other two are 7 and 12 years old.

GIBBS et al. v BLUE CAB, Ine. et al.
No. 7710. Decided July 15, 1958. (259 P. 2d 294.)

282

See 61 C. J. S., Vehicles, sec. 28. Bicyclist injured by automobile,
contributory negligence of. 5 Am. Jur., Automobiles, sec. 440; 172
ALL. R. 736.

Heber Grant Ivins, American Fork, Robert B. Porter
and Delbert M. Draper, Jr., Salt Lake City, for appellants.

Skeen, Thurman & Worsley and John H. Snow, Salt Lake
City, for respondents.

HENRIOD, Justice.

This case having been re-argued on re-hearing, and the
record and the law having been re-examined by the court,
and believing and concluding that no new matter
has been presented which convinces the majority of [ll
the court that error was committed, we affirm our
previous decision in this case. We are also in accord with
the comments of Mr. Justice CROCKETT published in
connection herewith.

WADE, J., concurs.

CROCKETT, Justice.

I concur in the opinion of Mr. Justice HENRIOD re-
affirming our original decision, but in view of the points
urged on rehearing think a brief explanation is in order.

The evidence does not show, that Mr. Gibbs was going
to work, nor in fact where he was going, nor which direc-
tion the bicycle was pointed. It is therefore necessary to
let the jury determine his direction from the sparse facts
in the record.

Without again detailing the evidence, it seems clear to
me that from the direction of the cab (from the west) and

what was shown of the position of the vehicles at the time
of impact and thereafter, plus the uncontrovertible fact that
the cab struck the rear of the front wheel of the bicycle
(that was the only place the bicycle was struck or damaged),
the jury could reasonably find that the bicycle was pointed
east or easterly at the time, and for some period before the
impact; therefore, the cab having approached from the
west, would not have seen the bicycle’s light if it had had
one. The dissenting opinion speaks of “a gleam emanating
from a light” casting a “reflection on an object or the
ground it might have warned the driver” as though the bi-
eycle light might be equivalent to an automobile or at least
a motorcycle headlight. Any kind of light would have satis-
fied the legal requirement; and it is common knowledge
that bicycle lights, necessarily powered by little batteries,
are but small lights. If pointed away from the cab, the
deceased’s body behind it, as it naturally would have been
whether walking or riding, could have completely obliter-
ated the light from-the view of the cab. Under such facts,
whether deceased had a light on his bicycle or not would
have had nothing to do with the cause of the collision.

Thus the question of whether deceased’s contribu-
tory negligence in not having the light was a proxi- [jl
mate cause of his injury and death is within the
principle recently announced by this court:

“x © %* if there is any reasonable basis, either because of lack
of evidence, or from the evidence and the fair inferences arising there-
from, taken in the light most favorable to plaintiff, upon which rea-
sonable minds may conclude that they are not convinced by a pre-
ponderance of the evidence * * * (b) that such [contributory]
negligence proximately contributed to cause the injury, the plaintiff
is entitled to have the question submitted to a jury.’

Counsel voice considerable concern over the statement in
the original opinion concerning the “confusion of already
decided cases” which the author says is “wholly irrecon-

1Martin v. Stevens, 121 Utah 484, 248 P. 2d 749.

284

cilable by employment of any amount of logic.” Respond-
ent now contends that the confusion is not only added to
but multiplied by such statement. It is to be noted that
that part of the original opinion is but obiter dicta, ratio
impertinens, having nothing to do with the ratio decidendi
of the case. The decision itself was entirely logical and con-
sistent with principles well established and expressly relied
upon by this court in similar cases in recent decisions.”

WOLFE, Chief Justice (dissenting).

My dissent in the case as originally written gives gen-
erally my reasons for the dissent here. The prevailing
opinion here sees nothing to correct in the former opinion.
It entirely spares us any answers to the many questions
raised in the dissent to the former opinion and helps us
not at all.

We learn from Mr. Justice CROCKETT whose more
helpful and candid opinion attempts to supply us with
some basis for the conclusions reached by the majority,
but as I shall in a few moments demonstrate actually gives
no basis for any inference, that the cab was going directly
behind the cycle and in the same direction as the cycle.
It is perhaps conceivable that had the cab been following
in a direct line with the cycle, a gleam from a light on the
cycle reflected straight ahead might not have acted as a
warning to the cab of the presence of the cycle. Even then,
had the gleam cast a reflection on an object or on the
ground it might have warned the driver of the cab. But
how far fetched can our speculations become before they
cease to be grist for the mill of jury deliberations?

Laying aside any discussion of the factor of giving the
benefit of such a speculation to one who has failed to pro-
vide himself with an implement, the lack of which makes

*Lowder Vv. Holley, 120 Utah 281, 283 P. 2d 350; Poulsen v. Manness,
121 Utah 269, 241 P. 2d 152; Hess v. Robinson, 109 Utah 60, 168 P.
2d 510; Martin v. Stevens, see Note 1, supra.

indulgence in such speculations necessary to save this case
for a jury (a matter thoroughly discussed in my former
dissenting opinion), I shall briefly comment on the validity
of the speculation itself.

The decedent lived in such location that the jury could
perhaps have inferred that it would have been necessary
or convenient for him to have traversed the intersection
across the east-west travel line of the cab in order to get
from his home to his work; further, in order to have been
first seen within the cone of light emanating from the left
head light of the cab (the record shows decedent was
first revealed by the left headlight) he would ordinarily
have been traveling near the center of the street where-
as by ordinance he should have been traveling—a slow
moving vehicle—close to the right curb—when his pres-
ence would normally have been revealed by the right
front headlight. These facts furnish a far more potent
and valid basis to infer his direction than the involved
and flimsy structure seeking to be erected by Mr. Jus-
tice CROCKETT. We must throughout this phase of
the case keep in mind that we are speculating on a negative.
We are speculating that the situation was such that had
the cyclist had light radiation, which he had not but which
the law required, it would nevertheless have been of no
avail to warn the cab driver because by a second speculation
the cyclist was so situated in relation to the cab driver that
a radiation from a light had there been one would not have
been seen. Admitting for the purpose of this speculation
only, but not conceding it as a phenomenon which would
have happened in this case had there been a light, a gleam
emanating from a light would not have been visible to any
one approaching directly from behind in line with the
gleam (had there been one).

The only two actors in that early morning drama were
the cab driver and the cyclist who is now deceased. The
cab driver testifies not to any direction in which the cyclist

286

was headed but only that he (the cyclist) suddenly loomed
up in front of the left headlight of his cab in the middle
of the intersection. He (the cab driver) does not know

- which direction the cyclist was headed, where he came from

or whether he was riding or pushing the bicycle afoot.
There was so far as known, no other witness. It is ex-
tremely improbable that any other witness will be found.
Yet under these circumstances this case is to be given to
a jury to decide whether

“there is any reasonable basis, either because of lack of evidence, or
from the evidence and the fair inferences arising therefrom, taken
in the light most favorable to the plaintiff, upon which reasonable
minds may conclude that they are not convinced by a preponderance
of evidence that such negligence proximately contributed to cause
the injury” (italies mine).

I suppose we on this bench and a judge on the district
bench may take judicial notice of the ready and easy
maneuverability of a bicycle. Its direction may be instantly
changed. .

I submit under all the evidence of this case which has
been adduced and which is all the evidence we can reason-
ably say it is possible to adduce, a finding that the bicycle
was proceeding in an east direction or an easterly direction
so as to base thereon a further finding that a gleam of a
light had there been one could not have warned the cab
driver arises no higher than the merest conjecture. Even
if the cyclist were travelling slightly north of east a
gleam or radiation (had there been one) might have
traversed the projected path of the oncoming cab and
warned him of its imminence.

Mr. Justice CROCKETT states that

“4t seems clear to me that from the direction of the cab and what
was shown of the positions of the vehicles at time of impact and
thereafter, plus the uncontrovertible fact that the cab struck the rear
of the front wheel of the bicycle, the jury could reasonably find that
the bicycle was pointed east or easterly at the time, and for some

period before the impact; therefore, the cab having approached from
the west, would not have seen the bicycle’s light if it had had one.”

What seems clear to Mr. Justice CROCKETT that the
jury could reasonably find, I see as presenting no basis
at all for an inference unless words alone can form the
basis for an inference. But I think that inferences in a
thinking process follow in sequential order from concepts
which words stand for and not from a series of sentences.
They are thought processes employing words as symbols
or vehicles but not themselves inferences. I cannot see how
it can be inferred in view of the easy maneuverability of a
bicycle that because it was struck on the rear of the front
wheel—not the rear of the rear wheel—the bicycle was
going in the same direction as the taxicab, if indeed there
is any real evidence of where the cab struck the cycle. How
does the direction concept of the cyclist flow from the
fact that he was struck lightly in the rear of his front
wheel with or without the aid of the fact of the relative
positions of the two vehicles before or after the impact?
Admitting for purposes of this discussion, but not con-
ceding, that a gleam shining directly ahead of an oncoming
car would not by any up and down or dancing motion of the
front light or any other physical phenomenon which might
furnish even a chance of warning to an oncoming driver,
if it were going ever so slightly on the bias or north or
south of east instead of directly east so that the gleam
penetrated athwart or across the path of the oncoming
driver, it may have given to him warning of its presence.
Yet here we are to give to the jury facts from which it
is claimed it could infer as the end fact that the gleam,
had there been one, would not Have been noticed by the cab
driver and that in the face of the fact that the unlawful
absence of a light which furnishes the basis of such pos-
sible speculation was due to the decedent’s own omission.
I cannot, so cavalierly as does Mr. Justice CROCKETT,
believe that the jury could reasonably find that the absence
of the light on the cycle did not contribute to the accident.

Apparently we do not reason alike. Hither there is a non
sequitur in his process or I am stressing the cogency of
fact and inference therefrom differently than he does.
Here is a finding which, if made by the jury, would rest
on pure conjecture. It is an interesting study of the length
to which we will go to save a case for the jury on the
ground of allowable and reasonable inference matters that
rest purely on guess. I submit the facts which I mentioned
a moment ago form a basis for an inference as to a direc-
tion of the cyclist which accord more accurately with the
true facts—yet even that would only be a speculation.

I would now at this late day rather than put this founda-
tionless case to a jury and go through another lawsuit
and perhaps another ‘appeal, dismiss this suit on a law
judgment “no cause of action.” This effort to find bases
for inferences—where the facts will not stand still long
enough to fix on any set but are so fluid or insubstantial
as not to permit of inferences is a practice which is not
healthy for the growth of the law.

Certainly in this case, if I have ever encountered one,
reasonable minds could not be convinced or even persuaded
by a preponderance of evidence because there is no evidence
that will not admit of a number of inferences of equal
strength and validity. The matter rests in the realm of
pure guess and conjecture.

McDONOUGH, J., concurs in the dissenting opinion of
WOLFE, C. J.

MORRIS v. FARNSWORTH MOTEL, et al.
No. 7947. Decided June 23, 1958. (259 P. 2d 297.)

See 48 C. J. S., Innkeepers, sec, 28. Contributory negligence of
guest, 28 Am. Jur., Innkeepers, sec. 64; 163 A. L. BR. 587.

Irwin Clawson and Dean W. Sheffield, Salt Lake City,
for appellant.

Richard H. Nebeker, Salt Lake City, for respondents.

CROCKETT, Justice.

Plaintiff, Dr. Lawrence Morris, seeks recovery for break-
ing a toe on his left foot by stubbing it against a chair in
defendants’ motel bedroom.

The questions: (1) Does the fact that, during Dr.
Morris’ absence, defendants moved a chair and left it in
the pathway to the bathroom where it was obscured by
shadows constitute negligence on defendants’ part, and
(2) Was Dr. Morris guilty of contributory negligence in
running into the chair?

Dr. Morris and his wife, residents of Salt Lake City,
were vacationing in El Paso, Texas, when the incident
occurred. He returned home, brought this action here and
got personal service on Dewey Farnsworth, one of defend-
ant partners, when the latter was on a trip to Utah. After
the taking of plaintiff's deposition, defendants moved for
summary judgment pursuant to Rule 56, Utah Rules of
Civil Procedure, which was granted. Plaintiff appeals.

Under such circumstances, the party against whom the
summary judgment is granted, is entitled to the
benefit of having the court consider all of the facts [ll
presented, and every inference fairly arising there-

|

from in the light most favorable to him; which we do in
reviewing the incident.

Dr. Morris and his wife arrived at the motel in the early
evening of May 23, 1952; he remembers noting that the
way to the bathroom was unobstructed; after bathing and
changing his clothes, he left the room, not to return until
about 10:30 p. m. In the interim, Dewey Farnsworth and
a motel employee had been in the room; had moved a chair
and left it in what would be the pathway from Dr. Morris’
bed to the bathroom. Light shining from neon tubing on
the outside of the building illumined the room to the extent
that plaintiff could pick out general objects within. He
states that, as his wife was sleeping, he did not want to
disturb her, so he undressed in the semi-darkness, changed
into his pajamas and then walked from his bed toward
the bathroom where he stubbed his toe on the chair. He
also avers that the chair was in a portion of the room where
it was obscured by a shadow.

Setting aside for the moment the question as to whether
defendants were negligent, we address ourselves to the
problem of plaintiff's contributory negligence. Dr. Morris
appears to be confronted with two horns of a dilem-
ma, either (a2) the room was sufficiently lighted so [jl
that he could and should by the exercise of ordinary,
reasonable care and observation for his own safety see the
chair and avoid walking into it, or (b) the room, or the
portion thereof in question, was so dark that he could not
see an object such as a chair, in which event due care
would have required him to turn on a light.

As to alternative (a), the statement of the proposition
answers itself. An object the size of a chair is something
which one using ordinary care ought to see; and that he
should heed it, the Doctor’s unfortunate experience pain-
fully demonstrated.

+Ramsouer V. Midland Valley R. Co., 8 Cir., 185 F. 2d 101; McLain
v. Haley, 53 N. M. 827, 207 P. 24 1018.

292

Plaintiff's argument as to alternative (b) above is that
because the outside neon gave a dim but fair lighting to
the rest of the room, he was justified in walking into the
shadow on the way to the bathroom under the assumption
that the pathway was clear, as it had been before. With
this we are constrained to disagree. There were two lights
in the room easily accessible to plaintiff's use: An over-
head light and a bed lamp. The latter could have been used
in such a way as to run no risk of awakening his wife.
Where facilities or equipment are provided which may be
used for safety, the landlord has the right to assume that
the guest will make reasonable use thereof and exercise
ordinary care in taking precautions for his own safety?
The principle is the same whether the entire room, or only
a portion thereof, was dark. The light being readily avail-
able, if the plaintiff chose to ignore that fact and walk
into a darkened area where he could not see, and stumbled
into a chair, how could it reasonably be said that some-
one else is to blame? Who has not at some time or other
had such an experience? It is painful, exasperating and
provocative of expletives unfit for the printed page; and
but human to blame something or someone else, if only
the family dog, for such a mishap. But upon mature re-
flection, rational minds will be of one accord as to where
the responsibility lies. Whether Dr. Morris chooses alter-
native (a) above, that the room was light, or (b) that it,
or a portion thereof, was dark, we see no escape for him:
we believé all reasonable minds would conclude that he
was guilty of contributory negligence.

Plaintiff is correct in his contention that the defendants
had a duty to use due care to guard against defects or con-
ditions that might reasonably be foreseen would cause its
guests injury and that he was entitled to rely upon
the defendants performing such duty.2 But the case i
of Baker v. Decker* cited in support of his contention

28ee 65 C. J. S., Negligence, § 15.
*Restatement Torts § 343 comment d. (1934).
4117 Utah 15, 212 P. 2d 679, 683.

is not analogous to our fact situation. There we held that
a Tl-year-old lady was not contributorily negligent as a
matter of law in catching her heel in some rumpled canvas
in an apartment house hallway. The court there also re-
posed some importance upon the fact that her sight and
perception were undoubtedly somewhat impaired by age,
stating that

“Inability of individuals to estimate accurately, impaired vision of
elderly people, blunt perception and imperfect judgment of ordinary
persons must all be considered in determining due care.”

The rumpled canvas on the floor is not comparable to
the chair in the motel room. A chair is among the usual
and necessary furnishings of such a room and is reason-
ably to be anticipated as being found therein. The only
hazard existing in connection with it was created by Dr.
Morris himself in failing to turn on the light which he
easily could have done. If he had stumbled over a box,
a ladder, or some other strange object not reasonably to
be expected in the room, the situation might have been quite
different. It is obvious that the facts in the Baker case
just referred to are not analogous to, nor the rule therein
laid down controlling in the instant situation.

Although we are sensitive of the duty of courts to safe-
guard the rights of citizens to have grievances fully tried
on the merits to courts and juries under proper circum-
stances, this does not lead to the necessity or desir-
ability of such submission where, taking the evidence i
and all fair inferences therefrom most favorable to
a plaintiff, all reasonable minds must yet conclude that
his own lack of due care proximately contributed to cause
his injury. Such appears to be the situation here, as the
trial court correctly indicated in granting the motion for
dismissal. This conclusion obviates the necessity of con-

sidering whether there was a jury question as to defend-
ants’ negligence in the placement of the chair.

Affirmed. Costs to respondents.
McDONOUGH, J., concurs.

WOLFE, Chief Justice.

I concur with Mr. Justice CROCKETT and also with the
observations made by Mr. Justice WADE as to the defend-
ant’s conduct.

HENRIOD, Justice.

I concur in the result. However, the majority opinion
asserts that plaintiff finds himself on the horns of a
dilemma both of which find him impaled by contributory
negligence. The second horn was that it was

“so dark that he could not see an object such as a chair, in which
event due care would have required him to turn on the light.”

In such event his failure to turn on the light was con-
tributory negligence committed before he broke his toe,
and hence would disallow recovery no matter what object
in the dark physically was responsible for the injury. Hence
I cannot subscribe to what appears to me to be an incon-
sistent statement in the main opinion when it is said that

“Tf he had stumbled over a box, a ladder, or some other strange

object not reasonably to be expected in the room, the situation might
have been quite different”,

—an assertion which to the writer, emasculates the basis
upon which the decision was rendered.

WADE, Justice (concurring in the result).

I concur with the result though I do not think the evi-
dence was conclusive that plaintiff was guilty of con-
tributory negligence. Though in walking around the dark

room plaintiff took some risks which he could have avoided
by turning on a light, and he could not expect to keep in
mind the exact position of a chair which can be expected
to be moved almost anytime, still the test of negligence is
did he use ordinary care, not whether he took known risks.
Life is full of risks, sometimes ordinary, prudent persons
avoid one risk only to create another, and sometimes they
take risks to avoid inconvenience, discomfort or danger to
others. There are many variations in the words and mean-
ing of the definitions of negligence, but all of them suggest
a relationship between negligence and what is ordinarily
done under the existing circumstances by ordinary prudent
people. It would seem that a person cannot fail to use
ordinary care when he does only that which almost every
one does at times under the circumstances and that in such
a case we should not hold him negligent as a matter of law.
Under the circumstances here presented I believe that most
people not only might but do move around dark rooms
without turning on a light. So I think it would not be un-
reasonable to find that plaintiff was free from negligence.

Applying this same test to defendant’s conduct I think we
must hold as a matter of law that he was free from negli-
gence. If the owner placed a stepladder, a bucket of paint
or a permanent fixture where he placed this chair I think
that probably would present a jury question on whether
he was guilty of negligence. For such objects are not com-
‘monly found in such places, and a person doing such an
uncommon act should be expected to foresee that a hazard
was thereby created. But chairs are necessarily mobile
objects which are often moved without much consideration
of whether a hazard is thereby created. Usually an acci-
dent involving a chair causes only momentary discomfort
or slight inconvenience, not real injury. So I think it is
clear the defendant’s act of moving the chair is the same
as any one might do under these conditions, and that it
would be unreasonable to find that he should have foreseen
that a hazard was thereby created.

296

This theory avoids the difficulty suggested by Mr. Jus-
tice HENRIOD to the prevailing opinion. For a person
might well anticipate that placing a permanent fixture
or some other unusual object in the room would create a
hazard but think nothing of moving a chair from one place
to another in the room.

WASATCH CHEMICAL CO. v. LEON.
No. 7662. Decided July 6, 1958. (259 P. 2d 801.)

See 77 C. J. S., Sales, see. 330. Agent, liability for declarations
of, 2 Am. Jur., Agency, sec. 851.

Samuel J. Nicholes and J. D. Hurd, Salt Lake City, for
appellant.

Glenn C. Hanni and R. A. McBroom, Salt Lake City, for
respondent.

McDONOUGH, Justice.

The plaintiff brought action against the defendant for
an unpaid bill of $162.82 incurred by the purchase of
several gallons of “Wasco General Oil” weed killer. De-
fendant counterclaimed alleging substantial damage to his
onion crop by reason of the use of the Wasco General Oil.
The defendant obtained a judgment in a substantial amount,
and plaintiff appeals.

Defendant is a farmer who planted a tract of leased land
to onions on or about the 1st of April, 1949. On April 28,
1949, defendant approached Dr. Stark concerning a prob-
lem of weeds in the onions. Dr. Stark is a trained and ex-
perienced horticulturist and plant physiologist retained
by plaintiff for the specific purpose of agricultural re-

search and dissemination of information pertaining to the
agricultural industry. A certain type of selective weedicide
was discussed but defendant told Dr. Stark that the crop
could not wait for the application of this type of killer
because of the rapid growth of the weeds. Dr. Stark then
asked whether defendant’s onions had yet emerged from
the ground, and upon being told they had not, Dr. Stark
recommended the Wasco General Oil as a pre-emergence
spray. Defendant was specifically told that this oil would
kill all plants, including onions, with which it came in
contact but that it would not harm those onions which were
underground at the time of application. Defendant, rely-
ing upon this representation, purchased the oil and applied
it to his field two days later. There is substantial evidence
that at the time of application sprouting onions of about
1 inch in height and approximately 1 foot apart had ap-
peared above the surface of the ground. There was also
substantial evidence that there was a satisfactory ger-
mination of the seeds planted. These facts indicated that
the remainder of the onion plants were immediately be-
low the surface of the ground. Expert testimony was in-
troduced to show that under such conditions a general oil
weedicide of the Wasco type would kill plants so crowding
the earth’s surface. Under such evidence and testimony
the jury found that the oil was the proximate cause of
defendant’s loss. The record fully substantiates such find-
ings. Hence only two main questions are raised on appeal:
(1) Whether Dr. Stark had the authority to make rep-
resentations concerning the effect of the weedicide; and
(2) Whether such representations constituted express or
implied warranties. We will discuss these questions in the
order raised.

It is the appellant’s contention that since Dr. Stark was
not a selling agent of the defendant he had no im-
plied authority to make any warranty or to make I
any representation.concerning the effect of the weed-

icide. However, the question of implied authority of a
selling agent is not here involved. The parties stipulated

“that Dr. Arvil L. Stark, at all times material in this case, was the
employee of the Wasatch Chemical Co. and was acting in the course
and scope of his employment.”

As stated in 2 Mechem on Agencies, 2nd Ed., Sec. 1778:

“It is not at all uncommon for the principal to put an agent in a
position in which the making of statements or representations or the
giving of information is the act expressly contemplated and directed.
Thus if the principal refers a person to his agent for information,
the agent is clearly authorized to give information for the principal
upon the subject indicated. If the principal carrying on an extensive
business establishes a bureau of information, or designates an agent
to whom inquiries may be referred or of whom information may be
obtained, the giving of such information or the answering of such
inquiries is an act which the principal has directly authorized.

“The giving of information or the answering of inquiries in such
a case must, of course, be confined to the subjects which have actually
or apparently been confided to him to answer for; but within that
sphere persons expressly or impliedly referred to him, who act in
good faith and with reasonable prudence may rely upon the informa-
tion as information given by the principal.”

Under the law as thus stated and the stipulation as re-
cited we can but find that as between these parties,
the representations made by Dr. Stark were bind- |
ing upon the plaintiff providing such representa-
tions constituted a warranty of the product so purchased
by the defendant.

Contrary to appellant’s contention there is no question
here as to liability based upon a theory of breach of war-
ranty as to a method of application, as distinguished from
a warranty as to the effect of the general oil.

There were no representations made as to method i
of application. The representations were that Wasco

General Oil, although destructive to all plant life which it
directly contacted, would not destroy those plants beneath
the surface of the earth at the time the oil was applied to

plants above such surface. No qualifications were made
by plaintiff as to how far beneath the earth’s surface the
plants must be in order to be safe.

Section 81-1-12, U.C.A., 1948 states:

“Any affirmation of fact or any promise by the seller relating to
the goods is an express warranty, if the natural tendeney of such
affirmation or promise is to induce the buyer to purchase the goods,
and if the buyer purchases the goods relying thereon.”

Section 81-1-15 provides for implied warranty as to qual-
ity or fitness for use:
“Where the buyer, expressly or by implication, makes known to

the seller the particular purpose for which the goods are required,
and it appears that the buyer relies on the seller’s skill or judgment
ek RD

In this case plaintiff, through their authorized employee,
represented that onions below the ground surface would
not be injured by Wasco General Oil. This was an affirma-
tion of a fact relating to the goods which did induce the
buyer to purchase such goods in reliance thereon. Further-
more, the buyer here did expressly make known to the
seller the particular purpose for which the weed killer was
required, and it is evident from the facts that the buyer
relied upon the seller’s judgment in selecting such killer.
Hence, we conclude as a matter of law that both an ex-
press and implied warranty were made by plaintiff in
this action and since there was substantial evidence that
the great majority of the plants were beneath the surface
of the ground when the oil was applied, and substantial
evidence from which the jury decided that the proximate
cause of destruction was the application of such oil, the
only remaining question is whether the defendant acted
in a reasonable, prudent manner to minimize his damages.

Against defendant there is testimony to the effect that
if the onions did not produce a satisfactory stand within

three or four days after the first plants broke the
ground surface, the majority of farmers would plow i
that crop up and re-plant the field. It was contended

that this would be the procedure of an ordinary prudent
farmer since such a farmer would know within that period
whether continuation of the project was reasonable and
prudent under such circumstances.

The testimony in favor of the defendant indicates that
he cultivated the crop about two weeks after it had been
sprayed. At this time an approximate stand of from forty
to fifty per cent of the onions had emerged from the ground
and they were in a damaged condition. In regard to this
stand, defendant stated that:

“{t was just barely enough, if they would have gotten in and started
growing, maybe I would have made it worth while to hang on to the
crop and break even.”

About one week after the cultivation, defendant weeded
the onions to eliminate weeds that had germinated sub-
sequent to the application of the oil. He then irrigated and
fertilized them twice and then recultivated again toward
the latter part of June. He then decided that the onions
would not make a marketable crop and they were aban-
doned. Evidence was also submitted that estimated costs
of approximately $2,928 or $2,565.50, depending upon time
of marketing, would be incurred subsequent to the abandon-
ment if defendant had elected to raise the crop to maturity.
The jury was properly instructed as to defendant’s duty
to minimize damages.

Under such circumstances we believe the record sub-
stantially supports a finding that a very poor stand of
onions appeared above the ground; that defendant did be-
lieve he might break even if the onions “got in and started
growing ;” that he continued working with the crop to-
wards that objective until it became apparent that the
crop would not be marketable; that upon such discovery
it was too late to plow the crop under and plant a new or

different crop; and that defendant’s only reasonable and
prudent recourse was to abandon the crop and minimize
damages by not making any further expenditures thereon.
In view of such facts we cannot say that defendant failed
in his duty.

The judgment is affirmed. Costs to respondent.
WOLFE, C. J.,. and CROCKETT and WADE, JJ., concur.
HENRIOD, J., not participating.

TRADE COMMISSION et al. v. BUSH.
No. 7783. Decided July 15, 1958. (259 P. 2d 804.)

See 68 C. J., Trade-marks, Trade-names and Unfair Competition,
sec, 255. Trading stamps as constituting unfair competition. 52 Am.
Jur, Trademarks, Trade-names, ete., sec. 186; 188 A. L. R. 1087.

Ray, Rawlins, Jones & Henderson, Salt Lake City, R. R.
Bullivant, Portland, Or., W. S. Beinecke, New York City,
for appellant.

Clinton D. Vernon, Atty. Gen., Quentin L. R. Alston,
Francis C. Lund, Asst. Attys. Gen., Calvin L. Rampton,
Sherman P. Lloyd, Salt Lake City, for respondents.

HENRIOD, Justice.

Appeal from an injunction restraining Bush, Ogden
grocer, from selling goods below cost as defined in the Un-
fair Practices Act.1 Reversed.

Bush assails the findings and judgment as unsupported
in fact or law. Specifically, that (1) no case was made
showing that Bush sold below cost, either from a “cost”
or “price” viewpoint, or that he had the intent to violate
the act; and (2) that the Unfair Practices Act offends
against the equal protection and due process clauses of the
federal and state constitutions.? A third contention that

1Title 18-5-7, “Sales, less than cost.—(a) It shall be unlawful for
any person * * * tosell * * * anyarticle * * * at less
than the cost thereof to such vendor * * * for the purpose of
injuring competitors and destroying competition * * * or when
the effect of selling * * * at less than cost * * * may be
substantially to lessen competition or tend to create a monopoly in
any line of commerce; and he * * * shall also be guilty of a
misdemeanor [fine or imprisonment or both] * * *

“Cost Defined: * * * 8. When used in this act, the term ‘cost
to the retailer’ shall mean the invoice cost * * * to the retailer
within thirty days prior to the date of sale, or the date of offering
for sale, or the replacement cost of the merchandise to the retailer,
whichever is lower; less all trade discounts except customary dis-
counts for cash; to which shall be added; (a) freight charges * * *
and (b) cartage [charges] * * * and (c) a markup to cover a
proportionate part of the cost of doing business, which markup, in
the absence of proof of a lesser cost, shall be six per cent of the cost
to the retailer as herein set forth after adding thereto freight charges
and cartage * * *”

214th Amend., U. S. Const.; Art. 1, §§ 1 & 7, Utah Const.

the Retail Grocers Association, intervenor, violated the
Sherman Act,® had “unclean hands” and therefore was dis-
qualified as a litigant, we think is without merit.

As to point (2): Similiar Acts have been held valid
under the police power* and generally when attacked under
the due process and equal protection clauses,5 although
some authorities have invalidated such Acts in toto,® and
others have voided only parts thereof.’

Bush opened a cash and carry grocery and installed the
Sperry & Hutchinson green trading stamp system, a plan
which has been held to be a legitimate adjunct of a legiti-
mate business,® by issuing stamps to those desiring them,
on all purchases, large or small, irrespective of markup.
Thus, stamps were issued on items marked up 6% or 30%.
He considered and treated their use as a cash discount, as
this court and others have suggested it is. The stamps
are valued and are redeemable by the S & H Co. in cash
at 1.66% or in merchandise at 2.08% of sales price. About
25% of the items are so-called 6% items,—staples ordi-
narily sold by merchants at cost as defined in the Act,
which, generally speaking, is invoice price plus delivery
costs and an arbitrary 6%.

Bush testified and it is not controverted that only one
out of 1,000 sales is a 6% item (or items) unmingled with
those having higher markups, the average of which, in-

sTitle 15, U.S. C. A. §§ 1-7.

4Wholesale Tobacco Dealers Bureau v. National Candy & Tobacco
Co., 1988, 11 Cal. 2d 684, 82 P. 2d 8, 118 A. L. R. 486.

'People v. Gordon, 1951, 105 Cal. 2d 711, 234 P. 2d 287, and cases
cited.

Cohen V. Frey & Sons, Inc., Md. 1951, 80 A, 2d 267.

State ex rel. English v. Ruback, 1938, 185 Neb. 385, 281 N. W. 607.

Ee parte Drewel, 1905, 147 Cal. 763, 82 P. 429,2 L. R. A, N.S,
588.

State v. Holtgreve, 1921, 58 Utah 568, 200 P. 894, 26 A. L. R. 696;
Sperry & Hutchinson Co. v. Hudson, 1951, 190 Or. 458, 226 P. 24 501.

cluding 6% items, is about 18%. Unassailed, also, is ex-
pert accounting testimony showing that a cash discount
customarily is considered as a non-operating business ex-
pense, like advertising, accounting and similar expenses,
includable in the cost of doing business, and also that the
amount represented by the stamps, roughly 2%, is about
the going rate of cash discounts.

The Trade Commission’s Mr. Hale purchased 4 grocery
items from Bush, all so-called 6% items,—unless, as urged,
the value of the stamps issued with the purchase, is not
includable in the statutory markup, but is merely a re-
duction in price, resulting in a sale below 6% and therefore
below cost as defined in the Act. Bush argues that the
cost of the stamps, largely passed on to his customers by
way of a discount for prompt payment, is an advertising
cost like that expended for newspaper, radio, television
or other advertising, that it is a buffer against credit losses,
constitutes a trade stimulant, offsets expenses incident to
deliveries which a competitor, not he, may make, and is a
customary cash discount, recognized as to type and amount
in the industry, and by accountants, as a non-operating
business expense, includable in any markup contemplated
by the Act.

The Trade Commission says that an article priced at $1
with 2¢ or its equivalent value in stamps returned at the
time of sale, is a 98¢ price no matter how you view it.
There is support for such contention.° Bush insists the
$1 price paid by everyone whether he receives or refuses
the stamps, is constant whether the cash and carry mer-
chant returns 2¢ as a discount for prompt payment, as-
suring him ready operating capital, eliminating advertising
and accounting expenses, bad credit risks and interest on

1Bristol-Myers Co. v. Picker, 1950, 302 N. Y. 61, 96 N. E. 2d 177,
22.A. L. R. 2d 1208; Hd. Schuster & Co. v. Steffes, 1941, 287 Wis. 41,
295 N. W. 787, 183 A. L. R. 1071; Sunbeam Corp. v. Klein, Del. Ch.
1951, 79 A. 2d 608.

borrowed operating capital, or whether the credit merchant,
for extended credit, finally may receive $1.02 for the item,
the 2¢ additional to offset expenses he may have, but which
the cash and carry merchant does not have. Hence, he
reasons, there is no reduction in price. He also is sup-
ported by authority.4

Where the evidence unquestionably shows that Bush does
not have the usual non-operating business expenses which
his brethren, the credit and delivery merchants have, and
where the statutory markup arbitrarily covers the cost
of doing business, requiring the vendor to sell at a price
higher than otherwise he might do in order to attract
business, it seems not unreasonable to assume that his
stamp cost, representing about 2% of sale price, and a
customary discount, is an element of the cost of doing busi-
ness intended by the legislature to be one of the costs of
doing business included in the 6% markup. It becomes
rather enigmatic, however, when that cost is passed along to
the consumer as a discount, which, as a practical matter
gives the housewife a $1 article for 98¢ if she redeems the
stamps— and where such cost does not represent the more
intangible type of benefit conferred where parking space is
provided or where the customer is relieved of interest pay-
ments on borrowed capital and the like, although a definite
and probably measurable economic kinship logically appears
to exist between the two types of benefits conferred.”

Were we to determine this case solely on the basis of
one or the other of the contestants’ debatable and anti-
thetical conceptions as to whether the price is static or
is reduced when a discount is given, we feel that Bush has
drawn a sharper and more acceptable sword, since the

“Bristol-Myers Co. v. Lit Bros. 1989, 886 Pa. 81, 6 A. 2d 843;
Weeo Products Co. v. Mid-City Rate Drug Stores, 1948, 55 Cal. App.
2d 684, 181 P. 2d 856; Food and Grocery Bureau, Inc., V. Garfield,
1942, 20 Cal. 2d 228, 125 P. 2d 8.

12Bristol-Myers Co. v. Lit Bros., supra; Weco Products Co. v. Mid-
City Cut Rate Drug Stores, supra; Bristol-Myers Co. v. Picker, supra.

discount he gives is common practice, is usual in amount,
and could be used as well for types of advertising which
all would agree are includable in the cost of doing business
which the Act by fiat, sets at 6%. Had Bush issued stamps
having a 6% value, thus indulging in a practice beyond
the usual and customary, a wilful evasion well might result
of a type that led a learned judge wisely to say in Bristol-
Myers v. Picker, supra [802 N.Y. 61, 96 N.H.2d 184], that
“Courts are not powerless to deal with obvious subterfuges”
and that “There is time to deal with such situations when
they are presented.”

But we decide this case on a different ground,—that no
prima facie case was established showing that Bush in-
tended to violate the Act,—certainly not beyond a reason-
able doubt.** He insisted that his only intent was to in-
crease his business, not to harm anyone, frankly admitting
that which we all know,—that any sales increase he en-
joyed of necessity reduced the sales of another or others.
He and his accountants considered and booked the cost
of the stamps as a non-operating business expense, real to
him, and certainly not a practice which of itself proves evil
intent. Only one out of 1,000 sales possibly could be con-
strued as a violation of the Act, and significantly in this
case even that isolated sale has provoked a lively, able and
intelligent debate and disagreement among learned counsel
as to whether it is or is not a violation, depending on which
of two technical and debatable accounting philosophies
maintains. Incredible it seems that one would intend to
violate a criminal statute by inducing,—or, if you please,
“uring to improvidence,”—“ a single housewife out of
about 1,000, with ‘bait of 8.3¢ in cash or 10.4¢ in merchan-
dise on an average $5 purchase, occurring but once in a

18State v. 20th Century Market, 1940, 236 Wis. 215, 294 N. W.
878; Adwon v. Okahoma Retail Grocers Ass’n, Inc., 204 Okl. 199, 228
P. 2d 876.

14Rast v. Van Deman & Lewis Co., 1916, 240 U. S. 342, 36 S. Ct.
370, 60 L. Ed. 679; L. R. A. 1917A, 421.

$5,000 sales volume. Particularly is this so in light of
the declared purpose of the Act, to safeguard the public
against monopolies by prohibiting unfair and discrimina-
tory practices by which fair and honest competition is
destroyed,—a purpose apparently directed at the vicious
price wars of a past era, preambling an Act perhaps born
of economic necessity or a changing philosophy, or both,—
one of a rising tide of Unfair Practice Acts, many drawn
in haste, loosely worded and provocative of constitutional
doubts inviting irreconcilable decisions.

With deference to the findings of the lower court, never-
the less we feel dutybound to hold that the record reflects
no intent on the part of Bush to violate the Act. The testi-
mony of competitors, admittedly conscious or unwitting
violators of the Act, that they had lost business since Bush
issued the stamps, hardly proves an intent on the part of
another to violate a criminal statute. Such loss of business
at times attended the common-law free enterprise system
and persists even now where Unfair Practice Acts in
derogation thereof prevail. Nor can a criminal intent be
proved by adding to such loss the Commission’s suggestion
that people normally do not admit violations of law. This
court certainly will not ascribe to the oath-taker the infamy
of a perjurious mind. We think, with every presumptive
support, that people normally are honest and tell the truth.

Since a majority of the Court feels that it is unneces-
sary to discuss constitutional or other objections raised
by counsel, such matters are not determined here.

McDONOUGH, CROCKETT and WADE, JJ., concur.

WOLFE, Chief Justice (concurring in the result).

I concur in the reversal of the judgment below on the
ground that the giving of stamps to customers paying cash
for merchandise, the value of the stamps being approxi-
mately 2% of the purchase price, does not amount to a
reduction of the price of the article. If the stamps had a

value substantially in excess of 2%, which is the customary
discount for cash, a different problem would be presented.

The other question discussed in the majority opinion
being unnecessary for our decision, I express no opinion

on it.
STEVENS-SALT LAKE CITY, Inc. v WONG et al.
No. 7920. Decided August 7, 1958. (259 P. 2d 586.)

See 65 C. J. S., Negligence, sec. 252. Res ipsa loquitur doctrine
as an inference, 20 Am. Jur., Evidence, sec. 218; 167 A. L. R. 658.

White, Wright & Arnovitz, Salt Lake City, for appellant.
Don J. Hanson, Salt Lake City, for respondents.

WADE, Justice.

Appeal from a jury verdict.and judgment thereon of no
cause of action in a suit to recover damages caused by a
leaking water pipe.

The facts are simple. Stevens-Salt Lake City, Inc., ap-
pellant herein, occupied the first floor of a building at
South Main Street, in Salt Lake City, Utah, as a ladies

apparel shop; and the China Tea Garden, respondents here-
in, occupied the second floor of this building as a restau-
rant. In 1938, respondents caused to be installed the water
pipe which in September, 1950 sprung a leak, causing water
to seep through the ceiling damaging some of appellant’s
merchandise. A couple of weeks later, in October, as a
result of the seepage of the water in September, large por-
tions of plaster fell from the ceiling causing extensive
damage to the merchandise and fixtures and necessitating
the closing of the business for a week.

One of the respondents testified that the pipe which had
sprung the leak was enclosed behind a wainscoting in re-
spondents’ premises and although he personally knew
nothing about pipes, it was installed by a plumber who was
paid on the basis of putting in new pipe. In order to inspect
this pipe it would be necessary to tear away the wainscoting.
When the water was discovered seeping through appellant’s
ceiling it was immediately shut off. An inspection was
thereupon made of their own premises without removing
the wainscoting but no water was found there, whereupon
the wainscoting was torn away and a small leak was dis-
covered in the pipe.

Although appellant did not request a directed verdict,
it now argues that the verdict of the jury was not justified
because respondents submitted no evidence to negative the
inference of their negligence and also that under the facts
of this case they were liable under the theory of “strict
liability” for all damages proximately caused by the leak-
ing pipe.

On the question of negligence of the respondents here-
in, the court, at the request of appellant, instructed the
jury on the doctrine of res ipsa loquitur, as follows:

“You are instructed that the plaintiff proved an injury which in
the ordinary course of things does not happen, if the person having

control of the water under pressure in pipes and plumbing fixtures
in the upper story of a building uses proper care and therefore there

312

is a presumption of negligence on the part of such person, and that
it speaks for itself that the defendants have been negligent. You are
further instructed that the defendants may overcome this presump-
tion of negligence if they offer an explanation as to how the water
came to escape without their fault or why it was permitted to flow
for such a length of time and in such volume as to find its way down
the ceiling and upon the goods in plaintiff's store.”

but refused to give appellant’s requested instructions num-
bers 8 and 4, which would have told the jury that the de-
fendants were negligent as a matter of law because the
only evidence they produced was that they did nothing to
prevent the damage such as removing the wainscoting to
inspect the pipe and that the defendants were liable for the
damages sustained by plaintiff unless

“the defendants offered evidence to prove that the injury happened
because of the neglect of some other person or persons who were

not in the control of the defendants, or by the act of some person
for whose conduct they were not liable * * *.”

It is appellant’s contention that by refusing to give these
instructions the court failed to invoke the theory of “strict
liability” and might have misled the jury into believing
that some third persons, not respondents, were responsible.

Appellant admits that this court is committed to the
principle that the doctrine of res ipsa loquitur merely allows
the fact finder to infer negligence from the happening of
the event and in the absence of explanation might compel
a finding of negligence. White v. Pinney, 99 Utah 484, 108
P.2d 249; Curby v. Bennett Glass & Paint Co., 99 Utah 80,
103 P.2d 657; and Angerman Co., Ine. v. Edgemon, 76
Utah 394, 290 P. 169, 79 A.L.R. 40. Since, in spite of the
fact that the court instructed the jury on the doctrine of
res ipsa loquitur the jury found for defendants, appellant
argues that under the facts of this case the inference of
negligence was so strong that the jury was compelled to
find defendants negligent and since no explanation absolv-
ing defendants was given, the verdict of the jury was
against the law.

318

We cannot agree with this contention. The doctrine of
res ipsa loquitur merely allows an inference of negligence
from the happening of the accident. The happening of
the accident and the surrounding circumstances may,
as in any other case, so conclusively show negligence [ll
that a contrary finding would be unreasonable in
which case the court should direct a finding on that issue,
not because of the doctrine of res ipsa loquitur but because
under the evidence any other finding would be unreason-
able. If the doctrine of res ipsa loquitur compelled a find-
ing of negligence from the happening of the event in the
absence of explanation it would be a presumption and not
merely a permissible inference from which the fact finder
could find negligence. While under the facts of this case
the jury well might have found in favor of appellant, it
was not compelled to find that respondents were negligent.
Respondents hired a plumber to install the pipe. They
paid on a basis of new pipe. In the twelve years after the
pipe had been put in and before the accident involved here-
in occurred, there was no evidence that anything hap-
pened to apprise respondents that the pipe which had been
installed by the plumber was not in good condition. It is
a matter of common knowledge that good or new pipe will
probably last the life of the building, that ordinarily water
pipes are concealed in buildings and are not easily inspected,
nor is there ordinarily a need for inspection until there is
evidence that something has gone amiss. Respondents’ first
inkling that anything was amiss was when they were in-
formed that water had leaked into appellant’s ceiling. An
inspection of their own premises showed nothing. They
immediately had the water shut off and it was only after
the wainscoting was removed and a thorough inspection of
the pipe was made that a small leak was discovered. Re-
spondents, as ordinary prudent men, had no reason to sus-
pect before the occurrence of the accident that their water
pipe was not in good condition and would be likely to cause
injury to someone. This being so, the jury was not com-
pelled to find respondents guilty of negligence.

From what we have said above it follows that the court
did not err in refusing to instruct the jury that defendants
were guilty of negligence as a matter of law because the
only evidence produced was that they did nothing to
prevent the injury, such as inspecting the pipes. [JI
Nor did the court err in refusing to instruct the jury

that defendants were liable unless they had produced evi-
dence that the damages were due to the negligence of some
third persons not under the control of defendants. Even if
this court in a proper case were to adhere to the principle
of “strict liability” the facts in this case do not warrant
such an application. By having water pipes installed, re-
spondents could not reasonably foresee that such an act
might cause injury to others. As stated in the case of
Green Vv. General Petroleum Corp., 205 Cal. 328, 270 P. 952,
60 A.L.R. 475, cited by appellant, the doctrine of “strict
liability” should be applied:

“Where one, in the conduct and maintenance of an enterprise law-
ful and proper in itself, deliberately does an act under known condi-
tions, and, with knowledge that injury may result to another, pro-
ceeds, and injury is done to the other as the direct and proximate
consequence of the act, however carefully done, the one who does
the act and causes the injury should in all fairness, be required to
compensate the other for the damage done * * *.”

That case involved the drilling of an oil well near a resi-
dence and the drillers knew or should have known that no
matter how careful they were in their operations that
damage might ensue from the very nature of the matter
they were dealing with. The experience of mankind has
not taught this to be true of water in pipes. Respondents
therefore had no reason to know that by installing the pipe
injury might result to others.

Affirmed. Costs to respondents.

McDONOUGH, CROCKETT and HENRIOD, J.J., con-
eur.

WOLFE, Chief Justice (concurring) .

I concur. While it is true that, as pointed out by the
appellant, we have stated in several prior cases that the
inference of negligence which the doctrine of res ipsa loqui-
tur permits the fact finder to make might, in the absence
of an explanation by the defendant, compel a finding of
negligence, I think that it would be a rare case where the
inference would be that strong. The burden of persuasion
being upon the plaintiff and negligence not being proved
by direct evidence but by circumstantial evidence, it is
difficult for me to visualize a situation in which the fact
finder would be compelled to find for the plaintiff even
though the defendant did not offer an explanation. The
circumstantial evidence of negligence might be highly per-
suasive and impelling, but I question that in any case
the fact finder would be compelled to find negligence.

I agree with the majority opinion that the instruction
given by the court which told the jury that the defendants
were presumed to have been negligent was a more favorable
instruction than they were entitled to under the law of this
State.

LODDER vy. WESTERN PAC. R. CO. et al.
No. 7809. Decided July 22, 1958. (259 P. 2d 589.)

75 C.J.S, Railroads, sec. 857. Negligence of gate tender at railroad
crossing. 44 Am, Jur. Railroads, sec. 527; 160 A.LR. 781.

Van Cott, Bagley, Cornwall & McCarthy, Leonard J.
Lewis, Robert John Jensen, Salt Lake City, for appellants.

D. Ray Owen, Jr, Salt Lake City, LeRoy B. Thatcher,
Ogden, for respondent.

WADE, Justice.

Defendants Western Pacific Railroad Company and
Richard White, locomotive hostler or engineer, appeal from
a judgment awarding plaintiff Merlene Lodder damages
for personal injuries sustained from a collision between
the automobile in which she was riding and a three-unit
Diesel locomotive. The accident occurred on December 19,
1949 after 9:00 p.m. while she was riding toward the west
with her husband in his automobile on Second South Street
in Salt Lake City where it intersects with Fourth West
Street. A heavy snow had recently fallen and it was still
snowing and very slippery.

This intersection is a part of the railroad depot and both
Second South and Fourth West Streets are 93 feet wide
from curb line to curb line. Four railroad tracks traverse
the intersection from north to south, the east track is
within 6 or 7 feet from the northeast curb line corner of
the intersection and runs about 15 degrees east of south
and is east of the curb line at the southeast corner. Within
400 feet to the north of the north curb line there are four
switches on the east track. On the northeast corner of the
intersection is a two-story building separated from the curb
line only by a 20.5 foot sidewalk on the south and west sides
but instead of coming to a right-angle corner the wall on
the southwest runs diagonally in a southeasterly north-
westerly direction for about six feet. From a point 90 feet
north of the point of impact, which was about 30 feet south
of the north curb line on the east track the view of the
north half of Second South Street is cut off by the building
at about 100 feet east of that point.

The accident happened when the locomotive backed down
the east track from the north into the front end of the
north side of the car after it came onto the track from the
east at a point about 30 feet south from the north curb
line. The impact turned the automobile toward the south
and it was shoved parallel with and to the east of the loco-

motive to within about eight feet of the south curb line, the
rear end of the locomotive came to rest about five feet
farther south and within three feet of the south curb line.
Plaintiff’s neck was wrenched by the jar of the impact.

A crossing watchman was stationed at this intersection
and at the east side thereof below the “Railroad Crossing”
sign was another sign which read “Watchman is off duty.”
When the watchman was on duty this lower sign was cov-
ered indicating that there was a watchman on duty. The
driver of the automobile testified that he noticed that the
sign was covered at the time he approached the intersection.
Both plaintiff and her husband testified positively that
there was no watchman in or around the intersection as
they approached. The watchman testified that he saw the
locomotive as it rounded a bend coming from the north and
stopped north of the fourth switch which is about 400 feet
north of the north curb line, that he had the switches lined
up for it to come south on the east track and he gave it the
come-on signal which it answered with two blasts of the
whistle that the whistle was not again sounded prior to the
collision, that the locomotive moved forward again and then
stopped before it reached the third switch which is about:
800 feet. north of the curb line and he saw a light move off
from the locomotive and go over to the third switch, where-
upon he went back into the shack and called the yard master
on the telephone, that after the call, while briskly swinging
his lantern with the red lights showing toward the east and
west, he walked from the shack to the center of the street
where he arrived just as the crash occurred. On cross-
examination he admitted that he testified in his deposi-
tion that he was walking toward the street instead of to-
ward the center of the street when the accident occurred.

Over defendants’ objection the case was submitted to the
jury on special interrogatories. The jury found for the de-
fendants that the locomotive bell rang continuously as it
approached the intersection and that the light on the south

end of the locomotive was burning. It found for the plain-
tiff that defendants negligently failed to keep a proper
lookout for the approach of automobiles, that such a lookout
would have disclosed the danger to this automobile in time
to avert the collision by sounding the locomotive whistle
or by stopping it before it reached the point of impact,
that the locomotive was driven into the intersection during
a snowstorm without sounding the whistle before entering
the crossing, that the watchman on duty at the time of the
collision neligently failed to be stationed in the intersection
or negligently failed to warn plaintiff or her husband, the
driver of the automobile, that the locomotive was approach-
ing and that each of the foregoing failures proximately
caused or contributed in causing plaintiff’s injuries. The
jury exonerated plaintiff and the driver of the automobile
from any and all negligence.

Before the argument the parties were informed that if
the jury’s answers indicated liability and exonerated plain-
tiff and her driver from negligence the question of dam-
ages would be then submitted to the jury. Counsel stipu-
lated a time limit for argument and it was understood that
only the stipulated time would be allowed to argue both
the main case and damages. Defendants used more than
their stipulated time to argue the main argument and the
court refused to allow them additional time to argue the
question of damages. The jury assessed plaintiff's damages
at $25,000, which the trial court reduced to $10,000.

Defendants contend:

1. That the evidence does not support a finding that
defendants’ negligence proximately caused the collision.

2. That the answers to the interrogatories do not sup-
port the judgment.

3. That the refusal to allow the defendants to argue
the question of damages prevented a fair trial.

4. That the trial court abused its discretion in denying
a new trial because the verdict was tainted with passion
and prejudice.

The jury could reasonably find that the defendants were
guilty of negligence which proximately caused the
collision. All of the grounds of negligence found by i |
the jury seem to be supported by the evidence but
in order to support the judgment we need find only one
ground of negligence that is reasonably inferable from the
evidence. We therefore discuss only one of such grounds
of negligence.

The jury found that the crossing watchman stationed
at the intersection negligently failed to warn the driver of
the approach of the locomotive, which failure proximately
caused the collision. The jury could reasonably infer
from the evidence that the crossing watchman al- | |
though stationed to direct traffic approaching this
intersection, at the time of this collision, was not in the
intersection nor near enough thereto to effectively flag
down traffic or warn approaching drivers that the locomo-
tive was approaching and that had he been in such posi-
tion and properly performed his duties the accident would
have been avoided. The watchman’s own testimony reason-
ably supports the conclusion that he made a telephone call
after the locomotive started toward the crossing and that
he did not get back to the intersection in time to give a
reasonable warning to the driver of the automobile that
the locomotive was approaching, and the testimony of
plaintiff and her driver that there was no watchman around
the intersection prior to the accident supports this conclu-
sion. There is nothing in the evidence which indicates that
had this watchman been stationed in the intersection flag-
ging all traffic down after the locomotive started moving
toward the intersection as was his duty, instead of going
into the shack and making a telephone call at this crucial
period, the automobile would not have stopped in time to
avoid the collision. Defendants argue that the evidence

shows that the street was so slippery that the automobile
could not have been stopped within any reasonable distance
but the evidence does not support that argument. From the
evidence the jury could reasonably conclude that the loco-
motive first came in the driver’s view when the automobile
was only about 100 feet from the point of impact while
the automobile was moving about 15 miles per hour, that the
driver immediately shifted into low gear and then used his
brakes when he found that it was not stopping soon enough
and that the automobile although equipped with chains, slid
about 60 feet to the point of impact, but that at that point
it was barely moving. The jury could reasonably infer
from such facts that had a warning of the locomotive’s
approach been given a little sooner the automobile would
have stopped in time to avoid the collision. Under the
circumstances here presented it would seem highly im-
probable that a warning of the approaching locomotive
from the red light of the watchman when the automobile
was from 200 to 400 feet away would have gone unheeded
by the driver or that he would have been unable to make
the stop well within such distance. The stormy night, the
slippery streets, the driver’s restricted view of the ap-
proaching train, and the covered sign indicating that a
watchman was on duty, all made it imperative that at this
crucial time just before the locomotive reached the inter-
section a watchman should be out in the intersection flag-
ging down traffic which would be endangered by such
movement of the train, and his failure to do so presented a
question of negligence and proximate cause for the jury.

Defendants argue that under the evidence, as a matter
of law, the sole proximate cause of the collision was
the automobile driver’s negligence. They claim that [jl
he clearly violated the statute by driving at a speed
greater than was

“reasonable and prudent under the conditions having regard to actual
and potential hazards then existing”,

and by his failure to

“drive at an appropriately reduced speed when approaching and
crossing an intersection or railway grade crossing”.

They cite cases holding as a matter of law that a similar
statute was violated and that such violation was the sole
proximate cause of the accident and therefore no recovery
could be allowed.? That there are cases where such a hold-
ing is proper is clear, but the statute does not fix any defi-
nite speed at which a driver may drive. It merely requires
that the speed be reasonable and prudent and appropriate
under the existing conditions and surrounding circum-
stances. The test which it provides is very similar to the
common law test of negligence. What rate of speed con-
stitutes negligence or a violation of this statute under the
conditions shown by the evidence is a matter about which
there is room for reasonable disagreement; such being the
ease, a jury question is presented.* The statute does not
require that a driver in approaching a railway grade cross-
ing must always drive at a rate of speed at which he can
stop instantly. He is only required to drive at a reasonable,
prudent and appropriate speed under the conditions having
regard to the actual and potential hazards. The fact that
in looking back we can see that it would have been safer had
the automobile been driven slower does not prove a viola-
tion of the statute, that can be determined only by taking
into consideration all the facts and circumstances known
or which should have been known to the driver as he ap-
proached the crossing. Under the circumstances here shown,
a finding that the driver was free from negligence was not

18ee See, 577-118, U.C.A.1948, subdividsions (a) and (c).

2See Papageorge V. Boston & M. R. R. Co., 317 Mass. 285, 57 N.H.2d
BT6.

3Lynch V. Pennsylvania Ry. Co., 48 Ohio App. 295, 194 NE. 81;
Carlin v. Thompson, 284 Iowa 469, 12 N.W. 2d 224; Davis v. Pere
Marquette Ry. Co., 241 Mich. 166, 216 N.W. 424; Boyle v. Lehi Transit
Co., 150 Pa.Super. 86, 27 A.2d 682.
‘See Horsley v. Robinson, 112 Utah 227, 186 P.2d 592.

unreasonable; a jury question was therefore presented and
we cannot overrule the jury’s conclusion.

Defendant further argues that there is no evidence that
plaintiff’s driver would have commenced trying to stop the
automobile sooner had he received earlier warning that the
locomotive was approaching. They cite a number of cases
all involving the failure to sound a whistle at a time when
the train was not within the range of the driver’s view,
where the driver had slowed down in anticipation of the
approaching train but found to his surprise that the road
was more slippery than he anticipated. None of these
cases involve the failure of a watchman on the job to at-
tempt to flag down approaching traffic to avoid a collision
with an approaching train. The signal of a crossing watch-
man continuously waving a red light to signal the driver
to stop is usually much more direct and effective in bring-
ing home to the driver that there is a train approaching
than a mere single whistle when even the track is not in
sight. There is no suggestion in the evidence that had the
watchman constantly signaled’ the traffic to stop while
the locomotive was approaching the driver would not have
tried to stop sooner. He did try to stop as soon as he had
reason to believe that a train was approaching. It is but
natural for a driver to obey a watchman’s continuous signal
to stop on an occasion like this one, and there is nothing
in the record which tends to show that he would have re-
fused to obey such a signal had it been given earlier, or
that he would have been unsuccessful in such case.

5See Lavallee v. Boston & Maine R. R. Co., 89 N.H. 828, 197 A. 816;
Umlauft v. Chicago M. & St. P. R. R,, 288 Wis. 391, 289 N.W. 628;
Hickey v. Missouri Pac. R. R, Corp., 8 Cix., 8 F.2d 128; Stroud v.
Chicago M. & St. P. Ry. Co., 75 Mont. 884, 243 P. 1089. Defendant
also cites a line of Utah cases including Haarstrich v. Oregon Short
Line Railroad Co., 70 Utah 552, 262 P. 100, which are obviously not
in point here.

|

Defendants contend that the findings of the jury do not
sustain the judgment. They argue that the determinative
issue in this case was whether the defendants failed to
give reasonable warning of the approach of the loco-
motive, that if they did give such warning the fail- i |
ure to give the warning in the manner specified in
the questions answered by the jury was immaterial. Al-
though no such question was proposed by defendants, it
would have been proper in the interest of clearly presenting
that problem to the jury to submit such issue to the jury but
the failure to do so was not prejudicial. The finding that
the failure to give the warning in the manners specified
in the questions proximately caused the collision is in effect
a finding that no reasonable warning of the approach was
given and the jury could not have failed to so understand
that such was the effect of their answers. So we conclude
that the failure to directly present that issue was harmless.

We also do not agree with defendants’ contention that the
amount of the verdict was so excessive as to require a hold-
ing as a mater of law that the jury was actuated by passion
and prejudice. We recently said that where

“the verdict is so execessive as to show that it must have been moti-
vated by prejudice or ill will * * * it should be unconditionally
set aside.”6

But we find no case where this court has held that
as a matter of law passion and prejudice were shown [qj
merely by the excessive amount of the verdict so we
have not indicated how great an amount or percentage of
reduction would be required to make such a showing but
we have approved reductions as high as 70 per cent of
punitive damages, or about 68 per cent of the total verdict.”
Here there was no other evidence of passion and preju-
dice. The trial judge evidently concluded that the verdict

“Wheat v. Denver & R. G. W. R. R. Co., 122 Utah 418, 250 P. 2d 982.
"See Falkenberg v. Neff, 72 Utah 258, 269 P. 1008; also following
chart prepared by defendants.

was not so tainted, In Wheat v. Denver & R. G. W. R. R. Co.,
supra, we stressed that in case of doubt the deliberate action
of the trial court should be followed. Here the reduction
was justified but there was no other evidence of passion and
prejudice.

It was not error to refuse to allow defendants additional
time to argue the question of damages. The limitation on
their time was the result of their own stipulation, and was
not imposed upon them by the court. They used all
of their time and more in the main argument, know- | |
ing that if the jury found against them on the ques-
tions of negligence, under their stipulation they would have
no time left to argue the question of damages. Under these
circumstances the court was not arbitrary in enforcing
their stipulation against them although under the circum-
stances it might have been better to have granted them
some additional time to argue this question. We affirm
the judgment with costs to respondent.

WOLFE, C.J., and McDONOUGH and CROCKETT, J.J.,
concur.

HENRIOD, J., concurs in result.

Name of Case Approximate %
Amount — Remission of Net Verdict
of net Approved — Constituting

Jury Verdict by this Court Remission
Duffy v. Union Pac. R.
Co., Utah, 218 P.2d

1080 $ 9,000.00 $ 4,000.00 44.4%
Mecham v. Foley,..

Utah,. .285 P.2d 497 1,000.00 500.00 50%
Pauly v. McCarthy, 109

Utah 481, 184 P.2d 23 50,000.00 15,500.00 30%
Geary v. Cain, 69 Utah

840, 255 P. 416 20,000.00 9,500.00 AT%

Bleganti v. Standard
Coal Co. 50 Utah
585, 168 P. 266

8,400.00 1400.00 41%

Stephens Ranch &

Livestock Co. v.

Union Pac. R. Co., 48

Utah 528, 161 P. 459 8,250.00 1,867.50
Kennedy v. Oregon 7

Short Line R. Co., 18

Utah 825, 54 P. 988 9,685.00 2,600.00
Bourne v. Moore, 17

Utah 184, 292 P. 1102 17,850.00 8,850.00
Sheperd v. Payne, 60

Utah 140, 206 P. 1098 10,000.00 2,500.00

In re MADSEN’S ESTATE
MADSONIA REALTY CO. v. ZION’S SAVINGS
BANK & TRUST CO. et al.

No. 7589. Decided June 26, 1958. (259 P. 2d 595.)

ry
3

See 87 C.J.8. Frauds, Statute of, sec. 252. Part performance of oral
agreement within statute of frauds. 49 Am. Jur., Statutes of Frauds,
sec, 419; 59 A.L.R. 1805.

McKay, Burton, Nielsen & Richards, George M. Mc-
Millan, Hadlond P. Thomas and Frank Armstrong, Salt
Lake City, for appellants.

G, A. Marr and Paul B. Cannon, Salt Lake City, for
respondent.

NELSON, District Judge.

This case was commenced by the Madsonia Realty Com-
pany filing a petition in the Probate division of the Dis-
trict Court in the matter of the Estate of Richard W.
Madsen, deceased, asking for an order directing the exe-
eutor in said estate to execute and deliver to Madsonia

382 Leen!
ee

Realty Company a deed to certain porperty known as 667
East 1st South Street, Salt Lake City, Utah, and more
particularly described as follows:

“Commencing at the Southeast Corner of Lot 1, Block 60
Plat ‘B’, Salt Lake City Survey, and running thence North
160 feet; thence West 99 feet; thence South 160 feet; thence
Hast 99 feet to the place of beginning.”

It was alleged by the petitioner that on or about January
1, 1987, Richard W. Madsen sold to petitioner, Madsonia
Realty Company, the land above described. Petitioner
further alleged that no formal deed was ever executed or
delivered by the said Richard W. Madsen to the Madsonia
Realty Company, but there was an agreed price of $10,680,
which was paid by the said Madsonia Realty Company to
Richard W. Madsen; that at the time of the said sale
Richard W. Madsen was president and general manager
of the said Madsonia Realty Company and also kept the
account books of said company; that as of January 1, 1937,
the said Richard W. Madsen, as general manager of said
company and as the bookkeeper thereof made a record of
sale by entering the same on the journal and ledger account
of said company; that no actual cash or money was de-
livered to said Richard W. Madsen, but his account was
credited in the amount of said purchase price and the
property was thereby paid for in full.

Subsequently the defendant, LaReta C. Madsen filed a
demurrer and answer to said petition and an answer was
filed by the executor. The District Court directed a transfer
of the matter to the Civil Division of the court, and the
matter was tried as a civil suit.

LaReta C. Madsen maintained that the purported sale
or conveyance of any property or interest in any property
by Richard W. Madsen to the Madsonia Realty Company
as described in the petition of the said company was void
by reason of the provisions of Section 33-5-1 Utah Code
Annotated 1948, and the provisions of Sec. 33-5-3 and Sec-

tions 104-2-6 and 104-2-23 Utah Code Annotated 1943; the
said LaReta C. Madsen further alleged that on the 30th
day of October 1935, she and Richard W. Madsen were
married and ever since said date, to and including the date
of the death of the said Richard W. Madsen on May 17,
1948, were husband and wife; that at the time of the mar-
riage of the said parties Richard W. Madsen was the sole
owner of the premises at 667 East ist South Street, Salt
Lake City, and more particularly hereinbefore described.
She further alleged and maintained that she received no
consideration for any sale or contract to sell, and at no time
released or conveyed to the Madsonia Realty Company any
interest in the said premises.

LaReta C. Madsen further set out that on June 6, 1946,
she and her husband Richard W. Madsen entered into a
uniform real estate contract of sale wherein they agreed
as vendors to sell and convey the aforesaid real property
to James O. Peterson and C. Amelia Peterson for a con-
sideration of $16,500; that at the time of the execution
of said contract to James O. Peterson and C. Amelia Peter-
son, the said LaReta C. Madsen believed and was led to
believe by Richard W. Madsen and Madsonia Realty Com-
pany that said property was the property of Richard W.
Madsen only; that at no time has the said LaReta C. Mad-
sen relinquished her dower in and to said real property
to Richard W. Madsen, to the heirs or devisees or creditors
of Richard W. Madsen or to Madsonia Realty Company, and
that she is entitled to her statutory interest in and to said
property as the surviving widow of Richard W. Madsen, de-
ceased.

That the said Madsonia Realty Company has no title,
right or interest in or to any of the property as herein-
before set out and described, and that she as one of the
parties to the contract of sale of said property to the Peter-
sons as aforesaid, is entitled to have assigned to her by the
Court not more than one-half nor less than one-third of
all sums paid under the contract.

334 ee
|

The executor herein defended the action on the theory
that there was no writing to satisfy the Statute of Frauds
(Utah Code Annotated 33-5-1, 1943), and no writing sub-
seribed as required by 33-5-3 of the Utah Code Annotated,
1948, and that the action was barred by applicable Statute
of Limitations, citing Utah Code Annotated 104-2-5, 22(2),
23 and 30.

Upon the trial the District Court established the follow-
ing facts:

That Madsonia Realty Company is and since 1923 has
been a corporation of the State of Utah. That Richard W.
Madsen died on the 17th day of May, 1948, and thereafter
on June 2, 1948, Letters Testamentary were issued to Zion’s
Savings Bank and Trust Company as executor of the last
will and testament of Richard W. Madsen, deceased. That
LaReta C. Madsen and Richard W. Madsen were married
October 30, 1935, and said parties continued as husband
and wife to the date of death of Richard W. Madsen. That
at and prior to the time of the said marriage Richard W.
Madsen was the sole owner of the premises located at 667
East 1st South Street, Salt Lake City, Salt Lake County,
Utah.

That on or about January 1, 1987, Richard W. Madsen by
oral agreement sold to Madsonia Realty Company the prop-
erty above described for $10,680. Richard W. Madsen evi-
denced said sale by entering the same on the books of Mad-
sonia Realty Company in his own handwriting, he being
president, general manager and bookkeeper of said com-
pany. Richard W. Madsen received the full consideration
but failed to deliver a deed to said property. That from
January 3, 1937, to June 6, 1946, Madsonia Realty Company
collected all the rents from said property, paid all the taxes
on the same, and paid all upkeep and repair of said prop-
erty. The said property was occupied by tenants of said
Madsonia Realty Company from January 1, 1937, to June
6, 1946.

835

That on the 6th day of June, 1946, said property was
sold to James O. Peterson and C. Amelia Peterson, his wife,
for the price of $16,500. That the contract was evidenced
by an instrument in writing signed by James O. Peterson
and his wife as buyers and by Richard W. Madsen and
LaReta C. Madsen, his wife, as sellers. That Richard W.
Madsen was in fact acting for and on behalf of Madsonia
Realty Company in the signing of the said contract. That
Richard W. Madsen entered the sale of the property on the
books of the Madsonia Realty Company and credited the
buyers on the books of the said company with all payments
made on the contract. That the contract provided for down
payment of $4,000 and monthly payments of $125. That
Richard W. Madsen caused the profit made by the Mad-
sonia Realty Company on the transaction to be entered upon
the books of account of said company, and made showing of
the profit on income tax returns of the Madsonia Realty
Company.

Court further found that LaReta C. Madsen signed the
said contract of June 6, 1946, voluntarily as the wife of
Richard W. Madsen, and without any misrepresentations
made to her by Richard W. Madsen or any other person
as an inducement to sign said contract. That LaReta C.
Madsen signed said contract for the purpose of and did
release her statutory dower right in said property pur-
suant to Section 101-4-8 Utah Code Annotated, 1948. That
at no time did Richard W. Madsen or any other person
promise LaReta C. Madsen all or any portion of the pur-
chase price for said property. That during a period from
April 8, 1936, to March 29, 1937, Richard W. Madsen trans-
ferred to LaReta C. Madsen from his account in the Mad-
sonia Realty Company to her account in said company
$8,567.50 and during the time of their marriage Richard
W. Madsen, transferred to LaReta C. Madsen, his wife, in
addition to living expenses, money, and property of a value
of not less than $49,000. That Richard W. Madsen left a
last will and testment which has been admitted to probate

336 ee
|

in this Court, and LaReta C. Madsen has elected to take
under said will and does not renounce the provisions there-
of in her favor. That neither at the time of the execution of
the Peterson contract on or about June 6, 1946, nor at any
time prior thereto did LaReta C. Madsen know that Mad-
sonia Realty Company had or claimed any right, title or
interest in or to the aforesaid property.

The Court ordered, adjudged and decreed:

(1) That Zion’s Savings Bank and Trust Company as
executor of the last will and testament of Richard W.
Madsen, deceased, execute and deliver to Madsonia Realty
Company, a corporation, a deed transferring all its
right, title and interest as the executor of the last will i |
and testament of Richard W. Madsen, deceased, in-
cluding all the right, title and interest which Richard W.
Madsen had or owned at the time of his death in and to the
property hereinbefore described. That said transfer shall in-
clude an assignment of the interest of said Zion’s Savings
Bank and Trust Company as said executor in and to that
certain contract dated June 6, 1946, wherein Richard W.
Madsen and LaReta C. Madsen, his wife, appear as sellers,
and James O. Peterson, and C. Amelia Peterson, his wife,
appear as buyers, together with all moneys owing upon said
contract.

(2) That LaReta C. Madsen has released her statutory
dower right and has no present interest in or to the prop-
erty hereinbefore described.

(3) That LaReta C. Madsen has no right to or claim
upon any of the moneys which have been paid or which shall
hereafter be paid upon the Peterson contract nor is she
entitled to an accounting by the Madsonia Realty Company
or Zion’s Savings Bank and Trust Company as executor
of the last will and testament for any of the moneys col-
Jected or to be collected upon the Peterson contract.

(4) That Madsonia Realty Company is not entitled to an
order directing LaReta C. Madsen to execute a deed to
Madsonia Realty Company conveying said property to said
corporation.

(5) That Madsonia Realty Company is not entitled

to a decree quieting title to said property as against LaReta
C. Madsen.

(6) That LaReta C. Madsen is not entitled to have set
apart to her any statutory dower interest to said property.

The defendants below and appellants here assail the
judgment and decree of the District Court, and base their
appeal on four points, as follows:

Point No. One

The action of the plaintiff and respondent is barred by
the Statute of Limitations.

Point No. Two

That plaintiff failed to prove a compliance with the
Statute of Frauds.

Point No. Three

The lower court erred in its Conclusion of Law, wherein
it found
“That LaReta C. Madsen, by the signing of the contract to James O.
“Peterson and C. Amelia Peterson, released her statutory dower right

as provided by Section 101-4-8 Utah Code Annotated, 1948, and she
has no present interest in or claim upon said contract.”

Point No. Four
That the silence of Richard W. Madsen, Sr., and the plain-
tiff, and their failure to disclose the alleged interest of the
- plaintiff in the land at the time of the execution of the
Peterson contract, constituted a fraud upon Mrs. Madsen.

fo

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That plaintiff should be required to account to her for one-

third of the total sales price, and such relief to her should
be a condition to any relief to plaintiff in this action.

We shall consider the points relied upon by appellants
in the order in which they are presented.

Point No. One

In support of the position they take by Point One the
appellants refer to Sections 104-2-5; 104-2-22; 104-2-23;
104-2-80 Utah Code Annotated, 1948. They maintain the
District Court failed to indicate, in any manner,
whether the Statute was tolled in some respect or i |
by some act of the parties or what other reasons it
may have had for enforcing the alleged agreement admit-
tedly made on the ist day of January, 1937. We cannot see
where any question of tolling a Statute is here presented.
The question is what is the date when the time for perform-
ance can be measured. The lower court was not in error
in holding, in effect, that Richard W. Madsen, and his estate
are the trustees of the legal title of the property in ques-
tion for the benefit of the Madsonia Realty Company. At no
time after the making of the contract on January 1, 1937,
until the date of his death, May 7, 1948, did Richard W.
Madsen repudiate the rights of the Madsonia Realty Com-
pany. On the contrary he openly acknowledged the rights
of the company as set out in said agreement, and openly
acknowledged the fact that the Madsonia Realty Company
was the owner of the property in question. As to Point One,
appellants’ position is untenable for two reasons:

First, in no event was there a breach of trust by Richard
W. Madsen to the date of his death, May 17, 1948, and any
action taken subsequent thereto was within time of any
Statute mentioned by the appellants. There is noth-
ing in the record of this case which shows the i |
Madsonia Realty Company ever made a demand on
Richard W. Madsen for conveyance of legal title which
was refused by the said Richard W. Madsen. Nor does the

record disclose any repudiation by Madsen of the January
1, 1987, contract, nor does it show any hostile assertion or
holding by Madsen against the Madsonia Realty Company,
which would mar the relation, and other trust or fiduciary
relations which would be required to bring into operation
the Statute of Limitations, whether applicable Statute would
be 7 years, 6 years or 4 years. This Court has held that
such condition or conditions must exist before the Statute
of Limitations will begin to run. Hatch v. Hatch, 46 Utah
116, 148 P. 1096.

The second reason why appellants contention is wrong is:

The Madsonia Realty Company was in possession of the
property in question at all times subsequent to January 1,
1937. Until the contrary is established there is no valid
reason for one to presume that a trustee will not
fulfill his obligation. It could be assumed with confi- | |
dence by the Madsonia Realty Company that Richard
W. Madsen would abide by and fulfill the terms of the
January 1, 1937, contract. At no time did Richard W. Mad-
sen by word or conduct repudiate the said contract. Being in
possession the Madsonia Realty Company did not lose its
equitable title and estate by any of the Statutes of Limita-
tion pleaded, i.e., 104-2-5; 104-2-22; 104-2-23; 104-2-30 as
claimed by appellant. See 34 Am. Jur. 296, Section 381;
55 Am. Jur. pages 784-785, Section 357.

Point No. Two
In support of Point Two, appellants maintain:

(A) There was no memorandum reduced to writing.
See 33-5-1 Utah Code Annotated, 1948.

(B) No writing was subscribed by the parties to be
charged. See 35-5-3, Utah Code Annotated, 1943.

(C) Plaintiff proved insufficient part performance to
take the case out of the Statute of Frauds.

340 Leer
ee

We agree with appellants that there is no memorandum
reduced to writing and no writing was subscribed by the
parties, leaving only (C) for our consideration. This elimi-
nates the necessity for any review of the law cited in support
of (A) and (B). There was no instrument in writing
subscribed by Richard W. Madsen sufficient to meet the
requirements of the Statute of Frauds, but the record does
show that there was a substantial part performance of the
contract of January 1, 1937, sufficient to avoid the Statute
of Frauds.

The record justifies a finding that:
(1) There was a payment of consideration.
(2) That there was delivery of possession.

(3) The Madsonia Realty Company collected all of the
rents, paid all of the taxes, made all repairs and paid an
income tax on the profit.

This Court has adopted and followed the general
rule laid down by Besse v. McHenry, 89 Mont. 520, i
300 P. 199, which states:

“Part performance which will avoid statute of frauds may consist of
any act which puts party performing in such position that nonper-
formance by other would constitute fraud.” Hecles v. Kendrick, 80
Mont, 120, 259 P. 609; Shaw v. McNamara & Barlow, 85 Mont. 389,
278 P. 886; 27 C.J. pp. 843, 844; 37 C.I.8., Frauds, Statute of, § 249;
Utah Merewr Gold Mining Company v. Herschel Gold Mining Com-
pany, 108 Utah 249, 184 P.2d 1094.

It should be kept in mind the parties in this case cannot
be placed in a position of status quo. Richard W. Madsen
is now dead. Having accepted the consideration and hav-
ing surrendered possession his heirs and successors
in title and interest should not now be allowed to | |
repudiate the contract. Such an act would in fact
constitute a fraud. We are cognizant of the charge that
the Madsonia Realty Company was an alter ego of Richard

W. Madsen, a cabal created for some sinister purpose. The
fact remains, however, that under the law they are two
distinct persons and for the purposes of this case must be
so considered.

It is provided by 33-5-8 Utah Code Annotated, 1943,
that nothing in the chapter on Fraudulent Conveyances
shall be construed to abridge the powers of courts
to compel specific performance of agreements incase [jl
of part performance thereof. In the exercise of such
power, we have held in Adams v. Manning, 46 Utah 82, 148
P. 465 that: Lf plaintiff relies upon a parol contract of sale,
the “first essential” is to establish contract by competent
evidence. And in order to

“make possession available as part performance, it must appear that
it was given or taken in pursuance of a parol contract proved;”

such possession must be notorious, exclusive

“and of the very tract of land which was the subject of the contract,
* * % the possession should be established without qualifications
or doubt.”

We hold the record supports the District Court’s finding
that the requirements set forth in the case quoted have been
met in this case. In support of Court’s ruling see Barrett
vy. Vickers, 100 Utah 584, 116 P.2d 772; Anderson v. Cer-
cone, 54 Utah 345, 180 P. 586; Wheelwright v. Roman, 50
Utah 10, 165 P. 518; Price v. Lloyd, 31 Utah 86, 86 P. 767,
8 L.RAN.S., 870.

We hold the record supports the conclusion that the
agreement between Richard W. Madsen and Madsonia Real-
ty Company was to sell the entire fee simple interest in the
property situated at 667 Hast 1st South, Salt Lake City,
Utah.

Point No. Three

Appellants Point Three raises the question, ie. did
LaReta C. Madsen in the signing of the contract of sale to

342, ee
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James O. Peterson and C. Amelia Peterson release her
statutory right of dower. To answer this question it will be
necessary for us to consider in a general way the subject
of dower.

Utah has by 101-4-9, Utah Code Annotated, 1948, abol-
ished common law dower, and has substituted therefor the
provisions of Section 101-4-3, Utah Code Annotated, 1943.
This section in part provides:

“One-third in value of all the legal or equitable estates in real
property possessed by the husband at any time during the marriage,
to which the wife has made no relinquishment of her rights, shall be
set apart as her property in fee simple, if she survives him * * *.”

The principle of dower is expressed in the Statute, and
is maintained though the form of administration has been
changed.

We shall therefore speak of the rights granted by the
above section as statutory right of dower, or statutory
right in lieu of dower. So considered an inchoate right of
dower is the legal right or interest, or the expecta- .
tion of a future right or interest which a wife ac- [x
quires by marriage in the legal or equitable estates
in real property possessed by the husband at any time
during the marriage. We recognize it to be the fact the
right of dower or its statutory equivalent has always been
highly favored in the law. It is one of the most ancient of
our principles, dating back into antiquity. So much is it
part of our institutions that as Lord Bacon said in 1641,
“The law favors three things—tife, liberty, and dower.”
The wife’s sustenance is a matter of great concern. The pur-
pose of the law is to assure proper support of the widow
after the death of her husband.

The record shows that at all times between the date of
marriage October 30, 1935, and the date of his death on
the 17th day of May, 1948, LaReta C. Madsen had been a
true and loyal wife to Richard W. Madsen. That al-
though there was a great difference in age, yet each J
had found happiness in their association with the

other, and that she had tenderly administered to him in
time of need and distress. Mrs. Madsen was a young woman
of beauty and charm. In her Mr. Madsen found love, de-
votion and loyalty, resulting in his happiness. She was en-
titled to all she received. It is true Mr. Madsen was a man
of wealth, but we cannot probe for reasons why more was
not given to her. It also appears that with them periods
of dissonances were fewer than with most married people.
Nevertheless it is true that the courts cannot preserve and
hold for a ‘widow something which she has voluntarily sold
or disposed of. Dower cannot be revived at the cost of a
wife’s liberty to contract. The Court cannot arbitrarily
vitiate a sale that has been voluntarily made. The granting
of dower in Utah is a matter of statutory regulation, as is
the disposition of such right. The right of dower, its use
and its loss or disposal are determined by the laws exist-
ing at the time. Dower is not a part of the marriage con-
tract, although marriage is a prerequisite. It is a right
arising, existing and passing by the operation of law.
We have heretofore held that

“py constitutional provisions and statutory enactments the common-
law disabilities of married women have been abrogated, and married
women are in all respects, with reference to their separate property
and power to contract, on the same footing as other persons.” Wil-
liams v. Peterson, 86 Utah 526, 46 P.2d 674, 679; Morrison, Merrill &
Co. v. Clark, 20 Utah 482, 59 P. 235, 77 Am.St.Rep. 924; 40-2-1 Utah
Code Annotated, 1948; 40-2-2 Utah Code Annotated, 1948; 40-2-3 .
Utah Code Annotated, 1943; 40-2-6 Utah Code Annotated, 1948.

A married woman in this State has been emancipated
in civil and political affairs. Thus she can convey or in-
eumber the real property she owns, and may otherwise
control the same, or lease or contract with reference
thereto the same as any other person. Such liberty
carries with it corresponding responsibilities and lia-
bilities. We are of the opinion and so hold that a married
woman, being able to buy, sell, own and dispose of real
property as freely as her husband is subject to the rules

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of estoppel. Release of dower is based on the principle of
estoppel rather than contract. A husband has the whole
legal title to his property while he lives. The wife’s right
of dower is a dependent right; it is not certain, but rather
a possibility, coming from or growing out of a coming
event. It does not affect the seisin of the husband’s grantee.
He acquires the title that vested in the husband by the deed.
The grantee has legal title encumbered by the dower unless
the wife has by a proper written instrument freed the title
of the encumbrance. A married woman although under
coverture at the time may by any legal form of conveyance
divest herself of her dower right, and such conveyance will
operate as an estoppel. To permit her to repudiate her
act would be to allow her to nullify the very thing she has
by law been permitted to do. See Johnson v. Mutual Life
ins. Co., 118 Ky. 871, 69 S. W. 751; Ratcliff v. Coleman,
241 Ky. 791, 45 S.W. 2d 498; 141 A.L.R, 487.

Appellants contend and the lower court found that Rich-
ard W. Madsen signed the Peterson contract as trustee of
the Madsonia Realty Company. Appellants further main-
tain that LaReta C. Madsen joined with Madsonia
Realty Company in the signing of the Peterson con- ||
tract and not with Richard W. Madsen acting in the
capacity of her husband, and therefore, she did not re-
linquish her dower in the land by joining with her husband
in his signing of the Peterson contract. In support of their
position appellants cite a number of authorities. Seribner
on Dower, Edition, Vol. 2, page 307; Robinson v. Bates, 1841,
83 Metc., Mass. 40; Tiffany on Real Property, 3rd Edition,
Vol. 2; French v. Peters, 33 Me. 896; Fulk v. Robinson, 140
Ark. 212, 215 S.W. 674; Page v. Page, 6 Cush., Mass., 196.

All these authorities may be distinguished from the case
at bar by the fact that LaReta C. Madsen did actually
join with Richard W. Madsen in the same instrument. The
fact that Richard W. Madsen executed the Peterson con-
tract as a representative of the Madsonia Realty Company

did not change his marital status, and when LaReta C. Mad-
sen signed the same instrument with him she signed as his
wife, and in so doing relinquished her inchoate right of
dower in the realproperty covered by that contract. The
record supports the trial court’s finding that she signed the
contract with her husband, and in so doing enabled him to
contract for the passing of title free from her inchoate right
of dower. She is now precluded from repudiating her act
or claiming against the contract she executed, by asserting
a divested right. To permit her to do so would allow her
to perpetuate a wrong, contrary to law and equity. Her
renunciation of dower is to attend the act of her husband
in that agreement, to endure as long as it endures; and no
longer. If the acts of her husband in the execution of that
contract are for any reason avoided, the right of her dower
remains unimpaired.

The appellants and respondents have raised the questions:
(a) Can a wife relinquish her dower right to her husband,
and (b) Must the act of conveyance or relinquishment be by
the same instrument with her husband, or may it be accom-
plished by the wife in a separate instrument. These ques-
tions we need not answer in this case, because they are
not germane to the decisive issues in this case. The facts of
this case are different. Here the wife LaReta C. Madsen
did join with her husband in the execution of the Peterson
contract. See Fowler v. Chadima, 1907, 184 Iowa 210, 111
N.W. 808; 17 Am. Jur. 716. There definitely is a privity
of contract between Madsonia Realty Company and the
Petersons, and Madsonia Realty Company is obligated to
deliver “title. LeCroy v. Cook, 211 Ark. 966, 204 S.W. 2d
178, 1 A.L.R. 2d 1082.

We are of the opinion and so hold that a wife can, with-
out additional consideration to that inuring to her husband,
release her statutory dower right. The consideration need
not move to her directly. She benefits in the con-
sideration reaching her husband and in his enrich-
ment. She may, however, take a consideration as a con-

346 es
en}

dition of releasing dower. A wife can sell her own interest

“when upon a sufficient consideration moving directly to her, or upon
a consideration moving to her husband in the sale * * * of his

she executes a formal release. Fowler v. Chadima, 1907,
184 Iowa 210, 111 N.W. 808, 810. See 28 C.J.S., Dower,
§ 65, pages 188-189. See Brumer v. Brumer, 223 App. Div.
186, 228 N.Y.S. 63; In re McBride’s Estate, 253 Mich. 305,
235 N.W. 166; Marshall v. Reed, 237 Mich. 336, 211 N.W.
687; In re Brown’s Estate, 140 Or. 615; 14 P.2d 1107. In
so holding we dispose of argument 3 under Point Three of
Appellants’ Points. The wife has only one right of dower
in one piece of property. If she divests herself of that right
she no longer has it. It is not a question of resuscitating
a dormant right. The right she had is gone, it no longer
exists. To hold otherwise would mean a complete release of
dower could never be effected. Whatever interest, if any,
a husband may have in a contract of sale, is not subject to
wife’s dower, when in absence of fraud, the wife has volun-
tarily disposed of such right. The lower court did not err
in finding and concluding Mrs. Madsen has no interest
in the land.

Point No. Four

In considering Point Four of points relied upon by ap-
pellants we must answer one question: Was a fraud: per-
petrated upon Mrs. LaReta C. Madsen in securing her sig-
nature to the Peterson contract. It is not for us to collate
all the activities of Richard W. Madsen. It may well be that
all his business transactions were not beneficient or produc-
tive of benefit to his wife. Yet on the whole it does appear
that she was well provided for during the time she and
her husband cohabitated with each other, having received
from her husband (in addition to all living expenses) gifts,
money and property of not less than $49,000. (R. 78, Find-
ing No. 8) Living in the Hotel Utah with every conven-

ience, she certainly was no scullion. There is no evidence
of antipathy between Mr. and Mrs. Madsen, nor can we
find any disparagement of one by the other at any time.
It may be true that Mr. Madsen was imperious in conduct,
but certainly he was no chameleon, nor was he malevolent.
He loved his wife and wanted her to have the best. As is
always true — there is conduct that is impervious, but this
would not justify a conclusion that he willed to delude his
wife. In the signing of the Peterson contract there is no
evidence of beguilement by Mr. Madsen.

Richard W. Madsen, a malapert person, mastered the
technique of his business. He became an expert in his work
by acquiring a knowledge of details and procedure essential
to expertness in the execution of his work. In paying taxes
his was not a recalcitrant reaction, but rather an adroit
solution. He was not a sycophant but a skilled manipulator.
This may explain the reason for the creation of the Mad-
sonia Realty Company. This company was not a canard
for the public, but a means of conducting his business to
reap the greatest net return. In all this his wife reaped
a profit. He first had to acquire before he could give to her.
This may explain the sale of the property to the Petersons,
rather than an evil intent to cheat his wife out of any
rightful inheritance that may have been hers. In any event
to uphold the appellants or Point Four we must find in his
conduct, by word or act, that he intended to and did deceive
his wife and thereby induced her to sign the Peterson con-
tract. This we cannot do. The record would not support
such a finding. Where a couple lived as happily with each
other as the Madsens, we realize we must exercise care
in reaching a conclusion. The record does not disclose that
he was ever captious with his wife. Rather it shows they
both were conversant with the conduct of each other and
open and frank in their relations. There is no evidence
of any brabbling between them. On the whole theirs was a
harmonious relationship. It is doubtful that Mrs. Madsen

348 ee
ee

thought her husband was pernicious — that he was cor-
rupt or would undermine her interest — that he would
wilfully deceive her. As time goes on she will come to think
of her husband’s wrongs as venial. To say she was not
graciously and generously treated is a calumny. It must be
borne in mind he had children he loved by a former wife.
He lived with a memory of his children’s mother. There was
a filial duty arising therefrom. When it comes to disposing
of property and money amongst relatives one seldom acts
out of experience. “Hxperience is like the polestar; it only
guides a man in the evening, and rises when he has gone
to rest.” Could Mr. Madsen have foreseen what was to
follow he would have exercised greater care in the prepara-
tion of his will.

Fraud is clearly defined in the case of Jesse
French Piano & Organ Co. v. Gibbon, Tex.Civ.App., wf.
180 S.W. 1185, 1187 as follows:

“¢Praud is defined to be any act, omission, or concealment, which
involves a breach of legal duty, trust, or confidence justly reposed,
and is injurious to another, or by which an undue and unconscientious
advantage is taken of another; and it may be collected and inferred
from the nature and circumstances of the transaction’ ”.

The record in this case does not disclose any act of af-
firmative misrepresentation. Richard W. Madsen did not
tell his wife any untruth before or at the time she signed
the Peterson contract. He did not give any fake in-
formation of the facts which misled his wife. Mrs.
Madsen admitted she discussed the Peterson contract
with her husband; “that he brought the contract to their
home and she signed it.” That he told her it was a contract
to “convey our home.” There is no testimony by Mrs. Mad-
sen that in their discussion Mr. Madsen deceived her in any
way. She knew she was signing a contract of sale which
involved the transfer of title to her home and by which
she was divesting herself of her dower right. She then
made no inquiry as to any of the things of which she now

349

complains, i. e., the money from the sale was not placed in
joint bank account; that the money was going to the
Madsonia Realty Company; that her husband was acting
as a fiduciary of the corporation; that she had never been
informed of the interest Madsonia Realty Company had in
the property; that her husband had already sold property
to Madsonia Realty. If there was fraud by Richard W.
Madsen we must find it in some omission or concealment
of material fact or facts. We agree with counsel for ap-
pellant that a husband owes to his wife a high degree of
good faith, and that

“husband and wife occupy a relation of special trust and confidence,
and when such relationship is abused, equity will intervene to right
the wrong.”

We further agree with counsel that Madsonia Realty
Company would be charged with the fraud of Richard W.
Madsen if fraud had been perpetuated by him. A diligent
examination of the record does not show that LaReta C.

* Madsen was directly or indirectly misled, or that by af-
firmative misrepresentation or omission or concealment
she was confused, or her judgment affected, or that she
had been made the victim of a person who was wilful, im-
portunate or cunning. See Pursley v. Wikle, 118 Ind. 189,
19 N.E. 478, 480; Shirk v. Mitchell, 187 Ind. 185, 86 N.E.
850.

It appears that Mrs. Madsen did know of the sale of the
property by her husband to the Madsonia Realty Company.
She knew the position he held and in a general way of
his responsibilities. The Madsonia Realty Company was
entitled to the money paid by the Petersons. Mr. Madsen
had been paid $10,680 for the property. Mrs. Madsen
benefitted from money paid to her husband. Not only that
but Mrs. Madsen received $3,567.50 of which $1,187.50 had
been paid to her after the sale of the home, from funds due
her husband from Madsonia.

350 ee
ee

To find for Mrs. Madsen on this Point the lower ||
court would have had to find:

(1) A representation by Richard W. Madsen of a mate-
rial fact relative to securing the signature of Mrs. Madsen
on the Peterson contract.

(2) That such representation was false and Richard W.
Madsen knew at the time of the signing it was false.

(3) That Mrs. Madsen relied upon the representation
believing it to be true.

(4) That Mrs. Madsen was damaged by reason of her
reliance on the representation which was false.

The record would not support any of such findings and
therefore the lower court was not in error in finding,

“That LaReta C. Madsen signed the contract of June 6, 1946, volun-
tarily as the wife of Richard W. Madsen, That there were no mis-
representations made to LaReta C. Madsen by Richard W. Madsen or
any other person as an inducement to sign said contract, and that
Mrs. Madsen signed the contract for the purpose of releasing her
statutory dower right.”

The authorities cited by appellants with regard to their
claim of fraud are not in point. In the cases of Nissen v.
Nissen Trampoline Co., 241 Iowa 474, 39 N.W.2d 92, and
Kratli v. Booth, 99 Ind.App. 178, 191 N.E. 180, there were
affirmative misrepresentations by the husband. As we
uphold the lower court in ordering the executor to execute
a deed we need not consider Point Two of respondents’
cross appeal.

We sustain the trial court in refusing to order LaReta
C. Madsen to give a deed. We agree with the trial court
that her agreement was only to give a deed to the vendees
when payment was completed, and an order now
would. be premature. Even if in signing the Peter- | |
son contract Mrs. Madsen relinquished her statutory
dower, yet if the Petersons defaulted in their contract it

351

may be that Mrs. Madsen should never be required to deed
the property to them. By signing the Peterson contract
she relinquished to them her dower right. It may be a
forfeiture of the Peterson contract would not restore her
dower, yet in such event she would not be required to do
some act which would be contingent upon an act being
performed by the Petersons. Until the Petersons have paid
the purchase price as called for by the contract Mrs. Mad-
sen cannot be compelled to deed the property to them.

Judgment of the trial court is affirmed. Costs to re-
spondent.

McDONOUGH, J., concurs.
WADE, J., concurs in the result.

WOLFE, Chief Justice (concurring).

I concur but desire to state my reasons why I think Mrs.
Madsen is not entitled to any of the proceeds which have
been and which will be received from the Peterson contract.

Mr. Richard W. Madsen orally agreed to convey the
property in dispute to the respondent corporation in 19387
at which time the latter paid him the purchase price and
went into possession. There being part performance of that
oral contract, the executor of Mr. Madsen’s estate cannot
plead the statute of frauds as a bar to the respondent’s
action. However, Mrs. Madsen was not a party to the
oral agreement which her husband made with the respond-
ent nor did she at any time agree, either orally or in writ-
ing, to convey the property to the respondent. Not only
was she not a party to any agreement with the respondent,
but the trial court found in its finding of fact no. 10 that:

“* ¥* * neither at the time of the execution of the Peterson con-
tract on or about June 6, 1946, nor at any time prior thereto did
defendant, LaReta C. Madsen, know that Madsonia Realty Company
had or claimed any right, title or interest in or to the aforesaid pro-
perty; that at no time did either Richard W. Madsen, personally, nor

352 ee
Le}

did any agent, officer or employee of Madsonia Realty Company, take
any step whatsoever to put said LaReta C. Madsen on notice of any
claim or interest by the said corporation.” (Italies added.)

The only contract which Mrs. Madsen entered into with
regard to the property was the Peterson contract, wherein
she and her husband agreed to convey the property to the
Petersons for $16,500. Mrs. Madsen, however, was not a
joint owner of the property. The only interest which she
had therein was her inchoate statutory right of dower.
The purpose of her joining in the Peterson contract was
to relinquish that right. When a wife joins in a contract
to sell realty owned entirely by her husband for the pur-
pose of relinquishing her statutory right of dower, she
acquires no interest in the proceeds of the sale. In re
Brown's Estate, 140 Or. 615, 14 P.2d 1107; In ve McBride's
Estate, 258 Mich. 305, 285 N.W. 166; Marshall v. Reed, 237
Mich. 336, 211 N.W, 637.

Mrs. Madsen has no interest in the proceeds by virtue
of being bequeathed by her husband one-third of his per-
sonalty. The balance due upon the Peterson contract at
the time of Mr. Madsen’s death belongs not to his estate,
but to the respondent corporation to whom he sold the
property in 1987.

Nor does she have any statutory dower in the proceeds.
As has been pointed out, all moneys paid or to be paid by
the Petersons under the contract belong to the respondent.
But even if the proceeds did belong to the decedent, they
are personalty in which the statutes of this state give a
widow no dowable interest.

HENRIOD, J., not participating.

CROCKETT, J., having disqualified himself, did not
participate.

DESERET LIVESTOCK CO. v. SHARP et al.
No. 7868. Decided July 21, 1953. (259 P. 2d 607.)

See 26 CJ.S. Dedication, sec. 51. Prescription, way acquired by.
17 Am.Jur. Easements, sec. 100; 47 A.L.R. 552.

McKay, Burton, Nielson & Richards, Salt Lake City,
for appellant.

Anderson & Cannon, Salt Lake City, for defendants,
respondents and cross appellants.

Edward W. Clyde, Salt Lake City, for intervener, re-~
spondent and cross appellant.

McDONOUGH, Justice.

Plaintiff is a large livestock company, owning and leas-
ing strategic tracts of land in Skull Valley with the value
and use of said lands being limited to the grazing, pas-
turing and driving of livestock, particularly sheep herds.
A trail, intermittently obscured by alluvial fans, meanders
up the east side of the valley crossing mostly over land of
public domain but customarily crossing over plaintiff's
land in order to avoid natural obstacles and certain plant
growths which are noxious to hungry sheep. This trail
has been used for vehicular traffic and has been traveled by
various sheep outfits, including those of plaintiff, defendant
and intervener, and their predecessors in interest, for over
50 years. Burnt Springs is a spring adjacent to this trail,
flowing upon land owned by plaintiff, but used by the
herds as they travel over the trail. A fence, enclosing the
spring, was erected by plaintiff in 1947.

356 |

Defendants and intervener, since 1939, have jointly
owned and operated approximately 11,000 sheep. They
have utilized the above trail twice each year and have
watered their stock at Burnt Springs while so doing. In- |
tervener, or its predecessor, has operated in this manner _
for over half a century. This controversy arose in 1947
when defendants and intervener utilized the above trail
and grazed off portions of the land prior to the time plain-
tiff had fully utilized these lands for its own sheep. Plain-
tiff sued for alleged trespass and sought injunctive relief
and punitive damages. Defendants and intervener denied
the trespass and alleged that they had the right to trail
over the lands of plaintiff by reason of a public “high
road”,—the aforementioned trail—,which was “not less
than 150 feet in width,” and by reason of an easement ob-
tained by themselves and the public through many years of
use.

The trial court found that a public road 100 feet wide
did exist and had never been abandoned; that the inter-
vener did have a private prescriptive right to trail 11,000
sheep along this road and to spread them out over an
approximate width of 3,000 feet while so doing. The court
further found that the plaintiff had no exclusive right in
the waters of Burnt Springs and that the intervener had
a prescriptive right to water its 11,000 sheep at Burnt
Springs and that in so doing it could spread them out over
a width of 500 feet on each side of the spring to a point
800 feet distant from the headwater. The court denied
recovery for damages resulting from the alleged trespass
and denied any injunctive relief to the plaintiff.

Plaintiff’s first contention in this appeal is that there
was no competent evidence of either a public or private
“high road” over these lands and that a county road
to the West is the only public or private means of | |
access. There is no merit in this contention; there
is substantial and competent evidence indicating that a

pT

357

public road 100 feet in width did exist and had never been
abandoned and we find no basis upon which to disturb the
finding of the lower court.

Defendants and intervener contend on cross appeal that
such a public road should have been found to be 2,000 feet
in width instead of 100 feet since the lower court found
that 2,000 feet is reasonably necessary for the trail-
ing of sheep through the area. Three Utah casest' [i
are cited by defendants and intervener as authority
for the general proposition that the width of the road is that
which is reasonably necessary for the purposes established
by public use. While the validity of this proposition is
without doubt, we cannot agree that 2,000 feet was dedi-
cated to the public. In Morris v. Blunt, 49 Utah 248, 161
P. 1127 we held that in order to establish a dedication, the
travel upon the road must constitute a use by the public;
we must consider the people who use the road. In the in-
stant case, the 100 feet in width was traveled by various
groups for a variety of private and commercial purposes
while a use beyond the 100 feet was devoted to the driving
and grazing of sheep. Compare the case made as to these
sheepmen to the situation disclosed by the evidence in
Lindsay Land and Livestock v. Churnot, supra, and Jeremy
v. Bertagnole, supra. In these latter cases, the use made by
the general public corresponded to the width of the road
reasonably necessary for driving sheep, the maximum
width allowed by either of the cases being 100 feet. In
the Lindsay case, we expressed some doubt as to whether
a public dedication would have been established if the claim
rested alone upon the trailing of sheep, and although evi-
dence in the case indicated that herds of sheep while trail-
ing occupied a space of four hundred yards, the court
limited the road as established to 100 feet in width. Fur-
ther, it is difficult to reconcile the instant case with the

Whitesides V. Green, 18 Utah 341, 44 P. 1082; Lindsay Land and
Livestock Company v. Churnos, 75 Utah 884, 285 P. 646; Jeremy v.
Bertagnole, 101 Utah 1, 116 P. 2d 420, 422,

Lindsay and Jeremy cases with regard to the width reason-
ably required for trailing sheep. Here the trial court
found 2,000 feet to be reasonably necessary while the other
cases established a limit of 100 feet. The distinction can-
not be made, as contended by defendants and intervener,
on the basis of natural geographical conditions confining
the sheep to the 100 feet in width. The road in the Jeremy
ease “crossing over mountains, rolling hills * * * and
through narrow canyons and ravines,” the evidence in-
dicating that in some instances the sheep would have a
tendency to spread out over a mile or more.? Therefore
the additional width must be based on a private right not
just for mere trailing or driving of sheep, but rather, as
indicated by the trial court and admitted by defendants
and intervener, for the purpose of grazing sheep as they
moved across plaintiff’s land. Defendant and intervener
characterize this alleged right as an easement in gross.
We agree that the alleged right is not connected with nor
for the benefit of any dominant estate and hence in gross
rather than appurtenant. Gale on Easements, 10th Ed.,
page 18. However, the grazing of sheep is more than a
privilege,—an easement, it is a privilege plus a profit,—
the taking of forage—,and generally characterized by the
authorities as a profit a prendre.’

The fundamental issue in this case is: In the absence
of statute, may a person through prescription acquire a
profit a prendre in gross? While we reserve a general
answer to the foregoing question, we think that
under the facts of this case, the authorities are cor- | |
rect in stating that prescription will not establish

2518 Abstracts and Briefs, Supreme Court of Utah, Case No. 6216,
Appellant’s Brief, Page 8.

8Gale on Easements, supra, page 1; Jones on Easements, Sec. 57,
page 45; Thompson on Real Property, Perm.Ed., Sec. 270, page 482;
Washburn’s Easements and Servitudes, 4th Ed., page 4.

such a right. In Gateward’s Case, 6 Co.Rep. 59b, 77 Eng.
Rep. 344, we find the initial announcement of the concept,
the court reasoning that a profit allegedly acquired by
custom without a dominant estate would create an interest
in the land approximating a fee, the interest being transi-
tory, altogether uncertain, in no way controlled by the
needs of a dominant estate, and hence a right so unqualified
cannot exist in the soil of a private landowner. In com-
menting on the case, Lord Coke said: “Note reader the
law in this general case well resolved and no book in the
law is adjudged against it.” Although the case concerned
acquisition of a public right by custom, extensive public
use virtually depriving the landowner of his entire interest,
when the deprivation would be as extensive by allowing
a private prescriptive right, the rule has been extended.
Merwin v. Wheeler, 41 Conn. 14. In the instant case we
have a situation where the plaintiff’s land is of little value
except for the grazing of livestock and if we deprive plain-
tiff of this benefit, it is left with an empty fee interest, re-
quiring the payment of taxes but with no commensurate
value. Therefore, add these facts to the foregoing rule
and we have the particular situation succinctly expressed
in Merwin v. Wheeler, supra as follows:

“It is further to be observed that the property in dispute appears to
be valuable mainly and perhaps solely for its sand as an article of
merchandise. An unlimited right in the defendant to take and sell
all the sand is therefore equivalent to full ownership and is inconsist-
ent with the title in fee of the plaintiffs. The claim of such a right in
another’s land by custom or by prescription is unnatural and unrea-
sonable, and is not sanctioned by the law. If allowed the whole beach
would be at the defendant’s mercy. A prescription as well as a custom
to be valid must not be unreasonable.”

The courts have announced a contiguous rule when deal-
ing with an easement, saying that it must be a right to use

41 Jones’ Blackstone, Sec. 854, page 1064; Gale on Easements,
supra, page 200; Jones on Hasements, supra, Sec. 58, page 41; 4
Tiffany Real Property, 8rd Ed., Sec. 1194, page 558; Thompson on
Real Property, supra, Sec. 265, page 426.

the land of another for a special purpose, not inconsis-
tent with the general property in the landowner. Nielson v.
Sandberg, 105 Utah 98, 141 P.2d 696; Htz v. Mamerow, 72
Ariz. 228, 238 P.2d 442. We hold therefore, that the rights
which defendant and intervener have acquired are in com-
mon with other members of the public, being limited to a
way 100 feet in width.

The third issue raised by appellant is in respect to the
use of the water which flows from Burnt Springs. It is
settled law in Utah that one acquiring title to public lands
does not also acquire title or interest in or to water
flowing upon that land. Riordian v. Westwood, 115 [jill
Utah 215, 203 P.2d 922; Smith v. Sanders, 112 Utah
517, 189 P.2d 701; Holman v. Christensen, 73 Utah 389, 274
P. 457. The record reveals that intervener and their pre-
decessor and defendant had used the waters of Burnt
Springs in conjunction with plaintiff and other members
of the general public for a period extending over 50 years.
There was nothing in the record to show a valid appro-
priation of water by plaintiff, respondents, or any one
else. Such evidence is sufficient to support, the trial court’s
finding that such water is still unappropriated public
water and we conclude that respondents have an equal
right with all other members of the public, including the
plaintiff, to use the water as they desire until a superior
right to such water is established. Insofar as the finding
of the trial court carries the implication that the plaintiff
has established no right to the use of the waters of Burnt
Springs, it is modified to conform with the foregoing con-
clusion.

The record also substantiates the finding that the public
road found by the trial court led right to Burnt Springs,
or within a rod or two of it, and that the herds, as they
traveled through the area always trailed to the
spring, watered, and trailed on. Further, under the i
finding that the road was 100 feet in width, the
springs would be reachable without getting off the public

road. Since plaintiff established no better or superior
right to the water than holding it in conjunction with
other members of the public, they had no right to fence
across such road and obstruct the use of the road, nor to
obstruct access to the stream as far as any person having
any right of access thereto.

In view of these facts the court decree which

“ordered, adjudged and decreed that the fence maintained by plaintiff
across the public road and around the waters of Burnt Springs is
wrongful and the plaintiff is hereby ordered to remove said fence as
it obstructs the public road” :

must be affirmed.

The court, however, has no power to require plaintiff to
provide facilities for the watering of intervener’s sheep,
nor to arrange for them to spread out on plaintiff’s
land for a distance of 1,000 by 800 feet. Let it suf- i |
fice that respondents be allowed only that area which
is reasonable and necessary in the proper exercise of their
right as one of the public to use the water.

The case is remanded with directions to enter a decree
in accordance with the views expressed herein. Each party
shall bear his or its own costs.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,
JJ., concur.

cy
is
iS)

DENVER & R. G. W. R. CO. et al. v. PUBLIC
SERVICE COMMISSION et al.

No. 7882. Decided Aug. 8, 1958. (259 P. 2d 873.)

See 18 C.J.S. Carriers, sec, 297. Carrier rates, establishment by
commission of. 9 Am.Jur., Carriers, sec. 119.

Bryan P. Leverich, M. J. Bronson, A. U. Miner, Howard
F. Coray, D. A. Alsup and Marvin J. Bertoch, Salt Lake
City, for plaintiffs.

Clinton D. Vernon, Atty. Gen., Cheney, Marr, Wilkins &
Cannon, Paul B. Cannon, Salt Lake City, for defendants.

WADE, Justice.

The Denver and Rio Grande Western Railroad Company
and the Union Pacific Railroad Company bring this action
to review an order of the Public Service Commission of
Utah wherein that commission granted the railroad com-
panies’ petition to charge the American Smelting & Refin-
ing Company’s plants at Garfield and Murray, Utah, and
the United States Smelting, Refining & Mining Company’s
plant at Midvale, Utah the same for its switching move-
ments in intrastate traffic as they did for interstate traf-
fic, but conditioned such permission upon the railroads re-
ducing their line-haul compensation so that the overall
revenue of the railroads would be the same with the in-
ereased charges as it had been before the change had been
allowed.

The American Smelting & Refining Company had com-
menced to do its own switching in its plants and so was
not concerned with the hearing before the Commission and
made no appearance.

The railroads contend that the commission did not
regularly pursue its authority in ordering the reduction of
line-haul rates so that the overall revenue would not be
increased as a result of the increases in switching rates
granted because the question of the adequacy or inadequacy
of line-haul rates was not before the Commission in this
proceeding, and the railroads had no notice that such
a question would be considered; and also there was no
evidence upon which the Commission could base its finding
that the established line-haul rates included compensation
for switching.

In their petition the railroads set out that the Interstate
Commerce Commission had made certain investigations of
switching services performed by the railroads for the
smelters which had resulted in the Commission finding
that these services were not reasonably compensated for

364 ee
er

in addition to that received in the line-haul rates charged,
and resulted in the smelters receiving preferential service
not given to other shippers. As a result of these investiga-
tions and the orders of the I.C.C. the railroads published
separate charges for switching done for interstate traffic.
They further alleged that the same services were preformed
by the railroads in switching for intrastate traffic as were
performed for interstate traffic and in order to avoid
any discrimination against interstate traffic they asked the
P.S.C.U. for the right to publish tariffs charging the same
for intrastate as for interstate traffic.

The U.S. S. R. & M. Co. filed a protest to the railroads’
petition which they entitled “Petition for Dismissal” in
which it alleged that line-haul rates already included com-
pensation for switching services rendered by the railroads
to the smelters and that this fact had been admitted by the
railroads in the proceedings before the I.C.C. and also in
various court proceedings.

At the hearing evidence was introduced of the historical
background of the line-haul rates and the investigations
by the L.C.C. of the services which were included in them
by railroads for the smelters and the conclusions of the
Commission that certain switching services accorded the
smelters went beyond that given to other industries under
the line-haul rates. The railroads appealed the decisions
based on these findings to the courts, contending that
there was no discrimination against other industries in the
services given the smelters under line-haul rates because
those services which were rendered were taken into con-
sideration when line-haul rates were fixed. A United
States District Court held in favor of the railroads’ con-
tention, but the United States Supreme Court in United
States v. U. S. Smelting, Refining & Min. Company, 339
U. S. 186, 70 S.Ct. 537, 94 L.Ed. 750 eventually held that
the I.C.C. had the right to determine where line-haul ended
and that the question of compensatory rates was not in-
volved; that if the line-haul rates actually included charges

365

for switching beyond the points where the Commission had
determined was the end of the line-haul, then a separate
hearing could be had to determine the reasonableness of
the rates charged for line-haul.

A line-haul is the beginning and end of transpor-
tation service by the railroads. As stated by the | |
court in U. S. v. U. S. Smelting, Refining & Min.
Co., supra, 389 U. S. at.page 189, 70 S.Ct. at page 540:

“« * * The Commission concluded that carrier obligation for
transportation service ends customarily when delivery is made at a
convenient point on the siding inside or outside a consignee’s plant.
This delivery is such as may be accomplished in one continuous move-
ment without ‘interruption’ occasioned for the convenience of the
industry, and is only the equivalent of team track or simple placement
switching. In the Commission’s view as developed in Ex Parte 104,
such a convenient delivery point marks the beginning and end of what
is termed ‘line-haul’ transportation, and is the extent of the service
which may be performed under the line-haul rate.”

The 1.C.C. found that certain tracks of the U. S. S. R.
& M. Co. within its plant at Midvale, Utah, known as the
assembly yard, was the point where line-haul began and
ended. :

In 1938 (which was before the U. S. Supreme Court
decision, supra, was rendered) after certain investigations
made by the 1.C.C. in which it had found that the smelters
were receiving free switching services not covered by line-
haul rates, the railroads applied to the Public Service Com-
mission of Utah to be allowed to charge for certain intra-
plant or industrial switching but still asked that line-haul
rates should include movements of loaded cars to the track
scales and subsequent delivery to any designated track,
if such movements could be made without interruption by
the industry. In other words, the assembly yard at that
time was not considered the point where line-haul began
and ended. This petition was granted.

366 ee
eres

It was developed at the instant hearing that the at-
tempted separation of switching and line-haul charges
under the provisions of the 1938 tariffs was impractical
because the smelters and railroads could not agree as to
what was an “uninterrupted movement,” each contending
that certain movements were for the convenience of the
other, with the smelters paying certain charges under pro-
test. In actual practice many switching movements which
were actually interrupted movements and beyond the road-
haul point of delivery were included in the line-haul rates
and not charged for separately. It became apparent, there-
fore, and was admitted by the railroads that they were
not merely seeking to bring intrastate and interstate switch-
ing charges into conformity with each other to avoid dis-
crimination against interstate commerce, as pleaded in
their petition, but rather were seeking permission to
raise certain switching rates and to be allowed to charge
for other switching movements for which, at least here-
tofore, there had been no separate charge under the 1938
order. In view of the evidence that its 1988 order separat-
ing charges for certain intraplant switching movements
was in actual practice inadequate and impractical to give
all shippers a reasonable uniformity in the application of
line-haul rates, the Commission found that the assembly
yard of the U.S. S. R. & M. Co. (which was proposed by
the railroads) was the point where road haul should con-
veniently begin and end and to which line-haul rates should
apply and any intraplant switching to or from that point
should be charged for separately. The Commission also
found that the switching rates proposed by the railroads
were reasonable when considered “separate and apart from
the overall rates and charges now in effect,” but since the
present line-haul rates included compensation for many of
the intraplant movements for which new charges not con-
tained in the 1938 order were to be allowed and since there
was no evidence that the present overall rates and charges
for traffic moving to or from or within the plant areas

of the smelters were “inadequate or noncompensatory,” it
concluded that the railroads in separately stating their
tariffs for switching charges and line-haul rates should
do so in a manner which would

“produce substantially the same revenue to the carriers as that now

being produced by this traffic by application of the present effective
rates and charges.”

The railroads do not object that the issues before the
Commission were not confined to the formal pleadings and
they admit that the scope of an inquiry may be enlarged
where the parties participate in such an inquiry.

They insist, however, that the issue of reasonable- |
ness of line-haul rates was not a part of this inquiry

and that they never had notice that switching charges
should be deducted from line-haul, nor that the Commis-
sion would consider such a move because in ruling on cer-
tain objections to proposed evidence it had indicated that
there was no necessity for the railroads to justify their
line-haul rates and therefore they had no opportunity to
present evidence or have a hearing on that point thus being
deprived of due process of law.

The simple answer to this contention is that the Com-
mission has not changed the line-haul rates. Those rates
are still the same and still based on the weight and value
of the ore. What the Commission has tried to do is to make
a more practical separation of switching charges from line-
haul rates than according to the evidence was accomplished
in the 1938 order. This it did by determining in so far as
the U.S. S. R. & M. Co. is concerned that line-haul begins
and ends at its assembly yard and that all charges for
switching movements beyond that point should be separated
from the line-haul rates and charged for separately. It
did not grant the railroads a raise in any of its charges
because it found that the railroads had failed to prove that
their overall compensation was inadequate or noncompen-
satory. In other words, though the Commission found that

368 Leen!
=}

the switching charges proposed by the railroads when
separated from the line-haul rates were reasonable, yet
it was of the opinion that those were the approximate
amounts which the railroads had been charging for their
switching by including them in the line-haul rates. The
railroads were fully aware from the pleadings and the
evidence introduced by the U. 8S. S. R. & M. Co. that it
was contending that the switching was already being paid
for in the compensation received by the railroads for line-
haul and therefore cannot claim that they had no notice
of any such issue. Under such circumstances had the rail-
roads desired they could have introduced any evidence they
had to offset this contention. This they did not do. Under
Sec. 76-6-12 U.C.A. 1943, now 54-7-12 U.C.A. 1953, the
Commission cannot grant a raise in rates except upon a
showing that such an increase is justified. Here the rail-
roads showed that certain rates would be reasonable for
certain switching movements but failed to show that they
were not already receiving those amounts in their line-
haul compensation which the evidence showed historically
included the switching charges. The Commission having
found, as it reasonably could, that there was no evidence
or justification for a raise did not err in refusing to grant
any increases but ordering instead a separation of charges
so that there can be a more practical basis for determining
where line-haul began and ended so that line-haul rates
ean be applied to what rightfully belonged to them and
switching charges to what rightfully belonged to them.
If under the present order the line-haul rates are un-
reasonable or non-compensatory, the railroads can file
a petition to that effect with the Commission and if that is
found to be the fact will no doubt be granted relief.

Affirmed.

WOLFE, C. J., and McDONOUGH, CROCKETT and
HENRIOD, JJ., concur.

369

YOUNG et al. v. BUCHANAN.
No. 7844, Decided July 21, 1958. (259 P. 2d 976.)

See 67 CJ.S, Parties, sec. 29. Unlicensed broker’s right to recover
for services, 8 Am. Jur., Brokers, sec. 154; 169 A.L.R. 767.

N. J. Bates, Richfield, for appellant.
Dilworth Woolley, Manti, for respondent.

McDONOUGH, Justice.

Appeal from a judgment entered in favor of plaintiff
and against defendant for an alleged commission under a
written contract of employment. The facts are clear and
without dispute.

Real Estate Brokers and Salesmen were regulated under
Title 82, Chapter 2, U.C.A. 1943 which is presently desig-
nated as Title 61, Chapter 2, U.C.A.1953. This title re-
quires brokers and salesmen to be licensed by the State
Securities Commission. A condition for such license is
that the brokers shall be bonded and that salesmen shall
work only under the supervision of a licensed and bonded
broker. Plaintiff, desiring to sell real estate, approached
one Bardsley, a licensed and bonded broker, sometime in
the forepart of 1949 and requested permission to sell under
Bardsley’s authorization. Permission was granted by Bards-
ley and plaintiff was licensed as a real estate salesman in
accordance with the statutory requirements. Bardsley,
however, did not intend to conduct a brokerage or to be
active in the real estate business. Hence, plaintiff and
Bardsley expressly agreed that plaintiff was to act in-
dependently of Bardsley; was to pay all expenses; retain
all commissions; and Bardsley was to take no responsibility
and was to be implicated in none of plaintiffs transactions.

On June 12, 1949 defendant listed his property for sale
with plaintiff. A standard real estate listing agreement

was signed by defendant and accepted by plaintiff. This
agreement gave plaintiff, for a period of six months, the
exclusive right to sell the property, and it further provided
that if such property were sold within three months after
the expiration of the six-month period to any person to
whom the plaintiff had previously offered the property,
then the agreed commission would be paid to plaintiff.
Bardsley was not consulted by either plaintiff or defendant;
was not a party to the agreement; and knew nothing there-
of.

Upon several occasions plaintiff offered the property to
one King, but closed no sale since King considered the ask-
ing price too high. The six-month period ended on Decem-
ber 12, 1949. Plaintiff, with defendant’s permission, con-
tinued showing the property to various parties and some
time in the forepart of February, 1950, the defendant re-
duced the asking price by $1,000. Plaintiff again contacted
Mr. King and told him of the reduction. King stated that
in view of the price decrease he was interested in the
property, but made no further contact with the plaintiff.
On February 17, 1950, within the three-month protection
period, without notice to plaintiff, and by dealing directly
with the defendant, King bought the property.

Defendant refused plaintiff’s demand for commission and
plaintiff commenced this action. The lower court decided
plaintiff was entitled to compensation and joined Bardsley
as an involuntary plaintiff. Judgment was then rendered
against defendant and in favor of Bardsley for the use and
benefit of the plaintiff. Defendant appeals.

Doubtless plaintiff rendered some measure of service
resulting in Mr. King’s purchase of defendant’s property.
It has long been established in this jurisdiction, how-
ever, that a broker or agent may recover only by | |
virtue of contract and cannot recover upon the basis
of quantum meruit. Watson v. Odell, 58 Utah 276, 198 P.
172, 20 A.L.R. 280; Case v. Ralph, 56 Utah 248, 188 P. 640.

Hence, the first question raised by this appeal is whether,
under Title 82, Chapter 2, U.C.A.1948, the agreement be-
tween plaintiff and defendant was valid and enforceable
by plaintiff. We hold that it was not.

Section 82-2-1, U.C.A. 1943, made it unlawful for any
person to engage in the business or assume to act as a real
estate broker or a real estate salesman within the state of
Utah without first complying with the statutory
provisions. Section 82-2-2, then defined a “real estate i
broker” as including persons who for another and for
a fee or consideration, “sells * * * or lists or offers or at-
tempts or agrees to list” any real estate. This section ex-
pressly provided that a real estate broker shall have the
right to fill out and complete such statutory or securities
commission approved forms or legal documents needed to
complete a transaction involving such realty. Section 82-
2-8 defines a “real estate salesman” as any person employed
or engaged by or on behalf of a licensed real estate broker
for the purpose of accomplishing any act or transaction
set out or comprehended by the definition of a real estate
broker in Section 82-2-2 and Section 82-2-10 made it un-
lawful for any real estate salesman to accept a commission
for the performance of any of the acts specified in Title
82, Chapter 2 from any person, except his employer, and
provided that such employer must be a licensed real estate
broker. The necessary implication of Section 82-2-10—that
a salesman may not sue anyone other than his employing
broker for his commission—was expressly established as
law in 1951 by a legislative addition to Title 82 which pro-
vided that any action to recover a fee or commission must
be instituted and brought by the broker under whom the
salesman is employed. (See Section 61-2-18, U.C.A. 1953.)
This same provision prohibits any person or association
from bringing an action for the recovery of any commission
for any act done, which is prohibited under the provision
of this act to other than licensed real estate brokers, unless
such persons are duly licensed under such act as a real

373

estate broker at the time such act or service was rendered.
Such provision, while not applicable to transactions com-
pleted before its passage, is indicative of the legislative
spirit and intent behind all of Title 82, Section 2 and par-
ticularly Section 82-2-10. ©

Under the facts, it is evident that plaintiff’s operation
as an unlicensed broker was in contravention of public policy
and statutory mandate. That such fact was within plain-
tiff’s knowledge is made manifest by his admission in open
court that he could look only to a licensed broker for his
commission and by his subsequent request to join Bardsley
as an involuntary plaintiff in order to receive a judgment
for his own use and benefit.

It is thus evident that the listing agreement between
plaintiff and defendant was prohibited by statute; was in-
valid; and was unenforceable by plaintiff unless he could
join Bardsley as an involuntary plaintiff under Rule 19(a),
Utah Rules of Civil Procedure. Such is the second question
raised by this appeal.

Rule 19(a), U.R.C.P. states that

“When a person who should join as a plaintiff refuses to do so, or his
consent cannot be obtained, he may be made a defendant or, in proper
cases, an involuntary plaintif?.”

Plaintiff contends that he was the real party in interest;
that he had a just claim against defendant; that under Title
82, Chapter 2, U.C.A. 1948 he was prevented from bring-
ing the action; that at the time the listing agreement was
signed, he was licensed under Bardsley; that Bardsley’s
presence before the court as a licensed broker was necessary
in order for plaintiff to recover; and that joining Bardsley
as involuntary plaintiff was therefore necessary and prop-
er under the law. We do not agree.

It may well be that plaintiff is the real party in interest—
providing any legal claim whatsoever exists against the

defendant. We believe none does. The agreement between.
plaintiff and defendant was unauthorized by statute.

Such agreement could only have been valid if exe- | |
cuted for and in behalf of Bardsley as authorizing
broker. It was not. Bardsley had no knowledge of such
agreement; was not interested therein; and had no inten-
tion of becoming so. Similarly, neither plaintiff nor de-
fendant intended Bardsley to have any relationship to or
interest in the listing agreement. Bardsley had no interest
in this contract whatsoever. Hence, plaintiff could receive
no interest under such agreement from Bardsley and was
prevented by statute from having an interest in his own
right. Thus, at no time was there a claim against defendant
which was enforceable by Bardsley, by plaintiff, or by
plaintiff through Bardsley.

It is true that Rule 19(a), U.R.C.P. states that a person
or party may be joined as an involuntary plaintiff. Such
person or party, however, must have some interest, af-
firmative or negative, which is beneficial or detri-
mental to the interest of the party desiring to so | |
join the recalcitrant person. Bardsley had no such
interest. He could bring no action against defendant
based on the listing agreement since he was not a party
thereto and had no assignment of interest therein. Simi-
larly, defendant had no contractual cause of action against
Bardsley since he made no agreement with Bardsley and
none with plaintiff acting in Bardsley’s behalf. Rule 19(a)
does not permit one having no relationship or interest
whatsoever in the conflict between the warring parties,
to be drawn into the fray merely because the real party
in interest,—who is barred by statutory provision from
prosecuting the action in his own name and right—, is in
need of such person to circumvent legislative mandate.

The judgment of the lower court is reversed. Costs to
appellant.

WOLFE, C. J., and CROCKETT and WADE, JJ., concur.

HENRIOD, Justice (dissenting).

I dissent, respectfully suggesting that the majority opin-
ion, in its endeavor to effectuate the purposes of Chapter
2 of Title 61, has misapplied that statute and has read
into the agreement between Bardsley and Young, much that
simply is not there.

This agreement is admittedly lawful and valid, unless
one of the several statutes set forth in the majority opinion
renders it illegal. A careful reading of each statute con-
vinces me that none outlaws this agreement nor renders
this rightfully-earned commission uncollectable, and that
only by assuming facts not in the record—and that fly
in the teeth of the findings of the lower court—can the
majority sustain its position. Furthermore, there is no
evidence in the record that the plaintiff failed to affirm-
atively comply with the statutory mandates.

Section 61-2-18, U.C.A.1958, seems to have no materiality
in this case. That statute was passed in 1951, subsequent
to this entire transaction, and does not and cannot affect
contractual rights and obligations created prior to its
passage. The 1951 legislative enactment can shed no light
on the intent of the 1921 legislature which originally passed
what is now Section 61-2-10, U.C.A.1953.

Chapter 2 defines a broker and sets forth what activities
he may legitimately pursue, 61-2-2, U.C.A.19538, and pro-
vides that the broker must post a $1,000 bond. 61-2-6(b).
Section 61-2-3 defines:

“The term ‘real estate salesman’ shall mean and include any person
employed or engaged by or on behalf of a licensed real estate broker
to do or to deal in any act or transaction set out or comprehended by

the definition of a real estate broker in section 61-2-2 for compen-
sation or otherwise.”

The two sections which lend greatest support to the
position of the majority opinion are 61-2-1:

“It shall be unlawful for any person, copartnership or corporation
to engage in the business, act in the capacity of, advertise or assume

876

to act as a real estate broker or a real estate salesman within this
state without first obtaining a license under the provisions of this
chapter”;

and, 61-2-10:
“It shall be unlawful for any real estate salesman to accept a com-
mission or valuable consideration for the performance of any of the

acts herein specified from any person, except his employer, who must
be a licensed real estate broker.”

In the case before us, all of the provisions precedent
to the plaintiff’s qualification as a licensed salesman were
met. Bardsley was a bonded broker, and in that capacity,
signed and filed with the Real Estate Division of the Utah
Securities Commission an application to allow the plain-
tiff to operate as a salesman. This application was open
to public inspection at all times. The rather apparent
purpose of this entire statute is to protect the public from
fraud. When Bardsley filed Young’s application for a
salesman’s license he signed the clause labeled: “Hm-
ployer’s Recommendation of Salesman” which read,

“T hereby certify that the applicant whose name appears on this appli-
cation is honest, truthful and of good reputation, and recommend that
a license be granted the applicant.”

The broker, Bardsley, thus held himself out as the em-
ployer of Young, vouched for his integrity and posted his
bond as protection to those who dealt with him. It is clear
that were this an action brought by a third party against
the salesman, the broker, whether or not disclosed and
whatever the agreement inter se, would be liable for the
conduct of the salesman. The signed application filed
amounted to an ostensible agency relationship. The ma-
jority maintains, however, that the arrangements between
Bardsley and Young, irrespective of the application pro-
visions, may be and are such as to manifest the intent that
no such agency or employment relationship be created. The

‘Restatement of Agency, Sec. 31; Sec. 49, comment (b).

strongest evidence in support of that contention is the
testimony of Bardsley:

“Q. Tell us whether or not you had a license from the State of
Utah as a real estate broker during the year? 1949 A. I did.

“Q. Tell us whether or not W. R. Young was employed by you as
a salesman during that year? A. He was.

“Q. And was he so employed on May 29th of that year? A. Yes,
sir.

“Q. Did you have any agreement or understanding with Mr.
Young regarding the payment of commission which might be earned
on any business that he transacted while employed in your office?
A. Yes sir.

“Q. Was that agreement in writing or just verbal? A. Verbal.

“Q. Will you tell the court what that agreement was? A. I had
paid my state license and my bond for my commission. Mr. Young
came to the office and wanted to know if he could write under my
commission. I told him I only renewed my license so that the next
year if I wanted to sell real estate, it would only cost me half the
price that it would if I let it pass by, but I didn’t intend to make any
effort to sell real estate during the year 1949. And he asked if he
could sell under my license and I told him yes, with this understand-
ing, that he was to be responsible for all sales and that all contracts
made must go to an attorney, that I wasn’t to be implicated in any
way whatsoever through court or otherwise and he was to have all
that was made as commissions.”

Bardsley also stated that he told the plaintiff that he
would not join in a law suit “unless I have to.”

It may be admitted that most of the usual prerogatives
of a broker were thus given to the salesman.? But the
statute does not expressly nor impliedly require that the
broker personally conduct the business affairs. Rather,
Section 61-2-3 authorizes the engaging of salesman-agents

2Normally in a principal-agent relationship, the agent is subject
to the control of the principal. However, as the Restatement of
Agency phrases it, ‘Principal’ * * * includes * * * both a
person who has directed another to act on his account in business
dealings or to represent him in hearings or proceedings but who has
no control or right of control over the other’s physical conduct and
also a person who employs another to act in his affairs having such
control * * *” Restatement of Agency, Sec. 1, Comment ¢, p. 9.

378

in the conduct of the business and no limitation is placed
on the number or type of rights which the broker may
delegate to them.

Young paid the $25 license fee Bardsley owed the city
of Richfield, and Young testified that Bardsley told him
to pay the expense of operating his (Bardsley’s) broker-
age. Young further testified that in the spring of 1949 he
was working “at that time” under the “supervision” of
Bardsley. Apperently the salesman understood the agree-
ment to mean that he was to pay all expenses and receive
all: commissions unless a really big sale were made, in
which case the broker was to participate, for he said:

“I work under a broker and when he and I would run across a real
estate deal of any consequence, say a big farm or ranch, or something,
we would put that deal over between ourselves, but I still would be
under him.”

The facts are not, as the majority states, clear and with-
out dispute. They are very much in dispute. The agree-
ment between Bardsley and Young, as pieced together
from the application, the verbal understanding, the con-
duct of the parties and the testimony of each, obviously
and reasonably is subject to more than one interpretation.
The interpretation employed by the majority opinion re-
solves this ambiguity by construing the agreement as
violative of the statutes and thus illegal and void. How-
ever, the law is well established that when the terms of an
agreement have two possible interpretations, by one of
which the agreement would create a valid contract and
by the other would be illegal or void, the former will be
adopted. The verbal understanding between Bardsley and
Young reasonably may be interpreted from the record be-
fore us as a lawful agreement between broker and sales-
man whereby the latter was to handle the business, keep
the broker’s contacts alive, and in the event of a law suit

8Schofield v. Zion's Co-op. M. I., 1984, 85 Utah 281, 39 P.2d 342, 96
A.L.R. 1083; Corbin on Contracts, Vol. 8, Sec. 546, p. 98; 20 Am.Jur.,
Evidence, §§ 226, 229.

879

to make the broker whole, and was not, as the majority
suggests, an unlawful attempt to circumvent the statute.
The findings of the lower court support this construction.*
Furthermore, there is no evidence in the record that the
plaintiff ever told anyone that he was not working under
a broker, and nothing in our statute, the regulations of the
Securities Commission, or in the law of agency requires
that the principal be disclosed to the third party nor that
the name of the principal appear on the contracts entered.5

Young was instrumental in the final sale of Buchanan’s
property. He earned the commission agreed upon. The
record discloses that Young was “engaged by” the broker
“to deal in any act or transaction * * * for compen-
sation or otherwise” within the language of Section 61-2-3,
U.C.A.1958. Thus Young, as salesman for Bardsley, had
a good cause of action against the broker for the commis-
sion. But may the salesman collect this earned compen-
sation from the seller when his broker is unwilling to join?
The method of the salesman here in joining the broker as
an unwilling party plaintiff in an action against the seller,
merely avoided a circuity of action, and was not violative of
Rule 19(a) since the broker did in law have an interest
in securing payment of the amount owed.°

This appears to me a strong case justifying our sus-
taining the judgment of the lower court.”

4On appeal, prevailing party is entitled to have us consider “all evi-
dence, and every inference and intendment fairly arising therefrom,
in light most favorable to him.” See Toomer’s Estate v. Union Pac. R.
Co., 121 Utah 87, 289 P. 2d 163.

5See, 2 Am.Jur. § 394, p. 809 and cases cited thereat.

2 Am.Jur. § 410, p. 820.

7See, footnote 4, supra.

wo

80

In re Adoption of WALTON et al.
WORTHEN et ux. v. WALTON

No. 7988, Decided July 20, 195. (259 P. 2d 881.)

It

See 2 C.J.S. Adoption of Children, sec. 21. Divorced parents, con-
sent of, as essential to adoption. 1 AmJur., Adoption of Children, sec.
48; 91 A.L.R. 1887.

Young, Young & Sorensen, Provo, for appellant.
Arthur H. Nielsen, Salt Lake City, for respondents.

HENRIOD, Justice.

Appeal from an adoption decree, wherein 2 minor boys
were awarded to Caroline (Walton) Worthen and her
second husband, ending the parental rights of her former
husband, Gerald B. Walton, on the theory Walton had
deserted the boys and therefore his consent to the adoption
was unnecessary under Title 78-30-4, U.C.A.1953. Reversed,
the decree to be vacated, costs on appeal to appellant.

Mrs. Worthen will be designated as W, Mr. Worthen as’
H, and Walton as F for simplicity. “Desertion” and “aban-
donment” will be considered synonymous for the purpose of
this decision.

W and F married in 1988, lived in Arkansas, then in
Nevada, where the boys were born, returned to Arkansas
where F supported the family until 1944, when W left him
and took the boys to Utah, where she has remained. The
year following, F divorced W in Arkansas by constructive
service of process. In 1949 W married H who since has
supported her and the boys. From 1944 to 1949, F, when
requested by W, sent small sums for the boys’ support,
aggregating at least $305, evidenced by a dozen money
order receipts. F asserted that he furnished more than
the receipts indicated, and also sent bicycles and other
gifts which W refused to accept. He visited Utah on more
than one occasion, where, he says, he was not permitted
to see the boys except at school. In 1947 he took the boys
to Arkansas, where they lived with him for a year. Sig-
nificant is W’s testimony that F was to return the boys
in 6 months, but kept them a full year, when she was forced

to go to Arkansas for them. After W remarried, F sent
no money except $20 after learning of the planned adoption,
after W had refused to accept the cash, and perhaps after
he consulted an attorney. It is uncontraverted that after
the separation, H was ill and unable to earn much, except
during a two-year period in Michigan where he grossed
about $8,000. Otherwise he seemed to be always burdened
with debt, business failure and ill health, which last cir-
cumstance partly induced him to go to Colorado, where he,
his second wife and her 3 children by a previous marriage
reside. There he bought a home and a business, both
mortgaged, requiring about $225 current monthly pay-
ments, which to date he has met, besides supporting the
family, although he has had some reverses in the past year.
W testified that F once told her when in Utah that he
would send some money and that “I am trying to help out
a little bit.” He wrote her in March, 1952 that he was
going to try to pay more and could do so if matters con-
tinued as they were going. He testified that because of
reverses he had been unable to respond. He further said
he was not permitted to see the boys and that W and H
told him they wanted nothing from him and for him to
leave them alone. F came to Utah, employed an attorney,
protested the adoption, withheld his consent and offered
to furnish support to the best of his ability.

We are convinced that these facts fall far short
of that type and degree of proof required by the [i
authorities to establish the necessary intent to desert
a child, sufficient effectively to dispense with a parent’s
consent under our adoption statute.

Courts have not hestitated to build a strong fortress
around the parent-child relation, and have stocked it with
ammunition in the form of established rules that add to
its impregnability. To sever the relationship successfully,
one must have abandoned the child, and such abandonment
all correlative rights and duties incident to the relation-

must be with a specific intent so to do,~—an intent to sever
ship. Such intent must be proved by him who asserts it,
by proof that not only preponderates, but which must
be clear and satisfactory,—something akin to that degree
of proof necessary to establish an offense beyond a reason-
able doubt, or, as one authority puts it “by clear and in-
dubitable evidence.’? The relationship has been considered
a bundle of human rights of such fundamental importance
as to lead courts frequently to say that consent is at the
foundation of adoption statutes,’ that evidence pertaining
to it must be appraised in a light most favorable to him
whose parental right is assaulted,‘ that adoption statutes
being in derogation of the common law are to be construed.
strictly in favor of the parent and the preservation of the
relationship,® (although not the rule in Utah) and that
all doubts are resolved against its destruction. The author-
ities have gone so far in their protection of these kinship
rights as to hold that an abandonment, even though a fait
accompli, can be the subject of repentance,’ absent vested
rights in others. Ofttimes it is pointed out that abandon-
ment, within the meaning of adoption statutes, must be
conduct evincing

“a settled purpose to forego all parental duties and relinquish all
parental claims to the child.”?

4In re Kelly, 1914, 25 Cal.App. 651, 145 P. 156.

2In re Kelly, 25 Cal.App. 651, at page 658, 145 P. 156, at page 159.

%In re Cozza, 1912, 163 Cal. 514, 126 P. 161; In re Cattalini, 1946,
72 Cal. App. 2d 662, 165 P.2a 250.
* 4People ex rel. Cocuzaa v. Cobb, 1950, 196 Misc. 961, 94 N.Y.S.2d
616; In re Cozza, supra.

®In re Adams. Mo.App., 1952, 248 S.W.2d 68: In re Cattalini, 1946
72 Cal.App.2d 662, 165 P.2d 250; In re Jackson, 1984, 55 Nev. 174, 28
P.2d 125, 91 ALR. 1881.

*Lavigne v. Family and Children’s Soc., 1952, 18 N.J.Super. 559, 87
A2d 739.

TL AmJur. 648, See. 42; Stalder v. Stone, 1952, 412 Ill. 488, 107
N.E.2d 696; In re Conman, 1951, 169 Pa.Super. 641, 84 A.2d 360; In
xe Cozza supra; In re Strauser, 1948, 65 Wyo. 98, 196 P.2d 862.

In defense of the relationship are authorities which re-
fuse to accept “abandonment” as synonymous with “non-
support” under adoption statutes,’ although nonsupport
may be an important factor in establishing an abandon-
ment.® So jealously guarded is the parent-child relation
that uniformly it is held that the adandonment or desertion
firmly must be established by the type of proof we mention,
before any question as to the best interests or welfare of
the child can be the subject of inquiry. The importance
of preserving the relationship clearly is pointed up when
one considers the well-established concept that custody may
be awarded in a proper case, while the courts may have
no power to sever the relationship,—accounting for the
principle that the welfare of the child is of great impor-
tance in custody cases, but quite immaterial in adoption
eases until an effective abandonment of parental rights
is shown. Were the rule otherwise, and an indiscriminate
sanction of the dispossession of parental rights without
consent were attempted, serious constitutional impedimenta
no doubt would loom large under the due process clause.

Perhaps this court has traveled as far as any in giving
expression to the type of abandonment intended to exist
in order to sever parental ties when we said in a custody
case, that
“abandonment, in such cases, ordinarily means that the parent has
placed the child on some doorstep or left it in some convenient place in
the hope that some one will find it and take charge of it, or has aban-
doned it entirely to chance or fate.”41

Hardly can it be said that F, under the facts of this
case, was shown to have evinced a settled purpose to desert,
of the type required by the authorities in order to terminate
parental rights.

8Smith v. Smith, 1947, 67 Idaho 349, 180 P.2d 853; In re Kelly,
supra.
°In re Strauser, supra.
10In re Susko, 1949, 363 Pa. 78, 69 A.2d 182; In re Strauser, supra;
In re Lease, 1918, 99 Wash. 418, 169 P. 816.
u4Jensen V. Farley, 1924, 63 Utah 604, 228 P. 217.

W urges also that F judicially was determined to have
deserted his boys, in a 1948 hearing, and hence his con-
sent is unnecessary. W brought a proceeding at that

time, alleged desertion and nonsupport and prayed | |
for custody of the boys. F was served in Arkansas,

but he testified his failure to appear in that action resulted
from financial difficulties. In F’s absence, the custody
of the boys was awarded to W

“to the exclusion of the defendant who shall have no right to see, visit
with, or otherwise exercise any paternal rights to said children unless
and until the defendant shall have made application to this cowrt for
permission so to do and shall have made proper provision for the sup-
port and maintenance of said minor children by defendant.”

This language in the decree plus a finding by the court
that “the facts set forth in said petition are true,” W as-
serts, constituted a judicial determination of desertion,
dispensing with F’s consent. We disagree. The decree is
conditional, and recognizes parental rights in F who, by
its terms, can assert such rights by performance of the
conditions. The divestment of paternal rights by desertion
must be of all such rights, and any adoption purporting
to transfer all such rights would fly in the teeth of the
custody decree itself wherein rights were reserved con-
ditionally to F,—which inconsistent procedure the authori-
ties will not permit.” To be effective in dispensing with
F’s consent, proof in the adoption proceeding itself would
have had to justify such result. This, as we concluded
above, was not accomplished under the facts of this case.

WOLFE, C. J., and McDONOUGH and WADE, JJ.,
concur.

12JIn re Jackson, supra; In re Lease, supra; Smith v. Smith, supra.

386 ee
|

CROCKETT, Justice (concurring).

I concur with the prevailing opinion but add this ob-
servation: Section 78-30-4, U.C.A.1953, provides that a
child
“eannot be adopted without the consent of its parents, * * * except
that consent is not necessary from a father or mother who has
been judicially deprived of the custody of the child on account of
eruelty, neglect or desertion * * *.”

Appellant urges that on the basis of the divorce decree
and the 1948 proceeding supplementary to it that all of
Myr. Walton’s parental rights were extinguished, so that
his consent is not necessary and that he now has no stand-
ing to oppose the adoption. It is my opinion that the above
quoted statute does not apply where the cruelty, desertion
or neglect is proved against the spouse in a divorce pro-
ceeding. The adversary there is the spouse and the cruel-
ty, desertion or neglect is primarily as to the other spouse,
even though such facts may be shown as to the children
or the home incidentally. A husband, for instance, may
fail to meet and disprove such issue as to his spouse or the
home, whereas both the facts and the proof might be quite
different if the direct accusation were cruelty, desertion
or neglect of the children themselves.

I believe the statute referred to was only intended to
cover situations where the parent has been judicially de-
prived of the custody of the child on account of cruelty,
neglect or desertion of the child in a proceeding wherein
the issue was as to such treatment of the child itself,?

1See Bell v. Krauss, 169 Cal. 887, 146 P. 874; In ve Metzger, 114
Misc. 818, 186 N.Y.S. 269. As to requirement of notice of hearing on
judicial deprivation of parental rights, see 1 AmJur. 644 ff.; 24
A.LR. 424; 76 A.L.R. 1081.

*Some statutes distinguish between a divorce action and a proceed-
ing wherein a parent’s fitness to have the custody of his child is dir-
ectly in issue, Idaho Code, § 16-1504 (1948) ; N.Y.Dom.Rel.Law, § 111,
McKinney 1941; see Iowa Code Annotated, § 600.8; Cal.Civ.Code, §
224 (Deering 1941).

387

for example, one in the interest of neglected, deserted or
dependent children before the juvenile court,’ but that
where one spouse has merely been awarded custody in a
divorce action, such statute has no application.

55-10-80 U.C.A.1958; See 55-10-5 & 55-10-82 U.C.A.1953.

BOSKOVICH v. UTAH CONST. CO.
No. 7888. Decided Aug. 7, 1953. (259 P. 2d 885.)

See 69 C.J.S, Patents, sec. 272, New trial, time for filing of motion
for. 89 AmJur., New Trial, sec, 185; 16 A.L.R., 1096.

Pugsley, Hayes & Rampton, Salt Lake City, for appellant.

Edward G. Lindsley and Scott M. Matheson, Salt Lake
City, for respondent.

McDONOUGH, Justice.

This case is here on appeal from a directed verdict for
the defendant. A motion for a new trial was granted in
the first hearing of the case after the jury had returned

a verdict for the plaintiff, on the grounds of probable preju-
dice to the defendant through the wording of the instruc-
tions and verdict.

Plaintiff-appellant is the inventor and patent holder
of a machine known as the Boskovich Mucker, used in
hard-rock mining operations. Defendant-respondent is a
Utah corporation, which has constructed, under the direc-
tion and license of appellant, two of these machines, one for
use at Bingham, Utah, and the second for use at Carlsbad,
New Mexico. The dispute here involves the terms of the
oral contract entered into by the parties with respect to the
company’s use of the appellant’s rights in his invention in
the second instance. Both parties agree that the company
was to pay Mr. Boskovich 50¢ per cubic yard of material
excavated by the machine at Carlsbad and further, that
payment of $456.54 has been made on the amount actually
taken from the shaft; however, appellant claims that the
respondent guaranteed him payment on a total of 9,200
cubic yards.

The main question raised on appeal is whether there was
sufficient evidence of the guarantee to go to the jury and
thus, whether the trial erred in directing the verdict for
the defendant.

It is fundamental that where there is no evidence upon a
material part of the plaintiff’s claim, it is the court’s
duty to direct a verdict. In deciding a motion for a directed
verdict, the court must consider the evidence in the
light most favorable to the party against whom the [El
motion is directed and must resolve every contro-
verted fact in his favor. Jackson v. Colston, 116 Utah 295,
209 P.2d 566; Toomer’s Estate v. Union Pac. R. Co., Utah
239 P.2d 168. The inquiry, then, must be directed toward
whether reasonable minds could disagree in this case on
the evidence presented so as to provide a question for the
jury.

Appellant bases his claim of a guarantee upon a
memorandum which reads as follows:

“The Utah Construction Company,
Salt Lake City District
“Write it * * * Don’t Say it

“To Mike Boskovich

“From George R. Putnam

“Subject Quantities of excavation in International Shaft
No. 8

“Date July 5, 1950

Shaft Excavation .. . 6500 cu. yd.
Enlargements ..... 2700 cu. yd.

Total. ....--. 9200 cu. yd.”

Appellant testifies that this was part of the inducement
and terms of the contract. Admittedly, there are some
slight contradictions in his testimony, but appellant is a
man of foreign extraction and evidently has some dif-
ficulty in the use of the language. George R. Putnam,
vice president and district manager of the respondent
corporation, admits that there was a contract between
his company and appellant, but testifies that the above
Memo was written to give Mike Boskovich an estimate
of the material which would be taken from the Carlsbad
mine at a time when operations had already begun and
the contract was complete. This memo, it is to be noted,
is unsigned. Respondent has introduced into evidence a
letter signed by Mr. Boskovich, which reads:

“Midvale, Utah
“June 21, 1950
“Geo. Putnam
“Salt Lake City, Utah
“Dear Mr. Putnam:

“I understand that the Boskovich Muck Machine was built
based on a 50¢ royalty which I agreed to accept.

892

“If the company pays my expense to go to Carlsbad and
supervise the installing of the machine for 15 days, I'll be
very glad to do so.

“On a 60¢ royalty basis, I would stand my own expenses.

“Yours truly,
“/s/ M. N. Boskovich

“(P.S. Enclosed please find contract)”

The contract in blank which was enclosed also makes
no mention of a guarantee. Appellant admits that the
signature is his and attempts no explanation of the date
of this letter, contending rather that his contract with
the company became effective on July 5, the date of the
memo.

Since it is apparent upon uncontroverted evidence that
the respondent had license to use the machine before July
5 and since the appellant did not present evidence of further
consideration to support the agreement of July 5, if the
memo is so viewed for the benefit of appellant, the ques-
tion was one of law only and there was no issue to go to
the jury. The trial court was under a duty to direct the
verdict for the defendant as plaintiff did not make out a
claim upon which relief can be granted.

Appellant further contends that the court erred in ex-
eluding certain evidence. He offers the court no argu-
ment in his brief as to what particular exclusions he con-
siders error nor what bearing the evidence if ad-
mitted would have on the findings of the case. After | |
a search of the record, we find that the evidence ex-
cluded pertained to the construction of the machine used
at Bingham Canyon, which is not here in dispute; an ad-
mission by the construction company’s engineer that the
machine was satisfactory; the royalty paid on a competi-
tive machine; and an offer of proof that the Boskovich
Mucker was replaced at Carlsbad by a competitive machine.

The issues of the trial were limited to the terms of the con-
tract and appellant does not claim that this evidence
would have shown a prior course of conduct or custom
in this type of business which would have given rise to an
intent to contract with a yardage guarantee. The trial
court was correct in refusing to admit this evidence which
would merely prolong the trial.

Appellant now objects that the granting of a new trial
was improper, although he did not raise the issue until
after the second trial and for purposes of this appeal. He
objects that the court’s order did not show the
grounds upon which the order was based as required [jl
by Rule 59(a) and (d) of the Utah Rules of Civil
Procedure; however, the record was corrected to show, as
the court stated at the time of hearing, that the verdict
and judgment were set aside and a new trial ordered be-
cause of possible prejudice to the defendant resulting
from error in the proceedings and particularly in the word-
ing of the instructions and verdict. The correction of the
record was properly made, even though not made until
after the record had been transmitted on appeal to this
court, under the authority of Rule 75(h), which was pur-
posely made broad enough by the Committee on the Rules
to cover any situation requiring remedial action to present
a complete and accurate record of the proceedings below.
Dempsey v. Guaranty Trust Co. of New York, 7 Cir., 181
F.2d 108, certiorari denied, 318 U.S. 769, 63 S. Ct. 761,
87 L.Ed. 1139.

Appellant further objects that the motion for a
new trial was not made within the 10 days pre- [jl
scribed by the Rules. Rule 59(d) states

“Not later than 10 days after entry of judgment the court of its own
initiative may order a new trial * *”

and all interpretations under the Federal Rule 59(d) in-
dicate that the time cannot be enlarged. Safeway Stores,

394

Inc. v. Coe, 78 U.S.App.D.C. 19, 186 F.2d 771, 148 ALR.
782. Nachod & U. S. Signal Co., Inc., v. Automatic Signal
Corp., D.C., 26 F.Supp. 418. This is in accord with our
own views. In re Bundy’s Estate, Utah, 241 P.2d 462. The
question then is whether the motion was made within ten
days of the final judgment. On September 24, 1951, at
the first hearing of this case, defendant moved the court
for a directed verdict and the court, with the consent of
both counsel, instructed the jury and had them retire be-
fore hearing the motion. It was discovered after the jury
retired that the reporter had left for the day and thus the
hearing on the motion was continued. A verdict was
rendered in favor of the plaintiff and judgment on the
verdict was filed, as a matter of course, the following day.
To hold that this was an entry of final judgment from
which the time for making a motion for a new trial would
run would be to make a useless act of the hearing of the
motions for directed verdict and judgment, notwithstanding
the verdict on October 6; obviously, neither the court nor
counsel who argued the motions contemplated a final judg-
ment in that entry. Rule 7(b) (8) provides that when
on the day fixed for the hearing of a motion, the judge
before whom such motion is to be heard is unable to hear
the parties, the matter shall stand continued until the
further order of the court. Thus, there was no final
judgment until after the rulings on the motions for a
directed verdict and for a judgment notwithstanding the
verdict. The court ordered the new trial of its own ini-
tiative on the day of the determination of the motions and
well within the time stipulated in the Rules.

As to the grounds upon which the new trial was granted,
We see no prejudice to the defendant in the wording of
either the instructions or the verdict, which mentioned the
lump sum payment of $4,600. If there was a guaran-
tee of 9,200 yards at 50¢ per cubic yard, then the | |
defendant was liable for that amount and any other
verdict for the plaintiff would have been inconsistent. The

395

failure to instruct the jury to deduct the $456.54 already
paid was cured by the judgment entered for $4,600 less
that amount. However, the evidence on both trials was
in all essentials the same, and the directed verdict on the
second trial was proper and should have been granted in
the first; hence, the judgment on the second trial will
stand affirmed. Costs to the respondent.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,

JJ., concur.

STEVENS v. GRAY.
No. T781. Decided July 20, 1958. (259 P, 2d 889.)

See 68 C.J.S. Partnership, sec. 483. Partnership accounting, pro-
ceedings to compel. 40 AmJur., Partnership, sec. 824; 168 A.L.R.
1109.

Elias Hansen, Salt Lake City, for appellant.
George W. Worthen, Provo, for respondent.

CROCKETT, Justice.

Edward R. Stevens in this suit sought to recover from
Mr. Fearn Gray a balance of $9,216.29 he claims due him
upon an accounting of a partnership in which the two
engaged in the business of buying, feeding, and market-

ing cattle. Gray denied any debt; set up a somewhat de-
tailed account showing:

Partnership costs and expenses $144,053.16
Less total income . 115,650.96
Net loss $ 28,402.20

Of the said loss he admits that plaintiff Stevens bore
the sum of $9,340.76 but claims that he bore the balance
of $19,061.44 and that Stevens should ‘be compelled to
pay defendant Gray one-half of the difference between
these sums, that is $4,860.84, for which he counterclaims.

This case classifies among the most protracted litigation
ever to come to the writer’s attention. The period of the
partnership operations was from about November 1936
to March 1989. The complaint was filed January 22, 1947
(for reasons not material here, the statute of limitations
is not involved). The trial commenced June 17, 1947;
after intermittent continuances, presentation of evidence
was concluded on July 3, 1947. During the trial both
parties discovered that their original pleadings did not
reflect the actual situation and mutually agreed, with the
court’s consent, that amended pleadings to conform to the
proof would be filed after presentation of the evidence—
which was done. The court had the matter under advise-
ment for nearly four years, and on July 25, 1951, filed
a memorandum indicating his decision in the case, which
simmered the account down to a judgment against the
plaintiff on his complaint and in favor of the defendant
on his counterclaim for the sum of $84.35.

Plaintiff pointedly, perhaps it is better said, bitterly,
complains of such delay and contends that because of it
the details of the many different partnership transactions
and of the extensive evidence relating thereto must have
passed from the memory of the trial court. Our review
indicates that there may be some substance to this con-
tention. It is appreciated that the trial court is always
much occupied with the press of current business. Yet we

are constrained to observe that we fail to see how any ad-
vantage could be gained by anyone, including the trial
judge, from any such long delay as occurred here. As has
peen wisely said, “Justice delayed is often justice denied.”
We regret that this delay occurred. It forms one of the
unfortunate examples of “the law’s delay” sometimes point-
ed to as a grievous fault, to which both trial and appellate
courts, including this one, too frequently may be addicted,
and which we who administer the law as judges, should
to the utmost of our ability, consistent with due care and
deliberation, seek to eliminate.

This action for an accounting is in equity and
appeals to this court’s scope of review, which was i |
elaborated in Crockett v. Nish :*

“Since this is a suit in equity, it is our duty under Art. VIII, Sec.
9 of the Constitution, to review the facts. In examining the transcript
to determine what our conclusions from the evidence will be we are
to make an independent analysis of it. If at the end of that investi-
gation we are in doubt or even if there be a slight preponderance in
our minds against the trial court’s conclusions we will affirm.”

As indicated, the judgment of this court will not be
substituted for that of the trial court merely because we
might disagree with him, but we will do so only when the
evidence clearly preponderates against his findings.”

No good purpose would be served by reciting the multi-
farious transactions of the firm. We limit discussion to
a necessary background and facts pertaining to the princi-
pal errors assigned.

The partnership arrangements were that the parties
were to divide profits and bear losses equally. Both ad-
vanced money to buy cattle, feed them and finance the
enterprise; the greater portion of the active management

1106 Utah 241, 147 P.2d 858, 854.
2First Security Bank of Utah v. Burgi, 122 Utah 445, 251 P. 2d 297;
MacDonald v. MacDonald, 120 Utah 578, 236 P. 2d 1066.

and actual handling and feeding of the cattle devolved
upon Mr. Gray.

Stevens’ main indictment against the judgment is that
the trial court erred in awarding Gray 3614¢ per day per
head for feeding partnership cattle. He argues that the
charges now asserted by Gray in this regard are exorbitant
claims devised as an after-thought to offset against Stevens
in this suit for an accounting. A number of aspects of the
evidence demonstrate the likelihood that there is at least
some merit to this contention.

The first significant fact to be noted pertaining to this
contention is that Gray, in his original pleadings, only
asked for 85¢ per day for feeding, and asserted no sep-
arate charge for the hiring of labor and equipment;
whereas he later amended his pleadings to ask for |
the higher amount plus a very considerable claim for
the men, teams and wagons, which is later herein referred
to. Second, although a substantial portion of the feeding ex-
penses were for cottonseed meal and rolled barley upon
which there should have been commercial records, no
weighbills, invoices or other record evidence of such ex-
penses were kept or produced by Gray; third, this is like-
wise true with respect to the men, teams and wagons al-
legedly hired. Fourth, as to the hay fed from his own
stacks, which had to be hauled, although scales were easily
accessible, Gray failed to weigh it or even measure it in
the stacks or otherwise keep records of the amount used.
As to the latter matter, perhaps no great importance can
be placed thereon because it may not be reasonable to ex-
pect him to keep records as to hay hauled out of his own
stacks. But as to the expenses of the feeds, and the men,
etc. hired, it seems only fair and proper that, knowing he
would charge these expenditures against the partnership
and offset them against Stevens’ expenses, he should have
kept records. In a partnership accounting, the partner

See 68 C.J.S., Partnership, § 91; Story, Partnership (7th Ed.) Sec.
181,

claiming a credit in his favor has the burden of proving
its

Stevens challenges the propriety of receiving secondary
evidence of such expenditures. Ordinarily, if an explana-
tion of failure to produce such records is satisfactory to
the trial court it is within his discretion to receive
other evidence concerning such facts. Gray evidently i
met this requirement because the court allowed him
and another witness to testify in reference to the issue. It
is true that where such records should have been kept, and
are not produced, the court should look with extreme
caution upon such secondary evidence. In the instant case
we see no justification for interfering with the trial court’s
ruling, and it is not advisable here to do so or to give any
extensive consideration to the matter because, when all
of the evidence is evaluated, it so clearly preponderates in
favor of the contentions of Stevens and against Gray’s
claims that the finding of 3614¢ per day for feeding can-
not be allowed to stand.

The finding just referred to rests only upon testimony
offered by Gray himself and one other witness, Rodney
Martin. In addition to the fact above noted, that Gray
had no record to support his claims, it is to be remembered
that he was self-interested in the highest degree because he
was being sued on the account and was seeking to offset
his charges against it. Instead of giving amounts of ex-
penditures, he based his testimony upon his estimate of
the average daily ration of feed steers would consume dur-
ing the fattening process: barley 10 pounds, corn 1 pound,
bran 1 pound, cottonseed meal 1 pound, hay 30 pounds.

‘McGinnis v. McGinnis, 274 Mo. 285, 202 S.W. 1087; see Moore v.
Malis, 292 Ky. 106, 166 S.W.2d 52; Bracht v. Connell, 318 Pa. 397,
170 A. 297; Sweatt v. Johnson, 97 Vt. 177, 122 A. 501.

At the prices shown for these commodities, the average
daily cost per steer would be about the amount allowed by
the trial court. An Analysis of the testimony of Rodney
Martin, Gray’s only other witness on this point shows that
on the basis of the actual costs of feeds testified about
by him, the average daily cost would be about 24¢. He did
mention other feeds without specifying either amounts
or costs.

As opposed to this, Stevens presented close to a dozen
witnesses, the purport of whose testimony indicates clearly
that the 3614¢ allowed is grossly out of line with the then
current reasonable cost of such feeding. A number of
them testified to having feed programs whose average
daily cost per animal was around 20¢ per day; several had
feeding schedules less than 20¢. The evidence further
showed that Gray himself contracted with others to feed
partnership steers during this period at a lesser figure
than he claims from the partnership. One such contract
was with the Davis Brothers under which they fed 60 head
of cattle on their ranch for 115 days at a cost to Gray of
2114¢ per day.

It is manifest that Stevens is correct in his contention
that the evidence clearly preponderates against the finding
of the trial court in allowing 36144¢ per day per animal
and it is therefore necessary to reject such finding.
Having done so, consistent with our desire, and | |
that of the parties, to see an end to this litigation,
we survey the evidence to determine what a fair allowance
should be. This is in accordance with the prerogatives of
this court—

‘Where the evidence is not in conflict or greatly preponderates one

way or the other, this court [the Supreme Court] has not infrequently
made its own findings.”>

Stevens, in the argument on appeal, concedes that an
amount up to 25¢ per day would be a fair charge with which

*Baker v. Hatch, 70 Utah 1, 257 P. 678, 676.

we agree, and adopt as a fair and reasonable allowance;
such should be the finding.

The next two points of controversy can best be discussed
together: The number of cattle fed by Gray, and the num-
ber he should be held to account for the sale of. It is evi-
dent that a total of 1,405 were bought by the part-
nership, but the accounts show that only 1,370 were | |
sold, only 4 having died, 31 head were not accounted
for. It is significant to note that in his claim for feeding,
Gray claimed these 31 head, but in accounting for the pro-
ceeds of sale did not list them, asserting that Stevens was
responsible for them. Gray claimed that these cattle were
short from a herd purchased at Minersville, but the evi-
dence shows that Gray and Stevens were there together
at the time they were bought; that the cattle were shipped
to Payson where they were picked up by Gray’s men, and
there is no showing that Stevens had any further possession
or control over them. Hence, as to the missing 31 head the
trial court erred in failing to charge them against Gray.
The account should be corrected charging him at the rate
of $84.41 per head, the average sale price of partnership
cattle. But as to the number fed by Gray, the finding will
not be disturbed. .

Stevens further maintains that it was improper for the
trial court to allow Gray for three men with teams and
wagons at the rate of $5 per day per outfit during the
feeding period. In support of his argument, in addition to
the facts above noted, that no records were produced,
that in the original counterclaim Gray made no such sepa-
rate charge, and that Stevens was not in a position to get
testimony to dispute this claim, Stevens presented evidence
that one man could take care of about 200 head of cattle
while Gray had no more than 317 feeding at any one time.
However, on the basis of the testimony of Gray himself and
his hired man, Willis Provstgaard, that such help was in
fact hired, there is sufficient evidentiary foundation for the
finding of the trial court that we would not be authorized

to vacate it and substitute a contrary finding. Consequent-
ly, the allowance of $2,677.50 to Gray for hiring such help
will be allowed to stand.

The next item in order of importance is a difference of
$1,000 in the amount credited to Gray. This arises from the
fact that the court credited him with having paid $1,000
on a note owed by Stevens to the Commercial Bank of
Spanish Fork. Early in the trial, counsel stipulated | |
that an officer of the bank if called as a witness
would testify that Gray paid the $1,000. But later, the de-
fendant admitted several times that he did not pay it. It
is to be noted that the stipulation was not that Gray had
paid the money, but only that a witness would so testify.
Such evidence is hardly credible against Gray’s own admis-
sion against his interest made repeatedly under oath. We
therefore agree with Stevens’ contention that the evidence
so clearly preponderates against the finding that it should
be changed and the credit of this $1,000 to Gray should be
deleted from the account.

The court likewise erroneously credited Gray for $19.78
for lumber used in repairing feed racks on his farm.
These repairs inured to Gray’s benefit; consequently | |
the charge against the partnership was improper.

Stevens also questions numerous other items in the
account. These pertain to pasturage fees, wintering some
calves, various purchases of hay and feed, telephone and
other incidental expenses and failure to charge Gray with
another 12 head of partnership stock he claims the latter
converted to his own use. With respect to such items,
although there is dispute concerning them, under the rule
of review in equity heretofore stated, we conclude they
are sufficiently supported in the evidence, that the trial
court’s findings must remain undisturbed.

Gray himself voices dissatisfaction with the trial court
for its failure to allow him compensation for the use of his

automobile on partnership business. Stevens makes no
strenuous objection to the allowance of some reason-

able compensation for this purpose; in fact makes | |
sort of a left-handed admission that the evidence
would justify Gray’s claim that he traveled about 15,000
miles in partnership activities. Gray testified that 7¢ was
the reasonable charge; this was countered by a claim of
5¢ by Stevens. In view of the fact that the trial court made
no finding on the issue at all, pursuant to the prerogative
of this court to make findings, as hereinabove stated,®
it would be mandatory to make a finding in Gray’s favor
for at least the amount admitted as reasonable by Stevens,
to wit: 5¢ per mile. On the basis of such admission, we
adopt that figure as the reasonable and proper amount to
be allowed. For 15,000 miles this amounts to $750 additional
eredit to Gray on the account. Since he is thus compensated
on a mileage basis, any credit to him for specific expendi-
tures on the automobile must be disallowed.

Stevens admits that in the judgment he is credited with
two substantial items, feeding cattle, $238.54, and a $423.35
bank deposit, to which he is not entitled. Corrections with
respect thereto should of course be made.

The cause is remanded with instructions to adjust the
account in the various particulars’ hereinabove indicated,
to make an accurate computation thereof, and to figure in-
terest thereon in accordance with the stipulation as to in-
terest made by counsel at the trial.

Costs to appellant.

WOLFE, C. J., and McDONOUGH, HENRIOD and
WADE, J.J., concur. .

Ibid.

HUBBLE et al. v. CACHE COUNTY DRAINAGE
DIST. NO. 3 et al.

No. 7982. Decided July 29, 1953. (259 P. 2d 893.)

See 28 C.J.S. Drains, sec, 29. Improvements, right of owner of
easement to make. 17 Am. Jur. Easements, sec. 107; 112 A.L.R, 1807.

George D. Preston, Logan, for appellants.

LeRoy B. Young, Ogden, Bullen & Olson, Logan, for re-
spondents.

WOLFE, Chief Justice.

The defendant Cache County Drainage District was cited
into the court below upon an order to show cause why it
should not be punished for contempt of court for alleged
violation of an amended decree of the lower court. The
original decree was before this court on a previous appeal,
Utah, 237 P.2d 848, but while the appeal was pending, the
parties entered into a stipulation for the purpose of amend-
ing the decree. We remanded the case and the amended
decree was subsequently entered by the lower court on
December 10, 1951.

The Cache County Drainage District Number Three is lo-
eated in the Northern portion of Cache County, the natural
topography dividing the district into the Northern and
Southern Divisions. The drain for the Northern Division,
so-called Outlet No. 1, flows across the plaintiffs’ land
into the Bear River, and the drain for the Southern Divi-
sion, Outlet No. 2, flows across the land of individuals not
involved in this suit, entering the meandering Bear River
at a point further south. The amended decree adjudges
the defendant Drainage District to have a perpetual ease-

A407

ment across plaintiffs’ land to drain the Northern Division
through Outlet No. 1.

After entry of the amended decree, defendant Drainage
District obtained the necessary consent of landowners,
not ineluding plaintiffs, to modify the manner of operation
of the District so that a large portion of its drainage waters
which previously flowed from the Northern Division into
Outlet No. 1, flowed into Outlet No. 2, thereby reducing
the area drained across plaintiffs’ land from approximately
705 to 187 acres and reducing the flow of water through
Outlet No. 1 by approximately 70%. This was accomplished
by the construction of a new drain leading to Outlet No. 2
and an earth dam at the head of Outlet No. 1. Although the
dam was destroyed by an unprecedented spring runoff,
the difference in level of the drains still caused a major
portion of the runoff to course through Outlet No. 2, and
after the spring runoff subsided, the reduction in flow of
approximately 70% remained.

In the fall of 1952, one Cyril Pitcher, owning approxi-
mately 40 acres of Jand located in the Northern Division
of the Drainage District and situated so that drainage
would be through Outlet No. 1 and across plaintiffs’ land,
with the knowledge and consent of defendant, constructed
two new tile drains. We must assume that these new drains
will increase the amount of water drained from Pitcher’s
land, but at the same time we again direct attention to the
fact that the overall drainage burden has been lessened by
approximately 70%. Since the evidence indicates that other
landowners in the Northern Division are contemplating
new drains, we are led to the following inquiry, all the
errors assigned going to substantially the same point: Un-
der the terms of the amended decree, is the burden on the
servient estate tested by the flow of water through Outlet
No. 1 on April 8, 1947, or by the number, size and location
of the drains existing on the dominant estate as of April

408 en!
ee

8, 1947? In order to answer the question, it is necessary
to quote portions of the amended decree as follows:

“1, hat the defendant, Cache County Drainage District No. 3
(Northern Division) is hereby adjudged and decreed to have a per-
petual easement over and across the lands of the plaintiffs * * *
in what is designated on the map as Outfall [Outlet] No. 1, for the
purpose of discharging therein and conveying across the premises
of the plaintiffs, through said channel, from its artificial ditches
and drains, all of the water as created, conducted and conveyed by
said ditches and drains from its system in the manner of operation
as the same emisted on April 8, 1947.

“2. That the plaintiffs are entitled to and there is hereby issued
an injunction against the defendant corporation forever enjoining
said defendant, its officers, agents, or employees, from causing any
waters which may be created, developed or increased by the construc-
tion of any new drains, either within or without the said district, or
the enlargement of any old drains where the water from said new
or enlarged drain is to be coursed through plaintiff's premises, or
aiding and abetting others, either within or without the district, to
drain waters into the present existing system, and across plaintiff’s
premises, provided, however, that nothing contained in this injunction
shall be construed to prevent or enjoin the defendant, its officers,
agents and employees, from making any improvements to or mainten-
ance of its drainage system as it existed on April 8, 1947, so long
as such improvement to or maintenance of the same does not mater-
tally increase the flow of water over or inerease the burden to the
lands of plaintiffs or their successors in interest, nor shall this in-
junetion be so construed as to prevent or bar defendant from pro-
ceeding, by condemnation, in eminent domain, to acquire a legal
right-of-way across plaintiff’s premises, should defendant at any
time elect so to do.” (Italics added.)

The lower court interpreted the amended decree to mean

“that the defendants have the right to improve, enlarge and extend
their drains and construct new drains within the limits of the drain-
age district so long as said new drains, improvements or enlargements
do not increase the burden on plaintiff’s land,”

and entered judgment for defendant. Both parties allege
that the words used in the amended decree are plain in
meaning, albeit, the parties reach opposite interpretations.

409

Plaintiffs maintain that the extent of the easement adjudg-
ed by the amended decree is measured by the number, size
and location of drains existing on April 8, 1947, and that
a right to make changes in the manner of operation, such
as the construction of new drains, can only be acquired by
proceedings in eminent domain. Plaintiffs complain that
although the defendant Drainage District has diverted a
large portion of the water which was drained through Out-
let No. 1 on April 8, 1947, still defendant is unwilling to
abandon its easement to that extent, retains the power to
redirect the diverted water through plaintiffs’ land, and
if new drains are constructed to reach the former flow of
water, an additional burden will be placed on plaintiffs to
measure the flow from year to year and compare it with the
flow as of April 8, 1947.

We think the lower court was correct in its interpreta-
tion. Although the italicized portion of paragraph one of
the amended decree seemingly, as contended by plain-
tiffs, limits defendant’s easement to the manner of [jl
operation of the Drainage District, viz., the number,
size and location of the drains, paragraph two contains a
proviso allowing for improvement and maintenance of the
Drainage District as it existed on April 8, 1947,

“so long as such improvement to or maintenance of the same does

not materially increase the flow of water over or increase the burden
to the lands of plaintiffs * * *.”

The word “maintenance” must relate to the number, size
and location of drains existing on April 8, 1947, while “im-
provements” must concern something new: enlarging old
or constructing new drains. Thus the test of the burden
on the servient estate is in terms of the flow of water
through Outlet No. 1 arising from within the limits of the
Drainage District and not maintenance of the status quo
as to number, size and location of the drains on the domi-
nant estate. To interpret otherwise would treat as surplus-
age the word “improvements.” In Salt Lake City v. Tellu-

410 Ce)
eee

ride Power Company, 82 Utah 607, 17 P.2d 281, 284, this
court said:

“In construing the decree, it should be construed together as a
whole so as to give meaning and force to all of its terms, and, if
a reasonable construction can be had which will give force to all of
its wording, such a construction should be made.”

Moreover, it is clear that the needs of society and the
concomitant policy of the law favor changes and improve-
ments for the benefit of the dominant estate so long
as the manifest intent of the parties does not dis- | |
allow the changes and the burden to the servient
tenement is not increased. Big Cottonwood Tanner Ditch
Co, v. Moyle, 109 Utah 218, 174 P.2d 148, 172 A.L.R. 175;
Robins v. Roberts, 80 Utah 409, 15 P.2d 340.

Affirmed. Costs to respondents.

McDONOUGH, CROCKETT, HENRIOD and WADE,
J.J., concur.

JACKSON LAND & LIVESTOCK CO. v. STATE
TAX COMMISSION

No. 7904, Decided July 20, 1958. (259 P. 2d 1084.)

412

|

See 61 C.J. Taxation, sec. 498. Exemption from tax. 51 Am. Jur.,
Taxation, sec. 502; 88 A.L.R. 778.

George D. Preston, Logan, for plaintiff.

John R. Rampton, Jr., Bountiful, Thomas C. Cuthbert,
Salt Lake City, for defendant.

WADE, Justice.

Certiorari to review a decision of the State Tax Com-
mission determining that the Jackson Land & Livestock
Company, admittedly an agricultural corporation organized
for profit, was subject to the Franchise and Privilege Taxes
and was not exempt under the terms of Section 80-13-5,
subdivision (1), U.C.A. 1948, now Section 59-13-4, sub-
division (1), U.C.A. 1958 which reads:

“Corporations exempted.—The following corporations are exempt
from the provisions of this chapter, to-wit:

“(1) Labor, agricultural or horticultural organizations.”

It is the Tax Commission’s position that not all labor,
agricultural or horticultural organizations are exempt from
the franchise tax under the above section but only those
which are not organized for profit. We agree with the
Commission.

Section 59-13-4, U.C.A. 1953 contains 16 types of corpo-

rations exempted from the state franchise tax all of which
as stated in American Investment Corporation v. State Tax
Commission, 101 Utah 189, on page 195, 120 P. 2d 331, on
page 834:
«* * * may be characterized by these features: They are organized
and operated not for profit but for the benefits of their members,
and they cannot under their articles engage in the trade, commerce
or business in the state. * * ¥”

Plaintiffs contention that the subsection exempting agri-
cultural corporations from the tax uses simple, clear and
unambiguous language which does not limit the exemptions
to such corporations as are not organized for profit
as could easily have been done by simply adding the [jl
words “not organized for profit” and therefore is
not subject to construction would have some merit if it were
not for the fact that it is contained in a group of organiza-
tions all of whose exemptions are based on the fact that
they are not organized for profit, but rather for educational
or charitable purposes and have for their objects the bene-
fits of their members. Under such circumstances one group
which appears to be out of harmony with the objectives of
the state franchise tax which was to tax all business being
done in the state for a profit and contained in a section
in which all the organizations exempted, except the one
in question, very apparently are either educational or
charitable corporations or such as are organized to benefit
their members and are not organized for profit, the legis-
lative intent is not so clear and unambiguous as not to be
subject to construction. Where the literal meaning of
words does not appear to be in harmony with the purpose
of the Act, this court will look into the reasons and history
of the enactment. As we said in Norville v. State Tax Com-
mission, 98 Utah 170, on page 177, 97 P.2d 987, on page
940, 126 A.L.R. 1318:

“Tax statutes should be interpreted in connection with other tax
legislation and in the light of the report of the committee which
framed the statute, Nash Sales v. City of Milwaukee, 198 Wis. 281,
224 N.W. 126. And where those statutes are patterned after statutes
of sister states, the interpretation given by the highest court of the
sister state is presumed to prevail. New York Jobbing House v.
Sterling Fire Ins. Co., 54 Utah 394, 182 P. 861; In re Schenk’s Estate,
53 Utah 381, 178 P. 844; Luckich v. Utah Construction Co., 48 Utah
452, 160 P. 270; In ve Raleigh’s Estate, 48 Utah 128, 158 P. 705.”

See also Union Portland Cement Company v. State Tax
Commission (On Rehearing), 110 Utah 152, 176 P.2d
879.

414 De
ee

The Franchise and Privilege Tax Act was enacted .in
1931 upon the recommendations of the State Tax
Revision Commission which had been appointed in | |
1929 to make a study for a revision of the entire tax-
ing policies of the state. One of its recommendations was
that:

“All business done for profit should be taxed at a moderate uniform
rate upon the net income of the business done within this state.”

See Report of the Tax Revision Commission of the State
of Utah, page 1, and on page 71 thereof the Commission,
recommended that in drafting a business franchise tax
Section 59-18-4, 1953, which is the exemption section of
the Franchise Tax Act is, except for a few differences,
copied almost verbatim from the Federal Income Tax Act,
26 U.S.C.A. § 101(1), and subsection (1), the section in-
volved herein, is identical with the same subsection in the
exemption section of the Federal Income Tax Act which
was in effect in 1931 when our Act was enacted.

At the time what it now subsection (1) of 59-18-4, U.C.A.
1953 was enacted there was a United States Internal Reve-
nue Bureau regulation interpreting what organizations
mentioned in Section 103(1) of the Federal Income Tax
Act, 26 U.S.C.A. § 101(1), which is the same as our Sec-
tion 59-13-4(1), U.C.A. 1958, were entitled to exemption
under that act. That was Reg. 74, art. 522 which reads:

“Labor, agricultural, and horticultural organizations.—The organ-
izations contemplated by section 108(1) as entitled to exemption from
income taxation are those which—

(1) Have no net income inuring to the benefit of any member;
(2) Are educational or instructive in character; and

(8) Have as their objects the betterment of the conditions of those
engaged in such pursuits, the improvement of the grade of their
products, and the development of a higher degree of efficiency in
their respective occupations.”

“Organizations such as county fairs and like associations of a quasi-
publie character, which are designated to encourage the development
of better agricultural and horticultural products through a system
of awards, and whose income from gate receipts, entry fees, and
donations is used exclusively to meet the necessary expenses of upkeep
and operation, are thus exempt. On the other hand, associations
which have for their purpose, for example, the holding of periodical
race meets, the profits from which may inure to the benefit of their
shareholders, are not exempt. Similarly, corporations engaged in
growing agricultural or horticultural products for profit are not
exempt from tax.”

Under this regulation it is clear that no agricultural
corporation organized for profit was exempt under the
Federal law. Similar regulations were in effect in 1921
when the Federal exemption act was reenacted,
which regulations were called to the attention of the | |
United States Senate at the time it was considering
the wording of subsection (1) of the exemption section of
the Income Tax Laws. See Seidman’s Legislative History
of Federal Income Tax Laws, 1988-1861, page 856. When
a regulation is of long standing and the statute which it
interprets has been enacted many times since such regula-
tion, it has the quality of law. Underwriters’ Laboratories
v. Com’r of Internal Revenue, 7 Cir., 185 F. 2d 871; Retail-
ers Credit Ass’n of Alameda County v. Commissioner of
Internal Revenue, 9 Cir., 9 F.2d 47, 11 A.L.R. 152.

In view of the above it is apparent that the Legis
lature did not intend to exempt agricultural corpo- m |
rations organized for profit.

Affirmed.

WOLFE, C. J., and McDONOUGH, CROCKETT and
HENRIOD, J.J., concur.

WARREN v. DIXON RANCH CO. et al.
No. 7848. Decided Aug. 18, 1958. (260 P. 2d 741.)

See 49 C. J. S., Judgments, sec. 281. Vacation of default judg-
ment for omission of attorney. 81 Am. Jur., Judgments, sec, 748;
164 A. L. R541.

Clyde & Mecham, Robert C. Gibson, Salt Lake City, for
appellants.

Hugh W. Colton, Colton & Hammond, Vernal, for re-
spondent.

Dean W. Sheffield, Salt Lake City, for respondent.

McDONOUGH, Justice.

Appellants seek to have the lower court’s refusal to vacate
a default judgment taken against them by the respondent
reversed on the grounds of excusable neglect.

The suit was one to quiet title. On May 26, 1951, appel-
Jant Arnold Dixon was served with process individually and
as a director and trustee of the Dixon Ranch Company, a
Utah corporation whose charter was suspended in 1934.
He failed to answer or to notify the stockholders of the
pending suit, and default was entered against him and the
company on July 11th. Appellant Paul Dixon, one of about
20 stockholders, first received notice of the litigation on
August 15th, through publication of summons upon J. G.
Brown, another defendant. He immediately employed an
attorney and an answer and counterclaim to the property
was filed on September 18th, in the name of Dixon Ranch
Company. This was 90 days after answer was due and

419

64 days after default had been entered. Appellants claim
that the trial court abused its discretion in not granting
their motion to vacate the judgment and urge that excus-
able neglect was shown by affidavit presented at the
hearing of the motion in (1) a promise made by respond-
ent’s attorney that appellants could have a longer time in
which to answer, (2) the illness of Arnold Dixon at the
time of service, and (3) that the stockholders received no
notice of the action in time to defend their interests.

The allowance of a vacation of judgment is a creature
of equity designed to relieve against harshness of en-
forcing a judgment, which may occur through procedural
difficulties, the wrongs of the opposing party, or
misfortunes which prevent the presentation of a [i
claim or defense. Rule 60 (b) of the Utah Rules
of Civil Procedure outlines the situations wherein a party
may be relieved from a final judgment, among which is
mistake, inadvertence, surprise, or excusable neglect claimed
here by the appellant. Equity considers factors which may
be irrelevant in actions at law, such as the unfairness of
a party’s conduct, his delay in bringing or continuing the
action, the hardship in granting or denying relief. Although
an equity court no longer has complete discretion in grant-
ing or denying relief it may exercise wide judicial dis-
eretion in weighing the factors of fairness and public
convenience, and this court on appeal will reverse the trial
court only where an abuse of this discretion is clearly
shown. Salt Lake Hardware Co. v. Nielson Land & Water
Co., 48 Utah 406, 184 P. 911; McWhirter v. Donaldson, 36
Utah 293, 104 P. 731.

The difficulty facing the trial court upon a motion to
vacate the judgment lies in the fact that a compromise
between two valid considerations must be selected. A rule
which would permit the re-opening of cases pre-
viously decided because of error or ignorance during [jl
the progress of the trial would in a large measure

420

. Vitiate the effects of res judicata and create a hardship

to the successful litigant in causing him to prosecute his
action more than once and possibly lose the ability to col-
lect his judgment; on the other hand, the court is anx-
ious to protect the losing party who has not had the op-
portunity to present his claim or defense. Discretion must
be exercised in furtherance of justice and the court will
incline toward granting relief in a doubtful case to the
end that the party may have a hearing. Hurdy v. Ford,
74 Utah 46, 276 P. 908. However, the movant must show
that he has used due diligence and that he was prevented
from appearing by circumstances over which he had no
control. Peterson v. Crosier, 29 Utah 285, 81 P. 860.

Appellants offer an affidavit by their former attorney
stating that he received an oral promise from respondent’s
attorney to the effect that he would be allowed a longer
time in which to file his answer. Relief in such
instances is granted not because the other party was I |
fraudulent but because complainant was deprived
of his chance to present his case by the conduct of the
other party whether or not the conduct was consciously
wrongful. In this case, appellants were deprived of nothing
by the alleged promise inasmuch as the default judgment
had been entered against them a month before the em-
ployment of the attorney. Such a promise, if given, could
in no way bind a client who already had a judgment.
McWhirter v. Donaldson, supra.

The second showing of excusable neglect submitted by
appellants is an affidavit by Paul Dixon to the effect that
Arnold Dixon, upon whom personal service was made, is
and has been seriously ill and did not notify the
interested parties. We are not told the nature of the | |
illness and it does not appear that appellant Arnold
Dixon was so incapacitated that he could not have called
an attorney to have his rights and the rights of the cor-
poration protected. Peterson v. Crosier, supra. Illness alone

|

is not sufficient to make neglect in defending one’s action
excusable. Cooper v. Deon, 58 Cal.App.2d 789, 187 P.2d 733.

A basic requirement of an action which can lead to a
valid judgment is that a procedure should be adopted
which in the normal case will give to the parties an op-
portunity for a fair trial which is reasonable in view
of the particular type of case. If this requirement [jl
is met, a judgment awarded in an action is not void
merely because the particular individual against whom it
was rendered did not in fact have an opportunity to pre-
sent his claim or defense. Restatement of Judgments § 118.
And although a judgment may be erroneous and inequitable,
equitable relief will not be granted to a party thereto on
the sole ground that the negligence of the attorney, agent,
trustee or other representative of the present complainant
prevented a fair trial. Restatement of Judgments, §126.

The judgment entered in this case was rendered against
the assets of the corporation. Rule 4(e) (4) of the Utah
Rules of Civil Procedure provides that personal service
upon a corporation may be made by delivering a
copy thereof to an officer, a managing or general ||
agent. 16-1-2, U.C.A.1958 states that a corporation
whose franchise has expired may continue for the purpose
of winding up its affairs and may sue or be sued; 16-7-8
provides that the authority of an agent of the corporation
continues until formally revoked. Hence, service upon
Arnold Dixon gave jurisdiction over the dissolved corpora-
tion and it is of no significance that he states in his affi-
davit that he has never been authorized by the charter or
by-laws or by court appointment to act as agent for the
stockholders; he was the proper process agent for the
corporation under the law.

To hold that Paul Dixon and the other stockholders
could now insist that they have a right to have the
case reopened since they personally received no | |
notice of the action would be to undermine the Rules,

*
which are positive in their application and are designed to
expedite litigation.

In order for this court to overturn the discretion of the
lower court in refusing to vacate a valid judgment, the
requirements of public policy demand more than a mete
statement that a person did not have his day in court
when full oportunity for a fair hearing was af- |
forded to him or his legal representative. Appellant
cites in his brief two instances where this court reversed
the trial court’s ruling denying vacation of the judgment.
In Hurd v. Ford: the reversal was based upon these con-
siderations: a motion to make more definite had been
filed within the time for answering, the default judgment
for attorney’s fees had been entered on an unliquidated
amount and no evidence of a reasonable fee had been taken,
and further, the court acted beyond its power in requiring
plaintiff to turn over documents in her possession as a
condition for vacating the judgment. In Cutler v. Haycock,?
a case decided in 1907, this court reversed the trial court
because it felt that in determining not to set aside the
judgment the trial court had not exercised its discretion
because of a misinterpretation of Peterson v. Crosier,?
and would otherwise have granted the motion inasmuch as
plaintiff had used every possible means to present his
defense but was prevented by the physical difficulties of
communication in a sparsely-settled county.

Appellants’ conduct is not entirely inexcusable and the
trial court could have, in its discretion, set aside the judg-
ment; but, on the other hand, respondent and the trial
court were justified in believing that appellants had.
abandoned their defense. The rule that the courts H
will incline towards granting relief to a party who

174 Utah 46, 276 P. 908. ‘

°82 Utah 354, 90 P. 897.
829 Utah 285, 81 P. 860.

has not had opportunity to present his case is ordinarily
applied at the trial court level, and this court will not
reverse the trial court where it appears (as here, from
the memorandum decision which is a part of the record)
that all elements were considered, merely because the
motion could have been granted. This court will not sub-
stitute its discretion for that of the trial court in a case
such as this.

Concluding as we do that there was no abuse of dis-
eretion on the part of the trial court, it becomes unnec-
essary to consider the question of whether or not appel-
lant had a meritorious defense. The judgment of the lower
court is affirmed. Costs to respondent.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,

JJ., concur.

LEACH et al. v. BOARD OF REVIEW OF
INDUSTRIAL COMMISSION, DEPARTMENT OF
EMPLOYMENT SECURITY.

No. 7751. Decided Sept. 3, 1953. (260 P. 2d 744.)

Herbert B. Maw, Salt Lake City, for appellants.

E. R. Callister, Atty. Gen., and Fred F. Dremann, Salt
Lake City, for respondent.

WOLFE, Chief Justice.

Certiorari to review a decision of the Board of Review
of the Industrial Commission affirming the decision of
the Appeals Referee that the plaintiffs are liable for con-
tributions to the Unemployment Compensation Fund on
moneys paid by them to certain “franchise dealers” who
solicited orders for the sale of the plaintiffs’ windows and
other products; also to certain “contract installers” who
installed the plaintiffs’ windows in buildings. The case
presents for our determination whether the “franchise
dealers” and “contract installers” were in the employment
of the plaintiffs within the meaning of the Employment
Security Act, Section 35-4-1 et seq., Utah Code Annotated,
1953.

The plaintiffs are partners engaged in the business of
distributing Rusco Windows and other products manu-

factured by the F. C. Rusco Company of Cleveland, Ohio.
Sales of the products are made by individuals and corpora-
tions denominated by the plaintiffs as “franchise dealers,”
hereinafter referred to simply as dealers, to whom the
plaintiffs by agreements in writing give the exclusive
right (subject to an exception not important here) to
solicit orders for the sale and installation of Rusco Win-
dows and products in a certain territory at prices fixed
by the plaintiffs. The plaintiffs furnish all order forms
and dealers are required to submit all orders solicited by
them to the plaintiffs for acceptance within five days after
procuring them. When the plaintiffs accept an order it
becomes a contract between the customer and them. Deal-
ers are precluded by their agreements with the plaintiffs
from referring the orders which they solicit to any one
but the plaintiffs. If a sale made by a dealer requires
financing, the dealer must complete certain forms fur-
nished by the plaintiffs giving necessary information. All
eredit investigations are made by the plaintiffs. Dealers
receive a commission on the orders which the plaintiffs
accept, the commission being usually paid after the pro-
ducts have been installed.

By their agreements with the plaintiffs, dealers may
not handle, sell or distribute any other products, although
there was testimony adduced that some dealers did, in
fact, solicit sales of products not carried by the plaintiffs.
The dealers work when and as they desire, pay their own
expenses, hire help, if needed, at their own expense, and
operate from their own homes or offices. They do, how-
ever, use the plaintiffs’ office telephone as a reference
in their selling activities and the plaintiffs provide a
table at its office for the use of the dealers. While
the dealers develop some of their own prospects, they
are aided by leads furnished by the plaintiffs and placed
by them in the dealers’ individual mail boxes at the
plaintiffs’ office. Because the plaintiffs have sales and
installation quotas to meet, the services of dealers who do

ne

426 eee!
ce

not produce sufficiently are terminated by the plaintiffs.
Only five days’ notice of termination need be given to the
dealers by the plaintiffs.

Before commencing work, dealers are given training
by the plaintiffs or by factory representatives to acquaint
them with the products which they will sell. During their
training period, the length of which depends upon their
previous sales experience, prospective dealers are classed
as employees by the plaintiffs and unemployment contribu-
tions are paid on their earnings.

Windows sold by the dealers are installed by persons
who usually have full or part time employment elsewhere.
Like the dealers, installers are given training by the plain-
tiffs to familiarize them with how the windows should be
installed. After this training, the plaintiffs enter into a
written agreement with each installer whereby the latter
agrees to furnish all necessary tools and to perform the
service necessary to install the products sold by the dealers
in a workmanlike manner. The agreements between the
plaintiffs and the installers provide that they may be
cancelled on five days’ notice by either party. When going
on an installation job, the installer obtains at the plain-
tiffs’ premises the windows or other products which have
been fabricated by the plaintiffs or which have been re-
ceived by the plaintiffs in a fabricated state. He also signs
a receipt for them, and obtains a list of specifications for
the installation which involves 20 points on standard jobs.
After transporting the products in his own truck to the
job and after installing the products pursuant to the speci-
fications, the installer returns a completed form to the
plaintiffs verifying that the materials have been installed,
whereupon he is paid. The amount of payment received
by the installers for the installation of windows is fixed
by the plaintiffs, but on certain other jobs the installers
often bid on the amount for which they will do the work.
While the work of the installer is usually not inspected
by the plaintiffs, they do occasionally inspect and some-

times the franchise dealer who obtained the job inspects
the work to make certain that the customer is satisfied.

It is the contention of the plaintiffs that neither the
dealers nor the installers were in their “employment” but
that the relationship of vendor-vendee existed between the
dealers and them and that the installers were “independent
contractors” outside the scope of the Employment Security
Act. In determining the merits of the plaintiffs’ conten-
tion, the following definitions found in subsections of Sec-
tion 35-4-22 of the Act should be borne in mind:

“(j) (1) ‘Employment’? means any service performed prior to
January 1, 1941, which was employment as defined in the Utah
Unemployment Compensation Law prior to the effective date of
this act, and subject to the other provisions of this subsection, ser-
vice performed after December 31, 1940, including service in inter-
state commerce, and service as an officer of a corporation performed
for wages or under any contract of hire written or oral, express
or implied.”

“(p) ‘Wages’ means all remuneration for personal services, in-
cluding commissions and bonuses and the cash value of all remunera-
tion in any medium other than cash. Gratuities customarily received
by an individual in the course of his employment from persons
other than his employing unit shall be treated as wages received
from his employing unit. The reasonable cash value of remuneration
in any medium other than cash and the reasonable amount of gratui-
ties shall be estimated and determined in accordance with the rules *
prescribed by the Commission; * * *.”

If the dealers and the installers rendered services for
the plaintiffs for wages or under a contract of hire, then
the plaintiffs had persons in their employment and are
liable for contributions on their wages unless those persons
are excluded from the Act by the exclusion test contained
in Section 35-4-22(j) (5) (A), (B) and (C), which test
we will consider later in this opinion.

We find in the record competent evidence from which
the Board of Review could have reasonably concluded that
both the dealers and the installers were rendering ser-

428 eee!
ee

vices for the plaintiffs for “wages” as that term is defined
in the Act. This court held in Creameries of America, Inc.,
v. Industrial Comm., 98 Utah 571, 102 P.2d 300, 304, that
the word “services” while not defined in the Act, should
be given a broad meaning. Said the court, speaking through
Mr. Justice MCDONOUGH,

“In ordinary usage the term ‘services’ has a rather broad and
general meaning. It includes generally any act performed for the
benefit of another under some arrangement or agreement whereby
such act was to have been performed.”

We further stated that all remuneration payable for
personal services is “wages.”

The plaintiffs were in the business of fabricating, selling
and installing Rusco products. To make their business
successful, customers to purchase their products had to
be obtained. In this endeavor, services were rendered to
the plaintiffs by the dealers who solicited orders for the
purchase of Rusco Windows and products. When the plain-
tiffs accepted an order obtained by a dealer, there arose
a contract between the plaintiffs and the customer for
the sale and installation of the plaintiffs’ products. The
plaintiffs are the sole distributors in this state of Rusco
Windows and products and thus are the only persons who
could accept the orders and supply the windows. The
dealers by their agreement with the plaintiffs could not
refer their orders to any one other than the plaintiffs.
The orders were written up on forms supplied by the plain-
tiffs; prices for the windows were fixed by the plaintiffs,
and dealers had to submit orders to them within five days
after obtained. The dealers did not have legal title to the
products for which they obtained orders. Title reposed in
the plaintiffs. It was their products which the dealers
sold, unlike the case of Fuller Brush Co. v. Industrial Comm.,
99 Utah 97, 104 P.2d 201, 129 A.L.R. 511, where this court
held that certain dealers selling brushes manufactured by
the plaintiff owned the brushes, and thus in selling those

|

brushes they were rendering service for themselves and
not for the plaintiff company.

Under the definition of wages given in the Act, which
definition is set out above, it is clear that the dealers’
remuneration constituted wages. That the dealers’ re-
muneration was a commission is manifest from paragraph
14 of the agreement between the plaintiffs and the dealers:

“This franchise dealer shall be entitled to a commission on any
contract secured by him from customer after said contract has
been approved by the distributor [plaintiffs] and after the products
ordered by the customer have been installed and invoiced and the
commission to be fixed by and in accordance with a discount or
commission schedule maintained by the distributor at its office in
Salt Lake City, Utah. The distributor agrees on written request to
provide in writing to the franchise dealer the amount of commission

called for on any particular contract or order secured by this franchise
dealer.”

The dealers were, in effect, agents who solicited orders
for the sale of their principals’ goods and were compensated
therefor by a commission on their sales.

There can be no question but what the installers were
performing services for the plaintiffs for “wages.” After
the plaintiffs accepted an order, they were obligated by
contract to furnish and install the products. The installers
performed a service for the plaintiffs which was in ful-
fillment of the plaintiffs’ contract with the customer. When
the plaintiffs needed some one to install windows, they
notified one of the installers who called at the plaintiffs’
place of business and obtained the windows and any other
necessary materials, along with a list of specifications.
After completing the job, he returned a completed form to
the plaintiffs verifying that the windows had been installed
and received compensation governed by a schedule formu-
lated by the plaintiffs.

The service performed by the dealers and installers for
the plaintiffs is analogous to the service found to be

430 © ee
ee

rendered for the newspaper publishing company by its
newspaper carriers in the case of Salt Lake Tribune Pub-
lishing Co. v. Industrial Comm., 99 Utah 259, 102 P.2d. 307.
There the company was interested in seeing that its news-
paper reached its subscribers and in order to accomplish
that result it entered into a contract whereby a carrier
was to perform the service of delivering its newspapers.
Similarly, in Creameries of America, Inc. v. Industrial
Comm., supra, we held that one Foss, who was a “franchise
dealer” of the plaintiff’s products was rendering personal
services for wages for the plaintiff in distributing those
products to its customers.

Having determined then that both the dealers and the
installers performed services for “wages” for the plain-
tiffs, we must next ascertain whether the dealers and the
installers are excluded from the operation of the Act by
the test posed in Section 35-4-22(j) (5) (A), (B), and (C),
providing that:

“(j) (5) Services performed by an individual for wages or
under any contract of hire, written or oral, express or implied, shall
be deemed to be employed subject to this act unless and until it is
shown to the satisfaction of the commission that—

“(A) such individual has been and will continue to be free from
control or direction over the performance of such services, both
under his contract of hire and in fact; and

“(B) such service is either outside the usual course of the business
for which such service is performed or that such service is per-
formed outside of all the places of business of the enterprise for
which such service is performed; and .

“(C) such individual is customarily engaged in an independently
established trade, occupation, profession, or business of the same
nature as that involved in the contract of service.”

It will be noted that the three requirements of the test
are stated conjunctively and hence all three requirements
must be met if the services rendered for the plaintiffs
are to be excluded from the Act.

Assuming for the purposes of this decision that the evi-
dence compels a finding that the dealers and installers met
the requirements of both (A) and (B), there is evidence
in the record from which the Board of Review could have
reasonably concluded that requirement (C) was not met,
i. e. that neither the dealers nor the installers were

“customarily engaged in an independently established trade, occupa-
tion, profession or business of the same nature as that involved
in the contract of service.”

In Fuller Brush Co. v. Industrial Comm., supra, we
pointed out that a shoe shiner, an auto mechanic, a plumb-
er and a barber meet this requirement because the ser-
vices which they perform emanate as a part of a business
in which they are engaged. They perform services for
others while in the pursuit of a business independently
established and in which they are customarily engaged
and for which service, like a common carrier, they hold
themselves out to perform. The plaintiffs urge that each
dealer was customarily engaged in the independently es-
tablished business of salesmanship. This contention is
untenable. Requirement (C) contemplates that the ser-
vice rendered is a part of, and is rendered in pursuance of,
a business of the person rendering the service, independent-
ly established, in which that person is customarily en-
gaged. In other words, the “independently established
business” must exist independent of the services under
consideration in the sense that it is the whole—of which
the particular service is a part. In Fuller Brush Co. v.
Industrial Comm., supra [99 Utah 97, 104 P.2d 208], it
was stated:

“Plaintiff contends that the provision [requirement (] refers wholly
to the service involved, and argues that if in rendering such service,
claimant was acting for himself he was engaged in a business of
his own, and therefore during such employment was customarily
engaged in an independently established business. The difficulty with
this position is that it ignores entirely the significance of the words
‘customarily’ and ‘independently.’ The statute does not say, as the

Colorado court read it in Industrial Comm. v. Northwestern Mutual
Life Ins. Co., 108 Colo. 550, 88 P. 2d 560, ‘independently engaged in
an established business,’ * * *, The adverb ‘independently’ clearly
modifies the word ‘established,’ and must therefore carry the mean-
ing that the ‘business’ or ‘trade’ was established independently of the
employer or the rendering of the personal service forming the basis
of the claim. And in the exclusion clauses (j) (5), or perhaps more
correctly the clauses making the exception from the general inclusion
of all persons rendering personal services for wages, the present
tense ‘is’ indicates the employee must be engaged in such independent
business at the time of rendering the service involved. ‘Customarily’
means usually, habitually, according to the customs, general practice
or usual order of things, regularly.”

By their agreements with the plaintiffs, dealers were
not allowed. to sell products not carried by the plaintiffs,
although there was testimony that some dealers did not
in fact abide by this restriction. However, it is not enough
that the dealers may have other sources of income. In
selling such other products the dealers were not pursu-
ing an independently established business, but rather work-
ing under contract of employment with other parties. The
dealers paid nothing for their franchises or dealerships.
They were prohibited by their agreements with the plain-
tiffs from assigning their franchises to any one else. The
risk of profit and loss was all in the plaintiffs. Selling
for the plaintiffs was the only or at least the main busi-
ness of the dealers, if indeed it can be called a business.
They had nothing aside from their relationship with the
plaintiffs. When the services of a dealer were terminated
by the plaintiffs, he became unemployed and had to secure
employment elsewhere. He had no business of his own
to fall back on—a business established independently of
his relationship with the plaintiffs and from which his
services for the plaintiffs emanate, a business in which
he was customarily engaged aside from his relationship
with the plaintiffs. The dealers’ occupation was selling,
but they had no independently established business as do
brokers or commission merchants. None of the dealers

held themselves out to the public as operating a sales
agency.

In holding that the dealers do not satisfy requirement
(C), we are supported by two cases heretofore decided by
this court on this point. In Glebe Grain & Milling Co. v.
Industrial Comm., 98 Utah 36, 91 P.2d 512, one Thomas
was engaged in soliciting orders for sheep pellets prepared
by the plaintiff. Like the dealers in the instant case,
Thomas was restricted to a certain territory and took
orders on company forms. The only other remunerative
work which he did during the period of time that he was
selling pellets was to sell a car of corn for a party in
Nebraska and to refer to one Maxfield, a dealer or broker
in feed, customers to whom he was unable to sell. There
was also evidence that Thomas attempted to sell insurance
when the pellet selling business was slow. This court up-
held a determination by the Commission that the evidence
did not satisfy requirement (C). Thomas’s occupation was
selling. He had sold insurance before becoming employed
by the plaintiff. But he was not at the time of his employ-
ment with the plaintiff customarily engaged in an inde-
pendently established trade, occupation, profession or busi-
ness.

In Creameries of America, Inc. v. Industrial Comm., 98
Utah 571, 102 P.2d 300, 306, one Foss entered in a con-
tract called a “franchise agreement” with the plaintiff in
which Foss was given the exclusive right to sell its prod-
ucts at retail in a defined area. We sustained findings by
the Commission that there existed a service relationship
between Foss and the plaintiff and that Foss was not
customarily engaged in an independently established trade,
occupation, profession or business. In regard to the latter
finding, this court stated that after the termination of
the “franchise agreement” Foss had
“nothing, except what credits he might have as a result of obtaining

new customers for the company, or what bills he might have out-
standing.” (Emphasis added.)

What we have said in regard to the dealers applies
equally as well to the installers. Their situation differs
from the dealers only in that a small fraction of their
time was consumed in rendering services for the plaintiffs
whereas the dealers spent almost all, if not all, their work-
ing time performing services for the plaintiffs. However,
this difference does not strengthen their case insofar as
meeting requirement (C). The evidence reveals that two
of the installers were regularly employed by the Kennecott
Copper Company, one by the United States Smelting &
Refining Company, one was a salesman, and another’s
occupation was unknown. It is readily apparent that be-
cause the installers were so employed, their services which
they rendered for the plaintiffs did not emanate from
any independently established business in which they were
customarily engaged. To the contrary, they were custom-
arily engaged in employment elsewhere for other employers.
None of them were licensed contractors or self-employed
carpenters or craftsmen.

Both the plaintiffs’ agreements with the dealers and
with the installers specified that the dealers and installers
were independent contractors and not agents or employees
of the plaintiffs. A similar provision was contained in the
“franchise agreement” under consideration in Creameries
of America, Inc. v. Industrial Comm., supra. Such pro-
visions, however, are ineffective in keeping an individual
without the purview of the Employment Security Act when
by his activity he brings himself within—just as parties
sharing profits cannot avoid becoming partners with its
attending legal liability despite any agreement which they
make to the contrary. ©

The decision of the Board of Review of the Industrial
Commission is affirmed. Each party to bear its own costs.

McDONOUGH and WADE, JJ., concur.

1953]

CROCKETT, Justice.

I concur, but note a problem which arises under the
statute in question.

It has long been established that whether one rendering
service for another is covered by the unemployment compen-
sation does not depend upon any common law concept of
master and servant or independent contractor relationship,
—the law defines classes of individuals covered and it
is only to the definitions in the act that we look to deter-
mine who is included.2 The purpose of the Act was to
stabilize the economy and decrease the burdens of un-
employment.? These matters are well settled and are
effectively covered in the main opinion.

The right to coverage by unemployment compensation
presumably is based upon the relationship existing be-
tween the individual who hires and the one rendering
service; their mutual rights and duties being measured
by the contract between them. But under test “C” upon
which the main opinion is based, coverage is made to de-
pend upon a circumstance entirely extraneous to the con-
tract of service: that is, it depends upon what the “em-
ployee” does at other times, which seems to be entirely un-
related to, and has nothing whatsoever to do with the
contractual obligations or the manner in which the service
is rendered.

It appears to me that the foregoing gives rise to a ques-
tion as to whether the application of the statute results
in unjust discrimination as between employees which fall
into different classes solely because of (C) of (J) (5)

185-4-1 et seq., U.C.A. 1953.

28inger Sewing Mach. Co. v. Industrial Comm., 104 Utah 175, 184
P, 2d 479. Auth. there cited.
Ibid.

436 Ce
beeen

referred to in the main opinion which specified that a
person hired who is

*

“customarily engaged in an independently established trade * *

of the same nature as that involved in the contract of service.
+k aD

is not covered.

Illustration: Suppose A and B work for Leach under
the identical contract; that A is also employed by X Com-
pany in other type of work; that B has an independently
established business as an “installer,” builder, or contrac-
tor. Under this statute A would be covered while B would
not.

There are these separate facets of discrimination:

1. In case of layoff A gets paid unemployment compen-
sation benefits, while B does not.

2. A will suffer disadvantage in getting hired on the
job because the employer will more readily hire B for
whom such contributions need not be made.

There is also a limitation upon the employer’s freedom
to choose between A and B upon their merits because of
the economic advantage to be gained by hiring B instead
of A.

It is appreciated that there may be a discrimination
between classes of individuals if there is some reasonable
basis for differentiation between them which is related
to the purposes sought to be accomplished by the act and
it applies uniformly to all persons within the class. I am
not sure that I see that the differentiation brought about
by paragraph (C) above referred to can be said to fulfill
that requirement. Sparing the detail here, it seems that
there are as good reasons why B should be paid as there

4State v. Mason, 94 Utah 501, 78 P. 2d 920, 117 A.L.R. 380;
Hansen v. Public Employees Retirement System, 122 Utah 44, 246 P.
2d 591.

are that A should, and that A should be as able to get
hired as B, consistent with the purpose of relieving the
hardship of unemployment and stabilizing the economy.

So far as I have discovered, this problem has not been
considered by this court in any of the cases dealing with
this statute; it is not raised, nor passed upon in this case.
I therefore concur in the opinion of Chief Justice WOLFE.

HENRIOD, J., dissents.

OGDEN CITY v. PUBLIC SERVICE
COMMISSION et al.

No, 7884, Decided Aug. 29, 1958. (260 P. 2d 751.)

See 62 C.J. Telegraphs and Telephones, sec. 109. Discrimination
in fixing of utility rates. 52 Am. Jur, Telegraphs and Telephones,
see. 87; 4 A. L. R. 2d, 595.

Poul Thatcher, Jack A. Richards and Charles H. Sneddon,
Ogden, for appellant.

Clinton D. Vernon, Atty. Gen., Sid N. Cornwall and
Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, for
respondents.

HENRIOD, Justice.

Review of a Commission order allowing the Telephone
Company’s application to charge and bill subscribers of
particular areas for excise, sales, franchise or occupation
taxes, costs of services rendered to local political sub-
divisions by agreement, or other local impositions, where
such impositions are exacted by local governing bodies.
Affirmed.

Ogden is such an area governed by such authority. Its
subscribers to the company’s service, distinguished from
its residents, are affected by the order, for better or worse.
Of 46 cities and communities whose subscriber-resi-
dents similarly are affected, including Salt Lake City, i |
whose population we judicially note as being better
than 8 times that of Ogden and better than 14, of the State,
only Ogden protested. There are 94 cities and communities
representing the balance of the exchanges in the state whose
subscriber-residents are affected, but where no local im-
positions attach. Where impositions on local gross revenues
are extant, the exactions range from .39% to 7.28% of
local gross revenues, Ogden’s being 1.44% and Salt Lake’s
being 2% at the time of hearing (as compared with Salt
Lake’s 1% at the time of the next preceding hearing). The
order increases company earnings by .21%, well within.
the maximum prescribed, but no future increase can re-
sult by the proposed tariff, whether other cities exact
local levies, increase them, or not.

In 1941, by ordinance, Ogden permitted the company,
for the ensuing 25 years, the use of its streets to install
transmission facilities for a sum equal to 1% of local ex-
change revenues plus .44% representing value of free ser-
vices rendered the City.

Such local impositions are a cost of doing business,
ealcuable in determining rates.1 The consumer ultimately
bears this cost. Heretofore such cost has been born pro
rata, statewide, by company subscribers, whether
living in an area whose local government exacted [ql
tribute’ or not. The Commission decided there was
an unfair discrimination as to subscribers in non-imposition
areas since they helped to pay other areas’ local levies
without correlative advantage. Ogden says no evidence
supports such conclusion,—but an exhibit names the cities
charging the company, with stated percentages of local
gross revenues, and those not charging the company, mak-
ing it obvious that subscribers in the latter assisted in
paying the imposts of the former under the billing system
demonstrated. Whatever the degree of discrimination,
aggravation was sure to result, when the most populous
city, Salt Lake, whose residents represent by far and away
the greatest number of phone users, doubled its take from
the Company.

Where there is evidence such as this, we cannot reverse
the Commission, and we cannot substitute our judgment
for that of the Commission, though other appellate
tribunals might do so, being authorized to weigh [jl
the evidence? We can but determine whether rea-
sonable minds could differ on the evidence adduced.? Con-

City of Elmhurst v. Western United Gas & Elec. Co. 1936, 368 Ill.
144, 1 N.H. 2d 489,

*Title 76-6-16, U.C.A. (1943), Title 54-7-16, U.C.A. (1953); See
Los Angeles & S. L. R. Co. v. Public Utilities Comm. of Utah, (St.
John Station Case), 1932, 80 Utah 455, 15 P. 2d 358.

8Los Angeles & S. L. R. Co. Vv. Public Utilities Comm. of Utah,
81 Utah 286, 17 P. 2d 287.

|
sequently Ogden’s objection that the Commission erred in
requiring her to sustain the burden of proof is answered.

Ogden says the order violated constitutional restraints
against 1) impairing contract obligations,* 2) ex-
tinguishing obligations,> 3) interfering with muni- | |
cipal functions,‘ and transforming franchise fees
into use taxes.7 Without discussing these objections, we
point to authority which we believe answers such conten-
tions.®

The question remains: Can the Commission per-
mit a utility to charge and bill subscribers of an area, i
for payment of imposts on the company levied by
local governmental authority of that area?

In a distinguishable case, Ogden finds support for 2
negative answer,® and another case agrees where franchises
only are involved, but deserts her and supports the Com-
mission, where other levies are imposed,°—a distinction
we logically cannot perceive, albeit there may be one. But
competent and well-reasoned authority agrees with the
Commission,“ and conforms more nearly to the views of

4Art, 1, § 10, U.S. Const.; art. 1, § 18, Utah Const.

SArt. VI, §§ 27 and 29, Utah Const.

eArt. VI, § 29 and Art. XII, § 8, Utah Const.

TArt. VI, § 29, Art. XI, § 5(a); and Art. XIII, § 5, Utah Const.

8Salt Lake City v. Utah Light & Traction Co., 1918, 52 Utah 210,
178 P. 556, 8 A.L.R. 715; City of Elmhurst v. Western United Gas &
Elec, Co., supra; State ex rel. Pacific Telephone, etc. v. Dept. of
Public Service, 1948, 19 Wash. 2d 200, 142 P. 2d 498; U. S. Smelting,
Refining & Milling Co. v. Utah Power & Light Co., 1921, 58 Utah
168, 197 P. 902. .

State ex rel. City of St. Louis v. P. S. C., 1952, 862 Mo. 977, 245
S.W. 2d 851, 855.

10State ex rel. Pacific Telephone & Telegraph Co. v. Dept. of Public
Service, 1948, 19 Wash. 2d 200, 142 P, 2d 498,

City of Elmhurst v. Western United Gas & Hlec. Co., supra.

this court, particularly where, as here, ever-changing and
probably ever-increasing local imposts appear on the hori-
zon which neither the legislature nor the company to date
has controlled, and where, should we conclude otherwise,
discrimination would fluctuate in direct proportion to the
actions of a myriad of local governing bodies.

The mere fact that Salt Lake upped its exaction by 100%,
considering population disparity, would point with almost
mathematical certainty to the conclusion that under the
former system, without the Commission’s order, in any
rate schedule adjusted with such increase, Ogden sub-
seribers would have a higher phone bill by paying their
pro rata percentage of local levies as statewide subscribers,
than they would were they to pay the arbitrary 1.44%
of local gross exchange revenues authorized by the Com-
mission. If such assumption be in error, and we think it
not, it requires little imagination to foresee the possibility
or probability of such result in the future.

Apparently Ogden lost sight of the obvious fact that its
subscriber-citizens for years have been paying their share
of the cost represented by local levies—perhaps as much
or more than the 1.44% of gross local revenues of which
Ogden complains. The pro rata share heretofore has been
lumped into the amount of the phone bill. Were Ogden’s
arguments sound, it follows that her subscriber-residents
unwarrantedly have paid and in the future should not have
to pay any part of the cost represented by local levies, since
any contribution toward payment of such cost of doing
business, pro tanto, that formerly was hidden in the phone
bill, would offset any amount Ogden might realize from
its franchise with the company,—possibly exceeding such
proceeds. Thus, every argument with respect to impair-
ment of contract, extinguishment of obligation and the
like equally would be pertinent and applicable to a pro
tanto contribution whether it be .5%, 1.%, 6%, or 1.44%
of local gross revenues, there being no magic in percentage

A
or the circumstance that the contribution equals the local
levy, so far as fundamental principles go. The order of
the Commission is not only an exercise of its legal author-
ity, but appeals to basic equities,—at least eliminating one
discrimination in a field where it is impossible to eliminate
them all.

Having decided as we do, we feel it unnecessary further
+o comment on the other learned arguments of counsel.

McDONOUGH, CROCKETT and WADE, JJ., concur.

WOLFE, C. J., concurs in result.

ODGEN CITY v. PUBLIC SERVICE COMMISSION
et al.

No, 7907. Decided Aug: 29, 1958. (260 P. 2d 654.)

z=

See 29 C.J.S. Electricity sec, 88. Discrimination in fixing of utility

rates. 48 Am. Jur., Public Utilities and Service, sec. 171; 4 A.L.R.
2d 595.

Paul Thatcher, Jack A. Richards and Charles H. Sneddon,
Ogden, for appellant.

E. R. Callister, Jr., Atty. Gen., Peter M. Lowe, J. Lambert
Gibson and F. Gerald Irvine, Salt Lake City, for respond-
ents.

HENRIOD, Justice.

Review of a Commission order directing the Power Co. to
charge and bill its customers residing in a municipality,
as a separate item, pro rata, for exactions of “any munici-
pality wherein is imposed any municipal franchise, occupa-
tion, sales or license tax” against the company, Affirmed.

Recently we approved a similar order in the case of the
Telephone Co.,1 on application. In the instant case the
Power Co., did not petition for such an order, but only for

10gden City v. Publie Service Comm. of Utah, 128 Utah 487, 260 P.
2d 751.

|

readjustment of rates. It resisted the order since it

had assured local authorities it had no intention of | |
billing local subscriber-residents for a pro rata share

of the local imposition. The company’s frank consistency
and adherence to principle are commendable, but its private
understanding hardly could bind the Commission.

The matter of billing and charging subscriber-residents
in the area where such impositions occurred, arose sua
sponte with the Commission at the rate hearing. No ob-
jection to statutory procedural requirements was voiced
in the hearing so that discussion thereof seems unnecessary
here.

The basic problem attends both cases: Whether custo-
mers in an area whose governing authority exacts taxes,
fees or other imposition against the utility, should pay the
cost of operation represented by the local levies, or whether
all customers of the company, statewide and Pro rata, should
shoulder that burden.

In the present case we affirm the order of the Commis-
sion and believe it was entered within the regulatory au-
thority with which the Commission is endowed, being sup-
ported by competent evidence. The order, incidental-
ly, has the effect of rendering uniform the practices | |
of the 8 regulable public service companies dispens-
ing gas, telephone and electric services, with respect to
allocation for payment, of that item of operational cost
represented by the local impositions. The desirability of
such uniformity cannot be gainsaid, though we do not pass
on whether or not it might be a controlling factor.

Mindful of the authorities cited by Ogden as to burden
and quantum of proof, with which we agree, we
believe the evidence sufficient and of such character | |
in this case as would justify a “reasonable judging
mind” to conclude as did the Commission?

*Los Angeles & S. L. R. Co. Vv. Public Utilities Comm. of Utah, 1982,
81 Utah 286, 17 P. 2d 287,

rs

Undeniable it is that 1) areas existed where impositions
on the utility were and were not extant; 2) all subscribers,
statewide and pro rata, paid such exactions; 3) after the
exaction of such impositions, and upon adjustment of rates
pased thereon, subscribers statewide paid more for power.
Those in non-imposition communities obviously received no
corresponding benefit. Consequently, discrimination in some
degree, was inevitable.

The Company’s president asserted that in the past, be-
cause of lower unit operational costs, densely populated
areas (where local impositions generally prevailed) had
benefited outlying areas having no impositions, since rates
for like service were the same, statewide, irrespective of
residence, in or out of a local imposition area, which, in
reverse, represented a discrimination against users in the
areas where such impositions existed. The argument is sug-
gested that the local imposts tend to lessen or neutralize
the discrimination against subscribers in non-imposition
communities. But neutralizing one discrimination by creat-
ing another is no answer. Public policy seeks the elimina-
tion of as many discriminations as possible in a field where
total elimination thereof is difficult or impossible of
achievement. If the discrimination adverted to exists in
fact, it is for the Commission to help write its obituary,
rather than to cancel its effectiveness by permitting the
creation or persistence in being of another.

The facts before the Commission indicate that users in
non-imposition areas, share the burden of paying the in-
ereased costs of operation resulting from local imposts
elsewhere. The Commission having decided as it did
we cannot say it did so arbitrarily and without foun- | |
dation in reason. We cannot substitute our judgment
for that of the Commission under such circumstances.?

%Los Angeles & S. L R. Co. v. Public Utilities Comm. of Utah (St.
John Station Case), 1932, 80 Utah 455, 15 P. 2d 358.

Our comments in the Telephone Case anent constitutional
questions, and sharing operational costs, whether on a state-
wide, pro rata basis, or by allocation to users in local im-
position areas, are equally pertinent here, and we answer
such matters here as we did there. °

McDONOUGH, CROCKETT and WADE, J.J., concur.
WOLFE, C. J., concurs in the result.

CRANFORD et al. v. GIBBS et al.
No. 7981, Decided Sept. 9, 1953. (260 P. 2d 870.)

See 58 C.J.S. Mines and Minerals, sec. 123. Record of location of
mining claim, sufficiency of. 36 Am. Jur., Mines and Minerals, sec. 96.

Gustin, Richards & Mattsson and John T. Vernieu,
Richfield, for appellants.

A. C. Melville, Salt Lake City, for respondents.

LEWIS, District Judge.

Appellants, plaintiffs below, brought this action to quiet
title to certain mining claims located in the Durkee Mining
District in Piute County. The Howell Mining Company, a
corporation, neither appeared nor was defaulted in the case.
The other respondents, asserting ownership in themselves
of conflicting mining claims, answered and counterclaimed.
The actions were subsequently dismissed as against the
Dunsmores, Johnsons, the various Does and all unknown
claimants. The court below determined the issues in favor
of the remaining respondents and found that each of the
locations of respondents in conflict was prior and superior
to the mining locations of appellants. We affirm the judg-
ment of the trial court.

Both parties have presented this appeal to this court
as one in equity and for the purpose of an opinion in this

case only, no prejudice to the parties being possible because
of the result reached, we shall so consider it. The

scope of review on appeal in pure equity is well set- | |
tled. If after an independent analysis of the evidence

as revealed by the transcript in this court we are not con-
vinced that the trial court misapplied proven facts or found
against the clear preponderance of the evidence we will not
disturb the judgment.1 Appellants recognize this rule and
the burden occasioned upon them in this court.

We have carefully examined the numerous exhibits con-
tained in the record and studied the testimony of the wit-
nesses in the voluminous transcript. The story revealed
is reminiscent of the Old West or typical of modern tele-
vision. It is replete with accusations of claim jumping,
threats, near violence, testimony of destruction of discovery
monuments, movement and altering of location notices,
end and corner stakes and the swinging, floating or “fly-
ing” of locations. This last is the essential basis of the ap-
peal. Appellants assert that the evidence clearly shows
that respondents’ claims have been floated several miles
from their point of original location to their present loca-
tion in more lucrative fields and that appellants’ claims
have intervened in point of time.

In 1948, near Marysvale, uranium ore was discovered
in the Durkee Mining District. Excitement ran high and a
rush resulted. Many locations were made by numerous
people including the principal respondent herein, H. Spencer
Gibbs. From April to June, 1949, Gibbs, for and with other
respondents and himself, located a group of claims known
as the Yellow Canaries and others. The Canaries claims
as described in the recorded location notices tied in with
each other and were described as being two miles north-
east of Marysvale, Utah, along Old County Highway. In

Stanley v. Stanley, 97 Utah 520, 94 P. 2d 465; Oliver v. Hleganti,
61 Utah 475, 214 P. 818, 315; Stevens v. Gray, 128 Utah 395,
1958, 259 P. 2d 889.

450

June and December, 1950, after a survey, Gibbs filed
amendments to his original locations and accurately de-
scribed the extent and location of his claims as presently
situated. Meanwhile, appellants in May, 1950, located a
group of claims known as the Juanitas which conflict with
the Canaries.

Priority of location cannot be maintained by amendment
if in fact the amendment amounts to a new and dif-
ferent location. However, neither niceties of descrip- [ll
tion in original notices of location nor more than
reasonable accuracy in the staking of claims is required
to effectuate a valid location.?

Prospectors are not engineers nor does the law expect
them to be. However, the law does require sufficient
detail and accuracy in the notice as recorded to allow I |
location of the claim upon reasonable effort?

Where then, were the original Yellow Canaries located?
Appellants contend the location to have been within an area
designated for convenience as Area 1, miles from the present
surveyed location, known as Area 2. Considerable testimony
and evidence is in the record which, if credible, supports
appellants’ position. Area 1 is considerably closer to the
Old County Highway than Area 2. Within Area 1 is a
natural monument of yellow color asserted to be the original
location of the notice of location and, by inference, the
basis of the name “Yellow Canaries.” Witnesses testified
as to actually seeing the location notices, monuments and
stakings within Area 1.

In direct conflict with appellants’ evidence is that of re-
spondents’, whose witnesses testified that notices, monu-
ments and stakes were moved, changed and destroyed upon

2Morrison’s Mining Rights, Sixteenth Ed., p. 88.
See Section 40-1-8, U.C.A, (1958); Morrison’s Mining Rights,
Sixteenth Ed, p. 86. "

numerous occasions (as did appellants relative to

those pertaining to the Juanita claims); that the | |
only effect and purpose of the amended locations

were to comply with the findings of the survey and to
avoid conflict with admittedly prior and valid claims be-
longing to strangers to this suit; that the Canaries claims
were all staked in Area 2 and were in the possession of and
being worked by respondents before the filing of the Juanita
claims; that some $4,000 had been expended upon the
claims in Area 2 up to the time of trial; that the Juanita
filings were made because of an unfounded rumor that the
Canaries had “flown” to a new location and were a deliber-
ate conflict in the hope of moving in on a known and proven
location.

We have generalized the principal testimony only to
point out that a finding as to the original location of the
Yellow Canary claims is dependent upon the credibility of
the witnesses. The trial court, having heard and observed
the witnesses and after visiting the actual lands involved,
resolved the issues in favor of the respondents and against
the appellants. We are not inclined to disturb his findings.

Appellants’ further contention is that even if the original
locations of the Canaries claims were within Area 2, that
they have been shuttled about within that Area to such an
extent as to invalidate them. The problem here is the same
and without setting forth the conflicting evidence, we
find no error in the trial court’s findings.

Costs to respondents.

WOLFE, C. J., and McDONOUGH, CROCKETT and
WADE, J.J., concur.

HENRIOD, J., having disqualified himself does not par-
ticipate herein.

COLE v. KLOEPFER et al.
No. 7897. Decided Aug. 25, 1958. (260 P. 2d 518.)

See 63 C.J.S. Municipal Corporations, sec. 850. Sidewalk, contri-
butory negligence of pedestrian falling on. 25 Am. Jur., Highways,
sec. 468; 188 A.L.R., 1026.

H. A. Sjostrom, Logan, for appellant.

Newell G. Daines and M. C. Harris, Logan, for respond-
ent.

453

WADE, Justice.

Appeal from a judgment dismissing with prejudice at the
end of plaintiff’s case her action for personal injuries caused
by defects in a sidewalk, on the grounds of contributory
negligence.

The evidence disclosed that in May, 1947, respondents
dug a trench for water and sewer pipes in front of a home
at about 268 East Third South Street, in Logan, Utah. In
digging this trench, respondents tore up about a 10 by 5
foot strip of sidewalk lying to the south of the house. When
the trench was backfilled with a bulldozer a depression was
left from the center of which some large blocks of cement
protruded about three inches above their surroundings,
which consisted of an uneven surface of dirt and gravel.

Appellant lived within a block of 268 East Third South
Street and was well aware of the defects left in the sidewalk
there, having had occasion to pass over it about twice a
week for about a year and a half before the accident occur-
red. She had frequently remarked that it was hazardous.
The accident occurred in broad daylight, about 5 o’clock
in the afternoon of October 8, 1948. Nothing was obstruct-
ing her view of the defects in the sidewalk and she was
aware of them when she started to cross this spot. Appel-
lant was in the process of crossing when some children
who were playing about a half a block away, screamed just
as @ speeding car drove by in the direction in which she
was walking. Upon hearing the screams she stopped and
looked up, and upon again starting to walk, she stubbed
her toe on the abutting pavement as she went to step on
the sidewalk an fell, seriously injuring her leg.

In Hisner v. Salt Lake City, Utah, 238 P.2d 416, this court
held that a pedestrian who had knowledge of and had an
unobstructed daylight view of a defect in a sidewalk was
contributorily negligent as a matter of law when because
of diversion by a group of children rushing toward her
she momentarily forgot about the defect and stepped into

“ DP
it, thereby causing her injury. We there recognized that
temporary forgetfulness of a known danger may be ex-

cuse where some outside cause distracts the attention if
such distraction is unexpected and substantial.

Although the writer of this opinion dissented in the
Bisner case, being of the opinion that it was a question of
fact for the jury to determine whether a large group of
children rushing towards a person was a sudden and sub-
stantial diversion or distraction, nevertheless that case is
now the law in Utah. The distraction in the instant case is
no more sudden and unexpected than in the Bisner case and
all the other elements were similar to those in that case.
The court, therefore, did not err in finding that appellant
was guilty of contributory negligence as a matter of law
and dismissing the case with prejudice. In view of this it is

. unnecessary to determine whether the court erred in hold-
ing that appellant had failed to prove a duty on the part
of respondents to maintain the sidewalk in a safe condition.

Affirmed. Costs to respondents.

WOLFE, C.J., and McDONOUGH and HENRIOD, J.J.,
concur.

CROCKETT, Justice.

I dissent. It seems to me that the question of plaintiff's
contributory negligence should have been submitted to
the jury.

The evidence showed without dispute that this defect
was readily observable; that it had existed for a year and
a half near Mrs. Cole’s home; and that she knew of it.
Under ordinary circumstances reasonable care would have
required her to observe and avoid it. She seeks to evade
the effects of this responsibility by showing that a speeding
car went down the street approaching some children; that
she heard them scream which momentarily distracted her
attention.

455

There is a plethora of cases dealing with what constitutes
sufficient distraction of attention to create a jury question
as to whether one used reasonable care in avoiding a known
danger in a sidewalk or street. Various circumstances have
been held sufficient: children playing in the street ;? being
absorbed in reading a newspaper; being attracted to
“something” one was passing;* men working in a trench
beside the walk;> a bulletin board which had been placed
there for the purpose of diverting the attention of passers-
by (night) ;° being accosted by a friend’ and by the crowd
upon the sidewalk.®

The foregoing cases are noted for the purpose of demon-
strating that there are many respectable authorities which
recognize circumstances which seem to me less distracting
than those in the instant case as being sufficient to justify
the submission to a jury of the question of the contributory
negligence of one who has failed to notice and avoid a
known or readily observable defective condition of a street
or sidewalk. I do not here argue that such authorities should
be approved, nor that they would be the law of this juris-
diction in view of the Eisner case.®

I am aware that there is some danger in permitting one
who is so injured to excuse himself by blaming some trivial
distracting factor and that such excuses would not be lack-
ing to plaintiffs who might be unscrupulous. (No sugges-
tion that such exists in the instance case is intended.) Asa
safeguard against the possibility of such abuses this court

ee 18 A.L.R. 87 et seg.; 70 A.L.R. 1888 et seq.

Barry v. Terkildsen, 12 Cal. 254, 18 P. 657, 1 Am. St. Rep. 55.

Van Praag V. Gale, 107 Cal. 488, 40 P. 555.

4DuVal v. Boos Bros. Cafeteria Co. 45 Cal. App. 877, 187 P. 767.

sLe Beaw v. Telephone & Teleg. Constr. Co. 109 Mich. 302, 67
N.W. 339.

Myers v. New York, 154 App. Div. 718, 189 N.Y.S. 482.

"Kenyon. V. Mondovi, 98 Wis. 50, 78 N.W. 814.

*Thomas V. New York, 28 Hun, N.Y., 110.

°Bisner v. Salt Lake City, 120 Utah 675, 288 P. 2d 416.

456

in the Eisner case adopted a somewhat restrictive rule: that
the cause diverting a pedestrian’s attention from a known
danger at least must be unexpected and substantial, with
which I am in accord.

The statement of the rule is one thing; its application
to given facts is quite another. Where there is disagree-
ment as to whether the rule applies, some light may be
thrown upon the subject by comparison with analogous fact
situations to which courts have applied it. The authorities
above cited and such others as the writer has seen indicates
that the Eisner case goes about as far as any in holding as a
matter of law that a diverting cause was not sufficient to
warrant submission of the question of contributory negli-
gence to the jury. I do not believe it should be extended.

In the Eisner case, children running toward plaintiff
on the sidewalk presented very little if any danger to her
or anyone else. But in the instant case the circumstances
distracting Mrs. Cole’s attention seem much more compel-
ling. There was a speeding automobile, which is a very
dangerous thing (there was no danger to Mrs. Cole person-
ally), she observed it going down the street at a high rate
of speed approaching some children and she heard the chil-
dren let out a scream. It seems to me that it would take
nerves of steel indeed for one to fail to direct attention
there to see what had happened. If that does not consti-
tute an unexpected and substantial diversion, one is led to
ask: what distraction would suffice?

Except for the Eisner case, the majority opinion cites
no authority supporting the proposition that in a fact situ-
ation similar to the instant one it was mandatory to rule
that the plaintiff was contributorily negligent because the
distraction was insufficient. We are given nothing but
the ipse dixit that the facts do not show “an expected and
substantial diversion.”

This question must be squarely faced: taking the evi-
dence, and every inference fairly arising therefrom, in the

ABT

light most favorable to Mrs. Cole, is there any reasonable
basis in the evidence which would justify a jury in con-
eluding that the distracting factor was unexpected and
substantial and such that it would so divert the attention
of an ordinary reasonable and prudent person that he would
fail to notice and stumble into this defective sidewalk? If
reasonable minds might conclude that in the exercise of
ordinary care her attention might have been diverted suffi-
ciently so that she was momentarily inattentive or unaware
of the defect and stumbled because of it, the question of
her contributory negligence should have been submitted to
the jury.

It should be borne in mind that ordinarily a pedestrian
has a right to assume that the sidewalk is in a reasonably
safe condition and to act on such assumption. True, this
is subject to the modification that where there is a known
danger she must be charged with awareness of that fact.
She is not required to forego the use of the street; nor is he
obliged to remain completely engrossed in the fact that
there was a defect in the sidewalk. It is understandable
that a prudent person might not keep her mind primarily
preoccupied with this circumstance and her efforts to avoid
it. Her duty was but to comply with the usual rule of ob-
serving the care which an ordinary reasonable and pru-
dent person would under the circumstances to avoid injury
to herself.

It is well settled that the question of contributory negli-
gence is usually for a jury and the court is justified in
taking it from them only in clear cases® as Mr. Justice
Frick" stated in relation thereto:

«“* * * unless the question * * * is free from doubt, the
court cannot pass upon it asa question of law; * * * if * * *

Stickle v. Union Pacific R. Co., 122 Utah 477, 251 P. 2d
867, and authorities there referred to.

uNewton v. Oregon Short Line Railroad Co., 48 Utah 219, 184
P. 567, 570.

the court is in doubt whether reasonable men, * * * might arrive
at different conclusions, then this very doubt determines the question
to be one of fact for the jury and not one of law for the court.”

For the reasons indicated I think the jury should have
been allowed to pass upon plaintiff's claim.

In re REPORT OF GRAND JURY
SHOEMAKER et al. v. STATE

No. 7856. Decided July 28, 1958. (260 P. 2d 521.)

See 88 C.J.S. Grand Juries, sec. 85. Grand Jury, report of investi-
gation by 24 Am. Jur., Grand Jury, see, 36; 120 A.L.R, 487.

459

George S. Ballif, Provo, E. Richard Callister, Jr., Atty.
Gen., for appellants.

Clifford L. Ashton, Salt Lake City, C. M. Aldrich, Provo,
for respondents.

WOLFE, Chief Justice.

This is an appeal from an order of the lower court grant-
ing the motion of the respondents to expunge from the
records of the court certain portions of a report made by a
Utah County grand jury.

In ‘August of 1951 a grand jury was drawn and im-
paneled for Utah County. In its charge to the jurors, the
court directed them to report any “undesirable or question-
able” conditions worthy of special comment which they
might find in the course of their investigation, even though
no indictment may be found, in order that the “public of
this County may be informed as to the condition of the
health of their government and administration.” After de-
liberating for three and one-half months, the grand jury
presented a report entitled “Grand Jury Presentment,”
signed individually by each juror. The report, comprised of
seven divisions, consisted of findings and recommendations
concerning (1) the Utah State Training School in American
Fork, Utah County (2) the Utah State Hospital (3) opera-
tions of the State Road Commission in Utah County (4)
affairs of Utah County (5) the Alpine School District (6)
law enforcement in Provo City, and (7) general recom-
mendations. The report both commended and condemned,
and in some instances either charged or cast inferences
of maladministration and misconduct on the part of certain
public officers. .

After the report had been presented to the court and
made public, the respondents moved to have the report
expunged from the records of the court and filed affi-
davits in support of their motions. The respondents are
the commissioners of the State Welfare Commission

460 eee!
ee

which has supervision of the State Training School and
the State Hospital, the commissioners of the State Road
Commission, and Provo City. Upon hearing the motions,
the court below ordered expunged those portions of the re-
port dealing with the State Training School, the operations
of the State Road Commission in Utah County and part of
the report dealing with law enforcement in Provo City.
From that order this appeal is prosecuted, the appellant
contending that in this state a grand jury may make a re-
port of its investigations even though it does not return
an indictment.

Before considering the appellant’s contention, it should be
noted that throughout this opinion we will refer to the
grand jury’s report as a report although the jury in the
instant case entitled it a “presentment.” The respondents
claim that a “presentment” by a grand jury is not a report
of conditions found by the jurors, but is an informal accusa-
tion of a crime addressed to the public prosecutor and dif-
fering from an indictment only in form. In some cases the
two words are used interchangeably. The words “present-
ment” and “present” appear in Sec. 77-18-4, Utah Code
Annotated 1953, prescribing the oath which must be ad-
ministered to the foreman of the grand jury:

« %* * You, as foreman of the grand jury, do solemnly swear
that you will diligently inquire into and true presentment make of all
public offenses against the laws of this state, committed or triable
within this country, of which you shall have or can obtain legal
evidence. * * * That you will present no person through malice,
hatred or ill-will, and you will not leave any unpresented through
fear; favor or affection, or for any reward or the promise or hope
thereof; but in all your presentments you will state the truth, the
whole truth and nothing but the truth, according to the best of your
skill and understanding, so help you God.” (Emphasis added.)

Again, in the Fifth Amendment to the Constitution of the
United States, the word “presentment” is used:

“No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a Grand

461

Jury, except in cases arising in the land or naval forces, or in the
Militia, when in actual service in time of War or public danger;
* * *” (Emphasis added.)

“Tt would seem that the word “presentment” was em-
ployed in the above statute and constitutional amendment
as meaning an accusation of crime. But because this ques-
tion of nomenclature is collateral to the matter with which
we are here concerned, no purpose would be served in
further pursuing it.

Counsel for the appellant and the respondents are not in
agreement as to whether at common law a grand jury could
make a report of conditions deemed by them to be in need
of remedying. In the appellant’s brief, quotations from
W. S. Holdsworth, “A History of English Law,” vol. X,
pp. 146-151 are set out wherein the author states that in
England in the eighteenth century, grand juries reported
that particular statutes had not been enforced by officials
responsible for their observance.

“The most important class of cases to which this procedure was
applied was the class of cases concerned with the maintenance of roads,
bridges, gaols, and other country buildings. Inhabitants were pre-
sented for not repairing their highways; counties were presented
for not repairing bridges, gaols or houses of correction; and disputes
between different districts were fought in proceedings initiated in
this manner. So normal was this procedure in these cases that it
was approved and encouraged by the Legislature.”

The respondents contend that this practice referred to by
Holdsworth was isolated and not general and that such
practice was abolished by statute in England in 1827 and
1835. The following cases hold that at common law a grand
Jury could not make a report not followed by an indict-
ment: In re Presentment to Superior Court, Hudson Coun-
ty, 14 N.J. Super. 542, 82 A.2d 496; Bennett v. Kalamazoo
Circuit Judge, 183 Mich. 200, 150 N.W. 141; In re Report
of Grand Jury of Baltimore City, 152 Md. 616, 187 A. 370.

462 ee
ee

In this state, we have statutes prescribing the powers
and duties of grand juries. Five of those statutes will be
here quoted:

77-19-1, Utah Code Annotated 1953:

“The grand jury may inguixe into all public offenses within the
jurisdiction of the court committed or triable within the county,
and present them to the court by indictment, or by an accusation
in writing.”

1T-19-4:

“The grand jury shall not be bound to hear evidence for
the defendant; but it is their duty to weigh all the evidence submitted
to them, and when they have reason to believe that other evidence
within their reach will explain away the charge, they should order
such evidence to be produced, and for that purpose may require the
prosecuting attorney to issue process for the witnesses.”

‘T1-19-6:

“If a member of a grand jury knows, or has reason to
believe, that a public offense within the jurisdiction of the court has
been committed, he must declare the same to his fellow jurors, who
must thereupon investigate the same.”

TT-19-7:

“The grand jury must inquire into the case of every
person imprisoned in the jails of the county on a criminal charge and
not indicted or informed against; into the conditions and management
of the publie prisons within the county; and into the wilful and
corrupt misconduct in office of public officers of every description
within the county.”

TT-19-8:

“They shall also be entitled to free access at all reason-
able times to the public prisons, and to an examination without charge
of all public records within the county”

‘California and New York have substantially identical
statutes. In those two states, intermediate courts of appeal
have construed their statutes as allowing grand juries, even

463

though they find no indictment, to make reports to the court
of conditions found by them although their reports, directly
or indirectly, charge or infer maladministation or miscon-
duct on the part of public officials. In the case of In re
Jones, 1905, 101 App. Div. 55, 92 N.Y.S. 275, 276, 16 N.Y.
Anno Cas. 15, 19 N.Y. Crim. Rep. 59; Id. 181 N.Y. 389, 74
N.E. 226 a grand jury made a report censuring certain
public officers for improper performance of their duties,
but did not indict them. A motion by the individuals cen-
sured to expunge the report was denied and an appeal was
taken to the Appellate Division of the Supreme Court which
affirmed the action of the lower court. After setting out
the provisions of sec. 260 and 261 of the New York Code of
Criminal Procedure (which sections are substantially identi-
cal with sections 77-19-7 and 8, Utah Code Annotated 1953,
quoted above) the court said:

“We may assume that these powers are conferred for some pur-
pose. Official inquiry intends either official action or official report.
As such powers are limited to inquiry, and the grand jury has no
executive or administrative authority in the premises, the result of
any inquiry must be report or statement which shall call attention to
the wrong. The grand jury can but report to the court to which it
was returned, and by which it is discharged. Such reports are com-
monly termed ‘presentments.’ * * *

“T think, therefore, that any final finding upon the exercise of these
inquisitorial powers may be called a presentment, and that it may be
-regarded as final, and not improper, because an indictment cannot or
does not follow it. * * *

“Such inquiry as is required by sections 260 and 261 may reveal
misconduct, inattention, or shortcomings of public officials, and the
report of presentment might be colorless or ineffective unless it speci-
fied individual delinquencies. I think that in such a case the grand
jury can properly point out those individuals who, as officials, are
deemed responsible, and that the presentment may stand though it be
not followed by an indictment. It may be pertinent to call attention
to the fact that inefficiency, carelessness, or neglect may require
correction, and yet not jutify indictment, and to the fact that not all
willful or corrupt misconduct in office can be presented in the first
instance by indictment; * * *”

464 een!
re

The court further stated that a grand jury could not
under the guise of a report accuse, and because there are
no means to answer the accusation, thereby compel the ac-
cused to stand mute if the facts would warrant indictment,
but that a grand jury could make a report even though it
incidentally pointed out that certain officials were responsi-
ble for omissions or commissions, negligence or defects.
In a dissenting opinion, Mr. Justice Woodward stated that
there were two purposes for a grand jury

“one to bring to trial those who are properly charged with crime, the
other to protect the citizen against unfounded accusation of crime.
When the grand jury goes beyond this, and attempts to set up its
own. standards, and to administer punishment in the way of public
censure, it is defeating the very purposes it was intended to con-
serve; * * #?

Since the decision of the court in the Jones case, there have
een decided several cases by county courts in New York,
some of which have criticized the majority opinion in the
Jones case and have preferred the dissenting opinion of Mr.
Justice Woodward. In re Heffernan, Co. Ct., 125 N.Y.S.
737; In re Osborne, 68 Misc. 597, 125 N.Y.S. 318; In re
Woodbury, Sup., 155 N.Y.S. 851; In re Crosby, 126 Misc.
250, 218 N.Y.S. 86; In re Funston, 183 Misc. 620, 238 N.Y.S.
81; People v. McCabe, 148 Misc. 330, 266 N.Y.S. 863; and
In re Wilcox, 153 Misc. 761, 276 N.Y.S. 117. In the most
recent county court case, however, In re Healy, 161 Misc.
582, 293 N.Y.S. 584, 596, the court states that

“Notwithstanding the splendid, well-reasoned dissenting opinion of
Mr. Justice Woodward, I am inclined to believe that the prevailing
opinion expresses the intention of the Legislature when it formulated
the provisions of section 260 of the Code of Criminal Procedure.
Under that section the grand jury must inquire, among other things,
into the condition and management of the public prisons in the county.
If the only result of inquiry with reference to the public prisons is
limited to the findings of an indictment or silence on the part of the
grand jury, then that subdivision of section 260 of the Code of
Criminal Procedure will be almost valueless, but, if the view adopted
by the court in Jones v. People, supra, is to prevail, then very valuable
and salutary results may come from intelligent investigations by

grand juries. Prison conditions may be deplorable due to overcrowd-
ing, lack of adequate sanitary facilities, the age of the buildings, and
to many other factors which may contribute to such conditions, yet in
no such instance might the grand jury be warranted in finding an
indictment. * * * So, also, it is entirely conceivable that public
officials, while not guilty of criminality, may be found to be so lack-
ing in understanding or appreciation of the duties which are part of
their office that a grand jury may be discharging a very high form
of public service if they report findings based upon a fair, honest,
and thorough investigation of all the facts. * * *

“The advantages to the people of the state in giving power to our
grand juries to investigate in accordance with the provisions of sec-
tion 260 of the Code of Criminal Procedure far outweigh any consid-
eration for the feelings of public officials who may be criticized by
such grand juries. The caliber of the membership of the grand juries
is a matter which lies within the control of the courts. The selection
of men of experience, of integrity, of high citizenship, of courage, of
honesty, and with a reputation for fair dealing, is a problem easily
solved by those whose privilege and duty it is to select and determine
the membership of our grand juries. And it is only fair to assume
that grand juries so selected will confine their presentments to
matters which are properly subject to their consideration. Under the
law of our state there is always available to‘the grand juries sitting
at any term of court the advice of the district attorney and of the
justices of the Supreme Court and the judges of the County Court.

“Long ago it was said that ‘public office is a public trust.’ Any
public official should at all times be willing to render promptly an
account of such trusteeship. No matter what his office may be, he is.
but the servant of the people, and in accepting such office he must be
presumed to know that his acts in office are subject to the scrutiny
provided by section 260 of the Code of Criminal Procedure. If he ad-
ministers his office with a high regard for the trust which has been.
placed upon him by those who elected or appointed him, then he need
have no concern about investigation; if he fails the trust, then, of
course, he should have no complaint if the interests of the people are
best served by disclosing his failure to fulfill the responsibilities and
obligations of the office which he has assumed.”

In 1933, a District Court of Appeal in California was con-
fronted with the question which concerns us in the instant
case. In Irwin v. Murphy, 129 Cal. App. 718, 19 P.2d 292,
293, a grand jury, after inquiring into a certain boxing con-
test in which one of the participants had been killed, made a.

466 ee
|

report condemning the manner in which boxing matches
were conducted and the conduct and character of those con-
nected with the promotion and management of the contests.
The jury recommended that the Governor request the resig-
nation of the boxing commissioner and that the license of a
certain referee be revoked. No indictments were found,
however, against any of the principals involved. The
referee censured by the grand jury brought an action
against the jurors for alleged libel and slander growing
out of the report, contending that a grand jury has only
the power to indict on definite charges, and that if they
do not find sufficient evidence to indict, their power termi-
nates and they cannot make a report of their investigations.
The court concluded that in view of the statutes governing
the powers and duties of grand juries, which statutes are
substantially identical with our statutes set out above,
such a construction of the powers of a grand jury was too
narrow. Said the court:

“As a matter of routine, if nothing further, the power to investi-
gate includes as an integral part thereof the right and duty to report
the result of such investigation. The duty of a grand jury is to pro-
tect the citizen against unfounded accusation. Matter of Tyler, supra
[64 Cal. 484, 1 P, 884]. Such a duty, coupled with the power of in-
vestigation, almost demands completeness of disclosure on matters
investigated. It seems futile to attempt demonstration of the obvious.
Law and common sense combine to compel the conclusion that, if a
grand jury is authorized and bounden to inquire of public offense, a
necessary element of this power must be the power and duty to dis-
close the result of the inquiry. * * *

«“* * %* Given a homicide, the grand jury upon investigation
must find whether or not a public offense had been committed. They
were compelled, under the statute, to hear and consider evidence which
would explain the death. What an inane and lifeless body a grand
jury would be if the limit of its power in case no indictment were re-
turned were complete silence or a formal report of two words—
‘charge ignored.’ Without further discussion, we conclude that the
report before us did not involve any person or subject beyond the
scope of legitimate inquiry.”

See also In re Report of Grand Jury, 152 Fla. 154, 11
So.2d 316, where it was held a grand jury did not exceed
its jurisdiction in making a report containing findings of
fact and recommendations to the Governor that a certain
constable be removed from office.

Outside of New York and California, there is little au-
thority for grand juries to make reports of undesirable
conditions found by them, if the report charges or casts
reflection of misconduct or maladministration upon a public
officer, unless the report is followed by an indictment of
the officer. Numerically, the weight of authority heavily
favors the position taken by Mr. Justice Woodward in his
dissent in In re Jones, supra, and many cases quote exten-
sively from his opinion. The reasoning of those cases which
deny to grand juries the power to make such a report is
perhaps best summed up in the case of People v. McCabe,
148 Misc. 330, 266 N.Y.S. 363, 367, wherein it is stated:

“A presentment [report] is a foul blow. It wins the importance of
a judicial document; yet it lacks its principal attributes—the right to
answer and to appeal. It accuses, but furnished no forum for a
denial. No one knows upon what evidence the findings are based.
An indictment may be challenged—even defeated. The presentment
is immune. It is like the ‘hit and run’ motorist. Before application
can be made to suppress it, it i8 the subject of public gossip. The
damage is done. The injury it may unjustly inflict may never be
healed”

In Bennett v. Kalamazoo Circuit Judge, 188 Mich. 200,
150 N.W. 141, Ann. Cas. 1916E, 228, the court held that
under the statutes of that state there were only two matters
upon which a grand jury had the statutory authority to
make a report viz.: trespass upon public lands and viola-
tions of the election laws. The Court of Appeals of Mary-
land in re Report of Grand Jury of Baltimore City, 152 Md.
616, 187 A. 370, held that a grand jury had statutory
authority to make a report to the court of their investiga-
tions of penal institutions within their jurisdiction. The
court noted that while it had long been the custom and prac-

468 Leen!
rene

tice in that state for grand juries upon their discharge to
make a report as to general conditions, such reports al-.
though they may have a salutary effect, would be permitted
only so long as they did not point out individuals as subjects
of public criticism and opprobrium. Other cases denying
the right to grand juries to make a report which charges or
implies misconduct on the part of a pubic officer but is not.
followed by an indictment are Ex parte Robinson, 231 Ala..
508, 165 So. 582; State v. Bramlett, 166 S.C. 328, 164 S.E..
878; In re Grand Jury Report, 204 Wis. 409, 285 N.W. 789;
Presentment to Superior Court, Hudson County, 14 N.J.
Super. 542, 82 A.2d 496; Hayslip v. State, 193 Tenn. 648,
249 S.W. 2d 882; State ex rel. Strong v. District Court,
216 Minn. 345, 12 N.W. 2d 776, 778. With the exception of
the last cited case, in none of the cases which deny the grand
jury the right to make a report does it appear that there
were any statutes involved similar to ours. In State ex rel.
Strong v. District Court, supra, however, the court held
that even under a statute (Minn. St. 1941 § 626.25 [now
M.S.A. § 628.61]) which is almost identical with our sec.
77-19-7, directing the grand jury to inquire into the “ ‘wilful
and corrupt misconduct in office of all public officers in
the county,’” a grand jury had no authority to make a
report which exposed a private citizen to odium and a.
charge of wrongdoing, even if not charging any violation
of the law.

The statutes of this state prescribing the powers and
duties of grand juries, some of which have been set out
earlier in this opinion, contain no express authorization
for the filing of a report by a grand jury of their findings
and recommendations. By sec. 77-19-7 grand juries are
enjoined to

“inquire into the ease of every person imprisoned in the jails of the
county on a criminal charge and not indicted or informed against;
into the conditions and management of the public prisons within the
county; and into the wilful and corrupt misconduct in office of public.
officers of every description within the county.”

There is no express direction in that statute that they make
a report of their findings to the Court. The only statute
which contains any express direction as to disposition is
sec. 77-19-1 which provides that

“The grand jury may inquire into all public offenses within the
jurisdiction of the court committed or triable within the county, and
present them to the court by indictment, or by an accusation in
writing.” (Emphasis added.)

In the instant case, the grand jury’s report did not deal
with the case of any person imprisoned in the jails or the
conditions and management of the public prisons. It was
devoted to findings of its investigation of certain
welfare institutions, the several political subdivisions [jl
in Utah County, and the activities of the State Road
Commission in Utah County. Whatever may be the duty
of a grand jury in regard to the condition and management
of the penal institutions and the persons imprisoned there-
in, a question which is not before us, and which may be
influenced by different considerations of public policy,
we conclude that it would be dangerous to imply from our
statutes any authorization for a grand jury to make a re-
port of unsavory conditions found by them in investigating
other public institutions and governmental subdivisions and
agencies, if the report, directly or indirectly, charges or
imputes misconduct on the part of a public officer whom
the grand jury does not choose to indict. Grand juries
should have and do have broad inquisitorial powers. It is
in the public interest that their investigations be unbridled
and unrestrained in order that the commission of any pub-
lic offense may be uncovered and the offender be brought
by indictment to answer for his crime. If however, no evi-
dence of the commission of a public offense is unearthed
by a grand jury which warrants their returning an indict-
ment, we think it subservient to the best interests of our
citizenry that no report be filed with the court which con-
tains any imputation of misconduct or wrongdoing on the

470 De
Ee

part of a public officer unless the grand jury follows the
report with an indictment of the officer in question. While
much good can result from a grand jury calling attention
to conditions which they find to be in need of remedying,
when the report goes further and impugns the motives and
conduct of public officials, the possibility of damaging
the reputation of blameless public officials overshadows the
good which might result to the public from the filing of such
a report.

The remarks of Chief Justice Gummere in his charge
to the grand jury of Essex County in 1907, quoted in re
Presentment of Superior Court, Hudson County, supra, are
apropos here [14 N.J. Super. 542, 82 A. 2d 497]:

«+ % * When a man is indicted his character is attainted because
the general public believes that he would not be indicted if he had
not violated the law. If he is innocent, however, he has the oppor-
tunity to demonstrate it. Where a presentment [report] besmirches
the reputation of a man he has not the opportunity to justify himself.
He goes through life with a stigma, and there are no charges which
he may meet. He is charged with matters not subject to the criminal
law, although not looked on with credit.”

To the lay citizen a grand jury report has the appearance
of being more than simply the concensus of the private
opinions of the several jurors. It has the appearance of
being made with great authority and under the sanction
of the court, giving to its findings and recommendations
a solemnity which impresses the mind of the public. In re
Osborne, 68 Misc. 597, 125 N.Y.S. 313. For these reasons
it is extremely important what a grand jury states in its
report.

Our conclusions are strengthened by the fact that the last
phrase of sec. 77-19-7 directs the grand jury to inquire into
the willful and corrupt misconduct in office of public offi-
cials within the county. As noted by the lower court in
his memorandum decision, the words “willful and corrupt,”
while often used loosely, mean something more than merely

“inefficient,” “incompetent,” “neglectful,” or “inept.” Will-
ful and corrupt misconduct is of a more serious nature,
constituting the violation of the law for which an indict-
ment would lie or malfeasance in office for which removal
proceedings could be brought against the official involved.

The order of the lower court expunging those portions of
the grand jury report which censured the respondents for
alleged misconduct and maladministration is affirmed. Costs
awarded to respondents.

McDONOUGH, CROCKETT, HENRIOD and WADE,

J.J., concur.

STATE v. SPRING CITY et al.
No. 7942. Decided Aug. 10, 1953. (260 P. 2d 527.)

See 64 C.J.S. Municipal Corporations, sec. 1846. Obligations subject
to municipal debt limit. 38 Am. Jur., Municipal Corporations, sec. 408
et seq.; 88 ALR. 1415.

Clinton D. Vernon, Atty. Gen., Allen B. Sorenson, Asst.
Atty. Gen., for appellant.

Don V. Tibbs, Jr., Manti, Dilworth Woolley, Manti, John
S. McAllister, Mt. Pleasant, for respondents.

McDONOUGH, Justice.

Plaintiff appeals from a decision of the trial court hold-
ing certain municipal bonds issued by defendant Spring
City to be void and denying any recovery against Spring
City or its city officials.

On January 15, 1948, defendant Spring City, a municipal
corporation, through defendant city officials, issued a
series of bonds with a total face value of $12,000. The
State of Utah, plaintiff, through its Commission of Fi-
nance, purchased the entire issue for the sum of $18,498.67,
representing principal, premium and accrued interest. The
bonds were issued to raise funds “for the purpose of ex-
tending and improving the power and light plant to be
owned and controlled by the city.” Coupons were attached
for interest payments, which were to be paid annually until
maturity of the bonds. None of the bonds were to mature
until the year 1961. Defendant Spring City paid all inter-
est payments as they came due to and including January 15,
1950. On January 15, 1951, the state treasurer presented
coupons for payment then payable for a total of $420. Pay-
ment was refused and no payments have since been made.
Defendant Spring City maintains that the bonds and cou-
pons are void.

Plaintiff brought this action against defendant Spring
City and defendant city officials. The trial court held (1)
That the bonds in question are void under Article XIV,
Section 3 and Article XIV Section 4 of the Constitution of
the State of Utah, (2) That plaintiff is not entitled to re-
cover on the theory of money had and received and (3)
That plaintiff is not entitled to recover from the issuing
authorities for negligence in authorizing the bond issue.
Plaintiff appeals, contending that the trial court erred on
these points.

Article XIV Section 3 of the Constitution of the State
of Utah reads as follows:

“No debt in excess of the taxes for the current year shall be
created by any county or subdivision thereof, or by any school district

ATA

therein, or by any city, town or village, or any subdivision thereof in
this State; unless the proposition to create such debt, shall have
been submitted to a vote of such qualified electors as shall have paid
a property tax therein, in the year preceding such election, and a
majority of those voting thereon shall have voted in favor of incurring
such debt.”

No election was held authorizing the issue of the bonds
in question. The trial court found that in 1948 the expendi-
tures of Spring City exceeded its revenues by $2,067.90.
The court concluded therefore that the municipality had
created a debt in excess of its revenues which was uncon-
stitutional and void.

The plaintiff argues that the validity of such a contracted
indebtedness should be determined as of the time when it is
incurred, rather than at the end of the year. Since the bonds
in question were issued January 15, they did not exceed
the prospective revenues for the year.t Plaintiff contends
that they were therefore valid when they were issued and
that their validity could not be impaired by subsequent
expenditures by the city officials.

It is true that the validity of an indebtedness should be
determined as of the time when it is incurred. Scott v.
Salt Lake County, 58 Utah 25, 196 P. 1022; and see numer-
ous cases collected at 159 A.L.R. 1268. Municipalities
can and often do borrow or otherwise contract in [jl
anticipation of revenues to be received during the
year. Dickinson v. Salt Lake City, 57 Utah 530, 195 P. 1110.
It would be manifestly unfair to permit persons who en-
tered into a valid contract with a municapility to be de-
prived of their rights by later acts of the officers of the

iThe proposed 1948 budget of defendant Spring City lists expendi-
tures anticipated at $16,091.08, in addition to $15,000 for “an electric
plant pipeline.” The revenues of the city in the year 1948 equalled
$20,284.44. Thus, if current operating expenses and the anticipated
cost of running the city are included, the issuance of the bonds ex-
ceeded the anticipated income at the time issued.

municipality. Obligations incurred after the debt limit is
reached are void, and their payment should not be permitted
to deprive legitimate claimants. If the debt is valid when
incurred, there is no objection to payment from the income
of a subsequent year. Carl R. Miller Tractor Co. v. Hope,
218 Iowa 1235, 257 N.W. 312; Nelson County Fiscal Ct. v.
McCrocklin, 175 Ky. 199, 194 S.W. 323.

If, therefore, the bonds in question were valid when is-
sued, they did not become invalid because of the fact that
the defendant Spring City ended the year 1948 with a
deficit. We are of the opinion, however, that the bonds
were void when they were issued.

The provisions of Article XIV Section 8 were placed in
the Constitution to protect the taxpayers against an abuse
of their credit. The evident purpose is that municipalities
be required to operate each year within their reve-
nues for that year; they must “pay-as-they-go” un- i |
Jess the voters enlarge that limit. Wadsworth v.
Sontaguin City, 83 Utah 321, 28 P.2d 161; Dickinson v.
Salt Lake City, supra; Fritsch v. Board of Commissioners
of Salt Lake City, 15 Utah 83, 47 P. 1026. In this instance,
the city officials of Spring City apparently decided that the
city needed an electric plant pipeline which it could not
well afford out of revenues for the current year. They
nevertheless decided to purchase the facilities and to pay
for them in future years. This was an attempt by the muni-
cipality to live beyond its income for the current year,
which violates the purpose of Article XIV Section 8. The
city did not “pay-as-it-went.” Whether the revenues of
Spring City for 1948 exceeded or were less than the amount
of the bonds at the time they were issued should not deter-
mine the validity of the indebtedness. It would be unreason-
able to suppose that bonds issued in 1948 with principal
payable in 1961 were to be paid out of 1948 revenues mere-
ly because on January 15, when they were issued, prospec-
tive revenues for the year exceeded their amount. On the

contrary, the bonds were never intended to be paid out of
revenues for 1948; they represent an indebtedness incurred
in anticipation of the income of future years. Article XIV
Section 3 requires that a city keep its expenses for a given
year within the income and revenue provided for that year;
it cannot incur debts to be met by revenues arising in years
to come. Fritsch v. Board of Commissioners of Salt Lake
County, supra; Trump Mfg. Co. v. Buchanan, 116 Mich.
118, 74 N.W. 466; Trask v. Livingston County, 210 Mo.
582, 109 S.W. 656, 37 L.R.A.N.S., 1045.

Plaintiff relies in his argument on Muir v. Murray City,
55 Utah 368, 186 P. 488. This was a suit to recover pay-
ment from Murray City of money borrowed to build a
power line, payable in four annual installments. The court
stated that Article XIV Section 3 was not a defense to the.
action because no evidence showed that the debt was in
excess of potential revenues for the current year. It is
conceivable that the decision is not inconsistent with the
views expressed above since there was no evidence to show
that the moneys that could be reached to pay the indebted- _
ness in question, were not from the revenues of the year
in which the obligation was incurred. To the extent, how-
ever, that the Muir case can be viewed as holding that a
municipality can incur indebtedness, absent an election au-
thorizing it, in anticipation of the income of future years,
it is overruled.

The trial court also held that the bonds are invalid under
Article XIV Section 4 of the Constitution. In view of
our holding as to the invalidity of the bonds under Sec-
tion 8, discussion of this point is not necessary to dis-
position of the appeal. Nevertheless, since counsel have
requested that we review the ruling, we elect to do so.
Article XIV Section 4 provides that, when authorized
to create indebtedness under Section 3, a city may incur
an original aggregate indebtedness of four per cent of
the value of taxable property within the corporate limits

pT

ATT

of the municipality. An additional eight per cent is per-
mitted “for supplying such city or town with water, arti-
ficial lights or sewers.” Since Spring City supplied the
city with artificial lights, it qualified to indebt the city to
the extent of 12 per cent.

The value of the taxable property is “to be ascertained
by the last assessment for State and County purposes, pre-
vious to the incurring of such indebtedness.” The County
Assessor’s figure for the valuation of the taxable property
in Spring City for 1947 was $179,407. If this figure is
used to compute the debt limit, Article XIV Section 4 would
limit the power to obligate the city to the sum of $21,528.84,
including existing indebtedness. At the time plaintiff
purchased the bonds in question, plaintiff already held un-
paid bonds issued by defendant city in the sum of $14,500.
Thus the issue of the additional bonds in the value of
$12,000 would exceed a debt limit of $21,528.84. Plaintiff
argues, however, that the limitation refers to the actual
value of the property and not the assessor’s figure. As an
original proposition, the standard referred to in the Con-
stitution appears to be the assessor’s figure and some
states with similar provisions so hold. City of Chicago v.
Fishburn, 189 Ill. 367, 59 N.E. 791.

Prior to 1947, statutes of Utah provided for assessment
of all taxable property at its full cash value. See Section
80-5-1, Utah Code Annotated 1948. Section 59-5-1, Utah
Code Annotated 1953 as amended by Chapter 102, Laws
of Utah, 1947, provides, however:

“All taxable propery must be assessed at forty percent of its
reasonable fair cash value. * * *”

In the light of this statute, this court, in Board of Edu-
cation, Rich County School District v. Passey, Utah, 246
P.2d 1078, held that the figure to be used in determining
the debt limitation is the full value of the property com-
puted from the assessor’s forty per cent figure. (That

is, that figure, forty per cent of which equals the assessor's
figure.) This view is in accord with decisions in Iowa,
N. W. Halsey & Co. v. City of Belle Plaine, 128 Iowa 467,
104 N.W. 494, and Washington, Hansen v. City of Hoquiam,
95 Wash. 182, 163 P.3891, where similar constitutional and
statutory provisions prevail.

This court stated in the Passey case [246 P.2d 1079]:

“The language of Article XIV, Sec. 4 is clear and unambiguous. It
establishes as a debt limitation ‘four per centum of the value of the
taxable property’ in the district The word ‘value’ is not limited or
qualified by any adjectives. It does not read ‘assessed value’ or spec-
ify any other particular kind of value. The word ‘value’ standing by
itself can have only one meaning, viz. the full worth of actual value
—not a fractional share thereof.

The assessment upon which depends the validity of the
bonds in the present case was made prior to the enactment
of the statute prescribing an evaluation by the assessor at
forty per cent. It appears, however, that the 1947
statute was merely an enactment of what has always i |
been the practice of assessors. This court may take
judicial notice of such a pre-existing condition. 78-25-1(3)
Utah Code Annotated 1953; State Board of Land Com’rs
v. Ririe, 56 Utah 218, 190 P. 59. The records of the Utah
State Tax Commission show that there was no substantial
increase in assessment for 1947 over previous years. It
follows therefore that assessment of the taxable property
in Spring City in the last assessment previous to the issue
of the bonds equalled forty per cent of the full value of
the property. The computation of the debt limitation in
this case should come within the rule of Board of Education,
Rich County School District v. Passey, supra. The full
value of the taxable property in Spring City, $448,517.50,
would permit a total indebtedness under Article XIV Sec-
tion 4 of $53,822.10, which is $27,322.10 in excess of the
then existing debt of the municipality. The trial court
therefore erred in holding that this bond issue violated
Article XIV Section 4 of the Constitution.

Even though the bonds are invalid under Article XIV
Section 8 of the Constitution, plaintiff contends that plain-
tiff is entitled to recover upon the theory of money had
and received. Plaintiff argues that the bonds were
purchased under mutual mistake, that defendant i
Spring City used the money for a legitimate purpose

for its benefit and that plaintiff is therefore entitled to
restitution apart from any express contract. Although it
results in a hardship on the purchasers of such invalid
bonds, neither reason nor authority support this position.

The constitutional provisions were enacted as a protec-
tion for the taxpayers against an abuse of their credit. The
protection is absolute in nature. If recovery is allowed
against the municipality on a theory of money had and
received, the entire purpose for which the provision exists
is contravened. Although the legal theory is changed, the
practical result would be payment by the taxpayers of an
obligation against which the Constitution specifically at-
tempts to protect them.

This situation should be distinguished from cases where,
although the city was authorized to incur the indebted-
ness, bonds issued by the municipality were found to be
invalid because certain procedural requirements were not
met or because the city was not authorized to issue bonds
negotiable in form or payable in the manner adopted. In
such situations, justice may well require restitution on a
theory of money had and received. Where a constitutional
prohibition against indebtedness is involved however, most
courts will not permit any such recovery. Litchfield v.
Ballou, 114 U.S. 190, 5 S.Ct. 820, 29 L.Ed. 182; Town of
Belleair v. Olds, 5 Cir., 127 F.2d 838; Fairbanks-Morse Co.
v. City of Geary, 59 Okl. 22, 157 P. 720.

The plaintiff also contends that the trial court erred in
denying. recovery against the individual city authorities
responsible for the invalid bond issue on a theory of negli-

gence. This claim is without substance. There is

no evidence of negligence on the part of the officials i |
in the performance of their duties. The invalidity of

these bonds results from the fact that they were issued in
anticipation of the income of future years. Defendant city
officials were entitled to rely on the advice of counsel and
the opinion of the Attorney General, which opinion was
issued prior to disposition of the bonds, as to the validity
of such bonds. It would be unfair and unjust to require
the city officials to guess at their peril what the opinion
of this court as to the validity of the indebtedness would
be.

Judgment affirmed.
WOLFE, C. J., and CROCKETT and WADE, JJ., concur.
HENRIOD, J., does not participate.

JENKINS et ux. v. MORGAN et al.
No. 7826. Decided Aug. 8, 1953. (260 P, 2d 582.)

See 5 C.J.8. Appeal and Error, sec. 2072. Prospective profits from
contemplated business, recovery of. 15 AmJur., Damages, sec. 157;
99 A.L.R. 938.

W. D. Beatie, Salt Lake City, for appellants.

J, Rulon Morgan, Provo, Elias Hansen, Salt Lake City,
for respondents.

WOLFE, Chief Justice.

In an action upon a supersedeas bond, plaintiffs appeal
from a judgment awarding them $24.00 as damages for the
use and occupation of 160 acres of land withheld by de-
fendants, pending their unsuccessful appeal.

In 1944 defendants purchased a tax title and received a
quitclaim deed from Utah County to plaintiffs’ property.
Plaintiffs sued to quiet title and were awarded a decree
in their favor based on defects in the tax title proceedings.
Defendants appealed and posted a supersedeas bond to stay
the trial court’s order granting possession to plaintiffs.
This court affirmed the decree in an opinion reported at 113
Utah 534, 196 P.2d 871, Jenkins v. Morgan. The present
case is a suit for damages caused by the acts of defendants
in withholding possession of the property pending the de-
cision on appeal.

The 160 acres here involved lie in Goshen Valley, Utah
County. The lands in this valley historically have been used
for grazing purposes, and the property was so used during
the time that defendants enjoyed possession.

The trial court’s decree quieting title in plaintiffs was
entered May 20, 1947. Defendants filed notice of appeal
in due time and on June 5, a supersedeas bond in the
amount of $100.00 was posted staying the order of the
trial court which granted possession to plaintiffs. On May
17, 1947, plaintiffs entered into a contract to sell the prop-
erty to a Mr. Powelson. This contract recited that Powel-
son was desirous of purchasing the property should plain-
tiffs be successful in having their title quieted; that Powel-
son intended to break and cultivate the land and drill for
water so he could harvest an irrigated crop in 1948. Plain-
tiffs were to deliver possession and title to the property
on or before September 1, 1947, but in the event he was un-
able to do so, plaintiffs

483 |

“shall cause a lawsuit to be commenced as soon as possible for any
damages caused by the delay of being able to deliver possession
* ®* * for loss of the use of the lands * * * for the harvest
of the year 1948 and all subsequent years.”

During the month of August, 1947, plaintiffs made appli-
cation to the State Engineer’s office to drill a well on the
land. They also secured the services of a government soil
expert who made extensive soil tests to determine the po-
tential agricultural value. Plaintiffs filed a motion except-
ing to the amount of the supersedeas bond and on August
27 a hearing was held at which plaintiffs stated to the court
that they had contracted to sell the property to Powelson;
that they had filed an application with the State Engineer
to drill a well and indicated their and/or Powelson’s inten-
tion of using the land for agricultural purposes. The soil
specialist testified at that hearing as to the deep dark loamy
type of soil and its potential for raising dry farm wheat.
Defendants elected to retain possession of the property
pending the appeal and on September 2, 1947 the amount
of the bond was raised to $1,000.

On August 16, 1948 this court affirmed the decision of
the district court quieting plaintiffs’ title. The remittitur
was docketed September 11, 1948. On December 6, 1948
plaintiffs conveyed the property to Powelson. Thereafter
Powelson cultivated and developed the land, drilled a well
and raised crops as follows. The ground was broken in
August, 1949 and in the spring of 1950, 80 acres were
planted to dry farm wheat, 47 acres to irrigated wheat and
20 acres in potatoes. The well was drilled in the spring of
1949 and produced approximately one and one-half second
feet of water. The 1950 wheat crop amounted to 1,200
bushels from the dry farm (15 bushels per acre) and 1885
bushels from the irrigated land (40 bushels per acre).
An undetermined amount of potatoes was harvested.

Prior to the commencement of the instant action Powel-
son assigned to the plaintiffs any cause of action he might

have arising from the delay caused by defendants’ reten-
tion of possession pending appeal. Plaintiffs’ complaint
prays for damages in the total amount of $3,500 on the
theory that they had been deprived of one and possibly two
years’ use of the land; that the land was valuable for agri-
cultural purposes which the defendants well knew, having
been so informed at the time the supersedeas bond was
raised to $1,000. At the trial, plaintiffs produced several
witnesses who testified that the reasonable rental value of
this 160 acres for farming purposes was $30.00 per acre
on the irrigable ground and $10.00 per acre on the non-
irrigable.

The trial court sitting without a jury assessed the plain-
tiffs’ damages at $24.00, based on ample testimony that
grazing lands in the nearby vicinity rented for $.15 an acre
in 1947 ($.15x160 acres = $24.00). Thus we have a situa-
tion in which land covered with sagebrush was used for
grazing purposes only, but once plaintiffs’ title was quieted
by the trial court’s decree, they announced their intention
to put the land to agricultural use, and two years after the
remittitur on appeal their grantee was successful in harvest-
ing over three thousand bushels of wheat.

In awarding damages based on the rental value of the
land as grazing ground rather than agricultural, the trial
court made findings of fact to the effect: that when the
supersedeas bond was raised to $1,000 the land was un-
cultivated and undeveloped native pasture land; that the
reasonable rental value at that time was fifteen cents per
acre; that the defendants were fully apprised as to plain-
tiffs’ contemplation of using the lands for farming; that in
consideration of the uncertainties of obtaining water by
drilling and of the historic inability of the lands to be suc-
cessfully cropped without irrigation, loss of use of the land
for farming purposes was too speculative and uncertain
to award damages for such use.

Be

485

This cause of action arose in 1947 at which time the gov-
erning Utah statute, Section 104-41-11, U.C.A. 1943, pro-
vided:

“If the judgment or order appealed from directs the sale or de-
livery of possession of real property, the execution of the same cannot
be stayed, unless a written undertaking is executed on the part of
the appellant, with two or more sureties, to the effect that during the
possession of such property by the appellant he will not commit, or
suffer to be committed, any waste thereon, and that if the judgment
is affirmed or the appeal dismissed, he will pay the value of the use
and occupation of the property from the time of the appeal until the
delivery of the possession thereof and for any waste committed there-
on * * *. (Emphasis added.)

On January 1, 1950, this court adopted the new Utah
Rules of Civil Procedure and the instant case was not tried
until November of 1951. The Rules Committee in formu-
lating our rule 73(d) adopted the provisions of Federal
Rule of Civil Procedure 73(d) in lieu of 104-41-11, supra.
The pertinent provisions of our rule 78 (d) are:

“When the judgment determines the disposition of the property in
controversy as in real actions, replevin, and actions to foreclose mort-
gages * * the amount of the supersedeas bond shall be fixed at
such sum only as will secure the amount recovered for the use and
detention of the property, the costs of the action, costs on appeal,
interest, and damages for delay.”

Although the old statute, section 104-41-11, made the
supersedeas bond conditioned upon payment of “the value of
the use and occupation of the property” while rule 73(d)
secures “damages for delay,” we do not believe that
this difference in choice of language changes the |
measure of damages to be allowed in a situation such
as the present dispute. The federal rule and the prior state
statute provided a procedural means whereby execution of
a judgment could be stayed. Because of the vast variety of
judgments which may be suspended upon posting a super-
sedeas bond, the language employed must necessarily be
susceptible of a broad interpretation and application. The

cause of action is to recover for temporarily being deprived
of the use of the premises. The language of the statute
merely serves as a guide to prescribe the sureties liability.
The phrase, “value of the use and occupation” and “dam-
ages for delay” have no particular significance in determin-
ing what monetary sum will compensate plaintiffs for being
deprived of possession of 160 acres while defendants un-
successfully appealed. Therefore, we hold that rule 73(d)
is determinative of the instant case, although it was not in
force at the time this bond was executed.

The issue involved is whether damages should be assessed
for the reasonable rental value of this land for purposes
of grazing or for farming. Once the law of damages is
properly defined, this issue resolves itself into a question of
fact. The applicable measure of damages is to compensate
the plaintiffs for temporarily being deprived of loss of use.
There is no punitive element involved.

The plaintiffs’ contention that they are entitled to the
rental value of the land for agricultural purposes, when in
fact the land was undeveloped sagebrush ground at the
time, is akin to a claim made for loss of prospective
profits. All the authorities are unanimous in holding | |
that prospective profits to be derived from a business
which is not yet established but one merely in contemplation
are generally too uncertain and speculative to form a basis
for recovery. Cramer Vv. Grand Rapids Show Case Co., 223
N.Y. 68, 119 N.E. 227, 1 A.L.R. 156, 99 A.L.R. 938, 15 Am.
Jur. Sec. 152, page 564. 1 Sedgman on Damages, Sec. 183.
Thus in North v. Byrnes, 183 Okl. 321, 82 P.2d 678, 117
A.L.R. 1269, the profit which would have accrued from the
operation of a going business, had the authority of a court
appointed receiver not been suspended by posting a super-
sedeas bond, was held to be a proper element of damages.
The general rule as to a business not yet in operation is
stated in Carolene Sales Co. v. Canyon Milk Products Com-
pany, 122 Wash. 220, 210 P. 366, 367, as follows: .

A8T

«sk * * before special damages for loss of profits to a general
business occasioned by the wrongful acts of another may be recov-
ered, it must be made to appear that the business had been in success-
ful operation for such a period of time as to give it permanency and
recognition, and that such business was earning a profit which
could be reasonably ascertained and approximated.”

By this decision we do not mean to hold that in every
case as a matter of law the value of the land or other prop-
erty must be confined to the conditions existing at
the time the supersedeas bond is filed, for the lan- [jl
guage of Rule 73(d) allowing “damages for delay”
may in a proper case permit compensation for some in-
creased beneficial use where the objection as to the enter-
prise’s speculative character is overcome by competent
proof.

The land involved in this litigation was not fenced. It was
covered with sagebrush and had been used for grazing
purposes only for at least 30 years prior to this dispute.
There was no way to definitely ascertain the presence of an
underground source of water, nor the extent of supply
thereof. Before the land could be broken up and planted
to crops and water secured to irrigate it was necessary to
spend several thousands of dollars and even then the ven-
ture might have proven a failure. The success of the ven-
ture depended upon water supply, market conditions, frost,
rain, pests and many other factors of which all farmers
are well aware. The trial court did not error in determining
that evidence of damages for loss of use of the land for
farming purposes was too speculative and uncertain to con-
stitute the basis of any award,

The judgment is affirmed.

McDONOUGH, CROCKETT, HENRIOD and WADE,
J.J., coneur.

LUNT et al. v. KITCHENS et al.
No. 7871. Decided Aug. 3, 1953. (260 P. 2d 535.)

489

See 28 C.J.S, Easements, sec. 70, Easement, consent to adverse
user as affecting validity of. 17 AmJur., Easements, see. 65; 5
ALAR. 1825.

Richards & Bird and Dan S. Bushnell, Salt Lake City,
for appellants.

Gaylen S. Young and Wesley G. Howell, Salt Lake City,
for respondents.

McDONOUGH, Justice.

This is a suit brought by a landowner to have defendants
enjoined from using a driveway on her property. Defend-
ants entered a counterclaim to have an easement by pres-
cription declared in them. The lower court found that de-
fendants and their predecessors in interest had used the
claimed right of way openly, adversely, continuously, un-
interruptedly, and under claim of right for a period of
more than twenty-five years and granted the counterclaim.
Plaintiffs appeal.

490

Appellant Lunt, the original plaintiff, is the owner of
property located at 418 East Fourth South in Salt Lake
City; appellant Strasser was joined as party plaintiff when
his interest under a contract of sale with plaintiff Lunt
appeared. Appellant’s predecessor in interest, Carrie E.
Weidner, and her husband were owners in possession of
the property when respondents’ predecessor in interest,
Willie Ann Kitchens, bought and occupied the property to
the west of the Weidner property, known as 414 East Fourth
South, in the year 1920. There is no evidence in the record
of an adverse user or claim to use the driveway on the Weid-
ner property between the two houses before that time.
The two families, the Weidners and the Kitchens, lived in
accord and there is in evidence a showing on both sides of
complete harmony and friendship. There were never any
objections as to the use of the driveway by the Kitchenses
for delivery of coal and wood to the coal shed on the east
side of their property, for parking their cars, and for foot
passengers, The Weidners also used the driveway, although
probably to a lesser extent since their family was smaller.

In 1934, Mrs. Weidner executed a warranty deed to her
entire property to her children, Fred E. Weidner and Bessie
Evelyn Ferguson. In 1936, she executed a quit-claim deed
to the driveway, a strip 10 feet wide and 99 feet deep, to
her friend, Mrs. Kitchens. Respondents do not claim under
this abortive attempt to convey a right of way, nor do
they say that this deed originated their claim of right be-
ginning their adverse use, but rather that this deed was a
recognition of a valid claim in the respondents. The only
evidence of challenge and dispute over the driveway ap-
pears in 1946, when Clarence James Evans, a tenant of
the Weidners, placed a gate across the driveway and George
Kitchens took it down.

The question here involved is whether there is sufficient
evidence of adverse user for a period of twenty years to
sustain the trial court’s finding of a prescriptive easement.

In order to settle rights in land to the benefit of the per-
sons profitably using the land and to avoid the impossible
burden of proving an ancient, actual grant to use

the property, the courts of this country early adopted [jl
the legal fiction of a lost grant, whereby proof of con-
tinuous use for the prescriptive period, openly and with
knowledge of the landowner, was sufficient to raise a pre-
sumption of grant, which in effect was a positive rule of
law.t The fact that the grantor with knowledge of such
use, makes no protest against it is proof of his recognition
of a claim of right in the grantee. In other words, it is
conclusively presumed from the landowner’s acquiescence
for the defined period of time in the other’s user of his land,
he having the right and power to stop such user, that it is
a rightful user. Tiffany on Real Property, §§ 1191-1196.
If, of course, the landowner consents to the use of his land,
then the right created is a license and a prescriptive right
cannot arise from a license unless the licensee renounces
openly his claim under the license.

This court has defined the difference between consent
and acquiescence in Zollinger v. Frank, 110 Utah 514, 175
P.2d 714, 170 A.L.R. 770. The distinction, we said, lies in
whether the use was “against” the owner or “under”
the owner, regardless of whether the use is described [I
as peaceable, hostile, adverse to, or as acquiesced in
by the servient owner. Because of the presumption that the
use of another’s land is adverse to him, the owner has the
burden to show that the use was under his permission as
distinguished from against it. Cache Valley Banking Com-
pany V. Cache County Poultry Growers Association, 116
Utah 258, 209 P.2d 251. Big Cottonwood Tanner Ditch
Company V. Moyle, 109 Utah 197, 159 P.2d 596. American
Law Institute, Restatement of Property, § 458d.

However, it is obvious that where a special relationship
such as a license exists, the owner of the land is entitled. to

1See Harkness v Woodmansee, 7 Utah 227, 26 P. 291.

more notice than the mere use of his land not inconsistent
with the license. Thus it is said in the Restatement of Prop-
erty § 458]

“Where a user of land and one having an interest affected by the
use have a relationship to each other sufficient in itself to justify
the use, the use is not adverse unless knowledge of its adverse char-
acter is had by the one whose interest is affected. The responsibility
of bringing this knowledge to him lies in the one making the use.”

In other words, the presumption of adversity will not
arise under mere use by a licensee and knowledge of
such use on the part of the licensor. Yeager v. Wood- I |
ruff, 17 Utah 361, 53 P. 1045. The use cannot be
adverse when it rests upon license or mere neighborly ac-
commodation. Jensen v. Gerrard, 85 Utah 481, 39 P.2d
1070. Sdrales v. Rondos, 116 Utah 288, 209 P.2d 562.

The failure of the Weidners to object to the use of their
property by the Kitchenses in the case at hand must have
been because of an implied consent in order to accommodate
their neighbors. The use by the Kitchenses added no bur-
den to the driveway; they did not attempt to widen it, nor
to interfere with the use by the Weidners. Where a person
opens the way for use of his own premises and another
uses it without interfering with the landowner’s use or
causing him damage, the presumption is that the use was
permissive and in absence of proof to the contrary, the
person so using it does not acquire a right of way by pre-
seription. Harkness v. Woodmansee, supra; Cache Valley
Banking Company v. Cache County Poultry Growers Asso-
ciation, supra. Since the use is presumed to have been with
consent in 1920, unless respondents in the present case have
presented sufficient evidence to show that it became ad-
verse and that the claim of use against permission was
known to the Weidners, the decree of the lower court must
be reversed.

An unsigned will by Mrs. Weidner and the quit-claim
deed to the driveway indicate her intent to give the right

493

of way to Mrs. Kitchens, but obviously these were insuffi-
cient to convey any interest. They each would present ade-
quate knowledge of an adverse claim necessary to start the
running of a prescriptive period under these circumstances,
but the will was dated 1935 and the deed was delivered in
1986 and the necessary 20 years and had not accrued when
this action was filed in 1950.2 Respondents claim that
the will and deed are recognition of the claim which had
existed previously, but the interpretation that these docu-
ments were an attempt to make a gift of property in which
the donor recognized only her own interest is more plausible.

When the driveway became muddy and rutty, the Kit-
chenses repaired it by dumping ashes in the roadway. If
the Kitchenses claimed an easement, they would be inter-
ested in keeping the premises in repair, but also their re-
pairing would not be inconsistent with duties under a li-
cense, particularly in view of the fact that no great amount
of money or labor was expended and no major repairs were
made. In the case of Zollinger v. Frank, supra, this court
considered evidence of replacement of a bridge along with
other evidence of a claim to an easement, but in that case
the landowner notified the claimant that the bridge was
down, implying acknowledgement of claimant’s easement.
On the other hand, use of a ditch for the necessary period
plus continuous repairs did not amount to notice of adverse
possession where such activity was consistent with a license
in Yeager v. Woodruff, supra. So it is in the present case.

The fact that, as witness for the respondents testified,
the driveway was used “constantly as ours [the Kitchens-
es]” is also insufficient to give notice to a licensor of an
adverse claim. The tearing down of a gate erected by the
Weidner’s tenant, of course, would give actual notice of a
claim of right, but this act did not occur until 1946.

2Harkness v. Woodmansee, supra; Morris v. Blunt, 49 Utah 243,
161 P, 1127; Bolton v. Murphy, 41 Utah 591, 127 P. 355.

494

This case is similar to that presented in Cache Valley
Banking Company v. Cache County Poultry Growers Asso-
ciation, supra, wherein there was no evidence of communi-
cation between the adjoining owners as to the usage
of the way, no permission was expressly sought nor i |
claimed and none was expressly given or denied. No
evidence was introduced contrary to the premise that this
usage was with permission and not against it; in fact,
the plaintiff, as in the present case, produced evidence that
defendant considered the use permissive and not adverse.
This court found no adverse claim. Where the use begins
as permissive, as it does here under the presumption of
Harkness v. Woodmansee, supra, it is incumbent upon the
party asserting that it has afterward become adverse to
show at what point this occurred in order to show a twenty-
year hostile period.

“We are not justified in conjecturing as to when or if such a hostile
period began.” Savage v. Nielsen, 114 Utah 22, 197 P.2d 117, 124.

The respondents have not introduced evidence of a
claim of right renouncing the use of the driveway under
permission nor have they met their responsibility of
showing actual knowledge of the claim on the part
of appellant’s predecessors to rebut the presumption
that the use continued with the permission of the land-
owner. The findings and decree of the trial court cannot be
sustained on the facts and evidence adduced and must be
set aside. The decree is reversed and the case remanded to
the lower court with instructions to enter a decree in con-
formity with the views herein expressed.

Costs to appellant.

WOLFE, C. J.. CROCKETT, HENRIOD, and WADE,
J.J., concur.

495

STATE v. VIGIL
No. 7924. Decided July 25, 1958. (260 P. 2d 589.)

496

See 22 C.J.8. Criminal Law, sec. 812. Corroboration of testimony of
accomplice. 20 AmJur., Evidence, sec, 1237; 17 A.L.R., 921.

John Moore Williams, Salt Lake City, for appellant.

E. R. Callister, Jr, Atty. Gen., and Walter L. Budge,
Ass’t Atty. Gen., for respondent.

WADE, Justice.

This is an appeal by the defendant Benito E. Vigil, from a
conviction on a jury verdict of the crimes of Grand Larceny
and 2nd Degree Burglary. The facts established by the evi-
dence are as follows:

On August 1, 1951, the automobile of Mr. T. A. Short of
Kettlemen, California, was parked on North Temple Street
in Salt Lake City, while the owner and his family were eat-
ing dinner in a local restaurant. While the automobile was
thus parked, it was broken into and several pieces of lug-
gage, containing clothing and other articles, including
travelers checks with a face value of $300, and a movie
camera, were taken.

The defendant was later arrested and charged with 2nd
degree burglary and grand larceny. At the preliminary
hearing both Mr. and Mrs. Short testified. She testified
as to the value of the articles that were taken, consisting of
three suitcases, two overnight bags and their contents, a

movie camera and a leather case. She described the contents
of these suitcases as her and her husband’s personal clothing
and some costume jewelry, a pair of scissors, a sewing kit,
and some pottery which she said were hers, and some little
vests which she had bought for the little boys at home, and
some movie films which they had taken along for the trip.
All of this property except some slacks, underwear, and
camping clothing for her husband, she referred to as “ours,”
or “mine,” she stated that “we” purchased the movie camera,
and that she kept the purchase ticket which she produced,
showing the purchase price of $77.50, which she stated was
the price which they paid for it. She testified that she had
an opinion of the value of the property at the time it was
taken, which she fixed at $200.

At the trial the transcript of the testimony of Mr. and
Mrs. Short was admitted in evidence when it was shown
that officers had inquired concerning the whereabouts of
the Shorts on the day before the trial, and a subpoena for
these witnesses had been duly issued. One officer testified
to his personal knowledge of the Shorts having left the state.

Mr. Johnson, a witness for the state, testified that he
and the defendant had broken into the Short’s automobile,
and had divided the goods taken therefrom, the defendant
taking one of the suitcases.

The officers who arrested and questioned the defendant
testified that sometime after the arrest, the defendant had
requested that they go to his hotel room and get his bag, and
see that he got it. The officers testified they went to the
room and got the bag, and that the defendant said that it
was his, but several things therein belonged to Johnson.
This bag was subsequently identified as one of those taken
from the Short automobile.

The defendant claimed that he was not at the scene of
the crime, and he denied all accusations and testimony ad-
vanced by the State. The jury found the defendant guilty
of 2nd degree burglary and grand larceny.

The main question presented to this court is whether or
not there is sufficient evidence outside the testimony of
Mr. Johnson, an accomplice, to connect the defendant with

_ the crimes of which‘he is convicted.

Section 77-81-18 U.C.A.1953 reads:

“A conviction shall not be had on the testimony of an accomplice,
unless he is corroborated by other evidence, which in itself and with-
out the aid of the testimony of the accomplice tends to connect the
defendant with the commission of the offense; and the corroboration
shall not be sufficient, if it merely shows the commission of the of-
fense or the circumstances thereof.”

In State v. Erwin, 101 Utah 365, 120 P.2d 285, this court
stated that the corroboration need not go to all the material
facts as testified by the accomplice, nor need it be sufficient
in itself to support a conviction; it may be slight and
entitled to little consideration. However, the corro- [jl
borating evidence must connect the defendant with
the commission of the offense, State v. Lay, 38 Utah 148,
110 P. 986; and be consistent with his guilt and inconsistent
with his innocence, State v. Butterfield, 70 Utah 529, 261
P. 804. The corroborating evidence must do more than cast
a grave suspicion on the defendant and it must do all of
these things without the aid of the testimony of the accom-
plice.

Thus, looking at the evidence completely aside from the
testimony of Mr. Johnson, we find that one of the bags
stolen from the Short automobile was found in the defend-
ant’s hotel room. Two different police officers testified
that the defendant stated to them that the bag was his, al-
though it contained some of Mr. Johnson’s belongings.

Section 76-38-1, provided that:

“* # * Possession of property recently stolen, when the person
in possession fails to make a satisfactory explanation, shall be
deemed prima facie evidence of guilt.”

Here the suitcase was not only found in defendant’s pos-
session but he asserted ownership thereto. The jury could
reasonably find from this evidence that he was in possession
of this property, that it was recently stolen and that he
made no satisfactory explanation of such possession.

Under this statute this constitutes prima facie evi- I |
dence of his guilt. This in no way required the testi-

mony of the accomplice to connect the defendant with this
crime, and so it clearly satisfies the requirements of Section
77-81-18 U.C.A. 1958, for corroboration of the testimony
of an accomplice.

It was proper for the court to admit into evidence the
transcript of the preliminary hearing. The law re-
quires that if such witness is beyond the jurisdiction | |
of the court or cannot with due diligence be found
within the state either party may read in evidence the testi-
mony of such witness.*

The evidence also shows that one officer testified as to
his personal knowledge that the Shorts had left the state.
This, with the other facts shown, was sufficient to, and
did satisfy the court that the Shorts were beyond the
jurisdiction of the court, and thus the requirements of the
law were satisfied.

The defense contends that the trial court erred in admit-
ting the testimony of Mrs. Short concerning the value of
the property involved in the larceny. The objection is to
the admissibility of this evidence, not to its suffi-
ciency to show the property to be worth more than [jl
$50. Of course, if it was inadmissible then there was
no evidence as to the value of the property taken, except
the general description of the property. The owner of
property is generally allowed to testify as to its value, be-
cause he has the opportunity to inquire and compare the
purchase and sales of like property.? Here the wife claimed

See Section 77-44-3, U.C.A.1948, and 77-1-8, U.C.A.1953.
*Beech v. American Surety Co. of New York, 56 Idaho 159, 51 P.2d
218.

to be the owner or joint owner of practically all of this
property which she claimed to have purchased by herself
or with others. By her testimony she shows that she had a
knowledge of the nature of the property, not only that which
she owned separately or jointly but also the property which
belonged to her husband. Under such circumstances she
was entitled to testify as to the value of all of the property
in a lump sum. The objection to this evidence was only
general, not to the fact that there was included in the prop-
erty covered by this evidence some which was the personal
property of her husband. The defendant had an opportunity
to develop on cross-examination her opinion as to the value
of the property which she either owned or in which she
had a joint interest, exclusive of that separately owned by
her husband but failed to do so. It has been held that a wife
may testify as to the value of her husband’s property where
she has the responsibility of doing the major portion of
the buying and keeping a supply on hand.* In view of these
circumstances it was not error to admit this testimony, and
it was sufficient from which the jury could reasonably find
the value in excess of $50 and thus support the finding of
grand larceny.

Judgment of the lower court affirmed.

WOLFE, C. J., and McDONOUGH, CROCKETT, and
HENRIOD, J.J., concur.

°To this effect see Gross V. Saratoga European Hotel & Restaurant
Co., 176 Ill. App. 160; Thomason v. Capital Ins. Co., 92 Towa 72,
61 N.W. 848; Tubbs v. Garrison, 68 Iowa 44, 25 N.W. 921.

PENDER v. JACKSON, et al.
No. 7896. Decided July 28, 1958. (260 P. 2d 542.)

See 2 C.J.8. Adverse Possession, sec. 24, Adverse Possession, actual
possession as necessary to claim. 1 Am. Jur., Adverse Possession,
sec, 128; 22 A.L.R. 550.

Milton V. Backman and R. S. Johnson, Salt Lake City, for
appellant.

Irwin Clawson, Salt Lake City, for respondents.

MeDONOUGH, Justice.

This is an action to quiet title in the plaintiff to named
realty. Defendants filed an answer and counterclaim claim-
ing as successors to twenty-six twenty-sevenths of the inter-
est in the property, and the lower court entered a decree
in their favor.

Plaintiff acquired a tax deed to the realty on June 7,
1939, paying $44.88 therefor, recorded the same and paid
all taxes on the realty from 1940 to and including 1949.
Plaintiff testified that he went upon the ground in 1939,
and at least once each year subsequently; that he kept the
weeds down and put up “For Rent” and “No Trespassing”
signs; and that in 1949 he plowed the ground. Although
persons living in the vicinity testified that they had never
observed the signs nor any other activity indicating that
the land was being held adversely and under claim of owner-
ship, other evidence establishes the fact that defendants
were aware of plaintiff’s claim under the tax title. It was
stipulated that the auditor’s affidavits were not attached
to the 1934 assessment rolls, pursuant to which year’s
delinquent tax sale plaintiff's tax deed was issued.

Telonis v. Staley, 104 Utah 537, 144 P.2d 518, 517, held
that the statutes requiring attachment of the audi-

tor’s affidavits to the assessment rolls, Utah Code i
Ann. 1958, 59-7-9 and 59-8-7, established a substan-

tive rule, designed for the protection of the taxpayer, and
“in the absence of any curative provision in the statutes for failure
of the auditor to subscribe to and attach such certificate of authen-
tication in affidavit form, the requirement of the statute must be
observed.”

Plaintiff contends that since general curative statutes’ have
been enacted in an attempt to cure all tax procedural flaws,
the reason for the rule in Telonis v. Staley, supra, has been
abrogated, and hence this court should reverse the holding
in that case. There is no merit in this contention. The
statutes cited by plaintiff are indeed general, dealing for
the most part with matters of limitation, and are in no way
related or designed to substitute for “failure of the auditor
to subscribe to and attach such certificate.” We find no
basis or reason for disturbing the rule of the Telonis case.

Plaintiff next contends that the trial court erred in deny-
ing his adverse possession. Utah Code Ann. 1958, 2,3
78-12-9, provides:

“For the purpose of constituting an adverse possession by any
person claiming a title founded upon a written instrament or a
judgment or decree, land is deemed to have been possessed and
occupied in the following cases:

a

“(8) Where, although not inclosed, it has been used *-* *

for the ordinary use of the occupant.” (Italics added.)

Plaintiff relies upon the proposition that since he deals
in real property interests and has often purchased and held
property at tax sales; that since the character of the land
involved is such that holding for speculation would be a

1Chapter 19, Session Laws of Utah, 1951, 104-2-5 to 104-2-5.11.
See also Compiler’s Notes to 9 Utah Code Ann. 1958, page 106.

normal use; therefore, “holding the land for investment,
speculation, lease, or the like” are ordinary uses permitted
to him as an occupant. We do not agree. Merely holding
land for speculation is the purpose for which the land is
held and not use of the land; we are not disposed to distort
the phrase “ordinary use of the occupant” to a point beyond
meaning. This is true even though a landowner is cognizant
of the facts and the adverse claim because the necessary
element of possession or occupation, as defined by the Utah
statute, is not established. The rule is stated in Madson v.
Cohn, 122 Cal. App. 704, 10 P.2d 531, 532, as follows:

“‘Hence, an open and notorious occupation with hostile intent
is a necessary constituent of an adverse possession, Neither a hostile
intent without such occupation, nor such occupation without hostile
intent, is sufficient.’”

In Day v. Steele, 111 Utah 481, 184 P.2d 216, 219, the
tax title claimant paid the taxes, placed a commercial sign
on the property, installed a water meter for future connec-
tion, and allowed the dumping of dirt on the land. This
was held to be insufficient possession under the Utah stat-
ute, the court reasoning as follows:

“Under such circumstances we are of the opinion that the property

was not improved in the manner usual to improve that kind and
character of land for the uses to which it could be put.”

In Weyse v. Biedebach, 86 Cal. App. 786, 261 P. 1092,
1095, evidence to the effect that the plaintiff has posted
upon the property a notice bearing his name and address
with the word “owner” thereon, that he had paid all taxes,
and that he had removed from the premises a tank with the
oil contained therein, was held not sufficient to show the
required occupancy or possession. In that case the court
said:

“But to sustain a title by adverse possession it is incumbent upon
the claimant to show actual, continued occupation and possession
* * *, in addition to the payment of state, county, and municipal
taxes levied and assessed upon the property.”

By reason of the foregoing rules, we affirm the trial
court’s finding that plaintiff was not in possession of the
property as required by the adverse possession statute.
Costs to respondent.

WOLFE, C.J., and CROCKETT, HENRIOD and WADE,
J.J., concur.

BROWN v. COOK et al.
No. 7959. Decided July 29, 1958. (260 P. 2d 544.)

See 89 C.J.S. Habeas Corpus, sec. 54. Contempt, inability to comply
with order as defense to charge of. 12 Am. Jur., Contempt, sec. 72;
120 A.L.R. 708.

Ray E. Nash, Vernal, for appellant.

Colton & Hammond and Whitney D. Hammond, Vernal,
Dean W. Sheffield, Salt Lake City, for respondent.

WADE, Justice.

Plaintiff Tommie Maurine Brown, respondent here, insti-
tuted habeas corpus proceedings to gain custody of Ronald
Glen Cook, her three year old son, from defendants Harold
and Cora Cook, his paternal grandparents. Glen H. Cook,
father of the child, was out of the state in the military
services and not available for service of process at the time
the action was commenced and he was not made a party to
the action. He left the child in his parents’ custody. In
June, 1952 the father and mother were divorced in an ac-
tion commenced by her in Wyoming where she was then
living, but neither the father nor child was in that state
and the question of custody of the child was not litigated
in that action. Shortly thereafter plaintiff married Mr.
Brown, her present husband, and then returned to Utah to
get the child and commenced these proceedings after de-
fendants refused to surrender him to her. The writ was
served upon defendants on December 1, 1952 in Uintah
County at a time when the child was in their custody and
control. It ordered the defendants to bring the child with
them into court on December 9th in the Court House at
Vernal, Utah at 10:00 a.m. of that day to be dealt with in
accordance with law.

508

Defendants appeared at the appointed time and place
without the child. Upon their counsel’s explanation to the
court that the father had appeared the day before and
taken the child from defendants, the court suggested that
in failing to produce the child as ordered after being served
with the writ while he was in their custody, they were guilty
of contempt of court. The plaintiff was then called and
testified in support of her right to the custody of the child;
defendants offered no testimony on that question but called
the defendant Harold Cook on the question of contempt. He
explained that immediately after the writ was served he
contacted his son both by telephone and telegraph, inform-
ing him that the writ had been served ordering them to
bring the child into court and earnestly requested him to
come home, which he did the day before the hearing and
stated that he was going to take the child and go out of.the
state, and that later while the defendants were away from
home the father left, taking the child and his clothing and
that he did not know where they were at the time of the
hearing. He further said that the father had consulted
counsel before returning.

The court, at the end of the hearing took both the matter
of custody and contempt under advisement, giving permis-
sion to counsel to submit authorities on either or both sub-
jects. Two days later he announced his decision in open
court giving detailed statements of the Jaw and facts as
he found them. He found the mother a fit and proper per-
son for the custody of the child and later signed and entered
findings of fact, conclusions of law and judgment to that
effect. .

No formal findings, conclusions or judgment on the
contempt were drawn up or signed but in his oral decision,
later transcribed and made a part of the record on appeal,
the court made detailed findings of the facts including the
facts herein above stated. He further found that the de-
fendant did nothing to prevent the father from taking the
child away except to tell him of the order, and that the

509

defendant Harold Cook had permitted and connived with the
father to get the child out of the jurisdiction of the court
and found him guilty of contempt. The court then sentenced
such defendant to 30 days in jail and fined him $150.00, but
stated that the jail sentence and the fine, except for $50.00
thereof, would be remitted if the child were surrendered
to the mother within ten days. Defendant Harold Cook
appeals from both judgments.

Four problems require consideration on this appeal: 1.
Did the court have jurisdiction to determine as between the
parties which one had the right to the custody of this child?
2. Does the evidence support the court’s findings and con-
clusions that appellant was guilty of contempt? 3. Was the
contempt, if any, committed in the immediate presence of
the court? 4. Did the court err in failing to make and enter
formal written findings, conclusions and judgment?

The court acquired jurisdiction to determine, as between
the parties to this action, the right to the custody of this
child. When the writ was served the child was within the
jurisdiction of the court, and in the custody of the
defendants. At that time the court acquired juris- | |
diction of the parties and the subject matter of the
action even though neither the child nor the defendants
were actually before the court. Parties are seldom actually
in the presence of the court when the court first acquires
jurisdiction. The court did not lose that jurisdiction by
the child being spirited away even though it were conceded,
which it is not, that the child was not actually within the
state at the time of the hearing. Once having acquired
jurisdiction courts often exercise such jurisdiction in
custody cases when the subject is outside of its territorial
jurisdictiont The father was not a party to this action so

See Little v. Little, 249 Ala. 144, 30 So. 2d 886, 171 A.L.R. 1899;
Maloney v. Maloney, 67 Cal. App. 2d 278, 154 P. 2d 426; Roberts
v. Roberts, 300 Ky. 454, 189 S.W. 2d 691; Cole v. Cole, 194 Miss.
292, 12 So, 2d 425; McMillin v McMillin, 114 Colo. 247, 158 P. 2d
444, 160 A.L.R. 396; State v. Porterfield, 221 Mo. App. 847, 285

the right to custody between him and plaintiff was not de-
termined by this judgment. That such is the case was not
the fault of the plaintiff for he was neither within the juris-
diction of the court nor had custody of the child when the
suit was commenced, and by secretly coming and taking
the child he afforded her no opportunity to join him in the
action. Had he been willing to litigate his right to the
eustody of the child, he could have intervened and asserted
his claim. Although the court had jurisdiction to deter-
mine this question, by secreting the child away from the
court, it was effectively prevented from enforcing its de-
eree, and the plaintiff was denied the opportunity to litigate
her right to the custody of her child which she was in jus-
tice entitled to do.

The evidence supports the finding that appellant was
guilty of contempt. Section 78-32-1 U.C.A. 1953 provides
that: “(5) Disobedience of any lawful judgment, order or
process of the court” is contempt of its authority.

It is a general rule, to which this court has repeat- [jl
edly adhered, that inability to comply with the order

is a complete defense.? But such inability to perform is no
defense where the person charged has lost such ability as
the result of his own actions. Such defense is only effective
where after using due diligence he still is not able to com-
ply with the order. This is a different problem than is
presented by section 78-32-12, U.C.A. 1958, which only au-
thorizes imprisonment until the act is performed where
the contempt consists in the omission to perform an act
which is yet in the power of the person to perform. The
penalty of that statute may only be imposed where present

.W. 186; Burckhalter v. Conyer, Tex. Com. App., 285 S.W. 606;
Peacock V. Bradshaw, 145 Tex, 68, 194 S.W. 2d 551.

2See in re Clift’s Hstate, 108 Utah 336, 159 P. 2d 872; In re Mary
Jane Stevens Company v. Foley, 67 Utah 578, 248 P. 815; State v.
Bartholemew, 85 Utah 94, 88 P. 2d 758; Limb v. Limb, 118 Uteh
385, 195 P, 2d 268.
8See cases cited in note 2, supra.

511

ability to perform is shown. The punishment ordered in
this case was under section 78-32-10, U.C.A. 1953, which
does not require present ability to perform.

There is no claim that the order was unlawful or that
appellant obeyed it, but he claims there was no showing
that he had the ability to perform. Since inability to per-
form is a defense, he had the burden of persuading
the court on that subject.t He contends that he was [jl
only caring for the child at the request of its father,
that he as between them had the paramount right to its
custody and that when the father returned he had no right,
power or duty to try to prevent the child’s father from tak-
ing it away, and further that since the father was not made
a party to this action it was not proper for the court to
punish appellant in order to induce the child’s father to
surrender the custody of the child, which would amount
to depriving him of his rights thereto without due process.

If it were shown that appellant had no power to prevent
the father from taking the child away, and that such taking
rendered him unable to obey the order, that would be a de-
fense.5 However, the question of whether appellant has a
right or duty to try to prevent the father from taking the
child away should be considered in determining this matter.
The father, had he chosen, could have intervened and as-
serted his right to the custody of the child in this action.
The plaintiff had no power to join him because he was not
within the jurisdiction of the court when the action was
commenced, and she could not join him later because he
came into the jurisdiction and secretly removed the child
without her knowing that he was there. So the failure to
litigate his right to the custody of the child was all of his
own choosing. Under such circumstances, appellant owed
a duty to the court to use reasonable diligence to prevent
the child from being taken from his custody and thereby

4See State v. Bartholemew, supra.
5See Limb v. Limb, supra.

make it impossible for him to comply with the order. The
policy of the law is to litigate rights and not to obtain them
by force or secret dealings.

There were a number of things which appellant could
have done to prevent the father from taking the child away.
He could have advised him to come with him into court and
defend his right there; he could have sought legal advice
thereon or disclosed the father’s intentions to the sheriff or
plaintiff or her counsel, or the court. There is no showing
that such procedure would have been ineffective. The evi-
dence shows that the appellant did nothing to prevent the
father from taking the child except to notify him of the |
order which had been served on him. He admits that by
telephone and telegraph he urged the father to come, and
that the father came upon such urging and said he was
going to take the child, but when the child was actually |
taken away appellant was not home. Counsel strenuously |
argues that appellant has no duty to prevent the father
from spiriting the child away, and that the court is power- |
less to do anything about it. It seems quite probable that }
such was his attitude when the child was taken, and that
the court was correct in finding that he connived with the |
father to get the child out of the court’s jurisdiction. Un-
der such facts he was guilty of contempt. Hl

Section 78-32-8, U.C.A. 1958 provides that:

“When a contempt is committed in the immediate view and presence
of the court or judge at chambers, it may be punished summarily,
for which an order must be made, reciting the facts as occurring in

such immediate view and presence, adjudging that the person pro- f
ceeded against is thereby guilty of a contempt, and that he be pun-~
ished as prescribed in section 78-32-10 hereof. When the contempt }f
is not committed in the immediate view and presence of the court or
judge at chambers, an affidavit shall be presented to the court or |
judge of the facts constituting the contempt, or a statement of the
facts by the referees or arbitrators or other judicial officers,”

513

Under this section an affidavit is required stating the
facts where the contempt is not committed in the immedi-
ate presence of the court. The contempt of which appel-
lant was convicted was his disobedience to the court’s
order to bring the child into court so that the court [jl
could deal with him according to law. Appellant ap-
peared in court but failed to produce the child. The pur-
pose of the affidavit is two-fold: first to inform the court
of the contempt, and second to inform the person charged
therewith of the charge which he must meet. Both appel-
lant and the court had definite information of the facts
which constituted the contempt as much as though he had
by a positive act interfered with the court’s proceedings,
so there was no reason for an affidavit to inform them of
facts they were both well aware of. The court made it clear
to appellant as soon as it became apparent that the child
was not going to be produced, that he contemplated press-
ing a contempt charge, whereupon appellant took the wit-
ness stand and presented his defense, so he was deprived
of no opportunity to exonerate himself from punishment.
Generally, contempts committed in the immediate presence
of the court are such because they interfere with the court’s
procedure with its business.’ This failure to produce the
child effectively prevented the court from dealing with the
child’s custody in accordance with law. For, although the
court still retained jurisdiction to decide the right to its
custody as between the parties to this action, it lost all ef-
fective power to enforce its judgment and place the child
in the custody of the person who it determined had such
right.

The cases are in accord with this holding: In Ex parte
Sternes, 77 Cal. 156, 19 P. 275, it was held that failure to
produce a prisoner as required by a writ was a contempt

*See In re Schulder, 62 Utah 591, 221 P. 565.
See 17 C.J.S. Contempt § 26, page 87; 12 Am. Jur. 390 and 391,
“Contempt” Sec. 4, .

514

committed in the immediate presence of the court, and no
affidavit was required. In Smythe v. Smythe, 28 Okla. 266,
114 P. 257, the court in a child custody case the same as
this one, except the father instead of the grandfather failed
to produce the child, was held to have committed a contempt
in the immediate presence of the court. The case of State
ex vel. Ewing v. Morris, 120 Wash. 146, 207 P. 18, involved
the failure of a receiver to file a report as ordered by the
court which the court held was committed in the immediate
presence of the court. The reasons given apply to this case.

Appellant relies on Robinson v. City Court of Ogden, 112
Utah 36, 185 P.2d 256. That case is so different in its facts
that it is of no aid in determining this one. There the city
judge while riding on the elevator, after court had ad-
journed, overheard a disparaging statement against the
eourt by a person he had previously found guilty and sen-
tenced for a crime. He immediately took the person back
into court and sentenced him for contempt. We held that
the remark, though in the presence of the judge, was not in
the presence of the court, because court had adjourned and
it did not interfere with the court business, distinguishing
between the judge while attending to the court’s business
while in session or in chambers and while attending to his
private affairs.

The court erred in failing to make formal written find-

ings, conclusions and judgment as required by Rule
52(a) and Section 78-32-3 U.C.A. 1953, supra. Sec- | |
tion. 78-32-38 provides that when a contempt is com-
mitted in the immediate presence of the court it may be
punished summarily,
“for which an order must be made, reciting the facts as occurring in
such immediate view and presence, adjudging that the person pro-
ceeded against is thereby guilty of a contempt, and that he be pun-
ished as prescribed in section 78-32-10 hereof.”

Rule 52(a) provides that in
“all actions tried upon the facts without a jury * * * the court
shall, unless the same are waived, find the facts specially and state

separately its conclusions of law thereon and direct the entry of

the appropriate judgment; * * *.”
From the foregoing it is clear that written findings of
facts, conclusions of law and judgment are contemplated,
that the facts must be recited as occurring in the immediate
view and presence of the court, adjudging that a contempt
has been committed and the punishment. Although the
court in open court announced in detail its findings, conclu-
sions and decree, that does not meet the requirements of
these provisions. The matter is reversed and remanded
to the District Court with directions to make findings of
fact, conclusions of law and judgment in accordance with
the views herein expressed. Each party shall bear his costs
on appeal.

WOLFE, C. J., and McDONOUGH, and CROCKETT, J.J.,
concur.

HENRIOD, J., concurs in result.

HOOPER v. GENERAL MOTORS CORP.
No. 7887. Decided July 81, 1958. (260 P. 2d 549.)

OO EE eEOWr- |
|

See 60 C.J.S. Motor Vehicles, sec. 167. Liability of manufacturer
of defective automobile. 5 Am. Jur., Automobiles, sec. 350; 142 A.L.R.
1494, .

McBroom & Hanni, Glenn C. Hanni, Salt Lake City (ZH.
R. Miller, J., Ely, Nev., of counsel), for appellant.

Leonard W. Elton, Max K. Mangum and H. Arnold Rich,
Salt Lake City, for respondent.

WOLFE, Chief Justice.

On October 15, 1951, plaintiff and later appellant, Bonnye
Hooper, was severely injured when a recently purchased
1951 Chevrolet pick-up truck she was driving on Nevada’s
Newark Valley Highway overturned. She sued defendant
and later respondent, General Motors Corporation, as-
sembler of the truck, to recover for injuries to herself and
for damages to the truck sustained in the mishap. She
charged that defendant negligently assembled, manufac-
tured and inspected the truck which she and her son on
July 21, 1951 purchased new from Hyland Motor Company
of Ely, Nevada, defendant’s authorized dealer. Plaintiff
further claimed that the truck was equipped with a defec-
tive left rear wheel and that the failure of such wheel caused
by separation into its component parts resulted in the acci-
dent.

From a verdict and judgment of “no cause of action,”
plaintiff appeals.

518

Between 6 and 6:30 p.m. of the day of the mishap, plain-
tiff was driving the Chevrolet truck south along the New-
ark Valley Highway, a gravel-surfaced country road of
White Pine County, Nevada. That road runs north and
south and about 14 miles east of Eureka, Nevada, it inter-
sects with U.S. Highway 50 which runs east and west.
Plaintiff was alone. She testified that she was traveling
in the center of the road at about 30 miles per hour. She
further testified that at a point about seven miles north of
the junction
«+ * * the left rear end of the pickup dropped suddenly, down,
and it swerved to the left and I tried to right [sie] it to the right
and it went end for end, and it seemed to be somewhat going to
the right front of the fender when it went over.”

The left rear wheel of the 1951 Chevrolet pick-up truck
is composed principally of a “spider” and a “rim.” The
“spider” is the center part of the wheel that bolts to the
axle drum. The “rim” is that part of the wheel upon which
the tire is mounted. The rim is connected to the spider by
12 rivets in sets of 3. After the accident, the spider and
the rim of the left rear wheel were found completely sepa-
rated. The spider remained bolted to the axle drum. The
rim, with the tire still mounted though flat, was lying on the
ground.

Worn and shiny spots appeared on the undersurface of
four adjacent rivet holes in the rim. David H. Curtis, ex-
pert witness for plaintiff, testified that such shininess and
smoothness “*** indicates there has been wear at these
points.” Mr. Curtis further testified that such wear

“* * * shows that there has been loose rivets in these portions in the
holes 1, 2 and 8, and that looseness is caused by wear and the loose
rivets would indicate there would be a movement between the spider
and the rim and vibration and oscillation between the two component.
parts.”

He further testified that the extent of the wear indicated
looseness over a considerable period of time and that “***

three loose rivets would bring about an ultimate failure to
the entire rim.”

Testimony was given by witnesses for the defendant as
to the manufacturing and inspection procedures of the
Norris Thermador Company, manufacturer of the wheel,
and the California plant of the Chevrolet Division of Gen-
eral Motors Corporation, the assembler of the truck.

Mr. Arthur Harris, an employee of and expert witness
for defendant, testified that in his opinion,
«+ * * the wheel was struck an extremely heavy blow by some object

on the outer rim which first * * * caused the spider to distort and
then shear off the rivets.”

The grounds for plaintiff’s appeal are basically two in
number: (1) The court erred in giving the following instruc-
tion to the jury which was requested by counsel for the
defendant:

“You are instructed that the fact that the rim and spider were found
in a separated condition after the accident is no evidence of the fact
that they were defective, unsound or unsafe when assembled and sold
by defendant, General Motors Corporation, nor is it evidence of the
fact that the separating of the rim and spider caused the truck to
go out of control and overturn.” (Emphasis added.)

(2) The court erred in admitting certain testimony into
evidence, namely: (a) The opinion testimony of Mr. Arthur
Harris on an ultimate fact in issue; (b) Certain testimony
of Mr. Arthur Harris claimed by plaintiff to be speculative;
(c) Certain testimony of Mr. Lowell G. Fouts claimed by
plaintiff to be hearsay.

The instruction as given is erroneous and prejudicial.

It is well settled that the assembler of an automobile, who
purchases wheels from a manufacturer, is liable to
one who purchases a car from a retailer for an in- | |
jury caused by the collapse of a wheel because of de-
fects which would have been discoverable by reasonable
testing or inspection. McPherson v. Buick Motor Co., 217
N.Y. 382, 111 N.E. 1050, L.R.A. 1916F, 696.

Thus, to impose liability on an assembler of an automo-
bile certain necessary elements must be made out.
Plaintiff is required to show: (1) A defective wheel | |
at the time of automobile assembly; (2) Such defect
being discoverable by reasonable inspection; (3) Injury
caused by failure of the wheel due to its defective condition.

Contrary to the instruction as given, the undisputed
fact of post accident rim-spider separation may be (1)
Some evidence of a defective wheel at the time of auto-
mobile assembly and, (2) Some evidence of accident
causation, Thus the effect of the above quoted in- [ll
struction was to unduly narrow the evidentiary base
from which the jury could infer two of the requisite ele-
ments of plaintiff’s cause. It may be that the mere separa-
tion of the spider from the rim, standing as an isolated
fact, would be an insufficient factual basis for an inter-
ference that the wheel was defective at the time it was as-
sembled on the truck. However, when viewed in relation
to other evidentiary facts—namely, the worn shiny spots on
the undersurface of the wheel rim; the expert testimony
to the effect that such shininess indicated smoothness and
wear over a considerable length of time, (the wear indicated
loose rivets; loose rivets would have permitted vibration
and oscillation between the component parts of the wheel
and that three loose rivets could cause the ultimate failure
of such a wheel) ; the age of the truck; the fact that it had
gone but 6700 miles; the fact that it had no record of prior
damage; the description of the mishap by plaintiff above
quoted; then the fact of rim-spider separation may have
provided the requisite force to tip the scales in favor of
plaintiff. Certainly, reasonable men from the cumulative
factual total could infer, and with the consideration of
rim-spider separation may have inferred, that the wheel
was defective at the time of assembly.

It is not enough to say, that though the instruction be in-
correct, the fact of rim-spider separation was so implicit

in all the evidence that no prejudice resulted to plaintiff.
The instruction as given withdrew from the jury a fact
which was some evidence of two requisite elements of plain-
tiff’s cause. It would be pure conjecture to say that the
jury ignored the instruction. If the fact of rim-spider
separation is said to be implicit in all of the evidence the
instruction as given may have had the effect of causing the
jury to ignore all of the evidence relating thereto to the
prejudice of plaintiff.

The same reasoning applies in relation to the issue of
accident causation. See Hupp Motor Corp. v. Wadsworth,
6 Cir., 118 F.2d 827; General Motors Corporation v. John-
son, 4 Cir., 187 F.2d 320. :

Counsel for defendant examined Mr. Arthur Harris,
qualified expert witness for defendant, in the following
fashion:

“Q. * * * Do you have an opinion, Mr. Harris as to what occurred

to cause the separation of the spider and rim as represented by
exhibits A and B? A. I have.

“My. Hanni: (counsel for plaintiff) We object on the same
grounds, your Honor. That is, calling for a conclusion as to the
ultimate fact in issue.

“The Court: The objection is overruled.
“Q. Do you have an opinion? A. I have.

“Q. And what is that opinion? A. That the wheel was struck an
extremely heavy blow by some object on the outer rim which first
caused the rim to distort, pardon me, caused the spider to distort and
then shear off the rivets.”

Plaintiff contends that the court erred in admitting into
evidence the opinion testimony of Mr. Arthur Harris on
“ * * * the ultimate fact in issue.” In our opinion
the court did not so err. Without determining
whether the fact upon which Mr. Harris gave his [i
opinion was properly characterized as “ultimate”
we look to the fact itself. We are of the opinion that within

|

the realm of his knowledge an expert may express an
opinion as to what did cause a particular occurrence or
condition and in so testifying his opinion may be cast in
the form of “what did” cause, as well as “what might”
or “what could” have caused a particular occurrence or
condition, depending upon the degree of positiveness the
witness desires to give his opinion. The general rule is
that

««* * * opinions as to the cause of a particular occurrence or accident
given by witnesses possessing peculiar skill or knowledge—that is,
experts—are admissible where the subject matter is not one of com-
mon observation or knowledge, or in other words, where witnesses
because of peculiar knowledge are competent to reach an intelligent
conclusion and inexperienced persons are likely to prove incapable of
forming a correct judgment without skilled assistance.” See 20 Am.
Jur. 686, § 817; Jones Commentaries on Evidence 2nd Ed., Vol. 3,
§ 1818, page 2402; Wigmore on Evidence, 8rd Ed., Vol. VII, § 1976,
page 121; Wigmore’s Code of the Rules of Evidence in Trials at Law
Rule 100 Art. 2, page 160 and Rule 107 Art. 3 (2) page 171.

For the contrary point of view see DeGroot v. Winter,
261 Mich. 660, 249 N.W. 69. See also Model Code of Evi-
dence, Rules 401 and 409, pages 199 and 210, for a broader
statement of the rule than that laid down in this case.
We confine ourselves in this case to the question of expert
opinion on questions of causation. The modern tendency
and the rule of this court is that an expert may give an
opinion as to the cause of a particular occurrence or con-
dition regardless of whether the cause of such occurrence
or condition is in dispute and regardless of whether the
jury must determine which of the causes urged by the
respective parties is the correct one.

The expert’s opinion otherwise qualified is proper
on the fact of “cause” whether such fact be labeled | |
evidentiary, primary, reconciled, inferential, or ulti-
mate.

We are of the opinion that the admission by the trial
court of the testimony complained of in assignment of

error number two, subsections (b) and (c) as above set
forth, was without error.

Because of the reasons above set forth, this case is
reversed and remanded to the lower court for a new trial.
Cost to appellant.

McDONOUGH, J., concurs.

WADE, Justice (concurring specially).

Except as herein stated I concur with the prevailing
opinion.

The so-called rule that opinion evidence on the ultimate
question for the trier of the facts is not admissable has
no tendency to lead the trier to the truth but tends to create
confusion, controversy and absurd results. Such rule

1See Cropper v. Titanium Pigment Co., 8 Cir., 47 F.2d 1038, 1043,
78 A.L.R. 787 at pages 744 and 745, where the court said: “But if
the questions propounded were such that the jury might not be
capable of determining from the evidence, then it was proper that
they should have the benefit of the opinion of an expert, even though
the opinion went to the matter directly in issue. The purpose of a
trial is to investigate the facts so as to ascertain the truth, and the
modern tendency is to regard it as more important to get to the truth
of the matter than to quibble over distinctions which are in many
cases impracticable, and a witness may be permitted to state a fact
known to him because of his expert knowledge, even though his state-
ment may involve a certain element of inference or may involve the
ultimate fact to be determined by the jury.” See also U. S. Smelting
Co. v. Parry, 8 Cir., 166 F. 407, which says.

“Tt is true that in trials by jury it is their province to determine
the ultimate facts, and that the general rule is that witnesses are
permitted to testify to the primary facts within their knowledge, but
not to their opinions. And it is also true that this has at times led
to the statement that witnesses may not give their opinions upon the
ultimate facts which the jury are to decide, because that would sup-
plant their judgment and usurp their province. But such a state
ment is not to be taken literally. It but reflects the general rule,
which is subject to important qualifications, and never was intended
to close any reasonable avenue to the truth in the investigation of
questions of fact. * * *

should be entirely discarded rather than to create an ex~-
ception thereto where the question of causation is involved,
as is done in the prevailing opinion. It is clear that there
is no difference in the principle involved for the so-called
rule is just as unsound when applied to other subjects
as it would be if applied to the question of causation, and
to make this fine distinction, will create more confusion,
uncertainty and absurd results.

The fact that the jury must decide the ultimate questions
of fact is no reason why they should not have the benefit
of expert opinion the same as on questions where only evi-
dentiary facts are involved. If the opinion evidence is
such that it will aid the jury to understand their problem
and lead them to the truth it is even more important that
they have its aid on the ultimate facts than on facts which
are not ultimate, for the ultimate facts are determinative
of the case and an erroneous conclusion as to them leads
to an erroneous result, whereas the jury might be mistaken
on some evidentiary facts and still reach the correct result.
Evidence on the ultimate facts is more pertinent and rele-
vant than on evidentiary facts and yet under that so-called
rule we reject the evidence which is more pertinent and
relevant and receive evidence which is less so, not in spite
of that fact but because of it. It has never been claimed
that direct eye witness evidence is not admissible because
it was on the ultimate facts, but in principle if such rule
is good when opinion evidence is involved it should be
equally good when dealing with direct evidence?

_ most important qualification of the general rule before stated

is that which permits a witness possessed of special training, experi-
ence, or observation, in respect of the matter under investigation, to
testify to his opinion when it will tend to aid the jury in reaching a
correct conclusion; * * *.”

2See note on this subject in 78 A.L.R. 755, wherein it cites many
cases and quotes the following from 11 R.C.L. 588: “ “Thus, it has
been held also that an expert may state that a certain cause may
have produced the result under consideration, but cannot state that

This whole rule grew out of a misunderstanding of a
catch-phrase and is based on nothing more than empty
rhetoric. In some early decisions some courts used the
phrase “that is the question which the jury must decide”
in rejecting opinion evidence on the ground that it would
not tend to aid the jury to understand their problem or
lead them to the truth. In so using that phrase they were
simply applying the general rule applicable to all opinion
evidence that it is only admissable where the witness has

in his opinion it did produce it. But it is evident that this. supposed
rule, when stated broadly as it often has been stated, involves great
confusion of thought and leads to absurd consequences. It is certainly
singular that a class of evidence which is admitted when it is only
slightly pertinent should be rejected when it is of the highest per-
tinency. Irrelevancy is made a ground of admission, and relevancy
of exclusion. Such evidence invades the province of the jury no more
than does direct evidence of an eye-witness to a decisive fact. In
either case, if the jury ave satisfied of the trustworthiness of the
evidence, it may be conclusive of the issue; but their duty is no more
invaded in one case than in the other. Every expert opinion rests on
an assumption of facts; if the opinion is given wpon a hypothetical
question, its weight depends wholly on the jury finding that the as-
sumed facts have been proven; if it is based on the expert’s own
testimony as to the facts, the truth of this testimony is no less open
to their belief or disbelief; and, in addition, the soundness of the
opinion itself is to be determined by the jury in consideration of its
apparent reasonableness or their confidence in the skill and trust-
worthiness of the witness, and of any contradiction from other
experts. The rule leads to absurd results in its application. Thus,
it is held that an expert may testify to the value of land before an
alteration and to its value afterward, and that the court must charge
the jury that the difference in value is the measure of damages, but
that the expert cannot express an opinion as to the amount of
damages. The technicality of the distinction is illustrated by the
holding that facts may be elicited from the witness, from which the
ultimate conclusion inevitably follows, though that conclusion cannot
be stated. The court in so declaring, however, admitted that the dif-
ference was largely one of form * * *, It seems safe to say,
however, that the modern tendency is decidedly towards the more
liberal practice, and that sooner or later no distinction will be made
between evidential and ultimate facts as subject of expert opinion. ”

526

knowledge on the subject which the lay jurors do not
possess, which will aid them to understand their problem
and lead to the truth. But later courts seized upon. this
catch- plirase and tortured it into meaning that all opinion
evidence ‘on the ultimate facts is inadmissible. Now the
pooks are full of cases on this question containing so many
fine distinctions and limitations thereon, that no trial
judge could possibly expect to keep in mind all of them?

88ee my dissenting opinion. on this question in Jimenez v. O’Brien,
117 Utah, 82 218 P. 2d 837, and the authorities cited and quoted
therein, especially Wigmore on Evidence, 8rd Ed. Secs. 1917 to 1929.
See also the American Law Institute’s Model Code of Evidence, Chapt.
Rule 401: “Testimony in Terms of Opinion. (1) In testifying to
what he has perceived, a witness, whether or not an expert, may give
his testimony in terms which include inferences and may state all rele-
vant inferences, whether or not embracing ultimate issues to be de-
cided by the trier of fact, unless the judge finds (a) that to draw such
inferences ‘requires a special knowledge, skill, experience, or training
which the witness does not possess, or (b) that the witness can
readily and with equal accuracy and adequacy communicate what he
has perceived to the trier of fact without testifying in terms of in-
ference or stating inferences, and his use of inferences in testifying
will be likely to mislead the trier of fact to the prejudice of the ob-
jecting party. (2) The judge may require that a witness, before
testifying in terms.of inference, be first examined concerning the data
upon which the inference is founded.”

Rule 409: “Opinion Without Previous Statement of Data. An
expert witness may state his relevant inferences from matters per-
ceived by him or from evidence introduced at the trial and seen or
heafd by him or from his special knowledge, skill, experience or
training, whether or not any such inference embraces an ultimate
issue fo be decided by the trier of fact, and he may state his reasons
for ‘such inferences and need not, unless the judge so orders, first
specify as an hypothesis or otherwise, the data from which he draws
then} but he may thereafter during his examination or cross-exa-
mination be required to specify those data.”

I of course do not contend that. these rules are the law of this
State until they are adopted by this court either in an appropriate
case or under its Rule Making power. See Section 78—2—4, U.C.A.
19538. «

Another catch-phrase which is equally unsound and
misleading and often used to explain why opinion evi-
dence on the ultimate facts is not admissible is that it
“would usurp the functions of the jury.”. The witness who
offers opinion evidence on the ultimate facts does not
attempt nor have the power to usurp the jury’s functions
any more than a direct eye-witness of the facts, or one
who gives opinion evidence on an evidentiary fact. Cer-
tainly a juror would feel no more bound to follow such
opinion evidence than he would the positive testimony
of a direct eye-witness to the ultimate facts, or the opinion
evidence of an expert on evidentiary facts. In all three
cases the jury still casts its vote on the verdict. The evi-
dence may or may not be contradicted, may have little or
great weight, and the jury should give it such weight as
the jury not the witness considers it entitled to under the
facts and circumstances of the case. Nor is there anything
about such opinion evidence which would tend to mislead
the jury any more than in the other two cases, certainly
no distinction in that respect can be found between opinion
evidence on the ultimate fact and on an evidentiary fact.‘

Appellate courts often overlook the fact that trial courts
must rule on the admissibility of evidence immediately and
on the spur of the moment, often without previous warn-
ing. The rules of evidence have developed through myriads
of cases with many exceptions and fine distinctions. It
took Wigmore nine volumes to explain these rules. A trial
judge cannot be expected to keep all of these rules in his
head and always rule in accordance with them. Here we
have a rule of law which is based on no sound principle,
and by this decision we overrule part of it by limiting its
effect we leave it still complicated, so that the trial court
must keep in mind that where the question of causation
is involved opinion evidence shall not be excluded on the
grounds that it is on the ultimate question of. fact which

4See cases and authorities cited and quoted in previous notes.

528

the trier of the facts must decide, but that as to all other
matters which are otherwise appropriate for opinion evi-
dence he can only guess which way this court will go the
next time the matter is brought here for decision. To leave
the law in that state seems to invite uncertainty and con-
fusion. I think we should adopt the broad rule advocated
by Wigmore, and adopted in the Model Code of Evidence
of the American Law Institute.

I do not understand what is meant by the statement in
the prevailing opinion
“that an expert may give an opinion as to the cause of a particular
occurrence or condition regardless of whether the cause of such
occurrence or condition is in dispute * * *,”

I see no occasion to give opinion evidence on a matter
about which there is no dispute. I agree with the broad
scope allowed for opinion evidence on the question of
causation as expressed in the rest of the sentence above
quoted and the following paragraph where it adds,

“and regradless of whether the jury must determine which of the
causes urged by the respective parties is the correct one.

“The expert opinion otherwise qualified is proper of the fact of
‘cause’ whether such fact be labeled evidentiary, primary, reconciled,
inferential or ultimate.”

I also think it a long step forward that the prevailing
opinion refused to quibble about whether the question
here involved was ultimate or not and the form of the
answer.

CROCKETT, Justice.

I concur except that I agree with the views expressed
by Mr. Justice WADE in regard to opinion evidence.

HENRIOD, Justice (concurring).

I concur for the reason that the instruction objected to
was erroneous and prejudicial as applied to the facts of
this case.

529

SEABOARD FINANCE CO. v. WAHLEN et al.
No. 7890. Decided July 7, 1958. (260 P. 2d 556.)

mn

30

See 58 C. J. S, Money Lenders, sec. 6. Usury, elements of. 55 Am.
Jur., Usury, sec. 12; 105 A.L.R. 796.

Howard N. Jones and Eksayn Anderson, Salt Lake City,
for appellant.

Richard C. Dibblee, Salt Lake City, for respondents.

Arthur H, Nielsen and B. R. Parkinson, Salt Lake City,
amicus curiae.

CROCKETT, Justice.

At pre-trial the lower court rendered summary judg-
ment of dismissal against the plaintiff on the ground that
the loan upon which this action was brought was usurious.
Plaintiff appeals.

The facts shown were: Plaintiff, a foreign corporation,
duly qualified to make loans under our Industrial Loan
Act, on July 2, 1951 received an application from defend-
ants for a loan “in an amount sufficient so they would get
$1,000.00 in cash.” They were given the $1,000. To this
sum the plaintiff added $20 for insurance, $27.57 for an
investigation fee, plus $330.81 for interest, making a total
of $1378.38, for which defendants executed a note payable
in 24 equal monthly installments of $57.44, and also signed
a chattel mortgage as security therefor.

Defendants paid only $58 as the August payment and
nothing further. On October 2, 1951 plaintiff brought
this action on the note, to foreclose the chattel mortgage,
and also asked for attorneys’ fees.

The general usury statute limits the maximum interest
on loans over $100 to 10% per annum, “except as other-
wise provided by law.”? The rate allowed industrial loan
companies is such an exception.

The Industrial Loan Act grants to industrial loan cor-
porations power:

“(1) To loan money * * * and to deduct interest thereon in advance
at the rate of one per cent * * * of the face of such loan per month,
and, in addition, to require payment in uniform weekly, semimonthly

17-6-8, U.C.A.1943, now 7-8-8, U.C.A.1958.
744-0-2, U.C.A.1943, now 15-1-2, U.C.A.1958 (1953 Supp.).

or monthly installments, with or without an allowance of interest on
such installments, and to charge * * * a maximum fee of two per
cent * * * for expense in * * * investigating * * * the borrower:
ee aD

Defendants contend that the basis for figuring the
interest and charges allowed by the above statutes must:
be the amount they received, i. e. $1,000 cash, plus $20:
in value for insurance coverage, which would make the:
computation. as follows:

Principal ...................0-- ... $1,000.00
Insurance ...................0.0.00-. 20.00
24 (months) x 1% x $1,000 240.00
2% investigation fee ................ 20.00

$1,280.00

Counter to this plaintiff maintains that because the
statute permits the lender to:
«* * © deduct interest * * ™ in advance at the rate of one per
cent * * * of the face of such loan per month * * *” (italics.
added)

it was authorized to make the face of the note sufficient:
to pay all of the interest and charges in advance, and.
figure the interest plus investigating fee, totaling 26%,.
upon the gross amount, computed thus:
Principal
Insurance .
24 (months) x 1% x $1,
(total of loan)

2% inv. fee x $1,878.88............... 2051
a $1,878.38

The question is posed, whether the basis for applying
the interest and charges allowed by the above statute is:

the amount of money and value actually received by the
borrower ($1020) or that amount plus all of the interest
and charges ($1378.38).

We first survey the arguments favoring defendants’
position.

The ordinarily accepted meaning of interest is that it
is compensation which one pays for the use of money he
has borrowed for his own use.? Obviously, one
cannot use another’s money after he has repaid it i
and it is no longer in his possession. As this statute
is here applied by the plaintiff, it is plain that interest is
charged for money that is not in the possession or use of
the borrower.

Ignoring mathematical niceties, the principal is demon-
strated thus: A borrower takes $100 to be repaid in ten
$10 monthly installments; there is deducted interest on
the total face of the loan at 1% per month for each month
of the entire period, total-$10. So he receives $90, but he
has this $90 in his possession only during the first month.
After he pays his first payment, during the second month
of the loan period, he has in his possession only $80 but
he has paid interest for the use of the full $100 during
that month; after the second payment, he has in his pos-
session during the third month, only $70.00 but he has
paid: interest for the use of the full $100; and so on down
until in the final month, when he has only 1/10th of the
money left in his possession for his use, he still has been
required to pay interest on the entire sum for that month.
And he has paid it a year in advance without any interest
in the money he has thus advanced being credited to him.
Thus in the tenth month he has paid, not 1% per month,
but 10% per month, or at the rate of 120% per year on
the money actually in his hands.

330 Am. Jur. 6.

Using smaller payments over a longer period shows the
picture even more cogently. One borrowing $100 to be
paid in twenty $5 monthly payments, at the last month
would have paid back $95, leaving only $5.00 in his pos-
session for use. In such instance, charging him interest
for the final month for the use of the full $100 would make
the interest rate on money he is actually using 20% per
month, or 240% per year. The longer the period’ for re-
payment of the loan, and the smaller the payment, the
more exaggerated the interest rate during the terminal
months becomes.

The application of the principle becomes even clearer
if some chattel or property other than money is used for
illustration. Suppose one hired 12 trucks at the rate of
$10 per month each for their use; that the lender required
the use be paid for a year in advance and that one truck
be returned each month. During the second month the
borrower would be using only 11 trucks but paying for
12; the third month using only 10 trucks but paying for
12; and so on down until the final month when he would
still be paying the full $120 fee for the use of 12 trucks,
but only using 1 of them.

It is thus plain that where the interest is deducted or
paid in advance on the full amount of the original loan
that the borrower only has on the average in his possession
for use during the period of the loan about 50% of the
money upon which he is required to pay interest. This
means that the interest rate is actually approximately
double that named as the interest rate of the loan.

Under the arrangement with the plaintiff, defendants
here would have had in their possession of the average,
during the period of the loan, only about one-half of the
amount of money they originally received ($1,000) and
considerably less than one-half of the total face of the
note ($1,378.88) so the interest rate of 37 plus percent,

ostensibly for two years, actually amounts to more than
37 plus per cent per year on the amount of money the bor-
rower has in his possession.

An argument which is at least plausible and which would
avoid the imposition of the exorbitant interest rate is the
approach that instead of interpreting the phrase “the face
of the loan” to mean the original total of the loan,
it should be interpreted to mean the balance due on the
Joan at any given time, that is, the amount which an exam-
ination of the face of the note at any given time would
reveal as the amount then outstanding on the loan. This
would result in interest being charged only on the money
actually in the hands of the borrower. It is suggested that
such is the reasonable and fair application of the statute.
It should be here noted, however, that the phrase in ques-
tion, “the face of the loan,” usually means the principal
thereof.*

It is urged that the legislature did not intend to permit
any such excessive rate of interest as plaintiff has con-
trived to charge because of comparison with interest rates
allowed by other exceptions to the general usury statute.
Under the Small Loan Act® where loans are limited to
$300, the maximum interest permitted is 3% per month,
but chargeable only upon the deferred balance of a loan,
which amounts only to 36% per year on the money the
borrower actually has in hand for use. A newly enacted
statutory provision ° relating to conditional sales contracts
permits the charging of 1% per month of the “unpaid
balance,” as defined in the act, to be added to the “unpaid
balance.”

It will be noted that adding the interest to the principal
of the contract, results in interest being charged on such

4See 85 OJ.S. p. 382.
57-10-18, U.C.A.1958.
+ *15-1-2a B (3), U.C.A.1958,

principal only, whereas the “deduction of interest in ad-
vance” permits the interest to be first added to the princi-
pal of the loan, so that interest is then figured on both the
money advanced as well as upon the interest, as plaintiff
did.

It is said that the exceptions to the General Usury Statute
allowed under the Small Loan Act and the conditional
sales enactment just referred to are justified because of
the risk and the large amount of detail and book work
required in the handling of such credit transactions. In
contrast to this, under the Industrial Loan Act, there is
no limit to the amounts that may be loaned and such reason
for an excessive interest rate does not exist, although as
has been indicated, the interest rate actually charged is
higher. Defendants argue that the legislature cannot rea-
sonably be supposed to have intended any such result. It
must be conceded that there does not appear to be any
justifiable reason for this anomolous situation.

The foregoing arguments in favor of defendants’ position
are not without merit. However, because of the antecedent
statutory and case law of this state, and other reasons here-
inafter stated, we are not at liberty to consider this cause
upon its merits as if it were a matter of first impression.

In People’s Finance & Thrift Co. v. Varney,’ this court
construed the predecessor of the present statute which has
undergone only slight changes (hereinafter noted) since.
A Miss Varney evidently applied for a loan of $200
from the plaintiff loan company; there was deducted i
therefrom $20 interest and a $2 service charge in
advance; she received $178 and signed a note for $200 to be
paid in ten monthly installments of $20 each. She resisted
suit on the ground of usury, claiming that she would be re-
quired to pay more than the 12% per annum (now 1% per
month), mentioned in the statute, since as succeeding in-

775 Utah 855, 285 P. 804.

stallments were paid, less of the borrowed money would be
in her hands for her use, arguing that interest should be
calculated on the basis that the borrower had the use of
$200 for one month, $180 for the second month, $160 for the
third and so on—the same argument set out in the fore-
going portion of this opinion.

This contention was directly met and answered by Mr.
Justice Straup, speaking for the court as follows:

«es * %* the 1925 statute expressly provides that an industrial loan
company * * * is authorized to deduct in advance interest on the
loan at the rate of 12 per cent. per annum, and ‘in addition, to
require uniform weekly, semi-monthly, or monthly installments.’
When therefore the company deducted 12 per cent. per annum as
it did on the face of the note, as interest in advance for the 10-month
period on the loan, it but did what the statute expressly authorized
such a company to do. The interest deducted was $20, which is the
interest on $200 for a period of ten months at the rate of 12 per
eent, per annum. When the company ‘in addition’ required the loan
to be paid in monthly installments of $20 each, it again but did what
the statute expressly permitted such a company to do. Such, we
think, is not only the reasonable, but the necessary, meaning to be
given the statute. We do not see wherein it in such respect is doubt-
ful or uncertain.”®

Defendants do not directly assail the holding of the Var-
ney case but seek to distinguish it from the instant one
saying that
“the amount originally requested by the defendant [Varney] and

the face of the note is identical, while in the case at bar the amount
requested by the defendants and the face of the note is not identical.”

The burden of their argument is that because the defend-
ants requested a loan of $1,000 that such is the amount
upon which the interest and investigating fee must be cal-
culated, implying that if a loan of $1378.38 had been re-
quested, the interest and charges could be figured on that
amount and deducted therefrom. It is plain that this is but

875 Utah at page 360, 285 P. at page 305.

538

a distinction in fact without any essential difference in
principle. Whether Miss Varney asked for a loan of $200,
or for $178, is of no import. The latter amount is what she
got. The $22 interest and fee was deducted from her loan,
which totaled $200.

If defendants’ argument were sound it would follow that
if a man asked for a loan of $200 and received $178, the
interest would be figured on $200; but if he asked for a
loan of net $178, and received such sum signing a note for
$200, interest would be computed only on the $178. It
is obvious that no such variance in interest rate should
depend: on any magical formula as to the wording of the
borrower’s request for a loan. If it were so, one may rest
assured that the borrower would always be required to ask
for the larger amount. Further, conclusive against the
defendants’ contention on this point is the fact that that
is just what was done in the instant case. The stipulation
at pre-trial was that defendants

“applied * * * for a loan in an amount sufficient to give them net
cash proceeds of $1,000, which was to be repaid within 24 months.”

That was the net amount they received and the charges
and interest were added to it and they were figured upon
the gross amount thus arrived at, just as in the Varney
case.

The holding of the Varney case that under the Industrial
Loan Act interest could be based upon the total of the loan
(the principal plus the interest) for the entire period and
deducted in advance, has stood since March 1927. It con-
strued Chap. 116, Laws of Utah 1925. The Legislature of
1927 amended the statute by inserting the provision “with
or without an allowance of interest on such installments.”
This was undoubtedly done to meet this situation: If a
substantial amount of interest is paid in advance, as in the
instant case, the loan company receives this payment be-

SLaws of Utah, 1927, p. 72.

fore the use of the money occurs. That is, the borrower
pays at the beginning for the use of the money for all 24
months of the loan and the lender receives his pay for the
use of the money before such service is rendered; for in-
stance, he gets paid for use of the money for the last month
a full two years in advance. Hence, in some states the lender
is required to credit the borrower with an offset for the
interest he thus pays in advance.*° The purpose of the
amendment just referred to was undoubtedly to eliminate
any question of the necessity of the loan company allowing
such credit in this state. Plaintiff’s position is that this
amendment is consistent with the Varney case and with its
interpretation of the statute. It is difficult to ascribe any
meaning to it except in accord with the contention of the
plaintiff that the lender is given the express privilege of
receiving the monthly payments without crediting the bor-
rower with interest on such payments.

This same statute was again re-enacted in 1945," the
only change being an addition of a proviso that the 2%
investigating fee could be assessed only once each six
months.

It therefore appears that 26 years and 13 general sessions
of the legislature have gone by since the Varney decision
interpreting the statute, yet the legislature has not seen
fit to make any change in the law, as therein established.
In reliance thereon the plaintiff and other industrial loan
companies have issued thousands of loans running into
many hundreds of thousands of dollars.

The authorities universally recognize that usury involves
some degree of mala fides. As we said in Cobb v. Harten-
stein “A contract, to be usurious, must be so at the time
made” and it is essential that “a corrupt or unlaw-
ful intent to violate the usury law, at least on the mi
part of the lender” be proved to render the contract

10Rem.Rev.Stat.Wash. § 8862-8; Wis. Stat.1951 § 115.09 (7) (b).
11Laws of Utah, 1945, ch. 78 § 1.

1247 Utah 174, 152 P. 424; Smith v. Parsons, 55 Minn, 520, 526,
57 N.W. 311.

_
usurious. It is undoubted that because of the fact that hold-
ing a contract to be usurious involves the application of a
penalty which will deprive a party of his property this
will not be done lightly, nor unless it is plainly manifest
that the lender intended to charge a rate of interest which
is clearly usurious. This does not dispute the principle
that one who knowingly charges interest at a usurious rate
will be presumed to intend the natural and probable conse-
quences of his act and be held to suffer the consequences.?
But if under the facts and the law two reasonable construc-
tions are possible, by one of which the contract will be legal,
while by the other it will be, usurious and invalid, the court
will not find the corrupt intent necessary to establish usury
and invoke the penalty thereof.4 As this court observed in
the case of Rospigliosi v. Glenallen Mining Co:

“Courts do not * * * and ought not, so interpret a legislative act
that the property of one citizen is forfeited and lost to another, unless
the plain and unequivocal mandate of the Legislature admits of no
other rational construction.”

There is no question but that the plaintiff, Seaboard
Finance Company, has practically “squeezed to the last
drop” all of the interest and charges possible to recover
under the statute. And there is always the straw that
breaks the camel’s back. If the insurance premium charged
was exacted under compulsion, as an additional burden pre-
requisite to the granting of the loan, that might under some
circumstances violate the statute and render the note in-
valid. No such contention is made by the defendants here,
and they stipulated that they got “value received” in insur-
ance for the $20.

It is entirely possible that the Industrial Loan Act was
sold to the legislature and passed by them as a 1% per
month act and not unlikely that its language was devised by

See 22 CI.S., Criminal Law, § 85, p. 98.
14See Note 13 supra.
1569 Utah 41, 252 P. 276, 279.

representatives of loan companies for the very pur-
pose of charging a much greater rate of interest.
It may well be that the legislature of this state would

not deliberately approve the charging of 37% per annum
on the amount the borrower actually has in use, particularly
in view of the comparison with the lesser rates allowed un-
der Small Loan and the Installment Sales Finance Acts.
Nevertheless, it is the prerogative of the legislature and not
of the courts to prescribe the rules as to usury. It is our
function to interpret and apply, but not to question the wis-
dom of legislation. We can with judicial propriety call at-
tention to situations which may appear to them to be un-
reasonable, inconsistent or undesirable so that due con-
sideration may be given thereto and a remedy provided if
deemed advisable by that body.

For the reasons hereinbefore delineated, we are con-
strained to hold that the instant loan does not partake of
such a usurious nature as to render it invalid and un-
collectible. Reluctant as the court may be to give Ml
sanction to this law which has resulted in charging
what seems to be a wholly unconscionable rate of interest,
it would be even more so to resort to distortion of the lan-
guage of the statute and the legal principles bearing upon
this controversy to bring about defeat of the plaintiff's
recovery.

Since the determination of certain of the issues, other
than that of usury, require the taking of evidence, this ac-
tion is remanded to the trial court for further proceedings
consistent with this opinion.

Costs to appellant (plaintiff).

WOLFE, Chief Justice (concurring).

I concur except for those statements in the majority opin-
ion censuring the plaintiff and charging that its practices
are morally wrong. Arthur H. Ham, for many years Dir-

ector of Division of Remedial Loans of Russell Sage Founda-
tion and an authority on the small loan business has, in his
miscellaneous pamphlets, demonstrated that only those loan
companies such as the Provident Loan Company of New
York City with large capital loaned in small sums can do
business at a cost of under 3 per cent a month. The plain-
tiff, as well as other finance companies licensed and regu-
lated by the state, is engaged in a legitimate and necessary
business. While the interest which it charged the defend-
ants may on the surface seem high, it was clearly within the
charge permitted by statute. The Legislature took into
consideration these factors when it established the maxi-
mum rates. Long before Remedial Loan statutes were
passed in Utah more than one Legislature had before it the
data as to the cost of investigating and losses sustained
by companies engaged in carrying on the small loan busi-
ness on the various levels of capital employed without the
security of chattels or real estate but on the security of
personal sureties only. Knowing nothing of the earnings
of the plaintiff or other finance companies, I cannot say
that their charges are “unconscionable”, nor do I think
their conduct can be properly classified as a “scheme.”

McDONOUGH, Justice (concurring).

I concur in the opinion of the court, but likewise concur
in the observations of Mr. Chief Justice WOLFE concerning
statements made in the opinion, which statements, how-
ever, in no way color its rationale.

WADE, Justice (concurring).

I concur. About the only benefit that can result from
this litigation is that certain vicious results from the stat-
utes on usury may be pointed out to the legislature for
consideration in the future. I think it appropriate to call
attention to some such results not emphasized in the prevail-
ing opinion.

The usury statutes of our state provide a harsh remedy
for their violation by providing that the lender shall lose
not only the excessive interest charged, but all of the princi-
pal loaned. The only possible justification for such a harsh
remedy is based on the theory that such lender has driven
an unconscionable bargain, and the courts have been re-
luctant to find a violation has occurred where the facts
do not clearly require such a finding. Too often the result
of this situation is that the person who drives an uncon-
scionable bargain stays technically within the law, but the
person who has done nothing unfair finds that he has made
a technical violation of the law and has to suffer the harsh
penalty. Sometimes persons who intend to traffic in
collecting unfair rates for loans lobby statutes through the
legislature which appear to be innocent but in actual prac-
tice tolerate unconscionable rates of interest. I wonder if
it would not more nearly accomplish the purpose to abolish
this harsh penalty and provide one which would not work
a great hardship in case of violation and thereby remove
the strict construction against finding a violation. This
proposition should be carefully considered by the legislature.

There is another very vicious thing about this statute.
It appears on its face to merely allow a charge of interest
at the rate of one per cent per month or 12 per cent per an-
num over and above other charges. The average borrower
legislator, lawyer, and judge who had not had occasion
to figure the matter out, would be lead to believe that 12 per
cent per annum was the top limit of the rate of interest
chargeable under such statute, and we are shocked when
we become conscious of the fact, as this case demonstrates,
that under this statute the rate of interest may run as high
as 87%. If the legislature was conscious of the fact that by
enacting such a law they were permitting the collection of
such a large percentage of interest, they would have been
much more frank to say so in language which would convey
that idea to everyone who reads the statute. This language

iSee Rossberg v. Holesapple, 123 Utah 544, 260 P. 2d 568.

seems to me to be calculated to mislead and give the im-
pression that the rate allowable is much lower than it ac-
tually is. It is hard for me to believe that a legislature
which deliberately enacted a statute which allows such an
exorbitant rate of interest would feel that any good would
be accomplished by any usury law. It seems to me to be
highly inconsistent to prohibit a man from charging more
than 10 per cent interest on a loan to his neighbor or busi-
ness acquaintance, but at the same time allow a finance
company to charge 37 per cent for same loan.

HENRIOD, Justice, concurs in result.

ROSSBERG et al. v. HOLESAPPLE et al.
No. 7802, Decided July 27, 1953. (260 P. 2d 563.)

546

See 66 C.J. Usury, sec. 805. Usury, payment for lender’s services
as, 55 Am.Jur., Usury, sec. 62; 105 A.L.R. 795.

John Farr Larson, Salt Lake City, for appellants.
Woodrow D. White, Salt Lake City, for respondents.

WOLFE, Chief Justice.

Action by the appellants to foreclose certain security
given by the respondents for the payment of a $1600 promis-
sory note executed by them. The respondents denied lia-
bility on the ground that the note was usurious. From a
judgment declaring the note and the security null, void
and usurious and cancelling the same, this appeal is prose-
cuted.

The evidence is substantially without dispute. On April
11, 1951, the respondents, as buyers, and Jack H. and La-
Von M. Rohlfing, as sellers, executed an “Harnest Money
Receipt and Agreement” for the purchase and sale of a
house in the southeastern section of Salt Lake City for the
sum of $16,500. Mr. Rossberg, one of appellants, a sales-
man for the Christensen Realty Company, handled the sale.
Respondents made a payment of $500 upon signing the
agreement and agreed to pay an additional $2000 on de-
livery of a final contract of sale on or before April 20,
1951. The balance of the purchase price was to be paid in
monthly installments. On April 20th, the respondents were
unable to make the $2000 payment, having been unable to
obtain the funds from relatives as planned, and the next day
informed Mr. Rossberg to that effect. After some discus-
sion with the respondents, Rossberg indicated that he might
be able to obtain the funds for them. He explained that
he did not have the money himself, but that he thought he
could borrow it from his father-in-law in Logan, 86 miles
distant. Mr. Holesapple, one of the respondents, testified
Rossberg advised the respondents, however, that it would
cost them $100 to obtain the necessary funds, but that he
(Rossberg) and his employer (Mr. Milton Christensen)

547

would bear that charge in view of the fact that they were
realizing a commission on the sale of the Rohlfing house.
Both Mr. Rossberg and Mr. Christensen deny that they
agreed to bear the $100 charge.

At the request of the respondents, Rossberg traveled to
Logan and borrowed $1500 at six per cent interest from a
friend of his father-in-law, the father-in-law vouching for
Rossberg’s credit. When Rossberg informed the respond-
ents that he had obtained $1500 for them they expressed
satisfaction and agreed to meet with him that day to close
the transaction, but they failed to do so, and later the same
day informed Rossberg that they could not go through with
the purchase, The next day Rossberg, his wife, and Mr.
Christensen, being of the opinion that the Rohlfing house
was a good buy, entered into a contract with the Rohlfings
for its purchase. The Rossbergs and Mr. Christensen each
made a payment of $1250 to the Christensen Realty Com-
pany pursuant to that contract. At the same time another
contract was signed by the Rohlfings wherein the respond-
ents were named as buyers. Mr. Rohlfing instructed Mr.
Christensen and he agreed that if the respondents became
able to purchase, they should be allowed to do so, and the
other contract would be destroyed. Later that same day
the respondents approached Mr. Christensen and informed
him that they had changed their minds and would like to
purchase the house if Rossberg would loan them $1500.
Rossberg agreed to do so and destroyed the contract which
he and his wife and Mr. Christensen had entered into with
the Rohlfings. The respondents then signed the contract
for the purchase of the house which the Rohlfings had
signed earlier that day. The respondents also executed a
promissory note for $1600 payable in 90 days to Rossberg
and his wife, bearing interest at six per cent, and Rossberg
paid the sum of $1500 to the Christensen Realty Company
for the benefit of the respondents. As security for the

payment of the note, the respondents assigned to the Ross-
bergs their interest in their contract with the Rohlfings.
Respondents understood at that time that the Rossbergs
had executed a contract for the purchase of the home and
were relinquishing their rights in the property in favor of
the respondents. Mr. Holesapple, one of the respondents,
testified that in signing the promissory note he understood
he was paying a $100 fee for obtaining the money; that
he had no knowledge of what constituted usury and did not
intend to violate the law; and that he could do nothing else
but sign because “they had five hundred dollars of my
money” (earnest money), although he admitted Mr. Chris-
tensen had told him on several occasions that he would
refund his $500 payment if the respondents could not go
through with the purchase.

See 15-1-2, Utah Code Annotated 1958, provides:

“The parties to any contract may agree in writing for the payment
of interest for the loan or forbearance of any money, goods or things
in action, not to exceed, except as otherwise provided by law, ten
per cent per annum; * * *,”

See. 15-1-6 declares void all contracts in which a greater
amount of interest is reserved, taken or secured, and sec.
15-1-9 authorizes courts to enjoin suits brought to recover
on usurious contracts and to cancel the contract and any
security given for the payment thereof.

The appellants assail the judgment rendered below, which
declared the note usurious and cancelled the note and the
security, on the ground that the evidence fails to establish
a corrupt or unlawful intent to violate the usury law.

It is well settled in this state that such an intent L |
on the part of the lender, at least, is a necessary
element of usury and must be proved. Cobb v. Hartenstein,
AT Utah 174, 152 P. 424, 430; Mathis v. Holland Furnace
Co., 109 Utah 449, 166 P.2d 518. In the Cobb case, this
court speaking through Mr. Justice Frick said:

|
“As we have seen * * * in order to establish usury, the existence
of an unlawful or corrupt purpose is one of the essential elements
which must be clearly proved to exist at the time the contract or
transaction which is claimed to be usurious is entered into. Where
the contract upon its face is usurious, the intention may be inferred,
and the inference may be so strong that no express denial can avoid
the same. Where, however, as here, the contract is a legitimate one,
and is one that is frequently used by stockbrokers, but it is neverthe-
less contended that it is a mere shift, cloak, or cover for usury, then
it requires substantial evidence of a corrupt or unlawful intent, or
some fact or facts from which such an intention may be clearly
inferred.” .

In that case the plaintiff and defendant were stockbrokers
engaged in buying and selling stock on commission and on
personal account. It was contended by the plaintiff, and
the district court found, that contracts which they had
entered into whereby the plaintiff purportedly purchased
on a margin and the defendant purportedly sold on a mar-
gin certain mining stock at an agreed price was in fact a

cloak to cover a usurious loan of money between the parties.
We reversed the judgment of the district court, holding
that in view of the fact that the contracts were not regarded
by the parties as loan contracts but were in daily use by
stockbrokers on a local stock exchange, there was no evi-
dence of an intent on either party to loan or borrow money
at a usurious rate.

in the instant case, it is clear that the transaction be-
tween the parties was nothing more than a simple loan of
money and that the parties so regarded it. While it is true
that there is no evidence that either party had the
specific intent to violate any law or understood what [ql
constituted usury, the necessary intent to consti-
tute usury is the intent to exact payments which exceed the
amount of interest allowed by the statute—not the specific
intent to violate the statute. Manchester Realty Co. v. Kan-
ehl, 180 Conn. 552, 86 A.2d 114; Atlas Realty Corp. v.
House, 123 Conn. 94, 192 A. 564, 567. In the last cited case

550

the court quoted with approval the following statement
from 66 C.J. pp. 177, 178, 179:

“The intent which enters into and is essential to constitute usury is
simply the intent to take and reserve more than permitted by law
for the loan. * * * By the weight of authority usurious intent is
implied if excessive interest is intentionally taken or reserved. * * *
If the mistake be as to the legal right to acquire the excessive
payment, which is received in good faith, there is nevertheless usury.
Ignorance of the law excuses no one, not even an honest money
lender.”

See Washington Fire Insurance Co. Vv. Maple Valley Lumber
Co., T7 Wash. 686, 138 P. 553, to the effect that the law
presumes the necessary unlawful intent from the mere
fact of intentionally doing that which is forbidden by the
statute.

The note in question is not usurious on its face. It pro-
vides for the payment of $1600 in 90 days, plus interest at
6%. Both parties readily admit, however, that the respond-
ents only received $1500. Appellants attempt to
justify their $100 bonus on the grounds that (1) Hl
the transaction was sale of the appellants’ credit in-
stead of a loan of money from them, and (2) part of the
$100 was to cover Mr. Rossberg’s expenses in traveling
to Logan to obtain the funds from a third person. As for
the first ground urged, it is well established that a sale of
credit, as distinguished from a loan of money, does not
come within the purview of usury laws. 55 Am. Jur. 343;
Oil City Motor Co. v. C. I. T. Corp., 10 Cir., 76 F. 2d 589,
104 A.L.R. 240; annotation at 104 A.L.R. 245. But we need
not here pursue the technical differences between a sale
of credit and a loan of money. Suffice it to say that the
mere fact that Mr. Rossberg had to travel to Logan and use
his credit to borrow the necessary money from a third
party before he could make available the funds to the re-
spondents does not make the transaction between the ap-
pellants and respondents a sale or loan of credit instead of
a loan of money. Chakales v. Djiovanides, 161 Va. 48, 170

551

S.E. 848. As regards the contention that Mr. Rossberg
expended part of the $100 in obtaining a loan from a third
party, the proceeds of which loan he in turn loaned to the
respondents, it is true that a borrower may agree to pay a
lender reasonable compensation for services rendered by
him in connection with the loan, in addition to the maximum
allowable rate of interest. See Fisher v. Adamson, 47 Utah
8, 151 P. 351, where we held not usurious a loan of $300 at
the highest allowable rate of interest even though the bor-
rower had paid the lender, pursuant to an agreement be-
tween the parties, ten dollars, in addition to the interest,
for examining certain security given for the loan. In the
instant case Mr. Rossberg testified that he told the re-
spondents he could get $1500 for them but that it would
cost them $1600. He admitted that he did not discuss with
the respondents why the $100 bonus was being charged.
The evidence fails to establish any agreement, express or
implied, between the parties that the $100 or any part
thereof was to defray Rossberg’s expenses in traveling to
Logan to obtain the money.

It cannot be successfully contended that the $100 bonus
agreed to be given by the respondents was in consideration
of the appellants and Mr. Christensen relinquishing their
rights in their contract to purchase the Rohlfing
home. The evidence will not support that contention ; i
on the contrary, it negates that contention. The ap-
pellants do not even make that contention. Rossberg offered
to endeavor to obtain the $1500 for the respondents at the
cost of $1600 several days before there was any contract
between the appellants and Mr. Christensen and the Rohlf-
ings. At the trial Rossberg was asked on direct examina-
tion whether there was any discussion before he went to
Logan why the respondents would have to agree to pay
$1600 for a $1500 loan. He answered:

“Not particularlarly except for the fact that I told them I felt that
that is the amount it would take to be able to secure the money.”

On cross-examination, Rossberg testified as follows:

“Q. Did you tell them that the parties from whom you obtained
the money would probably want sixteen hundred dollars for the
fifteen hundred dollar loan? A. I told them I would be able to
get them the money, but it would probably cost them sixteen hundred
dollars.

“Q. Will you say that you didn’t tell them that the parties from
whom you would obtain the money would want sixteen hundred dollars
for the fifteen hundred dollar loan? A. I stated my fact, that I told
them it would take sixteen hundred dollars to get the fifteen hundred
dollar loan.”

Thus it is clear that Rossberg intended to charge the re-
spondents a $100 bonus for obtaining the money several
days before he became a party to the contract with the
Rohlfings for the sale and purchase of their home. There
is no evidence that he thereafter changed his mind as to why
he was making the $100 charge.

As has been pointed out, at the time the Rohlfings signed
the contract with the appellants and Mr. Christensen, they
also signed a contract selling the house to the respondents.
Mr. Rohlfing testified that he directed Mr. Christensen
to allow the respondents to complete their purchase if they
became able to do so, and that Mrs. Rohlfing told the re-
spondents that they could have until the next day to com-
plete their purchase. Mr. Christensen testified that he
told the Rohlfings that if the respondents changed their
minds and wanted to go through with the purchase, “we will
step aside and let them have the house.” Rossberg testified
that he told the respondents after they had changed their
minds and wanted to go through with the purchase that
“we would let them purchase the property as before agreed.”
He does not contend that there was any condition or charge
attached.

Mr. Christensen was a joint purchaser with the appel-
Jants in their contract to purchase the Rohlfing home. Yet
both Mr. Christensen and Rossberg admitted that no part

of the $100 bonus was paid to Mr. Christensen nor did
Rossberg ever agree to pay any part of the $100 bonus to
him. Both Rossberg and Mr. Christensen tesified that they
did not discuss between themselves the purpose of the $100
charge. Mr. Christensen testified that the $100 was Ross-
berg’s “own personal. None of it was to accrue to the office,
*** o¢ to myself.” It would seem that if the parties in-
tended that the $100 bonus was in consideration of the ap-
pellants and Mr. Christensen relinquishing their rights in
the Rohlfing contract, some arrangements would have been
made to pay Mr. Christensen half of the bonus.

Mr. Holesapple, one of the respondents, testified that
Rossberg told him that the $100 charge was being made
because the party from whom he was to obtain the loan
in Logan required it. He further testified:

“I believe it was a sum of money that he had just for that, for quick

loans and returns, and he required this hundred dollars’ use on it,
something on that order.”

While it is true that the $100 charge could have been
agreed to have been paid by the respondents in considera-
tion of the appellants and Mr. Christensen relinquishing
their rights in their contract with the Rohlfings, it is clear
that such was not the intention of the parties in this case.
The evidence clearly establishes that neither Rossberg nor
Mr. Christensen intended to charge the respondents any-
thing for relinquishing their rights. They had promised
the Rohlfings they would do so if the respondents became
able to complete their purchase. It must be remembered
that both Rossberg and Christensen knew they would rea-
lize a commission on the sale of the house to the respond-
ents, and therefore it is not unnatural that they did not
exact consideration from the respondents when they re-
linquished their rights in their contract with the Rohlfings.
Rossberg testified that his commission was $306 on the
sale of the house to the respondents.

i
From the foregoing it is evident that there was evidence

from which the trial court could find that the $100 bonus

was in fact a charge for the use of the money. While

the usury statutes of this state exact severe penalties I |

for their violation, we cannot in an effort to uphold

a loan as nonusurious, make something appear to be con-

sideration for the charge when the parties themselves did

not so intend.

The judgment below is affirmed. Costs to the repondents.

McDONOUGH, Justice.

I concur. I also concur in the comments of Mr. Justice
CROCKETT.

CROCKETT, Justice.

I concur. It is natural enough to sympathize with the
plaintiff, who is not in the money lending business, be-
cause of the loss of his loan. But we are here dealing not
only with the parties to the instant transaction, but with
principles which must apply uniformly to lenders and bor-
rowers of money.

The statutes proscribing usury were enacted for a bene-
ficial purpose: to prevent the exaction of exorbitant charges
for the use of money. The penalty of forfeiture of the debt
is severe but salutary. It is appreciated that the invocation
of such penalty should not be done lightly, and that the de-
fense will not be allowed unless there is a “corrupt or un-
lawful intent to violate the usury statute.” Notwithstand-
ing the foregoing, all that is required is that the evidence
show clearly and unequivocally that the lender knowingly
charges interest at a rate in excess of that permitted by
law ;? he must be presumed to intend the natural and prob-
able consequences of his act and held to suffer the conse-
quences.

1Cobb v. Hartenstein, 47 Utah 174, 152 P. 424, 428.
2Smith v. Parsons, 55 Minn. 520, 57 N. W. 311.
*See 22 CJ.S., Criminal Law, § 85, p. 98.

Once the requirements of the foregoing rule have been
met, it is improper to permit the lender to seek around for
every possible excuse to avoid the consequences of his con-
duct; to do so would nullify the effects of the usury statute.
It is of no avail to theorize that if Mr. Rossberg had sold
his equity in the property to the Holesapples for $100, there
would have been no usury. We cannot indulge in any as-
sumption that it either was or might have been such a sale.
The case was not tried on that theory; the evidence does
not show that to be the fact; the evidence is that Rossberg
told the Holesapples that “they would have to agree to pay
sixteen hundred dollars for the fifteen hundred.” The trial
court found that the charge of the extra $100 was for inter-
est on the loan of the money. This finding is supported
by substantial competent evidence, wherefore this court is
powerless to disturb it.

The same process of reasoning destroys the suggestion
that perhaps it was worth $100 (the usurious portion there-
of) for Rossberg to go to Logan to get the money. If a
lender of money is going to make charges for additional
services in connection with a loan, he should be required to
prove that he is entitled to such charges by proof sufficient
to permit him to recover upon a theory of contract for such
services. It would have to appear either (a) that the parties
expressly agreed that the usurious charge was to be paid to
Rossberg for the purpose of going to Logan to obtain the
money or (b) that the circumstances were such that an im-
plied contract to pay for such services existed. The evi-
dence does not show either express or implied contract and
the court made no such finding, but found to the contrary.

The trial court’s findings, being supported by substan-
tial competent evidence, cannot now be disturbed ; that being
so, his conclusion that the loan was usurious is likewise
unassailable.

HENRIOD, Justice.

I dissent. The very facts related in the majority opinion
make it appear that Rossberg’s specific intent was to sell
a house, — not to loan money at an usurious rate. The in-
tent to exact money at an usurious rate must be shown by
clear and satisfactory evidence.* Hardly can it be said that
there is such clear and satisfactory proof, where Rossberg,
primarily a realtor, got the Holesapples to sign a binding
contract to buy a house, accepted $500 from them as a down
payment, which he could have retained, volunteered to re-
turn it when the Holesapples reneged on their bargain,
signed a contract to buy the house himself, but again per-
mitted the Holesapples to change their minds and sign
up for the house anew, tore up his. own contract and sacri-

- ficed a vested right in their favor, and spent a day and the
expense incident thereto in going 172 miles to get $1500 for
the accommodation of the Holesapples.

The majority opinion makes much of Rossberg’s state-
ment that the parties from whom the money was to be
obtained would want $1600 for the $1500. One wonders
what the majority would conclude had Rossberg obtained
the money from an industrial loan company, when we re-
cently approved a charge by such a company of 37% in-
terest, far in excess of the percentage involved in this case.5

The law frowns on penalties and forfeitures, and will give
no sanction to them unless justified by strong and unequi-
vocal proof, — lacking here.

WADE, Justice (dissenting).

I agree that no intention to violate the usury law is nec-
essary, it is sufficient if there is an intention to enter into
a contract which in fact violates that law. On that ques-
tion the narrow issue is whether from the evidence it is

455 AmJur. 487, See. 164.
5Seaboard Finance Co. v. Wahlen, 128 Utah 529, 260 P. 2d 556.

within the bounds of reason to infer that these parties in-
tended that the extra $100 was an additional interest charge
on the loan of $1500, and did not intend that it was a
charge for services performed or property rights sur-
rendered by appellants thus increasing the principal of the
loan to $1600, in accordance with the provisions of the note.
In view of the evidence and the trial court’s finding I am
not prepared to hold as a matter of law that appellants did
not intend this extra charge to be interest, although I think
the trial court might reasonably have so found.

This case and the recent case of Seabourd Finance Co. v.
Wahlen, 123 Utah 529, 260 P. 2d 556 which were pending in
this court at the same time, bring graphically to our atten-
tion the great possibility for injustice under the present
usury law. In that case we held that a charge of 37%
interest is permitted to industrial loan corporations. Here
we hold that individuals who charge more than 10% interest

are guilty of usury and lose all of the principal and interest
of the loan. This is true although the appellants in making
the loan acted fair in every detail in their dealings with
the borrowers, respondents here. In order to enable the
borrowers to purchase a home appellants borrowed the
$1500 from other people on their own credit, and then
after the borrowers said they could not complete the pur-
chase, they entered into a contract to buy the property as
joint purchasers with another, still reserving the right in
the borrowers to purchase it if they should change their
minds. Later the borrowers did change their minds and
appellants destroyed their contract of purchase and sur- —
rendered their interest in their property to the respondents
and loaned them the $1500, and in the note which they
took therefor they added an extra $100 making the princi-
pal sum of $1600 with interest at the rate of 6% per annum
for 90 days.

This money was made available to respondents on the
eredit of the appellants for which appellants, had they

changed the transaction slightly, could have legally charged
this $100. Appellants, in order to make this loan, had to
travel about 172 miles, and spend a day of their time, for
which they were entitled to make a charge. They sur-
rendered their right in this home which they and the real
estate company had contracted to purchase, and had they
had any idea that what they were doing constituted usury,
they could have required the additional $100 as payment
for that right. Then when they try to collect on the note the
respondents raise the defense of usury, after accepting
all the benefits which appellants have bestowed upon them.
There is no claim that in any of these dealings appellants
acted unfairly or in any way misrepresented anything.

The usury laws sets aside and makes void a contract
which would otherwise be binding. It is done for the benefit
and protection of the borrower, and can be justified under
the constitution only on the ground that such contract is
unfair, and unconscionable to him. Certainly in this case
there was no unfairness to the borrower, but by this law
he was enabled to do the appellants a grave injustice and
hardship. This seems to be somewhat akin to the situation
ereated by the statute of frauds which induced the saying
that the courts will not allow that statute to be used to
perpetrate a fraud.

Undoubtedly the statute was originally enacted to curb
what is referred to as the loan shark business. It was in-
tended to curb unconscionable charges made by professional
lenders of money. But our statute, although very rigid and
harsh in its remedy, now allows exceptions to its strict
provisions in favor of the very people it was originally
intended to curb. As we have noticed in the Seaboard Fi-
nance Co. case an industrial loan company may charge as
much as 837% interest on its loans with impunity. I cannot

®See section 7-8-3, U.C.A.1958, and section 7-10-18.

understand how our usury statute is constitutional when
the evil which it was intended to curb is expressly permit-
ted to flourish under exceptions to that statute.

RAVARINO vy. PRICE et al.
No. 7882. Decided July 29, 1958. (260 P. 2d 570:)

Re} -
1

561

See 87 C.J.S. Frauds, Statute of, sec. 246. Improvements sufficient
to constitute part performance, 49 AmJur., Statute of Frauds, sec.
449; 33 A.L.R. 1489,

Mulliner, Prince & Mulliner, Salt Lake City, Edward L.
Mulliner, H. L. Mulliner and J. R. Mulliner, Salt Lake City,
for appellants.

Wilford M. Burton, Salt Lake City, for respondent.

WOLFE, Chief Justice.

Action by the plaintiff, Angelo Ravarino, against the
defendants, Harry Price, Jr., Mrs. Harry Price, Jr., his
wife, and Mrs. Marcus Parr, his sister, to compel the con-
veyance to him of two tracts of real estate owned by de-
fendants at 225 and 235 West Fifth South in Salt Lake
City, Utah. The lower court found the facts substantially
as alleged in the complaint and decreed specific perform-
ance. Giving the plaintiff the benefit of all inferences and
intendments arising in his favor from the evidence, the
facts may be summarized as follows:

Mr. Price and Mrs. Parr are the owners of the above
mentioned property, each owning an undivided one-half
interest as tenants in common. During the course of pre-
liminary negotiations, Mr. Price, in May of 1950, executed
a listing agreement for the sale of the property with one
Lewis F. Hansen, a real estate broker; several months
later Mr. Hansen submitted to Mr. Price a written offer
by plaintiff for the purchase of the property for $18,000.
Mr. Price discussed the offer with his wife who rejected
it, expressing a reluctance to sell unless other income
property could be found in which the proceeds of the sale
could be invested.

Subsequently, Hansen submitted an “Earnest Money
Receipt and Agreement” to Mrs. Price and Mrs. Parr
providing for the sale to plaintiff of the property belong-
ing to defendants for the purchase price of $19,000. Mrs.
Price and Mrs. Parr on or about September 21, 1950,
signed this agreement, which is in words and figures as
follows:

“Earnest Money Receipt
*“ And Agreement
Salt Lake City, Utah, 9/21/1950

Received From A. Ravarino the sum of $1000.00 Dollars to secure
and apply on the purchase of the following described property:

1—Lot 165 x 165 at 235 W. 5th So. For the purchase price of
$19000.00 Dollars. .

The balance of the purchase price shall be paid as follows: $18,000.00
upon furnishing good and marketable title. Interest at 5% per
annum on the unpaid portions of the purchase price to be included in
the prescribed payments and possession given IMM. [immediately]
or before 60 days.

Property taxes for the current year shall be adjusted on pro-rata
calendar basis, seller to pay for period from January Ist to date of
closing, purchaser from date of closing to December 31st. Rents,
insurance, interest, water and other expenses of said property shall
be pro-rated as of date of closing.

No exceptions.

Contract of sale or instrument of conveyance to be made on the
approved form of the Salt Lake Real Estate Board in the name of
Angelo Ravarino. The following items are included in the purchase
price and are to remain with the property: Present buildings. This
payment is made subject to the approval of the Seller and unless so
approved within 10 days from date hereof, the return of the money
herein receipted shall cancel this sale without damage to the under-
signed.

In the event the purchaser shall fail to pay the balance of said pur-
chase price or complete said purchase as herein provided, the amounts
paid hereon shall, at the option of the Seller, be retained as liquidated
and agreed damages.

It is understood and agreed that the terms written in this receipt
constitute the entire Preliminary Contract between the Buyer and
Seller and that no verbal statements made by a representative of
the Agent relative to this transaction shall be construed to be a part
of this transaction unless incorporated in writing herein. It is further
agreed that the execution of final transfer papers abrogate this
Earnest Money Receipt.

The Seller agrees in consideration of the efforts of the agent in
procuring a purchaser to pay said agent the rate of commission as
established by the Salt Lake Real Estate Board.

Hansen Realty Co. Agent
by L. F. Hansen

We do hereby agree to carry out and fulfill the terms and conditions
on the above receipts specified, the seller agreeing to furnish a good

564

marketable title with abstract to date, or policy of title insurance at
the option of the seller and to make final conveyance by sufficient
deed. If either party fails so to do, he agrees to pay the expenses
of enforeing this agreement, including a reasonable attorney’s fee.

Mrs. Harry Price

Mrs. Mareus Parr Angelo Ravarino

Seller Purchaser

Approved Salt Lake Real
Estate Board”

The lower court found that Mr. Price was advised of
this transaction; that he stated it was acceptable to him
and he approved the terms; and that the signatures of the
women were not conditional upon Mr. Price signing sub-
sequently.

The parties recognized that the transaction could not be
consummated until the signature of Mr. Price was obtained.
In the course of frequent solicitations by Hansen, Price
manifested his intention to sign. One particular telephone
call by Hansen to Price plays an important part in this
action. The plaintiff was anxious to purchase a small
strip of land bordering the defendants’ property belonging
to one Terry, which strip was to be utilized as a railroad
spur, in connection with the Price property. Before pur-
chasing this “Terry Strip,” plaintiff wanted full assurance
that Mr. Price would complete the sale of defendants’
property in compliance with his oral promise. Mr. Hansen,
therefore, called Mr. Price, and according to the testimony
of Hansen, the following conversation ensued:

“Answer: [by Hansen] Yes, I called Harry [Price] and I said:

‘Now it looks like everything is okey and I just want to be sure there
won't be any backing out, because I don’t want to close the deal on
the Terry property. * *

565

“{ told Harry that, and then after the first part of September,
or the last part of September, I told him we were ready to close that
now. * * *

* # * * * # * *

“I said: ‘If there is no objections I will go ahead and close it.’
{The Terry deal]

“He said: ‘That is fine, go ahead.’

“I said: ‘I want to be sure because if Ravarino has that it will
be like a goat farm, because he won't have any right-of-way to it.’

“So he assured me it was all right and we closed it right close to
that date, I think October 5th is when we made the deed [to the
Terry property].”

As indicated by the last line of the testimony, on October
5, 1950, the plaintiff purchased the “Terry Strip” for
$1,796.00 in reliance on the oral promise of Mr. Price that
he would sign the Earnest Money Receipt providing for
the sale of defendants’ property to plaintiff. It is es-
tablished that the use of the “Terry Strip” is extremely
limited without possession of the defendants’ property.

For several weeks after the purchase of the “Terry
Strip” by Ravarino, attempts were made to obtain the
signature of Mr. Price on the Earnest Money Receipt who
consistently reiterated his intention to sign it. Ultimately,
Mr. Price refused to execute the warranty deed submitted
to him and refused to accept the purchase price of $19,000
which was tendered. He reportedly had discovered that
the property was “hot.”

In their original and amended answers defendants de-
nied many of the facts set forth above. It is unnecessary
for us to resolve the controversies with respect to the facts
but it may be noted that a review of the entire record re-
veals some evidence in support of the propositions that:
(1) the Earnest Money Receipt was not the intended agree-
ment, but rather the true agreement was a trade rather

than a sale, and as such did not pass the stage of oral
negotiations; (2) the promise by Mr. Price that he would
sign concerned only the contemplated trade rather than
the sale; and, (3) the Earnest Money Receipt relied on
as the agreement was not filled in when signed by Mrs.
Price and Mr. Parr. We do not mean to infer that the
findings of the trial court are not supported by competent
evidence; we express no opinion on that point, it being
unnecessary to do so to reach our decision.

In bar of the plaintiff’s claims for specific performance,
defendants pleaded the statute of frauds. Implicit in the
Conclusions of Law of the lower court is that Price is
precluded from asserting the statute. The implication
seemingly rests on the principle of estoppel—estoppel in
pais. The facts on which estoppel in pais are said by plain-
tiff to rest are as follows:

That the “Terry Strip” was purchased in reliance on
the oral representations of Mr. Price that he would sign
the Earnest Money Receipt, and plaintiff has been de-
frauded because (1) that strip is allegedly worthless with-
out title to defendants’ land, (2) real estate commissions
and taxes have been expended on the “Terry Strip,” (3)
during the intervening months prior to and during this
law suit he has lost the use of the $19,000 purchase price
for defendants’ property, and (4) he has lost the benefit
of the bargain. Plaintiff asserts that since he has been
defrauded, the doctrine of estoppel in pais should apply.

Defendant maintains that when the legislature stated
that courts have the power to take oral agreements out of
the statute of frauds and compel specific performance
“in case of part performance thereof,” Utah Code Ann.
1958, 25-5-8, the mandate is clear that the doctrine which
may be utilized to remove the bar of the statute upon oral
agreements to convey realty is part performance and not
estoppel.

We think it unnecessary to spend time over the
semantic aspects of the problem. Both “estoppel in | |
pais” and “part performance” (really itself a species

of estoppel) have their roots in fraud.+

Generally, the doctrine of equitable estoppel is applicable
only when a misrepresentation is made as to past or present
facts ; however, an exception is recognized when a misrepre-
sentation as to the future operates as an abandon-
ment of an existing right on the party making the [i
misrepresentation. 21 C.J. 1142; Bigelow on Estop-
pel (6th Ed.) 637. Actually this exception is a limited
application of the doctrine of promissory estoppel. 31 C.J.S.,
Estoppel, § 80. The general principle of promissory estop-
pel is embodied in the Restatement of the Law of Contracts,

2As stated by this court in Utah Mercur Gold Min. Co. v. Hershel
Gold Min. Co., 108 Utah 249, 184 P.2d 1094, 1097, the policy con-
siderations underlying the doctrines of part performance and estoppel
are indistinguishable: “Whether the legal label given to the basis
of plaintiff’s claimed right to continue in possession of the property
is equitable estoppel, irrevocable license, or an oral contract for a
written extension taken out of the statute of frauds because of
partial performance is not so important. These concepts are but
forms designed to serve a more ultimate principle that no one shall
induce another to act on promise of reward for such act and then
after obtaining the benefit of the same repudiate the contract.”

The thesis is given further weight by this court in Bamberger Co.
v. Certified Productions Inc., 88 Utah 194, 48 P.2d 489, 492: “As
stated by Mr. Justice Cardozo, then justice of the Court of Appeals
of New York, in Imperator Realty Co. v. Tull, 228 N.Y. 447, 127
N.E. 268, 266: ‘Sometimes the resulting disability has been char-
acterized as an estoppel, sometimes as a waiver. * * * We need
not go into the question of the accuracy of the description. * * *
The truth is that we are facing a principle more nearly ultimate that
either waiver or estoppel, one with roots in the yet larger principle
that no one shall be permitted to found any claim upon his own
inequity or take advantage of his own wrong. * * * The statute of
frauds was not intended to offer an asylum of escape from that
fundamental principle of justice.’ ”

Sec. 90, under the heading of “Informal Contracts Without
Assent or Consideration,” as follows:

“A promise which the promissor should reasonably expect to induce
action or forbearance of a definite and substantial character on the
part of the promisee and which does induce such action or forbearance
is binding if injustice can be avoided only by the enforcement of
the promise.”

Promissory estoppel is historically rooted as a substitute
for consideration, Allegheny College v. National Chautauqua
County Bank, 246 N.Y. 369, 159 N.E. 178, 57 A.L.R. 980,
per Cardozo, C.J., citing 1 Williston on Contracts, Secs.
116, 189; however, it is applied where the promise of the
promisor as to his future conduct constitutes the intended
abandonment of an existing right on his part. In Waugh
v. Lennard, 69 Ariz., 214, 211 P.2d 806, the defendant
induced the plaintiff to refrain from commencing action
on a promissory note by representations that he would not
invoke statute of limitations as a bar. The court held the
defendant was estopped from raising the defense of the
statute, basing its decision on cases where the promisor
had manifested an intention to abandon an existing right,
and quoting the Restatement of Contracts, Sec. 90. For
similar illustrations, see Schroeder v. Young, 161 U.S. 384,
16 S. Ct. 512, 40 L. Ed. 721; Faxton v. Faxton, 28 Mich. 159;
Dickerson v. Colgrove, 100 U.S. 578, 25 L. Ed. 618; 3
Williston on Contracts, Sec. 689, p. 1988. The common
element in these cases is that the promise as to future con-
duct constitutes a manifestation that the promissor will
abandon an existing right which he possesses. It is appar-
ent that an attempt to apply this doctrine to the oral promise
of Mr. Price to convey the property is factually impossible
unless the phrase is to be distorted beyond meaning.

Although some courts, including this court by dicta, have
announced the proposition that the only instance when
an estoppel may arise as to future conduct is when there
is an expressed intention by the promisor to abandon an

existing right, Elliot v. Whitmore, 23 Utah 342, 65 P. 70,
90 Am. St. Rep. 700, Union Mut. L. Ins. Co. v. Mowry,
96 US. 544, 24 L. Ed. 674, Williston states that the doctrine
of promissory estoppel has been extended beyond its his-
torical role

“to permit recovery on the contract by one who has relied to his

detriment on the promise of defendant to execute and deliver a suffi-
cient memorandum.” 2 Williston on Contracts, Sec. 533A.

Assuming this court will disregard the dicta in the case of
Elliot v. Whitmore, supra, and extend the doctrine to the
new limits noted by Williston, we must look to the reasons
which prompted the extension of the rule.

Illustrative of the extension of the rule is Interstate Co.
v. Bry-Block Mercantile Co., D.C., 30 F. 2d 172, and the
widely cited case of Seymour v. Oelrichs, 156 Cal. 782, 106
P. 88, 95. The latter case was an action to recover damages
for breach of an oral contract of employment. The defend-
ant invoked the bar of the statute of frauds because the con-
tract was not to be performed within one year. The court
found that the plaintiff had resigned a lucrative position
as captain of detectives of the San Francisco Police Force
to accept employment with the defendant; that the defend-
ant not only knew the plaintiff had been so employed but
that fact induced the defendant to hire him. The court held
the defendant estopped from pleading the statute of frauds
even though it recognized the rule that
“the acts, conduct, or statements relied on as constituting ground for
the estopped must generally be acts, conduct, or statements amounting
to a representation of fact, as distinguished from mere expression

of opinion or intention, or mere promise of something to be done in
the future.”

The California court stated that the general rule applies

“even where a party, relying simply on the honor, word or promise
of the other, has changed his position to his injury because thereof.”

However, the court reasoned that the

“application of the rules as to equitable enforcement must to a
considerable extent be governed by the circumstances of each case,”

and distinguished these facts from the general rule as fol-
lows:

“Here, certainly, * * * was a representation of a future intention
absolute in form, deliberately made for the purpose of influencing
the conduct of the other party * * *. [Italics added.]

“While the question is by no means free from doubt, we believe that
it should be held that there were sufficient facts in this case to
support a conclusion that the promise here to give such a written
agreement as was required by the statute was made under such cir-
cumstances that the irrevocable surrender by plaintiff or his posi-
tion in the police department in full reliance thereon made it, in the
eye of equity, a binding contract, the subsequent repudiation of which
by defendants would constitute such a manifest fraud as would justify
the application of the doctrine of equitable estoppel.”

The binding thread which runs through these cases, dis-
tinguishing them from the general rule that a mere promise
as to future conduct will not work an estoppel, is the promise
designedly made to influence the conduct of the promisee,
tacitly encouraging the conduct, and although the conduct
of the promisee constitutes no actual performance of the oral
contract itself, it is something that
“must be done by plaintiff before he could begin to perform, as was

known to the defendants.” Kraft v. Rooke, 108 Cal.App. 552, 284 P.
985, 937.

In the instant case, the initiative and solicitation were by
Hansen acting for Ravarino, with Mr. Price merely acquies-
cing or at best reiterating his oral promise to convey. More-
over, the purchase of the “Terry Strip” was not a step that
Ravarino was reasonably required to take before acquiring
title to the Price property as clearly shown by the fact that
as far as Ravarino and Hansen were concerned, acquisition
of the Price property came first, with the purchase of the
“Terry Strip” occurring late in the negotiations, long after

Mrs. Price and Mrs. Parr had signed the written contract,
presumably binding themselves and Ravarino.

The case of Vogel v. Shaw, 42 Wyo. 338, 294 P. 687, 689,
75 A.L.R. 639, illustrates the fringe area in which the doc-
trine of promissory estoppel has been invoked to remove
the bar of the statute of frauds. In this case, which is re-
lied on by respondent, the facts establishing the estoppel
did not constitute anything which had to be done before the
promisee could begin to perform. Williston refuses to class-
ify the case as an abandonment of an existing right and
cities it as contrary to the general proposition that
“a mere refusal to perform an oral agreement within the Statute,
however, is not such fraud as will justify a court in disregarding the
Statute even though it result in hardship to the plaintiff.” 2 Willis-
ton on Contracts, Sec. 583A.

This was an action by a lessee to recover an amount held
in escrow which was paid by the sub-lessee of defendants’
property. The plaintiff acquired the status of lessee from
defendant’s predecessor in title, and plaintiff orally
promised defendant that if defendant would purchase the
property, plaintiff would assign his interest in the sub-lease
to the defendant. Prior to the time the defendant completed
the purchase, the plaintiff was asked to complete a written
assignment, and plaintiff relied:

“I promised to give you those leases as soon as you obtained a deed
to the property. You haven’t obtained a deed yet and until you do,
I want to keep them, because if you don’t get the deed, I don’t want
you to have the leases”.

Plaintiff objected to the testimony on the ground that the
agreement was oral and barred by the statute of frauds.
The court held an estoppel applied, quoting from Union
Mut. L. Ins. Co. v. Mowry, supra, 96 U.S. 544, 24 L. Ed. 674,
as follows:

“An estoppel from the representations of a party can seldom arise,
except where the representation relates to a matter of fact—to a

present or past state of things. * * * ‘The only case in which a
representation as to the future can be held to operate as an estoppel
is where it relates to an intended abandonment of an existing right,
and is made to influence others, and by which they have been induced
to act. * * *

“The doctrine of estoppel is applied with respect to representations
of a party, to prevent their operating as a fraud upon one who has
been led to rely upon them They would have that effect, if a party
who, by his statements as to matter of fact, or as to his intended
abandonment of existing rights, had designedly induced another to
change his conduct or alter his condition in reliance upon them * * *,
(Italies added.)

A dissent in the case reasoned that the offered proof was

merely an oral promise, not a representation of an existing
fact nor an abandonment of an existing right, and stated:
“If the promise be one which under the statute of frauds must be in
writing, the promisee can protect himself in advance by insisting on
compliance with the satute. * * *
“With this decision as precedent it is difficult to see why every con-
tract void under the statute of frauds may not be made effectual by
estoppel when acted on by the promisee and not performed by the
promisor.”

The majority opinion was criticized on the same ground
by a case note in 44 Harvard Law Rev. 1147, where the edi-
tor reasoned that it constituted judicial legislation. Even if
this court should follow the majority opinion, we still do not
have an estoppel under the facts of the case at issue. There
is nothing in the conduct of Mr. Price or in the record which
indicates any design or interest on his part that the “Terry
Strip” be purchased.

Thus we conclude the genera] rule applies that an estoppel
will not arise simply because of a breach of promise as to
future conduct or because of a disappointment of expecta-
tions on an executory agreement. 2 Pomeroy on Equity
Jurisprudence (4th Ed.) Sec. 808; Bigelow on Estoppel
(6th Ed.) Sec. 636, 21 C.J. 1142; 31 C.5.8., Estoppel, § 30.
In Elliot v. Whitmore supra, this court announced the same
doctrine:

“Even taking these conversations in the most favorable view for
appellant, there was absolutely no statement upon the part of the
defendants of an intended abandonment of an existing right. It was
merely an acquiescence in the plaintiff’s proposition * * *. It has
frequently been held that an estoppel will not arise simply from a
breach of promise as to future conduct, or from a mere disappoint-
ment of expectations.” [28 Utah 842, 65 P. 74.]

With particular reference to the statute of frauds, this
court in Papanikolas v. Sampson, 73 Utah 404, 274 P. 856,
861, 862, quoted from 12 R.C.L. pp. 287, 238, as follows:

“There can be no fraud where there is nothing wrong, and fraud
cannot be deduced or inferred from that which the law pronounces
honest. Nor can it be predicated upon acts which the party charged
has a right by law to do, provided he pursues such right by lawful
means, nor upon the nonperformance of acts which by law he is not
bound to do, whatever may be his motive, design, or purpose, either
in doing or not doing the acts complained of * * *. Nor, as a general
rule, can fraud be predicated upon the failure to perform a promise
or contract which is unenforceable under the statute of frauds, since
in such case the promisor has not, in a legal sense, made a contract,
and hence has the right, both in law and in equity, to refuse to per-

The authorities are against the proposition that non-
performance of a ‘promise is fraud which will establish an
estoppel in pais. Under the facts alleged the plaintiff
could not make a case of equitable estoppel under
these principles of law, since the oral representations. t
of Mr. Price that he would complete the negotiations
constituted nothing more than a promise as to future con-
duct, not a representation as to material and existing fact
nor the expression of an intent to abandon an existing right.
Further, we have examined the cases relied on by plaintiff,
and think that the doctrine they announce is either con-
sistent with the foregoing principles of equitable estoppel
or where the facts show possession of the premises and
improvement of the land by the party claiming the fraud,
which brings us to a consideration of the doctrine of part
performance, as before stated a species of estoppel.

574

Turning now to a consideration of the doctrine of part
performance, whereas equitable estoppel is technically
limited to situations where there is a misrepresentation of a
material fact or the abandonment of an existing
right by declaration or conduct, substantial and true | |
part performance works an exclusion of the oral
promise to convey realty from the statute of frauds. The
doctrine is to be applied with great care, paying particular
attention to the policy expressed in the statute of frauds
and historical precedent where the limits have been defined
by the process of inclusion and exclusion. In Price v. Lloyd,
31 Utah 86, 86 P. 767, 772, 8 L.R.A.N.S. 870, this court said:

“Courts of equity, in establishing the doctrine invoked by plaintiff,
have not, by any means, intended to annul the statute of frauds, but
only to prevent its being made the means of perpetrating a fraud.
In order that a plaintiff may be permitted to give evidence of a
contract not in writing, and which is in the very teeth of the statute
and a nullity at law, it is essential that he establish [in equity], by
clear and positive proof, acts and things done in pursuance and on
account thereof, exclusively referable thereto, and which take it out
of the operation of the statute.”

And in Burns v. McCormick, 233 N. Y. 230, 185 N.E. 278,
274, the Court of Appeals of New York, through Mr. Justice
Cardozo, announced:

“The peril of perjury and error is latent in the spoken promise.
Such, at least, is the warning of the statute, the estimate of policy
that finds expression in its mandate. Equity, in assuming what is
in substance a dispensing power, does not treat the statute as ir-
relevant, nor ignore the warning altogether. It declines to act on
words, though the legal remedy is imperfect, unless the words are
confirmed and illuminated by deeds. A power of dispensation, de-
parting from the letter in supposed adherence to the spirit, involves
an assumption of jurisdiction easily abused, and justified only within
the limits imposed by history and precedent. The power is not
exercised unless the policy of the law is saved.”

See a similar view against the erosion of the statute in
Browne on the Statute of Frauds (5th Ed.) Sec. 492.

A careful analysis of the cases will aid in defining what
constitutes part performance in the framework of the facts
of the instant case. The act relied upon by plaintiff to in-
voke the doctrine is the purchase of a strip of land

to be used as a railroad spur in conjunction with the | |
Jand which Mr. Price orally promised to convey.

The doctrine, in its broadest scope, is that acts will consti-
tute sufficient part performance if they are clearly refer-
able to some contract existing between the parties, in
relation to the subject matter in dispute, and as a result of
these acts, the plaintiff has been defrauded. Price v. Lloyd,
supra; Hargreaves v. Burton, 59 Utah 575, 206 P. 262, 33
ALR. 1481; Hogan v. Swayze, 65 Utah 380, 237 P. 1097;
Latses v. Nick Floor, Inc., 99 Utah 214, 104 P.2d 619; Utah
Mercur Gold Min. Co. v. Herschel Gold Min. Co., 103 Utah
249, 184 P.2d 1094. A less liberal view is that the term
“part performance” is to be taken literally, and the per-
formarice must be something required in the identical con-
tract, Knoff v. Grace, 68 Colo. 527, 190 P. 526, 10 ALR.
1492; Forbes v. Los Angeles, 101 Cal. App. 781, 282 P. 528.

This doctrine has found little support because many of
the strongest cases, those where improvements have been
erected on the land by a plaintiff in possession, do not in-
volve any part performance at all, literally speaking. How-
ever, in the jurisdictions where the more liberal view is
accepted, the courts require that the operative fact relied
upon must be more than a mere collateral matter, one which
cannot be reasonably accounted for except on the postulate
that a contract exists. The rule frequently applied is stated
in Pomeroy on Specific Performance (2d Ed.) page 180,
as follows: .

“The improvements must be of a kind which would naturally and
reasonably be done under a contract, so as to indicate the existence
of a contract to account for them; they must be made on the faith
of the contract and must of course be subsequent to it.” See also
Browne on Statute of Frauds (5th Ed.) Sec. 460.

576

Thus in Price v. Lloyd, supra (31 Utah 86, 86 P. 770),
where the plaintiff took possession of property under an
oral promise by defendant to convey, and expended ap-
proximately $2,000 on improvements such as papering of
rooms, painting, fencing and construction of chicken coops,
this court denied specific performance on the ground that
the acts could reasonably be explained as merely for the
comfort and convenience of a tenant-at-will and held that:

«= * = the making of valuable, or substantial, or beneficial im-
provements by the donee in possession, or the doing of other ana-
ogous acts which would render a revocation and refusal to complete
inequitable, is essential to the enforcement of a parol gift of land.
It is also essential that the parol agreement or gift should be estab-
lished by clear, unequivocal and definite testimony, and the acts
claimed to be done thereunder, should be equally clear and definite
and referable exclusively to the contract or gift.”?

2The decision involved a verbal gift, falling within the statute
requiring a gift of realty to be in writing; however, the plaintiff
contended that a promise supported by consideration existed, prompt-
ing the court to deal with gifts and contracts in announcing the
principle quoted.

For an expression of the same rule on similar facts, see
Hargreaves v. Burton, supra.

In Graves v. Goldthwait, 153 Mass. 268, 26 N.E. 860,
861, 10 L.R.A. 763, the plaintiff and her six sisters were
tenants in common of several tracts of land, and the plain-
tiff made an oral agreement whereby she would pay the sis-
ters a stipulated sum in consideration of their conveyance
to plaintiff of their interests. Five of the sisters complied
with the oral agreement; the sixth refused. The plaintiff
contended that she had purchased the land in reliance upon
the representations of the defendant that she would convey,
which should constitute sufficient part performance. The
court upheld the defense of the statute of frauds on the

ground that the performance of the other contracts were
purely collateral matters. The court said:

“The reasoning by which a part performance of an oral contract for
the sale of land has been held to take it out of the statute has never

been extended to a partial or complete performance of collateral
contracts.”

It is to be noted that possession by the plaintiff is re-
garded as an important fact, one which is generally direct-
ly referable to the contract, and when combined with per-
manent and valuable improvements which are repre-
sentative of the existence of an ora] contract, virtually Hl
every jurisdiction will grant specific performance.

The same limitation, of course, is placed on the plaintiff’s
possession as is found when improvements are relied upon:
it must be of such a nature that it would not have been
given without the presence of an oral contract to convey.
Price v. Lloyd, supra; Hargreaves v. Burton, supra. Whether
or not the other facts are given efficacy without the ele-
ment of possession is not fully settled in the courts. Some
jurisdictions hold that possession is an indispensible ele-
ment, Northwestern Lumber Co. v. Grays Harbor & P. S.
R. Co., D.C., 208 F. 624 while others indicate the possession
is only ordinarily necessary. Blakely v. Sumner, 62 Wash.
206, 118 P. 257. We do not pass on this point. However,
assuming acts in the nature of general improvements are
sufficient without the element of possession, when it is
lacking this court must be convinced that no reasonable
doubt exists as to whether or not the acts of improvement
are explainable on some basis other than the hypothesis of
an oral contract. The reason for the rule is well estab-
lished in the common experience of mankind to which the
enactment of the statute of frauds bears witness: the
possibility of fraud and uncertainty in oral promises to
convey realty makes in incumbent on the courts to be hesi-
tant in applying a general exception to diverse factual situ-
ations. While the fundamental basis of the doctrine of

part performance is to prevent fraud, historical precedent
has drawn the line where evidentiary facts are not suffi-
cient to show an oral contract was made. The plaintiff
here did not acquire possession, nor is the purchase of the
“Terry Strip” an act of such a nature that explanation on
some ground other than the existence of an oral contract
is unreasonable. A reasonable man observing the acquisi-
tion by plaintiff of the “Terry Strip” would not be required
to say that the purchase was an incident of ownership
of the defendants’ property, but rather an act equivocal
under the circumstances. The argument gains weight by
reference to the fact that the grantor of the strip (Terry)
had no interest in the defendants’ property, and the plain-
tiff acquired the right, title and interest which the vendor
possessed, an interest more nearly explicable on the ground
of speculation, perhaps coercion, or as the record discloses,
reliance upon the zealous attempt of a real estate agent to
close a deal, than on the basis of ownership of defendants’
property.

Since Mr. Price is not bound on his oral promise and the
statute of frauds is operative, what is the status of the land
with respect to Mrs. Parr who did in fact sign the
contract and who owns the property with Mr. Price
as tenant in common? The finding on this point is
that the women signed unconditionally, and particularly
that the signatures of the women were not conditioned on
obtaining the signature of Mr. Price.

There is no evidence to support this finding. The testi-
mony at the trial, the nature of the transaction, and all the
surrounding circumstances point to the unavoidable conclu-
sion that the women signed conditionally. Therefore, since
Mr. Price is not bound, neither are the women.

The second count in the complaint is an action at law
for money damages; however, plaintiff cannot obtain re-
lief on that basis. It is well settled in this jurisdiction that
the doctrine of part performance is not available

|

in an action for damages on an oral contract to con- J
vey land. Baugh v. Darley, 112 Utah 1, 184 P.2d 335.

Nor does the complaint state a cause of action in unjust
enrichment since it is obvious that defendants have obtained
no benefit. We note in the plaintiff’s behalf, however, that
when it became apparent that the rights of the parties
could not be settled without litigation, defendants offered
to purchase the “Terry Strip” for $1,796.00, which was the
amount expended by the plaintiff in acquiring the land.
The offer was affirmed in the answer and reiterated in
this appeal. We presume that the “Terry Strip” will be
valuable to the defendants as a right of way as it would
have been to the plaintiff, in which case the former may
desire to keep open their offer to buy it from him.

Reversed and remanded with instructions to enter find-
ings in accordance with this opinion.

Costs to appellants.

McDONOUGH, CROCKETT, HENRIOD and WADE,
J.J., concur.

PALMER et al. v. BROADBENT, Mayor et al.
No. 7997. Decided Aug. 12, 1953, (260 P. 2d 581.)
Concurring Opinion Aug. 19, 1953.

See 62 C.J.S. Municipal Corporations, sec. 166. Petition for re-
ferendum, form and contents of. 28 Am.Jur. Initiative, Referendum
and Recall, sec, 19; 106 A.L.R., 555.

Orville Isom, Cedar City, for plaintiffs.
Patrick H. Fenton, Cedar City, for defendants.

WADE, Justice.

Plaintiffs, who with others are sometimes referred to
as sponsors and petitioners, are residents and voters of
Cedar City, Utah, and they petition this court for an extra-
ordinary writ, requiring the defendants, who are the mem-
bers of the City Council and the City Recorder, to submit
to the voters at the next regular city election, for approval

1See Rule 65B(a) U.R.C.P. which abolishes special forms of writs,
and (b) (8) where the relief sought is to compel a person to perform
an act required by law. Also see Section 20-11-16, U.C.A.1953.

or rejection, an ordinance granting the Southern Utah
Power Company a twenty year electric franchise. This
ordinance was passed by the City Council on February
19, 1953, and published on the 26th to become effective
on March 21, 1953.2

On March 7th, sixteen days after enactment and four-
teen days before the effective date, the sponsors filed a
petition with the City Recorder for a referendum to the
voters on that ordinance, together with an application for
petition copies and circulation sheets to be bound in 15
sections to be printed in legal form. Whereupon the Re-
corder certified to a true and correct copy of such petition,
and that she had received such petition on that day. On
March 10th, after waiting the three days allowed by law
therefor, the Recorder solicited three printers for bids
on that printing job. On that day without waiting for
such bids, the sponsors presented to the Recorder the re-

®Section 20-11-24, U.C.A. 1953, provides that referendum petitions
against an ordinance passed by the governing body of a city or town
shall be filed thirty days after its passage; Section 20-11-1, U.C.A.
1953 provides that legal voters of the State by petition, may require
a referendum before the law takes effect.

%Section 20-11-7, U.C.A. 1958, provides for the filing of such a
petition and application with the Secretary of State; Section 20-11-28,
U.C.A. 1958, provides that in cities and towns the manner of exer-
cising the initiative and referendum powers shall be similar to the
procedure prescribed for the State, and the duties required by the
Secretary of State shall be performed by the City Recorder or Clerk.
Section 20-11-8, U.C.A. 1958, provides for the acknowledgment of
all the signatures to be placed on circulation sheets with the address
of the signers; Section 20-11-10, U.C.A. 1953, provides the form of
the Petition for Referendum; Section 20-11-11, U.C.A. 1958, requires
the Secretary of State, upon the payment of the fees to cause to be
printed copies of the form of petition including all required matter;
Section 20-11-12, U.C.A. 1958, provides for the dividing of the petition
into sections, with circulation sheets and other matter which must be
contained therein; Section 20-11-18, U.C.A. 1958, provides the fee for
filing the application, requires the solicitation of bids within three
days after filing the application for printing the forms, and that
within ten days after filing the application the sponsors shall be
notified of the amount of the lowest and best bid and require the
payment of such amount together with 50¢ per hundred for the
circulation sheets, and within ten days after the payment of the
required amount the petition copies and circulation sheets shall be
‘made into sections as provided by law.

|

quired: forms, which had been printed at their expense,
with the request that she inspect and approve such forms
and sign her name to the printed certificate with her name
printed thereon and affix thereto the corporate seal of the
City. These forms which were presented to the Recorder
are conceded to be correct in every detail except that they
were printed in 514 instead of 6 point type and lacked the
certificate of the true and correct number and title of the
law as proposed for referendum. They were printed at
the same price and by the only printer who submitted a
bid for such work to the Recorder. The Recorder refused
to execute and record these forms without advice from the
City Attorney and Council but did certify that she had
received such petition and application and signed a cer-
tificate to a copy of the petition presented to her that such
is a true and correct copy of the Petition for Referendum,
this she retained in her office. Thereupon the sponsors
took other copies of the forms submitted to the Recorder,
which were bound in 15 sections, and proceeded to circulate
them for voters’ signatures. On March 11th, the sponsors
paid the $10 filing fee for filing the Petition for Refer-
endum, on the 12th, the City Attorney advised the sponsors
that the Recorder refused to sign or attach thereto the
corporate seal of the City to the forms presented to her,
because they had failed to substantially comply with the
statute and that all except one copy would be returned to
them upon request, which was done on March 15, 1953.

On March 17, 1953, again taking the full ten days allowed
therefor, the Recorder notified the sponsors that she had
received a bid for the proposed printing, and that upon
the payment of the amount of such bid plus 50¢ for the
circulation sheets she would have the forms prepared for
circulation. The statute allowed her 10 more days to ac-
complish this after receiving the required fee,® which would
be at least 7 days after the time for filing the Petition for

4See Section 20-11-18, U.C.A. 1953.
See Section 20-11-18, supra, also Note 3.

Referendum with the required number. of names signed
and the County Clerk’s certificate attached thereto.® Thus,
she had it in her power to delay this beyond the time for
filing the petition, if she continued as she had previously
done to take the full time allowed by law, and thereby
defeat the referendum without submitting it to the people.

On March 20th, the day before the effective date of such
ordinance, the sponsors took the fifteen sections of the
petition copies which they had circulated with 449 names
signed and acknowledged thereon, to the County Clerk
of Iron County, Utah, who checked the names against the
official registration books of his county. He attached there-
to a certificate
“that at the last general election 8122 persons of all parties voted

for governor in Cedar City, and that the Petition for Referendum
* * * contained 430 names of duly qualified and registered voters.”

He also attached thereto another certificate

“that on the 20th day of March, 1953, I received * * * a Petition
for Referendum * * *; that I have checked all names appearing
on the sections and on each circulation sheet thereof; * * * that I
have indicated such names appearing thereon as are registered voters
in Cedar City, Utah, by placing before each of such names a check
in the column where the name of such registered voter appears;
* * * that all the names on said sheets not markd with a check
either are not registered voters in Cedar City or are the names
concerning which I have some question * * *”7 (Italics ours.)

The checkmarks were actually placed after the names
instead of before as stated in the certificate. These peti-
tions and circulation lists with the attached certificates
were on that day taken to the City Récorder who received
the same and acknowledged receipt thereof.

*See Sections 20-11-1, 20-11-16 and 20-11-24, U.C.A. 1953.
Sections 20-11-8 and 20-11-16, U.C.A. 1953.

|

Thereafter on March 23rd, she endorsed on these petitions
and lists the word “Insufficient”® and attached thereto
a certificate

«x * * that upon said circulation sheets, duly verified by the County
Clerk were the names of O registered voters of Cedar City * * *.”

This she justified by the fact that the checkmarks were
after instead of before the signatures. Upon this being
called to the attention of the County Clerk he made an
amended certificate dated March 27, 1953, showing that
the checkmarks were placed after the signatures. This
was received by the Recorder who acknowledged receipt
thereof on March 30, 1958. Thereafter a recount was had
but the Recorder refused to change her endorsement from
“Insufficient” to “Sufficient.”

Plaintiffs contend the facts here shown require the sub-
mission of this ordinance to the voters for approval or
rejection because, (1) it was the Recorder’s duty to ac-
cept, retord, certify, number and return to the sponsors
for circulation, the printed petition copies presented to
them on March 10, 1953; (2) that having failed to do her
duty, where as here no one could be mislead or injured
thereby, the law will presume that what should have been
done was done, and thus make effective the Petition for
Referendum the same as though these required acts had
been done; and (3) that if so treated there were sufficient
signers and the County Clerk’s certificate was sufficient
to require the submission of this ordinance to the voters.

The Recorder should have accepted these printed petition
copies which sponsors furnished on March 10th. All of the
detailed procedure provided for in the statute for obtaining
these printed forms are mere formalities, for as long
as the prescribed forms are supplied, who arranged [i
for and the procedure followed in having them
printed have no substantial effect on the result. The only

8See Section 20-11-16, U.C.A. 1953.

586

purpose of the prescribed procedure is to provide a means
whereby the sponsors can obtain the properly printed forms
and to save them every possible expense. That they do
save expense is doubted for it is not apparent that a small
printing job like this can be had for less money through a
public official soliciting bids than can be obtained by a
private individual through his own private arrangements,
who in any event has to pay for it. But this procedure
does have the potentiality of consuming twenty days of
time which is always in this kind of case sorely needed by
the sponsors and in this case an absolute necessity. In
this case if the sponsors had followed the prescribed pro-
cedure it was within the power of the Recorder to defeat
their purpose to obtain this referendum merely by taking
all of the prescribed time in obtaining these printed forms
allowed under the statute. She was allowed twenty days
in which to obtain the forms and the petitions would have
to be circulated and signed by the required: number of
voters, certified by the County Clerk and then filed with
the City Recorder within fourteen days after the filing
of the original petition. Certainly this long delay was not
one of the purposes of the statute for we cannot ascribe
to the legislature a purpose to make it next to impossible
for the people to obtain the referendum which it provided.
So the only purpose of this detailed procedure was for the
benefit of the sponsors. It is everywhere recognized that the
person for whose benefit a provision is made may waive
it when it does not affect the right of others.® So in this
case the sponsors had a right to waive these provisions
and supply these printed forms through their own arrange-
ments and at their own expense, which they had to pay
in any event, as long as the forms furnished meet the
statutory requirements it was the duty of the Recorder
to accept them and proceed as required by law after the
forms had been provided. These forms meet all the statu-
tory requirements except in a small difference in the size

See 56 AmJur. 105 to 112, Waiver Sections 4, 6, 7, and 10,

of the type and a certificate by the recorder that the title
and number of the ordinance are stated correctly in the
Petition which were not substantial defects. There is no
claim that the title and number were not correctly stated
in the Petition.

The State Constitution vests in the people the right to
legislate directly. 1° The legislature has supplemented this
provision by this statute and it is the duty of the
courts to so construe the statute so as to make it [jl
operative where possible. We have held that the for-
mal requirements of this statute are directory and not
mandatory, and that substantial compliance with such pro-
visions is sufficient.

The failure of the Recorder to accept these printed forms
as she should have done does not render the sponsor’s Peti-
tion for Referendum ineffective. The forms of the petition
copies, certificates, and circulation sheets and their
binding in fifteen separate sections complied with | |
the statute in every substantial detail. The Record-
er’s certificate was printed in those forms with her name
printed in the place she should have signed them. She had
refused to affix to them the corporate seal, to sign her name
to the certificates, and to record the petitions as the law
required her to do.1? By her failure to do her duty, even
though acting in good faith, she caused the sponsors to be
faced with a serious problem. If they waited for her to ob-
tain these printed petition copies, there was no reason to
believe that they would be furnished in time to accomplish
their purpose, so they had them printed themselves, but now
she refused to sign the certificate which was attached to
the copies to be circulated, although she had made such a
certificate which she kept in her office. They could bring

2Constitution of Utah Art. 6, § 1.

Chapter 11, Title 20, U.C.A. 1953 and especially Section 15
thereof. Also Halgren v. Welling, 91 Utah 16, 68 P.2d 550; Allen v.
Rasmussen, 101 Utah 88, 117 P.2d 287.
22See Section 20-11-18, U.C.A. 1953.

a mandamus procedure to force her to execute these docu-
ments but such procedure would take time, and in order to
be effective these petitions must have the required number
of signatures and be filed with the Recorder within ten
days, the time would in all probability expire before she
could be forced to do her duty so the only safe course they
could take was to do as they did, circulate the petitions with-
out her signature or the corporate seal affixed to her cer-
tificate. So that is what they did. If it were not for the
scarcity of time it would have no doubt been their duty to
determine their rights in the courts before proceeding to
circulate the petition, under the circumstances here pre-
sented their actions were justified.

Here there was no fraud or misrepresentation by the
sponsors and nothing was done by them which was calcu-
lated to deceive or mislead any one. The sections of the
printed forms which were circulated were in correct form
except they lacked the signature of the Recorder and the
corporate seal of the City and the certificate as to the title
and number of the ordinance. These they did not purport
to have but they were true copies of the petition on file with
the Recorder and the certificate which she had attached to
a. copy thereof which was on file in her office. Under these
circumstances, since no one has been adversely affected in
reliance on her failure to act, the petition was not in-
validated by her failure to do her duty for the sponsors had
done all they could do to make the petition effective and
are not defeated by her failure to act.

48See Parker v. California State Life Ins. Co., 85 Utah 595, 40 P.2d
115; and Gressler v. New York Life Ins. Co., 108 Utah 182, 163 P.2d
324, 164 A.L.R. 1047, in which we quoted with approval from
Prudential Ins. Co. of America v. Union Trust Co., 56 Ind.App. 418,
105 N.E. 505, that “* * * if at the time of the filing of such ap-
plication to revise, and the signing and delivery of the necessary
papers accompanying it, there then existed no valid objection to the
form or substance of such application * * * appellant * * * could
do but one thing * * *.” [82 Utah 595, 40 P.2d 178]

Although the original County Clerk’s certificate was in-
accurate in one respect, it did not invalidate the Petition.
The Clerk’s certificate stated that the check had been placed
before the names of the duly registared voters, it was

clear from the contents of the certificate and an | |
examination of the names on the circulation sections

what was intended. There were no checks placed before
any of the names on the circulation sheets, but there were
checks placed after the exact number of names as stated
in the certificate and this is true as to each of the circula-
tion sheets, as itemized in the certificate, and this alone
would clearly indicate that the word “before” in the certifi-
cate was intended as “after.” Further, the petition states
that

“all the names on said sheets not marked with a check either are

not registered voters * * * or are the names concerning which I
have some question * * *,”

This statement is not limited to names with a check placed
before them but covers all names not marked with a check.
So the meaning of this certificate is not in doubt even with-
out the amended certificate. But if it were, we have no
doubt that the certificate could properly be amended to con-
form with the facts and correct an obvious mistake at any
time before the final decision of the Recorder on the re-
count of the names.

The extraordinary writ previously issued out of this
court is made permanent.
Costs to the plaintiffs.

McDONOUGH, CROCKETT and HENRIOD, J.J., concur.

WOLFE, Chief Justice (concurring in the result).
I concur on the ground that in this case no one was preju-
diced by the absence of the City Recorder’s certificate

“that the law contained thereon [on the petition copy] is * * *
the true and correct number and title of the law as proposed for
referendum”,

590

as required by Section 20-11-18, Utah Code Annotated 1953.
The departure from the statute was substantial because
the purpose of this requirement was to protect signers from
being misled into signing a petition copy which did not per-
tain to the ordinance whose reference they intended to
petition for. The matter of the style and size of the type
used and the place on the petition copies where the regis-
tered voters were designated by the County Clerk are in-
substantial requirements. The time table provided in Chap-
ter 11 of Title 20 for the doing of certain acts preceding
the placing of a referred ordinance on the ballot in a city
election has been used several times with no trouble. But
an ordinance may be passed at such time that to accommo-
date the time to the fixed prospective election day may
require utmost cooperation of the County Clerk and City
Recorder.

As Mr. Justice WADE suggests the matter of paramount
importance is to give the voters in the town opportunity
to vote on the ordinance. While I consider it also important
to maintain the integrity of the various parts of the act
so that each part may serve the purpose for which it was.
designed, in this case we may rest assured that no harm
can be done by dispensing with the safeguard which the
certificate was intended to provide, especially in view of
the importance of the right to vote on the ordinance, the
knowledge that no one was misled, and that the title of the
ordinance which the petitioners were seeking to refer was
correctly printed on each petition copy, along with the date
of its enactment.

I also agree that the refusal of the City Recorder to
certify as required by Section 20-11-12 that the petition
copies presented to her by the sponsors, which they had
had printed at their own expense, were true and correct
copies of the original petition (not to be confused with the
certificate required by Section 20-11-18) was not justified
and hence it should not defeat the sponsors’ attempt for
referendum.

eC

FORREST v. GRAHAM.
No. 8005. Decided Sept. 16, 1953. (261 P. 2d 169.)

Glen S. Hatch, Salt Lake City, for appellant.

E.R. Callister, Atty. Gen., Walter L. Budge. Asst. Atty.
Gen., for respondent.

WOLFE, Chief Justice.

This is an appeal from a judgment entered below in a
habeas corpus proceeding that the appellant is and has been

lawfully detained in the custody of the respondent, Warden
of the Utah State Prison.

Appellant was tried for and convicted of the crime of
second degree burglary on May 16, 1952, in the Seventh
Judicial District Court of Carbon County before Judge
L. Leland Larson. Subsequently a motion for a new trial
was granted, but the appellant’s motion for a change of
venue for the second trial was denied by Judge F. W. Keller,
the other judge of that district. At the second trial, Judge
A. H. Ellett of the Third Judicial District presided, having
been requested by Judge Keller to try the case in order
that Judge Keller could attend a grazing board meeting.
Judge Ellett heard the evidence, instructed the jury, and
after they had retired to deliberate on a verdict, Judge
Keller returned to the courthouse. Thereupon at the sug-
gestion of Judge Ellett, Judge Keller took over the duties
of presiding and Judge Ellett returned to his own district.
Apparently no objection was made at that time either by the
State or by the appellant to this substitution. When the jury
returned with a verdict of guilty, Judge Keller received
the verdict, and subsequently sentenced the appellant to an
indeterminate term in the State Prison, denied his request
for probation, and committed him to the prison.

The appellant contends that Judge Keller had divested
himself of jurisdiction in the case by calling in Judge Ellett
to preside and that he could not thereafter act in the case
except to perform ministerial acts; that the act of receiving
the jury’s verdict, sentencing the appellant and committing
him to prison were not ministerial, but judicial acts; and
that therefore the acts performed by Judge Keller in the
case were null and void for want of jurisdiction. Reliance
is placed by the appellant on State eax rel Moser v. District
Court, 116 Mont. 305, 151 P.2d 1002; State ea rel. Sullivan
v. District Court, 122 Mont. 1, 196 P.2d 452; McCabe v.
Whitehill, 51 N.M. 424, 186 P.2d 514. In the first cited case,
a district judge who had voluntarily disqualified himself

593

from hearing a case and who had called in a judge from
another district to hear it, was held to have no jurisdiction
to thereafter cite the relator for contempt of court for acts
allegedly arising in connection with that case. In each of
the other two cited cases relied upon by the appellant, a
district judge who was disqualified by the filing of an
affidavit of prejudice and bias by one of the litigants, was
held to lack jurisdiction to do anything in connection with
the case except in ministerial matters such as arranging the
calendar, regulating the order of business, and calling in
another judge or transferring the case.

The above cases relied upon by the appellant are not con-
trolling here for the reason that Judge Keller was at no
time disqualified to act in the trial of the appellant Al-
though the appellant moved for a change of venue from
Carbon County and that motion was denied by Judge Keller,
he did not apply for a change of judge on the ground that
a fair and impartial trial could not be had by reason of the
interest or prejudice of the judge, as permitted by sec.
%71-25-2, Utah Code Annotated 1953. Nor did Judge Keller
voluntarily disqualify himself from hearing the case because
of bias, prejudice or interest. All Judge Keller did was to
request that Judge Ellett try the case in order that he could
attend a grazing board meeting. This request was presum-
ably made pursuant to sec. 78-3-18, Utah Code Annotated
1953, which provides:

“Any district judge may hold a district court in any county at the
request of the judge of the district, and upon the request of the

governor it shall be his duty to do so; and in either case the judge
holding the court shall have the same powers as the judge thereof.”

Nothing in that statute requires that the requesting dis-
trict judge be disqualified in the case before he can request
a judge from another district to hold court in his district.

As heretofore stated, Judge Ellett presided over the trial
to the point where the jury had retired to deliberate on a

verdict, While they were so deliberating Judge Keller took
over the duties of presiding, and on the jury’s return, re-
ceived their verdict, and subsequently sentenced the appel-
lant and committed him to prison. As to whether it is error
entitling a defendant in a criminal case to a new trial for
a judge who has in no way been disqualified by the litigants
or by himself to substitute for another judge after the re-
tirement of the jury, and to receive the verdict and sentence
the defendant, there is no unanimity of judicial opinion.
See the annotation on this general subject at 114 A.L.R. 435.
The cases of King v. People, 87 Colo. 11, 285 P. 157; Com-
monwealth v. Thompson, 328 Pa, 27, 195 A. 115, 114 A.L.R.
482; and Brown v. State, 186 Tenn. 378, 210 S.W. 2d 670,
hold it not reversible error for a judge substituted after the
jury’s retirement to receive the verdict. That it is not
reversible error for a different judge from the judge who
presided over the trial to sentence the defendant, see State
v. Sweetin, 184 Kan. 668, 8 P.2d 397; Anderson v. State,
115 Fla. 477, 155 So. 726. However, the question before us
is not whether the substitution of Judge Keller for Judge
Ellett after the jury had retired constituted error which
would have entitled the appellant to a new trial had he
prosecuted an appeal — a question which we do not decide—
but whether it was error which divested the court of juris-
diction, made a nullity, of all subsequent proceedings in the
ease in which Judge Keller participated, and opens the
judgment of conviction to collateral attack in this habeas
corpus proceeding.

We conclude that the acts of Judge Keller were not null
and void for want of jurisdiction and hence are not subject
to collateral attack here. The Supreme Court of the United
States in the case of U.S. v. Valante, 264 U.S. 568, 44 S. Ct.
411, 412, 68 L. Ed. 850, held that habeas corpus would not
lie for the release of a prisoner because at his trial the
verdict was received by a judge other than the one who had

595

presided over the preceding stages of the trial. Said the
court:

“* * * it is clear that the error, if any was committed, did not go
to the jurisdiction of the court or render the judgment void, but was,
at the most, one which could have been corrected on a review by writ
of error. It is ‘the well-established general rule that writ of habeas
corpus cannot be utilized for the purpose of proceedings in error.’ ”

For a holding to the same effect, see Bowman v. Alvis, 88
Ohio App. 229, 96 N.E. 2d 605. Likewise, it has been held
not jurisdictional error for a different judge than the one
presiding over the trial to impose sentence. Ex parte Wil-
liams, 26 Fla. 310, 8 So. 425; Ridgeway v. City of Akron,
Ohio App., 42 N.E. 2d 724. There is the broad statement
in Allen v. State, 13 Okl. Cr. 533, 165 P. 745, L.R.A. 1917E,
1085, and in Henderson v. State, Okl. Cr., 246 P.2d 398, 399,
that

“the reception of the verdict in a criminal case is a judicial act,
which cannot be delegated, and a verdict so received is a nullity,

and that no judgment of conviction could be lawfully pronounced
‘upon such verdict”,

but both of those cases were appeals from judgments of con-
viction and the court did not have before it the question of
collateral attack.

The judgment below is affirmed.

McDONOUGH, CROCKETT, HENRIOD, and WADE, J.
J., concur.

an

96

In re BUTTARS ESTATE
No. 7945. Decided Sept. 26, 1958. (261 P. 2d 171.)

George C. Heinrich, Logan, for appellant.
L, E. Nelson, George D. Preston, Logan, for respondent.

WADE, Justice.

This is an appeal from a judgment notwithstanding a
verdict by a jury in a Will contest that Emma G. Buttars,
the testatrix, did not have a sound and disposing mind at
the time she made her Will.

The contestants and appellants herein are grandchildren
of the testatrix and the children of her eldest son who had
predeceased her. In her Will testatrix named all her living
children leaving them her estate in equal shares and pro-
viding that if any of them should predecease her the chil-
dren of such child should take the share of the predeceased
child. But to the children of her eldest son who had died
about a month before she had made the Will she left only a
dollar each giving as her reason that her oldest son had bor-
rowed money which had not been repaid and that the sum
owed would amount to more than his share in her estate. The
Will was executed in March, 1945, and testatrix passed
away in July, 1952, when she was about 87 years old.

Proponents of the Will produced testimony by the two
witnesses to the Will, one of whom was the attorney who
drew up the Will and the other his then secretary, that the
testatrix was alone with the attorney when she told
kim of how she wanted to dispose of her property. | |
She waited in the attorney’s office, while the secre-
tary typed the Will. After the Will was prepared it was
read to her by the attorney and the testatrix then signed the
instrument in the presence of her witnesses and remarked

that was the way she wanted her Will and asked them to sign
as witnesses which they did in her presence and in the
presence of each other. The witnesses had never met the
testatrix before she appeared at the attorney’s office and
requested him to draw a Will for her. When asked whether
she had a memorandum to aid her in disposing of her prop-
erty to the beneficiaries she named, the attorney testified
that he could not recall that she had and that he also could
not recall whether she had discussed the extent or value
of her property with him. Both witnesses testified that
from their observation of her in the office she appeared to
know what she was doing and that she was not acting under
ony fraud, duress or undue influence. By this evidence the
proponents made out a prima facie case entitling the Will
to be admitted to probate and it then became incumbent
on the contestants to prove by a preponderance of evidence
that the testatrix did not have a sound and disposing mind
at the time she executed the Will or that she was acting
under fraud, menace or undue influence. In re Hanson’s
Will, 50 Utah 207, 167 P. 256.

At trial the jury returned a special verdict wherein they
found that at the time testatrix subscribed the instrument
proposed for probate as her Will she was not of sound and
disposing mind, but that she was not acting under
any fraud or undue influence. Notwithstanding this [jl
verdict the court admitted the instrument to probate
as the Last Will and Testament of testatrix. This being a
law case it was a question of fact for the jury to decide
whether testatrix had a sound mind at the time she executed
her Will. In re Hanson’s Will, supra. Since the jury found
that she did not have a sound and disposing mind at that
time, it would have been error for the court to have admitted
the proposed instrument to probate, if the evidence, viewed
in the light most favorable to contestants, would have rea-
sonably permitted such finding. Mere eccentricities and
Jack of a keen mind or ability to conduct ordinary business
may not prove a lack of testamentary capacity. As stated by

then Justice Wolfe in In re Hanson’s Estate, 87 Utah 580,
52 P.2d 1103, on page 1116:

«“« * * A person may not be capable of conducting ordinary business
because not trained in it or even if incapable mentally may in cases
be capable of making a simple will. The true test is as to whether
the testatrix had ‘sufficient mind and memory (at the time of making
the will) to remember who were the natural objects of her bounty,
recall to mind her property, and dispose of it understandingly ac-
cording to some plan formed in her mind.’ * * *”

See also In re Swan’s Estate, 51 Utah 410, 170 P. 452.
With these rules in mind we shall review the evidence.

The record discloses that at the time the Will was made
testatrix was about 80 years old and had been brought to
the lawyer’s office by Wallace Buttars, her youngest son,
who was named executor in the Will. In order to
reach the attorney’s office she had to ascend a steep [jl
flight of stairs. After reaching the office, Wallace
left her alone there and went down to the street while she
transacted the business she came for and then came back
and got her when the attorney went down and informed
him his mother was ready to leave. Testatrix lived in
Clarkston, Utah and was unable to drive a car so when-
ever she wanted or needed to go to Logan, Utah, Wallace
or infrequently one of her daughters, would drive her there.

Sometime in 1940, testatrix who was then 75 years of age
became very ill and was hospitalized for a number of weeks
suffering from kidney troubles, high blood pressure and
hardening of the arteries. After she left the hospital her
memory appeared poorer. She did not recognize some of
her grandchildren who had been away for some years on
missions for their church or had been in the armed services,
when they visited her upon their return. She suffered a
great deal from headaches and would often repeat the same
subject in her conversation. She accused some of her daugh-
ters of taking and borrowing things when they hadn’t. She
would forget where she hid things. Once she hid the silver-

ware in bed, and other times she hid edibles such as fruit,
salmon, or vegetables in the living room bookcase. She be-
came weaker physically and as time went on she depended
more and more on Wallace to aid her in her business trans-
actions, although he was not with her when she made her
transfers of her stocks and purchased bonds for her daugh-
ters. Testatvix was again hospitalized in 1944, this time
for pneumonia, and that year her children held a meeting
to discuss her condition. At that meeting an older son
suggested that a guardian should be appointed because in
his opinion their mother was not physically or mentally
capable of handling her affairs. None of the other children
wanted this done, so it was agreed that the children would
take turns coming to their mother’s home to help take care
of her and that Wallace would continue to look after her
business interests. One of the daughters testified that al-
though in 1950 it was arranged that they should be paid
for their services and the mother signed the checks for that
and other necessities she did not think her mother knew
what she was doing or knew what property she had.

When the eldest son of testatrix died she showed no emo-
tion at his funeral and about a month later executed the
Will which is contested herein, wherein she stated that the
reason she was leaving his children only $1.00 each was
because their father had failed to repay a loan of $1500
which was more than would have been his share of her
estate. In this connection it is noted that his share, if it
were equal to that of his brothers and sisters, would have
amounted to about $8000 and that there was also evidence
that the loan was probably repaid, even though testatrix
had retained the note and mortgage evidencing the loan.
lt should be further noted that there was evidence that in
the notices of her eldest son’s death testatrix was not men-
tioned among his survivors and that this hurt her very
much.

Testatrix had always been a frugal woman who believed
that one should earn what he received. Shortly after she

601

executed her Will she made conveyances of a considerable
part of her real property to Wallace and two of her younger
daughters who lived near her. She also assigned some valu-
able bank stock and bought U.S. Savings Bonds for these
daughters, giving as her reason for doing so that they had
received worthless stock from their father’s estate, of which
she was one of the administrators, as part of their share
in his estate. This stock was not worthless at the time of
the distribution but became so within a few years thereafter.
By 1951, Wallace was made his mother’s agent on her check-
ing account and she also made him a joint tenant on her
savings accounts.

The uncontradicted testimony of friends, neighbors and
tradesmen was that in their contacts with testatrix even
after her illnesses she always appeared neat and under-
stood what she was talking about; that she always knew
what she wanted or needed and would take nothing else.
The doctor who attended her in her illnesses and who saw
her on the average of at least twice a year since her illness
in 1940 until her death, testified that in his opinion she was
competent during all that time except in March, 1952, a
short time before she passed away, at which time she was
extremely ill.

The jury did not find that the Will was executed under
any undue influence or fraud. The evidence related above
is proof that testatrix was eccentric in her actions and
forgetful at times of some things, but is utterly insufficient
to sustain the contestants’ burden of proving by a pre-
ponderance of the evidence that she lacked testamentary
capacity at the time she executed the Will. This is espe-
cially so in view of the positive testimony of the subscribing
witnesses that she appeared to know what she was doing
at that time and that she was alone with the lawyer when
she made her wishes known, since the Will itself shows she
remembered who were “the natural objects of her bounty”
and that she disposed of her property “understandingly ac-

602

cording to some plan formed in her mind.” There being
no question of fraud or undue influence in the formulating
and relation of that plan to the lawyer, the mere fact that
at times she was forgetful and eccentric and was weak
physically and that after she made her Will she disposed
of a good portion of her property after a lifetime of careful
saving is no proof that at the time of making her Will she
lacked testamentary capacity. The court therefore did not
err in admitting the Will to probate in view of the complete
lack of evidence that at the time of making the Will testatrix
lacked the mind to understand what she was doing.

Affirmed. Costs to respondents.

WOLFE, C. J., and McDONOUGH, CROCKETT and
HENRIOD, J.J., concur.

603

Clarence P. MARTIN, Appellant v. Ralph L. Jones,
d/b/a Mountair Pharmacy, Respondent

a No. 7766. Decided Sept. 15, 1953. (261 P. 2d 174.)
McCullough, Boyce & McCullough, Salt Lake City, for
appellant. _

Stewart, Cannon & Hanson, Edward M. Garrett, Ernest
F. Baldwin, Jr., Salt Lake City, for respondent.

PER CURIAM.

This case was reargued upon rehearing granted. The
facts and the law have been re-examined and the court
has been fully apprised in the premises.

A majority of the court is of the opinion that the pre-
vious decision in this case, reported at 253 P.2d 359, should
be affirmed for the reasons stated therein. It is so ordered.

HENRIOD, J., dissents.

HENDRICKS, D. J., dissents for the reasons set forth
in his former dissenting opinion.

CROCKETT, J., having disqualified himself, did not par-
ticipate herein.

a

104.

PETERSEN V. ALKEMA, et ux.
No. 7868. Decided Sept. 26, 1958. (261 P. 2d 175.)

Ray S. McCarty, Salt Lake City, for appellant.

Samuel C. Powell, Derrah B. Van Dyke, Ogden, for re-
spondents.

McDONOUGH, Justice.

Appeal from a judgment entered pursuant to an order
granting defendants’ motion for summary judgment against
plaintiff and in favor of defendant. The material facts
deduced are uncontradicted.

Defendants owned and operated a fruit farm near Ogden,
Utah. During the harvest season transient workers were
often hired by defendants to pick fruit. Such workers were
usually recruited from an Ogden employment office early
every morning and were returned to town after completion
of the day’s work. The growers furnished picking buckets
and standard eight-foot, three-legged picking ladders from
which the pickers operated. On the 24th of July, 1951, de-
fendants hired five men, one of whom was plaintiff, to pick
apricots. The workers were told to “pick out a row of trees
and a ladder and go to work.” Plaintiff selected a particular
row of trees, took the ladder standing in the row, and began
picking. Plaintiff stated that before beginning work he set
the ladder up and shook it to make sure it was tight, would
not tip over, and was not “rickety.” Some time later, after
plaintiff had picked thirty-two bushels of apricots and while
picking his last bushel for the day, the ladder collapsed and
plaintiff was injured in the fall.

Plaintiff sues claiming that defendants were negligent
in not supplying safe tools with which their employees
worked and in failing to administer proper first aid after
the accident. There being no material controversy over

these facts, the question becomes whether, as a matter of
law, the plaintiff could not recover under these circum-
stances, with the most favorable inferences of fact, so as
to justify the summary judgment.

In the case of Proctor v. Town Club, Inc., 105 Utah
72, 141 P.2d 156, we held that a ladder is a simple tool with-
in the meaning of the simple tool doctrine, which is in
accordance with the majority view among the states.* It
was under this holding, undoubtedly, that the lower court
granted defendant’s motion for a summary judgment. How-
ever, the mere fact that a ladder is classified as a simple
tool does not exonerate the employer from liability under
the simple tool doctrine.
“+ * * Tt does not necessarily follow that because tools or ap-
pliances are simple the servant for that reason, and under all cir-
cumstances, assumes the risk as a matter of law. The law imposes
a duty on the master to furnish and provide his servants with ‘such
appliances as are reasonably safe and suitable’ to do the work re-
quired of them.” Russell v. Borden’s Condensed Milk Co., 58 Utah
457, 463, 174 P. 688, 685.

Under the simple tool doctrine as recognized in this
jurisdiction, the employer retains the duty to supply safe
appliances for use in his regular business. Guitron v. Ore-
gon S. L. R. Co., 62 Utah 76, 217 P. 971; Reynolds
v. American Foundry and Machine Co., 121 Utah [yl
130, 1952, 239 P. 2d 209. The effect of the simple
tool doctrine is not to render the master not guilty of a
breach of duty, but rather to impose upon the servant a
duty of inspection, reasonable under the circumstances,
breach of which duty will provide the master with a defense
to an action for negligence.

The employee under the ordinary simple tool case, is ina
better position than the employer to judge of defects in
the tools which he fully understands and which he uses

1See Proctor v. Town Club, Inc., 105 Utah 72, 77, 141 P.2d 156, 158.

607

frequently in the course of his employment; he is
chargeable equally to the employer with knowledge | |
of all obvious or readily discoverable defects. Proctor

v. Town Club, Inc., supra. The simple tool doctrine operates
not because the employee assumes the risk of injury from
defects in such tools, but because the employer has the
right to rely upon the employee to inform him of any ob-
vious defects, or to not use the tool if it is unsafe. His non-
liability, then, rests upon the assumption that the employee
is in as good, if not better, position to observe the defect
as the employer.

The plaintiff in the present case was a day laborer, paid
by the bushel; thus, it might be considered unreasonable
to require him to make the same inspection required where
an employee uses the same simple appliance day after day,
with an opportunity to observe any deterioration or develop-
ing weakness in the ladder. Further, the ladder in this
case was five or six years old at least, and we have no evi-
dence upon the length of life to be expected from a ladder
of this type nor whether the age of the instrument was
sufficient to put the employer on notice of deterioration,
a fact of which plaintiff, of course, had no knowledge.
Unlike the Proctor case, supra, the ladder in this case,
was an important tool in defendant’s business, and we
held in Reynolds v. American Foundry & Machine Co.,
supra, that in such a case, a supplier of work tools is held
to a higher standard of care than one who furnishes the
chattels gratuitously and not for his business purposes.?

2Tt might well be reasonable to impose the duty of prudent in-
spection upon an employer who secures such tools for use in the
occupation in which he is generally engaged, and yet be unreasonable
to fasten liability for failure to so inspect, upon one who furnishes
a, simple tool or instrumentality to an artisan engaged to do a definite
job in which the latter is skilled and to whom the proper use of such
instrumentality and the possibility of latent defects therein as well
as methods of discovery and remedy thereof, would ordinarily be
much better known than to the one for whom the work is performed.”

. Proctor v. Town Club, Inc., 105 Utah 72, 81, 141 P.2d 156, 158, 160.

Under these circumstances, it would appear questionable as
to whether the simple tool doctrine would apply at all.

We have no evidence as to the nature of the defect, an
important factor in placing responsibility for the breakage
of the ladder. Was it the type of defect that the
employee was under a duty to discover in view of I
the fact that his opportunity for inspection was
limited? Was it the type of defect that the employer, on
notice of the age of the ladder, could have discovered on
proper inspection?

At 145 A.L.R. 543, a summation of the considerations
under the simple tool doctrine appears as follows:

“x % © Jt does not seem entirely logical, however, to say that
the employer is under no obligation to exercise ordinary care to
furnish reasonably safe appliances simply because those appliances
chance to be of a simple character, and an analysis of the cases
indicates that the mere simplicity of the tools does not alone exempt
the employer from all care or relieve him from all liability under
all circumstances; among factors that must be taken into considera-
tion are the capacity, intelligence, and experience of the employee,
the character of the defects, the employee’s opportunity for detecting
them, or the circumstances calculated to withdraw his attention from
them.”

In the present case, a summary judgment was granted
to the defendants upon depositions of both parties, each
taken by the adverse party for the purpose of discovery.
Quite naturally, the evidence upon the case is deficient in
many respects and upon these deficiencies turns the ques-
tion of whether or not, as a matter of law, the employer
is free from responsibility for the accident which occurred
as a result of the breaking of a work tool supplied by him.

While in a given case a tool may be so simple and the
employee so familiar with it that the court would be cor-
rect in holding as a matter of law that he cannot recover,
the case at bar is not such a case, but one in which the
court should have heard all of the evidence before deter-

mining whether there was a breach of duty by the plaintiff
so as to nullify a possible breach of duty by the defendant.

It remains to consider appellant’s second assignment
of error. For his second cause of action, plaintiff claims
that defendants had the duty to provide medical assistance
and first aid to the plaintiff, and their failure to do so was
actionable, and cites in support of this contention the rule
of Szabo v. Pennsylvania R. Co., 182 N.J.L. 331, at page
40 A.2d 562, at page 563 and quotes the language therein:

“It is conceded that in this and other jurisdictions the law is, that
in the absence of a contract or a statute, there rests no duty upon
an employer to provide medical service or other means of cure to an
ill, diseased or injured employee, even though it result from the
negligence of the master * * *,

“In our judgment there is a sound and wise exception to this rule,
founded upon humane instincts.

“That exception is, that where one engaged in the work of his master
receives injuries, whether or not due to the negligence of the master,
rendering him helpless to provide for his own care, dictates of human-
ity, duty and fair dealing require that the master put in the reach
of such stricken employee such medical care and other assistance as
the emergency, thus created, may in reason require, so that the
stricken employee may have his life saved or may avoid further bodily
harm. This duty arises out of strict necessity and urgent exigency.
It arises with the emergency and expires with it.”

The rule contended for when applied to the facts of this
ease obviously renders the ruling of the lower court in
this matter correct. There was no emergency: plaintiff
was fully conscious and minimized his injuries him-
self when reporting the accident to defendant, de- t
fendant was justified in thinking that plaintiff was
well able to care for himself, and further, driving him to
the city where he could obtain medical care was sufficient
under the requirement that he “put in the reach of such
stricken employee such medical care’ as was necessary
under the circumstances. Hence the summary judgment
of the lower court on this cause of action is affirmed.

For the reasons stated, the summary judgment as to
the first cause of action should be vacated and the cause
remanded for trial. It is so ordered. Costs to appellant.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,
JJ., concur.

FORREST v. EASON et al.
No. 7891. Decided Sept. 16, 1958, (261 P. 24 178.)

W. D. Beatie, Salt Lake City, for appellant.

Stewart, Cannon & Hanson and Ernest F. Baldwin, Jr.,
Salt Lake City, for respondents.

HENRIOD, Justice.

Appeal from a judgment entered on a directed verdict
against plaintiff, who sued defendant, licensed naturopathic
physician, for an alleged brain injury. Plaintiff claimed
liability on account of 1) defendant’s lack of licensed au-
thority to practice minor surgery, and 2) his course of
treatment involving injections of fluids which plaintiff
contends constituted failure to use ordinary care, skill
and knowledge. Affirmed, costs to defendant.

As to 1): Whether defendant was licensed to practice
minor surgery is not clear, but immaterial here. The record
does not indicate the plaintiff sustained the burden of
proving defendant negligent. A plaintiff, unable
io rely on any res ipsa loquitur theory, must prove [i
negligence in a case allegedly involving malpractice.+

1Jackson v. Colston, 1949, 116 Utah 295, 209 P.2d 566; Walkenhorst
v. Kesler, 1987, 92 Utah 812, 67 P.2d 654; Baxter v. Snow, 1981, 78
Utah 217, 2 P.2d 257.

Civil liability does not depend necessarily on lack of
statutory licensing qualification,? but rather upon failure
to exercise that degree of care and skill considered proper
by correct and accepted standards of the profession in-
volved, or, stated otherwise, failure to use that care exer-
cised by skilled professional men doing like work in the
vicinity?

As to 2): Viewing the evidence in a light most favor-
able to plaintiff, as we must,‘ it appears that plaintiff, 62,
had been a cleaning woman in a local building for 6 years,
that she left such employment 2 years before her
alleged injury on account of an arthritic knee con- i
dition, Thereafter she continued to suffer and con-
sulted defendant, who, between Aug. 4 and Dec. 27, 1950,
gave her some 48 treatments of varying types, including
heat applications, manipulation, and some 23 injections
of either vitamins, procaine hydrochloride, peni or
desoxycorticosterone, as he deemed best. One such injection
was attempted in the vein of the left arm without success
on Nov. 6, some 7 weeks before disablement, causing con-
siderable discoloration and swelling for about 2 weeks,
and soreness for a protracted period. It is uncontroverted
that such failure to inject is not uncommon, and also, that
the defendant had no difficulty in penetrating the vein
of the right arm. No evidence directly connects such in-
cident to the ultimate injury, nor is plaintiff seeking dam-
ages for injury to the arm. On Dec. 27, plaintiff sought
treatment, complained of a headache before receiving the
same, received a vitamin shot in the arm, and although
‘denied by defendant, testified that she received a second

"McKay v. State Board of Examiners, 1988, 108 Colo. 305, 86
P.2d 232,

*Bdwards v. Clark, 1988, 96 Utah 121, 88 P.2d 1021; McKay v.
State Board of Examiners; supra.
‘Finlayson v. Brady, 121 Utah 204, 1952, 240 P. 2d 491.

injection of some substance in another part of the anatomy.
After resting, she called a cab, said she felt terrible, and
that her head was nearly killing her. She was assisted
into the cab, taken home, and paid her fare. She insisted,
however, that she remembered nothing for 3 weeks after
she entered the cab.

Her headaches continued, according to her sister, and
plaintiff became progressively worse until five days later
she appeared to be in a death struggle following a convul-
sion, according to Dr. Day, physician summoned, who ad-
ministered stimulants and who attended her almost daily
thereafter until mid-April, when she was able to get around
with the aid of a cane, but without the ability to do house-
work. At trial time about 6 months later, she was able to
get about, had experienced an improvement, but was un-
able to get around as well as she had been able to in August,
1950 when she first consulted defendant.

Whether the injection of fluids may have been in dero-
gation of accepted professional standards is undetermin-
able from this record, which is devoid of facts indicating
that their use directly was responsible for her injury. Best
that can be said is that when Dr. Day first examined plain-
tiff there was evidence that injections had been made, but
he could not determine what substances had been injected,
and no evidence was adduced as to how the injections were
given. Dr. Day said the brain injury could have resulted
from several causes, naming them, but that he was “of the
impression” that the injury “probably” was caused by an
emboli due to bacteriemia or some soluble substance that
could be injected into the system, — such as bacteria (from)
a. dirty needle or from oil in penicillin or something of that
nature that could reach the circulation through the lung.
He admitted that all penicillin did not contain oil.

Counsel asked Dr. Day the following hypothetical ques-
tion:
“From what you observed first of Mrs. Forrest’s physical condition
as of Jan. 2, 1951, can you tell me * * * if you have an opinion

as to whether or not, from what you observed, that the administration
of substances by reason of injections had been in a careful and
skillful manner in accordance with that of a reputable physician
and surgeon in and about Salt Lake City, Utah?” (Emphasis added.)

An objection to answering the question was sustained
on the ground that the doctor had testified only as to what
substances might have caused the injury, not as to the
manner in which the injections were made, hence no
proper foundation was laid. There is no evidence | |
in the record as to the manner of making injections,
and plaintiff’s pleadings attribute liability to use of certain
fluids, not the manner of their injection. The answer, there-
fore, would appear objectionable.®

Giving the case to the jury under such circumstances,
with no showing that use of the substances was not in ac-
cordance with accepted standards of professional skill, with
no showing as to the manner of injection, and with no
showing that any of the substances were deleterious, allows
the jury to indulge in that type of speculation unpermitted
by this or other courts generally.®

Counsel lists authorities holding a treatment may indicate
so plainly a lack of due care as to dispense with expert
testimony.’ We agree, but this is not such a case. Plain-
tiff did not show that the treatments plainly indi-
cated unacceptability under standards of skill es- I |
poused by the professions authorized to treat the
ailment, and adduced nothing to show such treatments in

520 AmJur., Evidence, p. 667, Sec. 795.

*Jackson v. Colston, supra; Edwards v. Clark, supra; Anderson v.
Nisxon, 1948, 104 Utah 262, 189 P.2d 216; Passey v. Budge, 1934, 85
Utah 37, 88 P.2d 712; Baxter v. Snow, supra; Peterson v. Richards,
1928, 73 Utah 59, 272 P. 229.

‘Baxter v. Snow, supra.

615

fact resulted in injury. To charge a professional man under
such circumstances would make him an insurer. We believe
this case to be of the type requiring expert testimony.®

Plaintiff asserts further that expert testimony is un- |
necessary where an undiseased portion of a patient’s body
is injured by one’s negligence,® obviously alluding to the
injury to plaintiff’s left arm occurring on Nov. 6. Granted,
but the fallacy of, dnd a complete answer to plaintiff's
assertion, is that plaintiff sued not for damage to the arm,
but to the brain. The question of the need for expert testi-
mony in such event, is quite immaterial.

Finally, plaintiff’s counsel points out that if an injury
can be attributed to two or more causes, one of which is the
negligence of defendant, a jury question arises. He calls
attention to the disputed evidence as to whether defendant
gave one or two injections on Dec. 27. Our answer is that
negligence cannot be assumed simply because two, instead
of one, injections were given; the burden still remaining
on plaintiff affirmatively to show negligence, which ap-
pears not to have been done here.

WOLFE, C. J., and McDONOUGH, CROCKETT, and
WADE, J.J., concur.

8Anderson v. Nixon, supra; Baker v. Wycoff, 1938, 95 Utah 199,
19 P.2d 717; Wigmore, Evidence, (2nd ed.) Vol. VII P. 458, Sec. 2090.

*Walkenhorst v. Kesler, supra; Morrison v. Lane, 1935, 10 Cal.
App. 2d 634, 52 P.2d 580; Baxter v. Snow, supra.

CLAUSSE v. FIRST SECURITY CORP. et al.
No. 7980. Decided Sept. 80, 1953. (261 P. 2d 375.)

Herbert B. Maw, Salt Lake City, for appellant.

Young, Thatcher & Glasmann, Ogden, Fabian, Clendenin,
Moffat & Mabey, Peter W. Billings, Salt Lake City, for
respondents.

WOLFE, Chief Justice.

Plaintiff, Marie C. Clausse, as administratrix of the es-
tate of Leon L. Clausse, deceased, sued First Security Bank
of Utah and the American National Insurance Company,
defendants, to recover $2,000 claimed as due and owing
under an alleged oral contract of mortgage insurance be-
tween deceased and defendants. From a judgment of dis-
missal in favor of each of the defendants, plaintiff appeals
urging that the trial court erred (1) in striking certain
testimony of plaintiff and her son, Roscoe Clausse, and (2)
in granting a motion of dismissal in favor of each of the
defendants on the ground that there were insufficient facts
to warrant the case being submitted to the jury. It is not
clear from the record whether the court did strike any of
the testimony of the plaintiff and her son. However, con-
sidering all the evidence, it is clear that the trial court did
not err in entering a judgment of dismissal in favor of each
of the defendants.

About December 18, 1948, Mr. and Mrs. Clausse, dece-
dent and plaintiff, respectively, made application to defend-
ant Bank for a loan of $2,500 to be secured by a mortgage
on their home. On the afternoon of December 18, 1948, Mr.
Carl Porter and Mr. S. T. Jeppeson, Vice Presidents of de-
fendant Bank, visited the Clausse home to appraise it.
They found the house to be of satisfactory security value
and told the Clausses that the loan and mortgage would be
approved. Mrs. Clausse testified that at that time Mr.
Jeppeson stated to her husband that the Bank had a plan
with an insurance company that would take care of the
mortgage in case anything happened to him; that he did
not write the insurance plan but he would send out a
representative to write the plan; that payments could be
added to the mortgage installments and be paid to the bank
along with payment of the mortgage; that the first payment
could be made on the first of February; and that her hus-
band told Jeppeson that he would like to take the insurance
but wanted coverage of only $2,000 instead of $2,500.

618

Mrs. Clausse further testified that at this time Jeppeson
and Porter handed the deceased a pamphlet entitled “Mort-
gage Cancellation Plan.” The first page of that pamphlet
states in bold face type, “Mortgage Cancellation Plan —
a home for the family.” The text in substance explains
the desirability of having a home, mortgage free, and points
up the problems a family is faced with when the bread-
winner dies and the family home remains mortgaged. The
brochure offers the First Security Mortgage Cancellation
Plan as the solution to the problem arising from the death
of the breadwinner in a family. Inquiries concerning the
plan are solicited.

Sometime between the 18th and the 23rd of December,
1948, Mr. and Mrs. Clausse executed a note for $2,500 and
a mortgage on their home in favor of the Bank. The note
was due January 1, 1954, and was made payable in monthly
installments of $49.50 commencing in February, 1949. The
monthly installments included interest but did not include
any premium for insurance.

Mrs. Clausse testified that when she delivered the instru-

ments to the Bank she again talked with Mr. Jeppeson. She
testified:
“Mr. Jeppeson told me that Lee [decedent] had authorized him
to go ahead with the insurance, He would send the representative
out, and it would be added to the installments to be paid at the bank
and that he would send him out, that he didn’t write the insurance,
the mortgage insurance, but he would send the representative out
to the house.”

About the 27th day of December, 1948, plaintiff and her
husband received a letter bearing the heading, “Real Estate
Management Company,” which company on or prior to that
date was absorbed by the Bank and which for the purposes
of this action may be considered the Bank. The material
portions of the letter are set out below: .

“In line with the policy of many loan companies * * *, we have
worked out with the American National Insurance Company a plan,

which at a very nominal cost, will guarantee the payment of your
mortgage for you in case of your death, and at the same time, will
be a savings plan for you.

* * * * * * * *

“This protection can be obtained for you entirely upon your approval,
leaving you to make the decision whether or not you want to carry
it until after you have had an opportunity to examine the contract.
I am asking Reynolds Blackington, local representative of the
American National Insurance Company, to call on you in the near
future and explain this plan to you. You may listen to his explana-
tion without feeling that he is there to sell you additional life in-
surance, but rather to explain to you a plan which be believe is
very desirable, and to give you the opportunity to carry it, if you
so desire.

“Very truly yours,

“J, D. Madson

“Assistant Secretary.”

At the time of the occurrences relating to this contro-
versy, J. D. Madson was an assistant Vice President of
the defendant Bank.

January 5, 1940, Reynolds Blackington, the representative
of the American National Insurance Company mentioned in
the Madson letter, visited the Clausse home. Mrs. Clausse
testified that Blackington stated that Mr. Jeppeson had.
asked him to come out and go over the plan. Mrs. Clausse
further testified:

“They [Blackington and decedent] went over the questions [of the
insurance application] together, and Mr. Blackington explained that
it would be paid along with the mortgage at the bank each month,
and Lee told him that he had already made arrangements with
Mr. Jeppeson to take care of them at the Bank, and Mr. Blackington
said that it was O. K. that they handled all of them.”

Mrs. Clausse stated that the deceased read the application
for insurance and signed it. She testified that the insurance
doctor examined her husband the following day and pro-
nounced him “*** in perfect condition ***.” She further
stated that Blackington said that the plan “*** would take

620

effect immediately, all during the period of the mortgage.”
On cross-examination she stated that it was to take effect
“«*** immediately when he was there that night.”

At various times during the cross-examination of Mrs.
Clausse the following interchanges with counsel took place:

“Q, * * * you understood, did you not, that what Mr. Jeppeson
said was that if you and your husband desired to avail yourself of
a plan, which was available that you might take out an insurance
policy upon his life; that was it? A. That is correct, it was—

“Q. A life insurance policy on the life of either yourself or your
husband, or both, as you might desire; that was the substance of
it? A. Well, yes, to cover, in case anything happened to him, it
would cover the mortgage.

* # * * * * * *

“Q. In other words, a life insurance policy in case he died, then
there would be money available from the proceeds of the policy to
pay it; that was it, wasn’t it? A, He was insured: that was it.

* * * * * * * *

“Q. So you knew that the Bank wasn’t going to pay it unless
there was a policy issued by the Insurance Company, so that the
Insurance Company would pay the policy? didn’t you? A. Yes.

“Q. Did you understand that the Bank was going to pay that
policy? A. No, we was to make payments at the Bank, where they
would reimburse the insurance company.

* = * * * * * *

“Q. You understood that Mr. Jeppeson didn’t write any insurance,

didn’t you? A. Yes.

“Q. All he would do would be to send the insurance agent out to
your husband’s home if you people wanted to act on it: wasn’t that
it? A. He worked with the First Security Bank, yes.”

The testimony of Roscoe Clausse is substantially in ac-
cord with the testimony of plaintiff.

Mr. Clausse died on January 24, 1949, at which time no
premium payments had been made by him to either the
Bank or the Insurance Company. The defendant Insurance
Company had issued no policy.

|

Plaintiff contends that from the foregoing evidence it
may be inferred: (1) that an offer of mortgage insurance
had been made by Mr. Jeppeson and Mr. Porter to the de-
ceased and that the offer was accepted by him; (2) that the
consideration (monthly premiums to be paid by the deceased
to the Bank) had been agreed upon and the deceased had
authorized the Bank to add the insurance premiums to his
monthly payments on his note and mortgage, in return for
which the Bank agreed to cancel the mortgage in case of
his death; (3) that the insurance took effect on the signing
of the note and mortgage.

Contrary to plaintiff's contentions, the trial court cor-
rectly entered a non-suit in favor of defendant Bank. There
is insuffiicent evidence to warrant a finding of (1) an oral
offer on the part of the Bank to insure the mortgage,
and (2) an acceptance on the part of the decedent | |
of the purported oral offer of the Bank. The evidence
does indicate that the agents of the Bank “sold” decedent
on the “idea” of taking out a policy of insurance on his life,
the proceeds from which could be used to cancel the mort-
gage in the event that he died. It is clear that the agents
of the Bank, undertook to send to deceased a representative
of the American National Insurance Company to write the
insurance. There is no evidence that an oral contract of
“mortgage insurance” took effect upon the execution of
the note and mortgage by the Clausses as is contended by
plaintiff. The letter written by Mr. Madson on December
27th to the Clausses indicates that the insurance was at that
time yet to be written. The visit of Mr. Blackington on the
5th of January is probative of the absence of insurance
prior to that time. Plaintiff answered affirmatively the
question:

“So you knew that the Bank wasn’t going to pay it [the mortgage]
unless there was a policy issued by the Insurance Company, so that
the Insurance Company would pay the policy; didn’t you?”

She further testified that she knew that Mr. Jeppeson didn’t
write any insurance and that all he would do would be to
send the insurance agent out to her home. Such evidence is
insufficient to make out the elements of an oral contract
of mortgage insurance between the bank and deceased.

The court correctly entered a judgment of dismissal in
favor of defendant Insurance Company. The evidence
shows that Mr. Blackington visited deceased on the 5th
of January, 1949, about 12 days after the Clausses
had executed the note and mortgage in favor of the | |
Bank. He indicated that Mr. Jeppeson had sent him.

Mrs. Clausse testified that deceased read and signed a
written application for insurance. The Bank was made
beneficiary. No premium was paid or tendered by Mr.
Clausse at the time the application was signed. The appli-
eation provided in paragraph (e) thereof:

“Insurance liability of the company by reason of this application
shall be created only as follows: One. Either in accordance with the
terms of the aforementioned conditional receipt properly executed
and delivered; or Two. By complete and concurrent fulfillment at
the time of any policy delivery of three (3) conditions as follows:
(i) Issue of such policy and actual delivery of same during the life-
time and good health of the person to be insured must have taken
place; (ii) The whole premium (or regular installment thereof)
must have been settled for and accepted by the Company or its
authorized agent; and (iii) Neither the Company nor any person,
the Company’s agent or not, shall by such delivery or otherwise
determine at the time thereof the existence of such good health,
but acceptance of such policy by the undersigned shall be deemed
representation that then and theretofore no change in such good
health has taken place since the date hereof.”

The conditional receipt was never issued. No policy was
ever issued or delivered prior to Mr. Clausse’s death. Coun-
sel for defendant Insurance Company maintains that the
application represents the written integration of the parties
and their rights and duties are controlled by the terms
therein stated. Such is generally held to be the law. See
Field v. Missouri State Life Insurance Company, 77 Utah 45,

290 P. 979. Plaintiff makes no claim against the insurance
company based on the application for life insurance. She
argues that the application was executed merely because
it was one of the things which had to be done by the de-
ceased in order that he might receive protection on his
mortgage under the Mortgage Cancellation plan which had
been worked out between the Bank and The Insurance Com-
pany. This contention finds no support in the evidence as
heretofore set forth. In fact, it is contradicted by the
testimony of plaintiff elicited on cross-examination where-
in she indicated (1) the policy intended was one for life
insurance, (2) the proceeds of the policy were to be used
to pay the mortgage (8) the bank was not going to pay the
mortgage unless a policy was issued by the insurance com-
pany, (4) she knew Mr. Jeppeson (a vice president of the
Bank) did not write insurance. In addition it is signifi-
cant that the amount of insurance sued for is $2,000 and
the amount of the mortgage was $2,500. This fact is incon-
sistent with the contention of the plaintiff that the Bank
agreed to cancel the mortgage.

On the facts heretofore set forth a reasonable mind could
not find that the requisite steps necessary to impose lia-
bility on defendant Insurance Company had been complied
with. Nor is there any evidence of omissions by defendants
of the doing of an act which they promised or had the
power to do upon which a case could be built. This is the
usual situation where the obligation of the Insurance Com-
pany awaits upon the consummation of an effective writ-
ten contract. .

. Affirmed. Costs to respondents.
McDONOUGH, CROCKETT and HENRIOD, J.J., concur.

WADE, Justice (dissenting in part and concurring in
part).

. I concur with the dismissal as to the Bank but I think
the evidence would sustain a finding of liability against the

624

insurance company. The trial court having granted a non-
suit, if the evidence when considered in its most favorable
light to the plaintiff would reasonably support the finding
of facts sufficient to sustain a judgment against the de-
fendants or either of them, the case should be reversed.

Mr. Jeppeson represented to the decedent that the Bank
had a plan with the insurance company that would take
care of the mortgage in case anything happened to him, and
that payment for this plan could be added to the mortgage
installments and paid to the bank along with the payments
cn the mortgage with the first payment to be made on the
first of February. This representation was followed by a
letter of December 27, 1948, from the bank which stated
in part:

«* « % we have worked out with the American National Insurance
. Company a plan which * * * will guarantee the payment of your
mortgage for you in case of your death * * *,
“This protection can be arranged for you entirely upon your approval,
leaving you to make the decision whether or not you want to carry
it until after you have had an opportunity to examine the contract.
I am asking Mr. Reynolds Blackington, local representative of the
American National Insurance Company, to call on you in the near
future and explain this plan. * * *”

From these representations the deceased would be justi-
fied in believing that if he made application for insurance
under this plan the mortgage would be paid therefrom,
to the extent of the amount of the insurance, in case of his
death and that the insurance would be issued as soon as
possible after he gave his consent or approval giving him
the option to cancel it if he so desired after examining the
policy. He was definitely assured that upon his approval
the policy would take effect immediately without waiting
for the first payment.

On January 5, 1949, pursuant to those representations
Blackington the insurance company’s agent called and re-
peated these representations. He again asserted that the
premiums were to be paid along with the regular monthly

payments on the mortgage to the Bank. The deceased ap-
proved the policy for $2,000 and after reading the applica-
tion deceased signed it and took the physical examination
the next day wherein he was pronounced in perfect condi-
tion. The deceased, at that time, had complied with every
condition that he was requested to meet in order to make
the policy effective. He had been assured that upon meeting
such requirements the policy would go into effect immedi-
ately, but no policy nor conditional receipt required by the
application to make the insurance effective had been issued
until nineteen days had elapsed when the decedent un-
expectedly died. I think the evidence is such that it could
reasonably be inferred therefrom that had deceased lived
until the first premium payment was made the insurance
company would have claimed that the insurance had been
effective from the date of the application and would have
charged a premium thereon from that date.

If such is the case then the insurance company under

the prevailing opinion had it within its power to withhold
the issuance of the policy or of the conditional receipt until
after the premium had been paid and then choose in accord-
ance with its interest at that time whether or not to claim
that the insurance had been in effect from the date of the
application to the date that the first payment became due.
Thus, it could collect the insurance premium if at the time
the first premium became due the insured was in good
health but could refuse to pay the policy in case he died in
the meantime, if such is the case a grave injustice has been
done to the deceased’s family.

Clearly it would be a reasonable inference from the rec-
ord that both the Bank’s agent and the agent of the insur-
ance company represented that the insurance would become
effective upon the approval of the deceased and his passing
the physical examination, and that upon his complying with

“these requirements the insurance company would take the
necessary steps to make the insurance policy effective im-
mediately but that 19 days had elapsed before his death

which would give ample time for the insurance company to
make the policy effective had it lived up to its agreement,
but that it had failed to live up to its agreement. This is not
@ ease where the agents of the insurance company have
made representations beyond their authority to make for
there can be no doubt that the ordinary insurance company
agent (and this includes the agents of the bank in this
case) have authority to represent that an insurance policy
will be issued and made effective immediately upon the ap-
plicant meeting the company’s requirements. Here the fail-
ure seems to be on the part of the insurance company to
live up to its agreement and either issue the conditional
receipt or issue the insurance policy immediately after the
deceased had met all the requirements to be performed by
him in order to make the policy effective. Under such
circumstances I think we should hold that the policy went
into effect regardless of the failure on the part of the
insurance company for it should not be allowed to avoid
liability contrary to its agreement merely because it failed
to comply with that agreement.t

1See Gressler v. New York Life Insurance Company, 108 Utah 182,

* 168 P.2d 324, 164 A.L.R. 1047 and Parker v. California State Life

Insurance Company, 85 Utah 595, 40 P.2d 175.

627

PAUL et al. v. KIRKENDALL et al.
No. 7957. Decided Oct. 8, 1953. (261 P. 2d 670.)

Howell, Stine & Olmstead, David L. Stine, Glenn W.
Adams, Ogden, Donn B. Downen, Jr., Los Angeles, Cal.,
for appellants.

Young, Thatcher & Glasmann, Paul Thatcher, Ogden,
Milo V. Olson, Los Angeles, Cal., for respondents.

McDONOUGH, Justice.

Appeal from a judgment awarding plaintiff $20,000 for
damages arising out of an automobile collision, for which
defendant admitted liability, and from the trial court’s
denial of a motion for new trial on the basis of excessive
damages.

629

Appellant claims here that damages awarded were “so
excessive as to appear prejudicial.” Rule 59(a) (5), Utah
Rules of Civil Procedure, provides that a new trial may
be granted on grounds of excessive or inadequate
damages, appearing to have been given under the TE
influence of passion or prejudice. It is not enough,
under this rule nor under the code provision which it sup-
planted, merely to allege that the amount itself is excessive.
The amount of the verdict is ordinarily a matter exclusively
for the jury and on the ground of adequacy of the verdict
alone, the court may not interfere with the jury’s verdict
unless it clearly appears that the award was rendered under
misunderstanding or prejudice. If inadequacy or exces-
siveness of the vedrict presents a situation that such in-
adequacy or excessiveness shows a disregard by the jury
of the evidence or the instructions of the court as to the
law applicable to the case as to satisfy the court that the
verdict was rendered under such disregard or misappre-
hension of the evidence or influence of passion or prejudice,
then the court may exercise its discretion in the interest
of justice and grant a new trial. Saltas v. Affleck, 99 Utah
881, 105 P.2d 176; Walkenhorst v. Kesler, 92 Utah 812,
67 P.2d 654; Miller v. Southern Pacifie Co., 82 Utah 46,
21 P.2d 865. Therefore, in reviewing the trial court’s
ruling denying defendant’s motion for new trial on grounds
of excessiveness of damages awarded by the jury’s ver-
dict, this court is limited to a determination of whether
such a ruling was an abuse of discretion. The Supreme
Court is slow to interfere with a trial court’s ruling grant-
ing or refusing a new trial on questions relating to dam-
ages. Hirabelli v. Daniels, 44 Utah 88, 188 P. 1172; Chate-
lain v. Thackeray, 98 Utah 525, 100 P.2d 191. The ques-
tion here on appeal, then, is a determination of whether the
damages awarded bear no proper relation to the wrong
suffered as shown by the evidence and in accordance with
the instructions of the court so that this court may exer-
cise its power to set aside the verdict of the jury.

Irene Paul was awarded $11,800 general damages,
Charles J. Paul was awarded $200 for damage to his auto-
mobile and $5,000 for loss of his wife’s services, and there
was a further award of $3,000 special damages to Irene
and Charles J. Paul. Appellant complains that the gen-
eral award to Irene Paul was excessive in view of the fact
that she has a long history of physical disorder, dating
from the time she was 18 years old to her present age of
40. His second contention is that the award of $5,000 to
Charles J. Paul for loss of his wife’s services is excessive
inasmuch as the $3,000 special damages apparently in-
cluded the cost of household help up to the time of the trial.

Generally the evidence is not in conflict; respondent
Irene Paul made no effort to conceal the fact that she had
always been a nervous person and that she had undergone
treatment for various ailments including sinus trouble,
kidney disorders, and unusual complications resulting from
pregnancy, childbirth, and miscarriages. She testified,
however, that in spite of these difficulties she had always
accomplished the duties of housewife without help before
the time of the accident and that since the accident and

“ subsequent operation on her spine, she had been confined
to her bed and even at the time of the trial was unable to
perform the heavier work of keeping house and was pres-
ently wearing a brace to immobilize her back to permit
fused vertebrae to strengthen. There was some conflicting
evidence as to whether or not the operation on her spine,
the purpose of which was to eliminate a joint between two
vertebrae of her back, was a necessary operation and if
it was necessary, whether it became necessary by reason
of the accident or the previous illnesses. The jury had
before them the testimony of a number of doctors testi-
fying on both sides of the case and evidently concluded that
the operation was proximately required as a result of the
injury to her back received in the accident.

There was a great deal of testimony regarding the pain
suffered from the time of the accident to the time of the

631

operation and subsequent thereto in addition to Mrs. Paul’s
condition prior to the accident. The court instructed

the jury that if they should find the plaintiff entitled [i
to a verdict they should assess the damages suffered as a
proximate result of defendant’s negligence “such sum
as will compensate said plaintiff, Irene Paul, reasonably
for any pain, discomfort, fears, anxiety, and other mental
and emotional distress” and for “such like detriment, if
any, as she is reasonably certain to suffer in the future
from the same cause.” Appellant does not object to this
instruction nor does it appear that the jury disobeyed or
misconceived the instruction of the court. There can be
no fixed rule to measure the amount of damages to be
awarded for pain suffered; the matter is properly left to
the sound discretion of an unprejudiced jury, Hirabelli v.
Daniels, supra, and the jury is allowed great latitude in
assessing damages for personal injuries. Duffy v. Union
Pac. R. R. Co., Utah, 218 P.2d 1080. The elements which
the jury could properly consider in arriving at a figure
which, of course, can only approximate compensation to the
plaintiff, are loss of wages, permanent disability, loss of
bodily function, disfigurement and prolonged pain and
suffering. Duffy v. Union Pac. R. R. Co., supra. In this
case, the testimony of the operating surgeon was that the
purpose of the operation was to reduce the continuous pain
in the patient’s back, and that improvement could be ex-
pected up to one year after the fusion operation but that
it was common for some ache or pain to continue and that
the back would naturally be less flexible than normal. Mrs.
Paul is 40 years old; the jury watched her movements
and heard her testimony as to the pain she was suffering
nearly one year after the operation. In view of her present
life expectancy, it cannot be said that the jury acted arbi-
trarily in fixing the award for her future pain and suf-
fering plus the distress suffered by her from the time of
the accident to the time of trial. In addition, the perma-
nency of disability indicates that the limitation of the

” _
enjoyment of prior habits of work and recreation was
considered by the jury in arriving at the figure of $11,800.

Thus, it was not an abuse of discretion by the trial court
not to grant a new trial on this basis.

As to the basis of the jury award of $5,000 to Mr. Paul
for loss of his wife’s services, the jury could properly con-
sider not only the household help necessary up to the date
of the trial, for which respondents were compensated in
special damages, but could also consider the fact that work
for which help was hired was not all that previously per-
formed by Mrs. Paul. Hdminster v. Thorp, 101 Cal.App.2d
756, 226 P. 2d 873. The award must also include the cost
of hiring help in the future, as well as damages for those
services rendered in the relationship of husband and wife
beyond the duties of servants, and this court cannot say
‘as a matter of law that the diminution in the services per-
formed by the wife is to be valued at less than $200 per
year for the rest of her life.

The judgment of the trial court is affirmed. Costs to
respondents.

WOLFE, C. J., and CROCKETT, HENRIOD and WADE,
JJ., concur.